Knowledge is

Great Quote of the Day from Cafe Hayek. Especially this part:

In particular, free trade facilitated the exchange of knowledge across countries about new production methods and business practices.

An Boudreaux then wisely comments on this:

…knowledge itself – that most precious and misunderstood ‘input’ into the operation of any commercial society – is spread more widely, effectively, surely, and quickly when trade is free.

We don’t think in these terms. When I read this, I imagined a teacher holding an iPhone up to her class and asking her students, What is this?

I then imagined answers from her class such as:

  • It’s an iPhone.
  • It’s a social media device.
  • It’s technology.
  • It’s whatever you need it to be, for the most part.

And then the teacher responding:

Yes. It’s all of that. But, it’s something more. It’s a culmination of knowledge from across the world and time. It’s here now and accessible to you because of the knowledge of millions of people who exist now or in the past. 

Think of it this way. If you had to rely only on yourself (like cavemen), or your family (like hunter gatherers), or the people in your town (like feudal societies), or your state (like closed-border communist/fascist and sometimes socialists societies) or people in some government somewhere (like people who think government can provide all we need) to make things for you, you would not have this or the benefits that you enjoy from it. 

We never think of how knowledge of others benefit us. Just think if you had to rely on yourself to come up with even the most basic element of this device: its touch screen. Where would you have started? Would you ever figured out how to make it before you starved to death?

Simple exchange of knowledge allows us to have the best standard of living ever experienced on this planet. We should grow to appreciate things that allow us to share knowledge (like free trade, immigration, etc.) and be very leery of things that stifle it.

 

Walmart can’t win for losing

For years (maybe decades), the media portrayed Walmart as the big bad wolf for opening stores.

Now, it seems ironic that the media portrays it as the big bad wolf for closing stores.

You Get What You Incent

Most parents learn this the hard way with their children.

Those in government sometimes learn it. It seems this former administrator of New York City’s welfare program, Robert Doar, gets it, too, as evidenced by his piece in the Wall Street Journal.

He writes:

I am not an economist, but one likely reason for the dismal labor-force participation is that many U.S. assistance programs act more like work replacements than work supports.

Consider the 45 million recipients of food stamps. While touring the country with the National Commission on Hunger, I often heard from recipients that the Supplemental Nutrition Assistance Program was good at providing electronic-benefit transfer cards, but not so effective at helping them get a job.

Thomas Sowell

Mark Perry about Thomas Sowell:

…there is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society..

I agree. Perry’s post contains 16 (or is it 15?) of his favorite Sowell quotes that are worth a read.  Here’s a good one:

Helping the Poor. It was Thomas Edison who brought us electricity, not the Sierra Club. It was the Wright brothers who got us off the ground, not the Federal Aviation Administration. It was Henry Ford who ended the isolation of millions of Americans by making the automobile affordable, not Ralph Nader.

Those who have helped the poor the most have not been those who have gone around loudly expressing “compassion” for the poor, but those who found ways to make industry more productive and distribution more efficient, so that the poor of today can afford things that the affluent of yesterday could only dream about.

I think society would be better off if Sowell’s Basic Economics was used as the text for Econ 101. Maybe I should start a petition or something.

Get a book by Thomas Sowell now and read it. I think of this one often: White Liberals and Black Rednecks.

Overconfidence in opinions

This example occurred to me on a recent jog.

A woman was jogging on the sidewalk on the other side of the street from me. We were both running in the same direction.

She was ahead of me. I caught up to to her. She kept my pace for a few hundred yards, then she slowed down and I passed her.

Later I turned to see where she was. She had crossed the street to my sidewalk, but was a good distance behind me.

I thought to myself, maybe she thinks my side of the road is faster.

Then I thought, if I told the story just like that, most people would discount that immediately as a case of mistaken cause.

They may think, no you left her behind because you’re faster. How dumb is it to think you can get faster simply by running on your sidewalk?

I thought to myself that would be a great example of how something that sounds dumb, could make sense with a wee bit more information.

It’s winter. There’s snow and ice on the ground. My side of the road had seen more sun which had melted the snow and ice off my sidewalk. Her side of the road still had patches of snow and ice because it was shaded from the sun by embankments and trees.

So, indeed, she did get faster simply by crossing the street.

This example reminds of many conversations I’ve had over the years where a person forms an opinion and doesn’t budge. They believe they have all the information they need and stick to their guns.

But, if they were just a bit more imaginative or open to other bits of information, maybe they wouldn’t be so married to their opinions.

Preparation is key #2

From How Colleges Make Racial Disparities Worse by Richard Sander in the Wall Street Journal (I added the bold):

Supreme Court Justice Antonin Scalia ignited a firestorm last week at oral arguments forFisher v. University of Texas, a case concerning that school’s affirmative-action policies. The media pounced after Justice Scalia suggested that it might be not be a bad thing if fewer African-Americans were admitted to the University of Texas. Many rushed to call the comments racist.

Subsequent reports clarified that Mr. Scalia had been invoking the “mismatch” hypothesis, which posits that students who receive large admissions preferences—and who therefore attend a school that they wouldn’t have gotten into otherwise—often end up hurt by the academic gap between them and their college peers. But on the whole even this coverage has spread confusion.

The mismatch theory is not about race. It is about admissions preferences, full stop. Mismatch can affect students who receive preferential admission based on athletic prowess, low socioeconomic status, or alumni parents. An important finding of mismatch research is that when one controls for the effect of admissions preferences, racial differences in college performance largely disappear. Far from stigmatizing minorities, mismatch places the responsibility for otherwise hard-to-explain racial gaps not on the students, but on the administrators who put them in classrooms above their qualifications.

Re: first passage in bold: As I mentioned in this post, preferential treatment can hurt anyone, it doesn’t depend on race.

Re: second passage in bold: If true, why isn’t that persuasive for folks who advocate watering down admissions, rather than bolstering preparation?

This also supports my hypothesis for #2 from this post. An author at fivethirtyeight.com thought that, “Top private colleges, though they enroll fewer black students, do a somewhat better job of helping them graduate.” I thought, perhaps, top private colleges just do a better job of admitting those who are properly prepared.

Matt Ridley on the Chan-Zuckerberg Initiative

Matt Ridley regarding Zuckerberg and Chan’s gift.

Yep, I agree. And it’s interesting to see more info about some of the ideas Zuckerberg/Chan have in Ridley’s post. Like:

Zuckerberg thinks that “the only way to achieve our full potential is to channel the talents, ideas and contributions of every person in the world”. To that end he wants to get the four billion people who do not have access to the internet online. Through “internet.org” he is trying to find ways to use solar-powered drones flying at 60,000 feet and equipped with infra-red lasers to bring the internet to remote parts of the developing world where they could give farmers weather forecasts and crucial market information, plus a chance to educate their children.

Nice.

Ridley also makes an important point about charitable foundations:

Yet most foundations start out effective and gradually become captured by political correctness and vested interests. The Rockefeller Foundation did a truly brilliant thing in the mid-20th century when it supported Norman Borlaug’s tireless efforts to breed high-yielding varieties of wheat in Mexico and then to get them adopted in India and Pakistan, thus sparking the “green revolution” that has brought billions out of hunger. Later in the century, it succumbed to fashionable dictums and failed to back Borlaug’s attempt to do the same for Africa, arguing that high-yielding crops might be bad for the environment. (Recently it has reversed again and joined the Gates Foundation in supporting agriculture in Africa.)

With this sort of history, it is little wonder that the young Zuckerbergs want to retain flexibility in deciding how their Chan-Zuckerberg initiative does good work.

He made a similar point about companies and countries in his book, The Rational Optimist. I wrote about that here and here.