Archive for the ‘Capitalism’ Category

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Consistency

August 30, 2017

Here’s one of Prof. Mark Perry’s internet-famous Venn diagrams.

Source

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GR8 PL8

August 27, 2017

What is seen and what is not seen.

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Go taxpayers!

August 26, 2017

This is sort of a low-priority topic but it’s a funny video.

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Trade, automation, and employment

December 17, 2016

This is sort of a rambling post about items I’ve come across recently that are loosely related.

ReasonTV released this clip this week.

This pretty much confirms what I’ve read about NAFTA. And that’s one reason I’ve never been happy about Trump’s bashing free trade agreements, NAFTA in particular.

Trade’s not a case of one-side-wins-while-the-other-side-loses. Trade works to mutual advantage: that’s why people engage in it, after all.

The only point I can take from Trump’s comments is that the U.S. is big enough to gain concessions by threatening to stop trading so freely. (He may be correct about that but I think it would be a bad idea.)


Being a free trade kind of guy, I was more than a little surprised to read about Stephen Moore’s turn to "the Dark Side."

If you know anything about Moore’s background, his new position is a fundamental shift for him. (For example, the Wikipedia article about him says, "Moore is known for advocating free-market policies…")

But read this whole thing to find out why Moore now backs Trump’s approach to trade and the economy.

Welcome to the Party of Trump

I stirred up some controversy last week when I told a conference of several dozen House Republicans that the GOP is now officially a Trump working-class party. For better or worse, I said at the gathering inside the Capitol dome, the baton has now officially been passed from the Reagan era to the new Trump era. The members didn’t quite faint over my apostasy, but the shock was palpable.

I emphasized that Republicans must prioritize delivering jobs and economic development to the regions of the country in the industrial Midwest — states such as Michigan, Pennsylvania, Ohio, Indiana, Wisconsin, Iowa, and Missouri. These are places that, for the most part, never felt the meager Obama recovery and where blue-collar Reagan Democrats took a leap of faith this election and came back to the Republican party for the first time since 1984. The GOP will be judged in 2018 and in 2020 on whether they deliver results for this part of the country and for the forgotten middle-class men and women (“the deplorables”) whom Democrats abandoned economically and culturally. This is all simply a political truism.

What roused the ire of some of my conservative friends was my statement that “just as Reagan converted the GOP into a conservative party, with his victory this year, Trump has converted the GOP into a populist, America First party.”‎

One friend lamented that I must have been drunk when I said this.

No. I meant exactly what I said, but I will clarify. […]


And here’s an interesting TED Talk by David Autor, professor of Economics and Associate Head of the MIT Department of Economics. It was published at the end of last month.

Prof. Autor has some explanations for the fact that the more we automate, the more people we have working. There are more jobs, not fewer.

Near the end of the clip, he makes a good point about the influence of culture on the employment picture.

Update 12/19/16:

I ran across an interesting post at pseudoerasmus that goes into detail on Prof. Autor’s topic. Despite its mocking tone and focus on conspicuous consumption, I think it’s a pretty fair explanation of how employment can increase despite increasing automation. (It doesn’t have a lot to say about people working in fields that weren’t even possible before automation enabled them, unfortunately.)

The emptiness of life will save us from mass unemployment

I don’t I have much to add to the debate about the dystopian robot future scenario envisioned by many people. But I do think the nightmare scenario is less mass unemployment than a kind of revamped neo-mediaevalism. I’m not predicting that, so much as saying that’s the worst-case scenario. {Edit 28/12/2016: This was written more than 2 years ago as a half-joke to mock trends in luxury consumption more than anything else.}

In the past 250 years, technological progress has not caused unemployment because human wants have been infinite. Every time productivity (output per unit of input) rises, the implied extra income in the economy still gets spent on something (at least when there isn’t a recession), and extra work gets created to produce that something. In other words, fewer inputs may be used to make one unit of output, but more output always gets desired / created. (OK, that sounds Say’s Law-ish, but please be patient.)

Environmentalists understand keenly that when energy prices fall, people frequently just drive more or fly more, or the savings get spent, ultimately, on something else that uses energy. Productivity growth produces the same effect. Which is why, as of now, we’ve never had permanent mass unemployment from technological displacement.

After the basic needs of food and shelter are satisfied, people go in search of other fulfillments — more caloric, varied, and exotic diets; more living space to fill with ever more stuff; 58 changes of clothes instead of 2 per year; more leisure in the form of vacations and entertainment; and ever more marginal extensions of life expectancy. That’s all very obvious.

But as people get wealthier, they demand not only more quantity of stuff, but also ever more trivial and even imaginary increments to the quality of goods and services. How else to explain the market for, say, honey in a jar that’s ‘raw’, unfiltered, unpasteurised, ‘fair-trade’, non-GMO, single-country-origin, single-bee-colony, and single-flower-species? […]


Finally, I learned yesterday that the Cato Institute has a session scheduled next month with the author of Men Without Work: America’s Invisible Crisis. From the descriptive blurb at Amazon:

Today, nearly one in six prime working age men has no paid work at all—and nearly one in eight is out of the labor force entirely, neither working nor even looking for work. This new normal of “men without work,” argues Eberstadt, is “America’s invisible crisis.”

I have to wonder if all these people are really unemployed or whether some of them are simply working off the books in the underground economy.

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How crony capitalism works

December 2, 2016

Kevin Williamson has a good article about how Trump ‘saved’ jobs at a Carrier plant in Indiana. RTWT.

The Economic Stupidity of the Carrier Bailout

One particularly tough and indigestible nugget of talk-radio stupidity afflicting the guts of conservatism is the idea that there is some sort of fundamental difference between bribing a business with tax cuts and bribing it with a wheelbarrow full of cash. The Trump-Pence bailout of Carrier’s operations in Indiana provides an illustrative case. […]

Republicans might have had a little bit of a point in the question of general tax cuts: A tax cut and spending are different things, even if the budgetary effects are exactly the same.

But in the matter of industry-specific or firm-specific tax benefits of the sort extended to Carrier in Indiana, they do not have a leg to stand on. These are straight-up corporate welfare, ethically and fiscally indistinguishable from shipping containers full of $100 bills. […]

For Carrier’s accountant, any pecuniary benefit will do. So far as the bottom line is concerned, a $7 million tax credit is the same as a $7 million check or $7 million in Apple stock or $7 million in gold. It’s all +$7 million on the line where you want it. […]

This is a case of Frédéric Bastiat’s problem of the seen vs. the unseen. The benefits are easy to see, all those sympathetic workers in Indiana. The costs are born by sympathetic workers, too, around the country, and by their families and by their neighbors. But those are widely dispersed, so they are harder to see and do not hit with the same dramatic impact.

But the math is the math is the math. Trump and Pence are trying to sell you a free lunch, the same way the Keynesians and their magical spending multiplier do when they promise that government stimulus programs (Trump is pushing one of those, too) will somehow magically pay for themselves. […]

I suppose the good news for most of us is that the State of Indiana (and its taxpayers) will be the ones picking up the tab for this.

Bastiat’s That Which is Seen, and That Which is Not Seen.

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How a market works

December 2, 2016

This is an interesting story that I read on Dan Lewis’s Now I Know list. (Now I Know is worth a look, if you’re not already a subscriber.)

To set the scene: Herbert Dow, founder of Dow Chemical, came up with a new way to refine bromine in 1891. That was the good news; the bad news was that he got into a trade war with an international cartel when he tried to sell his bromine outside the U.S.

Here’s the bulk of Dan’s article, called The Bromine Gambit:

Before Dow came onto the bromine scene, a German government-backed cartel named the Bromkonvention had a monopoly on bromine. As Investopedia explains, the Bromkonvention “sold bromine at a fixed price of 49 cents per pound, but it would implement a predatory pricing strategy quickly, if challenged.” And Dow Chemical posed such a challenge.

Dow Chemical operated independently of the Bromkonvention, which didn’t make the Germans all that happy, but they were willing to coexist so long as Dow kept its bromine sales within the United States. And considering that Dow was selling bromine at 27 cents per pound — about 45% less than what the Bromkonvention priced it at in Europe — the Germans saw Dow as a real threat. So the Bromkonvention made a threat of their own: if Dow entered markets outside the United States, the Bromkonvention promised to use its huge supplies of bromine to force Dow out of business by selling it cheaply — below cost — in the States.

Dow called their bluff, selling bromine to England. And the Bromkonvention retaliated. The cartel began dumping bromine in America, offering it for sale at 15 cents per pound. Dow couldn’t compete, and it didn’t have any other products to make up for the shortfall. This put Dow’s business in jeopardy — in theory at least.

In practice? Something went wrong, at least from the perspective of the Bromkonvention. American demand for bromine went up, as expected, but by leaps and bounds — no matter how much bromine Bromkonvention sold there, it would sell out, and Dow was still able to find customers at its 27 cents/pound price point. Not only did Dow not go out of business, but it expanded. Dow began selling its bromine — still at 27 cents per pound — in Germany itself.

How was this possible? Instead of dropping its price to meet that set by the Bromkonvention, Dow became buyers, as Investors Business Daily (via the Indianapolis Recorder) explains: “[Herbert Henry Dow] had an agent secretly buy up hundreds of thousands of pounds of the cut-rate imported bromine.” And what do you do with that bromine? IBD continues: Dow would then “repackage [the cheap bromine] and export it back to Europe.”

The Bromkonvention, at first, wasn’t sure where the cheap European bromine was coming from; in that interim period, they also continued their price war against Dow and continued to lower the price in the U.S. (ultimately to 10 cents/pound). In the end, there wasn’t a price low enough to force Dow out of business, as Dow was well-enough capitalized to buy up the dumped bromine and arbitrage its way to success. (And besides, the Bromkonvention made it easier and easier by lowering the price.) A century plus later, Dow is still around; the Bromkonvention is long gone.

Dan writes that Dow Chemical had the capital reserves to buy up the "dumped" bromine. But I’ll guess that in this case it wouldn’t have been to hard to find speculators – or banks – willing to loan the money to buy the under-priced bromine.

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What’s it worth to you?

September 19, 2016

Mark Perry at Carpe Diem has a good post about what I’ll call the Information Economy (for lack of a better term). He starts out writing about the different ways music has been delivered for sale and then moves on to the more general point of how information of all kinds gets delivered now.

I particularly liked the "What’s the internet worth to you?" question.

[t]he limitations of GDP accounting

Thanks to the advances in computer technologies, the Internet and smartphone apps, consumers are getting more and more services like GPS for free (or at a significantly reduced cost compared to the past) today and displacing services that used to get accounted for as market-based production (maps and road atlases). In past decades like the 1950s, maybe economic output measured by GDP was a pretty good measure of both economic performance and Americans’ economic well-being. In 2016, that may no longer be the case.

Finally, the video below captures the point I’m trying to make by asking people:

How much would someone have to pay you to give up the Internet for the rest of your life? Would a million dollars be enough? Twenty million? How about a billion dollars?

“When I ask my students this question, they say you couldn’t pay me enough,” says Professor Michael Cox, director of the O’Neil Center for Global Markets and Freedom at Southern Methodist University’s Cox School of Business. The free market, says Cox, creates a huge gap between what consumers would be willing to pay for Internet access and how much it actually costs.
From the video: Since we’re getting something that we really value that is almost free, and wouldn’t give it up for even $1 million or more, “In some ways, maybe we’re all millionaires and billionaires, if we have something that’s worth that much to us… You might just be richer than you realize…”


Update/Related (HT: Joe Sullivan): From a July 2015 WSJ interview with Hal Varian, Google’s chief economist — “Silicon Valley Doesn’t Believe U.S. Productivity Is Down: Contrarian economists at Google and Stanford say the U.S. doesn’t have a productivity problem, it has a measurement problem”:

“There is a lack of appreciation for what’s happening in Silicon Valley,” says Hal Varian, “because we don’t have a good way to measure it.” One measurement problem is that a lot of what originates here is free or nearly free.

Take, for example, a recent walk Mr. Varian arranged with friends. To find each other in the sprawling park nearby, he and his pals used an app that tracked their location, allowing them to meet up quickly. The same tool can track the movement of workers in a warehouse, office or shopping mall. “Obviously that’s a productivity enhancement,” Mr. Varian says. “But I doubt that gets measured anywhere.”

Consider the efficiency of hailing a taxi with an app on your mobile phone, or finding someone who will meet you at the airport and rent your car while you’re away, a new service in San Francisco. Add in online tools that instantly translate conversations or help locate organ donors—the list goes on and on.

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Markets know how to handle peaks

May 16, 2016

Here’s the opening of an interesting article by Ronald Bailey at Reason.

Sliding Down the Super-Cycle: Resource Doom Postponed Indefinitely

Legendary investor Jeremy Grantham admits he was wrong about “peak everything.”

“Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever” was the title of an urgent report written by the legendary asset manager Jeremy Grantham in 2011. Grantham proclaimed the advent of a resource scarcity “paradigm shift” that was “perhaps the most important economic event since the Industrial Revolution.” […]

Grantham also pointed to a slowdown in crop productivity, suggesting that it would be impossible to feed the world’s burgeoning population. “How we deal with this unsustainable surge in demand and not just ‘peak oil,’ but ‘peak everything,’ is going to be the greatest challenge facing our species,” he wrote.

This week, Grantham took almost all of that back. Grantham, like a whole raft of professional doomsters, was declaring Peak Everything just as the latest economic super-cycle was cresting; many commodities’ prices peaked the very year of his report and have been drifting downward ever since. […]

In their 2012 study “Super-Cycles of Commodity Prices Since the Mid-Nineteenth Century,” economists Bilge Erten and José Antonio Ocampo — from Northeastern University and Columbia University, respectively – confirm that the commodity price increases in the first decade of this century were the result of a super-cycle upswing. Parsing real price data for nonfuel commodities such as food and metals from 1865 to 2009, they find evidence of four past super-cycles ranging in length from 30 to 40 years. […]

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They’re Number 1

May 4, 2016

This article appeared in February, 2015, so the Pew Research survey mentioned below is probably around 18 months old.

Communist Vietnam just adores global capitalism—and it’s easy to see why

Global capitalism isn’t always easy to love. But Vietnam is still in the free-market honeymoon phase.

Roughly 95% of Vietnamese respondents to the Pew Research Center’s spring survey of global attitudes agreed with the following statement: “Most people are better off in a free market economy, even though some people are rich and some are poor.” That was the highest rate of agreement among all the countries where researchers asked the question.

pew-better-off-in-free-market

Of course, capitalism is always easier to love during an economic expansion. And Vietnam has had itself quite a boomlet in recent years. The country is steadily making its way up the manufacturing food chain, depending less on churning out low-skill manufactured goods like textiles and shoes to produce more sophisticated products such as smartphones. And foreign capital has poured in, thanks to global companies’ eagerness to tap pools of labor that remain relatively cheap in comparison to fast rising Chinese wages. That all means that standards of living are going up. The IMF expects the economy to expand by 5.6% this year. […]

I recall being in the last few draft lotteries during the Vietnam War. (I never served.) And now the Vietnamese are schooling us – in markets at least.

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Heh (3)

April 16, 2016

I found this pretty amusing not only on its face but also because it reminded me of a similar discussion I had in the summer of 2000. At the time, I was managing a small development group in Minneapolis. One of the group members was a fairly hippie cat who wrote Java for the company’s web site. We came to get along fairly well and we spent a few evenings eating pizza (in the office) and discussing his Java and whether it was good object-oriented design.

I recall one day he was telling me about how he disliked American Consumerism (whatever that means) and how cool it would be instead if people could only trade with each other. I asked him if he meant that everyone would be bartering with one another.

No, he told me, it would have to be more flexible than that. So I asked if his "trading" scheme wouldn’t lead to some type of markets. He admitted it would and added that the thought discouraged him. I was a little bemused by that.

A Hippie Discovers Economics, And You’ll Never Guess What Happens Next!
What if we all grew crops and traded with each other? And what if we discovered the science of economics?

A post from Facebook has been making the rounds, where I came across it by way of my Federalist colleague Scott Lincicome.

grow-food-not-lawns

Here’s the mind-blowing argument: “If we each grow a large crop of different food, we could all trade with each other and eat for practically free.”

Where to start?

Well, for one thing, growing your own food isn’t exactly “free,” not even “practically free.” As anyone who has his own vegetable garden knows, it requires seeds, fertilizer, irrigation, weeding, protection from insects and birds and animals, and a lot of work. The cost may not all be measured in monetary terms, but it isn’t free. In fact, it’s notoriously easy for a vegetable garden to end up costing more money than it saves, which is why most of us do it just as a hobby. […]

But let’s not pick this apart. Let’s take the idea seriously. Hey, what if we all became small farmers and traded with each other? As they say on the Internet: you’ll never guess what happened next.

Maybe instead of everybody growing the same things, we could all produce what we’re best at and trade with others for what we need. We could come up with a catchy name for this, like “division of labor.” And we would need somewhere to exchange these goods with each other, which we could call a “market.”

Don’t Stop There!

Maybe we could get even more specialized. Some people could devote themselves just to growing young plants in greenhouses in the spring for others to plant when the weather gets warmer. Or they could provide seeds for other people to use, or breed hybrids with better yields or other desirable characteristics.

And maybe some crops would grow better in different areas, or at different seasons. I’ll bet you can’t grow blackberries in the middle of winter, but there are other areas of the country, or of the world, where these things still grow even when they won’t grow in your front yard. Maybe you could trade with people who live in those places.

Still, crops come ripe at different times, so maybe we need a system where I can trade my spring harvest of peas for somebody else’s fall harvest of pumpkins. Maybe we could write this all down on little pieces of paper which we pass between us to make trades. Has anybody ever thought of that? […]

It’s a tough problem to design a replacement for a system which generates an enormous bounty but which still doesn’t give the results you like. It’s an attitude I hear from Senator Sanders when he says things like, "You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country."

I take Sen. Sanders claim about hungry children as just more political hyperbole. Here’s a fact-checking article about how measures of "food security" have replaced measures of going hungry because, basically, there aren’t many children who actually go hungry. These days, there are just varying amounts of food in the pantry.

I won’t say that children never go hungry or are never poorly nourished but I suspect that when they do (or are), it’s not for lack of food but instead for lack of responsible parents or care-givers.

I’m not sure what the relationship is between "too many" choices in the consumer market and the number of irresponsible parents. I don’t think Sen. Sanders knows that relationship either.

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Thanks to the Hand

November 25, 2015

Jeff G sends a link to this column by Jeff Jacoby that appeared in The Boston Globe in 2003. RTWT. My emphasis (and Jeff G’s) below.

As I like to put it (or tl;dr) "Don’t bite the Invisible Hand that feeds you."

Giving thanks for the ‘invisible hand’

GRATITUDE TO THE ALMIGHTY is the theme of Thanksgiving, and has been ever since the Pilgrims of Plymouth brought in their first good harvest. “Instead of famine, now God gave them plenty,” their leader, Governor William Bradford, later wrote, “and the face of things was changed to the rejoicing of the hearts of many, for which they blessed God.”

The annual presidential Thanksgiving proclamations always invoke God, and they frequently itemize the blessings for which we owe Him thanks. […]

Today, in millions of homes across the nation, God will be thanked for many gifts — for the feast on the table and the company of loved ones, for health and good fortune in the year gone by, for peace at home in a time of war, for the incalculable privilege of having been born — or having become — American.

But it probably won’t occur to too many of us to give thanks for the fact that the local supermarket had plenty of turkey for sale this week. Even the devout aren’t likely to thank God for airline schedules that made it possible for some of those loved ones to fly home for Thanksgiving. Or for the arrival of Master and Commander at the local movie theater in time for the holiday weekend. Or for that great cranberry-apple pie recipe in the food section of the newspaper. […]

And yet, isn’t there something wondrous — something almost inexplicable — in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers? […]

No turkey czar sat in a command post somewhere, consulting a master plan and issuing orders. […]

Adam Smith called it “the invisible hand” — the mysterious power that leads innumerable people, each working for his own gain, to promote ends that benefit many. Out of the seeming chaos of millions of uncoordinated private transactions emerges the spontaneous order of the market. […] No dictator, no bureaucracy, no supercomputer plans it in advance. Indeed, the more an economy is planned, the more it is plagued by shortages, dislocation, and failure. […]

Mr. Jacoby’s opinion is backed by the reactions of Russian visitors to the US during the Cold War. The snippet below comes from Back in the USSR (in the Winter 2004 edition of Boston College Magazine). My emphasis again.

For Russians, most of whom have a heritage in agriculture, such a visit exposed the shortcomings of Soviet agriculture and by extension the Soviet system. “Why do we live as we do?” was a question many of them ended up asking, according to a veteran State Department interpreter who has escorted many Russians around the country:

Their minds were blown by being here. They could not believe there could be such abundance and comfort. Many of them would even disparage things here. “Excess, who needs it,” they would say. However, you could see that they did not believe what they were saying. When they returned home, in their own minds and in the privacy of their own trusted little circle of family and friends, they would tell the truth to themselves or to others.

ACCOUNTS OF Soviets’ astonishment on visiting their first American supermarket are legion, from the first Russian students who came to the United States in the late 1950s and early 1960s, to the future Russian president Boris Yeltsin in 1989.


Thank goodness for free markets.

WonTheLottery

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Los taxistas y los médicos

November 9, 2015

In the general sense, this applies equally well to Venezuela. (Even though I don’t know the salary comparisons for cabbies and doctors there.)

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She’s been there and done that

September 2, 2015

Here’s a recent opinion piece in The Washington Post by Mirta Gutierrez.

IMO, a $15 minimum wage is great news for automation companies. But…

A $15 minimum wage would hurt entry-level workers

Living in poverty in Argentina was not easy. Like many Argentinians trapped at the bottom of the economy, I was determined to make something of myself. I pursued a degree in accounting, but I quickly discovered that even with an education in my country, I was on a path to a dead end. […]

After arriving in Washington, I learned at a job fair that an Angelo & Maxie’s restaurant was opening and hiring 300 people. I met the chef, and in very broken English I asked for an opportunity to prove myself. He agreed, reluctantly, to hire me as a dishwasher at $5.50 an hour. It was 2001. I watched everything, took mental notes and looked for every opportunity to try something new in the back of the house. […]

When Angelo & Maxie’s closed, I went to work at District ChopHouse near Verizon Center. In nine years, the general manager and executive chef taught me everything he knew about the restaurant business. Then, in a bittersweet moment, he told me, “It’s time for you to fly.”

I was hired as the executive sous chef at Rosa Mexicano, where I was able to apply the skills that I had learned over the years. Before long, restaurant executive Spike Mendelsohn asked for my help with kitchen management and bookkeeping for one of his restaurant concepts, Good Stuff Eatery, on Capitol Hill. Soon, I was recruited to be executive chef at Tortilla Coast, where I am today.

I am an immigrant who started at the bottom with nothing. I became an executive chef who understands the kitchen and an accountant who understands the numbers of running a business. […]

As a poor immigrant, would a $15 minimum wage have helped me? Absolutely not. No restaurant owner would hire someone without experience, skills or English at such a high wage. I would never have made it to that first rung on the career ladder. […]

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Intellectuals and capitalism

August 18, 2015

I think Mr Mackey makes a good point early in this clip about what amounts to snobbery, in a word. (After the mid-point, he gets off onto other topics.)

A free market is the most reliable way to let the next mad genius succeed.


Glenn Reynolds had a good op-ed on a related topic this week.

Fast moving bad news builds prosperity

Nassim Nicholas Taleb recently tweeted: “The free-market system lets you notice the flaws and hides its benefits. All other systems hide the flaws and show the benefits.”

This drew a response: “The most valuable property of the price mechanism is as a reliable mechanism for delivering bad news.” These two statements explain a lot about why socialist systems fail pretty much everywhere but get pretty good press, while capitalism has delivered truly astounding results but is constantly besieged by detractors.

It is simple really: When the “Great Leader” builds a new stadium, everyone sees the construction. Nobody sees the more worthwhile projects that didn’t get done instead because the capital was diverted, through taxation, from less visible but possibly more worthwhile ventures — a thousand tailor shops, bakeries or physician offices.

At the same time, markets deliver the bad news whether you want to hear it or not, but delivering the bad news is not a sign of failure, it is a characteristic of systems that work. When you stub your toe, the neurons in between your foot and your head don’t try to figure out ways not to send the news to your brain. If they did, you’d trip a lot more often. Likewise, in a market, bad decisions show up pretty rapidly: Build a car that nobody wants, and you’re stuck with a bunch of expensive unsold cars; invest in new technologies that don’t work, and you lose a lot of money and have nothing to show for it. These painful consequences mean that people are pretty careful in their investments, at least so long as they’re investing their own money. […]

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Slum dog millionaires

July 23, 2015

Here’s the opening of an interesting article at Cato at Liberty. RTWT.

How Capitalism Is Undermining the Indian Caste System

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.

As an aside, my brother-in-law’s wife was born in Kolkata (Calcutta). She told us a story once about her parents’ household and mentioned in passing that the family’s servants washed their car by hauling water in buckets.

It made my back ache to think of it. I’m hoping those servants have better things to do these days than schlepping water to wash cars.

But getting back to castes and feudalism, I’ve always been fond of this rhetorical question: When Adam delved and Eve span, who was then the gentleman?

That applies as well to Eve’s children in India as it does to her children everywhere else.

Anyone claiming privileges because of "breeding" or "family line" deserves a poke in the nose, IMO. When you think about those claims, they’re just another form of racism — or maybe "sub-racism", which is a concept that’s even more ridiculous.

Now that I think of it, claims like those make a very good reductio ad absurdum argument against racism.


Update: (8/18/15)

I just came across this trailer for a documentary that will appear on public television soon.

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