Fun-Loving, Freedom-Loving
Oliver Kamm writes about education as a positive externality--public good--with regards to the recent legislation pass in the UK.#
According to Professor Nicholas Barr on Newsnight last week, the government's proposals on top-up fees would mean that one-sixth of the current cost of a degree would be borne by the student, if and when he was in a position to pay. To raise this money from general taxation when 82% of taxpayers are not graduates is an overt case of sectional interests triumphing over the public good. The only possible case for objecting to this reform, given that poor students do not pay tuition fees, is that education is - in economists' jargon - a public good that generates positive externalities. But as Alison Wolf, Professor of Education at London University, has pointed out, there is no clear link between student numbers and economic growth:
[W]ithin developed countries there is no clear link between student numbers and growth rates, GDP per head or productivity. For example, Switzerland, at the top of the income tree, has the lowest university participation rates in the OECD; while the US, also near the top, has the highest. Big increases in university numbers are at least as likely to follow periods of rapid growth as they are to precede them: Japan is a prime example.
So when a minister asserts that "We need more young people to go to university because it is an economic necessity," he or she would be hard pressed to back up the claim.
Philip Greenspun writes about Cuba and socialism.#
Flew from Miami to Panama City, Panama yesterday. While sitting in a comfortable leather seat aboard an American Airlines 757 and eating a filet mignon lunch, I looked down at Cuba. Supposedly they have everything to which we Americans aspire, i.e., universal health care and an excellent public education system. Yet Cubans are dirt poor and it is we ignorant and infirm residents of the United States who designed and built the 757. The comparison isn't quite fair but really you'd think that the Cubans, being so well educated and blessed with a large and fertile country, would have done better for themselves. Perhaps politics do matter, a sobering thought as Election 2004 sweeps across the U.S.
What's the quote? "The tragedy of capitalism is that people do not share in the happiness, and the virtue of socialism is that people share in misery." Or something?
Good Health Care exists BECAUSE it is not for everyone.
Alex Tabarrok writes about Patent Theory versus Patent Law.#
According to the economic theory of patents, patents are needed so that pioneer firms have time to recoup their sunk costs of research and development. The key element in the economic theory is that pioneer firms have large, hard to recoup, sunk costs. Yet patents are not awarded on the basis of a firm's sunk costs. Patent law says the subject of a patent should be novel, useful and non-obvious but nowhere does it say the original idea should have required extensive costs of research and development as the economic theory would predict.
François-René Rideau, what do you think about this? (Note: I haven't gotten to read Patents Are An Economic Absurdity yet so I'm not sure if you are referring to the theory or the law.)
Brad Edmonds proclaims he doesn't "owe the Military anything."#
If the military is supposed to be defending our freedoms in the US, why is all the action in other countries? The only foreign action the US has seen is Pearl Harbor, into which the Japanese were goaded by FDR with his full knowledge and intent, as has been declassified only recently; and 9/11, which was most plausibly retaliation for 40 years of bombing women and children in the Middle East. I would be more willing to believe that the military was about defending our freedoms if they would limit themselves to defending our borders, and if they would do so successfully. Remember, on 9/11, the military couldn't even defend the Pentagon.
It is much more plausible that the military is merely a tool for Congress and the White House to enact their foreign-policy desires. "Defending American interests abroad" explains the last 200 years far better than "defending freedoms at home." [...]
Second question: If the military has done such a great job of defending our freedoms at home, why do we need a Department of Homeland Security? Wasn't the Department of Defense supposed to provide defense? Instead, the Department of Fatherland Defense is an open, if unwitting, admission that the Department of Defense is in reality the Department of Offense, going abroad to force Congressional and White House foreign policy on whomever they want, whether the foreign party is willing or not.
Butler Shaffer write about unchaining liberty and being a free individual.#
It should be evident that a system of private property fosters responsibility. If I, alone, control my actions, I, alone, am responsible for what I do. This is not a moral proposition, but a causal one, in much the same way that we can say a tornado was responsible for destroying Uncle Charlie's barn. But to be responsible is to be accountable, particularly to the harshest critic we face in life: ourselves.
Most of us fear this sense of responsibility, which is why individual liberty is such a troublesome proposition to so many people. Walter Kaufmann has written of "decidophobia," the fear of making decisions. If we delude ourselves that we have no control over our lives, then we cannot be held responsible. And if we are not responsible for what we do — even to ourselves — then we must be the victims of other people's decision-making. Is it any wonder that men and women who, having smoked cigarettes for fifty years and developed lung cancer, now want to sue the tobacco companies for the consequences of their own actions, or that alcoholics seek damages from distillers for their cirrhosis of the liver? A recent news story told of a man who brought suit against his local cable television company for turning himself and his family into television addicts! Do you not see the connection between the continuing diminution, by the state, of respect for privately-owned property, and the rise of the "victimization" industry?
François-René Rideau explains why, economically, all politics is completely zero-sum.#
Of course, in this con game of resource redistribution, there will be net winners and net losers; we already established that early on. In a way, the political market is a huge lottery -- and that makes it all the more ironic that once again, collectivists will accuse the free market of being a lottery, whereas it isn't and their system is one. But most importantly, the game of Politics is a negative-sum game the total cost of which to society is directly measured by the total visible benefits to some. To any government spending corresponds to a global waste to society exactly equivalent in value to said spending, except for a small part that profits but the politicians. That's the famous rule of the double incidence of the loss, which is well known since the nineteenth century as applied to protectionism, but that applies just as well to any form of government welfare. We thus see that the One Lesson of Political Economics, that which is seen and that which is not seen, applies to every and all political intervention. And this is a praxeological law, that is valid even though you may fail to imagine where the resources are being wasted in a particular intervention.