Effective Visual

On the Dennis Miller Show, columnist Jeff Jacoby provides a good illustration of what it means to him when he heard President Obama say he wants to freeze government spending for the next five years.

I was envisioning a guy going to the doctor.  The doctor says, Tim, you’ve been overeating, ridiculously. You are grossly obese. You weigh 300 pounds more than you ought to.  So we’re going to freeze your diet and weight at the point it is now.  You’re not going to gain any more weight.

That guy is still going to die of a heart attack in the next three years.

The podcast of the interview is available on iTunes.  It was released on January 26.  This part of the conversation is about 8 minutes in.

Jacoby exposes one of those sleight-of-hand tricks that politicians use to make unreasonable things sound reasonable.   Saying that you are going to freeze spending, sounds really good to folks who don’t pay too close attention.  It sounds responsible, almost austere.  We’re making adult decisions here.

But, it’s not that remarkable at all when you consider that government spending today is 67% higher than it was when W ran for re-election.

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This has all happened before, and it will all happen again

Fellow sci-fi geeks might recognize this as a phrase that was repeated throughout the re-imagined Battlestar Galactica TV series.   It’s popped up elsewhere also.

Those words have crossed my mind repeatedly as I read Matt Ridley’s book The Rational Optimist.  In it, Ridley tells a history of the world made possible by trade.

A common theme is the stages of society.  A society emerges from decentralized trade.  I make fish hooks and give you some in return for a few fish.  We both come out ahead.  That allows enough gain in free time that some folks have time to do things other than hunt and gather food.  Some of those folks form government.  They offer up something of value at first, like protection.  But then tend toward more centralized control, more expansive power and more meddling.  That chokes off the gains from trade and the society dies.

Here’s a passage from page 182:

Empires, indeed governments generally, tend to be good things at first and bad things the longer they last. First they improve society’s ability to flourish by providing central services and removing impediments to trade and specialisation; thus, even Genghis Khan’s Pax Monglica lubricated Asia’s overland trade by exterminating brigands along the Silk Road, thus lowering the cost of oriental goods in European parlours.  But then, as Peter Turchin argues following the lead of the medieval geographer Ibn Khaldun, governments gradually employ more and more ambitious elites who capture a greater and greater share of society’s income by interfering more and more in people’s lives as they give themselves more and more rules to enforce, until they kill the goose that lays the golden eggs.  There is a lesson for today.  Economists are quick to speak of ‘market failure’, and rightly so, but a greater threat comes from ‘government failure’.  Because it is a monopoly, government brings inefficiency and stagnation to most things it runs; government agencies pursue inflation of their budgets rather than the service of their customers; pressure groups form unholy alliance with agencies to extract more money from taxpayers for their members.  Yet despite all this, most clever people still call for government to run more things and assume that if it did so, it would somehow be more perfect, more selfless, next time.

These changes happen over generations.  It’s interesting to look at the societies on Earth now and consider which stage each might be in.

Since the changes happen over generations, it’s hard to tell sometimes.  Sometimes we look at a society and think it’s doing okay and we mistake it for a successful experiment.  In reality, though, it might be just on that cusp between the benefits realized from trades of the past and the decay that will come from a centralized control.

We mistake the cause and effect.  Trade enabled the wealth of the nation and the government, not the other way around.

Some societies that we think of as primitive, may have been more advanced in the past.  China is catching up now, as its government favors decentralization, but it was once well ahead of the rest of the world.  Page 180:

China went from a state of economic and technological exuberance in around A.D. 1000 to one of dense population, agrarian backwardness and desperate poverty in 1950.  According to Angus Maddison’s estimates, it was the only region in the world with a lower GDP per capita in 1950 than in 1000.  The blame for this lies squarely with China’s governments.

What follows in the next few paragraphs in the book is a picture of what China had mastered in the 1000s “silk, tea, porcelain, paper and printing”, “multi-spindle cotton wheels, hydraulic trip hammers, umbrellas, matches, toothbrushes, playing cards and pig iron.”

Then Ridley describes impact the Black Death and natural disasters and centralized government control of the Ming Dynasty that caused China’s GDP per capita to be less than in was nearly 1000 years earlier.

These are the same stories told in Hayek’s The Road to Serfdom (though maybe he stopped short), Rand’s Atlas Shrugged and Orwell’s Nineteen Eighty-Four, except it’s for real.  It’s happened here on Earth many times before.  It’s happening right now many times and will happen many more times.

Sowell Podcast

There’s an excellent interview with Thomas Sowell on The Dennis Miller Radio Show available as a free podcast on iTunes.  It was released on January 14 (or search for Sowell Dennis Miller in the iTunes search box).

Sowell should get more media time.

libertarians are made, not born

Of the very limited sample size of libertarians that I know, it seems all held some other form of ideology in the past and came to a libertarian position by way of reason.

If reason is the primary path to libertarianism, that might explain its relative obscurity (not meant to be funny).

For example, other ideologies seem to be passed down from generation to generation as effectively as religion and are intimately linked with other human associations and affinities like religion, movie stardom, status signaling (“I’m for the poor” as if others aren’t), unions and such.

I think other political ideologies are similar to religions because many that hold those ideologies seem to accept whatever it is their ideology stands for without questioning whether it actually works or not.

Libertarians have none of that going for them.

Perhaps this is what Bryan Caplan meant in this blog post on EconLog, where he ranks libertarian economists as the most productive folks to have conversations with.  Libertarian non-economists ranked third.

I think there’s a reason for this.  Of all the folks I have discussions with, libertarians are the most likely to consider that they might be wrong and are open exploring the rationale of the opposing argument for its merits or demerits.  Discussions with these types of folks can be extremely productive.

I’ve also noticed libertarians aren’t as married to their biases.  They don’t always stop when they find the answer they’re looking for.  They seem to be good at continuing to pick at something until they uncover the root-cause.

Of course, I could be wrong.

State of My Home (SOMH)

I agreed to give an annual State of My Home update to my family each year.  Unfortunately, it was scheduled on the same night as the SOTU, so I wasn’t able to watch the President’s speech.

Actually, I finished with plenty of time to watch the President’s speech, but I decided to watch basketball for awhile and then tuned in to watch Paul Ryan’s hair.  Man, I’m still impressed with that.

The SOMH is not a constitutional requirement in my home.  My home doesn’t have a written constitution.

Since we are family, we mainly rely on unwritten rules of conduct or standard social norms that are similar to other families.  Except we take off our shoes in our house, which seems to be outside the norm judging by the looks we get when we ask our guests to do so (or maybe they’re just worried about us smelling their stinky feet).

But I have decided to use the U.S. Constitution as guideline for my SOMH (Article II, Section 3):

He shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.

While I wouldn’t be so presumptuous to appoint myself to the Executive role in my house, I assumed my wife would allow me the honor of making this annual update.

What follows is my SOMH, which might have some parallels to what I believe would constitute a good SOTU:

We’re still here and in relatively decent shape.  That’s good.  Thank you.

We got along well as a family unit and we all contributed to decisions over the last year. (While our government seemed awfully interested in making decisions against the people rather than for the people).

Darwinian Common Law

Last week I had a discussion with Ed Darrel about law.   In response to the Supreme Court Justice Oliver Wendell Holmes’ quote that his job is not to do justice, but apply the law, Ed wrote:

…in western law, we have given judges the ability to apply justice where the law fails — which is, by the way, where we get common law.

I asked by whose judgment do we determine when the law fails.  Ed responded:

We use the judge’s judgement.

I should have pointed out that the parties in dispute determine when law fails.  When they cannot reach an agreement privately, they then may decide to bring their dispute to court to be settled by a judge.

I then confused the term ‘common law’ with law when I wrote that I believe ‘common law’ emerges from custom. Ed wrote:

Common law is judge-made law, not custom…

I agree that judges codify common law through their judgments in court cases.  However, I still contend the true source of common law is custom or evolved social norms.

The view that law, in general, emerges from evolved human interactions is that of economist F.A. Hayek and others.  Don Boudreaux (an economist with a law degree) does a great job of laying out his own Hayek-inspired emergent order view of law in the video I linked to in this post.  At the 20 minute mark, Boudreaux defines law as:

Law is socially imposed constraints on behavior, that emerge from everyday, ordinary human behaviors, and that become embedded in widespread expectations.

When deciding a case that will become a part of common law, judges try to make sensible decisions.  How do they do that?

They listen to the arguments from both sides, consider the judgments on similar prior cases, refer to social norms as a guide among other things.  But the key is that evolved social norms weigh heavily on judgments that will set precedents for future similar cases.

In this interview with Richard Posner, regarding his book How Judges Think, Posner said (emphasis added):

American judges operate in a setting of extreme uncertainty, which forces them to exercise an uncomfortably large amount of discretion, casting them often in the role of de facto legislators. They are reluctant to admit that they are (as I call them in the book) “occasional legislators,” and have been skillful in concealing the fact from the public, being abetted in this regard by the legal profession, which has an interest in depicting the law as a domain of sophisticated reasoning rather than, to a considerable extent, of politics, intuition, and emotion. The secrecy of judicial deliberations is an example of the tactics used by the judiciary to conceal the extent to which such deliberations resemble those of ordinary people attempting to resolve disputes in circumstances of uncertainty. The concealment feeds a mystique of professionalism that strengthens the judiciary in its competition for power with the executive and legislative branches of government, the branches that judges like to call “political” in asserted contradistinction to the judicial branch.

What do ordinary people do when attempting to resolve disputes?  They heavily consider what is customary.

It’s not always perfect.  None of us perfectly adhere to social norms.  Sometimes we modify existing norms which might result in a new norm.  That’s what makes it an evolutionary process.  And one of our evolved social norms is when we cannot settle a dispute on our own, we seek the help of a third party.  Sometimes those are judges.

Maybe a better way to make the point of norm-based common law would be to ask this question:

What do you think might happen if judges made arbitrary decisions that had no basis in social norms and customs?

I don’t think it’s a stretch to imagine that judges and the legal system would quickly lose credibility with the people.  We might even see the rise of alternative dispute resolution methods, like private arbitration (hmmm…).

All I can say is that I for one feel more comfortable with judges who agree with Oliver Wendell Holmes on the matter.  Especially in cases where codified law fails (or doesn’t exist), I’d much prefer a judge who thinks his role is to discover the existing non-codified law that is “embedded in widespread expectations” than the judge who thinks he can make it up as he goes.

The SOTU Challenge

What good is the SOTU?

For me, it’s unproductive political theater, campaigning and posturing.  Maybe I’m missing something.  Feel free to try to convince me otherwise.

My theory is if government was doing its job nobody would care to watch this speech.

I think one reason folks do watch is that the Federal government has expanded so far beyond its chartered role that folks like to tune in and get an idea of which winners and losers the government might pick in the coming year.  After all, who tunes into their Governor’s State of the State speech or their Mayor’s State of the City speech?  Nobody.

I did notice one interesting thing last night.  Paul Ryan’s hair is very Reagan-esque.

How to think Part II

Fellow blogger Zombiehero points to a study that provides more evidence about the lack of teaching critical thinking skills.  He links to an article that describes a study that found college students have difficulty thinking critically.  From the article:

Many of the students graduated without knowing how to sift fact from opinion, make a clear written argument or objectively review conflicting reports of a situation or event, according to New York University sociologist Richard Arum, lead author of the study. The students, for example, couldn’t determine the cause of an increase in neighborhood crime or how best to respond without being swayed by emotional testimony and political spin.

This lines up remarkably well with the story about the first day assignment I wrote about in How to think, not what to think.

Why some folks don’t like markets

Commenting on this enjoyable post by Don Boudreaux of Cafe Hayek about the realities of health care, JohnK, originator of the 8 word Constitution writes of the “believers in socialized medicine”:

Markets deny them the ability to arbitrarily deny access to people because they don’t like them.

I suggest that this is a corollary of a broader distrust of markets:

Markets deny believers in collective decision-making the ability to arbitrarily tell others what to do.

How to think, not what to think

Hera are a couple more bookmarks from Thomas Sowell’s Dismantling America.  First, Sowell suggests a response to folks who seem to believe they have a firm grasp of an issue (p.199):

Another approach might be to respond to the dogmatic certainty of some young person, perhaps your own offspring, by asking, “Have you ever read a single book on the other side of that issue?”

When the inevitable answer to your question is “No,” you can simply point out how illogical it is to be so certain about anything when you have heard only one side of the story–no matter how often you have heard that one side repeated.

Would it make sense for a jury to reach a verdict after having heard only the prosecution’s case, or only the defense attorney’s case, but not both?

It would also be useful to be ready to recommend good books on the other side of the issue if they happen to want to take your advice.

Here’s another good one (p. 235):

It was once the proud declaration of many educators that “We are here to teach you how to think, now what to think.”  But far too many of our teachers and professors today are teaching their students what to think, about everything from global warming to the new trinity of “race, class and gender.”

Even if all the conclusions with which they indoctrinate their students were 100 percent correct, that would still not be equipping students with the mental skills to weigh opposing views for themselves, in order to be prepared for new and unforeseeable issues that will arise over their lifetimes, after they leave the schools and colleges.

Many of today’s “educators” not only supply students with the conclusions, they promote the idea that students should spring into action because of these prepackaged conclusions–in other words, vent their feelings and go galloping off on crusades, without either a knowledge of what is said by those on the other side or the intellectual discipline to know how to analyze opposing arguments.

A philosopher once said that the most important knowledge is knowledge of one’s own ignorance.  That is the knowledge that too many of our schools and colleges are failing to teach our young people.

I remember such activist assignments. It would have been helpful to have spent more time reviewing how we went about researching,  reasoning, editing and testing out our logic with others to gain practice on developing well-thought and articulated arguments rather than sending incoherent rantings.

I also remember some good assignments that did just that.

A business econ professor in grad school once gave an interesting assignment for the first day of class. He told us to prepare a 3 minute speech stating our position and rationale for our position regarding a specific hot topic (that he specified)  in news at the time.

We each got a chance to make our case and listen to each other.  The next week he gave us our grades and feedback.

Few people scored well. Most hadn’t researched or prepared.  They spoke from their emotions and repeated talking points from the media.  Most cases didn’t contain an ounce of logic and many had fallacies. The professor stepped through how he researched his position and bolstered it with logic and data.

My classmates were mad.  I think they were used to BS’ing their way through such assignments by repeating the politically correct, mainstream talking points.

While there was no right or wrong in regards to which position we took, there was in how well we constructed our arguments.

I still think of this as one of the most memorable and helpful assignments from my academic career.   And the fact that so few graduate level students, many with several years of work experience, didn’t do well helps corroborate what Sowell writes above.

My classmates continued to struggle through this gentleman’s course.  Some quit.  I enjoyed it and couldn’t figure out why so many people didn’t.  Now I think I know.  He was teaching us how to think, not what to think.  I don’t think my classmates were accustomed to that.