Friday, May 30, 2008


I seem to have developed a strange fetish for graphs and maps. Whenever I get a new Economics book, I look through all the graphs. The same is true for history books and maps. For those who share my strange affection for maps, I have the perfect place for you: Strange Maps.

It will suck hours of time from you.

Thursday, May 29, 2008


The day after the primary, I decided to become a dues paying member of the Libertarian Party. It was not out of support of Barr, but the realization that as much as Barr was the last person I wanted to win the nomination, he is better than either of the major party candidates. I am planning on voting for Barr/Root in November.

I think I tend to side with the left-libertarians on most issues, but I'm much more pro-market than I think the left ones are. I like the market, not only because it is the best way to accomplish the goals of decreased poverty and increased wealth creation, but because it is the only system where a person is rewarded based on what he or she contributes to the rest of society.

Libertarian Party: 2008

Today's Libertarian Party is extremely interesting. For such a small party, the internal divisions rival those of the larger parties, if they don't surpass them. There seem to be two rival factions: the Left-Libertarians and the Right-Libertarians. By Left-Libertarian I don't mean the Noam Chomsky Libertarian Socialists, those guys don't really fit in here.

The Right-Libertarians tend to share the social outlook of the conservatives. They are the type of person who believes that the moral fiber of society is being eroded by government intervention - i.e., social security breaks up multi-generational homes, the government through welfare makes the nuclear family unnecessary, etc. Right-Libertarians are less likely to stand up for gay rights, and are more likely to be pro-life. To their credit, they are unlikely to want to enforce anything via the federal government.

The Left-Libertarians share the same goals as extreme social liberals, but do not believe that they can be accomplished by government intervention. Their primary goals include the abolition of poverty, the empowerment of women, the queer community, and of minorities. They support things like affirmative action in spirit, but not practice, because they realize that the use of government to pursue these goals just gives the establishment more power which hurts any positive social cause in the long run. They believe that the best way to fight poverty is to create wealth - and the best way to do that is through a laissez faire, capitalist system.

This is my perception of the two sides; I don't know how correctly I've characterized them.

For this presidential election, the Libertarian nominees were, on the Right: Bob Barr, Wayne Allyn Root. On the Left: Mary Ruwart, Steve Kubby, George Phillies, and maybe Mike Gravel (though Gravel was less enthusiastic about the free market). These sides are clearly not fixed; Mike Gravel did end up endorsing Root, which surprised me. For the most part, through the six ballots, the votes stayed on the same side. As Kubby, Phillies, and Gravel were eliminated, their support went to the strongest Left-Libertarian candidate, Ruwart. Root and Barr were fairly strong throughout, and once Root was eliminated most of his support went to Barr, which was enough to push him over the edge.

There has been surprisingly little backlash against Barr. The Left-Libertarians realize, that for all their philosophical differences, they agree about what the government should do 95% of the time. Even though the ticket ended up being Barr/Root, the schism between the left and right hasn't hurt the party too much.

Wednesday, May 28, 2008

Henry George

In a libertarian world, where do taxes come from? Income taxes violate the most fundamental of rights; the right of a person to his or her own body, and the labor that it produces. They also have the negative effect of disincentivising work; if people get to keep less of what they produce, they'll produce less, especially in a progressive income tax system, which punishes people for producing the most.

Sales taxes have the same problem; they punish people for trading, which is the last thing you want to do in a free market system. So do tarrifs, etc.

What remains is property tax. This is where Henry George comes in - to digress slightly, a problem with libertarian philosophy comes with the ownership of land. The ownership of private property, or anything that is the product of one's labor, can morally be assigned to whoever produced it, or whatever they traded the product of their labor for, etc. Land was produced by no one; natural resources were produced by no one. Therefore, the only way one can claim ownership of them is by showing up before anyone, or by using coersion to claim ownership. Neither is tenable under libertarian philosophy.

So, a legitimate form of government is the collection of rent from a resource that cannot be morally owned. A good primer for this is here.

Tuesday, May 27, 2008


What responsibility does a person have to society? Ayn Rand would turn this question around, and rephrase it: "How much ownership can other people claim on you?" A responsibility seems to suggest some claim of ownership, which, in most claims of ownership, implies that the owner has some role in an object's creation. The question comes down to: how much does society create us? If we owe a majority of our selves to outside influences, than it can be justified that some of our labor go back to that society. Even Rand concedes that, in the case of parents, children have a special responsibility due to the labor that the parents put into raising someone. If we are largely products of our selves, then we owe little back to society (I am speaking of responsibility, or duty; this would be the moral justification for such things as welfare. If one concedes that they owe nothing to society, yet derive pleasure from helping others, that is a completely different case).

This is (clearly) a question I have yet to fully answer for myself. It is due to my happening to be born into modern, rich, post-industrial nation that I had the possibility of schooling, etc. My most valuable tool, perhaps the most valuable thing in any society, is language. I would be capable of little without language. But to whom do I owe the possibility of my learning a language? My parents, clearly, and my schoolteachers, yes, but they hold as much claim on language as the cashier at the store holds on the giving me of bread. Do I owe society a part of me because there is access to more and more information that I had no part in developing? I can't see that as possible, as the only free people could be isolated savages, and as we learned more and more we could own less and less of our selves. If something is a free, public good, then I don't think that people can ethically be required to pay for it.

I tend to lean more towards the 'we owe little to society,' because despite the advantages that individuals may have due to race, class, etc, I believe that an individual has the largest role in what he or she ultimately becomes. Why is it that someone who is mentally handicapped can earn a living in this society, but some people who are more genetically gifted cannot? This is the question I've been trying to answer for a while. Luck may be a factor, but in most cases I can't see that as the determining one. Lack of opportunity? I don't think this is so - if anything it is the lack of knowing that there are opportunities that impedes people most. Ultimately, I believe, the answer is a lack of ambition (I'm not saying this is a character flaw; some people may believe that they really do have no opportunity). I think this is largely due to our society promoting a belief that if someone is not well off, it's not their fault; I'm not challenging this belief, but it seems to me that if this is accepted there will be more people who are not well off.

Friday, May 23, 2008

Windfall Profits

There is no greater indication of a widespread ignorance, if not sheer loathing, of economics is the concept of a "Windfall Profit Tax." Generally levied on oil companies as a way to take anger out on someone, these taxes are perhaps the most irrational taxation of all. 'Windfall Profits' happen when one of two things happen: the supply of a good shoots down, driving prices up and rewarding those with inventory, or the demand shoots up with an inelastic supply curve, meaning price rises inordinantly.

To bring the price of a commodity back down to the market rate, the industry so affected must invest in new forms of production. To do this, the companies will invest in capital and labor, increasing their supply. They use their 'Windfall Profits' to return the good back to its equilibrium price.

Of course, if the government slaps a 'Windfall Profits Tax' on the industry, less of this investment will happen, so the government keeps the price artificially high for a longer period of time. This is what the government wants to do to the oil industry; though to be fair, they receive subsidies from the government, so they kind of asked for it.

One of the industries that is experiencing the most 'Windfall Profit' right now is the farming industry. The government, instead of slapping a tax on them, is rewarding them with the biggest subsidy of all time (I think). Now that's just stupid.

Wednesday, May 14, 2008

Health Care

The biggest benefit of the free market is that it gives each person the ability to allocate their time and resources in the way that benefits him or her best. In the market, this means that producers have to provide the highest quality goods at the lowest possible price, or people will go somewhere else. This system would of course be best for health care, as well... but in America today, does such a system exist? Not at all. If the cost of health care is rising, and the cost of providing care isn't rising, then this cannot be a free market system.

What is it then? Our system seems to have the downsides of a bureaucratic system with the downsides of a free market system, and few of its benefits. The problem stems from WWII wage controls (see, the government removing choice from the people) - sometime during the war, the government imposed a wage freeze, looking to provide stability in the labor markets, most likely. Of course, this didn't work. Some businesses were still expanding and were willing to pay more for employees - so they offered non-wage benefits that were tantamount to a pay raise. Now we have employer provided health insurance. This is stupid for several reasons: it impedes the freedom of workers to go to the best jobs, out of fear that something will happen in between jobs, making them uninsurable. It's also stupid because insurance came to cover everything - the price signaling that is so important in a free market does not exist when the customer never sees the price tag; why go somewhere that charges $100 for a physical, when you can go somewhere where it costs $300 - it makes no difference to the consumer, because the insurance just covers it. It makes sense to have insurance for emergency situations, you aren't going to shop around for the lowest price if you're having a heart attack.

What are the solutions offered? There's single payer nationalized health care, where we just decide to end the market for health care. Prices go up (though consumers don't see it directly - only through their taxes), quality goes down (and consumers can no longer decide not to patronize the poor quality places, since they would all be the same), and waiting times go up, and people have no incentive to take care of themselves, since no matter what there will be no cost to taking care of them. The benefits: everyone has access to at least some health care. The rising prices under the employer-based system, which hurts the poor most, would be taken care of.

I think the two front Democrats' system is that the government would become an alternate health care provider. The government offers health care at an artificially deflated price, and you can choose between that and the current options for health care. (Under Barack's system, you still have the option to decide not to have insurance, but you must cover your children somehow. Under Hilary's system, everyone's a child and has no choice but to get some sort of insurance). This doesn't solve any of the problems of the increasing price of health care, and has the further disadvantage of screwing up the market for health insurance. The advantage seems to be that there would be fewer uninsured people demanding care, who drive up prices by being unable to pay; health care would be available to a lower class of people (but it doesn't solve the problem of illegal immagrents being uninsurable).

I think both of these alternatives are worse than our current system. What needs to happen is insurance needs to be shifted to covering only emergencies, and it needs to be moved out of the hands of employers. It wouldn't cost workers more: their wages would go up, as the money that was spent on insurance would instead be given out as wages. People then have greater choice in getting insurance, and can buy a program that best fits them, and they are no longer tied to their employers (how lame would it be if you got a car and house leased to you by your employer? Noone would ever change jobs). We would see prices drop - this would make health care accessable to even more people, and it would give everyone more wealth. For those who truely cannot afford the bare minimum of health insurance, charity would be able to cover this (as it is now, the high price of care makes the government the only charity that can possibly afford to cover everyone). I think our system is slowly moving this way, and is likely being impeded my the government, and the health lobby's control over regulation. The best thing the government can do, if it wants to improve the quality of life for people, is to do nothing.

Wednesday, May 7, 2008


There's a passage I like in Stranger in a Strange Land, in which Valentin Michael Smith (I think that's his name) realizes what the concept of 'money' is. I think that our society today doesn't recognize its conceptual beauty; In a perfect world, money would represent an individual's value added to other individuals; the only way a person could earn money is by doing something that improves another's life somehow. Therefore, the highest paid people should be the people who produce most for society.

Of course, this has some issues. First, what will be used as money? This is easy among a small group, as long as they can agree on something. Historically, of course, gold has filled this role. The problem is, since the Industrial Revolution and the end of Mercantilism, economies have been growing faster than the gold supply, causing deflation. With deflation, people can earn wealth by just sticking money under their mattress, which violates the entire purpose of money.

That's where the Federal Reserve comes in. This is almost as bad; money went from being directly transferable to something solid to being completely determined by faith in the government, with the money supply being completely arbitrary, chosen at the whim of the Federal Reserve Chairperson. I think, for money to perform its purpose, there has to be some set value; I wouldn't be opposed to having the money supply fixed to GDP. I also kinda like David Friedman's idea of having the money supply fixed to a commodity bundle - i.e., like being tied to gold, but instead weighted 1/8th to wheat, 1/8th to oil, etc.

The other question is: does our contemporary society distribute money in the way that I described in the first paragraph? Are the richest people the ones who contribute the most to society? In general, yes, I believe that. People criticize our society because baseball players make several times the amount of school teachers. This makes complete sense, though. Of course, education is several times more important to society than baseball, but the utility is gained from the millions of schoolteachers, whereas the utility derived from baseball is from only a thousand or so players. If the average person in America decides that baseball is worth $10 to them, (on average; it will be unevenly distributed), then that's $3 billion distributed to 1000 players, the executives, managers, coaches, etc. If education is worth $1000 a year to the average American, that means the Education industry is a $300 billion industry. This is distributed over a much larger number of educators than baseball players, which is why they make less than a baseball player.

Of course, there ARE people who make money and don't contribute anything to society; this usually is a result of either force or fraud, or a pure misallocation of resources. An ineffective employee at a giant firm may not be producing equal to his salary, and isn't employing either force or fraud. Government is also a massive perpetrator of giving money to people who do nothing for society, which makes sense given the fact that they can employ force to get other people's money, and government bureaucrats are responsible for spending the money of other people. The person who best knows how to allocate an individual's resources to maximize his or her happiness is, of course, that individual. Anyone other than that person who tries to maximize their happiness with the same resources cannot succeed.

History and Economics

In deciding between the study of History and the study of Economics, I should try to define why I am attracted to each of them. Economics is the application of reason and common sense to reality; it is the science of making good decisions, as one of my econ teachers puts it. One would think that this means that Economics may be limited and straightforward, but it is anything except that, largely because determining what will happen in the future, which can affect decision making, is an art. Especially in Econometrics, thinking about your data and how it relates to other phenomena. There's a misconception that Economics has all to do with money; this couldn't be further from the truth. It's just that people care more about rational decision making when money is at stake.

One of my professors and I wrote a paper about Major League Baseball; the purpose of the paper was to determine if players gave 'hometown discounts,' and whether they accepted less money to remain with their previous team. We didn't find that the first one existed; perhaps players figure they will be traveling enough during the 162 game season that they should maximize their salary and just live near home in the offseason. I have a feeling that people with exceptionally high incomes have less of an incentive to stay near home than those with lower incomes; the cost of traveling home is porportionally lower for someone making a million dollars a year, since they could afford airline tickets, etc, more easily. We did find that players accepted less to stay with their previous team; the psychic cost associated with moving houses, and changing employers, would be about the same regardless of income, it would seem. There was much more to the paper, but that's it in a nutshell.

Does this give us any useful information outside of Major League Baseball? I think it does. When looking for a job, each of us has to weigh the cost of leaving home behind in order to get the best job; quantifying this is useful.

Human Nature II

I have yet to be convinced either way, about the existence of a specific human nature.

The best evidence for the existence of human nature is the consistency among differing human societies for some specific morality... in no society has there been the acceptance of murder, for example. If one can distill what that morality is... you'll get a very narrow definition of morality.

I believe that every individual has a specific nature... my evidence for this is the existence of such a thing as happiness. If an individual is happy, he or she is operating in accordance to his or her nature. I also believe that a society has a nature... there is some way to maximize the total happiness of individuals in a group.

The leap from these to a nature for all of humanity is the one which I have trouble with. C.S. Lewis makes this leap, I think Ayn Rand does to. We live in a society that is different from any other existing society; technology makes the rules different than they have ever been before. For example: I believe, that in previous societies, patriarchy could be somehow justified. If a group needs a consistent hunter, than it will not look to the woman to find its catch, because a woman will bear children. In contemporary society, however; this is not the case, a woman can give birth to a child an be back on the job within a couple weeks. If my wife had a child, I would request the same time off. If this is the general case, then there should be no differentiation between women and men in the workplace - the nature of women and the nature of men is pretty much the same in contemporary society.

Tuesday, May 6, 2008

Human Nature

The big question I have been grappling with over the past while is: Is there such a thing as an inherent Human Nature? This seems to be one of the most important questions in philosophy, and one of the most fundamental ones; someone's philosophy hinges on this. Philosophers with extremely varied beliefs all believe in such thing as Human Nature: C.S. Lewis, G.K. Chesterton and other followers of Thomas Aquinas, but also people like Ayn Rand and Noam Chomsky.

On the other hand, you have those who believe that humans have no nature. Either they are completely dependent on society, or they have no real purpose. Nietzsche, Derrida, Foucault, and of course David Hume are in this camp.

I've yet to be convinced either way. I'll talk about this more later.


Since I am now a college graduate, and will no longer have my school's newspaper to publish my random thoughts, I have decided to start writing a blog!
I've named it (at least for now) with the following comic in mind:

This was published in the Gonzaga Bulletin, and is drawn by Rod Aminian.

So, what is the purpose of this blog? Basically, it will just be a place for me to think out loud. I will (hopefully) be reading a lot of philosophy, economics, and history over the next year or so while I decide what I want to do with the rest of my life.

A tiny bit about me: I am a recent graduate of Gonzaga University, a major in both History and Economics. I am taking a year off to decide where I want to continue my studies; I'm leaning towards Economics, but I don't yet know what sub-genre I want to work in. History is still a dark horse, as I enjoy the studying history as well as economics and could be persuaded either way.