“It’s not the equality or inequality; it’s the possibility of earning a high rate of return… In a world with genuine opportunities you’ll create billionaires. In a world without it, the people at the bottom will remain where they were, there will be nobody at the top to subsidize them, so everybody will be worse off.”
From his recent NPR interview.
At small group last night, we got talking about prosperity gospel preachers (in particular a rather famous gentleman from Houston), and I came up with a rather humorous allegorical image. I pictured a giant billboard along a highway that says “A relationship with God and all the blessings that come with it – Exit Now”. At the base of the sign sit a group of people, and their leader, with impeccable hair, is expounding to them all the wonderful attributes of the billboard.
I’m about to start some posts on ideas and issues that I believe are very important in life. These will range from faith and knowledge to economics and politics (big surprise there, huh?). I realize I’ve been far too narrow in the things I’ve been reading, studying, and writing about. I hope to update these as I learn, adding references and research; I even installed the NetBlog plugin to make it look more scholarly.
My desire in doing this is two-fold: first, to catalog my own experience and discoveries and leave markers along the path so I can see where I’ve been and where I’ve grown; second, that it may help someone discover some truth. I don’t claim to know all truth, but I believe in Truth, that there is one Truth and a way to this Truth that leads to life and freedom.
What to expect? My writing will probably be rife with quotes from Scripture, because I believe it is absolutely the most important book of all time, for all peoples. This is not something I accept blindly, and I hope to adequately lay out the reasons for faith. In addition, I plan to share some of my questions, doubts, and struggles. I hope that for the most part my train of thought will be consistent, but I admit that’s not always how my mind operates, so there may be some wandering and interjection of related smaller topics. I’ll probably spin some of those off into their own posts.
This is something I really look forward to doing, though the daunting part at the moment is methodically collecting my thoughts and consistently adding resources as I come upon them. If you read any of these posts, or even attempt to follow them as they come, I hope you’ll let me know, as it would be a great incentive for me to concentrate efforts on this endeavor.
By the way, these will be filed under the “Big Questions” category.
A paper on young children and math abilities.
The Guardian has this story:
China appears on track to forge a modern military by 2020, a rapid buildup that could be potentially destabilising to the Asia-Pacific region, the Pentagon has said.
So let me get this straight: a country that’s almost a decade away from being even “modern” is according to many already a threat to our national security; and competition (from our biggest trading partner, no less) to absolute U.S. dominance in far-flung seas is “destabilizing”.
I find it interesting that the U.S. government’s encroachment into foreign affairs, from France to Japan and Mexico to Chile, preceded its expansion into private, domestic matters. Theodore Roosevelt and Woodrow Wilson really started us down the path of global military dominance, even if their intentions were not so ignoble as the outcome. Yet it was not until a generation later that the federal government took more interest in domestic affairs that had until that point been left to local and state governments or – just imagine! – didn’t involve a government at all – things like business regulations and care for the elderly.
If we want the government out of our lives, we should start by stripping away our national leaders’ influence over world affairs. After all, how can a government that sees itself as the leader (or perhaps ruler) of the free world not feel it has the wisdom to direct our day-to-day lives?
On Techdirt, this article:
Unfortunately, the industry is pretending that it has everything to do with that. What they’re really looking for are laws not to build back up the gate of copyright — but to take us back into history, whereby the walls of limitations are back up and people have to go through the gates. That era is over. But what’s truly amazing is that we still think the gatekeepers matter here. They don’t.
Made me think of this video
A PDF with some very good graphs on price levels and inflation going back to before the War for Independence. I thought the logarithmic graph (page 2) was especially enlightening. The linear plot of price levels looks roughly exponential, so you might expect that inflation has been roughly the same percentage every year, but the logarithmic plot shows that after the creation of the Federal Reserve inflation has, yes, been nearly constant – with a downward elbow in the early 1980′s – but the average rate has been significantly higher than the historical average prior to 1914.
A couple of paragraphs that stood out to me from Ludwig von Mises’ article, “Inequality of Wealth and Incomes“:
People can consume only what has been produced. The great problem of our age is precisely this: Who should determine what is to be produced and consumed, the people or the state, the consumers themselves or a paternal government? If one decides in favor of the consumers, one chooses the market economy. If one decides in favor of the government, one chooses socialism. There is no third solution. The determination of the purpose for which each unit of the various factors of production is to be employed cannot be divided….
There is no use in fooling ourselves. Our present taxation policy is headed toward a complete equalization of wealth and incomes and thereby toward socialism. This trend can be reversed only by the cognition of the role that profit and loss and the resulting inequality of wealth and incomes play in the operation of the market economy. People must learn that the accumulation of wealth by the successful conduct of business is the corollary of the improvement of their own standard of living and vice versa. They must realize that bigness in business is not an evil, but both the cause and effect of the fact that they themselves enjoy all those amenities whose enjoyment is called the “American way of life.”
The whole article is not very long. I’d urge reading it. It is as relevant today as it was 56 years ago.
For my deregulation-hating friends, from Washington Post via David Boaz at Cato:
The freedom of individual pursuit — as long as one stays away from politics — is one undoubted achievement of Russia’s post-communist development. Putin’s government reinstated the Soviet-style political monopoly and uncontested governance but did not encroach on individual rights. The constraints that existed in the USSR on entrepreneurship, artistic or academic self-fulfillment and lifestyle were not brought back. If one views the events of August 1991 as people rising in defense of freedom against a communist comeback, today’s individual freedoms should be seen as a goal fulfilled.
Another post-communist achievement is the rise of a consumer society. Although a sizable number of Russians still have low incomes, never has the proportion of those who enjoy reasonable wealth and comfort been so high. During Soviet times, frustrated consumers faced chronic shortages and ubiquitous lines; after August 1991 and the adoption of a market economy, this cause of discontent was eliminated.
What I find remarkably… stupid, to put it bluntly, about Keynesian economics is that it only looks at consumption. “Aggregate demand”, in any discussion or explanation I’ve ever heard, is only focused on consumption of some sort, and in popular economics usually government consumption. Even so-called investment is really more of consumption, especially because most governments don’t follow the theoretical contraction during market booms and save. Today, saving is vilified. The central monetary authorities implement policies that encourage spending, especially spending on politically lucrative things like green energy and housing, by falsifying the return on those investments through inflation and wealth transfers.
The “capital” in capitalism is savings. The whole point of investing is to forego consumption in order to improve productivity and future gains in overall wealth. Keynesianism is not capitalism. Capitalism is future-minded. Keynes tells us to look only at the present.
I have a real problem with government spending because of the perversion of political incentives. In private investment, the incentive is to get a return – that is, to spend in a way such that the output is of greater value than the input. This is the foundation for creating wealth. People and projects that do this the best produce the highest returns and attract competition for capital. So in investment there are dual competing yet cooperating interests: demand for higher returns by those with capital and demand for lower premiums by those seeking capital. The person seeking capital wants the lowest premium (interest rate) so he can keep more of the value he produces and become himself a supplier of capital. The person with capital to invest wants the highest premium so he has more capital to turn around and reinvest. These examples are strictly monetary, and of course there is subjective value, especially in consumables. One may consider philanthropy a greater return than capital investment, and that is a subjective determination.
In contrast, the political incentive in a democracy or representative government is not to increase capital or wealth, but to increase popularity and the corresponding probability of retaining or increasing political power. In theory, popularity can be garnered by increasing overall capital, but in practice, as we have seen, it is easier simply to move wealth and buy votes. However, this wealth transfer usually decreases the overall wealth because of the overhead of enforcement – the government’s efforts are spent on transferring capital rather than productively increasing it.
Now, can some public goods that the government monopolizes be a positive return on investment? It’s possible, but hard to know because those public goods are rarely market priced. The price system is the only sure way to know just how much value people assign to any good or service, objective or subjective. If we want to know if roads and parks have a negative or positive net return, we should charge for them and see what the price market would bear. The argument to this is that the poor will not be able to use them if the price is too high. I have a two-part rebuttal to this. The first is that we shouldn’t assume the price would be so high as to exclude a meaningful portion of the population. Almost everyone can afford to go to movies or eat at restaurants, even if only occasionally, and those are not provided by the government. Secondly, even if the price point is too high, it could be made a two-tiered program where those who demonstrate need get reduced prices, and everyone else pays slightly more. Here you still have a price system, but those in the upper tier are also judging the subjective value of knowing that they are helping the poor by paying slightly more.
