21 Mar 2015


Potpourri 4 Comments

==> I haven’t read this yet, but a published response to the “Dark Leviathan” piece that John Bush and I discussed on our recent podcast.

==> At FreedomFest this year, I’m going to be the prosecutor in the “Fed on Trial,” while Jeff Madrick is going to be the defense attorney.

==> Another article on Bitcoin, private law, and all kinds of stuff that I haven’t yet read, but it looks very provocative. Lots of glossy photos!

==> A funny comic on the economics of Superman. I’ll repost my old article on this when they send me the updated URL.

==> FEE publishes Ralph Nader! (Note the date.)

19 Mar 2015


Bitcoin, Climate Change, Economics, Potpourri, Shameless Self-Promotion 82 Comments

==> I thought this Lew Rockwell podcast about “guilt, shame, and anxiety” was interesting. Now I understand my life…

==> My recent Mises CA post on bank moral hazard and liability for shareholders.

==> Here’s the agenda for the Texas Bitcoin conference, on March 28-29 in Austin. If you use discount code “robertmurphy” you get $25 off.

==> Speaking of Bitcoin, here’s my interview with John Bush. We talk about Silk Road, hitmen, pacifism, the regression theorem, and all kinds of cool stuff…

==> Here’s a good NR article talking about Krugman (and Mike Konczal) pointing at the stands and then the Market Monetarists struck them out. I like this one in particular because it focuses on David Beckworth.

==> My latest at IER shows that even the fans of a carbon tax agree it will hurt the economy, even if 100% of the revenues are recycled back through payroll tax cuts. Look at this chart from a 2013 Resources for the Future (RFF) study:


The next time someone tells you, “Econ 101 says ‘tax bads, not goods,’ duh, a sensibly designed carbon tax swap will help the environment and the economy!” you can show him this chart.

19 Mar 2015

Believing Is Seeing: Noah Smith Reagan Record Edition

Austerity, Economics, Noah Smith 32 Comments

Besides my contributions to the rehabilitation of the fine art of karaoke, one of my favorite contributions to humanity is the phrase, “Believing Is Seeing.” (It is self-affirming since many of you probably initially read the post title as, “Seeing Is Believing.”) Today’s example comes from a recent Noah Smith blog post, where Noah wrote:

The U.S. federal deficit, which had been decreasing since the end of WW2, began to trend upward beginning around 1980: [Smith then inserted a chart of federal debt.]

Why? Well, the proximate cause was big tax cuts, without any offsetting spending cuts. The beast was not starved, and tax cuts did not pay for themselves.

Then Noah goes on to give a theory to explain this “fact.” And yet, he never really established the premise of his argument. Even though “everybody knows” that the Reagan Administration ran up huge deficits because of irresponsible “tax cuts for the rich,” it’s not obvious that this is what happened.

First, let’s look at the federal budget deficit, as a share of the economy, to get a sense of historical context:

Budget deficit as share

There are a few takeaways from the chart above. First, the budget deficits of the Reagan years weren’t unprecedentedly large looking at any year in isolation. For example, they were comparable to the “do-nothing” Herbert Hoover’s budget deficit in 1932, and there were isolated years in the decades following World War II where the deficit was in the same ballpark as the Reagan years after the early 1980s recession. (The deficit sounded unprecedented in the 1980s because people were hearing it quoted in absolute dollar terms, not as a share of the economy.) The reason the federal debt (as a share of the economy) mushroomed so much in the 1980s–as Noah shows in his post–was that there was a consistent string of large deficits; it wasn’t that the deficit in any particular year was that much larger than it had been under previous Administrations.

Now let’s look at the level of federal spending and tax receipts (in historical dollars), using the White House historical tables:


Carter Reagan fiscal

The above chart is calibrated in billions of historical (i.e. not inflation-adjusted) dollars. As the data indicate, there was no point during the Reagan years during which federal revenues actually went down. They treaded water for two years during the worst economy since the Great Depression, but then they began rising again.

Now Noah might be tempted to say that the trend under Carter was clearly interrupted by the tax rate reductions of the early 1980s; federal spending continued its typical growth, while receipts never recovered from the shortfall of the recession years.

If that’s how Noah wants to interpret the chart, fair enough, except I would ask that he be consistent. If we use the above chart to rate Carter vs. Reagan, then we should do the same thing with Bush vs. Obama:

Bush Obama fiscal

To repeat, if Noah thinks it is obvious that the debt problem under Reagan was due to irresponsible tax cuts without comparable spending cuts, then it shouldn’t be a problem for us to find posts from 2009 and 2010 where Noah is decrying the irresponsible tax cuts of the Obama Administration. Indeed, federal tax receipts didn’t even recover to their pre-recession levels until a good three years after Obama took office.

Finally, let’s look at federal outlays and receipts as a percentage of GDP:

Fiscal trends

The above chart shows that if we compare federal outlays and receipts during the Reagan years to their average values under the Carter years, we conclude the following:

(1) Federal spending under Reagan (as a share of the economy) was consistently and much higher than under Carter.

(2) Federal tax receipts under Reagan (as a share of the economy) were higher during the recession years than under Carter, and for the middle three years were moderately lower than they had been during the Carter years.

So, if you are OK with the way I’ve chosen to slice and dice the data in that last chart, we would reach the exact opposite conclusion from Noah Smith: Namely, the explanation for the explosion of federal debt during the Reagan years is that the federal government took in about the same share of the economy (over the whole period) in receipts, but increased spending.

In conclusion, let me admit that Noah could play with Excel and probably come up with a different way to make his case; there is a lot of wiggle room depending on how we treat Fiscal Year 1981, for example–is that a Carter year or a Reagan year? (Fiscal year 1981 ran from October 1, 1980 through September 30, 1981. Ronald Reagan was elected in November 1980 but not sworn into office until January 20, 1981.) Even harder to evaluate, do we count the big rise in tax receipts as a share of the economy in 1981 and 1982 as due to deliberate policy, or as due to the collapse in economic output during the awful recession?

All I’m trying to do with this post is show that the standard progressive line that the 1980s were due to “tax cuts for the rich” is hard to square with the facts. For sure, it is impossible to simultaneously maintain the progressive narratives regarding Herbert Hoover, Ronald Reagan, and Barack Obama. They would have to adjust their metrics and definitions between presidents for their stories to hold up.

One last thing: I am NOT defending the “Reagan Record” in this blog post. If the Reagan Administration had lived up to the wonderful speeches of the Gipper, then we wouldn’t have these arguments. If President Reagan had actually signed into law massive “spending cuts” as his critics often allege, then nobody would dare suggest that “tax cuts for the rich” had led to a fiscal problem.

15 Mar 2015

Reprint From 2006: Judging the ID / Darwinian Debate

Evolution, Religious 32 Comments

Editor’s Note: Someone recently asked me about William Dembski (one of the leaders in the Intelligent Design [ID] movement) and so I dug up this old article from 2006 that I originally wrote for LewRockwell.com. Since we’ve been discussing this debate on and off here recently, I thought some of you would enjoy this. To provide the context, back in 2006 (when I was a college professor at Hilldale) I really immersed myself in this area, reading a lot of material pro and con regarding ID.

One minor set of edits is that I thought Eugenie Scott was a man when I originally wrote this article. I think I changed it all (“him” to “her” etc.) in the text below, but let me know if I missed any.

Judging the ID/Evolution Debate

Bob Murphy

January 2006

 One of the most unfortunate aspects of the controversy between proponents of modern, orthodox evolutionary theory (to which I shall simply refer as “evolution” from now on) and Intelligent Design (ID) theory is the sloppy argumentation. Perhaps this is because biology is a hard science, and hence the experts in this field are not as well trained in rhetoric as, say, people with PhDs in philosophy or even economics. In any event, in the present article I analyze an excellent summary of the dispute hosted by Natural History magazine. Three major figures in the ID movement give short position statements, followed by responses from proponents of evolution. I rate these exchanges and also the introductory and concluding portions of the special issue. (Disclaimer: I believe that the allegedly overwhelming case for evolution is overrated.)


Dembski vs. Pennock: Very Good

In this exchange concerning information theory, Dembski and Pennock do a wonderful job of clearly stating their positions. As we shall see, Dembski starts with a very strong case, but Pennock impressively rebuts.

Dembski starts by reminding his readers that explanations relying on intelligence are certainly not alien to unquestionably “scientific” disciplines:

But how do we know that nature requires no help from a designing intelligence? Certainly, in special sciences ranging from forensics to archaeology to SETI (the Search for Extraterrestrial Intelligence), appeal to a designing intelligence is indispensable. What’s more, within these sciences there are well-developed techniques for identifying intelligence. Essential to all these techniques is the ability to eliminate chance and necessity.

Hoping to draw the reader in with an obvious (and popular) example, he then refers to a movie:

 For instance, how do the radio astronomers in Contact (the Jodie Foster movie based on Carl Sagan’s novel of the same name) infer the presence of extraterrestrial intelligence in the beeps and pauses they monitor from space? The researchers run signals through computers that are programmed to recognize many preset patterns. Signals that do not match any of the patterns pass through the “sieve” and are classified as random. After years of receiving apparently meaningless “random” signals, the researchers discover a pattern of beats and pauses that corresponds to the sequence of all the prime numbers between 2 and 101.…When a sequence begins with 2 beats, then a pause, 3 beats, then a pause…and continues all the way to 101 beats, the researchers must infer the presence of an extraterrestrial intelligence.

After illustrating his basic approach with this example, Dembski then gets a bit more rigorous and explains the process by which one can operationally define information. Finally, because (Dembski claims) DNA is, among other things, a huge repository of information, it is evidence of intelligence. To switch examples: If two guys are hiking in the woods and discover some rocks arranged to spell out, “WARNING SNAKES AHEAD,” then there would be no doubt in their minds that something intelligent had deliberately designed this arrangement. All Dembski has done is to systematically explain how it is that we make such an evaluation all the time (in our everyday lives) and how to apply it to the biological context.

As I said earlier, Pennock does a great job meeting Dembski’s challenge. He first claims (plausibly) that “the odd sequences found within DNA are quite unlike a series of prime numbers. Dembski has no way to show that the genetic patterns are ‘set up in advance’ or ‘independently given.’” In other words, Pennock is challenging the analogies. If I may put words in his mouth, I think Pennock is arguing that the only reason we think DNA contains information is through our understanding of the evolutionary process; it’s not analogous to our understanding of mathematics which then could provide independent evidence for extraterrestrials.

Next Pennock challenges Dembski’s “law of conservation of information.” Basically, Dembski argues (in his work, not in this short piece) that if you see a system with a certain amount of information, it must have gotten “in” from somewhere, and more important it must have been caused by an intelligence. Pennock counters this superficially plausible claim by pointing out that “researchers are beginning to use Darwinian processes, implemented in computers…to evolve complex systems and to provide solutions to design problems in ways that are beyond the power of mere intelligent agents.”

This may sound hokey to the average person, but (at least for those readers who are familiar with economic theory) we should be careful. One of the biggest mistakes (which Friedrich Hayek spent much of his career attacking) we can make in the social sciences is to assume that a complex order (such as a monetary economy) must have been deliberately designed by someone or some group. Now of course, one could argue from a certain point of view that the intelligence of all actors in a market taken together gives rise to the complex economic system, but in the same way the evolutionary theorist could argue that the ecosystem as a whole had all the information from the beginning, which only manifested itself in particular strands of DNA billions of years later.


Behe vs. Miller: Fair

Behe is the most famous of the ID proponents, and I’ve heard his standard case so often that I’ve lost the ability to disinterestedly evaluate it. As we shall see, I think the evolutionist response (at least in this exchange) is fair at best, and really doesn’t help the intelligent layperson evaluate Behe’s argument.

Behe first reminds us of Darwin’s own criterion for success or failure:

 How can we decide whether Darwinian natural selection can account for the amazing complexity that exists at the molecular level? Darwin himself set the standard when he acknowledged, “If it could be demonstrated that any complex organ existed which could not possibly have been formed by numerous, successive, slight modifications, my theory would absolutely break down.”

Quite simply, Behe thinks he has taken Darwin at his word and offers the examples of the bacterial flagellum, the blood clotting mechanism in humans and other animals, and the system of protein distribution in cells. But Behe’s famous illustration of his idea is the mousetrap analogy:

Some systems seem very difficult to form by such successive modifications—I call them irreducibly complex. An everyday example of an irreducibly complex system is the humble mousetrap. It consists of (1) a flat wooden platform or base; (2) a metal hammer, which crushes the mouse; (3) a spring with extended ends to power the hammer; (4) a catch that releases the spring; and (5) a metal bar that connects to the catch and holds the hammer back. You can’t catch a mouse with just a platform, then add a spring and catch a few more mice, then add a holding bar and catch a few more. All the pieces have to be in place before you catch any mice.

In case it’s not clear, the reason Behe added the last sentence above was to show that an “irreducibly complex” system (such as a mousetrap) cannot arise through the Darwinian process of mutation and natural selection. The evolutionary account makes perfect sense when explaining, say, how a giraffe’s neck got to be so long; over time those giraffes with slightly longer necks produced more offspring than those with shorter necks, etc. (And the reason that a giraffe doesn’t have a neck sixty feet long is also easily explained by the larger requirements of calories, loss of speed, etc.)

But, according to Behe, when it comes to something even as (apparently) simple as a single celled organism, we see an astoundingly complex machine that consists of numerous parts, many of which are crucial to the success of the organism as a whole. Unlike the giraffe story, it is impossible (according to Behe) to come up with an account of how a cell could have arisen step-by-step through gradual mutation and natural selection, because gaining just part of (say) the system for protein distribution wouldn’t be advantageous; only getting the whole system in one fell swoop would be. Thus, if life evolves only through unguided or “blind” processes, the (alleged) irreducible complexity of cells is a serious problem.

Miller’s response to Behe is very pithy and no doubt caused great mirth in the evolution camp, but I shall argue that it is rather weak indeed:

 Ironically, Behe’s own example, the mousetrap, shows what’s wrong with this idea. Take away two parts (the catch and the metal bar), and you may not have a mousetrap but you do have a three-part machine that makes a fully functional tie clip or paper clip. Take away the spring, and you have a two-part key chain. The catch of some mousetraps could be used as a fishhook, and the wooden base as a paperweight; useful applications of other parts include everything from toothpicks to nutcrackers and clipboard holders. The point, which science has long understood, is that bits and pieces of supposedly irreducibly complex machines may have different—but still useful—functions.

As I said above, Miller’s response is clever, but does it really hold up? Let’s forget the biological context for a moment (because one’s own position on evolution versus ID will certainly cloud one’s judgment) and imagine that we’re really in a situation involving a “mousetrap,” and I put that word in quotation marks because to label it as such begs the question of what this thing’s purpose is.

Okay, so you and I walk onto a porch and see, perhaps in the corner, a flat piece of wood with a spring, a hammer, etc. You claim that it is a mousetrap, by which you mean that it is a device that someone with intelligence deliberately designed, for the purpose of catching mice. In contrast to your assertion, I maintain that there is no reason to invoke an unseen designer. After all, it’s possible that those components came together in some other way.

You of course are astounded by my position. Although it’s difficult to even set up the scenario for calculations, you feel quite sure that my explanation is astronomically improbable.

Now—and here’s the rub, folks—suppose I say, “Hold on. My story isn’t nearly as improbable as you think. I don’t need to assume, for example, that a tree got hit by lightning and a flat board was produced, and that an earthquake caused an iron deposit to eject a spring, etc. Those individual components could have existed for other reasons. For example, maybe someone was using the wooden base, the hammer, and the spring as a three-part tie clip, and maybe someone else was using the catch as a fishhook, and finally maybe a third person was using the metal bar as a nutcracker. So it’s not unreasonable to suppose that those components all existed. All my explanation needs, in terms of random chance, is that some event occurred in which all three of these components come together accidentally to form a functioning mousetrap, which a human then placed in the corner of his porch.”

Does the reader see where I’m going with this? It is a very weak response to Behe to argue that each of the components of an allegedly irreducibly complex system could exist in some other capacity. First, why would natural selection have those components exist in the proper state long enough for the random coupling to occur? To go back to the mousetrap analogy, even though you could use the wooden base+hammer+spring as a tie clip, you wouldn’t do so for very long. Maybe you’d use it once in an emergency, but you would discard it after that use because it wouldn’t be a very good tie clip. Second, even if we concede that it’s possible that each of the numerous components could exist on its own, it would still take a complicated story to explain how they all came together at the same time. To go back to the mousetrap analogy, even if we did have people using each of the components for the uses Miller suggests, it would still be a ridiculous claim to say that they all came together to form a mousetrap without someone’s deliberate design.

Of course, the proponent of evolution will argue that this isn’t the case in biology, and that there are plenty of plausible accounts by which (say) something like the human eye could have evolved step-by-step. All I’m trying to do above is show that Miller’s response to the mousetrap analogy isn’t very good at all; what he should have done instead is simply say that it’s a bad analogy.


Wells vs. Scott: Poor

In his contribution entitled, “Elusive Icons of Evolution,” Jonathan Wells is taking the modest position that two of the allegedly great pieces of evidence for evolution are, in fact, nothing of the kind:

Scientific theories, however, must fit the evidence. Two examples of the evidence for Darwin’s theory of evolution—so widely used that I have called them “icons of evolution”—are Darwin’s finches and the four-winged fruit fly. Yet both of these, it seems to me, show that Darwin’s theory cannot account for all features of living things.

Regarding the finches, Wells points out that the supposedly important work on this (by Peter and Rosemary Grant) doesn’t demonstrate what the evolutionists think it does:

In 1977 the Grants watched as a severe drought wiped out 85 percent of a particular species on one island. The survivors had, on average, slightly larger beaks that enabled them to crack the tough seeds that had endured the drought. This was natural selection in action. The Grants estimated that twenty such episodes could increase average beak size enough to produce a new species.

When the rains returned, however, average beak size returned to normal. Ever since, beak size has oscillated around a mean as the food supply has fluctuated with the climate. There has been no net change, and no new species have emerged.

Wells then tackles another oft-cited piece of evidence in the alleged mountain of confirmation of evolution, the four-winged fruit fly:

 Normal fruit flies have two wings and two “balancers”—tiny structures behind the wings that help stabilize the insect in flight. In the 1970s, geneticists discovered that a combination of three mutations in a single gene produces flies in which the balancers develop into normal-looking wings. The resulting four-winged fruit fly is sometimes used to illustrate how mutations can produce the sorts of anatomical changes that Darwin’s theory needs.

But the extra wings are not new structures, only duplications of existing ones. Furthermore, the extra wings lack muscles and are therefore worse than useless. The four-winged fruit fly is severely handicapped—like a small plane with extra wings dangling from its tail. As is the case with all other anatomical mutations studied so far, those in the four-winged fruit fly cannot provide raw materials for evolution.

Admittedly, Wells doesn’t spell out quite clearly what his overall point is. We must remember what he (and many other, though not all, ID proponents) thinks is true in the Darwinian story: Wells believes that there is genetic variation within species, that this can lead to phenotypic differences, and finally that environmental change can favor or hinder the different groups, such that the proportion of a given species having a certain trait can change over time. However, what Wells denies is that this “microevolution” can lead to the formation of entirely new species. He admits that “large” changes are possible, particularly if humans deliberately alter the genetic code, but he claims that such large changes would never be beneficial, and so cannot explain the complexity of life.

Now that we understand the view of Wells, and how it differs from the standard Darwinian story, we can better understand his short piece. Wells is pointing out that two of the most popular pieces of evidence that allegedly make the case for evolution do no such thing, when contrasted with Wells’ own story. In other words, if one is trying to decide between Wells’ view and that of an orthodox evolutionist, one would have to conclude that the work of the Grants and the research on fruit flies either was neutral or helped Wells.

So how does Eugenie Scott respond to these claims? It would have been ideal to either contradict Wells’ claims (i.e. to say that the finches really did experience a permanent deviation in beak size or that the fruit flies really did improve after the mutations), or to offer other examples where these phenomena occurred. But Scott does nothing of the kind. Regarding the study of finches:

Reading Wells, one might not realize the importance of the Grants’ careful studies, which demonstrated natural selection in real time. That the drought conditions abated before biologists witnessed the emergence of new species is hardly relevant; beak size does oscillate in the short term, but given a long-term trend in climate change, a major change in average size can be expected.

 Do you see what Scott has done here?? She has said that the mere fact that the example doesn’t illustrate what people typically claim—and that, in contrast, it illustrates only the weaker claim of Wells and other IDers—is irrelevant, and that the very thing under dispute “can be expected.” That’s the whole point, Dr. Scott—Wells and others are saying it can’t be expected, and they challenge you to show a counterexample. (Note that I’m not saying no such counterexamples exist; the talkorigins site claims that there are observed cases of speciation. I’m just pointing out how silly Scott’s response is.)

Now what about the fruit fly? Again, in light of Wells’ position—that major mutations are harmful and so can’t explain the diversity of species—Scott should’ve (ideally) given an example where it was helpful, or acknowledged the empirical gap in the theory that perhaps would be filled over time. Instead she cavalierly says:

 Wells admits that natural selection can operate on a population and correctly looks to genetics to account for the kind of variation that can lead to “new features in new species.” But he contends that mutations such as those that yield four-winged fruit flies do not produce the sorts of anatomical changes needed for major evolutionary change. Can’t he see past the example to the principle? That the first demonstration of a powerful genetic mechanism happened to be a nonflying fly is irrelevant.

Scott then goes on a long (relative to her whole piece) discourse on how many researchers are working in this area (and this, presumably, is evidence for its validity) but she doesn’t tackle Wells’ point head on. Finally, she demonstrates that her own a priori views make it impossible for her to agree with Wells, regardless of the empirical evidence:

 Wells argues that natural explanations are inadequate and, thus, that “students should also be taught that design remains a possibility.” Because in his logic, design implies a Designer, he is in effect recommending that science allow for nonnatural causation. We actually do have solid natural explanations to work with, but even if we didn’t, science only has tools for explaining things in terms of natural causation.

In light of this conclusion, it’s not surprising that Scott (apparently) put such little effort into understanding Wells’ position. Since Scott can reject Wells’ theory on methodological grounds, the alleged problems with the finch and fruit fly studies really are (in Scott’s worldview) irrelevant.


The Introduction and Conclusion: Horrible

Finally, let us briefly analyze the setup and concluding remarks for the above three exchanges. First, if you click on the link I provided, you’ll see that the website places at the top the label: “evolution: science and belief.” This is a very typical move, illustrated by Futuyma’s book, Science on Trial. Rather than treating PhDs such as Behe, Dembski, and Wells as peers who espouse very bad theories, they are classified as being opposed to science itself.

Before I continue, let me make one thing clear: I completely understand that the overwhelming majority of biologists, chemists, and other relevant experts support the theory of evolution, and think Behe et al. are crazy. I don’t expect the ID proponents to be published in mainstream journals or to be featured at major conferences. But when their peers elect to address their views, they could at least offer them the basic respect of treating them as fellow (misguided) scientists.

(For an analogy, I have participated in a forthcoming Journal of Libertarian Studies symposium on a book that deplores capitalism. Let me admit upfront that the journal editor selected participants whom he knew would criticize the book; the purpose of the symposium was not to really consider the possibility that our worldviews were totally wrong, but rather to demonstrate to the faithful how right we are by gang-criticizing this particular book. Nonetheless, the symposium will not be entitled, “Capitalism: Economics and Emotion,” where our views correspond to the former and the mutualist’s to the latter.)

The concluding “Overview” by Barbara Forrest is, to only slightly oversimplify, one long ad hominem attack. She tells us, for example, that, “At heart, proponents of intelligent design are not motivated to improve science but to transform it into a theistic enterprise that supports religious faith.”

Now yes yes, I understand what makes her say that, and I have no doubt that the overwhelming majority of people who get excited by the IDers with PhDs do so for religious reasons. Nonetheless, her impugning of the motivations of thousands of people (based on the behavior of, shall we say, a subset of that group) is not only classless, not only irrelevant (because you evaluate a theory on its merits, not the motivations of its proponents), but it’s not even sensible. If someone really believes, say, in the Genesis account, then that person thinks the Darwinian story is just plain wrong. It’s not merely that this person objects to the theory of evolution because it offends his religious sensibilities, no, this person objects because he thinks it makes false claims about the natural world. Now if that really were somebody’s view, wouldn’t the ID movement be a necessary step in improving science?

13 Mar 2015

Naomi Klein Gets on Board With Climate Alarmism

Climate Change, Shameless Self-Promotion 21 Comments

…and she also sees how it helps fulfill her prior political goals. Interesting. An excerpt from my latest IER post:

In an extended essay for the Guardian excerpted from her new book, Naomi Klein showcases everything wrong with climate alarmism. First, she slings out a string of dire warnings that are preposterous, going far beyond what the “consensus science” of the latest IPCC report says. Then, after terrifying her readers with bogus warnings, Klein then calls for massive government action on the scale of the “Marshall Plan” in order to achieve all sorts of progressive goals, including a more equal society. Klein’s essay shows that she too—just like outgoing IPCC chief Rajendra Pachauri—views climate activism not merely as a scientific endeavor, but as a secular religion.


11 Mar 2015


Potpourri, Shameless Self-Promotion 46 Comments

==> Tom Woods has a good discussion of the “living wage.”

==> A recent interview with “Political Badger” where we discuss the mechanics of a voluntary society.

==> I knew “The Imitation Game” (movie about Alan Turing and Enigma) had a lot of bogus details. This article outlines some.

==> Viewers’ Choice: If I’m going to go after one of Noah Smith’s recent Bloomberg posts, would you guys prefer this one or this one? We don’t believe in democracy here; I’m asking you to make a case.

==> Scott Sumner has been writing on tax theory again, and I think he is badly mistaken. (Or at least, if you didn’t know economic theory beforehand, reading Scott’s treatment of taxation would totally screw you up.) He presented a cleaned-up version here, which I will critique formally elsewhere. For now, let me just bring to your attention an interesting throw-away observation Scott made in his initial post. After proposing to tweak the Rubio-Lee tax plan by adding “a 50% rate for income above $250,000 (or $500,000 for married people),” Scott wrote:

Conservatives might complain that a 50% top rate is too high.  The current top rate is 43.4% (don’t believe the liars who claim it’s 39.6%.)  But that is the top rate for an income tax system.  Rubio and Lee are proposing that we switch to a consumption tax system.  Consumption is less than income, especially for the rich, or should I say the “rich.” (How much will I consume the year I finally sell my house?  Not $600,000.)  So the top rate should be higher with any switch to a consumption tax.  Indeed you can argue that people with consumption levels in the $100s of millions per year should face an even higher tax rate.  And don’t tell me they “deserve” the 500 yachts earned through legal barriers to entry like intellectual property laws, there is no such thing as “deserve” in a cold heartless universe composed of nothing but subatomic particles, where most people are born into peasant families in places like Nigeria and Bangladesh.  If conservatives won’t be hardheaded realists, who will be?

That’s actually kind of freaky. But, then again I realize most economists don’t like my metaphysical Sunday posts and just stick to criticizing my “austere” policy positions…

11 Mar 2015

Are Markets Myopic?

Economics, Shameless Self-Promotion 10 Comments

My sources say no. From my latest at FEE:

Notice that even if a particular owner of a tin deposit is diagnosed with terminal cancer, he still has an incentive to behave in this “efficient” manner. The reason is that he can sell the tin deposit outright. The market value of the entire deposit will reflect the (present discounted) future flow of net income derived from owning the deposit and operating it in the optimal manner indefinitely. If the owner ever thinks, Well, if I had 10 years left, I would run the operation in such-and-such a way, then that decision won’t change just because he only has one year left. Instead, he can sell the operation to the highest bidder, including people who do have 10 or more years left of expected life.

11 Mar 2015

The Robot Lobby Loves a Minimum Wage Hike

Economics, Minimum wage, Shameless Self-Promotion 47 Comments

There is a clever page on Facebook purporting to represent Robots who are for a $15 minimum wage. Here’s one of their “posters”:

robot min wage

This is fantastic. It alludes to the fact that labor unions and other groups support the minimum wage for personal gain, while cloaking that support with noble-sounding rhetoric. (Here’s a recent article by Jeff Tucker outlining the really ominous history of the minimum wage. It’s not a case of legislators meaning well.)

Elsewhere I have walked through the scholarly debates on the subject, but I imagine clever graphics like the above will reach more eyeballs than my discussion of the peer-reviewed literature.