Karl Marx was wrong about many things but right about one thing: the revolutionary way capitalism attacks and destroys feudalism. As I explain in a new study, in India, the rise of capitalism since the economic reforms of 1991 has also attacked and eroded casteism, a social hierarchy that placed four castes on top with a fifth caste—dalits—like dirt beneath the feet of others. Dalits, once called untouchables, were traditionally denied any livelihood save virtual serfdom to landowners and the filthiest, most disease-ridden tasks, such as cleaning toilets and handling dead humans and animals. Remarkably, the opening up of the Indian economy has enabled dalits to break out of their traditional low occupations and start businesses. The Dalit Indian Chamber of Commerce and Industry (DICCI) now boasts over 3,000 millionaire members. This revolution is still in its early stages, but is now unstoppable.
Archive for the ‘Capitalism & Libertarian Philospohy’ Category.
I had an argument in a comment thread of one of Kevin Drum's minimum wage or some such posts (sorry, I can't even find which one now to link it). Anyway, my concluding remark was that the best thing that could ever happen to the unemployed, and particularly to low-skilled workers, would be if people were to discover ways to get rich from their labor. Of course, I was met with total scorn, as if I had suggested sacrificing virgins to improve the climate.
The reason I mention this is that this disconnect seems to be at the heart of the problem of Progressivism. I am convinced that they honestly want to help low-skilled workers and the poor do better economically, but they advocate for policies that are 180-degrees askew. Most of what they wish for -- higher minimum wages, larger mandated benefits packages, more paid leave, more ability to sue employers over trivial slights -- absolutely, with near mathematical precision, raise the cost of hiring low-skill workers, making it increasingly unlikely anyone will do so. Low-skill workers get hired for one and only one reason (which is the same reason any worker gets hired): someone thinks they can profit from that labor. It is the potential for profit that is the sole reason for hiring anyone, but it is exactly that profit potential that Progressives most fear and deride.
My contention is that what drives most progressives, at a very fundamental level, is a deep conservatism. Of course, most “progressives” would freak if they were called conservative, but what I mean by conservative in this context is not donate-to-Jesse-Helms capital-C Conservative but fearful of change and uncomfortable with uncertainty conservative.
Because capitalism is based so completely on individual decision-making, because its operation is inherently chaotic, and because its rewards can’t possibly be divided equally and still be “rewards”, progressives are hugely uncomfortable with it. Ironically, though progressives want to posture at being “dynamic”, it turns out that capitalism is in fact too dynamic for them. Industries rise and fall, jobs are won and lost, recessions give way to booms. Progressives want comfort and certainty. They want to lock things down the way they are. They want to know that such and such job will be there tomorrow and next decade, and will always pay at least X amount. Which is why, in the end, progressives are all statists, because only a government with totalitarian powers can bring the order and certainty and control of individual decision-making that they crave..
Progressive elements in this country have always tried to freeze commerce, to lock this country’s economy down in its then-current patterns. Progressives in the late 19th century were terrified the American economy was shifting from agriculture to industry. They wanted to stop this, to cement in place patterns where 80-90% of Americans worked on farms. I, for one, am glad they failed, since for all of the soft glow we have in this country around our notion of the family farmer, farming was and can still be a brutal, dawn to dusk endeavor that never really rewards the work people put into it....
I am sure, if asked, most progressives would profess to desire iPod’s and cures for cancer. But they want these without the incentives that drive men to invent them, and the disruption to current markets and competitors and employees that their introduction entails. They want to end poverty without wealth creation, they want jobs without employers, they want cars without unemployment for buggy whip makers.
In her first major economic policy address of the 2016 campaign, Democratic presidential frontrunner Hillary Clinton raised questions about the effect that companies like Uber and Airbnb are having on American workers. . . .
Later in the speech, Clinton vowed to “crack down on bosses who exploit employees by misclassifying them as contractors” — a possible reference to something like the recent California Labor Commission decision that threatens to undermine Uber’s business model.
To be sure, Clinton does not want to destroy the sharing economy. She acknowledged that “these trends are real” and “none is going away.” But she may believe that, with the right application of political muscle, the new economy can be forced to conform with the antiquated blue social model — that is, the midcentury vision of steady, regulated, unionized employment with generous benefits.
As we have argued again and again, this notion is unrealistic. Like it or not, this 1950s model of economic organization is breaking down, and has been for several decades, thanks to globalization, demographic changes, technological innovation, and other trends that simply cannot be reversed. Measures like the California decision are futile and counterproductive. We should treat the emergence of a more entrepreneurial, dynamic landscape as an opportunity to be engaged with productively, not a danger to be henpecked by regulations better suited to the last century.
The invaluable Carpe Diem blog has a compendium of 18 forecasts of doom that were made on or around the first Earth Day in 1970 -- all of which turned out wrong. Here is an example:
8. Peter Gunter, a North Texas State University professor, wrote in 1970, “Demographers agree almost unanimously on the following grim timetable: by 1975 widespread famines will begin in India; these will spread by 1990 to include all of India, Pakistan, China and the Near East, Africa. By the year 2000, or conceivably sooner, South and Central America will exist under famine conditions….By the year 2000, thirty years from now, the entire world, with the exception of Western Europe, North America, and Australia, will be in famine.”
9. In January 1970, Life reported, “Scientists have solid experimental and theoretical evidence to support…the following predictions: In a decade, urban dwellers will have to wear gas masks to survive air pollution…by 1985 air pollution will have reduced the amount of sunlight reaching earth by one half….”
Participants in the global warming debate today will surely recognize the formulation of these statements as representing a consensus scientific opinion.
For those of you too young to actively follow the news in the 1970s, Mark Perry is not cherry-picking cranks. These fearful quotations are representative of what was ubiquitous in the media of that time.
My school (Kinkaid in Houston) took speech and debate very seriously and had a robust debate program even in middle school. In 1975-1976 the national debate topic was this:
Resolved: That the development and allocation of scarce world resources should be controlled by an international organization
The short answer to this proposition should realistically have been: "you have got to be f*cking kidding me." But such were the times that this was considered a serious proposal worth debating for the entire year. In fact, in doing research, it was dead-easy to build up suitcases of quotations of doom to support the affirmative; it was far, far harder finding anyone who would argue that a) the world was not going to run out of everything in a few decades and b) that markets were an appropriate vehicle for managing resources. I could fill up an hour reading different sources predicting that oil would have run out by 1990 or 2000 at the latest.
Kevin Drum Claims "We" Haven't Learned Anything from Deepwater Horizon. What you mean, "we," Kemo Sabe?'
Kevin Drum claims that "we" haven't learned anything from the Deepwater Horizon disaster (the BP oil rig that exploded five years ago in the Gulf, killing a number of people and creating a large oil spill).
What is his evidence? Has he looked at oil company drilling practices and found them unchanged since the disaster? No, he does not mention any evidence based on observed drilling practices one way or another. His sole evidence that "we" have not learned anything is that the US Government has not shut down drilling in the Gulf and has not passed any new laws.
This is almost a caricature of progressive thinking -- nothing matters except what the government does. But presumably oil companies have been influenced by the cost of the disaster on BP. So far BP has paid out about $30 billion (billion with a B) in reparations and restoration expenses and may be facing another $20 or so billion in fines based on a 2014 court decision. All this ignores the loss of the platform itself, of access to the resource below the platform, and of BP's reputation.
One would presume that the prospect of losing $50+ billion would be enough to get the attention of private companies and cause them to make changes to their procedures. I suppose it is also possible that they completely ignored this, but Drum offers no evidence one way or another. To him, anything not done by the government is irrelevant.
Brandon Morse wrote about the My Little Pony critique of Marxism and social justice warriors. I couldn't really believe it, so I had to watch (or at least skim). Check out the 25 minute mark for a taste.
And yes, I know Vonnegut intended Harrison Bergeron as a parody of the parodies of Marxist dystopias. But it reads just fine straight up. Or in particular, in the really well done short film version from several years ago called 2081. If interested, skip the songs in the My Little Pony episode above and watch 2081 instead, it is barely 20 minutes long.
I have always read Atlas Shrugged not as a character story (and thus I don't get bent out of shape by the stiff black and white characters) but as a story about the world itself changing and crashing under socialism and cronyism. As such, my favorite scene in the book is the hobo's tale of the socialist experiment on the 20th Century Motor Company.
Anyway, the final chapters of the book are full of more and more outrageous state interventions that build to a point that they are hard to believe anyone would actually ever try such things. Unbelievable, until one looks at Venezuela
Venezuelans soon may need to have their fingerprints scanned before they can buy bread and other staples. This unprecedented step was proposed after Maduro had the brilliant idea of proposing mandatory grocery fingerprinting system to combat food shortages. He said then that "the program will stop people from buying too much of a single item", but did not say when it would take effect.
Privacy concerns aside (clearly Venezuelans have bigger, well, smaller fish to fry) there was hope that this plunge into insanity would be delayed indefinitely, as the last thing Venezuela's strained economy would be able to handle is smuggling of the most basic of necessities: something such a dramatic rationing step would surely lead to.
Unfortunately for the struggling Venezuelan population, the time has arrived and as AP reported over the weekend, Venezuela "will begin installing 20,000 fingerprint scanners at supermarkets nationwide in a bid to stamp out hoarding and panic buying" as of this moment.The government has been selectively rolling out the rationing system for months at state-run supermarkets along the western border with Colombia where smuggling of price-controlled goods is a major problem.
On Saturday, President Nicolas Maduro said that seven large private retail chains had voluntarily agreed to install the scanners.
Last month the owners of several chains of supermarkets and drugstores were arrested for allegedly artificially creating long queues by not opening enough tills.
It gets better: Maduro also accused Colombian food smugglers of buying up price-controlled goods in state-run supermarkets along the border.
What a mess. An entirely predictable mess.
Noting that the United States is currently experiencing a drastic shortage of laws, America's media (example, but many others) have finally begun to chastise the recent Congress for being, as described by the Huffington Post, "pretty close" to "the least productive ever." Like fishes cast ashore flopping on the beach dying for lack of oxygen, Americans are desperately begging for more laws and for more things to be made a criminal offense, and Congress is shamefully ignoring them.
Said one man interviewed on the streets of New York, "there are barely 4000 criminal offenses outlined in the Federal code. No wonder we have so much anarchy. We need a lot more crimes and Congress is not cooperating."
A local business woman echoed these thoughts: "With only 80,000 pages in the Federal Register, I often don't know what I should be doing. Sometimes I go a quarter of an hour in my business making decisions for which there is absolutely no Federal guidance. It's criminal Congress is shirking its responsibility to tell me what to do."
Said everyone, "there ought to be a law..."
Remember the whole VA thing? It has mostly been forgotten, though we will all remember it again, or more accurately get to experience it ourselves, once the Democrats manage to get single payer passed.
People talk about government employees being motivated by "public service" but in fact very few government agencies have any tangible performance metrics linked to public service, and when they do (as in the case of the VA wait times) they just game them. At the end of the day, nothing enforces fidelity to the public good like competition and consumer choice, two things no government agency allows.
I will admit that government employees in agencies may have some interest in public welfare, but in the hierarchy of needs, the following three things dominate above any concerns for the public:
- Keeping the agency in existence
- Maintaining employment levels, and if that is achieved, increasing employment levels
- Getting more budget
But look at the VA response in this context:
- The agency remains in existence and most proposals to privatize certain parts were beaten back
- No one was fired and employment levels remain the same
- The agency was rewarded with a big bump in its budget
The VA won! Whereas a private company with that kind of negative publicity about how customers were treated would have as a minimum seen a huge revenue and market share loss, and might have faced bankruptcy, the VA was given more money.
On the free market, in short, the consumer is king, and any business firm that wants to make profits and avoid losses tries its best to serve the consumer as efficiently and at as low a cost as possible. In a government operation, in contrast, everything changes. Inherent in all government operation is a grave and fatal split between service and payment, between the providing of a service and the payment for receiving it. The government bureau does not get its income as does the private firm, from serving the consumer well or from consumer purchases of its products exceeding its costs of operation. No, the government bureau acquires its income from mulcting the long-suffering taxpayer. Its operations therefore become inefficient, and costs zoom, since government bureaus need not worry about losses or bankruptcy; they can make up their losses by additional extractions from the public till. Furthermore, the consumer, instead of being courted and wooed for his favor, becomes a mere annoyance to the government someone who is "wasting" the government's scarce resources. In government operations, the consumer is treated like an unwelcome intruder, an interference in the quiet enjoyment by the bureaucrat of his steady income.
Obama, 2008: "I taught constitutional law for ten years. I take the Constitution very seriously. The biggest problems that we're facing right now have to do with George Bush trying to bring more and more power into the executive branch and not go through Congress at all, and that's what I intend to reverse when I'm president of the United States of America." (Townhall in Lancaster, Pennsylvania, March 31, 2008).
They all suck. Every one of them. This man was the great hope of more than half the nation and look what a loser he is. We should stop talking about whether we are going to hand power to the Coke or the Pepsi party and start talking about limiting the power of these jerks.
Paul Roberts has an editorial in the LA Times that sortof, kindof mirrors my post the other day that observed that corporate stock buybacks (and investments to reduce tax rates) were likely signs of a bad investment climate. Until he starts talking about solutions
Roberts begins in a similar manner
Here's a depressing statistic: Last year, U.S. companies spent a whopping $598 billion — not to develop new technologies, open new markets or to hire new workers but to buy up their own shares. By removing shares from circulation, companies made remaining shares pricier, thus creating the impression of a healthier business without the risks of actual business activity.
Share buybacks aren't illegal, and, to be fair, they make sense when companies truly don't have something better to reinvest their profits in. But U.S. companies do have something better: They could be reinvesting in the U.S. economy in ways that spur growth and generate jobs. The fact that they're not explains a lot about the weakness of the job market and the sliding prospects of the American middle class.
I suppose I would dispute him in his implication that there is something unseemly about buybacks. They are actually a great mechanism for economic efficiency. If companies do not have good investment prospects, we WANT them returning the cash to their shareholders, rather than doing things like the boneheaded diversification of the 1960's and 1970's (that made investment bankers so rich unwinding in the 1980's). That way, individuals can redeploy capital in more promising places. The lack of investment opportunities and return of capital to shareholders is a bad sign for investment prospects of large companies, but it is not at all a bad sign for the ethics of corporate management. I would argue this is the most ethical possible thing for corporations to do if they honestly do not feel they have a productive use for their cash.
The bigger story here is what might be called the Great Narrowing of the Corporate Mind: the growing willingness by business to pursue an agenda separate from, and even entirely at odds with, the broader goals of society. We saw this before the 2008 crash, when top U.S. banks used dodgy financial tools to score quick profits while shoving the risk onto taxpayers. We're seeing it again as U.S. companies reincorporate overseas to avoid paying U.S. taxes. This narrow mind-set is also evident in the way companies slash spending, not just on staffing but also on socially essential activities, such as long-term research or maintenance, to hit earnings targets and to keep share prices up....
It wasn't always like this. From the 1920s to the early 1970s, American business was far more in step with the larger social enterprise. Corporations were just as hungry for profits, but more of those profits were reinvested in new plants, new technologies and new, better-trained workers — "assets" whose returns benefited not only corporations but the broader society.
Yes, much of that corporate oblige was coerced: After the excesses of the Roaring '20s, regulators kept a rein on business, even as powerful unions exploited tight labor markets to win concessions. But companies also saw that investing in workers, communities and other stakeholders was key to sustainable profits. That such enlightened corporate self-interest corresponds with the long postwar period of broadly based prosperity is hardly a coincidence....
Without a more socially engaged corporate culture, the U.S. economy will continue to lose the capacity to generate long-term prosperity, compete globally or solve complicated economic challenges, such as climate change. We need to restore a broader sense of the corporation as a social citizen — no less focused on profit but far more cognizant of the fact that, in an interconnected economic world, there is no such thing as narrow self-interest.
There is so much crap here it is hard to know where to start. Since I work for a living rather than write editorials, I will just pound out some quick thoughts
- As is so typical with Leftist nostalgia for the 1950's, his view is entirely focused on large corporations. But the innovation model has changed in a lot of industries. Small companies and entrepreneurs are doing innovation, then get bought by large corporations with access to markets and capital needed to expanded (the drug industry increasingly works this way). Corporate buybacks return capital to the hands of individuals and potential entrepreneurs and funding angels.
- But the Left is working hard to kill innovation and entrepreneurship and solidify the position of large corporations. Large corporations increasingly have the scale to manage regulatory compliance that chokes smaller companies. And for areas that Mr. Roberts mentions, like climate and green energy, the government manages that whole sector as a crony enterprise, giving capital to political donors and people who can afford lobbyists and ignoring everyone else. "Socially engaged" investing is nearly always managed like this, as cronyism where the politician you held a fundraiser for is more important than your technology or business plan. *cough* Solyndra *cough*
- One enormous reason that companies are buying back their own stock is the Federal Reserve's quantitative easing program, which I would bet anything Mr. Roberts fully supports. This program concentrates capital in the hands of a few large banks and corporations, and encourages low-risk financial investments of capital over operational investments
- All those "Social engagement" folks on the Left seem to spend more time stopping investment rather than encouraging it. They fight tooth and nail the single most productive investment area in the US right now (fracking), they fight new construction in many places (e.g. most all places in California), they fight for workers in entrenched competitors against new business models like Lyft and Uber, they fight every urban Wal-Mart that attempts to get built. I would argue one large reason for the lack of operational investment is that the Left blocks and/or makes more expensive the investments corporations want to make, offering for alternatives only crap like green energy which doesn't work as an investment unless it is subsidized and you can't count on the subsidies unless you held an Obama fundraiser lately.
- If corporations make bad investments and tick off their workers and do all the things he suggests, they get run out of business. And incredibly, he even acknowledges this: "And here is the paradox. Companies are so obsessed with short-term performance that they are undermining their long-term self-interest. Employees have been demoralized by constant cutbacks. Investment in equipment upgrades, worker training and research — all essential to long-term profitability and competitiveness — is falling." So fine, the problem corrects itself over time.
- He even acknowledges that corporations that are following his preferred investment strategy exist and are prospering -- he points to Google. Google is a great example of exactly what he is missing. Search engines and Internet functionality that Google thrives on were not developed in corporate R&D departments. I don't get how he can write so fondly about Google and simultaneously write that he wishes, say, US Steel, were investing more in R&D. I would think having dinosaur corporations eschew trying to invest in these new areas, and having them return the money to their shareholders, and then having those individuals invest the money in startups like Google would be a good thing. But like many Leftists he just can't get around the 1950's model. At the end of the day, entrepreneurship is too chaotic -- the Left wants large corporations that it can easily see and control.
Michael Munger has one of the most useful articles I have read in a very long time. As illustrated by the Venn diagram I posted a while back showing the heavy overlap between the Tea Party and Occupy Wall Street, we have much more concurrence in the diagnosis of problems than in the prescriptions for solutions. Munger gets at the heart of why many people go wrong in these prescriptions
When I am discussing the state with my colleagues at Duke, it's not long before I realize that, for them, almost without exception, the State is a unicorn. I come from the Public Choice tradition, which tends to emphasize consequentialist arguments more than natural rights, and so the distinction is particularly important for me. My friends generally dislike politicians, find democracy messy and distasteful, and object to the brutality and coercive excesses of foreign wars, the war on drugs, and the spying of the NSA.
But their solution is, without exception, to expand the power of "the State." That seems literally insane to me—a non sequitur of such monstrous proportions that I had trouble taking it seriously.
Then I realized that they want a kind of unicorn, a State that has the properties, motivations, knowledge, and abilities that they can imagine for it. When I finally realized that we were talking past each other, I felt kind of dumb. Because essentially this very realization—that people who favor expansion of government imagine a State different from the one possible in the physical world—has been a core part of the argument made by classical liberals for at least three hundred years....
He follows with this useful test
But they may not immediately see why "the State" that they can imagine is a unicorn. So, to help them, I propose what I (immodestly) call "the Munger test."
- Go ahead, make your argument for what you want the State to do, and what you want the State to be in charge of.
- Then, go back and look at your statement. Everywhere you said "the State" delete that phrase and replace it with "politicians I actually know, running in electoral systems with voters and interest groups that actually exist."
- If you still believe your statement, then we have something to talk about.
This leads to loads of fun, believe me. When someone says, "The State should be in charge of hundreds of thousands of heavily armed troops, with the authority to use that coercive power," ask them to take out the unicorn ("The State") and replace it with George W. Bush. How do you like it now?
If someone says, "The State should be able to choose subsidies and taxes to change the incentives people face in deciding what energy sources to use," ask them to remove "The State" and replace it with "senators from states that rely on coal, oil, or corn ethanol for income." Still sound like a good idea?
How about, "The State should make rules for regulating sales of high performance electric cars." Now, the switch: "Representatives from Michigan and other states that produce parts for internal combustion engines should be in charge of regulating Tesla Motors." Gosh, maybe not …
I spent most of the Bush years asking Conservatives a similar question -- you may be fine when "your guy" has this power, but would you be happy if Al Gore or Nancy Pelosi had it. And of course I have spent most of the Obama years asking Liberals whether they would be comfortable if George Bush or Rick Perry had similar powers to what Obama has claimed for himself. Because they will.
I said something similar here, though less elegantly. I concluded in part:
Technocratic idealists ALWAYS lose control of the game. It may feel good at first when the trains start running on time, but the technocrats are soon swept away by the thugs, and the patina of idealism is swept away, and only fascism is left. Interestingly, the technocrats always cry "our only mistake was letting those other guys take control". No, the mistake was accepting the right to use force on another man. Everything after that was inevitable.
Four things I would do to help African Americans
- Legalize drugs. This would reduce the rents that attract the poor into dealing, would keep people out of jail, and reduce a lot of violent crime associated with narcotics traffic that kills investment and business creation in black neighborhoods. No its not a good thing to have people addicted to strong narcotics but it is worse to be putting them in jail and having them shooting at each other.
- Bring real accountability to police forces. When I see stories of folks absurdly abused by police forces, I can almost always guess the race of the victim in advance
- Eliminate the minimum wage (compromise: eliminate the minimum wage before 25). Originally passed for racist reasons, it still (if unintentionally) keeps young blacks from entering the work force. Dropping out of high school does not hurt employment because kids learn job skills in high school (they don't); it hurts because finishing high school is a marker of responsibility and other desirable job traits. Kids who drop out can overcome this, but only if they get a job where they can demonstrate these traits. No one is going to take that chance at $10 or $15 an hour**
- Voucherize education. It's not the middle class that is primarily the victim of awful public schools, it is poor blacks. Middle and upper class parents have the political pull to get accountability. It is no coincidence the best public schools are generally in middle and upper class neighborhoods. Programs such as the one in DC that used to allow urban poor to escape failing schools need to be promoted.
** This might not be enough. One of the main reasons we do not hire inexperienced youth, regardless of wage rates, is that the legal system has put the entire liability for any boneheaded thing an employee does on the employer. Even if the employee is wildly breaking clear rules and is terminated immediately for his or her actions, the employer can be liable. The cost of a bad hire is skyrocketing (at the same time various groups are trying to reign in employers' ability to do due diligence on prospective employees). I am not positive that in today's legal environment I would take free labor from an untried high school dropout, but I certainly am not going to do it at $10 an hour when there are thousands of experienced people who will work for that. Some sort of legal safe harbor for the actions of untried workers might be necessary.
What Happens When You Abandon Prices As A Supply-Demand Matching Tool? California Tries Totalitarianism
Mostly, we use prices to match supply and demand. When supplies of some item are short, rising prices provide incentives for conservation and substitution, as well as the creation of creative new sources of supply.
When we abandon prices, often out of some sort of political opportunism, chaos usually results.
California, for example, has never had the political will to allow water prices to rise when water is short. They cite all kinds of awful things that would happen to people if water prices were higher, but then proceed instead with all sorts of authoritarian rationing initiatives that strike me as far worse than any downsides of higher prices.
In this particular drought, California has taken a page from Nazi Germany block watches to try to ration water
So, faced with apparent indifference to stern warnings from state leaders and media alarms, cities across California have encouraged residents to tattle on their neighbors for wasting water — and the residents have responded in droves. Sacramento, for instance, has received more than 6,000 reports of water waste this year, up twentyfold from last year...
Some drought-conscious Californians have turned not only to tattling, but also to an age-old strategy to persuade friends and neighbors to cut back: shaming. On Twitter, radio shows and elsewhere, Californians are indulging in such sports as shower-shaming (trying to embarrass a neighbor or relative who takes a leisurely wash), car-wash-shaming and lawn-shaming.
“Is washing the sidewalk with water a good idea in a drought @sfgov?” Sahand Mirzahossein, a 32-year-old management consultant, posted on Twitter, along with a picture of a San Francisco city employee cleaning the sidewalk with a hose. (He said he hoped a city official would respond to his post, but he never heard back.)
Drought-shaming may sound like a petty, vindictive strategy, and officials at water agencies all denied wanting to shame anyone, preferring to call it “education” or “competition.” But there are signs that pitting residents against one another can pay dividends.
All this to get, in the best case, a 10% savings. How much would water prices have to rise to cut demand 10% and avoid all this creepy Orwellian crap?
One of the features of Nazi and communist block watch systems was that certain people would instrumentalize the system to use it to pay back old grudges. The same thing is apparently happening in California
In Santa Cruz, dozens of complaints have come from just a few residents, who seem to be trying to use the city’s tight water restrictions to indulge old grudges.
“You get people who hate their neighbors and chronically report them in hopes they’ll be thrown in prison for wasting water,” said Eileen Cross, Santa Cruz’s water conservation manager. People claim water-waste innocence, she said, and ask: “Was that my neighbor? She’s been after me ever since I got that dog.”
Ms. Franzi said that in her Sacramento neighborhood, people were now looking askance at one another, wondering who reported them for wasting water.
“There’s a lot of suspiciousness,” Ms. Franzi said. “It’s a little uncomfortable at this point.” She pointed out that she and her husband have proudly replaced their green lawn with drought-resistant plants, and even cut back showers to once every few days.
Update: Seriously, for those that are unclear -- this is the alternative to capitalism. This is the Progressive alternative to markets. Sure, bad things happen in a free society with free markets, but how can anyone believe that this is a better alternative?
It should not be necessary to say this, but apparently it is:
- The government's reluctance to ban an activity does not constitute an endorsement
- The government's refusal to subsidize an activity does not constitute a ban
I cannot find a single opposition statement to the Hobby Lobby decision that does not contain some variant of this:
Today, the Supreme Court ruled against women’s basic access to contraceptive healthcare. This decision opens up the door for for-profit companies to impose their personal beliefs on their employees and deny them basic contraceptive care.
Basic healthcare decisions shouldn't be subject to the whims of bosses and employers. ...
I will continue to fight for the right of every woman to make her own private medical decisions. #notmybossbusiness
It seems that a huge number of Americans, even nominally intelligent ones, cannot parse the difference between banning an activity and some third party simply refusing to pay for you to engage in that activity. This really does not seem to be a complicated distinction, but yesterday I watched something like 40% of America fail to make it. How is it possible to make any progress on liberty and individual rights if peoples' thinking is so sloppy?
By the way, the passage above is from the Facebook page of Hanna-Beth Jackson, a California state senator. The reason I find her faux libertarianism initeresting is that Ms. Jackson is co-sponsor of the bill requiring explicit verbal or written consent for each sex act (and each step of the sex act) in California colleges. A woman's body may not be her boss's business but it appears it is the California government's business, at least according to Ms. Jackson. This is typical of the abortion and birth control issues, where supporters use libertarian-ish arguments narrowly to defend abortion and contraception rights, but then go all-in for authoritarianism everywhere else. Jackson's bedroom regulation bill is co-sponsored by Kevin De Leon, who said yesterday "No boss should have the power to interfere with a worker’s personal health decisions." Because that's his job, I guess.
Here is something I find deeply ironic: On the exact same day that Conservatives were flocking to the desert to protest Cliven Bundy's eviction from BLM land, San Francisco progressives were gathering in the streets to protest tenant evictions by a Google executive. To my eye, both protests were exactly the same, but my guess is that neither group would agree with the other's protest. I think both protests are misguided.
In the case of Cliven Bundy, I agree with John Hinderaker, right up to his big "But...."
First, it must be admitted that legally, Bundy doesn’t have a leg to stand on. The Bureau of Land Management has been charging him grazing fees since the early 1990s, which he has refused to pay. Further, BLM has issued orders limiting the area on which Bundy’s cows can graze and the number that can graze, and Bundy has ignored those directives. As a result, BLM has sued Bundy twice in federal court, and won both cases. In the second, more recent action, Bundy’s defense is that the federal government doesn’t own the land in question and therefore has no authority to regulate grazing. That simply isn’t right; the land, like most of Nevada, is federally owned. Bundy is representing himself, of necessity: no lawyer could make that argument.
It is the rest of the post after this paragraph with which I disagree. He goes on to explain why he is sympathetic to Bundy, which if I may summarize is basically because a) the Feds own too much land and b) they manage this land in a haphazard and politically corrupt manner and c) the Feds let him use this land 100 years ago but now have changed their mind about how they want to use the land.
Fine. But Bundy is still wrong. He is trying to exercise property rights over land that is not his. The owner gave him free use for years and then changed its policy and raised his rent, and eventually tried to evict him. Conservatives and libertarians don't accept the argument that long-time tenancy on private land gives one quasi-ownership rights (though states like California and cities like New York seem to be pushing law in this direction), so they should not accept it in this case. You can't defend property rights by trashing property rights. Had this been a case of the government using its fiat power to override a past written contractual obligation, I would have been sympathetic perhaps, but it is not.
I would love to see a concerted effort to push for government to divest itself of much of its western land. Ten years ago I would have said I would love to see an effort to manage it better, but I feel like that is impossible in this corporate state of ours. So the best solution is just to divest. But I cannot see where the Bundy Ranch is a particularly good case. Seriously, I would love to see more oil and gas exploration permitted on Federal land, but you won't see me out patting Exxon on the back if they suddenly start drilling on Federal land without permission or without paying the proper royalties. At least the protesters in San Francisco likely don't believe in property rights at all. Conservatives, what is your excuse?
I suppose we can argue about whether the time for civil disobedience has come, but even if this is the case, we have to be able to find a better example than the Bundy Ranch to plant our flag.
Sorry, this is one of those posts where I am still struggling to figure an issue out, so bear with me if we wander around a bit and the ideas are a bit unfinished.
Kevin Drum and other progressives have been bending over backwards to argue that the now three year delay in implementing PPACA standards for private insurance policies is no big deal.
Really? The PPACA is likely, for Progressives, to be the most important piece of legislation passed during this Administration. Hell, based on the discussion when it was passed, for many it is likely the most important piece of legislation passed in the last three or four decades. And when Republicans suggested delaying these same rules and mandates, e.g. during the government shutdown, they freaked, arguing that people should not have to go another day with their old crappy health care policies.
But now they just roll over and say, yeah, ho hum, this thing that everyone supposedly wanted is a political liability so its fine to delay it, no big deal.
If this were a signature piece of libertarian legislation (yeah, I know its hard to imagine such a thing) that was not being implemented by somebody I voted for and supported, I would be pissed. I would be raking the President over the coals.
This difference in outlook may be why the Republican leadership hates the Tea Party. The Tea Party gets pissed when folks they elect punt on the ideological goals they got elected to pursue. They have no tribal loyalty, only loyalty to a set of policy goals. The key marker in fact of many groups now disparagingly called "extremists" is that they do not blindly support "their guy" in office when "their guy" sells out on the things they want.
I have friends I like and respect -- smart and worldly people -- who are involved in a series of activities to promote political moderation. What I have written in this post is the core of my fear about moderation -- that in real life calls for moderation are actually calls for loyalty to maintaining our current two major parties (and keeping current incumbents in office) over ideas and principles.
Which leads me to an honest question that many of you may take as insulting -- can one be a principled moderate? I am honestly undecided on this. But note that by moderate I do not mean "someone who is neither Republican or Democrat," because I fit that description and most would call me pretty extreme. So "fiscally conservative and socially liberal" is not in my mind inherently "moderate". That is a non-moderate ideological position that is sometimes called "moderate" because it is a mix of Republican and Democrat positions. But I would argue that anyone striving to intellectual consistency cannot be a Republican or Democrat because neither have an internally consistent ideology, and in fact their ideology tends to flip back and forth on certain issues (look at how Republican and Democrat ideology on Presidential power, for example, or drone strikes changes depending on whose guy is in the Oval Office).
Moderates in my mind are folks willing to, or even believe it is superior to, take average positions, eg. "the PPACA just went too far and we should have had a less-far-reaching compromise" or "free trade agreements go too far we need a mix of free trade and protectionism". They value compromise and legislative action (ie passing lots of laws in a fluid and timely manner) over holding firm on particular ideological goals. I guess the most fair way to put it by this definition is they value consensus and projecting a sense of agreement and teamwork over any individual policy goal.
Postscript: One other potential definition of "moderate": One could argue that in actual use by politicians and pundits, "moderate" effectively means "one who agrees with me" and "extremist" means "people who disagree with me." The real solution here may be to accept that "moderate" is an inherently broken word and stop using it.
Update: There are areas where I suppose I am a moderate. For example, I think that making definitive statements about what "science" has been "settled" in the realm of complex systems is insane. This is particularly true in economics. Many findings in economics, if one were honest, are equivocal or boil down to "it depends." The Left is insanely disingenuous to claim that the science is settled that minimum wage increases don't affect employment. But it is equally wrong to say that minimum wage increases always have a large effect on unemployment. For one thing, almost no one (percentage wise) actually makes the minimum wage so we are talking about changes in the first place that affect only a couple of percent of the workforce, and may be mitigated (or exacerbated) by other simultaneous trends in the economy. So of course their impact may not be large (in the same way that regulations on left-handed Eskimo Fortran programmers might not have much of an impact on the larger economy).
We have gotten into this bizarre situation that the science is suddenly always settled about everything, where it would be safer to argue that given the complexity of the systems involved the science can't be settled. I liked this bit I read the other day in the Federalist
One of the more amusing threads that runs through the conversation among the online left is the viewpoint that the science is settled in every arena, and settled in their favor. The data backs the leftward view, and if it doesn’t, there must be a flaw in the data, or in the scientist, or secret Koch-backed dollars behind the research. This bit of hubris leads to saying obviously untrue things – like “every economist from the left and right” says the stimulus has created or saved at least two million jobs. Or that there’s “no solid evidence” that boosting the minimum wage harms jobs. Of course the media knows that these aren’t true, but they largely give these politicians a pass, because dealing in data and with academic research is their turf.
Folks on the Left who want to blame the Tea Party for the destruction of civil discourse need to look at themselves as well, declaring the science settled on everything and then painting their opponents as anti-science for disagreeing. As I have pointed out before, this sort of epistemology is not science but religion, the appeal to authority backed by charges of heresy for those who disagree.
If I were going to make a political plea, it would not be for moderation but for better more respectful practices in the public discourse.
Corruption is often blamed on the corruptible. But corruptible people will always exist (see: entire history of civilization) if the incentives for corruption are sufficient. Here is another example, from a vote-buying scandal in south Texas:
In the deeply Democratic Rio Grande Valley, the primary is the election that matters. And in local races like county commissioner and district attorney a sliver of votes can make a difference between winning and losing the election. Many times, paid campaign workers called “politiqueras” deliver the votes that put a candidate over the top.
Politiqueras—who are paid to turn out voters, especially in low-income neighborhoods and colonias—have been part of elections in the Rio Grande Valley for decades. But the recent suicide of a school board president in the small town of Donna and the indictment of three politiqueras for allegedly buying votes in a Donna school board election with beer, drugs and cash has rattled the Valley’s political world.
Politiqueras are typically older women with deep ties in the community. They meet with seniors at nursing homes and adult daycare centers and residents in colonias to advocate for their candidates. They come bearing barbecue plates or Mexican pastries and offer voters a ride to the polls, none of which is illegal. But over the decades intense competition in an impoverished region for a limited number of jobs and the power to decide who gets a government contract or a lucrative-paying job has pushed some candidates to cross the legal line and offer cash for votes. “The competition for access to [government] contracts has become intense,” says former Edinburg state Rep. Aaron Peña. “Politiqueras have been pushed further and further to perform in a system that has been corrupted.”
The Senate Majority Leader has decided to try to shame and silence a private citizen for daring to engage in political discourse. Here is Harry Reid:
I believe in an America where economic opportunity is open to all. And based on their actions and policies they promote, the Koch brothers seem to believe in an America where the system is rigged to benefit the very wealthy.
Remember that this is coming from the man who has somehow become a multi-multi-millionaire over a lifetime of only holding government jobs.
Contrast this with Charles Koch's actual words, parts of which could have come out of the mouth of an occupy Wall Street protester:
I think one of the biggest problems we have in the country is this rampant cronyism where all these large companies are into smash-and-grab, short-term profits, saying how do I get a regulation, or we don’t want to export natural gas because it’s one of our raw materials … Well, you say you believe in free markets, but by your actions you obviously don’t. You believe in cronyism.
And that’s true even at the local level. I mean, how does somebody get started if you have to pay $100,000 or $300,000 to get a medallion to drive a taxi cab? You have to go to school for two years to be a hairdresser. You name it, in every industry we have this. The successful companies try to keep the new entrants down. Now that’s great for a company like ours. We make more money that way because we have less competition and less innovation. But for the country as a whole, it’s horrible.
And for disadvantaged people trying to get started, it’s unconscionable in my view. I think it’s in our long-term interest, in every American’s long-term interest, to fight against this cronyism. As you all have heard me say, the role of business is to create products that make people’s lives better while using fewer resources to do it, and making more resources available to satisfy other needs.
When a company is not being guided by the products they make and what the customers need, but by how they can manipulate the system — getting regulations on their competitors, or mandates on using their products, or eliminating foreign competition — it just lowers the overall standard of living and hurts the disadvantaged the most.We end up with a two-tier system. Those that have, have welfare for the rich. The poor, OK, you have welfare, but you’ve condemned them to a lifetime of dependency and hopelessness.
Yeah, we want “hope and change,” but we want people to have the hope that they can advance on their own merits, rather than the hope that somebody gives them something. That’s better than starving to death, but that, I think, is going to wreck the country. Is it in our business interest? I think it’s in all our long-term interests. It’s not in our short-term interest. And it’s about making money honorably.
People should only profit to the extent they make other people’s lives better. You should profit because you created a better restaurant and people enjoyed going to it. You didn’t force them to go, you don’t have a mandate that you have to go to my restaurant on Tuesdays and Wednesdays or you go to prison. I mean, come on. You feel good about that?
Harry Reid's entire job is built on a foundation of cronyism. Most of his re-election money comes from outside his home state of Nevada, from companies hoping to score political favors from him and from the power he weilds in the Senate. If laws were proposed to thwart Congressional cronyism, say through reducing the power of Congress to pick winners and losers, who would fight such a law, Reid or Koch?
The PJ O'Rourke / Cato Supreme Court amicus brief that is making the rounds is well worth your time. A lot of it is funny, like this footnote:
While President Obama isn’t from Kenya, he is a Keynesian—so you can see where the confusion arises.
But my favorite is footnote 15 where they make fun of the Supreme Court
Driehaus voted for Obamacare, which the Susan B. Anthony List said was the equivalent of voting for taxpayer- funded abortion. Amici are unsure how true the allegation is given that the healthcare law seems to change daily, but it certainly isn’t as truthy as calling a mandate a tax.
The only reason people like Michael Moore or Tom Harkin can get away with singing praises of Cuban socialism is because most Americans can't go visit and see for themselves. By keeping Cuba off-limits, we are doing the communists' work for them by allowing them to provide cherry-picked videos and stories through useful idiots that have zero bearing on the true life of the average person in Cuba.
Why Do We Manage Water Via Command and Control? And Is It Any Surprise We Are Constantly Having Shortages?
In most commodities that we consume, market price signals serve to match supply and demand. When supplies are short, rising prices send producers looking for new supplies and consumers to considering conservation measures. All without any top-down intervention by the state. All without any coercion or tax money.
But for some reason water is managed differently. Water prices never rise and fall with shortages -- we have been told in Phoenix for years that Lake Powell levels are dropping due to our water use but our water prices never change. Further, water has become a political football, such that favored uses (farmers historically, but more recently environmental uses such as fish spawning) get deep subsidies. You should see the water-intensive crops that are grown in the desert around Phoenix, all thanks to subsidized water to a favored constituency. As a result, consumers use far more water than they might in any given year, and have no natural incentive to conserve when water becomes particularly dear, as it is in California.
So, when water is short, rather than relying on the market, politicians step in with command and control steps. This is from an email I just received from state senator Fran Pavley in CA:
Senator Pavley said the state should consider measures that automatically take effect when a drought is declared to facilitate a more coordinated statewide response.
“We need a cohesive plan around the state that recognizes the problem,” Pavley said at a committee hearing. “It’s a shared responsibility no matter where you live, whether you are an urban user or an agricultural user.”
Measures could include mandatory conservation, compensation for farmers to fallow land, restrictions on the use of potable water for hydraulic fracturing (“fracking”), coordinated publicity campaigns for conservation, increased groundwater management, and incentives for residents to conserve water. Senator Pavley noted that her hometown Las Virgenes Municipal Water District is offering rebates for customers who remove lawns, install rain barrels or take other actions to conserve water.
Pavley also called for the state to create more reliable, sustainable supplies through strategies such as capturing and re-using stormwater and dry weather runoff, increasing the use of recycled water and cleaning up polluted groundwater basins.
Note the command and control on both sides of the equation, using taxpayer resources for new supply projects and using government coercion to manage demand. Also, for bonus points, notice the Senator's use of the water shortage as an excuse to single out and punish private activity (fracking) she does not like.
All of this goes to show exactly why the government does not want a free market in water and would like to kill the free market in everything else: because it gives them so much power. Look at Ms. Pavley, and how much power she is grabbing for herself with the water shortage as an excuse. Yesterday she was likely a legislative nobody. Today she is proposing massive infrastrure spending and taking onto herself the power to pick winners and losers (farmers, I will pay you not to use water; frackers, you just have to shut down). All the winners will show their gratitude next election cycle. And all the losers will be encouraged to pay protection money so that next time around, they won't be the chosen victims.
This startling assertion of government power became public in December when the FEC released an enforcement file in the case of a Boston television station's regular Sunday-morning news program, "On the Record." The station, WCVB, had invited two congressional candidates (a Democrat and a Republican) into its studio to appear on "On the Record" in the weeks leading up to the 2012 election and formatted the joint appearance as a 30-minute debate.
Another candidate (a libertarian) who was not invited filed a complaint alleging that the value of WCVB's production costs and airtime constituted unlawful corporate contributions to the two candidates who were invited.
Wow, I am sure glad the "libertarian" is pushing for government regulation of speech and government restrictions on the decision-making of private businesses.
I thought this was a useful simple picture from Arnold Kling, vis a vis countries and their economies:
|Low Creation||High Creation|
|Low Destruction||Corporatist Stagnation||Schumpeterian Boom|
|High Destruction||Minsky Recession||Rising Dynamism|
He suggests the US may currently be in the lower-left quadrant. Europe and Japan in the upper left. My sense is that China is in the upper right, not the lower right (too much of the economy is controlled by the politicians in power for any real destruction to occur).
Once a government gains powerful tools for economic intervention, it becomes politically almost impossible to allow destruction to occur, no matter how long-term beneficial it can be. The US is one of the few countries in the world that has ever allowed such destruction to occur over an extended period. The reason it is hard is that successful incumbents are able to wield political power to prevent upstart competition that might threaten their position and business model (see here for example).
It takes a lot of discipline to have government not intervene in favor of such incumbents. Since politicians lack this discipline, the only way to prevent such intervention is by castrating the government, by eliminating its power to intervene in the first place. Feckless politicians cannot wield power that does not exist (though don't tell Obama that because he seems to be wielding a lot of power to modify legislation that is not written into my copy of the Constitution.).