Saturday, March 31, 2007

Farm Subsidies Breakdown

The Environmental Working Group publishes the Farm Subsidy Database which tracks a ton of information on farm subsidies, especially American ones. Here is an interesting break down of spending between 1995-2005 by subsidy program. Unsurprisingly, corn is the most subsidized crop in the US. The breakdown of corn subsidies by year (here) shows that corn subsidies are actually rather volatile, and they have recently increased significantly. In 2002 corn subsidies totaled almost 2 billion dollars, but by 2005 they totaled almost 10 billion. Large corn subsidies are one of the main reasons why ethanol is so popular in the US. I would be very interested in seeing the size of the subsidies by crop relative to the amount of crop grown, to get a sense of the relative subsidization.

Will Gonzales Resign?

The firing scandal appears to be getting worse for attorney general Gonzales; some republican law makers are now calling for his resignation (more here). Gonzales is scheduled to testify before congress in mid April. It will be very interesting to see the content of his testimony. I get the impression that if things continue as they are, Gonzales will resign.

As much as I hate Gonzales, I am not sure if I will be glad if he steps down, because I am afraid Bush will appoint someone even worse than Gonzales. When Ashcroft resigned I was happy because I didn't like him, but he was succeeded by Gonzales, who has been undeniably worse.

Friday, March 30, 2007

Trade Sanctions Against China

The federal government announced today that it will be imposing economic sanctions on Chinese paper imports to offset the subsidies that China gives to paper makers. China has been classified as a 'non-market' economy for 23 years and therefore not subject to sanctions, but this action reverses that policy (full story).
It is somewhat disheartening, but not surprising, to see the government give in to obvious special interests. If the Chinese government wants to subsidize part of our paper consumption, more power to them. It will be interesting to see how much trade protection against China the US puts up in the near future. I hope it is not much.

Wednesday, March 28, 2007

Efficient Spiritual Environmentalism

Some time ago, I asked my friend if the environment has inherent value (value independent from human good; this was a loaded question), and in response he said that he didn't think it had any inherent value, but that the environment is valuable because humans have an inherent spiritual attachment to the earth. I had not considered this before, but I have to admit it is possible that a lot of people feel this way. I doubt that spiritual attachment to the earth is inherent, but it is certainly possible that many people do have such an attachment. I have to hope that this is not the case because I can't imagine any sort of public good more difficult to measure and legislate for than a spiritual good. Coupled with the difficulties in measuring environmental effects and estimating their costs, the problem of achieving relatively efficient behavior becomes almost intractable. Think about the problems we have in measuring global warming and the costs of its effects and then imagine how impossible the problem would be if we also had to measure how much people valued the environment itself.

Tuesday, March 27, 2007

Again on the Legitimacy of Government

In response to an earlier post about the moral legitimacy of governments John the Other wrote:
I think a government gains legitimacy by the fact that people would prefer it to the feudalism and/or Iraq-situation that would result if it went away.

One thought that Hussein's government was terrible and illegitimate, but seeing what happened to Iraq since his departure, one is at least much less certain.
While I nominally agree with this, I would like to expand a little bit. First, I think it is important to stress that the preference for government over no government is individual not collective. For a government to be morally legitimate, it must respect the rights of everyone on an individual basis. Second, for a government to be morally legitimate, the people in it need to be able to choose between government and no government, not just prefer it. Taking these two points into account, it is clear the Hussein's government was not morally legitimate because the people he killed would no doubt prefer no government to being dead, but they had no choice to opt out. This is not to say I support the Iraq war; the war was obviously not well planned, it continues to be expensive, and it has probably caused net harm to the people in Iraq.

Monday, March 26, 2007

Libertarianism Makes You Stupid

I like Seth Finkelstein's essay "Libertarianism Makes You Stupid" about how ... well, how libertarianism makes you stupid. The essay is well written and pretty funny because it's peppered with silly quotes from net libertarians.

Obviously I disagree with his main thesis, but I certainly agree with many of Finkelstein's criticisms of libertarianism. For example, I'm not a big fan of the tax-is-theft crowd, and their refusal to recognize the existence of public goods or that government can be a voluntary institution. I think that a lot of libertarians engage in a rather shallow analysis of anything government related.

I also like this comparative essay I found some time ago comparing economics to religion because it's creative, self-righteous and totally wrong all at the same time.

Friday, March 23, 2007

School Vouchers in Sweden

I was very interested to learn that a school voucher system was been tried very successfully in Sweden (one article on it). The system was apparently very quickly accepted and has lead to marked improvements in education quality and both teacher and student satisfaction. I am trying to figure out why this idea isn't supported more in America.

Wednesday, March 21, 2007

Can Government Be Legitimate?

I ran across a great comment thread (here) on an old post at EconLog. The commenters got to discussing the ultimate legitimacy of government, and one post in particular by "James" got my attention. James beautifully captures the good arguments against the legitimacy of the state. He writes:
One reason to reject the concept of legitimate government is that there have been no good arguments to believe that one exists. Philosophers, in their attempts at justifying various states, have defined government in terms of what a government is entitled to do, or in terms of a set of positive attributes. To move from the first approach to claims of legitimacy is to presuppose one's intended conclusion. To move from the second approach to claims of legitimacy becomes an argument for any agency having that set of attributes to be entitled to engage in those behaviors reserved to governments, but the defenders of the state refuse to accept this conclusion.
Another is that even if there are legitimate governments, there is no way to verify that an agency claiming to be a legitimate government really is one. As an empirical issue, there is no way to determine if some group of merry tax collectors is a government because there is no such defining attribute as "government-ness." In practice, such decisions are made by assertion and backed up by force.
Another still is that whatever ethical theory underlies one's philosophy of law must be able to answer the question, "May a non-government entity become a government?" If not, then any government is illegitimate. If so, then this implies a universal right of secession rather than the universal duty of submission that every existing government claims.
Another is that the story of the social contract as told by the British empiricists cannot be distinguished emprically from the formation of a marauding gang with really great esprit de corps. Nor can one verify that the formation of a social contract ever took place. Even governments recognize this problem in their own courts, as I cannot expect to win if I sue you for a debt and simply assert the existence a social contract between you and me.
Yet another is the frequently held selective application of social contract theory regarding obligations to the state. As modern social contract theorists tell it, you enter a social contract by driving on government owned roads or partaking of other government services. Must an entity be a government prior to gaining the priviledge of forming social contracts the way that a government does? Is so, then governments could not have formed by social contract. If not, then even governments must submit to social contracts when, for example, an IRS agent drives on a privately paved road. But the statists who make the "when you drive on these roads..." arguments are never willing to accept this conclusion.

James makes numerous wonderful points, and his argument against the state as it exists now is ultimately solid. My criticism of his post is that he fails to think more deeply about the important questions that he brings up. He brings up both the failure of social contract to explain the modern state and the fact that any sort of government should be morally indistinguishable from any other sort of human institution, but he fails to take his reasoning further. He doesn't try to answer his own question, "May a non-government entity become a government?". The answer is in fact, 'yes'. If a body came together, and formed a literal contract that includes a provision for leaving the contract, a government, morally indistinguishable from a bowling league, could be formed. It is important to note that there aren't any legitimate governments today but, I tend to think that the moral harm done by modern states is relatively minor because their behaviour is in many important respects similar to what the behaviour of literal contract states would be, so I don't think this should be an important libertarian issue. I wish I could talk to James; I bet we would have some interesting discussions.

I'm writing an essay on this topic (I have been for a while), and I hope I can post a draft soon.

Monday, March 19, 2007

On Hoppe's Derivation of the Private Property Ethic

I've had some time to mull over Hoppe's derivation of the private property ethic (available here), and though I find it extremely interesting, I think I have found major, though perhaps not insurmountable a flaw.

Hoppe's argument proceeds essentially by excluding all other ethics besides the private property ethic. As I understand it, it is essentially this:

1) Any argument that is inconsistent with the ability to argue is self contradictory
2) To argue, one must be able to use one's body and to appropriate other property by the use of it
3) Combining 1 and 2, all ethics besides the private property ethic are invalidated, so the private property ethic must be true.

The problem I see lies in 3. I don't think all other ethics are eliminated. For example, what might be called the 'anything goes' ethic is still valid. The ethical principle that anyone is justified in doing what they can do by force or otherwise still satisfies this rule, so the private property ethic is not the only valid ethic.

I am still quite happy with this meta-ethical rule however, because it demonstrates two special and important ideas. First, as Hoppe explicitly shows in his paper, the argumentation-consistency rule bars any sort of collectivism. This is important because it bars the most popular ethical opponents to the private property ethic. Second, Hoppe's argument suggests that one can indeed derive ethical principles from objective truths, even if it doesn't quite do so itself. I am optimistic that such a derivation can and will be made.

I think that what Hoppe has proven is that of all what might be called 'property ethics' the private property ethic is the only self-consistent one. Property ethics are those that claim that the rightness or wrongness of an action depend on whether the actor has ownership over the subject of the action, and that ownership is non-overlapping; that is, no two actors can claim the same ownership over some subject (though they could share ownership through some agreement).

Sunday, March 18, 2007

Austrian Economics and Interval Value Scales

I've been reading about Austrian economics, and how it differs from mainstream neoclassical economics. My understanding is that the Austrian economist's main criticism of neoclassical economics is that neoclassical economists treat value as interval, while one could only objectively claim ordinal preferences; that is, Austrian economists claim individuals only have an ordinal list of preferences, not a continuous interval scale of value. And they're right, you can't objectively claim that value is interval, but if value is ordinal only, then it is very curious that neoclassical economics is useful at all.
If neoclassical economics were totally wrong, then it wouldn't make successful predictions. So the truth must be somewhere between Austrian and neoclassical economics. I would like to suggest that interval value scales may be a useful approximation of actual ordinal preferences. Approximations are widely used in the sciences. For example, in physics, Newton's laws of motion are used all the time to make very accurate predictions even though they are approximations that ignore relativistic effects. When physicists figured that Newton's laws of motion were not entirely correct, they did not throw them out; they simply noted that they are approximations and made sure to note when they are useful and when they are not. This same approach could be used in bridging the gap between Austrian and neoclassical economics. If it could be shown experimentally that for many goods, the value scales of individuals are near interval then much of neoclassical economics would be validated. I haven't been able to come up with an experiment that would resolve this question, but I don't see any reason why it should be impossible.
I find it curious that nowhere in my readings have I found anyone who discusses the possibility.

Friday, March 16, 2007

The Road to Voluntary Government

I'd like to talk a little bit about how I came to support voluntary government. This process started because I was thinking about intellectual property (IP). Like many libertarians I came to the conclusion that it is not an innate right to be able to own ideas. Even though the institution of intellectual property has gained huge acceptance in the real world, many people struggle to justify it ethically. Ideas are not scarce resources, you can distribute ideas without reducing your ability to consume them. It makes no moral sense to establish property rights over non-scarce resources and, it is immoral to prohibit someone from using their property in a way which does not violate your property. So I decided that I did not believe that ideas could be property, but IP still seemed vital to continuing prosperity, because ideas are public goods and if people did not reap the benefits from their investment into researching ideas, then they would have little incentive to do so. For example, the only reason software companies sink resources into writing code, is because they know they will have the exclusive right to sell the product of that code. So I was stumped for some time. It didn't seem right that something could be necessary and unethical at the same time.
Then I realized that people would be willing to come to a collective agreement to pay an inventor if they benefit from using their idea, because it is both ethical and beneficial to agree to pay for the use of public goods. From there I started thinking about other public goods like roads and defense, and how similar agreements can exist to fund those as well. My second realization was that these agreements are very much like government. It would be very possible to form government around a voluntary social contract.
Realizing that an agreement to form a government could exist made me realize something else, which should have bothered me before, but didn't. Strict classic libertarian government, who's only role is to protect private property rights, but which is not voluntary, must still collect taxes (can't fund police without taxes), and is still unethical because forced payment is no less ethical because it goes to the protection of property, the protection of property is a good like everything else.
This chain of reasoning is what set me along the road to realizing how fully ethical government could be established. This was particularly satisfying to me because traditionally as libertarians get more moderate (less anarchist), they become less rigorous about their reasoning, and it becomes easier for them to support non-libertarian ideas, but here I had become much more moderate and much more rigorous at the same time. I later told one of my friends that I was both moderate and rigorous about my libertarianism, and I got a very strange look from him; very satisfying.

Wednesday, March 14, 2007

Morons are Infuriating

I read this article titled "Why do the rich give away so little?" by Austan Goolsbee. Goolsbee bemoans the fact that most rich people don't give away lots and lots of their money.
Goolsbee writes:
The rational economic argument for accumulating wealth says that people want to use it for something: to spend, to give to their families to enhance their future standard of living or to do something philanthropic. When you look at the Slate 60 list, however, you see that philanthropy can’t be the main reason. For all of their amazing generosity, the super-rich typically do not give away their entire fortunes, or even a big share. That’s what makes Buffett so notable. For 2006, the Slate 60 not including Buffett pledged or gave a little over $7 billion to charity. Yet as of September 2006, the 60 richest Americans had an estimated $630 billion of wealth, up more than $62 billion (about 10 percent) from the year before. People are accumulating money much faster than they are giving it away. Carroll says the super-rich can’t be accumulating the money with the intention of spending it, either, because no one could spend that much.
I found it very irritating because the author is under the impression that wealthy people hoard money and just sit on it, like Scrooge McDuck. I can understand being angry about that, that would be monumentally stupid and hurt pretty much everyone, but rich people are anything but stupid with their money (duh, that's why they're rich). The money of rich people is almost always productive; they have investments. If Goolsbee had taken any time at all to think from the perspective of a rich person, he wouldn't have written this article. It's one thing to be angry at the rich, but this is just moronic.

I have recently learned that Goolsbee is a professor of economics at the University of Chicago (link), which just further confuses me. Shouldn't Goolsbee know better? I spent some time re-thinking this article, but I still can't figure out where he's comming from.

Sunday, March 11, 2007

Yum, more alcohol.

So, the Washington state senate is looking to double the number of liquor stores open on Sunday (read about it here). I should note that in Washington, all hard liquor sales must be done at state run liquor stores. Not exactly a victory for free markets, but anything that increases my access to alcohol is good by me.

What caught my eye was this little gem by the head of the budget panel, Margarita Prentice (D-Renton): the Seattle PI says, "She said she has carefully watched the pilot project and is convinced that further expansion would raise needed revenue without causing more alcohol problems." What a shock! You mean to say that more store hours increases profits? and that alcoholics aren't too stupid to buy a day in advance? The government is fabulous at controlling scarce goods. I suppose I should just count my blessings that that I can buy beer at Safeway.

The budget panel is supposed to pick the locations by September. Efficient.

Wednesday, March 7, 2007

No Time to Write

I would really like to write and post stuff to this blog more, but this last week of school and finals week next week will be taking up a lot of my time. I plan to write significantly more over spring break.

Sunday, March 4, 2007

Wow: A Derivation of the Private Property Ethic

I have long assumed that an ethical system must be axiomatic. You can't derive a system of ethics from a priori knowledge. But I have been proved wrong; Hans Hoppe wrote a paper doing just that. In his paper, which you can read here, Hoppe derives the private property ethic and the homesteading principle.

Hoppe's argument is roughly this:

1) Any proposition which is inconsistent with the ability to make propositions is self contradictory.
2) For a human to make any proposition requires the presupposition of exclusive use over that human's body (private property).
3) Combining 1 and 2 means the only self consistent ethic is private property.

There are a lot of subtilities in his argument that I don't think I have grasped yet. I am not sure I am convinced by his proof of the homesteading right, and I am troubled by the fact that his proof does not seem to offer a justification for the meta-right, the right to enforce your rights by force.
Although I have some concerns about the argument, I am none the less very excited and happy to heave read this paper. I need time to mull this paper and Hoppe's arguments over.

Friday, March 2, 2007

A Step in the Right Direction for Washington State

On my way home from school I happened to glance at a Seattle Times newspaper stand as I walked by. I was very happy to read that the Washington State Senate has passed a bill creating 'domestic partnerships' which provide some of the same legal rights as marriage does. Governor Gregoire has said she supports the bill, so she is expected to sign it if it passes the house. Domestic parnerhips will provide hospital visitation, inheritance, funeral arrangement rights, as well as a few other rights. Hopefully this is just a stepping stone to establishing equal marriage rights for gay couples in the next few years.
The Seattle Times article has an interesting map showing the states that have same-sex partnership laws and the states that have legislation pending. Washington will be the seventh such state.

I have to applaud Sen. Dale Brandland from Bellingham who was the only republican to vote for the bill. Dale cited hearing Charlene Strong speak as the reason he voted for the bill. Charlene spoke in the senate earlier about being denied the right to visit her life partner, who later died, in the hospital after her partner was trapped in her basement studio by rising storm water. Way to go Dale; way to put principle over party.

I should note that in general I oppose conferring special economic rights on married couples, but because the current government sanctioning of marriage is not likely to change anytime soon, I support equal application to heterosexual couples and homosexual couples.