06 May 2019


Potpourri 29 Comments

==> Part 3 of 3 of my scintillating series on Capital & Interest. In this one, I take aim at Bohm-Bawerk, Mises, and Rothbard. I am the Thanos of economics.

==> Dave Smith will debate Nicholas Sarwark at the SoHo Forum in September.

==> This is a fantastic SlateStarCodex piece on what’s driving big prices in Big Pharma. An excerpt:

Extreme fringe libertarians have a certain way with words. For example, they call taxes “the government stealing money from you at gunpoint”. This is a little melodramatic, but words like “patent loopholes” and “onerous review processes” sound a little bloodless for something that probably kills thousands of diabetics each year. So I would like to take a page from the extreme libertarian lexicon and speculate that the problem with insulin costs is that the government will shoot anyone who tries to make cheap insulin.

==> Some really good ones in this compilation:


29 Responses to “Potpourri”

  1. Tel says:

    I heard a Lara-Murphy Show recently, dunno if I’m ahead of the curve or behind. Date stamp says May 3. The one where you talk about mortgage brokers and so called “shadow” banking … have not see that posted around here.

    I did some research on Quicken Loans, and it’s kind of interesting. They sell 10 year corporate bonds, typically at between 5% and 6% return … provided nothing drastic happens, it’s unlikely their capital can get yanked from under them in the short term. The ratings agencies don’t like them much, but then again, tell me one major event that the ratings agencies saw coming. Who trusts ratings agencies??

    A lot of the Quicken Loans go via the “Prime” route involving Fannie, Freddie and Ginnie so those are taxpayer backed and Quicken Loans is nominally safe … but there’s always sovereign risk, could happen to anyone. Maybe when push comes to shove, government might refuse to pay up on those.

    You have to presume there’s a bit of leverage in the mix there, because the 15 year “official” mortgage rate listed on the FRED series MORTGAGE15US has been hovering around 4% and recently dipped below that, which means the return on these is lower than the corporate bonds that Quicken Loans is selling. I’m presuming that quite a few of these mortgages get resold on the secondary market … maybe there’s a bit of margin there to pick up. I seem to remember they leave a little bit of fat for broker commission (which is essentially just a sales fee), so someone is collecting that at some stage in the process.

    Also worth checking out that there’s a growing tech startup industry in Detroit. Kind of makes sense because it was the unions and corrupt city officials (perhaps I’m repeating myself there) that brought down the Motor City aspect of Detroit, and the tech industry has no unions, and all their assets are virtual so they are probably one of the few industries that can survive in a place like that. Low costs in Detroit probably help, and I presume there are at least some talented people around. Quicken Loans has the advantage of being highly automated, that’s stronger than Carlos thinks when it comes to “Prime” loans, because after you tick all the boxes and get your rubber stamp GNMA guarantee after that it doesn’t matter much who your customer is. Robot box ticking … what could go wrong huh?

    Based on their press releases and interviews they do only a tiny amount of subprime stuff so I’m guessing they play it safe. Obviously I don’t have any deep visibility beyond what they say to the public.

  2. guest says:

    “Part 3 of 3 of my scintillating series on Capital & Interest.”

    I’m looking forward to hearing it.

    I hope Jeff Herbener and Joseph Salerno chime in in some way, like in an article or podcast of their own.

  3. Ken P says:

    The StateStarCodex piece starts with the faulty premise that insulin prices have been rising rapidly. Yes, retail insulin proces have been rising rapidly but that is only in order to give the illusion of steeper discounts to quantity buyers.like PBMs Medicare and insurance companies. According to manufacturers the net price they receive has been essentially flat for over 10 yrs. Add up price for all vials sold and divide by number sold and price hasn’t changed.The incentives are really screwed up because the price difference comes in the form of a rebate and the PBM pockets a percentage so high retail equals bigger rebate and bigger profit to PBM for “negotiating “.

  4. Tel says:

    Fascinating turn in Australian politics … seems like the spirit of Stefan Molyneux has possessed one of our parliamentarians. See how long it takes to wear off.


    The building they are in, with the antiquated Victorian decor, has been known as “The Bear Pit” for about the last 200 years. The guy giving the speech is built a bit like a bear … the story has it that he broke a taxi driver’s arm while arguing over the fare … sort of thing that could happen to anyone.

    There’s some discussion of local issues, if you are curious then search out “Israel Folau” who is a footballer (Rugby player to be more precise) facing dismissal over expressing christian views. Kind of similar issue to the whole Tim Tebow affair if Americans want something to visualize.

    Australia’s PHON party recently got bad press cavorting with supposed NRA officials, while getting suckered by a journalist backed by Al Jazeer, Qatar. That’s triggered a few Australians to scratch their heads about whether there could be a bit of foreign interference with our elections. Someone told me that’s bad when that happens, so I’m concerned. Interesting times huh!?

  5. Harold says:

    It does seem as though he gets his information from Stefan. Cultural marxism and postmodernism is a bit of a give-away. Unfortunately, it makes him just as badly informed and thoughtless as Stefan.

    4:51 – what on Earth is headrest indoctrination? I may have mis-heard, but it sounds odd- please put me out of my misery and explain.

    It also seems very, very odd that he considers safe schools to be garbage. Does he actively promote dangerous schools?

    He also does not want unconscious bias training. That means either he does not believe unconscious bias exists, in which case he is wilfully ignorant. Or he knows it exists but prefers that it remains unchallenged, in which case he is pretty evil.

    On gender fluidity. He says “with few exceptions they are fixed”. Well, well, so there are exceptions then – what are we to do about the suffering of those people? I guess he thinks we should just ignore them.

    It is hilarious really. He complains that the coverage of transgender individuals is out of proportion to their numbers. Yes! He has finally got it! Perhaps all these right wing bloggers can shut up about it. Why are they making this a central part of their campaigning?

    Apparently the left is all about control. Not like the Christian right wants to control peoples’ sexual expression.

    Talking of the origins of Australia he says “dividing people on the basis of race, gender and sexuality is so foreign to the Australian way” and “the Australian habit of treating everyone as equals.” Unless they are aboriginals, that is. Has he forgotten there was lots of of stuff done to them? Taking children away from their parents on the basis of race, for example. Who was doing the identity politics then? No use the aboriginal claiming “I don’t hold with this identity politics!” “Doesn’t matter, mate, I do”, the policemen might have said as they dragged the children away. Remember he is talking specifically of the great history of Australian culture and society, yet this was still going on to the 1970s. He calls identity politics a “new mutant strain”, seemingly forgetting the hundreds of years on which Australian society was based on identity politics.

    ” facing dismissal over expressing Christian views.” It was not the Christian nature of the views expressed that got him in trouble. He could have talked about how Christ died for our sins without facing censure.

    The Catholic church goes out of its way to point out that being homosexual is not a sin. Anglicans have gay bishops. To say that hell awaits homosexuals is not a universal Christian statement.

    It was primarily the homophobic nature that got him into trouble. Folau tweeted a homophobic message that was not in line with mainstream Christian teaching. He deserves to be censured. Nobody was sacked for saying “I am a Christian.” Latham says nobody should be afraid to say this, but offers no evidence that there is anything to be afraid of..

    Then he deplores how corporations are trying to control their employees. Well, he should butt out. We all know employers are subject to competition and therefore whatever they do is for the best. Otherwise they will be out competed.

    The BETA study is interesting. There are flaws – the participants knew the applications were not real, and it looked at only one aspect of recruitment for senior positions, for example. However, it is interesting and very encouraging. It also worth noting that the bureau’s experiment coincided with intensive training for its recruiters on how to fight unconscious biases. Maybe we should be doing more rather than less, as Latham wants. This BETA study is just about the only one to show this result. A great many others show negative discrimination. Was Latham trying to give a picture of the science as it stands, or was he trying to cherry pick to create a distorted impression? I will let you decide. (It is the latter). Latham is flat out wrong when he says the study shows favouritism in the workplace. It did not even pretend to be studying this.
    Study here:

    At least he recognises that it causes enormous resentment when people are discriminated against on the basis of race, gender etc. I suppose that is a start. he only mentions it specifically where white men feel discriminated against, but perhaps he will broaden his awareness.

    He says trying to abolish greyhound racing is putting animal rights above human rights. I do believe animals should not be tortured and that should take precedence over any human’s desire to torture animals. Does that mean I support animal rights over human rights? He is being disingenuous.

    Oh – now he is having a go at soft skills! Monster says of soft skills “You’d be hard-pressed to find professional skills that matter more than these.” Investopedia says “Company leaders often are most effective when they have strong soft skills.” Why should schools not be concerned with these? This guy is perverse, not only does he not want schools to be safe, he does not want them to try to teach kids stuff that will be useful in their careers.

    Oh my, this has gone on far longer than I thought it would. And that is not all of it! Who would have though that someone could so much rubbish in 30 minutes? Oh yes, I have seen Stefan Molyneux, so I suppose it was predictable.

    • Tel says:

      4:51 – what on Earth is headrest indoctrination? I may have mis-heard, but it sounds odd- please put me out of my misery and explain.

      I’m fairly sure he said “headdress” indoctrination, which seems to be a reference to various religious and cultural headdress being worn as part of school uniform. The argument is that you have uniform for a reason, it brings everyone to the same level (remember modern schools are modeled on Prussian military training) and once one particular group gets to wear their special thing, now you don’t have uniformity anymore. It might alternatively be a reference to various native type headdress but I cannot find any specific incident that might be relevant.

      I’m personally not a great fan of uniformity. Some wag saying that if the “Progressives” keep dividing the community down further and further into identity groups, they will eventually get down to individuals … admitting that Ayn Rand was right all along. Might as well throw away school uniforms and let kids be individuals to begin with. Hey, we could also have individual rights.

      We do have to have some rules though, keep it simple and don’t make the rules any more than they absolutely need to be. I think people should show their face for example, covering your head with a scarf is reasonable but covering your entire face and having tiny eye slits is outright anti-social.

      • Harold says:

        Could be. I have had a further look and some people think is is mindfulness training, which also sounds plausible in this context.

        There are pros and cons to uniforms. Most secondary schools in the UK do have a uniform. Actually primary schools as well, but this tends to be more casual – mostly polo shirt and jumper rather than shirt, tie and blazer.

        On balance I am in favor of uniforms, but not something I get hung up about. Uniforms are not allowed to discriminate against protected groups. ” An example of such an effect came up in a recent court ruling, which found that a ban on jewellery which made it against the rules to wear a Sikh bangle was unlawful indirect discrimination on the grounds of both race and religion.” from the children and young people’s commissioner of Scotland.

        • Tel says:

          Can I be a “protected group” of one person?

          My religion says that I need to wear a hockey mask and carry a large knife at all times. Hey, I’m a Friday the 13th Day Adventist.

          What gives you the right to discriminate against my religion?

          • Harold says:

            Recently a Dutch guy wanted to be wearing a colander as a hat on his driving licence photo. Claimed it was part of his Pastafarian religion. But the Dutch Council of State said that religions must have “seriousness and coherence” and that Pastafarianism has neither.

            Meanwhile, in the USA, colander hats are OK! A woman called Miller was turned down initially, but appealed and was allowed to demonstrate her devotion to the Spaghetti Monster on her driving licence.

            You are right, if you have protected groups then someone has to decide what is a religion. In Germany, Scientology is considered an organisation with primarily economic interests and not a religion. Different regions will decide differently.

            I am pretty sure the “rules” are not fixed. In the USA you might be able to use scant evidence to claim religious freedom for wearing a colander in a photo, but it would not be so easy for wearing a hockey mask and carrying a big knife at all times.

            In the UK, there will shortly be a tribunal to decide if ethical veganism is a protected belief. the Human Rights Act speaks of “religion or belief”. the claim is that ethical veganism is such a belief akin to a religion. Eating vegan for dietary reasons would not be.

            “The Act says that ‘religion means any religion’, but doesn’t include a definition of religion.
            The courts have interpreted this as including any religion of sufficient seriousness which
            has a clear structure and belief system.”

            the rights under the act are also “qualified”, which means they do not supersede requirements for public safety.

            So you may try to be a protected group of one person, but I doubt you would get very far. For anything serious, I think the courts would not back you. At least Pastafarianism has a significant international following. I am sure there are lots of cases where people try to claim religious beliefs to get out of stuff and it gets rejected.

            • Tel says:

              You are right, if you have protected groups then someone has to decide what is a religion.

              The implication of that is that separation of Church and State is intrinsically impossible. So called “protected groups” exist for political reasons and every religion ultimately has a political purpose.

              The only remaining option is what Ayn Rand said, “The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities.”

              We could sort it all out by choosing to protect individual rights … including the individual right to free speech. Then everyone becomes a “protected group” of only one person. Wait, maybe we could make a list of these, call it a “Bill of Rights”. What do you think?

            • Tel says:

              So you may try to be a protected group of one person, but I doubt you would get very far. For anything serious, I think the courts would not back you.

              Oh yeah, the courts would back it … forgot about that. Darn, I guess individuals don’t deserve protection after all.

              Gosh it feels like the courts get to decide everything, and yet they aren’t even elected. Who gave those guys so much power … any idea?

              Why won’t the courts stand up and protect a single person from groups of other people? I kinda thought that was their job or something. Funny old world … nothing is as it seems.

              • Harold says:

                ” Who gave those guys so much power … any idea?”

                In the USA, the constitution, I think.

                Something to do with three branches and the separation of powers.

                The thing about protected groups is that in the absence of discrimination, they make almost no difference.

                If we introduced a law making people with b+ blood group a protected class, what would happen?

                As far as I know, there is no such discrimination. So nobody would be forced to make a cake, offer employment or accommodation or act in any particular way towards anyone they were not going to do anyway.

                So why do some people feel strongly about other protected groups? I presume it is because they want to continue treating them differently and discriminating against them.

    • Tel says:

      On gender fluidity. He says “with few exceptions they are fixed”. Well, well, so there are exceptions then – what are we to do about the suffering of those people? I guess he thinks we should just ignore them.

      To the best of my understanding the current system works like this: everyone is fluid and can choose whatever they want to be, EXCEPT when the suggestion comes up that maybe homosexuality could be changed and then we get, “Oh no! That’s absolutely impossible! Born that way can never change.”

      Then again, this system never made a lot of sense to me. All people are different, and you can categorize them any way you want. Certain pairs of people can produce children, while other pairs cannot and that’s biology. Most people over the history of humanity have figured this one out. No doubt technology will eventually overcome biology … but that’s some way off, and in the meantime perhaps explain the basics to the kids and encourage a sense of realism.

      Some kids are taller than others. Telling the tall kid that he’s really short and telling the short kid that if he wishes hard enough he is going to be tall seems kind of self defeating. Speaking of such things, how about this one?


      I’m sure there’s various ways to interpret this … but to me it looks like the mother is mentally ill and wants to castrate her son who would otherwise be a perfectly normal boy. I know divorce can be a messy thing, but that’s for the adults to sort out amongst themselves … the best thing you can do is leave the boy alone to grow up as best he can.

      Now there’s a long history of castration … the Chinese used to do it, the Ottomans had their eunuchs, even European Christians did a bit of it here and there. Then later we kind of had some worldwide consensus for a while that it was no longer the done thing. Associated with an older and more barbaric past. But now the old practice is coming back! Why? Who benefits from this? The only conclusion I can come to is this is really about power … literally the power over life and death. What else makes sense?

      • Harold says:

        I am very suspicious of the Save James appeal. Take it with a big pinch of salt. Things that sound too outrageous to be true often are. A quick dig apparently shows the father to be a serial liar, but that may be disinformation also.

        “To the best of my understanding the current system works like this: everyone is fluid and can choose whatever they want to be, EXCEPT when the suggestion comes up that maybe homosexuality could be changed …”

        There is a difference between sexuality and gender. If you identify as male and fancy men you will consider yourself homosexual. If everyone else also considers you to be a man, they think of you as a homosexual also.

        If you were trans, others may consider you to be a woman, and therefore heterosexual. These people would probably not consider who you fancy to be changeable -you are a woman so you fancy men. But they may feel your identity as a woman is.

        The general consensus is that most people are cis-hetero. That is they identify as the gender society also assigns them, and they fancy the opposite sex. Far from being fluid, they are pretty much fixed in both their gender identification and sexuality. They don’t have choice about this, it is just who they are.

        The concept of bi-sexuals has been around for a long time. For the bisexual, one day they may fancy a man and another they fancy a woman.

        People who are gender fluid are a bit like that, but with gender instead of sexuality. For the very small number of people who are gender fluid, they feel more like a male some days and more like a female other days.

        Just as the existence of bisexuals doe not mean everyone is fluctuating between hetero and homo, the existence of gender fluid people does not mean everyone is fluctuating between male and female. Gender fluidity is something that affects a small number of people.

        Skeptics scoff at gender identity and claim to identify as an attack helicopter. If I see them living in an aircraft hanger and behaving as best they can like a helicopter, I may have sympathy. The fact is, they do not identify as an attack helicopter, so they are just lying.

        However, it does raise a point. If someone genuinely did identify as an attack helicopter, it would cause them very severe difficulties, possibly fatal ones (if they tried to fly or eat petrol). I would consider them to have a serious mental health problem in the form of a fixed delusion. If someone who appears to be a man claims to be a woman, is that the same thing? I say it is not, partly because there are very many humans who identify as women without any problems, so such identification is intrinsically human and harmless. [Almost] nobody identifies as a helicopter.

        Can we rule out delusion? Probably not, but them we cannot do so for pretty much everything we believe about ourselves.

    • Tel says:

      It also seems very, very odd that he considers safe schools to be garbage. Does he actively promote dangerous schools?

      Because if you oppose the Patriot Act, you must be unpatriotic.

      If you don’t support the DREAM Act, that’s because you don’t like people dreaming.

      If you don’t love “Progressive” politics, you must hate progress!

      Oh wait … sometimes people might put misleading names on things. Hmmm, I wonder … maybe we could look at the consequences to get a better understanding. How about that?


      There’s a lot of activism going on and they are cloaking it with feel good words like “anti-bullying” and “safe”. It’s a political movement under the hood.

      • Harold says:

        I get your point about “safe schools.” There may be a movement called “safe schools” which may not really be about safe schools. Saying you oppose this does not actually mean you don’t want schools to be safe. Fair enough.

        Since he does not say, we don’t know what he does actually object to in the safe schools coalition. It appears a perfectly useful resource to me.

        The article you link to is misleading. They say 1% of bullying is for this reason, but do not cite any sources. Whereas “In fact, a 2015 nationwide study of the prevalence of bullying
        across Australian schools found that teachers ranked “being or seeming gay” as one of the top three reasons why Australian students are bullied (Rigby, 2015).” Other studies have found it the second most common, below physical appearance. Homophobic bullying was found to be the second most common form of bullying after name calling (Stonewall). The UK found ” About one half of primary school teachers report that their pupils experience homophobic, biphobic or transphobic (HBT) bullying; in secondary school, this problem becomes even worse, with nine out of ten teachers reporting that their pupils experience HBT bullying.”

        Trying to dismiss this as a trivial issue is really bad and shows a real lack of concern for these children.

        It is clear that homophobic bullying is a big problem fro some pupils. I think that Latham does not care abut the safety of these children.

  6. Tel says:

    The Catholic church goes out of its way to point out that being homosexual is not a sin. Anglicans have gay bishops. To say that hell awaits homosexuals is not a universal Christian statement.

    It was primarily the homophobic nature that got him into trouble. Folau tweeted a homophobic message that was not in line with mainstream Christian teaching. He deserves to be censured. Nobody was sacked for saying “I am a Christian.” Latham says nobody should be afraid to say this, but offers no evidence that there is anything to be afraid of..

    Here’s a link to the exact post.


    Can you just point out the “phobia” in that? The meaning of “phobia” is an irrational fear. I can’t see any fear being expressed … concern for the spiritual well-being of sinners perhaps, but hardly fear. I doubt that Folau would run away screaming or anything if he knows there’s sinners in the world. The quote comes straight out of the Bible. It hasn’t changed since the reign of King James in the 17th Century. Has there been irrational fear across the entire English speaking world for the past 300 years? Funny that no one noticed it until just recently.

    As for what the Catholics do with their Bibles … well they were the ones who did their best to prevent the King James Bible ever being created … precisely because the last thing they wanted was lay preachers like Israel Folau getting out there and quoting the word of God. You are welcome to side with the Catholics if you want, but that does mean supporting the concept that ordinary people must not be trusted to think for themselves. Then again, interpreting the many off-the-cuff statements of Pope Francis is probably even more difficult than interpreting the Bible.

    I’m not a Christian, but personally I think the Catholics have something of a problem with this current Pope. I leave that for them to think about.

    • Harold says:

      Look up homophobia:

      Online dictionary: “dislike of or prejudice against homosexual people.”

      Cambridge dictionary: “a fear or dislike of gay people”

      Oxford dictionary: “Dislike of or prejudice against homosexual people.”

      So dislike is in all of them. No need for fear.

      Etymology can lead you astray very easily, because origin is not the same as meaning. Awful, egregious, terrific all mean pretty much the opposite of what their etymological roots would suggest. Homophobia is not the same as arachnophobia.

      So the homophobic bit is “Warning…homosexuals… hell awaits you.” This is not rocket science. It shows a dislike of and prejudice against homosexuals.

      “You are welcome to side with the Catholics ” I am not siding with the Catholics. I cited what Catholics say and that Anglicans have gay bishops. Between them Catholics and Anglicans represent a large part of Christianity. My point is it is not necessary to say what he did to be a Christian. It seems a great many, possibly most Christians can happily not believe what he said, be they Catholic or Protestant. It is incorrect to say he was punished for espousing Christian views.

      • Tel says:

        I looked up the Oxford English Dictionary, 1989 edition and there is no such word as “homophobia” so it a recently made up word, presumably for political purposes. The OED does have a definition for a generic suffix “-phobe” and the meaning is “fearing, dreading adjective ending”. There’s also the root from Latin and Greek.

        So is “fear” the same as “dislike”?

        Let me see, are carrots really the same as radish? Are beansprouts the same as Brussels sprouts? Oh I know … we have different words for things because they are different things. If you glom together all the meanings of words into one big lump of meaning, you don’t get a language, you just get stupid.

        So the homophobic bit is “Warning…homosexuals… hell awaits you.” This is not rocket science. It shows a dislike of and prejudice against homosexuals.

        And yet he included drunks in that, but strangely no one is inventing new words to call him an “alcophobe”, he also included fornicators in that list and no one is inventing new words to call him “shagophobe”. In fact, the details of the list were not reported at all … why would that be? Why select parts of what he said and ignore other parts? Perhaps the alcoholics don’t have the same strength of political representation.

        It’s almost like they invented a word just for the purpose of pretending like Folau had singled out homosexuality as the only sin in the world and then further pretending like he was irrational and fearful.

        From my perspective, I’d call it dishonesty. If you don’t like the Bible, then say, “I disagree with what’s in the Bible”. Don’t have to invent things. I’m an honest Atheist and I don’t believe the Bible is the word of God, nor do I believe in Hell for that matter. I don’t like the idea of Christians forcing their beliefs on me … but I understand that it’s also equally inappropriate for me to force my beliefs on them. We aren’t going to have a world where everyone believes exactly the same things, and lives exactly the same lifestyle so the choice is war or tolerance. Both of those choices are two-way streets.

        Trying to tell people what they can say or believe is the path to totalitarianism, that’s not going to be a good outcome for either Christians or homosexuals.

        The Islamic State will execute homosexuals, and it’s punishable in various ways throughout the Middle East, and Asia. Then again, the Islamic State will execute you for smoking, or for drinking … so at least they are consistent in their extremism. Do you want to live in that kind of society?

        • Harold says:

          Oil is hydrophobic, yet somehow it has no capacity for experiencing fear.

          Alfalfa and clover are acidophobic plants, yet again have no capacity for irrational fear.

          The suffix -phobic means different things in different contexts.

          In the context of homophobia it means dislike, prejudice against or hatred of a particular thing.

          You can find this out very easily by looking it up.

          Your argument makes no more sense than me arguing that oil is not hydrophobic.

          It really is such a pointless argument that sticking to it seems to indicate a lack of interest in engaging with the real issue.

          “Trying to tell people what they can say or believe is the path to totalitarianism…”
          Nobody has said anything about what one believes, just what they say.

          I don’t think Folau has been arrested. It was Rugby Australia that drew up the rules.

          Folau thinks homosexuals go to hell, RA thinks saying that is against their code of conduct. That is up to them.

          Just out if interest, were you similarly outraged when Trump called for football players to be fired and deported for not standing? Since he is the Head of State that seems a lot closer to totalitarianism than a rugby union deciding their own code of conduct.

          • Tel says:

            Oil is hydrophobic, yet somehow it has no capacity for experiencing fear.

            That’s known as a “metaphor” or Anthropomorphism to be precise. Attributing human emotion to non-human things. Oil has no capacity to experience “dislike” either, nor any other emotion.

            It’s weird and inappropriate to take that the other way and presume this applies when attributing human emotions to actual humans.

            In the context of homophobia it means dislike, prejudice against or hatred of a particular thing.

            You can find this out very easily by looking it up.

            I did look it up, it isn’t in my dictionary which is not a particularly old dictionary as the English language goes. If people want to invent words, they can do that but there’s an expectation of consistency with other similar words.

            There’s trickery at work here … this isn’t some accidental misunderstanding. No one makes any rule against “Dislike Speech” but instead they make rules about “Hate Speech”. But then with tricky words like “XYZ-phobia” they can pretend that personal dislike or disagreement should be cooked up into a much bigger thing. It’s the misuse of the word allowing that to happen. We define it this way … but it sounds a bit that way. Bait and Switch. When setting the standard of what counts as a “phobia” we set that very low, so as to later make a big deal over it as if the standard was set much higher.

            It is necessary to be strict about these things in order to highlight such use of trickery.

            I don’t think Folau has been arrested. It was Rugby Australia that drew up the rules.

            Rules that supposedly applied across the board, so it’s just a much a breach of the rules to discriminate against Christians as it is to discriminate against anyone else. Yet strangely, those rules apply to some people, but not to others. The biggest and most important rule of all is “Don’t bring the game into disrepute” so there’s a very large number of Australians who think what the RA executive did was disreputable. Who gets to hold those RA executives to account? We are going to find out, because a lot of people are really pissed about this incident. Not just the other islanders who are strongly evangelical, but a lot of regular Australians like Mark Latham who are fed up with political correctness.

            Nobody has said anything about what one believes, just what they say.

            Oh so the favourite argument of leftists everywhere comes to the fore, “Shut up!”

            So why do some people get to say their opinion, while others do not? Who gets to decide this?

            You haven’t explained why it’s fine to speak out about why smoking and drinking are poor lifestyle choices, but at the same time not ok to upset the gay lobby. The amount of real “Hate Speech” thrown at smokers for so much as a slight puff that could waft in an open window is unbelievable. Why is bullying smokers considered acceptable?

            When the question of same-sex marriage came up,
            David Pocock spoke openly in favour of it, and Israel Folau spoke against. It’s a divisive issue, and it has nothing to do with the game of Rugby. Both people gave their opinions … but David Pocock was not given the “Shut up!” treatment. His opinion was allowed, but disagreement was not allowed.

            Pocock has also been arrested for climate change activism, and that’s another divisive issue which has nothing to do with the game of Rugby, and once again, he gets told it’s no problem to express his opinion.

            Why some people and not others? Who decides the allowable opinions here?

            Just out if interest, were you similarly outraged when Trump called for football players to be fired and deported for not standing? Since he is the Head of State that seems a lot closer to totalitarianism than a rugby union deciding their own code of conduct.

            Trump is welcome to write anything he likes on Twitter, that is Trump acting in the personal capacity of Trump. It isn’t an Executive Order, nor anything with legal standing … it is one man’s opinion. Personally I think most of Twitter is junk, and there’s plenty of other people who can disagree with Trump … so it doesn’t bother me if they throw their jibes back and forth. That would presumably be the intention of Twitter. In theory that’s how free speech is supposed to operate.

            And the footballers can take Trump’s advice if they feel like it or ignore him. Trump has no authority to fire any footballers. The owners of the team can fire people, but most chose not to. I think a few did get fired, and given that the footballer is actually on the clock at the place of work, and the USA tends to not require any reason to fire people … that’s the way it works. The team owner takes the risk on losing a valuable player, the team owner puts the money into the team to keep it going, so that’s why they make the call. There’s some advantages in “fire at will” and there’s some disadvantages … it’s easier to get a job, and it’s easier to lose that job if your boss gets upset with your performance at work.

            However, that’s quite different to chasing people for their personal opinions that they hold outside work. It’s also different to people are Rugby Australia who are merely employees themselves, who never invested their own money into the teams, and who think they personally own all the players and all the personal opinions of all the players. In Australia you need a very good reason to fire someone, and you need to make sure you state the reason why you fired someone. There is no “fire at will”.

            The only job of Rugby Australia is to do what’s good for the game. By encouraging certain types of activism while stamping down on others they have put themselves officially into the political arena and done terrible damage to the reputation of the game. They are employees, not owners, it doesn’t belong to them.

            • Anonymous says:

              “I did look it up, it isn’t in my dictionary ”
              That is the weakest excuse I have seen in a long time.

              If you don’t see homophobia as a problem then you are simply not going to get it.

  7. guest says:

    Working on my response to Part 3 of 3 of the Capital and Interest series.

  8. guest says:

    I tried to post, but got this: “This comment is longer than the maximum allowed size and has been dropped.”


  9. guest says:


    “I am the Thanos of economics.”

    Thanos, you’ve been doin’ too much toot. (Because Howard the Duck is also MCU. Heh.)

    Austrians, assemble!

    (Time stamps are exact, referring to the beginning of the contexts of the arguments addressed.)

    (00:07:02) – “Present goods are more valuable than future goods”. Bob says productivity determines spot price, and interest is based on the spot price, not the utility that determined the spot price.

    But that’s just as true for the seller of the tractor ticket as it is for the buyer, so the question that needs to be answered is why doesn’t the seller just use the tractor, himself, to benefit from the earlier productivity and the greater profit – and that’s a time preference issue, not a productivity issue.

    And if the tractor is worth $100K, today, and, in a year from now, since it will then become a Present Tractor, the buyer of the ticket could collect his tractor for $90K and sell it for $100K – why wouldn’t the seller just do that same thing, but first, selling the tractor now for the full $100K, rather than accepting only $90K?

    Earlier productivity, itself, cannot explain why there’s a spread because productivity, itself, doesn’t determine prices. Like with interest, only subjective value can do this.

    Pure Time Preference Theory would say, with regard to the tractor, that the reason there’s a price spread is because the seller of the tractor ticket currently ranks what he can get with $90K now as higher on his preference scale than he does the profit he currently expects he can make with the tractor up until the time of delivery to the ticket holder, and that creates an arbitrage opportunity for someone else. (For example, maybe the seller *can’t* sell it now for more than $90K, and he expects to value the space available to store the tractor more highly for some different use in a year.)

    Consider, also, that we try to tell Keynesians that some kinds of productivity can be a bubble because it doesn’t conform to consumer spending and saving preferences. Inherent in that argument is the claim that productivity is not the source of value.

    The value of the productivity of a capital good is entirely dependent on the subjective ends of the owner; Sometimes, even, when productivity can be increased, it could be the case that the owner only values up to X amount of production such that any more would be excessive for his ends, in which case, he might choose a less productive means for his ends.

    (00:32:55) – Bob has problem with explaining interest in terms of goods, rather than money. Says interest should not be abstracted away from money. Thinks that if you do, you support that socialism could be possible. Says interest can only be explained by referencing money.

    Except that the usefulness of money *comes from* the goods it is capable of purchasing. So, of course all exchanges have a barter nature to them: When you sell your labor or goods for money, your exchange is not complete because you acquired the money in order to buy something with it (eventually), and when you buy something with that money, you have indirectly bartered your labor (or whatever you had previously sold) for that good. It makes no sense to value money without reference to the goods you wish to buy with it.

    The economic value of money never bypasses the subjective value for the goods and services required to satisfy subjective ends; Money doesn’t have its own, independent, capacity for economic stimulus. It is only because something is *perceived* as having the capacity (rightly or wrongly) for enabling indirect exchanges that cost less than barter that people choose to hold it as money.

    This doesn’t change when buying and selling money in one time period in terms of a different time period.

    It’s the goods sought after that gives the money of one time period its value in terms of money in a different time period. That is what is meant by the “real interest rate”, or the interest rate in “real” terms.

    As such, the subjective ends for those goods will determine whether or not the money interest rate will be positive, negative, or otherwise less than some other possible money interest rate.

    As to the claim that attempting to reduce all economic activity to barter terms suggests that socialism could be possible:

    Socialism is impossible not because money is somehow necessary for economic calculation (yes, I know Mises thinks that term only applies to a money economy, and I think he’s wrong), but because freedom is necessary to express prices for the most desired ends, in any terms, and money is simply a subset of expressions of economic valuation, and that particular expression is suppressed under socialism.

    And when you suppress the expression of values for longer-term plans – in any form that expression may take (whether money or barter) – then you have less capital being created. It is capital creation (of the kind that produce what consumers want), not money per se, that enables increasingly higher standards of living.

    When people exhaust all of the arbitrage opportunities available to them through direct exchange (or otherwise less costly exchange in terms of opportunities foregone) for the expected satisfactions of the immediate future, it logically follows that any plans for future satisfactions will have to be attained through some good that they, themselves, don’t immediately need, but that someone else will likely want in the future, and that’s money (or at least a medium of exchange [i.e. a conduit for the expression of the preference for the good bought over the good sold]).

    (More could be said about that last point, but I’ll talk about that some other time.)

    That’s a logical extension of barter, not an independent stimulant somehow resident in things that are scarce, divisible, etc.

    Like I’ve said before, those are the qualities of money *not* because those qualities are useful, in themselves, but because those are the qualities left over after having secured as much present and future satisfaction as possible in barter (or less costly) terms (we all live in a money economy, so it’s hard to see this, now, but that’s the logic of Marginal Utility).

    And, contrary to the idea that thinking of interest in terms of goods would lead to central planning, it is, in fact, the other way around: Thinking of interest in only money terms would be what leads to central planning.

    The reason is because it will be claimed that, at least where interest is concerned, “Well, nothing to see here, but numbers, and since we have the math data we can now direct economic growth with mathematical precision.”

    It is *because* interest is about the underlying goods (or really about the underlying subjective ends for those goods) that makes central planning impossible. Fiddling with the interest rate is actually fiddling with the underlying structures of production as preferred by consumers, consumers being the ones who ultimately decide which businesses are going to be successful.

    (00:40:29) – Bob says talking about Time Preference is as superfluous as if people were to talk about Proximity Preference; says you can explain proximity by reference to shipping costs and patterns of market prices.

    Henry Hazlitt, in “Failure of the New Economics”, dealt with a similar (not the same, but similar enough) claim about Say’s Law, and nevertheless concluded that Say’s Law was worth talking about, sometimes:

    “It is true that Say’s Law is not explicitly needed in the solution of specific economic problems if its truth is tacitly taken for granted. Mathematicians seldom stop to assert that two and two do not make five. They do not explicitly build elaborate solutions of complicated problems upon this negative truth. But when someone asserts that two and two make five, or that an existing depression is the result of a general overproduction of everything, it is necessary to remind him of the error.”

    Say’s Law is subsumed under Marginal Utility, such that, in a perfect world, people would begin their assessment of any economic phenomenon with the understanding that subjective ends are what instigate all economic activity, and then logically conclude that since people don’t just stop trying to fulfill their ends, it must be the case that when people stop spending on one thing, it’s because they’re trying to fulfill some other end. That’s why there cannot logically be a general overproduction of everything – in the consumer’s judgment, producers are producing the *wrong* things (or, “economically undesirable” things).

    In the same way, Time Preference (as well as Proximity Preference) is subsumed under Marginal Utility. Both time and proximity are only economically relevant when subjective ends make them so.

    (Aside: Paintings and rockets are not counter-examples to “Proximity Preference”. Consumption of the aesthetics of a painting *means* that the painting is viewed within a range of distances away from the face (different for each person and his ends). Consumption of a rocket *means* that you’re not sticking your face in the exhaust (and in the rare cases where exceptions apply, it’s, again, Marginal Utility that determines what constitutes “consumption” in terms of space and time).

    (00:46:49) – Bob says a really bad flood could cause negative time preference, such that you would give up two apples now for one apple later.

    That’s not a negative time preference, but rather a higher-ranked preference for a future with one apple than a future with no apples (after a really bad flood).

    Also, Hoppe makes a mistake when he says that “time preference for future goods rises” with the knowledge that a flood is coming. (I’m taking your word that Hoppe said this.)

    That phrasing shows that he is trying to compare time preference for present vs. future goods absent a flood to one in which a flood occurs. But the former scenario is not at all related to the latter one.

    When I become aware that a flood is coming, the non-flood time preference becomes irrelevant – it doesn’t “rise”, because I don’t get to factor in both scenarios into my preference ranking; I now have a new set of ranked preferences.

    There’s no point in comparing the time preferences of scenarios I’m not able to choose between.

    True, I would have a higher time preference for apples if there weren’t a flood, but then I’m not *only* choosing between numbers of apples when I know a flood is coming.

    Under a flood scenario, I am choosing between

    a) having two apples now and having none after the flood


    b) foregoing the enjoyment of two apples now for the use of one apple after the flood.

    That I rank scenario B above A is not an expression of negative time preference since more than just the apples are being compared. I’m choosing among “packages” of expected future conditions.

    (Rothbard talked about ranked packages in “Man, Economy and State” in “Chapter 4 – Prices and Consumption” in the section called “Appendix A: The Diminishing Marginal Utility of Money”.)

    Maybe I don’t value going through a traumatic event without some apples. In that case, having one apple after a flood is better than having zero apples, and that’s a positive “real” rate of interest (as well as a positive nominal rate).

    Continued in Part 2 of 2.

    • guest says:

      RESPONSE, PART 2 OF 2.

      (00:53:46) – Bob disagrees that Time Preference is always for an earlier good of the same kind as a later one. He also disagrees that Time Preference is always positive. Bob has a problem with Rothbard numbering successive units of the same good.

      All other things equal, there’s no value in waiting for the satisfaction of a preference when presented with the same satisfaction in different time periods. That’s the reason why time preference is always for sooner, rather than later, satisfaction. That’s just logic.

      And it’s not a contradiction to say that units of the same good can be different economic goods.

      One of Bob’s challenges is the question: Would you prefer ice in January or ice in July (originally “ice cream”, but is presented as ice for the rest of the challenge)?

      He thinks that a preference for ice in July disproves necessarily-sooner time preference.

      But all you have to do see that the question involves two different economic goods is to ask another question: Would you prefer ice in January or next January?

      What happened to the negative time preference?

      (And even here, it could be possible that, for the past several years, I’ve had lots of ice in January and I need a break and would choose ice next January – in which case it would obviously be a different economic good.)

      But beside that (using a different analogy, now), if I am forced to choose between being shot in January or in July, my preference for being shot in July is *not* expressing a preference for being shot. Rather, it is an expression of value for ends that are actually on my value scale to be attained sooner than being shot.

      Likewise, it could be the case that I don’t value ice-in-January at all, in which case ice-in-July is clearly a different economic good.

      And it’s not like earlier time preference is a “general rule”, either. “General rules” are useful for most cases, but they are not intended to thoroughly explain anything.

      Where someone prefers a unit of the same good later, that’s not a case where some other law applies; We don’t get to say that “such-and-such law applies until it doesn’t” – that’s not a law. The same good would have to be considered a different economic good in order to be preferred later because, again, there’s no value, all other things equal, in waiting for the satisfaction of an end that is expected to be desired in two time periods.

      Regarding negative interest rates:

      Advocates of the Pure Time Preference Theory don’t have to “pretend” that negative money interest rates don’t exist, we can address that head on. Whereas it seems that deniers have to come up with non-explanations like “rules that are generally, but not always so”.

      Money interest rates express valuations for the goods money can buy in different time periods, and so it’s the satisfactions that are expected to be possible in those time periods that determine what interest rates will be acceptable, whether positive or negative.

      It is because Pure Time Preference Theory is perceived, by some, to be inconsistent under certain circumstances that its advocates speak about it in terms of those circumstances. And sometimes answering those objections are not always straight forward because the challenges, themselves, have some faulty assumptions.

      That’s not being “tied up in knots”, that’s being thorough.

      And where Rothbard numbers successive units of water, it’s for ordering the units according to when they were received. If he plans to do four things with the water he has, then obviously more uses would require successive units of water, and we would call the next unit “the fifth unit” or “the fifth unit acquired”. But that’s as far as the use of cardinal ranking goes – Rothbard isn’t saying that the guy will empty each received container of water in the order it was received. (He may even have one large container into which he puts all the units of water, and it would still make sense to talk about the number of units [economic units] available in that one container.)

      Interestingly, where Rothbard talks about “ranked packages of conditions” (my wording, not his) in Man, Economy and State, he also talks about money as being “units of the same good” like Bob talks about units of water, and yet Rothbard shows that it’s conceivable that one’s 60th unit of money can become the 1st unit of a 60-unit package of money, such that all prior ranked preferences under a 59-unit scenario are abandoned.

      I thought they were all units of “the same good”? What made the 60th unit so special?

      The answer is, again, that units of “the same good” can be different economic goods.

      (Taco Bell is also proof of this.)

      (01:07:03) – Bob says, “The Pure Time Preference Theory invites you to conceive of a cardinal notion of utility.”

      Bob says, critiquing the way Rothbard dealt with the ice-in-Winter scenario, “So, if you think about it, you’re comparing the present satisfaction of someone who doesn’t exist, yet, to the present satisfaction of someone right now – namely, yourself. And so, for all the reasons interpersonal comparisons of utility go out the window for Rothbard, by the same token, what does it even mean to say, ‘Oh, I’m comparing my satisfaction right now, from this ice, versus what I’m picturing my satisfaction will be in July.'”

      (Keep in mind, at this point, that people do make plans for the future, so expectations of future satisfactions can be, and are, assessed by “present you”, even though “future you” doesn’t exist, yet. So, if expected future satisfactions can be assessed by “present you”, then they can be compared to present satisfactions by “present you”.)

      The answer is that you’re *not* comparing present satisfaction to future satisfaction, but rather

      a) present satisfaction


      b) presently expected future satisfaction

      Notice that both options are available to be assessed in the present, and as such can be both ordinally ranked and also compared INTRA-personally (as opposed to INTER-personally, which I agree is impossible to do).

      Mises explains, in Human action:

      “The judgments of value which determine the choice between satisfaction in nearer and in remoter periods of the future are expressive of present valuation and not of future valuation. They weigh the significance attached today to satisfaction in the nearer future against the significance attached today to satisfaction in the remoter future.

      “The uneasiness which acting man wants to remove as far as possible is always present uneasiness, i.e., uneasiness felt in the very moment of action, and it always refers to future conditions. The actor is discontented today with the expected state of affairs in various periods of the future and tries to alter it through purposive conduct.

      And by the way, if you can call, as Bob does (and I deal with that, above), the supposed preference for one apple after a flood to two apples before a known coming flood (such that the rate is supposedly negative), then that means that you have to be relying on a comparison of expected future satisfaction of one apple to the present satisfaction of two apples.

      So, you can’t even make that critique without relying on a present assessment of expected future satisfaction.

      (01:17:26) – The “absolute smoking gun, and on this I will rest my case.”

      Bob says, “I’m going to quote, from Ludwig von Mises, in Human action; He says”

      And here’s Bob’s quote:

      “Originary interest is the ratio of the value assigned to want-satisfaction in the immediate future and the value assigned to want-satisfaction in remoter periods of the future.”

      Bob then claims that, “The Pure Time Preference Theory of Interest has lead Mises to literally divide the value of want satisfactions. That’s clearly a subjective thing: the value of want satisfaction. Now, he didn’t say ‘the market value of a good’ …”

      Two points to make, here.

      One, while it’s true that Mises makes a mistake, here in attempting to divide subjective values (at least in the way he words it, *wink*), there’s nothing about the Pure Time Preference Theory that *required* him to do so.

      And, two, an extended quote would actually lead you to believe that it’s plausible that he *does not* actually believe in the divisibility of want satisfactions, and that he’s merely attempting to apply the otherwise correct view that “like things can be compared and divided”.

      Again, this is a mistake, to be sure, but consider a more extended quote:

      “Originary interest is the ratio of the value assigned to want-satisfaction in the immediate future and the value assigned to want-satisfaction in remoter periods of the future. It manifests itself in the market economy in the discount of future goods as against present goods. It is a ratio of commodity prices, not a price in itself.”

      Is he talking about the ratio of want satisfactions or about the ratio of commodity prices?

      From this extended quote, we can assume that he made a mistake that the Pure Time Preference Theory does not require him to make, and that what he’s really talking about is the ratio of commodity prices (in money terms) that express his subjective value for the ends expected to be satisfied by those commodities in one time period over his value for those ends expected to be satisfied in a different time period.

      As well, it shows that, yes, he kind of did say “the market value of a good”, after all.

      Iron Man.

    • Tel says:

      But that’s just as true for the seller of the tractor ticket as it is for the buyer, so the question that needs to be answered is why doesn’t the seller just use the tractor, himself, to benefit from the earlier productivity and the greater profit – and that’s a time preference issue, not a productivity issue.

      I would see that as a division of labour issue, in as much as the seller presumably knows a lot about building tractors, while the buyer knows a lot about what tractors can be used for … and those are entirely different skill sets.

      You can somewhat clarify the problem by moving to a “Robinson Crusoe” situation where there is no buyer and seller, and one entity does everything. That would imply throwing away division of labour. In this situation we are back to physical production, in as much as the real physical cost of producing a tractor compared with the real increase in physical productivity that a tractor delivers is the key question … and we ignore any haggling in the middle.

      • guest says:

        I’m not sure the seller was a builder in Bob’s example, but if so, I think you’re at least right that it’s not about time preference, anymore.

        With the Robinson Crusoe situation, I would say that Crusoe still has to want the finished goods in order for the physical production *of* those goods to be valuable to him.

  10. Transformer says:

    I just listened to and enjoyed very much this three part series. It made me think more about capital theory than is probably good for my brain. I also read Bob’s dissertation which I also enjoyed.
    However I ended up not getting why a single good mo0del cannot be used to demonstrate Bohm Bawerk’s theory. Here’s my logic.

    Assume an economy with the following attributes:
    – A fixed labor supply
    – Free raw materials and land
    – The capacity to produce only 1 good that can either be consumed or saved. If it is saved it become capital
    – The more capital possessed by this economy the greater its productivity
    – However as more capital is added productivity increases at a diminishing rate.
    – Adding capital is the only way of increasing productivity
    – People in the economy have positive time preference
    In this economy any units of the single good that are saved will lead to higher productivity the next period. As there are diminishing returns to scale the economy will expand until the point where the additional productivity gained from saving a unit of the good is equal to the equilibrium rate of time preference in this economy.
    At that point both the marginal physical productivity and the interest rate will be equal.
    However if one drops the assumption about falling marginal productivity of capital and assumes constant returns (say 10%) then I believe that the amount of capital will expand until the economy as a whole is indifferent between the 10% extra output from saving one additional unit of the good and consuming the unit in the current period. At least in this case (as Bob points out) interest rates are determined by physical productivity.
    I think this single good model can be applied to the real world of diverse consumer and capital goods. The simplest way to do this is to think of the economy as a “utility generating engine”. All goods are essentially embodied utility. If the good is consumed in the present period it can be classified as a consumer good and if not a capital good. Just as in the single good model if there are diminishing returns to adding capital to a fixed labor supply then capital will be added until its physical output of embodied utility matches societal time preference and this will be the prevailing interest rate. In the unlikely event that all capital goods in this model have constant returns to scale then it will be this constant rate of return that will be the interest rate (to avoid arbitrage opportunities) and the capital structure will expand until at the margin the economy is indifferent between consuming a unit of output now and the additional units in the next period from saving that unit.

    I’m sure much of the above is confused or just plain wrong but welcome any feedback.

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