Good Entropy

The market’s “freedom to exit” doesn’t solve society’s problems

You know, Albert Hirschman, the development economist wrote this book a number of years ago, I’m sure you know about it, “Exit, Voice, and Loyalty.” And sort of the idea was, okay, so you got an institution. And it’s screwing up. And so one way to fix it is to exercise voice. The other way is you can exit. The market solutions are all exit solutions.

Meet the Regulations – TCS Daily

Thorium is a radioactive metal that isn’t used for very much any more, precisely because of its light radioactivity. The US Geological Survey (having absorbed the Bureau of Mines) estimates annual usage in the US at about $30,000 worth a year. One of the people who does use it is one of our customers and a few years back they asked us to provide some for them. About 12 or 13 lbs was needed to keep their process going for 5 years or so in the manufacturing of a particular type of light bulb, a fairly trivial enterprise you might think and certainly one that you would think would be easy to supply. Especially if like us you were on the inside of the metals business and knew that there were (and are) warehouses full of this metal in the US. The material is left over from the US Navy’s nuclear reactor program and at current rates of usage there are centuries of supply simply sitting there. Should be the easiest thing in the world really, shouldn’t it? Buy a piece, slap a decent profit margin on to it and send it off to the customer and, as is said in certain English circles, Bob’s your parent of choice’s male sibling. Then we met the regulations.

That people should wish to be relieved of the bitter choice which hard facts often impose upon them is not surprising. But few want to be relieved through having the choice made for them by others. People just wish that the choice should not be necessary at all. And they are only too ready to believe that the choice is not really necessary, that it is imposed upon them merely by the particular economic system under which we live. What they resent is, in truth, that there is an economic problem.

F. A. Hayek. The Road to Serfdom: Text and Documents–The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) (Kindle Locations 1705-1708). Kindle Edition.

No Substitute For Saving – Megan McArdle – Business – The Atlantic

At this point, I think that most people who are likely to be reading this blog should be targeting a savings rate in the range of 20-25% of income, more if they can manage it.

Washington in One Easy Sentence – Megan McArdle – Personal – The Atlantic

In Washington, if something’s obviously desirable that means it’s a bargaining chip.

~Mickey Kaus

The Political Economy of Health Care | The Unbroken Window

If people truly cared about the poor and the permanently infirm being taken care of, I would not be as ascerbic as I am. I don’t believe for a second that the majority of people who argue for health reform really give a damn about the poor or infirm – it just makes them feel good to say it, or be more acceptable in the company of others. Why do I say this so strongly? Because providing even a very generous level of support to the poor and the infirm is so easily within our reach that it is laughable to suggest otherwise. Instead, “we” use the poor and infirm as pawns in a corporatist game, in a middle-class entitlement game, special-interest game, political-nanny-statism game, and no one is willing to admit it.

George F. Will – A recoil against liberalism

The progressive agenda is actually legitimated by the incomprehension and anger it elicits: If the people do not resent and resist what is being done on their behalf, what is being done is not properly ambitious. If it is comprehensible to its intended beneficiaries, it is the work of insufficiently advanced thinkers.

Response to an Angry Critic

Response to an Angry Critic

by Don Boudreaux on August 23, 2010

in Competition,Myths and Fallacies,Regulation,Seen and Unseen,Work

Dear Ms. ___________:

Thanks very much for writing. I appreciate your thoughts.

I assure you, though, that you’re mistaken in your conclusion that I am “a disgusting typical conservative corporate mouth piece.” First, I truly am not conservative. Second, I very often speak out against policies that benefit corporations. (Whether or not I am disgusting is not for me to say.)

Contrary to your accusation, to recognize (as I do in my offending blog-post) that statistical differences in the pay of men and women might well be the result of perfectly reasonable differences in the patterns of career choices typically made by men from the patterns of career choices typically made by women is not at all, as you describe it, “to tow [sic]… [an] ignorant conservative line.” For example, here’s philosopher Peter Singer, who is no one’s idea of a conservative or of an economic libertarian!:

While Darwinian thought has no impact on the priority we give to equality as a moral or political ideal, it gives us grounds for believing that since men and women play different roles in reproduction, they may also differ in their inclinations or temperaments, in ways that best promote the reproductive prospects of each sex. Since women are limited in the number of children they can have, they are likely to be selective in their choice of mate. Men, on the other hand, are limited in the number of children they can have only by the number of women they can have sex with. If achieving high status increases access to women, then we can expect men to have a stronger drive for status than women. This means that we cannot use the fact that there is a disproportionately large number of men in high status positions in business and politics as a reason for concluding that there has been discrimination against women. For example, the fact that there are fewer women chief executives of major corporations than men may be due to men being more willing to subordinate their personal lives and other interests to their career goals, and biological differences between men and women may be a factor in that greater readiness to sacrifice everything for the sake of getting to the top.*

Correct or not, people can – and do – without being mouthpieces of corporate America, or even favorably disposed toward free markets, believe that statistical differences in men’s and women’s pay are explained by factors having nothing to do with ill-intent, discrimination, or, as you say, “men/male power/domination over women/female subservience/exploitation.”

Thanks again for writing.

Sincerely,
Donald J. Boudreaux

* Peter Singer, A Darwinian Left: Politics, Evolution, and Cooperation (New Haven: Yale University Press, 2000), pp. 17-18.

Ms. __________ should read some of the economics literature on this topic. She can begin with J.R. Shackleton’s Should We Mind the Gap?: Gender Pay Differentials and Public Policy (2008).

Megan McArdle :: The Atlantic – Sage

Harold Meyerson makes an argument that will be familiar to readers of this blog: stimulus doesn’t work the way it used to. Workers have more skills, which makes it harder to create jobs to soak up an untapped labor pool–even if we did create large numbers of jobs swinging pickaxes, many unemployed Americans wouldn’t take them.

Meyerson identifies a lot of the procedural barriers that I frequently talk about–the bidding and environmental safeguards that make federal projects very slow to get off the ground. But perhaps unsurprisingly, he doesn’t really explore a huge barrier to a WPA-type jobs program: public sector unions. They are not going to let you hire a bunch of cheap workers and run crews without civil service protections.

There’s something ironic in the fact that the legacy of the New Deal is the inability to reproduce it. On the other hand, it’s not so necessary, either. People are richer now, and though it isn’t perfect, our financial regulation is better. We’re not at much risk of people starving to death. So there’s no urgent need to create low-skilled jobs for them to fill.

Matthew Yglesias » Political Conflict Isn’t About Free Markets

To borrow an idea from Robin Hanson, I think it’s useful to think about political conflict in terms of valorized figures. On the right, you see a lot of valorization of businessmen. On the left, you see a lot of valorization of pushy activists who want to do something businessmen don’t like. Formally, the right is committed to ideas about free markets and the left is committed to ideas about economic equality. But in practice, political conflict much more commonly breaks down around “some stuff some businessmen want to do” vs “some stuff businessmen hate” rather than anything about markets or property rights per se. Consequently, on the left people sometimes fall into the trap of being patsies for rent-seeking mom & pop operators when poor people would benefit more from competition from a corporate bohemoth.