Message in a Bottle

Monday, May 31, 2004

Who is the "Typical Intellectual"?

Don Boudreaux from Cafe Hayek thinks intellectuals are ignorant of the fact that implementation requires power.
It’s true that nothing thrills the typical intellectual more than the prospect of his pet abstract theory being imposed whiz-bang, full-bore by government planners upon a subject population. (Note: this typical intellectual typically does not think deeply enough to understand that whenever government planners force any scheme upon any group of people, no matter how well-intentioned and how divinely promising that scheme might be, standing behind the seemingly genial planners are armies, armed policemen, and jailors. Always.)

One might wonder wether intellectuals aren´t more interested in, well, intellectual activities, but that´s another question. What makes me wonder is how Don fails to see that government force stands behind all public institutions. Like property rights. To have property rights you need armies, armed policemen, and jailors. Always. So what´s the deal again?

Is there a case for Monarchism?

Walter Block, in his review of Democracy, The God that Failed by Hoppe, writes that a monarchy is preferable to democracy since monarchs aren´t as shortsighted
If he engaged in socialism, or promulgated price controls (especially for things he purchased), or raised taxes very much, or indulged in too much inflation, or expropriated property or in any other way threatened his people’s incentives to create wealth, he might make out like a bandit (which he was in any case) in the short run, but in the long run he would kill or at least seriously maim the goose that was giving him all those golden eggs.

No one worries about an oil change for a rental car, but if you own one, you tend to keep in mind its future operation. And, as an added incentive, if the prince didn’t act in a reasonably responsible way, if he was in the process of ruining things, a son or a nephew or a brother would likely assassinate him, secure in the knowledge that the law of succession would transfer these spoils in his own direction.

But then a second tragedy befell mankind, one far more serious: we moved from monarchy to democracy. Now, all bets were off. The President or Prime Minister or Elected Leader knew that he had only so much time to feather his own nest. Why worry unduly about the future of the economy when he will not be around to collect after the next four years? Nor could he pass off his "kingdom" to his heirs. "Grab now" and "make hay while the sun shines" became the mottos of the elected officeholder.

This is not the place to discuss what gives bad incentives, but it is anything from clear why the optimal exproprietion the ruler does should be good for the citizens. Even stranger is the view that bad policies should result in the monarch to be more likely to be killed by his 'loved ones'. After all, wouldn´t it be be better to steal a fat cow? Does he think it is easy to murder a paranoid dictator today? And has Block ever heard of reelected politicians? I am always amazed at how mad the folks at mises.org are.

Friday, May 28, 2004

So does Marginalism work?

Steven Landsburg and his colleages spent some time wondering "If people stand still on escalators, then why don't they stand still on stairs?". After all it gets you as much forward in both cases. Their solution:
Regarding escalators, the solution came in a blinding flash. Marginal analysis does work. It is right to compare the costs and benefits of each individual step. (And thank God it's right; otherwise I'd have to retract everything I've told my students since the day I started teaching.) But before you can weigh costs against benefits, you've got to measure the benefits correctly. And in this case, "getting one foot closer to where you're going" is the wrong way to measure benefit. Who cares how close you are to where you're going? What matters is how long it takes to get there. Benefits should be measured in time, not distance. And a step on the stairs saves you more time than a step on the escalator because—well, because if you stand still on the stairs, you'll never get anywhere. So walking on the stairs makes sense even when walking on the escalator doesn't.
To Landsburg this is a big victory for marginal analysis. I have my doubts. It doesn´t only matter how much faster you are, it also matters wether you get there at all. And so the benefit of a step depends on later steps. So one has to think about the whole way, not only small steps. The benefit of one additional step may well be zero while the benefit of thirty steps may be huge.

Should we take Racism as given?

Alberto Alesina thinks we have to chose between liberal immigration policies and a extensive welfare state. I doubt that these things are simply given.
Project-Syndicate: Simply put, when middle-class Europeans begin to think that a good portion of the poor are recent immigrants, their ingrained belief in the virtue of the welfare state will begin to waver. Even Europe's leftist intelligentsia now associates crime and urban squalor with immigration. The step from here to lamenting the high taxes spent on welfare for immigrants is a but a short one.