Max Borders

Crony Climate Capitalism

Excellent piece - "The Climate Industrial Complex" - in the WSJ today. Bjorn Lomborg points out the unholy alliance between corporate rent-seekers and green activists:

Some business leaders are cozying up with politicians and scientists to demand swift, drastic action on global warming. This is a new twist on a very old practice: companies using public policy to line their own pockets.

The tight relationship between the groups echoes the relationship among weapons makers, researchers and the U.S. military during the Cold War. President Dwight Eisenhower famously warned about the might of the "military-industrial complex," cautioning that "the potential for the disastrous rise of misplaced power exists and will persist." He worried that "there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties."

This is certainly true of climate change. We are told that very expensive carbon regulations are the only way to respond to global warming, despite ample evidence that this approach does not pass a basic cost-benefit test. We must ask whether a "climate-industrial complex" is emerging, pressing taxpayers to fork over money to please those who stand to gain.

Bootleggers and Baptists, of course. (Bruce Yandle sees this coming as far back as 1998). Public choice theory may finally be getting a hearing in the public forum. Let's hope so. Because now the left can't decide whether it wants to be socialist or merchantilist. My money goes on crony capitalism.

Max Borders's Top Ten Public Intellectuals

These are in no particular order and based on the Max Borders scale of coolness, bad-assedness and awesomeness:

1. Steven Pinker

2. Matt Ridley

3. Daniel Dennett

4. Tyler Cowen

5. Ron Bailey

6. Christopher Hitchens

7. Jonathan Rauch

8. Amity Shlaes

9. Stuart Kauffman

10. William Easterly

Love Land of the Lost

Me not rove you rong time (apparently). A new sex-themed park in China will be shut down by the Chineses gubment.

Socialism is Theft

This article, currently making the rounds, is just flat depressing. It reminds me that in addition to returning to the Founding principles, we need to return to calling a spade a spade.

Socialism is theft. It doesn't matter how you slice it. Socialism, redistribution -- whatever you want to call it -- requires the initiation of force by some power. C has forcibly to strip resources from A and give them to B. We don't allow this in our everyday lives. There is no reason we should allow this from our government. Just because 50% + one vote says it's okay, doesn't make it okay. Socialist democracy is just a tyranny of the majority. If we continue to allow such theft to proceed unabated, we are in for another Dark Age, a piecemeal, marginal crumbling that could happen over decades, even a century. But more importantly, state theft is just wrong. It doesn't matter who carries it out, or with whose mandate. Corporate welfare is wrong. Social welfare is wrong. And all other variants of socialism are wrong. If a majority of Americans think resources should be taken out of the exchange and savings sector and put into the charity sector, let that majority put its resources into philanthropy. But compulsory charity is evil. Socialism is theft.

Taxed and Happy (Dumbest. Article. Ever.)

File this, by Thomas Kostigen, under either "Onion Wannabe," "Fellated someone for my journalism job," or "Causation/Correlation Confusions of 2009 #5,211" Here's a sliver:

The Organization for Economic Cooperation and Development says people in Denmark, Finland and the Netherlands are the most content with their lives. The three ranked first, second and third, respectively, in the OECD's rankings of "life satisfaction," or happiness.

There are myriad reasons, of course, for happiness: health, welfare, prosperity, leisure time, strong family, social connections and so on. But there is another common denominator among this group of happy people: taxes.

Usually I'd launch into some sort of critical analysis. But this warrants none of that. Between the question begging and the correlation/causation problems, the high tax countries with unhappy people (oh, and Nordic suicide rates), I'm going to let the Logic 101 students pick this one apart.

 

5 More Suggestions for the GOP

Check 'em out. (The last post got picked up by Andrew Sullivan, the Economist (blog) and Yglesias.)

5 Ideas for Republican Reform

I realize this is pretty hopeless. But why not say it anyway? 10 more coming soon.

Self-organizing Criticality (The Grain of Sand that Caused an Avalanche)

Consider this passage on the ideas of Per Bak, one of the original thinkers on complex systems:

Bak uses a metaphor and the concept of long-term equilibrium to describe how traditional economists model economics. In this metaphor, economic flow and the economic agents are compared with water and reservoirs, respectively. The economic flow then will correspond to water flowing continuously and linearly through the reservoirs in such a manner that all reservoirs obtain the best value they can (with accumulation of water corresponding to economic satisfaction) - achieving some sort of stability equivalent to Nash equilibrium.

He rejects this traditional view, considering it simplistic, and presents his idea that the dynamics of economic flows is more like the dynamics observed in (and in his models of) sand piles, as changes are not linear and continuous but rather non-linear and discrete. The forces which each individual agent (grain) exercises over the others plays and important role in the dynamics of the system. He considers that there is friction in the economic flow and that agents are not perfectly rational. He believes that friction prevents (long-term) equilibrium from being reached and that fluctuations in economics are of a different nature than those notions the traditional economists propose. He refers to empirical data to support his suggestion that economic systems would be better modelled as critically self-organised systems. For example, he discusses results obtained by Benoit Mandelbrot, in which the percentage of monthly variation in the price of cotton versus the number of occurrences of such percentages over several months follows a power law distribution.

Bak also hypothesises that the dynamics of an economic system should be somewhat similar to that shown by the evolution model described above, where agents (consumers, producers, traders, thieves) interact with each other in accordance with the set of options they have, exploiting such options in order to increase their 'happiness'. These ideas depict a co-evolution model where the more successful agents will survive while the least fitted ones will not or will be forced to mutate by changing their strategy.

I'll leave you, Dear Reader, to decide how far non-linear dynamics go in describing the current "crisis," which is used, of course, by politicians to gum up the works and blame markets. If you believe that a point of self-organized criticality can be reached in certain economic phenomena, you might also agree that government can be (and in this case probabiy is) a factor in our recent economic avalanche. The market itself might also be culpable, but due to natural dynamics, not greed (I argue something similar here). The good news is, self-organizing systems tend back toward longer term equilibrium (as opposed to classical equilibrium or steady state). The bad news is the government is filled with dummies and fixers who have no clue about these dynamics.

Libertarianism for Recovering Leftists

My friend Michael Strong has a great interview on this NY Times blog. Check it out. (And in case you missed it, here's my review of his book.) My favorite part of the interview:

Just as a painter needs paints, paintbrushes, and a canvas, an entrepreneur needs key institutions, including property rights, rule of law, and the freedom to create. In order to plan a venture, in order to create new value through a new vision, one must be able to determine what resources one will be allowed to use (well-defined property rights), what the rules will be for using those resources (rule of law), and significant freedom with respect to how to organize and manage those resources (economic freedom). Nineteenth-century classical liberals were clear that these tools were the foundations of the entrepreneurial wealth-creation machine that had made the U.S. and Britain the first societies in the world in which the masses experienced a steadily improving standard of living.

A century of Marxist hostility to the foundations of capitalism has obscured the fact that throughout the developing world, property rights are insecure and ill-defined; the processes through which contracts are adjudicated is often obscure and unpredictable; and there are severe constraints on the extent to which entrepreneurs can create and manage their enterprises. The Fraser Institute’s Index of Economic Freedom, shows that by objective measures (which include institutional measures of property rights, rule of law, as well as the freedom to create), the entire developing world has less economic freedom than Scandinavia.

I like his bet proposal to Jeffrey 'drop money from the heavens like manna' Sachs, too:

G.D.P. per capita correlates with levels of economic freedom, and increasing levels of economic freedom increase average rates of long-term economic growth. There is little evidence that government-to-government foreign aid increases average rates of economic growth.

In order to get Sachs to acknowledge this, I propose that we compare G.D.P. growth of three sets of 20 nations, 20 years from now:

Sachs 1: The 20 nations that have received the most government-to-government foreign aid as a percentage of per capita G.D.P.

Sachs 2: The 20 nations that have experienced the greatest percentage growth in government (in honor of Sachs’s claim that large government does not inhibit growth).

Strong: The 20 nations that have experienced the greatest increases in economic freedom as measured by the Fraser Economic Freedom Index.

Foreign aid may do some good (occasionally) or it may do some harm (usually), but no amount of aid will ever create a dynamic economy in the absence of the Entrepreneur’s Toolkit. Due to Sachs’s prominence in the poverty alleviation debate, until he acknowledges the role of economic freedom in alleviating poverty, he should be regarded as the leading cause of poverty in 2025.

Can We Compete With Free?

I attempt an answer over at TCS.