Blackadder’s Lair

The home of many a cunning plan

Economics for People Who Hate Capitalism

If you’re like me, you’ve spent a lot of time (probably too much time) searching for the perfect introductory guide to economics, something to recommend to people who are interested in learning more about the subject or who, in your own arrogant opinion, would benefit from learning more about the subject. Such a book, to be ideal, would have to meet two criteria:

1) It would have to set forth the sometimes difficult and/or counter-intuitive ideas of economics in a way that is compelling and easy to understand (yet not overly simplistic); and

2) It must be a book that people will actually read.

Sadly, finding a book that meets these criteria is harder than it might appear. I’ve looked at plenty of contenders, but virtually every book I’ve come across has had some major drawback or flaw. Either it’s too technical, or too dated, or it leaves too much out, or most of it is excellent, but there is one part that will turn off anyone who reads it so thoroughly as to nullify any effect the rest of the book might have.

After viewing this episode of Bloggingheads, I’m considering making Filthy Lucre: Economics for People Who Hate Capitalism my standard recommendation, at least for people who are broadly speaking left-of-center. The book’s author, Joseph Heath, is a philosophy professor at the University of Toronto, student of Charles Taylor, expert on Habermas, and author of The Efficient Society: Why Canada is as Close to Utopia as it Gets and The Rebel Sell: How the Counter Culture Became Consumer Culture. Heath is no one’s idea of a right-winger, but he also acknowledges that a lot of arguments made by the left are premised on a faulty understanding of how the economy can and does work. Continue reading

May 1, 2009 Posted by | Capitalism, Economics | Leave a comment

If Only We Were More Like Europe

Another Scott Sumner gem:

Let’s say the center of power in America is in the center. In that case neither liberals nor conservatives will be able to construct the sort of society that they dream about. In frustration, they will demonize the other side, and take some extreme; and perhaps unrealistic positions. In particular, liberals will be able to indulge in the very satisfying sport of capitalism–bashing.

Now let’s assume that in Northwestern Europe (especially the Nordic countries (including Holland), but to a lesser extent the other countries north of the Alps and west of Poland) the center of the political spectrum is “liberal” as the term is defined in America. So they are successful in erecting a large welfare state. Once they achieve this success, however, they start running into problems. The heavy tax and subsidy burden starts slowing growth in the 1970s and 1980s. Unemployment rises sharply. In response they frantically cut away at all sorts of non-essential statist interventions, anti-market policies that don’t seem to have much egalitarian benefit. In particular, they do the following:

Continue reading

April 24, 2009 Posted by | Economics | 1 Comment

The Weak Case for Torture

I have a confession to make: I watch a fair amount of Fox News, frequent conservative blogs, etc. Most days this isn’t a problem as the slanted noise machine talking points mislabeled as news one gets from these sources are in line with my own Radical Individualist Calvinist Capitalist Stooge beliefs. Occasionally, however, the experience can be a painful one, and the last couple of days, with all the renewed attention on the use of waterboarding and other forms of tor- er, “enhanced interrogation” have been some of the most painful in recent memory.

The latest meme running through these sites is that while it may be honorable to be opposed to torture on principle, we ought to be reasonable and just admit that torture works. Here, for example, is Jonah Goldberg:

I have no objection to the moral argument against torture — if you honestly believe something amounts to torture. But the “it doesn’t work” line remains a cop out, no matter how confidently you bluster otherwise.

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April 23, 2009 Posted by | Torture | Leave a comment

The End of the Affair: Review

This is an awful movie based on a fabulous book. Don’t see it. Continue reading

April 22, 2009 Posted by | Film, Literature | Leave a comment

Human Smoke: Review

Nicholson Baker’s Human Smoke: The Beginnings of WWII and the End of Civilization is a haunting and sometimes horrifying revisionist look at the lead up to and early years of the Second World War. The book is composed entirely of small vignettes (ranging in length from a paragraph to a few pages) drawn from newspaper accounts, diaries, memoirs, official documents, and other largely contemporary sources. While this style leaves little room for direct argumentation, the main theses of the book are fairly clear and may be summarized as follows:

1. The Allies during WWII (particularly Britain) engaged in numerous atrocities, violations of civil liberties, etc. during the war, and in some cases did so before the Germans.

2. The leaders of the Allied powers (particularly FDR and Churchill) wanted war, and in the case of FDR did everything in his power to provoke an attack.

3. That the Allied powers didn’t particularly care about the Jews, and that the Holocaust could have been averted had the United States and Britain allowed Jews to immigrate as refugees (something which was considered but rejected).

4. That Hitler was a madman in the literal sense of the term. Continue reading

April 19, 2009 Posted by | History, War and Peace | 1 Comment

The Regressive Welfare State

Let’s start with what I would expect is an uncontroversial sounding principle (call it the progressive principle): if the government is going to run a social assistance program, the average income of the people paying for the program should be higher than the average income of the people benefiting from the program.

The justification for this principle is, as I say, common sensical. Most people support the idea of redistribution, but it’s usually redistribution from the rich to the poor that they have in mind. Redistribution from the poor to the rich (or from the poor to the poor) would, I think, strike most people as perverse. Yet the odd thing is that quite a large portion of the modern “social assistance state” violates this very principle. Both Medicare and Social Security, for example, involve redistribution not to the poor, but to the old, who are statistically speaking much wealthier than the average American (here is one analysis of the question regarding Social Security; I’m confident that if you ran the numbers for Medicare you’d get the same result). Not only that, but the funding for Social Security and Medicare comes mainly from taxes that are highly regressive. Similarly, funding for education tends to be only slightly progressive at best, and in many cases (such as funding for higher education) is downright regressive. Much of the funding for public schools comes from property taxes, which means that the people paying for the schooling (either directly or indirectly in the form of increased rents) are the same people getting the benefits from the schools. An increasing proportion of education spending, however, comes from state taxes, which as Ezra Klein notes, tend to be regressive overall. Indeed, a recent trend has been to use revenues from state lotteries (a particularly egregious form of regressive taxation) as a source of education funding. Thus you have a strange situation of states bragging about taking money from the poor to improve the educational experiences of the well to do.

I could go on, but you get the idea.

If we want to reform the social assistance state to bring it in line with the progressive principle, we have two options: we can change the structure of benefits or we can change the structure of how those benefits are funded. For things like Social Security and Medicare, changing the benefits would mean instituting some sort of means testing, to ensure that people aren’t receiving government assistance if they don’t actually need it. The typical argument against means testing is that it will erode public support for the programs. If the wealthy don’t themselves benefit from a program, it is argued, they will agitate for it to be abolished. The problem with this argument is that it has almost no empirical support. We don’t send food stamps to Bill Gates, yet somehow the food stamps program has not been eliminated. Social security remains popular in countries where benefits are means tested (like Australia), and do not seem to be in any danger of being repealed on that account. And if the argument were really true, then it would be hard to see how any attempt to make the funding of these programs more progressive wouldn’t be doomed to failure.

For reasons that I don’t quite fully understand, many people would prefer to keep paying benefits to the rich, while raising their taxes even more to do so. I’m not opposed on principle to the idea of making taxes more progressive, but realistically there are limits to how far one can go with this. States didn’t resort to lotteries because they hate the poor or are just dumb. They did it because there is a wide spread anti-tax sentiment in this country, and that isn’t likely to change soon. Even discounting issues of political viability, it really is the case that higher taxes discourage productivity and growth, and these effects are only going to increase as a global economy makes it easy to move capital from one country to another (one reason, I suspect, that state taxes are so much less progressive than federal taxes is the ease of moving from one state to another). I would therefore submit that if a progressive social assistance state is your goal, it’s going to have to come largely by means testing benefits rather than by raising taxes on the rich.

April 17, 2009 Posted by | Government, Political Theory, Progress, Taxes | Leave a comment

On the Tyranny of Standing in Line

Stuart Buck has a post up about political consistency. People say they object on principle to X, and make quite a stink about it, yet they show comparatively little concern for Y, which is arguably just as bad. His examples: people object loudly to the use of torture in interrogation, but are fairly quite when it comes to the use of solitary confinement (which many claim is as psychologically damaging as torture) or sexual abuse in prisons; they object to the government finding out which books people have checked out of the library under the Patriot Act, but not the much more intrusive information a person has to give to the government when paying his taxes.

Stuart blames this inconsistency on partisanship. No doubt there is a lot of that, but I think that the examples he gives illustrate a deeper and even more puzzling phenomenon. When it comes to the question of how to balance the protection of civil liberties against the needs and interests of society, it seems to me that there are three coherent approaches:

1. Protecting civil liberties should always trump the needs of society;

2. The needs of society should always trump civil liberties; or

3. Civil liberties should receive less protection where the needs of society are weighty, and greater protection as they become less weighty.

So, for example, one might rationally give less protection to civil liberties in cases involving, say, threats to national security than in cases involving traffic safety.

Very few people subscribe to approach number one, and at least in America virtually no one subscribes to approach number two. The odd thing, though, is that in practice most people don’t subscribe to approach three either. Instead, most people seem to subscribe to something like the following:

4. Civil liberties should receive *more* protection where the needs of society are weighty, and less protection as they become less weighty.

They wouldn’t put it that way, of course, but if you look at when people actually do object to violations of civil liberties, and how strenuously they do so, it does seem as if they are apt to give greater scrutiny to government action when the government interests involved are most pressing. So, for example, the Patriot Act took various techniques (involving wiretapping, search and seizure, etc.) that had been used for decades in drug cases, and applied them to terrorism cases. You might think that if such techniques were justified to keep people from getting high, then they would be justified to keep people from blowing up buildings (and that, alternatively, if they were objectionable as a means of stopping terrorism that they would be much more objectionable as a means of stopping drug trafficking). Yet a lot of people who never raised a peep about the use of these techniques in the war on drugs became seriously concerned about them once they began to be used in the war on terror. Likewise, many of the traditional protections against search and seizure applied in the criminal context do not apply in the administrative context, even though preventing people from being raped and murdered would seem to be a more pressing interest than ensuring that a building is up to code.

You might argue that this difference is due to lack of knowledge. Cases involving national security or whatever attract more attention, and hence more condemnation. The problem with this is that when you do bring such cases to people’s attention they rarely get even more outraged and start protesting the new civil liberties violations were even more vigor. Tell someone upset about some national security related violation of civil liberties about some comparable violation in a more mundane context, and you may get a verbal denunciation of this other practice (“yes, I think that’s wrong too”) but you can usually tell that the person’s heart isn’t in it, and often times they will in fact defend the government’s actions in the less compelling case.

The source of this discrepancy, I think, has to do with the stories we tell ourselves about our political activities. There are plenty examples, both in fiction and in history, or tyrannical regimes who have abuses civil liberties and have tried to justify this by an appeal to national security. A person who protests such actions, therefore, can easily be seen (and can see himself) as part of a heroic tradition to dissent, struggle against oppression, etc. By contrast, no country has ever descended into totalitarianism by making people stand in line at the airport. Going to jail for burning your draft card has a chic value that getting arrested for performing a manicure without a license just lacks.

April 16, 2009 Posted by | Government, Libertarianism | Leave a comment

The Tax Man Cometh

A couple of things here.

First, note the lyrics “There’s one for you/Nineteen for me,” and “Should five percent/Appear too small/Be thankful I don’t/Take it all.” Unbelievable as it may now seem, the marginal tax rate in Britain at the time was 95% (and the American rate wasn’t much lower). Today no country has marginal rates anywhere near that high (so quit yer complainin’ – things could be a lot worse!) Continue reading

April 15, 2009 Posted by | Taxes | 1 Comment

Quote of the Week: John Updike

Make no mistake: if he rose at all
It was as His body;
If the cell’s dissolution did not reverse, the molecule reknit,
The amino acids rekindle,
The Church will fall.

It was not as the flowers,
Each soft spring recurrent;
It was not as His Spirit in the mouths and fuddled eyes of the
Eleven apostles;
It was as His flesh; ours.

The same hinged thumbs and toes
The same valved heart
That–pierced–died, withered, paused, and then regathered
Out of enduring Might
New strength to enclose.

Let us not mock God with metaphor,
Analogy, sidestepping, transcendence,
Making of the event a parable, a sign painted in the faded
Credulity of earlier ages:
Let us walk through the door.

The stone is rolled back, not papier-mache,
Not a stone in a story,
But the vast rock of materiality that in the slow grinding of
Time will eclipse for each of us
The wide light of day.

And if we have an angel at the tomb,
Make it a real angel,
Weighty with Max Planck’s quanta, vivid with hair, opaque in
The dawn light, robed in real linen
Spun on a definite loom.

Let us not seek to make it less monstrous,
For our own convenience, our own sense of beauty,
Lest, awakened in one unthinkable hour, we are embarrassed
By the miracle,
And crushed by remonstrance.

– John Updike, “Seven Stanzas at Easter”

(HT: Ross Douthat)

April 13, 2009 Posted by | Literature | 1 Comment

Of Bootleggers and Baptists

Last week I was accused of being a stooge for the powerful. It wasn’t the first time, and it probably won’t be the last. What did I say that caused this charge? I suggested that the market should be given a greater role in the provision of health care.

Well, then, you might say, what more need have we of witnesses. Everybody knows that free markets are in the interests of the powerful. That’s why big businesses are so opposed to government intervention in the economy.

Changing the subject completely, I was reading an article in the DC Examiner only a few hours later when my eyes fell upon the following sentence:

Philip Morris, openly and without qualification, backs Kennedy’s and Waxman’s bills to heighten regulation of tobacco.

Continue reading

April 13, 2009 Posted by | Capitalism, Economics, Global Warming, Government, Health Care | 1 Comment