Thu, 29 Jun 2006

An Anarchy

An anarchy is not the absence of government. It is the presence of a system which keeps the peace sufficiently well as to not allow any one entity to monopolize violence over entire regions (aka form a government).

Posted [03:02] [Filed in: ] [permalink] [Google for the title] anarchism,anarchocapitalism [digg this]

Sat, 24 Jun 2006

Worry About Real Problems

We are in no danger of running out of oil.

In free markets, there is a role played by certain people called "speculator". These people have more money than they need to live on, and have intimate knowledge of certain fields, such as the orange crop, or apple crop, or timber, .... or oil. Their function in the market is to even out price fluctuations. They buy when the price is low and sell when the price is high. Or the other way around, in which case they run out of money and go do something else. Thus, anybody who continues to speculate in a market can be presumed to be able to identify when prices are low and hold until prices are high.

In the process of buying while prices are low and selling when prices are high, they serve the raise the low prices (by increasing demand) and lower the high prices (by increasing supply). Speculation makes people better off even if they grumble when low prices get raised.

Speculators aren't (yet) speculating higher oil prices. Since speculators go out of business when they speculate badly, we have to presume that long-term speculators have expertise that exceeds our own. Were the situation otherwise, then we should become speculators ourselves.

What the USA needs right now is less central control over markets, and less war on {drugs, terrorism}. Since these are wars on jobs and tactics respectively, these wars can never be won, but can only be fought in perpetuity. We need to have the will to declare victory, stop wasting treasure and blood, and go home.

Worry about real problems.

Posted [13:09] [Filed in: ] [permalink] [Google for the title] [digg this]

Thu, 22 Jun 2006

Minimum wage price insensitivity

Most of the arguments in favor of a minimum wage are total economic crap. They argue that it is simply immoral to not legislate a minimum wage without reference to its effects. Intentions are more important than results to these people.

However, at least one argument is based on good economics: the argument that labor is insensitive to price. Most often, the law of supply and demand says that when the price goes up, the demand will go down. There are some goods for which this is not true: diamonds or Rolex watches (the real ones; not the ones that spammers want you to buy). At the other end of the curve, it is possible (but for which there is no good empirical evidence) that some tasks simply require a minimally-trained human. Employers will get the same employees as long as the wages remain within this magical range. Thus, minimum wage advocates argue, simple justice requires a minimum wage to ensure that the surplus goes to the workers and not the owners.

The problem is that this theoretical price range probably doesn't exist, or else is so small that it cannot reliably be discerned. Take the task of cleaning a floor. One might use a little four inch diameter broom such as I've seen used in India. Or you might buy a 24 inch push broom. Or a 72 inch floor sweeper. Or a ride-upon vacuum cleaner which sucks the living shit out of anything that might resemble dirt. There are wage scales at which each capital investment makes sense .... or doesn't.

Even if certain market sectors have a price insensitive range, it's quite possible that others do not. A minimum wage law that applies equally to everyone would be a benefit to some workers, and cause workers in other market sectors to have their jobs disappear permanently.

Economics cannot tell you what is moral or not. Economics can only tell you what will happen when you take a given action. Thus, if voters choose to destroy some people's jobs because that is the moral thing to do, they cannot be judged by economists. They can only be judged by their moral authority, who will doubtless send them to their religion's version of hell. But oops, I'm judging them, aren't I? I cannot see how workers are helped by having the worst-off lose their jobs, so that other more prosperous people may earn more money. If a rich person did that, they would be judged harshly by the very people who advocate for a minimum wage.

Oh, and Don Boudreaux points out that a law setting a minimum price for the sale of a car would be rejected by any sane person, and then goes on to ask why said sane people then argue for a minimum price for the sale of labor.

Posted [02:53] [Filed in: ] [permalink] [Google for the title] [digg this]

Fri, 09 Jun 2006

Network Neutrality letter

Here's the Network Neutrality letter that I wrote to my congressman:

Hi. My telephone and cable company are currently seeking permission to create a two-tier Internet, and charge websites for access to me. I am currently paying them for a certain amount of bandwidth. If they are going to create NEW bandwidth and sell that to someone else, fine, let them. However, I don't trust them to do that. I expect them to double-sell bandwidth to me, and the same bandwidth to some website. This is fraudulent behavior and you should write a law that prevents them from doing that.

Previous Network Neutrality posts: 1 and 2.

Posted [15:11] [Filed in: ] [permalink] [Google for the title] [digg this]

Sat, 03 Jun 2006

Network Neutrality elevator pitch II.

Here's the Network Neutrality elevator pitch, take II:

I'm already paying my ISP for high speed Internet. If my ISP can provide me with higher bandwidth, why isn't he offering it to me?

Posted [03:14] [Filed in: ] [permalink] [Google for the title] [digg this]

Network Neutrality elevator pitch.

Here's the Network Neutrality elevator pitch:

In a competitive market, I would buy the telco and cableco arguments. Their sector is very strongly regulated. There is little competition outside of their comfy duopoly. Thus, if they're given the chance to sell high speed to some people, and low speed to others, what will really happen is that no extra bandwidth will be offered. Instead everyone will get the low speed unless they pay. This is the equivalent of "Nice website ya got there. You wouldn't want anything bad to happen to it, would ya?"

Any questions?

Posted [01:57] [Filed in: ] [permalink] [Google for the title] [digg this]