CotC Roundup

This weeks Carnival of the Capitalists is up at Beyond the Brand. Some of the posts I found interesting:

  • New Economist on the connection between democracy and economic growth, referencing the recent interesting Becker-Posner discussion. Which touches on the the puzzling point that I first heard in a talk by Milton Friedman 10 years ago: that while economic freedom tends to lead to increased political freedom, political freedom (usually in the form of democracy) tends to decrease economic freedom. The freest economies, like Singapore and Hong Kong, tend to be totalitarian. Public Choice economics helps this make sense - democracies tend to vote themselves bread and circuses - but its a little unintuitive and quite important for fans of political freedom to keep in mind.
  • Brian Gongol on why even fans of creative destruction shouldn't rejoice too much at specific business failures. I agree that there are large costs to business failures, but we have to also keep in mind the large costs to letting bad businesses stay afloat (which he acknowleges). I think the PR aspect he points out is a good one - rejoicing at the failure of a bad business earns enemies among the victims of that failure, so temper joy with sympathy.
  • Different River has an interesting post on medical malpractice. He attempts to use the econ technique where you point out that if X were true, there would be a lot of money to be made by doing Y. So if Y is not happening, X is unlikely to be true. While this is a part of "the economic way of thinking", IMHO, we should be careful not to have too much confidence in the output, since its easy to make subtle mistakes. The comments section demonstrates some such issues for this case.
  • No Illusions demonstrates why activism must be tied to analysis by pointing out how pointless it is to boycott World Bank bonds in order to hurt the World Bank: "As you can see, it’s tough to boycott a not-for-profit lending organization without hurting all the wrong people. Member governments’ contributions and guarantees don’t change. The Bank will pass on any increased costs, or reduce the amount it lends. Buyers of its bonds are better off. Boycotters lose, and so do the people in countries receiving World Bank funding."
  • Dale Franks at QandO has an interesting piece about the problems that SS privatization will cause, by creating a giant institutional investor that CEOs will be beholden to.
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Patri wrote: "Dale Franks at

Patri wrote: "Dale Franks at QandO has an interesting piece about the problems that SS privatization will cause, by creating a giant institutional investor that CEOs will be beholden to."

Just look at California's pension system and their ability to manipulate corporations and the market to see the issues that will arise. I'm surprised the Dems haven't figured out that this will give them a huge club to use against the companies they so despise.

Governments like Singapore

Governments like Singapore are not totalitarian. They can't be by definition. I think the word you're looking for is "undemocratic," or perhaps simply "authoritarian."

Carnival of Capitalist

Carnival of Capitalist Malpractice Link
The Carnival of the Capitalist has this link to a blog discussion on the economics of medical malpractice.