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Markets and Culture

(I wrote this in response to a professor's complaint on a mailing list about the rampant commercialization of modern culture)

Markets enable coordinated action between anonymous individuals. They are essential for the functioning of large-scale society. But they have popped up rather recently in our evolutionary history so they don't sit well with our subconscious. They feel, well, anonymous and impersonal. As they are.

So in the classroom we organize interaction to look like much older social structures that sit better with our subconscious, namely tribes or extended families. One could imagine the professor as an older hunter, passing along his knowledge of tracking game animals in the forest to the tribe's children. Markets for labor and material are used to make the university function but on the inside it doesn't look that way.

It is considered rude for a boss to influence his employee by reminding him that "I pay your salary", although it would be an accurate statement to make. Politeness requires us to temporarily forget that market forces were often responsible for drawing us together in the first place; we remember only when we get a paycheck or a tuition bill comes due. Even at the checkout line in a grocery store we make small talk with the clerk and inquire after his well-being while the true nature of our interaction is as plain as the money we hand over.

At the risk of sounding Panglossian, this seems pretty optimal. There is wisdom in choosing the correct social structure to apply to any given interaction. Markets enable us to build and run structures like universities, but it would feel wrong if a professor charged students for attending his office hours, or if students paid his salary by handing over a $10 bill at the beginning of every class.

But I do think our innate suspicion of markets may be stronger than what is rational and we sometimes fail to use markets in situations that make sense. I also think we tend to underestimate the good qualities of markets, especially when we harken back to halcyon times when markets figured less prominently in everyday life. Yes, life was more personal then, maybe even happier. But people also had a lot less freedom in how they organized their lives. Freedom is one of the market's two most compelling virtues (the other is economic growth).


Obamacare Countdown

Here's a great post by Keith Hennessey about the ins and outs of what needs to happen for Obamacare to pass in this dirty game called politics.

As of today, Intrade prices the futures for Obamacare passing at 57.


The dark past, the dark present in North Korea

From the Financial Times via North Korean Economy Watch:

North Korea’s harvests cannot feed all its people and in recent years the annual food deficit was about 1m tonnes. People are chronically malnourished and as many as 1m are believed to have died during famine in the 1990s. [Emphases mine.]


What it means to hit rock bottom

Ike Whitaker was once a scholarship athlete playing quarterback for Virginia Tech. Though he showed promise very early in his career, he was eventually kicked off the team for violation of rules. Eventually, the news came out that he had a problem with alcohol. Articles appeared in the press containing feel-good interviews with Ike in which said all the right things about how he was working to get sober, and later Ike was even reinstated on the football team. However, just a short time later, he was once again dismissed, and rumors flowed about his relapse. That was over a year ago.

Ike just made his first public statement since then.

Okay. I’ve been sober now for five months. I hit rock bottom in the fall. I was still in Blacksburg, but I had nothing going on in my life. I wasn’t part of the football team, I wasn’t in class, I didn’t have a job...I was nothing. My life was bad. My life was corrupt. I was drinking every day. I had no money. So, I’m very ashamed to admit this, but it’s part of my recovery to be completely honest with myself and everyone, so, I would steal food where I could find it to have something to eat. There were stretches that I really don’t remember. My alcoholism had completely taken over. I had to drink to function. That’s how bad it was. Much of it is a blur.

I remember that I was ready to end my life. I was a burden to myself and everyone around me. I just felt dark inside. I knew I had to stop drinking, but I couldn’t. So, I decided to just end it. That’s how tough this addiction is. That’s how depressed and sick the alcohol can make you.

I wanted to go and see Coach (John) Ballein one last time because he had been good to me through my toughest times. He never beat around the bush, he was honest with me and hard on me, but I knew he was hard on me because he cared about me and wanted to see me get my life straight. I remember that I had a bag of alcohol, I had been drinking all night and all morning, and that I was in his office. I don’t know exactly what I said to him, but I’m sure it was something to let him know that I was saying goodbye and that I appreciated everything that he ever did for me and that I’m very sorry that I let him and Coach Beamer down.

Well, I never made it out of his office. He told me that I wasn’t going anywhere and that I certainly wasn’t going to hurt myself. He took the bag of alcohol out of my hands and told me that I was coming with him and that we were going to get some help. I thank God for Coach Ballein. He’s truly an angel on earth. Coach Beamer and Coach Ballein gave me chances and I blew every one of them. That’s totally my fault. I’m ashamed that I treated those two good men the way I did. I’m ashamed that I lied to them. I’ll always regret that and I’ve told them that I’m very sorry.

...

Every day is a battle. It’s a battle. As soon as my eyes open in the morning, I drop to my knees and I ask God to give me the strength and courage to get through another day. I just can’t go back to where I was. I can't. I was at a point where I was no longer drinking for the high, I was drinking to just function. I needed alcohol to be able to speak. I needed it to be able to walk to the store. That’s how bad it was. My body couldn’t function without it.

Also, I want people to know that I’m not a bad person. I don’t have an evil heart. I have a good heart. I don’t mistreat people. I’m a loving, caring person. I’ve just been very sick. I’ve been in a battle and I’ve been losing. But now, I’m starting to win that battle.

I didn't believe the earlier interviews. I believe this one. There's nothing feel-good about it. Hitting rock bottom means standing naked before the world with all your imperfections. This is a prerequisite for recovery. Now Ike has a fighting chance.


Dylan Ratigan has an anger problem


It's unbelievable that MSNBC has a host who actually believes that the Tea Party constituents include a significant number of people who say, "I want to kill blacks and Jews and women." What universe is this guy living in?

Once in a while something amazing happens: a person accuses someone else of the very thing they themselves are doing while being oblivious to the fact. Classic example.


Dems go Nuclear

There's been a shift in sentiment over the past week. I thought health care reform was dead, but it has suddenly sprouted wings. Obama is pushing the reconciliation option without actually calling it that. Despite what the pundits said about the Republicans winning the health care summit, I think they lost. The opinion input wasn't pro-Republican; it was anti-Democrat. When America thinks your opponent is being completely unreasonable, you do not give them a chance to appear reasonable. The pundits said that Republicans came across as "reasonable"; what they missed is that Obama came across as reasonable too. That gave new life to reform.

What's interesting now is that the pundits have no idea what's going to happen. Rather, there's no sort of consensus about what's going to happen. Most think there's no chance in hell. Many others, though, are cautiously optimistic. Intrade was at about 30 yesterday and is 55 today.

I wouldn't be surprised if Republicans get completely pwned here.


Ayn Rand’s genius….

…was not in making a philosophy, but in selling it. Can you do as well?

This year’s ThinkOff debate topic is, “Do the wealthy have an obligation to help the poor?” They’re looking for a pool of 750-word essays from which to pick two champions for each side of the proposition for a live debate.

Easy-peasy, right? Here’s the real challenge: The judges ain’t lookin’ for a dry exchange of talking points comparing Objectivism to Rawlsianism. They’re looking for people with COMPELLING PERSONAL STORIES to illustrate their own arguments.

Now, it’s not hard to imagine lots of compelling personal stories from poor (or formerly poor) people about how they benefited from wealth transfers from the rich, or how they didn’t get those transfers and suffered as a result. Can you construct a countervailing compelling personal story for the opposite perspective? And having constructed it, can you think of a champion who could plausibly claim the story as his or her own? Some alternatives:

1. Find a real-life John Galt who is as succinct as Ayn Rand was verbose.

2. Draft Patri. Admittedly, I know nothing of his personal circumstances, although I suspect that everybody’s life story has SOMETHING that could be told. No, I nominate Patri because of his personal commitment to Seasteading movement – action with inherent drama. So we’d need a brief personal anecdote somehow related to the topic, and immediately transition into describing the life of the new frontiersmen. Recreating the story of the Pilgrims but without the Indians. Risking lives, fortunes, sacred honor in pursuit of the ideals of liberty. Hell, it writes itself.

3. As a fall-back position, there are various ways to criticize the “OBLIGATION to help the poor.” While I can’t think of how to mount an appealing attack on the concept of compassion in 750 words, I can drive a wedge between the idea of compassion and the idea of obligation.

A. “People with the discipline to change themselves are laudable – and rare. For most of us, change becomes possible only when we must confront the consequences of our refusal to change. X% of American adults living in poverty do so because of mental illness, chemical addiction, etc. -- circumstances that cannot be solved with money alone. For people with these issues, an entitlement to a stream of resources merely delays the day of reckoning and the possibility of reformation and growth. As the director of Alcoholics Anonymous – and a recovering alcoholic myself – I know the harm that can be done by a misguided sense of obligation….”

B. “As the principle fundraiser for Catholic Charities, the first thing I want to tell parishioners is to stop feeling guilty -- and among Catholics, that’s a hard message to sell! But I repeat, if you feel even the slightest resentment about contributing, please keep your money. That kind of contribution will not only diminish your own life and vitality, it will diminish the welfare of the poor. Today more families than ever are struggling with financial and other stresses. On top of this, they struggle with a sense of inadequacy for coming to us during their hours of need. We don’t want to compound their problems by subjecting them to a free-floating sense of resentment from the rest of society. So Just Say No to obligation. God loves the cheerful giver!”

C. “As a former Klansman, I can tell you that nothing is eroding the foundations of our society more than the widespread sense of resentment felt by people who feel that they’ve been compelled to help the poor. And because a disproportionate number of poor people are also members of ethnic minority groups, this resentment is fueling racism. If we as a society ever want to get serious about our real obligations – that is, our obligations to remedy the harms of racism – then we need to stop stoking resentment against members of minority groups. Don’t be fooled: while the Klan is currently – and blissfully -- in decline, the Tea Party Movement is now expressing this popular frustration more forcefully than ever….”

4. If the link between compassion and obligation is too great to be overcome in 750 words, then the next best position may be to whipsaw the argument: “Yes, the rich have an obligation to help the poor, just as the poor have an obligation to help the rich. We all have an obligation to use our resources for the betterment of society in general. But an obsessive concern with the resources of the rich – that is, with money -- reflects a misguided sense of envy. As the director of the Organ Donor Repository, I’m in a position to observe that people’s feelings about the duty that the rich owe the poor are not generally reciprocated. People who have signed up to donate organs, volunteer for a bone marrow transplant, or even give blood are overwhelmingly upper class. If we’re all in this together, let’s act like it. No more excuses!”

Those are a few ideas that leapt to mind. Whadda you got?

Deadline is April 1, no foolin'.


Celebrity Deathmatch: Mencius vs Hanson

I finally got around to seeing the video of Robin Hanson debating Mencius Moldbug about "futarchy".

As some have remarked, that was one nerdy gathering. I think if I showed up there, some of the attendees would have hid under the table.

Most of the questions in the follow-up session were piss-poor (except, of course, DDF's) showing that nerds aren't always that smart about markets and government. Then again, I'm just one of those young doctors that Hanson believes thinks they know everything.

I agree with Hanson that futarchy should be judged against the status quo, not against some hypothetical ideal.

Getting down to the meat of the argument, I don't think liquid prediction markets can be manipulated to any significant degree. We have examples of prediction markets right now: stock markets and sports betting markets. It's nearly impossible to predictably manipulate the stock market, and the only way to manipulate the sports betting markets is for a player to throw a game, something that's rare enough to be a non-factor.

Can decision markets be manipulated? That was the question at the center of the debate. The example most understandable to me was a decision market on whether or not Steve Jobs should be replaced as Apple's CEO by a chimpanzee. Let's look at that more closely, because I'm not sure I understand the mechanisms that well. Futures used in prediction markets, I understand. But I don't know how a decision market would actually work.

I can't find where exactly in the video Hanson mentions the "called off bets", and I don't feel like watching the whole thing over again, but lets say there are two cash for stock markets, one for keeping Jobs as CEO (symbol: KEEP), and one for replacing Jobs with a chimp (symbol: DUMP).

On a given day, KEEP is worth $15 and DUMP is worth $10. What exactly does this mean? What am I buying? As I understand it, the losing side gets their money back. So if the board sees that the price of KEEP is higher than the price of DUMP at some predetermined time in the future, it keeps Jobs as CEO of Apple, the KEEPers win, the DUMPers get their money back (because that would be the called-off bet). What do the KEEPers win? What's the payoff? Is there something that ties KEEP to AAPL?

I can't have any sort of opinion on whether decision markets can be manipulated because I don't understand how they would actually work. I suspect this was also the case with most of the audience of the debate.


Who created civilization?

God did.

My own opinion towards religion is that its ontological correctness is one of its least interesting attributes.


Happy Birthday, Tea Party

It's been a year. It's amazing how one man can spark a huge movement if there is enough pent-up pressure in society.


Respect to Brian Macker and Arthur B. who were there when it all started.

A NY Times article profiles Keli Carender, a Tea Party activist from Seattle.

Keli Carender has a pierced nose, performs improv on weekends and lives here in a neighborhood with more Mexican grocers than coffeehouses. You might mistake her for the kind of young person whose vote powered President Obama to the White House. You probably would not think of her as a Tea Party type.

But leaders of the Tea Party movement credit her with being the first.

...

She, like many Tea Party members, resists the idea of a Tea Party leader — “there are a thousand leaders,” she says.

Glenn Beck? “He can be a Tea Partier, but it’s not like the movement bends to him.”

Sarah Palin? She will have to campaign on Tea Party ideas if she wants Tea Party support, Ms. Carender said, adding, “And if she were elected, she’d have to govern on those principles or be fired.”


Community and Exit

Max Borders and Mike Gibson propose a debate over at A Thousand Nations-- Does the right to exit a community undermine the very idea of the community?


Insurance and Mortality

Last week, Megan McArdle wrote in The Atlantic that after you control for this and that, it's not clear that having insurance makes one less likely to die. Leftists were shocked and outraged. Matt Yglesias was all a-twitter:

Do rightwingers really believe that US health insurance has no mortality-curbing impact?

Megan McArdle replied that, okay, maybe there is a relationship between having insurance and being less likely to die that we don't see in the research, but if there is, it's gotta be small.

I'm surprised at the shock and awe from leftwingers, though maybe I shouldn't be. It's part of their gospel that people are dropping dead left and right because of lack of insurance.

As someone in the medical field, though not an epidemiologist or familiar with the research, my personal reaction was a lack of surprise at McArdle's conclusion. Why?

  • Any emergency will be treated at US hospitals. If you don't have insurance but are in a car wreck and bleeding, you will get treated-- you'll receive fluids, blood, angiograms, and if needed, surgery.
  • Aside from that, medical science is still at a primitive level on an absolute scale, even if it has made significant progress on a relative scale. Most things that are going to kill you will still kill you even with the best medicine has to offer. Insurance won't save your life if you get a metastatic cancer (with rare exceptions).
  • The place where insurance would make a difference is with things that would kill you if not treated but would save your life if treated. These types of illnesses, in my anecdotal experience, are rare in the larger scheme of things.
  • On the other side of the ledger is when medical care kills people who would otherwise live to an old age.

Link commentary

Radley Balko's morning links were a treasure trove. The highlights:

Police Officer Seeks Protection FROM the Police

When he opened his locker at the NYPD’s 42nd Precinct, Officer Frank Palestro was greeted with a symbolic death threat: A mousetrap with his name on it.

Palestro, who was one of three elected precinct delegates to the Patrolmen’s Benevolent Association, had been outed as a “rat” for reporting acts of official corruption ordered by Lt. Susana Seda, a former midnight platoon commander who is mired in scandal.

The whistleblower “was transferred to another command for his safety,” reports the February 24 New York Daily News.

...

Lt. Seda, according to Palestro, “told everybody I was a `f****** rat’” because he acted in the interests of the public and conscientious street officers, rather than corrupt figures further up the chain of command. Accordingly, the nine-year police veteran and union rep is being offered protection akin to that extended to defectors from criminal syndicates. [emphasis mine]

They're the largest, best organized, most dangerous gang of all, don't forget it.

God wants gays dead, says beauty queen Lauren Ashley

CARRIE Prejean isn't the only beauty queen open to expressing her objection to same-sex marriage.

Miss Beverly Hills 2010 Lauren Ashley is also speaking out in support of traditional nuptials, Fox News reported.

"The Bible says that marriage is between a man and a woman," Ms Ashley told Fox News.

"In Leviticus it says: 'If man lies with mankind as he would lie with a woman, both of them have committed an abomination. They shall surely be put to death and their blood shall be upon them.'

"The Bible is pretty black and white.

"I feel like God himself created mankind and he loves everyone, and he has the best for everyone.

...

"If he says that having sex with someone of your same gender is going to bring death upon you, that's a pretty stern warning, and he knows more than we do about life."

Ms Ashley, 23, will be representing Beverly Hills in the Miss California pageant in November.

Her statements mirror former Miss California Carrie Prejean's answer to a question about same-sex marriage in last year's Miss USA pageant.

That's a direct quote from the book! I agree that it's appalling that anyone would have that belief, but Lauren Ashley is only one of billions who trusts that book. She's given us a good reason to reject the whole thing. It's just plain hypocritical for people who base their religion on this text to get worked up about her comments.


Where's the beef?

David Harsanyi has written an article in response to Ron Paul's winning of the CPAC straw poll that can only be described as a "hatchet job". I kept waiting for the meat of his arguments to emerge, but they never did. I'll quote one part:

If only it stopped there. Paul isn't a traditional conservative. His obsession with long-decided monetary policy and isolationism are not his only half-baked crusades. Paul's newsletters of the '80s and '90s were filled with anti-Semitic and racist rants, proving his slumming in the ugliest corners of conspiracyland today is no mistake.

Perhaps the greatest tragedy of Paul is that thousands of intellectually curious young people will have read his silly books, including End the Fed, as serious manifestoes. Though you wouldn't know it by listening to Paul or reading his words, libertarians do have genuine ideas that conservatives might embrace.

Did the folks at Reason just dig up an article from two years ago and put a new timestamp on it?

What about monetary policy is "long-decided"? Shouldn't the fact that the Fed was created to promote economic harmony but has reigned over numerous recessions be unsettling?

If Ron Paul is not a "serious thinker", why not, and by what standard? Are Obama, Bush, or McCain serious thinkers?


Obligatory Olypmics Post

Only this year did I realize the essential difference between the summer and winter olympics. Summer Olympics are about pure athleticism - how fast can you run? How high can you jump? (Though I still think LeBron James and Michael Vick are better athletes than any summer olympians).

Winter Olympics are about conquering fear. Most of the events involve performing feats with a decent risk of death: jumping off a mountain, doing multiple flips in the air on a snowboard off a halfpipe, riding down a mountain in a sled doing 90 mph, etc. You have to be a little bit crazy to get good at doing these things.

Maybe as a result of this realization, I find myself enjoying this Olympics, whereas in the past I usually changed the channel. Or it might be that one of the events combines skiing and shooting a rifle.

Also, short track speed skating is awesome.


Everything Confirms it and Nothing can Falsify it

This has long been my problem with global warming. Every slight statistical deviation in the weather of a given year is chalked up to global warming regardless of whether it makes for a milder season or a more extreme one. Every bad storm or perceived change in insect behavior suddenly has climatic implications without even a discussion on what should be the statistical norm, or what constitutes a meaningful change from past trends.

George F. Will has a nice Op-Ed in the Washington Post about the extended "very bad day" that global warming advocates are having:

Last week, BP America, ConocoPhillips and Caterpillar, three early members of the 31-member U.S. Climate Action Partnership, said: Oh, never mind. They withdrew from USCAP. It is a coalition of corporations and global warming alarm groups that was formed in 2007 when carbon rationing legislation seemed inevitable and collaboration with the rationers seemed prudent. A spokesman for Conoco said: "We need to spend time addressing the issues that impact our shareholders and consumers." What a concept.

Global warming skeptics, too, have erred. They have said there has been no statistically significant warming for 10 years. Phil Jones, former director of Britain's Climatic Research Unit, source of the leaked documents, admits it has been 15 years. Small wonder that support for radical remedial action, sacrificing wealth and freedom to combat warming, is melting faster than the Himalayan glaciers that an IPCC report asserted, without serious scientific support, could disappear by 2035.

Jones also says that if during what is called the Medieval Warm Period (circa 800-1300) global temperatures may have been warmer than today's, that would change the debate. Indeed it would. It would complicate the task of indicting contemporary civilization for today's supposedly unprecedented temperatures.

It is nice to see the climate change politicos finally getting a little of the scrutiny they deserve, even if it is short lived. All we need is a hot or a "not hot enough" summer for the IPCC to start pushing their snake oil again.


One party will tax and spend. The other party won't tax, but will spend.

This is part 1 of Glenn Beck's speech at the CPAC. The rest of the speech can be found on Youtube.


Though I don't agree with every single thing he said, I agree with much of it. There are times in my life when I've hit rock bottom when it appeared that my dreams had been shattered, and Beck's message about picking yourself up without the government's help certainly resonates with me. Beck's bottom was obviously much deeper than mine as his alcoholic mother and one of his siblings committed suicide when he was young, he dropped out of college, and was an alcohol and drug addict without a job. He's got rock bottom "cred". Failure has to be allowed--for people, institutions, businesses, Fortune 500 companies--because it teaches the lessons needed to succeed.

He praises the charitable impulse of Americans. Perhaps the most moving part of the speech was his reading of Emma Lazarus' poem inscribed on the Statue of Liberty describing America as a place where immigrants could come and lift themselves up out of poverty.

He calls out not just the Democrats, but also the Republicans, and receives applause. He thoroughly eviscerates McCain by implication.

His calls to end the Fed received applause too, a response that would have been unthinkable to me only two years ago.


Austin's Temporary Insanity

So I turn on the news today (mostly interested in more Olympic coverage), to find the local news plastered with city officials blathering about what a great job they have done.

Until that moment I had not realized how much I had tuned out "the news" lately. I discovered, (mostly by questioning my husband), that a plane had crashed into a building approximately 15 miles from the area I live and work in, and I was blissfully unaware of the event for well over 24 hours.

When I did try to tune-in the reports I got were smiling officials talking about "how bad it could have been" if they hadn't been so very well prepared.

Okay so maybe they need that for their morale, but really?! It hasn't been two days since a horrific tragedy of the intentional variety and the big news story in Austin is officials explaining in detail how well they performed their jobs.... creepy!

Meanwhile the debate that seems to be raging in Austin and nationwide is whether or not to call the guy a "terrorist." The Austin Police Department thinks calling him a terrorist will lead to greater fear in the community.

But as expected there are those who feel that it is important to immediately condemn this man's actions by boldly going out on a limb and calling persons who intentionally crash airplanes into buildings "terrorists."

The story for the online news media seems to be all about which fringe groups online have been labeling the guy "hero" and/or "patriot," and also the fascinating detail that the FBI insisted the guy's suicide note be taken down after it had gotten over 20 million visits.

Interestingly enough it can still be read over at the Austin American Stateman's blog. Though most of it has been quoted in detail in the major news media anyhow.

We all know the guy committed homicide, suicide, arson, and some pretty serious assault via airplane, so I suggest it doesn't really matter what we call him now. What should matter is what we called him a few days ago.

A few days ago Joe Stack was a fellow Austinite, according to the news he was a good friend and a good neighbor to those who knew him. He wasn't the weird guy in the corner, or the quiet guy. He seems to be pretty average as far as Austinites go even in his distaste for government.

That guy slaughtered a fellow Austinite whom he had never met and severely injured many others in his attempt to strike at a government and more importantly a tax code that he hated.

We really should be reeling from this instead of trying to write him off as a fanatic, or patting ourselves on the back for a job well done. Austin should be thinking about this, and America should be thinking about this. When the average guy commits an act of terror-suicide against his own city, surely we have misstepped.


Let us be clear: we can all do whatever we want to you

Obama's Justice Department has cleared some high-ranking Bush officials of any legal ethics violations in authorizing torture of people who were not charged with crimes.


American children are well-prepared for the Industrial Age

I just ran across this old presentation by Scott Mcleod addressing the NEA. It's on target except for the idea that the NEA can disappear like other companies and industries. The way children are primarily made to learn today should have been obselete 50 years ago.


I get paid to interpret signs sometimes

Late last year when the weather started getting cold (and people started getting sick) a sign went up in the mens' room at my office:

Always wash hands with soap and warm running water before returning to work.

My first thought was "Do we really need a sign to tell us this?" My second thought was "When they run out of soap, do I get to go home?" Well, the soap is running low now. Half days all around!


American Idol '10

I like watching the early rounds of American Idol, not to laugh at crazy tryouts, but because that's when you get to see the raw talent of the singers - just a mic in Hollywood, and not even that during the first round auditions. As soon as the field narrows to the final twelve, the singers get a massive band to accompany them, along with light shows and a supportive audience. The result is an over-produced sound. Chris Daughtry has put out a lot of crappy music since his Idol days, but what I remember most are the raw, imperfect vocals of his audition.

The one that sticks out so far is Didi Benami.


Tyler Grady has a Chuck-like thing going and had a nice initial audition but they didn't show what he did in Hollywood (though he did move on).



If it fails, do less or more?

One of the key differences between private and public sectors is that in the private sector, failure is punished. If a product or company fails, resources shift away from it. In the public sector, unfortunately, the opposite seems to be the case. A program which solves its target problem will go away, while one which cleverly tackles an impossible problem or uses a poor strategy is guaranteed a long lifespan.

The private method is more scientific, because it views any project as an experiment, whose initial success or failure is a meaningful data point about whether the project is possible or worthwhile. The public method ignores the data generated by early trials (or even worse, gives them a reversed interpretation).

I'm at a Mercatus Center + IHS mini-conference today, and Brian Doherty gave a talk about the enduring legacy of Ayn Rand and Milton Friedman. Most of the talk was about the details, but his views on the future basically seemed to be that Rand & Friedman had significant cultural & academic impact, and so we should be optimistic and keep on trying those routes.

Yet I can't help but see a disconnect between the positive change in the cultural and academic climate, and the lack of change in outcome metrics like government spending as a percentage of GDP, pages in the Federal Register, or the government's Keynesian response to the recent financial crisis.

Now, one way to look at this disconnect is as progress - we've won part of the battle, now it's time to bring it home. Yet this perspective ignores the data generated by the results so far. Another way to look at the disconnect is as evidence that cultural and academic change may not work, and if we want results, we may need to try something else. This interpretation is scary because it suggests that the approach most natural to us may not be the most effective - but it is no less valid for of its unpleasantness.

I'm not arguing that we should completely ignore culture or academia - they are surely part of the answer, and perhaps even the ultimate solution. But I am deeply concerned that the freedom movement is almost completely invested in strategies that may have won mindshare, but have demonstrably failed to achieve our ends.

We need to decide: do we want to be like the public sector, throwing good money after bad, or like the private sector, nimbly switching strategies based on the evidence? At the very least, we should take seriously the idea that we might be fighting the wrong war - like the war of ideas instead of the war of concentrating power. And if that is a possibility, shouldn't we be putting more of our resources into new strategies, like the Free State Project, my own Seasteading Institute, or Agorism?


Government: Save me from myself!

Seriously.

[I]f we were to think about raising taxes on cigarettes, we would typically say raising the price is bad for people who smoke, right? But there's a little bit more going on. Lots of people actually want to quit. So we might ask, is it possible to improve welfare by raising cigarette taxes? A pair of economists Jon Gruber and Sendhil Mullainathan found that excise taxes make potential smokers happier. The intuition is that because some people actually quit smoking when the price goes up, they are made better off. And so it is possible to improve welfare by raising a tax that encourages us to kick bad habits.


"How to Start Doing Agorism"

Cross-posted from a comment at George Donnelly's blog:

Agorism may sound complicated, but it’s just extra-governmental trade. Anyone can do it.

I was in South Africa in the '90s when the National Party (who had run the apartheid political machine) and the ANC were negotiating the future rule of the country. The two parties were highly antagonistic to each other, yet each had lost the backing of their cold-war benefactors (US support exclusively for the Nats crumbled with the sanctions program and the Soviet Union had simply evaporated) who could have helped one dominate the other. Each party attacked the other's bad ideas: the Nats wouldn't allow the ANC to nationalize the mines, the ANC wouldn't allow the Nats to continue the agricultural control boards. The Zulus, the DP, and dozens of other parties were doing whatever they could to avoid domination by the two major parties. More than gridlock, this was actually shrinking the political pie. As a result, the country was on the brink of completely freedom. Laws were deleted from the statute books, entire government departments closed, and people ignored what unpopular laws were left in the expectation that they would soon be overturned. Finally, the negotiators realized they better start agreeing or they would lose everything. The future was with the ANC--individual Nats either left government or finally merged with their "archenemies" to stay in the power game. It took the ANC the better part of a decade to reimpose the restrictions on the country; to make sure no matter what you wanted to do with your life, first the government had to get its cut.

But in that period of crippled government, the country bloomed like a desert when the drought finally ends. Office buildings turned their underground parking lots over to managers to rent out as flea markets on the weekend. Traders could rent two parking bays for the weekend (though competition was fierce for spots and most were tied up with long-term commitments). Sometimes a food court would be built in a cul-de-sac. Traders would chat during the day--which markets were doing well these days? Have you got an "in" there? Can my brother share your cousin's stand until we get our own?

I was doing contract work (mostly scientific data analysis for mining houses), and my wife was running a goat dairy. Milk is highly perishable, and your animals' production varies wildly from a maximum after newborn kids are weaned to nothing in the last few months of pregnancy; the name of the game is to figure out how to deliver a steady supply of products. We sold pasteurized, frozen milk to regular shops and made cheese during the peak times. We had big wheels of Gouda that needed to be matured for anywhere between six months and two years, we had soft cheeses that could be sold within a month, and we had a processed cheese made from the wheels that cracked open or otherwise didn't pass our QC test (taking a plug from the side and tasting it) at the end of a six month production process.

We wanted to know what customers like, so we would pack up everything for our stand: cheeses and some frozen milk (using a broken chest freezer as a big cooler), the cheeses of other suppliers (some ran their own stalls at different markets, some were busy enough with just cheese-making), tables and shelves built to fit in our two parking spaces, table cloths, packaging, scales, and cleaning supplies. We'd tie it all on the back of a pick-up truck, and try to be early in line when the market opened for traders at 06:30. If you were early, you could drive in and unload in 15 minutes; the later it got, the more difficult it was to drive out around the other stands; if you didn't get in well before 08:00 when the market opened to customers, you had to hump in all your gear on your back. Then, the music would start being piped in, signaling that opening time had arrived.

I loved the buzz of the marketplace! Indian traders with spices, Boere with biltong, undocumented black immigrant peddlers with blankets, east-ender type English with pirate CDs, Pakistanis with carpets, car parts, books, clothing, art work, fish, balloons, candy, jugglers, musicians, puppet shows--the place was all color and sound and smells and desire swirling together. It was the glorious integration of hundreds of individual wishes being negotiated and satisfied. As a trader, you had to learn to manage your focus. At once, you had to keep an awareness of everything around you, and make personal eye contact with your customer. You had to keep the line moving or people would leave, yet you had to make enough time to swap pleasantries and stories with whoever was trading with you, for you were selling the market experience as much as your product. You had to invite opportunities and yet protect your goods against thieves and cheats.

The best times were when the whole family worked the same market together. Our two sons were probably between six and ten during this period, and my wife and I would coach them in how to serve customers and run the till. It was amazing to see our eight year old offer up samples for tasting, then slice a piece of cheese that came to within 5g of the price the customer wanted, wrap it, ring it up, and bid the customer well on their way. As they became comfortable with the routine, my wife and I would excuse ourselves to go to the food court for a schwarma, or satay, or boerewors. We wouldn't tell the boys that one of us had our eyes glued to them while the other bought food; that the topic of discussion while we ate together rarely strayed from pointing out to each other the skills they had developed. The boys would get paid as soon as the morning rush was over so they could go buy treats and toys from the other stands.

I can remember only two interactions with government people during this time. One was 40-ish Xhosa woman in expensive western business dress and speaking in a condescending tone that confirmed she was from some child welfare bureau. She asked lots of pointed questions to our eight-year-old about how many hours he was working, and gave him a card with a help-line number before she left. My son gave me a puzzled glance--I explained to him that if he was unhappy working on the stand, she could use the police to remove him from us and put him in the care of an institution or another family. He rolled his eyes and threw away the card. The other government worker was a 20-ish white girl from the health department, new enough in her job to take things seriously. She gave me a lecture about how we needed running water on the stand in order to keep selling cheese. She didn't seem to be worried that this would be impossible in the middle of an underground parking lot. It was a slow day, and she was kind of cute, so I kept asking her help for how we could bring things up to her standards. I think we got 20 minutes into designing a portable water storage tank above the stand with a gas heater before she got creeped out by the middle-aged married guy having such an interest in her. Never saw her again.

This system worked in layers of government legitimacy. There were those, like the building owners, with assets that couldn't be easily hidden and were easy pickings for tax collectors. Then, there were the market managers, who had offices in the buildings, but made private contracts with traders. They would have to show some income on the building owners' books to justify their position, but it would have been nearly impossible for anyone to track their transactions.

Finally, there were the traders. They were doing business in cash and turning over a handful of bills to the market manager. They could disappear at the end of the day, if they wished, leaving nothing behind but a pay-as-you-go cell phone number on the manager's application form.

The market exists everywhere there are two people who can satisfy each other's needs. A free market exists anywhere they can do so without interference.