Law, Legislation, and Lunacy

For a pleasant non sequiter, I'd like everyone to amuse themselves with the possible applications of my newfound Russian vocabulary my next time crossing the border. Examples include:

"The enemy commander has been slain!"

"They run like frightened bunnies from the field of battle!"

and of course,

"Attack, lay their settlement under seige!"

If anyone's actually looking to say these things, or one of many more practical phrases curiously missing from my Berlitz guide to Russia, feel free to ask.

Tim

Border Control

Welcome back! I hope weather is better by you than in Irkutsk, where we rang out May with a snowstorm, and rang in June with a rainstorm (I gather the phase change was planned by the central weather commission of the Supreme Soviet... I mean Russian Legislature. Thanks for not snowing us in again, your upper-mongolian Comrades thank you!

But if you've been tuning in, you'll know that I didn't plan on blogging the weather. Come on, I know my life is boring, but that'd be serious, even for me. As advertised, I'm going to say my two bits on immigration, and hopefully I'll piss a few people off (pissed of together with me, not at me or on me). Pissed off people make for regular reader.

First, the context about immigration. I gather that there's a little bit of talking going on stateside with regards to this right now. Some people, like Kim du Toit, seem to want to flush billions of taxpayer dollars down the toilet by building a wall to keep out illegal immigrants. I'm not one of those people, and I'm not even going to say the obvious, that it won't work. I don't care if it would work, and I'm not even going to talk about the economics of it all. I'm going to stick to my principles, and tell you where I'm coming from.

Here it comes: The US has no right, nor does any other country, to keep people out (or in, for that matter).

I've been thinking about this a lot. I was recently stranded in Mongolia on the Russian border, but couldn't cross because my passport had been stolen. After an expensive and lengthy process to fix things, it turns out that the best the US would do to help was to say that I was at least lucky I hadn't been beaten up for it, and that I'm on my own. In short, the Mongols ransomed me, not letting me leave until I paid a fine. While the fine wasn't that bad, the ambassador indicates it could have been anything they wanted, and they said they couldn't and wouldn't do anything about it, even if I were unable to pay. Charming, but in the words of a better man, you're fired.

My aim is to deligitimize the power governments have taken upon themselves in setting border and immigration restrictions. Their basis for this power is even part of the conventional poly-sci definition of a state: an organization that has a monopoly of force in a given geo-political territory. Taking out of their incompetent hands this tool is just as sensible as taking the car keys from a drunk. If you want to talk about how this could change things, just comment away, I'm always happy to chat or post again. But for now, I'm happy just planting that landmine and walking away.

Yours truly,
Tim

Law, Legislation, and Lunacy

For your reading pleasure, today's installment will be a brief recount of my experience with the Russian healthcare system. FYI, I'll be writing up a few words on immigration, borders, and more such things by tomorrow.

I know. You're probably snickering at the compound: "Russian healthcare" seemed to me too little more than an oxymoron, even for much of the time when I've been living here. But then, as are so many of our preconceptions and prejudices, they're laid bare for their inadequacy in the face of their subject. I went to the pharmacy to buy medicine, and to the hospital for my wife's sonogram (yes, she's pregnant! Very.), and in both cases, I saw something very different than what I expected to find.

While the characterization of Russia as a backwards country is in many ways accurate with regards to its economic development, the medical system seems to be flourishing. Despite a free alternative being offered by the government, nobody that can afford private medical care makes use of it. The consequence is that there are a number of private clinics offering service and medication for next to nothing, even by Russian standards.

Examples: I pay a $20 co-pay plus insurance and doctor's fees every month for ONE of my medications in the US. Here, I pay about $10 for the exact same product with a Russian-language lable, no insurance fees, no perscription, no overhead, no doctor's fees, nothing. Straight, honest, easy. For another, I paid about the same $10 dollars, even a bit less, for my wife's sonogram. No appointment, no hassle, we just walked in, saw our little baby, got our paperwork, then left.

Why are things like this? For starters, the Russian government realized that they weren't able to take care of people after the USSR let its outer territories go. Consequently, the medical regulations they have are much less prohibitive, and the legal climate much less prone to lawsuit-frenzy. Don't get me wrong, the Russians would love to regulate things more, and the Russian lawyers would wet their pants to have the kinds of opportunities offered in the American system, but for now, things are basically OK - quality medical care is available and relatively inexpensive (even free, if you don't mind standing in lines for hours).

All this just makes me wonder: how much does my medication actually cost in the US, AFTER counting doctor's visits, co-pays, the litigi-mania insurance (for the PRODUCERS), medical insurance costs (for me, the CONSUMER), etc.? I figure that on my insurance rate and number of perscriptions, about 80 dollars a month, give or take. I'm horrified, and I hope lots of other people are too. These kinds of imbalances speak volumes about the ways costs rise when price discrimination become possible.

It's nice to have medical coverage of the quality in the US, but big numbers tend to help people remember the kind of helpful aid drug companies and medical professionals have in the form of government regulations, not to mention the harm done them by insane awards in lawsuits. Allowing people to buy their medicine wherever they want is a great start, and dropping the perscription requirement would be a wonder as well.

But ah, it's very hard to be angry about it when you're not stuck with the costs involved :-P But heck, I'll be back state-side soon enough; and while my return to the "land of the free" will find it anything but free, I'd like to think that filling it back up with people like me helps make it more so.

Back from the Abyss...

Law, Legislation, and Lunacy

Well, OK, let me be straight: I'm still in the abyss. And it's not all that bad. So where'd I go, what I do? I know, you're all dying to know (all 3 people that read me when last I blogged), so I'll make it short and sweet.

I done run off and got married. And boy, I really couldn't have run much farther, since Irkutsk, Russia is about as far from Chicago as you can get. Almost every step I take from the city brings me closer to home (a nice way of looking at it, eh?). But I met a wonderful girl, and we're simply content to share our lives. It takes a little of the edge off, makes it harder to rant and rave, but believe me, staying up until 4 in the morning storming Illyrian fortified cities (Rome: Total War, anyone?) is a helluva whetstone.

I'll just say now that Russia is a very different place than I ever imagined, and it never ceases to amaze me. Usually it's "amazed" as in "horrified", but you'd be surprised by some of the positive things going on here. I'm going to take advantage of my time here to try and share some of my experience with and thoughts about my host nation - where I might someday choose to live out my days!

But that's another post entirely. Until then, this is your respectful blogger,

Tim

Visualizing Villains

Last night I saw V for Vendetta (again) with some friends. As usual, the film inspires me to poke around online and I came across a quote by Don Feder on Wikipedia, claiming the film is "the most explicitly anti-Christian movie to date."

Really? Even ignoring the "to date" qualifier--which covers a lot of history so I doubt it is true--I fail to understand why it is "anti-Christian." I saw no suggestions that Christ was a bad guy, nor the Bible should be thrown aside. The opposition weren't necessarily cast as Muslims nor Jews nor Atheists (for example, one admits he isn't Muslim even though he has a Koran; he just likes the book and its words for their own sake).

The movie was anti-fascist, anti-totalitarian, anti-big government but not anti-Christian. Christianity was a cloak the antagonist wore to justify their statism. It was an ends, not a means. To claim the movie was anti-Christian is akin to claiming it was anti-guns, because that's what the bad guys were armed with (especially since V relied on knives and explosives).

Everyone wants to be seen as victim, even the worst tyrants. There are few better ways to gather sympathy and power. I suspect it is that motivation that subconsciously drives Feder to make such absurd conclusions. However, it is also possible there are a few in Christianity--a vocal minority to be sure--that may see a world of merged faith and government as a virtuous goal. Those are among the scariest of people. They stand along other power hungry who feel unions or businesses or intellectuals or any one group should stand solely at the helm of the state. Those governments are by its very nature tyrannical and that's what V for Vendetta shouts down.

I'll be visited Iowa for the next week and a half so expect my posting to be less frequent. Thankfully Jenny is here to help pick up the posting in my absence.

Libertarian Workers Unite!

You know what’s the worst thing about receiving a paycheck? Checking out the line-by-line deductions. What I could do with that money! Actually, I know what I’ll do with the part that I expect to be returned to me next April. But a bit of it I can guarantee will never come back. It’s that 1% stolen by the teaching assistants’ union each month.

Out here in sunny California, the TA union has the legal right to charge nonmembers “their fair share” for services rendered. Never mind that I never voted to allow them this “right.” Never mind that I never asked them to represent me in their collective bargaining efforts. I still have to dish out almost 1 cent for every dollar I earn! And, speaking as a “starving college student,” I need every penny I can get!

Now, I’ve about had it with the union and its marketing team. Those annoying people tout the virtues of their parasite organization but have no response when faced with opposition. One rep couldn’t understand why I couldn’t see that it was “democracy in action” for my paycheck to be raided every month. “Democratic”? What ever happened to freedom? Why should I accept the $20-per-hour rate “agreed” upon when I end up making less since no one seems to care that professors work their TAs over the time limit? I’m tired of the abuse from hypocritical professors who brag about complying with union regulations at the beginning of the school term but somehow forget about them when there’s a time crunch all though finals week.

My solution? Well, it doesn’t look like the TA union can be eliminated very easily. Too many people think that they have to depend on it. So, what’s the next-best-thing? Eliminated the union monopoly! That’s right! All that’s needed is some libertarian students who know something about collective bargaining laws to organize some laissez-faire competition for our “democratic” organization. Platform? Lower pay rate. Enforced work hour limits or overtime pay. Of course, no rep, no fee. No fee, no rep. Any takers?

Our Secret War

Two days ago John Stossel visited Cato to talk about his new book (and sell signed copies along the way). I'm a huge fan of Stossel, him being my earliest introduction to libertarianism, so I gladly went down to the District to listen to him speak. After he was finished, I asked him what Jeremy describes as the "stock Youngberg question" which boils down to "How can libertarians improve our rhetoric so we can better argue the case for liberty?"

On the news channels and radio stations there is a war going on between statism and liberty and liberty is losing. In academia we don't like thinking about it as a war. When professors and students make the case for less government, it really does just boil down to conveying the facts; we are talking to people who, for the most part, want to learn this stuff (or are at least a captive audience).

But outside the ivory tower it sadly boils down to winning and losing, not learning. A wittier argument convinces more people than a right one and I thought of all people, John Stossel, a libertarian journalist, could offer insights to improve our rhetorical arsenal. Facts are not enough when you're trying to convince someone who doesn't want to admit he could be wrong.

Mr. Stossel responded by acknowledging he's always surprised how poorly CEOs argue their case when put in front of a camera. Then he realized he wasn't answering my question so he continued not to answer it: "Just keep doing what you're doing at George Mason."

Recently Mike and I have been discussing how we can be better advocates. (Perhaps creating more posts like Libertarianism in 30 Seconds and Respond Another Day but with comments by people with more experience than us but I'm not sure how we would get this.) Over the summer I plan to add posts on this precise subject and hopefully I'll get company both in both comments and articles.

There's a clear need for better arguments. Our current ones simply state the facts: they are carefully formed, tailored to the conversation and can only change a few people's minds. Statist use broad, straight-forward arguments that do poorly in formal debate but bring countless droves to their banner when in the forum of mass media. In the mainstream debate, we are fighting only with sniper rifles and everyone else has a machine gun. I think it's time we diversify our weaponry.

Robin Hood Revisited

Today marks the second anniversary of my first post on L3, The Curse of Coercive Recycling. In it I alluded that Robin Hood shouldn't be considered a standard of morality and today seems like an appropriate time to elaborate on that.

Robin Hood is on the surface a quality hero. His main nemesis is the Sheriff of Nottingham who taxes the people into poverty. Paired with his battles with Prince John, Robin Hood appears to be an archetype hero of liberty.

And on the whole I agree but I'm concerned when people sum up his actions as "robbing from the rich and giving to the poor," often confused with what he actually does: rob from the government and give to the poor. The mistaken mantra easily translates into an argument for progressive taxes and the equalization of wealth. Robin Hood becomes a sort of "medieval Che Guevara," as Wikipedia phrases it, not a defender of liberty.

Perhaps it is not Robin Hood that is the problem but the modern interpretation of him. But he is an icon and his character changes as culture molds it. I still think of this green-costumed bandit as a defender of liberty but sadly I doubt the general public feels the same way.

Respond Another Day

A few days ago I had a conversation with some friends about economics and trade. There was a lot of disagreement and naturally there are some things I wish I said but am not witty enough to think of it at the time. So here's a list of quick retorts if you ever find yourself on the other side of one of these claims as I did on Saturday.

Corporations only care about the immediate future. This is a rather strange argument in world where a firm is legally an immortal entity. Even stranger because all industries engage in investment (notably medicine, real estate, energy, computers). The only reason why we think all firms are so short-sighted is because most of their activity necessarily revolves around certain and immediate (thus urgent) changes in the world around them.

If a firm finds a loophole in the legal structure and uses it to their advantage, the firm should be blamed. So if I find a bag of money on the street with a sign that says "free money" I'm at fault if I pick it up? Paradoxically, the lawmakers who shamelessly created these flawed regulations are the same politicians who celebrate themselves for making laws that give people incentives to do good.

Only governments can reliably aid in a disaster because of their large size. Which is like saying ten people have an easier time agreeing on pizza toppings than two people. Human beings are not mindless ants; the capacity of our society does not increase as our bureaucracy inflates. Many specialized organizations do every day what governments can't.

People should give aid (such as water) away during disasters rather than sell them to ensure the most frail will get what they need. In reality, the strongest will be first in line for water they may or may not need while the weakest will definitely be least likely to lay their claim on the scarce and vital resource. Selling water forces people to prioritize and create the incentive for others to supply more. "Price gouging" merely advocates shaving isn't as important as living.

The only reason companies want to be located in the US is because the liability laws are slanted to their favor. Because the only thing Time Warner cares about is legal shelter in case someone claims TV really did rot their brain. There are hundreds of reasons for companies to leave the US; I find it hard to believe there is only one reason why those thousands (tens of thousands?) stay (to the point that I almost feel silly listing them: educated work force, high quality graduate schools, ease of immigration, favorable labor laws, proximity to financial institutions, stable government, etc etc).

The Four P's of Privacy

This week's Newsweek cover featured a massive phone set atop the White House with the headline "Spying On Your Calls." Micheal Hayden stares ominously at you in the Time cover next to big red letters asking "Does This Man Have Your Number?" The media in general is awash with stories and commentary about domestic spying.

I'm very pleased the reaction has been so strong but was surprised to hear on NPR today reasoning I hoped was long extinct. A reporter visited the National Mall and asked passerbys what they thought of the spying. To my surprise, they were overwhelming in favor it. One man gave the old argument that only people who have something to hide don't want the government to spy on them. This is a very scary line of reasoning, one that I've seen shot down on TV dramas, Hollywood movies and other media outlets, I naively thought it was purged from our culture. So I find it neccessary to summerize four reasons why this argument is a poor one.

Principle. Commonly the most cited argument, many, such as myself, don't think the government should spy on us not because we have something to hide but because it's wrong to do so. Similarly, I'm against the death penalty not because I think being on death row is in my future but because I find the whole idea morally repugnant.

Precedent. Another often repeated argument, this wonders if we allow the government extra ground, it acts as a stepping stone to invade our lives in other ways. We see this issue come up in the realm of the law: if we allow illegally obtained evidence to be used in court, then we've just make warrants meaningless.

Persecution. Closely related to precedent, this reason notes that when government is allowed to enter our private lives, they now have the ability to punish us for activities that have nothing to do with terrorism; for acts that are not wrong, but are illegal. (It also easier to justify making certain acts illegal if legislators know they can use NSA data to enforce them.) What's "wrong" changes from person to person.

Prosaic. This one's new to me; NPR mentioned a Jewish legal scholar that noted when people know they are being watched, they act differently, even if their actions wouldn't be seen as wrong to whoever's watching them. The mere act of spying makes society less diverse, people express themselves less, they take few risks. I wish I could remember the exact word the scholar used, but I think this one works very well.

Package Deals

In preparing for my micro final, I'm re-reading Donald Wittman's critique of public choice economics. PC (in its most basic form) claims that the political sector rarely achieves the efficiency of free market economics because of the incentive structure in play.

Wittman disagrees, claiming politics is as efficient as economics. I disagree with him but one claim he makes bears special mention. "Candidate develop reputations. If they have not kept their campaign promises in the past, they are less likely to be reelected or elected to a higher office. In economic markets, a firm's "goodwill" may be capitialized in the value of the firm and ultimately sold." (1397)

Implict in Wittman's reasoning is an astonishing assumption: candidates are not package deals.

In economics, there is not any product that, all at once, promises to make your car run smoother, feed your baby, improve your productivity, clean your air, secures your retirement and educates your child. Yet these (and more) resemble the standard claims of politicians. And while any one of these promises I can check and punish for on a product-by-product level, a candidate asserts to be a master at all of these. It becomes too easy to forget what he's promised to do and impossible to punish him for just that violation.

I'd buy Wittman's argument more if we lived in a world where each politician was only allowed on campaign promise and could only work on that one thing if elected. (Though there would still be other problems with this world.)

Economic Darwinism

A few months ago, Bryan Caplan and I discussed a chapter of Landsburg's Armchair Economist entitled "Why Prices Are Good: Smith Versus Darwin." Landsburg claims there little connection between free markets and evolution. "The outcomes of biological processes are often inefficient, for the simple reason that there is no reason why they should not be." (p75)

Unlike Landsberg (and Caplan), I see no inherent difference between the two. There's inefficiency in ecology, but it also exists in free-markets. And there's reason for both of them not to be as such: the strongest (most efficient) survive.

Prof. Caplan disagrees and recently he illustrates with this post. In The Tawny, Scrawny Lion a lion runs around all day chasing down animals. He eats a lot, but since he spends all day hunting, he stays thin and weak. This is pure deadweight loss, says Prof. Caplan, no doubt recalling the above quote from Landsburg.

I completely agree; it's deadweight loss. And just like a firm that's swapped in inefficiency, this lion is unlikely to reproduce, let alone survive for much longer.

Landsberg complains that the ecosystem has no prices, thus its inefficiency remains. But there are prices in ecology and just like all good prices, they convey relevant information. This lion is being told that there are too many lions in this ecosystem and if he doesn't find greener pastures, he's going to become a textbook example of creative destruction.

Look! A Girl!

I would like to welcome Jennifer, who has just promised to join L3. I met Jenny (I really don't know which one she prefers: Jennifer or Jenny) about two or three years ago at an IHS seminar. She just told me she'll be posting sometime next week. I look forward to her insights and commentary.

What Really Matters

While reviewing readings for my upcoming macroeconomics final, I stumbled onto a paper by Ian Dew-Becker and Robert J. Gordon called "Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income." They agrued that between 1966 and 2001, only the top 10% of income earners experienced income growth equal to that of productivity growth. This reality runs counter to general macro theory where productivity growth is the direct cause of the growth of real income per capita. So what happened?

Dew-Becker and Gordon cite downward pressures on wages--deunionization, immigration, free trade--to justify the discrepency. This seems awfully lacking. If free trade decreases net exports, it must increase investments (BP=0). Fewer unions might decrease wages, but they also decrease demand for workers, which increases wages. Immigration might decrease demand, but it saves companies money which increases demand for labor in other areas. Money doesn't disappear.

At the heart of the problem is believing having less money means you become poorer. This is false. Suppose I give everyone in the US $2,500. Has everyone become richer? Nope; inflation rises to compensate (this analysis gets a little strange when you consider trade so let's make a simplifying assumption of a closed economy). Now let's suppose I give everyone in the US a $2500 fridge. Has everyone become richer? You bet they have (expect for that small minority that has absolutely no use for another fridge and despises it taking up so much space). How can this be? Aren't they the same thing?

Not at all. Money is a means to an end. Think of all the things the average American has access to now that they didn't in the 1960s. That fridge is well and beyond this one from the 50s, which features automatic defrosting and balanced humidity as some of its main selling points. We also have computers, cell phones, more colors for paint, iPods, longer lasting durables, etc, etc. In other words, just because the real income is not has high as it "should be" doesn't mean that lower 90% is getting shafted.

Pirates of the Coase Theorem

Suppose you buy some land in the Hollywood Hills, knowing its high price is partly justified by the great view the Hills yield (I assume the Hills are below smog level). Imagine now someone else bought some property just downhill from you and plans to build a big shopping mall that will ruin said veiw. What do you do?

If you're Johnny Depp, you sue West Hollywood to stop the construction. Citing environmental quality laws, the Pirates actor is trying to block the Sunset Strip development; the city's best defense is they don't think the actor uses his land enough, as he spends most of his time in France. So what? I can't remember the last I used my Risk board, but that's hardly grounds for anyone to take it from me.

It sounds like the parties could use a hefty dose of the Coase theorem. If you're not familiar with it, all it means in this case is a judge would determine who's right takes presedence (Depp to what he paid for, developers to using their land as they see fit) and then one party could pay the other to forgo their right. There's a lot of really cool implications from the Theorem but all you need to know is whatever the payments are between the parties, the result will be mutually beneficial.

Sadly, it seems to be a lot more fun to sue people than test the theories of Nobel Prize winners. Still, I wonder who has the right to what but my guess is Depp because A) he was there first and B) it's the Hollywood Hills: the view's the main reason why people live there and thus represents a large portion of the price he paid.