15 Jul 2014


Piketty, Potpourri, Shameless Self-Promotion 13 Comments

==> S4L response to Piketty.

==> So the government has been caught repeatedly lying about the extent of its NSA activities. I’m shocked.

==> Krugman has already explained that people oppose ObamaCare because they hate poor people. In this post he clarifies: It’s specifically poor *black* people the critics want to get sick and die. Keep it Klassy Krugman.

==> Speaking of which, in two recent posts Krugman claims quite confidently that ACA enrollment is currently higher than the projections, but he offers no link. That makes me guess (not certain, just a guess) that it’s the other way around. Anybody have these numbers quickly at hand? Something like the CBO estimate made back in 2010 for right now, compared to reality?

==> Dan Sanchez was not happy about Tyler Cowen’s essay on the economic benefits of war.

==> I just want to point out that I scooped Alan Reynolds by a few days (at EconLib) on why his earlier work shows the problem with the Saez-Zucman wealth figures. The only person I’ve seen give even decent pushback on our brilliant points is Daniel Kuehn. I don’t expect any big guns to respond to me, but has Zaec or Zucman or Piketty answered Reynolds?

13 Responses to “Potpourri”

  1. Major.Freedom says:

    Sanchez’s article is excellent. He suspects that Cowen is participating in “pop economics”. Probably, but as always I think there is a deeper reason. One that explains why “pop” economics, with the allure of connecting separate concepts, without regard for the fundamentals and their logical connections, is even on the radar.

    The S4L article is also a great read. Egalitarianism has acquired this aura of humanitarianism, when in fact egalitarianism and humanitarianism are mutually exclusive. To be a healthy individual does not mean to be relatively more healthy than someone else. It means to be healthy absolutely, meaning as an individual living in the world. Forcing egalitarianism makes everyone worse off in the long run.

    We still live among many people who have feudalist mentalities and no understanding whatsoever of the division of labor and what it implies. The lack of the teachings of Austrians in schools is to blame, but the internet is helping greatly.

    • noiselull says:

      Cowen destroys Higgs here: http://www.bcaplan.com/Cowentech.pdf

      • Ben B says:

        I didn’t read the article; however, if I did read the article, one of the questions that I would be looking for Cowen to answer would be “how do inanimate objects (technology) cause government growth?” It’s hard to believe that poor technology is the main obstacle that a government faces in raising taxes.

        • Ben B says:

          If the government came out tomorrow and said, “hey guys, rejoice, we’ve found a more efficient way to take more of your money”, how would this drive government growth?

          It seems like government agents would need some sort of shift in the underlying political climate before they could get away with something like that; hence, in times of crises, the political climate changes, and the government is able to get away with certain policies that previously would have been untenable.

      • Ben B says:

        I don’t see where Cowen destroys Higgs. He briefly mentions Higgs’ argument as one of the arguments that have been put forward to explain government growth. Cowen then says that the Ratchet effect seems to be more applicable beginning in the 20th century, and that it doesn’t really account for governments before the 20th century. Perhaps this variance in the degree that the ratchet effect plays on the growth of government can be accounted for in Hoppe’s analysis of monarchy and democracy, and the transition that took place in the 20th century from monarchies to democracies.

      • Major.Freedom says:

        I don’t think it is a “destroy”, noiselull. An addition which Cowen said is not monocausal, to what Cowen says are a plausible series of explanations, cannot possibly be reasonably construed as a “destruction” of one of those explanations.

        I also notice what seems to me an inconsistency in the paper. Cowen first rejects ideas as the cause for growth in government, but then he writes:

        “Government was small in previous eras, in part, because the technologies for supporting large government simply did not exist. In other words, big government might have always “been in the cards,” for demand-side reasons, but only the twentieth century has brought large government on a national scale.”

        Isn’t “demand for big government” an idea? If the demand for big government, i.e. the idea of desiring big government, wasn’t there, then surely any offer of additional supply, even if it were low cost due to advanced technology, would be rejected by the ideological “small government” public, would it not?

        I think Cowen was logically compelled to ground his paper on ideas, because it would be absurd to claim that an idea of small government is responsible for big government.

        The argument that technology allowed an existing ideological demand to be satisfied, is not actually an argument that technology as well and not just ideas are the cause.

        Think of the “would you press the red button” thought experiment. Suppose some sociopathic individual wants everyone to die, and they were presented with a red button that if pressed, would end the human race. Would it be a valid argument that the technology of the red button and the effects of pressing it, is even in part a cause? If you say yes, then logically you would have to attribute the shooting death of a person to the technology of guns, of bullets, of gunpowder, of the metal casings, of copper mining, of shovels, of wood cutting…see where this goes? We have to attribute a cause of our choices, our ideas, to technology. That is right out of Marx’s theory.

        Mises showed quite convincingly that technology is grounded on ideas, not the other way around. But big government ideas solely? If people wanted bigger government, but they couldn’t figure out how to do it without more advanced technology, this too doesn’t suggest technology is itself a driver. For even in a primitive tribe, big government is possible. For large regions and larger populations, big government would be possible as well if enough people had sufficiently big government desires. Carrior pigeons can send statistical reports, local armies can collect taxes, etc.

        If size of government is positively correlated with advancement technology, and we even notice how governments are able to expand by usage of technoloty, all this does not rule out big government ideas as the necessary driver.

        Could it be the case that Cowen is underestimating just how much more prononced big government ideas have escalated during the growth of government from 5% to 40-50% GDP? That the “social conditions” (also a Marxist conception) he imagines as affecting ideas, are actually themselves also a product of ideas? Cowen is looking for a materialist cause for the shift in ideas. But ideas, as Mises noted, are the only coherent datum. “Social conditions” is an untenable explanation because they are themselves driven by ideas.

        • Harold says:

          “Mises showed quite convincingly that technology is grounded on ideas, not the other way around.” I had not previously seen Mises argument here. I looked up “The role of ideas” at Mises.org. I don’t think thisis the bit you mean, but he describes technology thus: “A world view is thus, on the one hand, an explanation of all phenomena and, on the other hand, a technology, both these terms being taken in their broadest sense.”

          This meaning of technology does not match what most people think of as technology.

  2. Bob Roddis says:

    Over 40 percent of all U.S. births now are illegitimate. Among Hispanics, the figure is 52 percent. Among African-Americans, 73 percent. Egypt now has 82 million people crammed into a tiny area along the Nile. Government subsidies and welfare (which cannot be described as “capitalism”) have induced these outcomes. How are these people not going to live in poverty especially with the implementation of more socialism/facism and more violent interventionism?

    I enjoy the attack on Piketty’s methodology as much as anyone but to the extent that there is “institutional” inequality, it is the height of academic fraud to blame it on “capitalism” or suggest that its solution is “redistribution”.

    • Harold says:

      Is there anything wrong with illegitimacy birth per se? I expect quite a lot of illegitimate children will not live in poverty.

  3. Fake Herzog says:

    Bob, here is an excellent article with the answers you seek regarding ACA enrollment projections:


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