Archive for the ‘Economics’ Category
“There are people who think that plunder loses all its immorality as soon as it becomes legal. Personally, I cannot imagine a more alarming situation. However that may be, one thing is certain, and that is that the economic results are the same…
Moral: To use force is not to produce, but to destroy.” – Frédéric Bastiat
Found via Coyote Blog
Could stand to have a little more of the history, but all around a great video.
I meant to blog this when it first popped up in my RSS feed, but the Fighting Aging blog had a post awhile back relating aging to the Broken Window Fallacy. In short, one argument against longevity research is that longer healthy lives will impede opportunities for the young. Quote:
What is the greatest ongoing disaster, the cause of the greatest destruction? The answer is degenerative aging. Aging destroys human capital: knowledge, skills, talents, the ability to work, the ability to create. It does so at a ferocious rate, a hundred thousand lives a day, and all that they might have accomplished if not struck down. If translated to a dollar amount, the cost is staggering – even shifts in life expectancy have gargantuan value. And why shouldn’t they? Time spent alive and active is the basis of all wealth.
It is unfortunate, but many people advocate for the continuation of aging, for relinquishment of efforts to build medicines to extend health life. Among these are people who welcome aging and death because to their eyes it gives a young person the chance to step into a role vacated by an older person. This is another form of the broken window, however: the advocate for aging looks only at the young person, and dismisses what the older person might have done were they not removed from the picture by death or disability. So too, any apologism for aging based on clearing out the established figures because it provides a greater opportunity for younger people to repeat the same steps, follow the same paths, relearn the same skills, redo the same tasks … these arguments are the broken window writ large.
I think this response is very compelling, but I wanted to highlight one other way in which this pro-aging argument is fallacious. Namely, in saying that aging and death are good because they create opportunities for the young, proponents are arguing that the economy is in some sense a fixed-sized and inflexible resource and that a job possessed by one person is one less job available for everyone else. This simply isn’t the case. Economies are highly metamorphic and flexible and grow to accommodate and use new technologies and resources that become available to them. Curing aging would be a huge economic boon, freeing up resources currently spent on medical care and job retraining, and allowing people to build careers and develop skills unimaginable in the current economy. Such a massive shift in resources and the drastic expansion of people’s time horizons will have huge economic effects, and the economies that result from such a change certainly won’t look anything like the ones we have today.
So to argue that the labor economy we have today can’t survive the end of aging misses the point. Our economy will evolve and grow in response to end aging, producing one that reflects economic patterns more conducive to a world in which people get more than forty productive years. There’s no reason to think that economies in an ageless world will look anything like the economies we have today.
To be honest, I find this video mawkish and obvious. But I think that its mawkishness is intentional homage and its obviousness is because I’m a member of the choir to which it’s preaching.
But regardless of its artistic merits, the video’s message (that Capitalism has real, positive impacts in our lives) is an important one. It serves as a necessary counterpoint to the principled, moral arguments for Capitalism and the more abstract disagreements about freedom vs. security vs. equality vs. etc. People like me, who can get tediously pedantic and philosophical at times, would do well to keep in mind the practical benefits of Capitalism when arguing its merits, and I think this video does a good job of pithily summarizing the concrete value that Capitalism has added to our lives.
After all, we live in a world where a significant number of people will say sincerely and in good faith:
“We don’t want freedom any more … We want regulation. We want control“
As easy as it would be to write such people off as idiots or lunatics, a number of them simply have different values and/or a deep ignorance about the practical consequences of the diminution of liberty. We probably won’t win over those that have moral objections to liberty or who subordinate it on principle to other Goods. After all, there are those who would prefer a world where everyone’s chains chafed equally to a world where everyone prospered, but some prospered more.
But what we can do is rehabilitate freedom for those who simply don’t understand the practical benefits that it brings.
After all, Capitalism is just the term we use for freedom in economic exchange. And so any argument against Capitalism is an argument against freedom, and vice versa. So in the face of outright hostility to Freedom, it can be helpful to highlight the real tangible costs of lost liberty.
Helping people to understand the real, concrete benefits of economic freedom can help win minds where abstract philosophizing can’t.
“Marx’s fundamental error was to assume that there was such a thing as ‘capitalism’, that is to say that normal economic relations were a specific state of being, out of which humanity could escape by adopting a rather vague alternative known as ‘socialism’. I always object, these days, to the very idea of ‘capitalism’. It treats remorseless reality as a dogmatic choice. You might as well call weather ‘ rainism and sunism’, as if we had some way of creating and dwelling in an alternative atmosphere which dispensed with the earth’s climate as it is, and instead provided perpetual delight, warmth, fertility, plenty and joy (details unspecified, to be supplied after you’ve handed over state power to me).”
Link.
Hear, hear!
Another from the brilliant Daniel Hannan on the legacy of pluralism in Europe and how the EU betrays exactly the decentralized competition that made Europe great in the first place.
Daniel Hannan is one of the greatest living rhetoricians and he’s in top form here. He’s also one of the most sensible and effective opponents for national independence in Europe.
The blog yields the floor to Mr. Daniel Hannan, MEP:
Peter Risdon has an excellent post from a few years back about poverty, ownership, and self reliance. It’s a great post and it does an excellent job of highlighting a fact that a lot of people miss, which is that modern poverty is primarily caused by bad memes.1 Some of these memes are personal mental traits, some are social or group traits, but ultimately it is these dysfunctional ideas that are at the root of almost all poverty in Western countries. Which memes they are specifically (and I have my personal theory) is an important debate, but outside the scope of this post. It doesn’t matter what the bad memes are exactly, the fact is that poverty as we know it today will not change until those memes get replaced by better ones.
A natural consequence of this fact is that redistribution of wealth is not a solution to poverty. Taking money from the rich and giving it to the poor does not fix poverty any more than ingesting aspirin fixes a cold. It relieves some of the symptoms, and so it may be desirable in the short term, but it’s not going to resolve the underlying problem. In addition, as Risdon points out in his essay, redistributive welfare may actually foster bad memes. Implemented poorly, welfare encourages bad memes to go unresolved, to spread, or to get worse.2
Until we as a society start working to eliminate (through education and welfare reform) the bad ideas that keep people in poverty, we’re never going to appreciably reduce the suffering caused by poverty in America and the rest of the industrialized world. Again, whether you personally believe that the bad memes causing poverty are fundamentally personal (e.g. lack of future orientation or entitlement culture) or social (e.g. endemic greed, lack of charity, or interpersonal alienation) doesn’t really matter. The memes are the issue and wealth transfers won’t change those bad ideas one bit. Per Risdon, though, poorly-implemented welfare may actually worsen them, meaning that redistributive welfare might end up being not the cure for poverty, but the cause of it.
1 Two caveats to this post are that I’m not talking about poverty due to disability or mental illness, which are clearly not caused by bad memes. Also that poverty is relative and that poverty in the modern Western world is a different beast from poverty a century ago or poverty in the Third World.
2 For more evidence of this, see this CFP post showing that the War on Poverty correlated with the end of poverty numbers declining in America.
John Steele Gordon, in a lecture for Hillsdale College, gives a brief economic contrast between America’s economic origins and today:
AMERICA is still a young country. Only 405 years separate us from our ultimate origins at Jamestown, Virginia, while France and Britain are 1,000 years old, China 3,000, and Egypt 5,000. But what a 400 years it has been in the economic history of humankind!
When the Susan Constant, Discovery, and Godspeed dropped anchor in the James River in the spring of 1607, most human beings made their livings in agriculture and with the power of their own muscles. Life expectancy at birth was perhaps 30 years. Epidemics routinely swept through cities, carrying off old and young alike by the thousands. History tends to dwell on a small percent of the population at the top of the heap, but the vast mass of humanity lived lives that were, in the words of Thomas Hobbes, “nasty, brutish, and short.”
Today we live in a world far beyond the imagination of those who were alive in 1607. The poorest family in America today enjoys a standard of living that would have been considered opulent 400 years ago. And for most of this time it was the United States that was leading the world into the future, politically and economically.
He follows this up with 5 lessons about the economy and government’s role in it.
I think it does us all good once in awhile to rekindle our perspective by thinking about what life was like 100, 200, 400, n years ago. Liberty, Trade, Science, and Technology have dragged us (at times kicking and screaming) out of poverty and ignorance. And so long as we don’t fight them too hard, they’ll continue to do so into unimaginable prosperity in the future.
