On Facebook, a friend says he’s tired of hearing conservatives claim the country is heading toward socialism and will ask the next person who makes the claim to support it with a dissertation.

This chart shows government spending as a percent of the economy has long been trending up to less than 10% in the early 1900’s to between 35% and 40% now.

But, even with the growing percent of the economy in the government sector, I may still not call that necessarily ‘moving toward socialism.’ I think a more appropriate term is bureaucratism.

Learning by doing

Many folks write about the threats to traditional education from things like online education. I would like to see this type of thing play a major role in defining its next wave (HT: Carpe Diem).

Here’s more on ‘this type of thing’ from the linked article:

This is not some kind of dorm, but a “hacker hostel.” It’s one of several in the Bay Area that offer short- or long-term stays for aspiring tech entrepreneurs on the bottom rung of the Silicon Valley ladder, those who haven’t yet achieved Facebook-level riches. These establishments put a twist on the long tradition of communal housing for tech types by turning it into a commercial enterprise.

The San Francisco hostel is part of a minichain of three bunk-bed-stuffed residences under the same management, all places where young programmers, designers and scientists can work, eat and sleep.

These are not so different from crowded apartments that cater to immigrants. But many tenants are here not so much for the cheap rent — $40 a night — as for the camaraderie and idea-swapping. And potential tenants are screened to make sure they will contribute to the mix. Justin Carden, a 29-year-old software engineer who is staying in another hostel, in Menlo Park, while working on a biotech start-up, talks about the place as if it were Stanford.

“The intellectual stimulation you get from being here is unparalleled,” Mr. Carden said. “If you’re wanting to do something to change the world and make it a fundamentally better place, you need to be around the right people.”

I’d also like to see businesses get in on these sorts of things. I often joke that established companies desperately looking for their next big thing hope to skip over the experimentation, discovery, pilot and organic growth phases of the business and get to the mature phase, usually in a few months. That plan usually fails.

Sponsoring some hacker hostels, and things like it, just might help businesses create an experimentation and discovery breeding ground. And it would cost a fraction of one of their idea-to-national-product failures.

Things like it would be similar types of breeding grounds for non-tech startups.

Two Open Letters

First, from Laurence Reed to people who think we need more government to solve problems: Say when (H/T: Speedmaster). Here’s the opening paragraph:

At the start of the 1900s, government at all levels in America claimed about 5 percent of personal income. A hundred years later, it takes more than 40 percent—up by a factor of eight. So my first questions to you are these: Why is this not enough? How much do you want? Fifty percent? Seventy percent? Do you want all of it? To what extent do you believe a person is entitled to what he (or she) has earned? I want specifics.

I like to think of government as a partner in the prosperity of its citizens. The more prosperous the citizens, the better this partner does. If you had a similar partnership with someone and you kept demanding more from him as if you were entitled to the produce of his talents, at what point to you think he would say enough is enough?

Second, from Don Boudreaux to the would-be lords of our manor:

Dear Sen. Casey and Sen. Schumer:

Irked that Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship, you propose, with your “Ex-Patriot Act,” to punitively tax and to permanently bar from ever again entering America men and women who, to reduce their tax liabilities, renounce their citizenship in the U.S.

The very fact that sitting U.S. senators issue such a proposal – the sick reality that representatives of an allegedly free people act as if individuals are serfs bound to a master – the noxious yet proudly paraded assumption by American government officials that a peaceful man’s or woman’s freedom of movement can properly be restricted by a government jealous that it misses the opportunity to seize a huge chunk of that man’s or woman’s earnings – does nothing other than to confirm the wisdom and justice of Mr. Saverin’s decision.

“Why I Support Obama”: Points 2 & 3

The second point made by the Facebook Obama Supporter (from this post) was:

He ended the war in Iraq and is drawing the war in Afghanistan to a close.  Like he said he would.

In my original post, I mentioned that only one point was really related to the President’s job.  This is it.  The President is the Commander-in-Chief of the military and responsible for our country’s security and foreign policy.

I think the Obama supporter makes a good point here. But, Obama’s other foreign policy and security measures leave a bit to be desired.  Stepping over the Congressional balance of power to get involved in Libya, along with his domestic actions, tells me that the President doesn’t hold the Constitution or his oath to defend it in high regard.

The third point made by the Obama supporter was:

He thinks women should have access to free preventative health care.  Why is that an issue?

This is a free country and even the President can think what he wants.  However, actually providing this as President is not in his job description.  Forcing other to provide this makes this country less free.

For me, this is like saying that according to my Homeowner’s Association covenants, it’s my neighbor’s job to stock my fridge with free bottled war.  My supporting argument is very similar to the supporting argument for free birth control: Without it I might die of thirst and if I’m dying of thirst, that will cause many social costs, like I might steal water from others.  Or, society will lose my production.

But, most people will instantly see problems with my argument.

One problem is that there is no such thing as free bottled water. Someone would need to pay for it. So, had the Obama supporter said “third-party paid preventative care” instead of “free preventative” care this would be more accurate.

A key problem is that HOA does not have the power to force my neighbor to provide me with bottled water. It’s not in the HOA covenants and if someone tried to amend our covenants to add this, the other homeowners would have a good laugh.  What’s not funny is how many people think it’s okay for our Supreme HOA to do things that aren’t in its covenants, for no better reason than thinking, ‘that’s the way things ought to be.’

Finally, the most devastating blow to my argument is that I will not die of thirst if my neighbor doesn’t provide me with bottle water.  Potable water, while essential to my life, is cheap and clean enough from the tap or bottle that very few people in our country go without it.

Also, I’m guessing that the average cost of water, even from the tap, is about the same or more than the average cost of women’s preventative care on a monthly basis.  Yet, amazingly we don’t have arguments about having the government force third parties to provide everyone with water.

And, if there are a few people who have trouble paying their water bill, we take a more targeted approach than changing the entire water delivery system for everyone.  We help them out voluntarily.

“Why I support Obama”

The photo below came to me via a Facebook friend.  It appears to be in the process of ‘going viral’.

I thought I might address some of these points in the future.  One positive for me is that the author of these points is attempting to state points rather than simply prattling on.

However, none of these points changes my mind about anything.

I will say for now that I am disappointed that only one of the eight points is related to the President’s job.

The rest of the points are good examples of Thomas Sowell’s ‘the way things ought to be‘ politics.  More on that in future posts, too.

You can click on the photo for a larger version.

Recipe for riots and flash mobs

High minimum wage + Coddled kids + Facebook/smartphones + Cheap public transit + Coddled parents = Flash mobs

A. A minimum wage set higher than the market wage rate for unskilled, entry-level teenagers causes high unemployment among this group, producing large numbers of teenagers that don’t have jobs to occupy their time and develop their sense of cooperative and mutually beneficial behavior.

B. An education system that passes troublemakers, fails to teach kids to think critically and accept responsibility for their behavior and teaches that external societal forces are somehow responsible for so much wrong and at the same time owes them something brews much discontent, especially when not tempered with on-the-job experience of having to serve others in order to serve yourself.

C. Amazing and cheap technology (which is not recognized as amazing by any of the folks in B) that enables kids to instantaneously communicate with hundreds of their friends.

D. Cheap public transit that allows these networked, privileged and idle kids to meet after receiving these instant messages.  Or, parents wealthy enough to provide transportation for their kids (also lost on folks in B).

E. An ‘it takes a village‘ mentality about raising kids and lenient penalties for misbehavior creates a moral hazard so parents are not that concerned with their kids’ behavior (and perhaps some of the parents believe in what they learned B).

The Social Network

I watched The Social Network this past weekend.  It exceeded my expectations.  I saw a few things that made me think about topics I post about here frequently.

1 – Black Swan – Zuckerberg’s Face Mash and Facebook were black swans (Taleb not Portman).  Both resulted from a random series of events and ended up popping with users.

2 – The Rational Optimist – In this book, the author Ridley likens ideas to evolution and new ideas come from the mating of different ideas.  Facebook was a good example of this.  Zuckerberg mated several basic ideas that he got from others and his own observations and experience to create something that many people now find value in.  Many of those  people wouldn’t have predicted that they would find value in it.

Many who do use Facebook, still are not sure why.  They poke fun at it like it’s a kids game they happen to enjoy.  This behavior is a great example of a revealed preference not matching their stated preference.

3- Value prop – Zuckerberg had an innate understanding of the value prop he could provide with Facebook.  He evolved and experimented the website keeping a couple key questions in mind.  First, will this change make it useful to the people using it?  Second, will it be as natural as our physical social network?   Compare that to other sites like MySpace, which diverged from providing users a value-prop to trying to provide advertisers the value-prop.

Zuckerberg’s key value prop insight seemed to be that he understood how folks interacted, even though the movie depicts him as not being able to do it well himself.  This reminded me of the insights Adam Smith had about how humans interacted with each other in Theory of Moral Sentiments.  Smith was somewhat of a social outsider, which may have helped him see what others took for granted.  Maybe Zuckerberg benefited from a similar perspective.

4 – I enjoyed the backdrop of conflict throughout the movie between talent and conventional privilege.  Zuckerberg wasn’t courted for elite clubs at Harvard.   His friend and CFO, Eduardo was.  Eduardo played the game of delighting the few that held the keys to the club of privilege and prestige.  For many this turns out to be a lucrative path.  Zuckerber played the game of delighting users.   Talent won this round.