Undesirable

It is undesirable to believe in a proposition when there is no ground whatever for supposing it true.

–Bertrand Russell

Regulation: just try holding on to your wallet

Milton Friedman via Coyoteblog:

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

Why We Trade

By Russell Roberts

We’re used to shrugging off all sorts of rhetorical gobbledygook from our politicians. But when you hear U.S. presidential candidates start to mouth off about free trade, watch your wallet: A discredited 14th-century theory of economics is enjoying a dangerous renaissance in the 2008 campaign.

To hear most politicians talk, you’d think that exports are the key to a country’s prosperity and that imports are a threat to its way of life. Trade deficits—importing more than we export—are portrayed as the road to ruin. U.S. presidential hopefuls Hillary Clinton and Barack Obama want to get tough with China because of “unfair” trading practices that help China sell products cheaply. Republican candidate Mitt Romney argues that trade is good because exports benefit the average American. Politicians are always talking about the necessity of other countries’ opening their markets to American products. They never mention the virtues of opening U.S. markets to foreign products.

This perspective on imports and exports is called mercantilism. It goes back to the 14th century and has about as much intellectual rigor as alchemy, another landmark of the pre-Enlightenment era.

The logic of “exports, good—imports, bad” seems straightforward at first—after all, when a factory closes because of foreign competition, there seem to be fewer jobs than there otherwise would be. Don’t imports cause factories to close? Don’t exports build factories?

But is the logic really so clear? As a thought experiment, take what would seem to be the ideal situation for a mercantilist. Suppose we only export and import nothing. The ultimate trade surplus. So we work and use raw materials and effort and creativity to produce stuff for others without getting anything in return. There’s another name for that. It’s called slavery. How can a country get rich working for others?

Then there’s the mercantilist nightmare: We import from abroad, but foreigners buy nothing from us. What would the world be like if every morning you woke up and found a Japanese car in your driveway, Chinese clothing in your closet, and French wine in your cellar? All at no cost. Does that sound like heaven or hell? The only analogy I can think of is Santa Claus. How can a country get poor from free stuff? Or cheap stuff? How do imports hurt us?

We don’t export to create jobs. We export so we can have money to buy the stuff that’s hard for us to make—or at least hard for us to make as cheaply. We export because that’s the only way to get imports. If people would just give us stuff, then we wouldn’t have to export. But the world doesn’t work that way.

It’s the same in our daily lives. It’s great when people give us presents—a banana bread or a few tomatoes from the garden. But a new car would be better. Or even just a cheaper car. But the people who bring us cars and clothes and watches and shoes expect something in return. That’s OK. That’s the way the world works. But let’s not fool ourselves into thinking the goal of life is to turn away bargains from outside our house or outside our country because we’d rather make everything ourselves. Self-sufficiency is the road to poverty.

And imports don’t destroy jobs. They destroy jobs in certain industries. But because trade allows us to buy goods more cheaply than we otherwise could, resources are freed up to expand existing opportunities and to create new ones. That’s why we trade—to leverage the skills of others who can produce things more effectively than we can, freeing us to make things we otherwise wouldn’t be able to afford.

The United States has run a merchandise trade deficit every year since 1976. It has also added more than 50 million jobs during that time. Per capita income, corrected for inflation, is up more than 50 percent since 1976. The scaremongers who worry about trade deficits talk about stagnant wages, but they ignore fringe benefits (an increasingly important part of worker compensation) and fail to measure inflation properly.

In a recent Republican presidential debate, one of the moderators said that since 1989, the United States has lost 5 million jobs to foreign trade. He wanted to know what the candidates were going to do about it.

I have no idea how you measure that number, but the implication was that 5 million lost jobs over 18 years is a big number. Five million is a large number if we’re talking about the number of pennies I have to carry in my pockets. It’s a big number if we’re talking about the number of people coming to my kid’s birthday party. But it’s a very small number when you’re talking about job destruction and the job creation that follows in a dynamic economy.

On the first Friday of every month, the U.S. Bureau of Labor Statistics produces an estimate of how many new jobs are added to the U.S. economy. That’s the net change, the gains minus the losses. The bureau also estimates quarterly gross job changes, the absolute number of jobs created and destroyed. In the fourth quarter of 2006, there were 7.7 million jobs created and 7.2 million jobs lost. That happens every quarter when there isn’t a recession—that’s how you add 50 million jobs over three decades.

Five million jobs lost over 18 years? Every three months, the U.S. job market more than makes up for those losses.

Trade is just one economic force that creates and destroys jobs. Tastes change. Innovation makes workers more productive. Some industries shrink. Others expand. Some disappear. New industries get created. Joseph Schumpeter called it creative destruction. He understood that it is the underlying mechanism that transforms our standard of living for the better.

Let’s stop trying to scare people with the Chinese threat to our economy. The world would be a better and more peaceful place if we stopped measuring the trade deficit. But if we’re going to measure it, the least we can do is talk about it sensibly.

Russell Roberts is professor of economics at George Mason University and a research fellow at Stanford University’s Hoover Institution. He is the host of the weekly podcast EconTalk at EconTalk.org and the author of The Choice: A Fable of Free Trade and Protectionism (Upper Saddle River, NJ: Prentice Hall, 2006), a primer on trade issues written in the form of a novel.

Beijing’s Demonstration Sports

by John Derbyshire

Tibetan Snow Shooting. In their bid for a future Winter Olympics, the Communists will demonstrate their skills at picking off Tibetan refugees attempting to cross snow-covered Himalayan passes into Nepal. (This event may be scrapped because of a dispute with the Olympic authorities over the use of telescopic sights and snow goggles.)

Synchronized Slimming. Competitors here have to devise an agricultural policy so irrational that 30 million peasants starve to death simultaneously. Traditionally the winning contestant has his portrait hung in a prominent position overlooking Tiananmen Square, but for Olympic purposes a medal award will be substituted.

Organ Extraction. A test of speed and skill in wielding surgical instruments. A succession of convicted criminals, or members of obstreperous religious sects, are strapped to operating tables and their organs are removed without anesthetic, to be sold to intermediaries for transplant into wealthy foreigners. Points are awarded based on the total market value of the removed organs.

Indignathon. Competitors have to bluster continuously for six hours, maintaining an attitude of sustained righteous indignation about the Opium Wars, the burning of the Summer Palace, the Siege of Peking, the Chinese Exclusion Acts, and other wrongs inflicted on the long-suffering and ever-righteous Chinese people by cruel, dastardly foreigners. (Some other traditional events — the 10,000 meters Self-Pity, the Triple Emotional Blackmail — have been folded into this one for Olympic purposes.)

Buddha Tossing. Infant children declared by the Dalai Lama to be incarnate Buddhas must be seized and tossed into a barbed-wire enclosure, where they will spend the rest of their lives eating rice gruel and sewing export-quality gunny sacks. Extra points for family members of the living Buddha rounded up and incarcerated. (Half points for those dead on delivery to the enclosure.)

Korean herding. Competitors operating in groups of four must surround parties of North Korean refugees and hustle them back across the Korean border to the warm embrace of the Dear Leader.

Chest thumping. In this rather advanced event, competitors attempt to intimidate each other by shooting down satellites, threatening to nuke major cities, asserting ancient claims to other people’s countries, and setting up missile installations aimed at long-independent provinces.

Student Crushing. Yet another attempt to introduce motorized sports into the Summer Olympics. Competitors driving tanks are let loose among crowds of student protestors with the aim of crushing as many students as possible beneath the tank tracks.

Toy Painting. In a test of manual speed and dexterity, competitors try to load as much lead-based paint as possible onto small children’s toys.

Currency Manipulating. In this financial-trading sport, competitors struggle to keep their currency undervalued and nonconvertible against pressures from foreign bankers and trading partners. The competitor who, beginning from a fixed stock of currency, amasses the largest amount of foreign reserves, gets the gold.

Fingernail Pulling. Developed by the Communists’ superbly trained security police, competitors in the fingernail-pulling event race against the clock, equipped only with pliers, to remove as many fingernails as possible from Falun Gong practitioners in a fixed time period.

Land Seizing. A modern Chinese team sport in which teams must drive peasants off their land to make way for commercial or industrial development. Points are lost for dead peasants and residential structures left intact after the designated period.

Electric Hurdles. Middle-aged women who have been seen practicing meditation are driven over a 110-meter hurdles course with the aid of electric cattle prods, the hurdles wrapped with electrified barbed wire.

400-Fetus Relay. Teams of competitors administer forced abortions to women who have violated the one-child policy. A complicated scoring system awards points to each termination based on age and sex of fetus.

Internet Blocking. In this completely new event appropriate to the computer age, hackers must try to block access to all websites containing a long list of key words and phrases: “democracy,” “liberty,” “rule of law,” “East Turkestan,” “Dalai Lama,” “Taiwan independence,” and so on.

Petfood Doping. A popular sport that has emerged quite recently from China’s crowded factories, petfood doping involves trying to kill off as many domestic pets as possible with a single can of contaminated pet food. (The variant form, practiced in south and southwest China, in which the winner of the event is determined by aggregate body weight of dead pets, is not favored by the Olympic monitoring committee.)

Do you believe in God?

How about the one found in "the ancient legends of Ultimate Chaos, at whose centre sprawls the blind idiot god Azathoth, Lord of All Things, encircled by his flopping horde of mindless and amorphous dancers, and lulled by the thin monotonous piping of a demoniac flute held in nameless paws"?

Via Overcoming Bias

Inconsistent Paternalism

...we are much more paternalistic toward the low in status. We allow rich people to invest in most anything they like, but limit poor people to investments approved by regulators, and we are far more concerned about alcohol and illegal drug use by the poor than the rich, even though both groups use them at similar rates. An inner city activity with a similar mortality rate to BASE jumping would be illegal so fast it would make your head spin.

John M. Ellis

A sophisticated man of letters, disillusioned and even embittered by the flaws, inconsistencies, and retrogressions of a great civilization, deludes himself that a world of primitive innocence and natural goodness exists in peoples who are untouched by the advances of that civilization. So intense are his hostile feelings toward his own society that he is unable to see the one he compares it to with any degree of realism: whatever its actual qualities, it is endowed with all of the human values that he misses in his own. Consequently, he sees his own culture not as an improvement on brutish natural human behavior but as a departure from a state of natural goodness. This recurring Western fantasy runs from Tacitus' idealized Germans all the way to such twentieth-century versions as Margaret Mead's sentimentalized Samoans and ultimately to one of the most far-reaching outbreaks of this illusion--the political correctness of our own day.

...

John Searle recently defended Western thought against the criticisms of the politically correct by pointing out that it is uniquely self-critical. But an even stronger point can be made: political correctness itself is a thoroughly Western phenomenon. From earliest times, Western society has been prone to recurring fits of this self-doubt. Those who are seized by this mood may imagine that they are taking an anti-Western stance, but that is all part of the same pattern of self-delusion.

...

There is more than a broadbrush similarity between today's political correctness and these recurring fantasies of the primitive innocence to be found outside a corrupt Western society. Many of the views that are currently cherished as the sophisticated products of modern theory are in fact neither modern nor derived from theory) they are instead a replay of earlier episodes in the history of Western culture. Take, for example, the view that the Western canon of great books reflects ruling class values and that when reconstructed it reveals hidden power relations that have the repressive function of social control of the lower classes. This sounds like the very latest thought of those among us who have absorbed the teachings of Michel Foucault, Jacques Derrida, and Antonio Gramsci. But now look at the same point, made in a more felicitous style over two hundred years ago: "Princes always view with pleasure the spread among their subjects of a taste for the arts.... The sciences, letters and arts ... cover with garlands of flowers the iron chains that bind them, stifle in them the feeling of that original liberty for which they seemed to have been born, make them love their slavery, and turn them into what is called civilized people."

This is again Rousseau, and here he presents all the essential elements of the avant-garde thought of our daring modern theorists: both the literary canon and scientific inquiry are really about social control and serve the interests of rulers by brainwashing the lower classes.

...

All the major elements of modern political correctness can be found in the Western tradition, and in every case we can learn something from the way they have played out. One worth a careful look is the currently fashionable theory of cultural relativism.

In the modern context, what has become known as political correctness has two distinct strands. The first consists of people who are rather like Tacitus--intellectuals who are alienated from their own society and who in their disgust with its imperfections imagine a primitive society full of sweetness and light. The second reaches the same conclusion as the first but by a different route. We might call the two groups the alienated insiders and the resentful outsiders. The outsider denigrates the dominant culture not because of his disgust with its imperfections but because he does not feel part of it. Resentment is the reason for his adulation of primitive cultures. The alienated insider is motivated by self-disgust, the outsider by self-defense) and that defensiveness takes the form of cultural relativism.

...Anyone who thinks that cultural relativism and the celebration of ethnicity will ensure democracy and egalitarianism is sadly mistaken: history has shown us, to the contrary, that these attitudes are more likely to unleash the dangerous forces of tribal chauvinism and resentment. Encouraging people to think of themselves first and foremost as members of a tribe is a perilous undertaking. If Serbs and Sinhalese could have thought of themselves as human beings first and Serbs or Sinhalese second--the Enlightenment's way--much bloodshed might have been avoided.

When some scholars argue that we should pay less attention to the history of the Western tradition and more to both our own age and Third World peoples, we should be aware that this is a very Western thing to say. The Third World cultures so favored by these scholars are generally far more insistent on their own traditions that we are.

...

Given our knowledge of the world through modern communications, it rakes an extraordinary act of self-deception nor to see that it is the developed countries that are slowly leading the world away from racism and male dominance. To demand an end to racism and sexism is not to reject Western society but, on the contrary, to ally oneself with certain Western values. "Enlightened" attitudes toward the relations between men and women; social justice; torture, rape, and other forms of physical brutality; tribalism; and even imperialism have slowly coalesced in Western societies. Only someone who reads history blindfold could think that the absence of these evils is a normal state of humankind from which the West deviates. In denouncing any deviation from their own value system as "oppression," race-gender-class scholars by implication denounce non-Western cultures and measure them rigidly by Western standards, the reverse of what they think they are doing.

...

Some degree of dissatisfaction with one's society, or more specifically with one's place in it, is normal and rational.... Experience shows, however, that when these feelings reach a certain level of intensity, all perspective is lost. Antagonism toward one's own society then becomes so great that nothing can be conceded to it. Its imperfections can no longer be compared to those of other societies, yet it is the imperfect implementation of its own values that has caused the anger. The alienated insider is so much a creature of his own society that the values that are the basis of his criticism are uniquely its values.

When most of us reflect on the shortcomings of our society, we are likely to remember that the frailty of human nature is always the biggest problem...

It is this critical step that determines the nature of politically correct thinking, because from this beginning it must follow that people are not responsible for, since they are inherently better than, what the alienated insider complains about. They are dragged down by this society, and their current state of degradation need not have happened. The politically correct impulse thus leads inexorably to thoughts of a place where people are simply allowed to be what they can be. And this, in turn, leads to the idea of a primitive harmony and Rousseau's idyllic state of nature.

Primitive harmony is therefore not simply a daydream that arises through fantasy but a result that follows with ironclad logic from the premises of the initial impulse... For some, the disparagement of Western culture has had the effect of impoverishing their education so that they have been protected from any knowledge of Rousseau's thought and of the disasters that it has helped bring about. But even for those whose education was not deficient in this respect, the force of the impulse is still strong enough to make them dream of the elusive primitive harmony that allows them to denounce their own society. It is there in the idyllic life of the American Indians, according to Annette Kolodny, before the white man raped the country; or it was there in the Americas before Columbus brought the evils of European society; or it was there throughout the world, before Western civilization destroyed the reign of the "Goddess," a benign deity who presided over human life just before recorded history began; or it was there in Africa before colonization by Europeans brought misery with it; or it was there before capitalism. In each case we are told of lives of great beauty and simplicity, without exploitation of people or abuse of the environment; in short, these were ecological and human paradises. But they all appear to have existed before we could actually witness them and, in most cases, before recorded history began. In such settings, imaginative fantasy and wishful thinking encounter fewer obstacles.

It would be an understatement to say that arguments can be mounted against all these imagined conditions and more to the point to say that it is embarrassingly easy to show that none really existed. Our knowledge of pre-Columbian society, of North American Indians, or of precolonial Africa establishes that all the Western vices that race-gender-class scholars complain of were there, and more: human sacrifice, cannibalism, slavery, ethnic hatreds, rigidly hierarchical societies, and even a taste for cruelty and torture that would have put medieval Europe to shame...

Most would agree that Western society, though far from perfect, has made very real progress: compared with the rest of the world, its system of laws keeps cruelty and torture in check, its people live longer and are healthier than those in other societies, it feeds its people comparatively well, it manages to change governments without civil war or bloody coups, and so on. But to say this simply angers alienated intellectuals, who know that the core of Western society is rotten, however rosy its surface appearance. Starting again will not return us to natural goodness, however, but only to a natural chaos where all kinds of natural human nastiness flourish; that would mean both undoing the progress made by the Enlightenment and abandoning much practical experience about the calamity of naive utopian political thought.

The cruel paradox of the politically correct impulse is that it is impatient with imperfection and wants something better, but its actual results are always destructive. As Marxism is to the economic sphere, so cultural political correctness is to the cultural sphere. Marxism promised a utopian economic abundance to be shared equally by all--if only we would dismantle the existing bad economic structure. But only the dismantling was ever realized, with the result that the formerly socialist countries must now suffer severe hardships during the long process of rebuilding their economies. In just the same way, cultural political correctness now promises cultural abundance for everyone in a new egalitarian culture if only we are willing to reject our elitist Western culture. The result is just as predictable: we shall all be culturally poorer as, once again, the destruction succeeds but the promised state of cultural utopia that is to replace it never materializes. Our Western cultural inheritance is not perfect, but it has succeeded in raising us from the barbarism of a state of nature. It has managed to abolish many forms of human cruelty, has given us forms of democratic government that actually work, and has a record of human thought in literature and philosophy that offers extraordinary range, depth, and complexity. Far from debasing human beings, it has enhanced their dignity in a thousand different ways. We can build on it, extend it, modify it; but if we allow the politically correct to pull it down with their characteristic utopian promises about what they can replace it with, we have only ourselves to blame. We can be sure that if we allow their destructive resentment to destroy yet again so that they can create perfection, we shall witness the destruction but never see the benefits promised. We shall soon be faced with cultural ruin and a painful period of rebuilding--a cultural disaster analogous to the economic disaster that has befallen eastern Europe.

Aka 关系 or 人情

From Shankar Vedantam again:

"Most people in America get their jobs because of who they know, not what they know," said Robert Putnam, a political scientist at Harvard's Kennedy School of Government. "It's not nepotism -- one person knows me and another person finds out and someone says, 'Did you hear there is a new job at the bank?' or they say, 'Do you know a good lawyer?' "

[This] highlights the importance of something that Putnam calls social capital: a measure of how closely people in the community are interconnected. Levels of social capital predict everything from the quality of schools and local government, to the risk a country will go down in corruption or blow up in civil war.

...

The problem with an external agent handing down largesse -- building bridges, roads and schools, for instance -- is that it runs counter to everything known about how social capital grows, Putnam said. And without social capital, societies fall apart, even if the roads are smooth and the trains run on time.

So what exactly is social capital? Putnam, the author of the 2005 book "Bowling Alone," said it describes how much people in a community feel responsible for each other.

...

[Duke University political scientist Anirudh Krishna] also found that government aid and nongovernmental organizations could do virtually nothing to build social capital -- contractors and aid agencies can build bridges, but they cannot build connections between people.

"You cannot build social capital from above," he said. "It can only be built by the people involved."