Is this true?

...[A]ccording to standard microeconomic theory, unless an industry is dominated by tiny firms with small production capacity and all goods sold in that market are exactly the same, there exists a market failure. That is right; according to the economics canon, any product differentiation is “proof” that the market has failed, and only can be set right by outside (read that, government) action.

In the real world, competition is defined by heterogeneity; people seek to demonstrate that their products are better than others, that there is a quality difference. Academic economists, however, hold that such differences demonstrate that markets are less competitive than what is socially optimal. (Joan Robinson, a student of Alfred Marshall and a developer of “imperfect competition” theory, wrote that such differences provided a “spatial monopoly” to producers and should be regulated by government.) Nor do they have a workable theory of capital, and they ignore the role of time and time preference.

That's from William Anderson, “Free Market” Economists and Economic Ignorance.

Are these people retarded?

I always thought Scrooge got a bum rap from Dickens.

Butler Shaffer agrees with me.

Make no mistake about it: my client has been the victim of a cruel criminal conspiracy to extort his money, as well as of such torts as intentional infliction of emotional distress, libel and slander, trespass, assault, malicious prosecution, battery, nuisance, and false imprisonment. To that end, my client may elect to bring his own suit, but for now let us focus upon his defense to this action. As we do so, pay particular attention to the utter contradiction underlying Dickens’ case: my client is charged with being a greedy, money-hungry scoundrel, and yet it is the conspirators against him who want nothing more than his money! Scrooge – unlike his antagonists – earned his money in the marketplace by satisfying the demands of customers and clients who continue to do business with him, and did not, as far as we are told, resort to terror or threats of death to get it. Perhaps Dickens does no more, here, than engage in psychological projection. In doing so, he reminds us of the definition of a "selfish" person as "one who puts his greedy interests ahead of mine!"

Although, I have to admit that it wouldn't have been pleasant to work for the guy.

Ah. I could take it.

World War is not the solution to economic crisis

This comment on Tom Sowell's article today, Another Great Depression? -which describes the problem, gives the most succinct answer I've ever seen as to what ended the Depression:

Pistol
Location: FL
Reply # 17
Date: Dec 23, 2008 - 6:33 AM EST

Subject: George
Please cease spreading the false notion that WWII saved our economy. What saved us was the destruction of our competition and the goods and profits we built in the 50's. The same war crushed England France and Germany as players on the world stage. Theories have value only according to their ability to predict results. The theory of relativity was hotly debated until the advent of instruments able to confirm its predictions arrived. Economics is no different. Sowell occupies a big place because his theories have predictive value. Make work projects only make things worse. Does a man up to his ears in credit card debt reduce it by digging holes on the beach for the tide to fill? Work is not the answer, profit is the answer. Whichever country manages it the best will emerge from this world wide slump the quickest and best. In the 30's it was Germany, and it made Hitler the most admired politician in the world.

The war did end unemployment by sending millions of young men overseas to kill and die, but we didn't get much in the way of an increase in production of anything but killing tools. Nothing you'd care to have lying around the apartment, say (I'm assuming normal space restrictions-as much as I'd like to have the Yorktown in my living room, my wife won't allow it).

As to how Hitler did it? First, he repudiated Reparations payments. Second, he didn't - he convinced the people of the virtues (in both meanings) of martial discipline and sacrifice instead. They did without.

As did we, during the war.

Things may not be as bad as we fear.

http://www.independent.org/blog/?p=667
I hadn't heard this, but Obama says that Adam Smith is one of the most influential writers he's read. He's read both The Theory of Moral Sentiments and The Wealth of Nations.

Smith had some flaws, but his book had a generally salutary effect on world history.

***

Note to self: I want to check out the podcast mentioned in Art Carden's article, Deirdre N. McCloskey on the Bourgeois Virtues.

From David Calderwood's article

Cargo Cult Economics:

Members, leaders, and prophets of the government-regulated economy cults maintain that the manufactured goods (productive economy) of the Free Market have been created by spiritual or ideological means (Gaia or egalitarian socialism/Keynesian-monetarist policy, respectively), and are intended for the cult’s members, but that, unfairly, the Free-Market capitalists have gained control of these objects through attraction of this wealth to themselves by malice and greed.

Like Cargo Cultists in New Guinea, truly these people don’t know any better. Even highly placed and widely quoted professional economists are as ignorant of the source of economic wealth as were stone age tribesmen whose first contact with technology was with people landing airplanes in the jungle.

The cultists’ spending on (or cheering for) the bailouts, stimulus payments, and infrastructure "investments" is based on the belief that it is money that causes economic prosperity, just like cargo cultists thought that if they built straw models of airplanes and recreated airstrips the "cargo" would return.

When I go to the store to buy something with money, the only reason I have money to spend is because someone paid me to produce what it is I do at work. My job lasts only so long as I produce in value for my employer more than I cost to employ, and my job’s security exists only so long as my employer’s production is profitable.

...
In my quest to become an economist, I've been listening to the mp3 recordings of Salerno and Klein, Fundamentals of Economic Analysis: A Causal-Realist Approach.

###

Oh, and my beloved Carly Fiorina has an op-ed in the WSJ. She says CEOs should be more moral.

Haiku cycle to Obama

The African Man
The American Christian
Muslim is coming.

His foes all warned us
Barack isn't black enough
His friends knew better.

Americans, people,
don't like to be told what to think.
Source, dissolution.

Robert Ringer:

I am a hard-core, free-market capitalist. As such, I believe that a deflationary depression is a good thing for the economy because it shakes out excesses. It exposes the lie of artificial wealth. Above all, it calms the soul, tempers our gluttonous instincts, and causes us to refocus our priorities.

Link.

Leaving out some softening transitions (I'm eliding them, I mean), he also says:

Always keep in mind that you have free will, which means that you can choose to find both business and personal opportunities that will not be visible to those who are focused on what they believe they are entitled to. Such people are likely to have a difficult time accepting the reality that the Age of Gluttony is coming to an end.

Remember that WASP Work Ethic? Actually Weber said Protestant work ethic. As a German, he had to include the Luths. And no Catholic ever works hard, not to mention those heretics and heathens... Atheists?! Forget about it! What have they got to work for? All they are is dust in the wind!

Jeez! What's gotten into me?

L. Neil Smith has some ideas

on how to celebrate Bill of Rights Day, coming up in one week:

Don't love money. Love the idea of your business. Love the good that it does. Love the fact that in some way your products meet the needs or wants of your customers. See money for what it is - a neutral indicator of how good you are at doing what you do. If the value you provide is worth the money you get for it, people will buy what you're selling. The better the value you give, the more money you will get.

Oops! Well, look what I have on my clipboard! That's Michael Masterson from his Early to Rise article today.

Back to El Neil:

The Bill of Rights is the property of the people, not of lawyers, judges, or academics bent on weasel-wording it out of existence. It is also the highest law of the land, superceding all lesser statutes and ordinances, treaties, and the body of the Constitution itself. Judges who consistently rule against the Bill of Rights should face continual efforts to remove them from office. Wherever it is possible, the 14th Amendment should be used to prevent such creatures from ever holding office again. Avoid trivialities (like semen on a White House intern's blue dress) and focus, instead, on crimes against the people and the Constitution.

He's advocating

The National Recall Coordinating Committees must be guided solely by the Bill of Rights and—since it's the creation of libertarians—the Zero Aggression Principle. I detest having to write these words, but it should avoid those areas of controversy that legitimate members of the freedom movement are divided on, such as abortion and immigration. I have strong opinions on these issues, myself, and it is distasteful not to pursue them, but if the Founding Fathers hadn't followed a similar course with regard to slavery (something they're often criticized for), we'd all be speaking with British accents today.

Once we have the free country the Founders intended, we can settle all our old arguments with coffee and pistols at dawn, if absolutely necessary.

...

Above all, we must always act with complete openness. We must never lie. Nor must we ever soft-pedal our principles or eventual goals.

First among these must be the placement of a stringent—no, let's make that Draconian—penalty clause within the Bill of Rights.

We must also repeal that section of the Constitution which gives legal immunity to legislators for whatever crimes they commit in office, and with it, all laws and findings that give similar immunity to those—like hired FBI assassins—who commit crimes for the government.

He has other practical suggestions for the operation of these Committees of Correspondence, as they were called in the days of the Revolution.

"Why do I drink?" asked Hank Jr.

I haven't for a while, actually, but I was thinking about it. Not surprising; I think about it a lot.

I haven't read Future Shock, but according to this guy:

Alvin Toffler predicted that we would be overwhelmed by too many items competing for our time and attention, especially in the workplace. He foresaw that this would inhibit action, result in greater anxiety, and trigger a perception of less freedom and less time. Having choices is a blessing of free market economy. Having too many choices results in increased time expenditure and a mounting exhaustion.

The article is about time management. He's got a better suggestion than hitting the liquor store (or knockin' one over, or visiting your local illicit substance dealer...):

Whenever you're about to make a low level decision, consider: does this really make a difference? The executive or manager today who seeks to stop racing the clock, to keep piles from ever starting, and to have more energy each day needs new perspectives and fresh approaches for managing his career and his life. Get in the habit of making fewer decisions each day--the ones that count.

Sounds like creative procrastination to me. Well, OK, he means judicious procrastination. Oh, all right! Dump that p-word and call it 'delegation.'

Michael Masterson ignores his emails until the end of the workday, when, hopefully, all the minor stuff people wanted to bug him about has been resolved. He works on projects of his own choosing until then and only deals with other people's problems when they turn out to be incapable of dealing with them without help.

How all this fits with my title is that I was just thinking that a major contributor to my last relapse was my feeling of guilt that I wasn't making progress on the long list of commitments I'd made to myself. I just wanted to hit CONTROL-ALT-DELETE.

The goal of all those commitments was to show everybody that "Life's not so bad! Anyone can succeed!" But I've got tons on my plate: I want to be a great husband, a great father, an expert on Aristotle, an economist, an entrepreneur, a marathoner, a strongman, a benefactor of Mankind, rich, honorable-just-moral, smart-learned-wise...

Those are the things I want to be great at. The list of good-enoughs is at least twice as long, with no overlap. I read about setting goals and priorities all the time. Sometimes I take some of the steps. They say writing those things down gets you a long way toward getting them done. Somehow, it seems, my unconscious mind thinks that once something is written down it's done. Move on.

So, I hit CONTROL-ALT-DELETE...but the same, damn page just comes back. Unchanged. Except that I'm older, and have less time and less health.

Wow! Dr. Amen (pronounced A-men - long A, accent on the first syllable) is right: negative thinking shuts down your brain. He was pushing this book on PBS today.

Oh, I see QuackWatch has a page on him. Hmm.

Another way Obama could help:

Let's End Drug Prohibition

Yes, the speedy drugs -- cocaine, methamphetamine and other illicit stimulants -- present more of a problem. But not to the extent that their prohibition is justifiable while alcohol's is not. The real difference is that alcohol is the devil we know, while these others are the devils we don't. Most Americans in 1933 could recall a time before prohibition, which tempered their fears. But few Americans now can recall the decades when the illicit drugs of today were sold and consumed legally. If they could, a post-prohibition future might prove less alarming.

But there's nothing like a depression, or maybe even a full-blown recession, to make taxpayers question the price of their prejudices. That's what ultimately hastened prohibition's repeal, and it's why we're sure to see a more vigorous debate than ever before about ending marijuana prohibition, rolling back other drug war excesses, and even contemplating far-reaching alternatives to drug prohibition.

You answered 33 out of 33 correctly — 100.00 %

No, not you, me. On this Civic Literacy Quiz.

Our country is run by morons.

Well, crap...

D.W. MacKenzie (I'm pretty sure that's not for Dorothy Winifred, but I could be wrong):

The problem with advocating free banking and deflation at this time is that such proposals often do not go far enough. Deflation works only within the context of markets with freely adjusting prices and wages. The most obvious lesson therefore is that price and wage floors, in this case the minimum wage, make free banking unworkable. We need free banking and freely adjusting prices and wages. The larger lesson is that partial efforts to deregulate the economy usually have serious unintended consequences. Partial deregulation can open the way to new and potentially serious problems stemming from remaining controls.

The dilemma we face is simply this: partial acts deregulation and privatization are the easiest to enact, but the most likely to generate deleterious unintended consequences. It makes no sense to advocate limited reforms that will surely end in failure. On the other hand, we need more comprehensive reforms, but the task of raising popular support for bolder privatization programs is obviously difficult. What this all means is that the likelihood that we will see real solutions to our economic problems in the immediate future is low. However, the case for sweeping deregulation is strong, and public opinion can change.

Only Obama can save us.

Hey, Barak! Let's have a little of

this Swedish Socialism!

The big difference between the education system in Sweden and the UK is that, in Sweden parents are given an educational voucher for each child, and they use that voucher to apply for any school they want to.

It has certainly led to a wide variety of providers, with Waldorf Steiner, Montessori, confessional (faith schools) and traditionally-run schools which emphasise the basics and are strong on discipline.

Bertil Ostoberg, the Swedish Secretary of State for Education, summarised the scheme as "providing freedom of choice for the parents and the pupils, much wider freedom of choice". He added: "They have to compete to provide a high quality to get pupils. We think this competition has led to a higher quality in the system."

I'm not sure, Prob, but I think this addresses your comment on the last post.

Of course, nobody but white, northern europeans are really capable of handling freedom.* Where's the shower? I've got too much sarcasm dripping off me.

*That comment is NOT directed at you, Prob. But I do know people who think that. They're Democrats.

Stossel says:

Markets are never perfect. They are made up of people making their best judgments, and people’s judgments are never perfect. Yes, under some circumstances market activity such as speculation and short-selling could harm innocent bystanders. But those who say government is the best protector are wrong because the knowledge problem is an insurmountable obstacle.

Link.