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« Imam Jacques Chirac | Main | Final four finally gone »

March 26, 2006

Comments

Richard Landes

interesting post. when you made the remark at the meeting, i was thinking something along the line of what i say to my students: every day everyone alive needs to eat and find shelter. every society has to provide the opportunity for everyone to fulfill at least minimally those needs. but this is more complex and sophisticated.

on one level, what you're arguing is that human choices are much too complex to try and control. on the other hand, can't govt. influence those choices? for example, SUVs are monsters; they guzzle gas, they dwarf sane cars; they wear the road down faster. can't the govt. tax them heavily to discourage that choice?

Tom Bowler

You're absolutely right. What I'm arguing, and what von Mises taught, is that those choices are way too complex to be controlled in a way that benefits anybody but the select few. There's some truth to the old saying that he who governs best governs least, because of those inevitable unintended consequences.

You made the point in that discussion about the importance of having information to be able to make decisions, but I think you were speaking of information from media sources -- about the accurate reporting of events. Of course we both know what a huge importance that is, but in economic terms, prices are a source of information. Prices convey the results of millions of those economic decisions that are way too complex for anybody to control.

And yes, government influences those decisions, through tax incentives mostly. The SUV argument is a great example, because there is always somebody talking about putting a luxury tax on them. But the point I would make is that you should question the wisdom of it. Maybe it's a good idea, but I'd argue that it's not as simple a question as you might think.

It makes for a wonderful stand off. On the one hand information from the mainstream media is aimed at convincing everyone that the world as we know it is about to end -- SUVs are pumping out the CO2 and heating up the atmosphere. On the other, we have information from the markets which are constantly adjusting to consumer demands, and which don't bother to ask whether or not the world is ending but somehow seem to take it into consideration. For example, we already have hybrid SUVs in the showroom, and it's not unreasonable to expect we'll have hydrogen fuel cell powered SUVs in the future.

The cynical side of me is willing to bet, when we finally get our hydrogen SUVs (that will do zero to sixty in three seconds flat) somebody will dream up some new threat to human existence, and they'll be telling us there is some particular thing we're doing that we have to stop doing or the world will end. I suppose if I thought about it for a while I could think of one of these tax incentives that is broadly beneficial, but except for charitable contributions, I can't. Because the grandiose plans always seem to benefit the connected, they deserve a lot of scrutiny. Microeconomics is an example of that scrutiny.

Sissy Willis

Totally awesome, Tom. Too bad microeconomics isn't a core requirement at our so-called institutions of higher learning, but the competition is stiff, what all those identity-group squeaky wheels.

You might be interested in this not-unrelated post of mine from last year -- Bloggers are "cracking, popping, drilling and peeling their victims open" -- where I noted:

Leftists have become soft and flabby in their thinking over the last 20, 30 or more years because their fellow travelers in the mainstream media -- supposed to be keeping them honest -- have been giving them a free ride, even as thinkers of the right, not enjoying such reflexive support, have been honing our debating and intellectual survival skills. That leaves the left soft and lazy and the right battle ready. Enter the bloggers, stage right. As paleontologist Dr. Vermeij might say, "It isn't going to be pretty." Googling the good doctor, we were thrilled to see his field studies of animal evolution had led him to very much the same place Thomas Sowell has come to in his studies of economics. Re Vermeij's new book, Nature: An Economic History, from the Princeton University Press:

From humans to hermit crabs to deep water plankton, all living things compete for locally limiting resources. This universal truth unites three bodies of thought -- economics, evolution and history -- that have developed largely in mutual isolation. Here, Geerat Vermeij undertakes a groundbreaking and provocative exploration of the facts and theories of biology, economics and geology to show how processes common to all economic systems -- competition, cooperation, adaptation and feedback -- govern evolution as surely as they do the human economy, and how historical patterns in both human and nonhuman evolution follow from this principle.

The leftist utopian dream was doomed from the start because it denied the economic logic of nature and human nature. The long-repressed voices of opposition in a free society, now ringing loud and clear through talk radio, cable TV and -- of course -- the blogosphere, will force the left to rethink its arguments or go extinct.

Solomon

I had economics as a Business undergrad, but sadly remember it mostly as some very boring charts, graphs and formulae, not this more interesting take away material. Well done, and a very good intro/overview of the Libertarian position isn't it?

Tom Bowler

Thanks, Sissy. And thanks for the link to that post of yours. One of the lessons of microeconomics that can be applied to non-economic situations is that people tend to act in what they believe is their self interest. This leads me into my half baked theory on the evolving relationship between liberal politicians and the liberal media.

Totalitarian regimes present and past notoriously exerted control over the press, but since there is no such control in America, the press turns out to be a good place for the totalitarian personalities among us to go where they can have some control over the rest of us. The relationship that has evolved between the media and governing class is one in which aspiring politicians are winnowed out for failing to hew to the media approved positions, while those who get elected are generally those who see that it's in their self interest to say agreeable things about the media's pet issues. Some are true believers, but others are just willing to mold their positions to whatever will get them into office.

That may partly explain the pathetic state of the Democratic party. As you said in your post, they've gotten a free ride, but on top of that look at the "natural selection" that gets them into office to begin with. Fortunately, along comes the blogosphere to screw up their evolutionary process.

Sol, you must be remembering your macroeconomics course which was the invention of John Maynard Keynes, hero of 1950s and 60s (and I guess even present day) liberals because of his theory that government spending was a wonderful tool for spurring the economy. Macro deals with all those wonderful things government can do for the good of the economy. I had a macroeconomics instructor that thought price controls were a good thing. Sheesh!

Sissy Willis

Hey, Tom . . . I was just reviewing the wonderful blogs of our Sub Rosa group in preparation for tonight's gathering, and as I reread this truly outstanding post of yours, my forgetful mind was saying "I must send Tom a link to my Bloggers are cracking, popping, drilling and peeling their victims open post. :)

Tom Bowler

Thanks Sissy. Please do send the link. I'm sorry I missed our gathering last Thursday, and I'll do my very best to be in attendance at the next one. I anticipate lively discussion with great group of people.

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