Whoa!

Every so often, I read something that really forces me to examine a preconceived notion. This article by David Friedman (quoted in it's entirety) is one such time.

If you want war, work for justice

I think it is a more plausible slogan than the usual version. If you and I disagree because I want an outcome more favorable to me and you want an outcome more favorable to you, there is room for compromise—as we see whenever people bargain over the price of a house. But if we disagree because I see what I want as just and the alternative as unjust and you see it the other way around, compromise looks to both of us like moral treason.

Consider the issue, currently a live one in Europe, of whether people should be fined for saying or writing things critical of Islam. For those who support the traditional liberal view, agreeing to a fine of five hundred dollars instead of a thousand dollars isn't a solution—any punishment at all is an intolerable violation of free speech. For some orthodox Muslims, on the other hand, permitting people to slander the Prophet is clearly unacceptable; if the government will not impose a fine large enough to stop such an outrage, it is up to the believers to stop it themselves.

That, I think, is part of the nature of beliefs about justice—they are absolute, bright edged, in a way in which preferences are not. The point is summed up in the Latin phrase Fiat justicia, ruat coelum—let justice be done though the sky falls.

Those whose bumper stickers read "If you want peace, work for justice" simply take it for granted that there is no question what is just; if you want to find out, just ask them. The problem with the world as they see it is merely that other people are insufficiently virtuous to act accordingly.

IMHO, this is spot on. I just took it for granted that peace requires justice. Now, to be fair, I do think that there is a lot of unanimous ideas of right and wrong. But not all of it is unanimous, and there's a great deal of disagreement on some topics, like abortion. I'm sure you can easily come up with others.

And this reminds me of some of the things that Rob Bell talks about in Velvet Elvis, e.g. brickianity.

I love it when I can find things that are surprising, but persuasive enough that I'm forced to think differently. Very cool.

Luxurious Lifestyles

One of my favorite podcasts is American Public Media's Speaking of Faith. The most recent podcast revisits an interview from last year with Barbara Kingsolver, who chose to move her family to the mountains and live off of food that she grew in her backyard, supplemented by food provided by local farmers. Ms Kingsolver got a great deal of reward from doing this, as she expresses in the podcast. And, it's great. I applaud her choice and rejoice along with her in having done that.

If that was as far as it went, that would be the end of my comments. But she also tries to make the claim that her lifestyle was ethical, and implies that the lifestyle that most of us have with our food is unethical. There is a subtle advocacy for all of us to lead that kind of lifestyle, and I can't agree with that. One of the things that she says in the podcast is that we don't take account of the costs in the lifestyle that we lead. But I think she does a very poor job of taking account of the costs that would be associated with imposing that lifestyle on the rest of the world.

Her lifestyle is one of luxury. It's a byproduct of the fact that we're fantastically wealthy that some of us can choose that lifestyle. In the third world, that lifestyle is called subsistence living, and is generally considered to result in massive amounts of suffering. A few random thoughts from the podcast as I re-listened to it...

Early in the podcast she complains about not knowing where our food comes from, whether it be China or Argentina or elsewhere. Part of what raises her concern is the amount of distance that our food must travel and how much fossil fuels must be consumed in the transport. But I'm not sure that she's measuring correctly. She just assumes that using fossil fuels will release more CO2 into the atmosphere, but when measured, that assumption turns out to be bad:

Most notably, [researchers] found that lamb raised on New Zealand’s clover-choked pastures and shipped 11,000 miles by boat to Britain produced 1,520 pounds of carbon dioxide emissions per ton while British lamb produced 6,280 pounds of carbon dioxide per ton, in part because poorer British pastures force farmers to use feed. In other words, it is four times more energy-efficient for Londoners to buy lamb imported from the other side of the world than to buy it from a producer in their backyard. Similar figures were found for dairy products and fruit.

New Zealand is a *MUCH* more efficient producer of lamb than Great Britain. They have what economist David Ricardo called a comparative advantage in producing that lamb. Their advantage is so big that it makes more sense to ship the lamb than grow it locally. Additionally, commercial processing of foods allows for economies of scale that local growing simply can't match:

Contrary to current wisdom, packaging can reduce total rubbish produced. The average household in the United States generates one third less trash each year than does the average household in Mexico, partly because packaging reduces breakage and food waste. Turning a live chicken into a meal creates food waste. When chickens are processed commercially, the waste goes into marketable products (such as pet food), instead of into a landfill. Commercial processing of 1,000 chickens requires about 17 pounds of packaging, but it also recycles at least 2,000 pounds of by-products.

That 2000 pounds of by-products become waste when a 1000 people harvest a chicken in their homes.

She claims that humans throughout all of history have eaten local organic food, up until the time of WWII. I don't know if that's false, so I'll simply take her word for it. She seems to think that this is a "normal way to eat". I don't understand why that makes it a good way to eat. Until very recently, women were at a lower social status than men. Many argue that this problem persists. When compared against history, male dominance over women is the norm. But I don't think it's good. Steve Landsburg argues that prior to the Industrial Revolution, all of humanity was poor. Which would suggest that poverty is a pretty normal state for us. I don't think that's good, either.

So the question is what makes eating local foods good and eating imported foods bad? The case really can't be made that importing is always worse for the environment. The case is hard to make that normalcy defines good. On the other hand, the amount of wealth that is created as a result of division of labor and specialization has greatly enriched all who take place in that trade. That wealth has directly reduced human suffering. Division of labor and specialization seems to me to produce more good than self sufficiency.

LOL! An excerpt is read from her book and she quotes the bible saying, "The harvest is bountiful and the labors few". She hears this and is amazed at how much food is growing in her garden, but that the labors were not few - she had a ton of work to do. I find it funny because it's a misquote. It should have been "The harvest is bountiful and the laborers few". The original quote means something completely different than how it was applied. But even so, if you were to interpret the quotes from the perspective of division of labor, the correct quote makes much more sense.

The biggest problem with a country getting rich is that the cost of labor goes up. Which means that the farmers are less willing to farm for low wages relative to the wages of everyone around them. They're better off trying to get some of the other jobs that pay more. In a market, there are two general responses to this:

1. Send the work where labor is cheaper - which means we'll get our food from overseas
   
2. Develop technology to replace expensive labor - which means it'll be mass produced
   

What does it mean that we see both #1 & #2? To Ms. Kingsolver, it means we're worse off. But what it looks like to me is that the labor market is too wealthy to produce food locally. There are more profitable things to do. Of course, when the government intervenes, they do things like create farm subsidies, which encourages more local farming, because farmers no longer see the need to chase after the better paying job.

She then goes onto say something that I agree with wholeheartedly: that the subsidies that our government provides to farmers distort the market. Unfortunately, she seems to think that it distorts the market away from local farmers. That is a surprising conclusion since those subsidies and trade barriers were enacted to protect the production by the local farmers, and combat competition from foreign products. In other words, the subsidies and trade barriers serve to cause us to buy more locally than we would without the subsidies and trade barriers.

She'd like to see more people buying locally to expand the market for local produce. But this ignores the economies of scale that mass production creates (as mentioned above). So expanding the local growers market means increasing the price of food. This is a great luxury item for someone who's wealthy enough to afford it. It's a horrible thing to impose on those who are not. (To be fair, I didn't hear her directly advocating imposing these things on people.)

She laments that we lack strong regional traditions in our food that tie us to our surroundings. But I see lots of local foods. For example, around here the barbecue is a matter of local pride. In Texas, it's steak. In Wisconsin, beer & cheese. New York has pizza. Chicago has a different type of pizza. California yet another version. She goes on to say that we're surrounded by cheap fats and carbohydrates and that what lines our bookshelves are diet books. That seems true to me. But even this is evidence that we're so wealthy that eating has not become the biggest problem that we face. To reverse this means becoming poorer. I don't like that tradeoff.

I want to say something about how this lifestyle was very enriching to her personally. I don't want to dismiss that. If it's something that would be enriching to you, go for it. But realize that choosing that lifestyle is a luxury item. It's entirely impractical for a single parent mom living in the inner city to do this kind of thing. That person will likely spend most of their time maximizing the time working at things their talents and gifts enable them to do. Which, in most cases, means outsourcing the production of food.

She's now going on about how our consumption has contributed to global climate change, and that Hurricane Katrina is evidence that our consumption comes with a price. Immediately, this strikes me as another case of "here's a bad weather event, see it's proof that global warming is causing problems". But that doesn't match with the data.

She claims that we're over consuming the world's limited resources and then bemoans the idea that if you can afford it, it's ok to use it. But that idea is exactly correct. The pricing system tells us about the relative scarcity of things. If the thing you are buying is cheap, then by the simple supply and demand, it's not very scarce. Moreover, as the thing gets more and more scarce, the price will go up to reflect the scarcity, and fewer people will buy it. Take a look at the number of people taking public transportation now that gas is more than $4/gal. Take a look at your local car dealers: they're all advertising high mileage cars. We're consuming less gas because the price of as has gone up. That dynamic is true for all goods and services. So when a good or service becomes more scarce, the pricing system signals us to consume less of it, and we do. If that's true, then we are not over consuming.

At the end of the segment she asks, "Do you think you can keep doing this without paying some kind of a price?" And that is, of course, a valid question. But I would respond with, "Do you think you can engineer change without also paying some kind of a price? What would you recommend we do if the price of change is higher than the price of not changing? How can you measure those prices without first understanding economics?"

UPDATE: Mike Munger has a very well written article that explains how the division of labor works and benefits us, by describing the market for pins. IMHO, the most salient part of that article is this:

I could make my own pins. Working hard, with some wire and some cutters and a file to sharpen them, I might make 100 or more pins a day. But my time is too valuable to spend that way. Likewise, we could make pins in my home state, North Carolina. But the amount of capital required to be competitive with world prices of 10,000 pins for $1 would be... well, it would be a lot. Too expensive, given all the other profitable investments available for capital in North Carolina. The same is the true for the U.S. as a whole: we could make our own pins, but it's cheaper to buy them, and exploit our own comparative advantage in activities where division of labor works for us, rather than against us.

I'll spare you from the really bad joke that starts and ends that article. But the point is this: division of labor in the food market has provided cheap and plentiful food. This is a good thing. It means that we can expend our creative energy and time on things other than food production. Blithely calling for the unwinding of that division of labor is a road to poverty and food crisis.

The Wrong Question

My wife and I recently went on (and thoroughly enjoyed) our first cruise. The picture is of me standing in front of the boat. I found myself totally fascinated by how *big* the thing was. The day our cruise departed, we could see the boat from our hotel room. If you had turned it on it's side, it would have been taller than most of the tallest buildings that were in the area. And our boat (at 855 ft) is not even close to the biggest cruise ship. Not only do these things have all the accoutrements of a resort hotel, but the thing is mobile! Most of the pictures that I took, much to the surprise of my wife, were to capture the awe that I had of that situation.

One accoutrement that we really enjoyed was the attentiveness of the service staff. For long time cruisers, this is not surprising. But for my first time, the fact that our cabin steward remembered my name after my having told it to him only once, and that our wait staff were genuinely friendly was a level of service that my wife and my frugality do not usually encounter. We really liked the different animals that we'd seen on our bed that were constructed from towels.

At some point, my wife and I started to consider the tip that we should be giving to the service staff. The cruise director made some comment that was created for the purpose of encouraging bigger tips. She said that a large proportion of their earnings came from the tips, so tip generously. So we did a little math, and concluded that these people were making significantly less than minimum wage for the amount of work that they did. When we talked to them, we discovered that 14-15 hour days are normal for them. Our assistant waiter, Erix, had been on the boat for 6 months (a standard length of time). During which time, his most recent child was born, whom he had not yet met. He expressed quite a bit of excitement for the current cruise to end because he was going home to meet his child.

For my wife, this was an unforgivable horror. How could the cruise line not allow him to go home to be with his wife during the birth of their child? For me, considering the pittance of wage that they made, it seemed extreme and I was washed over with a pang of guilt. So much work was being done for us, and we were paying almost nothing for it. I confirmed with my wife that she was feeling the same thing. This feeling was strong enough that it made me seriously consider whether or not I would go on another cruise in the future.

Fortunately, I remembered economics, and I realized that we had assumed an answer to a question, but that it was the wrong question. So I asked our head waitress, Chonmila, why she did this job. Why would she submit herself to long work hours, the long stays away from home, etc. Her answer was what I expected but was a complete surprise to my wife: "Because the money is so good." Chonmila went on to say that she's lucky to have the job. The line of people waiting to get the job is really long.

We had fallen prey to viewing the world of the service staff through the lens of living in the wealthiest country in the world. We assumed that pay that was less than the U.S. minimum wage would be grossly insufficient to make ends meet. But we'd ignored two important things in coming to our initial conclusion:

1. The cost of living in the country where the person resided
2. The alternative wages available to each server on the boat

And the 2nd point is the most important. Whatever you think of the U.S. minimum wage for Americans, it's might be a huge salary in some other country. Additionally, if the only other alternative for me is making much less money, then even the minimum wage seems like a great deal.

Now to be certain, there are probably people on the boat who are likely making less money that the people we got to talk to. Perhaps they're making much less than the alternatives available at home, but they're holding out hope for a promotion in order to make much more than their alternatives. Or perhaps they're from a wealthy country, but they take the job that pays them much less because they enjoy taking a day off on a nice sunswept beach. I have no idea why all of them are there. But I'm certain that none of them are their by force. All of them are there because they believe that this is the option that best maximizes the things they want at this point in their lives, be it money, leisure, etc.

So stopping cruising is the wrong thing to do. If all of the customers felt guilty enough to stop cruising, every single person on the boat would have to go get a job that was less than this option for them. We would, in fact, be appeasing our moral sensibilities at the expense of their jobs. We'd be limiting their freedom in order to feel better about ourselves.

There's no rational reason to feel guilty about cruising. I'll gladly do it again... as soon as I save up enough money to afford it.

The Big 3

The goals of the free-market agenda should be:

1. Increase the proportion of children who are schooled outside of the public school system.
2. Increase the proportion of health care spending that is paid for directly by consumers.
3. Limit the fraction of people's lives where they collect Social Security.

If the Republicans want to win my enthusiasm, they need to convince me that they will make a difference on these indicators. (For those readers on the Left, I should hasten to add that I am all in favor of education, good health, and retirement security for all Americans. I believe that those goals would be better served by market-oriented policies than by government expansion.)

This is a wonderful article. I recently moved and, as a consequence, needed to re-register to vote. I used to register republican, but I have switched to unaffiliated because of the recent behavior of the republicans. This is my favorite part of the article:

My personal message to Republicans is that I care more about what happens on the Big Three than about whether you hold power.

Me, too.

Decertifying Skeptics...

The Weather Channel’s most prominent climatologist is advocating that broadcast meteorologists be stripped of their scientific certification if they express skepticism about predictions of manmade catastrophic global warming.

My initial reaction to this was shock and revulsion at the attempt to silence skepticism. I'm not a professional scientist, so certainly my understanding of the scientific method is limited. But I think I'm right when I say that skepticism is a builtin part of the deal. So to hear someone deeply involved in climate science attempt to deny skepticism, it strikes me that someone might be asking for a method to the truth other than the scientific method.

I think that's a reasonable conclusion to make and I find it highly ironic that this is being done by a professional scientist. But it doesn't address the core problem: should this person's recommendation be applied? And I'm surprised that my answer is, "I hope so".

First, this recommendation really ignores how I think many people will react to this. What I think will eventually happen is that the value of the AMS certification will be diminished. When people consume weather forcasts, they look for accuracy. There seems to be little relationship between the accuracy of:

• Local, short term weather predictions
• Global, long term climate change

A stance on the latter is unlikely to influence the accuracy of the former. And consumers of weather forcasts will prefer those from anyone who can provide them, whether they've got an AMS certification or not.

So the impact is to increase the supply of accurate weather predictors who don't have AMS certification. In addition, by increasing the scarcity of AMS certifications, they increase the wages of AMS certified meteorogists. Which creates incentives for those who hire meteorologists to ignore the certification - accurate weather predictions are not related to whether someone is AMS certified or not. This can't be good for the certification. So, I suspect that the AMS will plainly ignore the recommendation.

However, I hope they don't. I hope that they're foolish. I've become convinced that the US health care system is where it's at, in part, because of licensure. Only those who are licensed are allowed to practice medicine. This sets a floor on the minimum quality of medical provision. Which, in turn, sets a floor on the cost of that provision. Why is this bad? Some states require certain procedures to be performed by opthamologists, while other states allow optometrists to perform those same procedures. Clearly, there is a set of procedures that can be performed by both, yet in some cases, licensure prevents it. Licensure ensures that only the higher cost provider does the job. The end result is that licensure in US health care, results in higher wages for health care providers at the expense of health care consumers. Licensure becomes a form of rent seeking.

I'd like to see the AMS certification devalued in order to put the idea in people's minds that perhaps certifications and licensures are subject to being questioned. I'd like to see licensure not be legally required. And if that happens, then a more open market for provision of those services can develop.

Brilliant!

I love this post which I will quote in it's entirety here:

Sure, if the FCC isn't toothless, then it has the power to do much good for us. No argument there, but I think the old maxim still applies with regard to government authority: "Only relinquish power to your friends that you would not fear in the hands of your enemies."

Put another way, give the FCC as much power as you'd let a Sony exectutive have in setting technology mandates, because one day the Sony executive will be pulling the strings of the FCC's processes.

I like it because:

1. It's concise
   
2. It's easy to understand
   
3. It's correct
   
4. It's a nice refutation to statists
   
5. It's something the statists will tend to agree with
   

Great post. Wish I had mod points.

Surprising application of discount rates

The blog over at the Economist has a surprising entry. The basic idea behind this blog entry is that there's a large portion of the liberal left who thinks that it is our moral obligation to save the lives of future generations of people who will be killed by our collective apathy towards the environment. The idea is that the future value of those people's lives is worth protecting.

The surprising part is this: if the left believes that we have this moral obligation, then why do they disagree with the moral obligation to protect a fetus? The author of the article does a much better job of pointing out this discontinuity than I can. I recommend the article.

As for myself, I am opposed to abortion. I think the prima facia case is that the fetus is a proto-human being, and I need proof that it's not a human being before I think that killing it is ok. Absent any proof, stealing another person's right to live is wrong. It doesn't matter if that person is dependant on another for survival.

But the author of that article forces me to question my consistency. I don't know what to think about the global warming. On the one hand, there seems to be a lot of evidence that it's happening and that we play some part in causing it. However, I'm generally skeptical of the claim that we must limit economic growth in order to stop it. The above article forces me to ask myself this: if I'm concerned about the rights of an unborn fetus, shouldn't I also be concerned about the rights of future (as of yet unborn) Bangladeshis? If I think that a financial crisis does not justify the restriction of rights to life imposed in an abortion, shouldn't I also think that a financial crisis shouldn't justify the restrictions of rights to life imposed in global warming?

I have to ponder this a bit. My instinct is to recognize what Arnold Kling says about the issue, "I think that people in Bangladesh... are at least as threatened by economic and political backwardness as they are by coastal flooding." This doesn't fully resolve the issue, though. One could make the same argument of a baby: The life of that baby is threatened by finacial crisis of the mother as it is by abortion. This would justify abortion on demand for the destitute. I find that discomforting, but feel compelled to examine my consistency.

Economics and Parenting Cross Paths

Marginal Revolution has an entry about tantrums. The basic idea is that the tantrum is a status symbol. If you are able to have a tantrum, it means that you are in a higher social status than the rest of us.

CEOs throw more tantrums than mailboys. Similarly movie stars, sports stars, and politicians throw more tantrums than ordinary people in those industries. Also famous for their tantrums: spoiled young wives, bigshot patriarchs, elite travelers, and toddlers.

The last entrant may seem surprising, but...

Parents mostly serve toddlers, not the other way around.

What does this mean? It means that Foster Cline and Jim Fay are right. But it also means that they're more than just astute parents; they're astute economists. If you want to change the behavior of the toddlers, change the incentive structure.

Hammers

I've written in other places on the stupidity of municipal broadband. Russ Roberts has taken his shot. My favorite part:

If you only have a hammer, everything looks like a nail. Spending money is the hammer of politics.