Wednesday, August 22, 2012

The End

This is the final post on The Paltry Press. It's been a good run, but you can see its activity has idled. Fear not; there are new exciting projects brewing. Farewell.

Thursday, May 17, 2012

International trade in health care among governments

On an episode of EconTalk from a while back, Dean Baker offers a really cool idea:

Baker: I actually support what I consider a more market solution, in the sense that I'd like to see more trade in health care, and there are a few different ways you could do that. One is you could let people who are on Medicare, who by definition almost--they aren't all retired but most of them are--let them buy into the health care systems of other countries that have lower costs. Let them buy into England's health care system or Germany's and pocket half the difference. So, if the difference, and you look at the projections, 10-20 years out, differences are in many cases over $10,000, even $20,000 a year depending on which country you look at, and suppose you said: Let people pocket the difference.
Roberts: How would we do that? How would that work? 
Baker: Well, we'd have to negotiate a deal with these countries. 
Roberts: They are subsidizing their own people; they are not going to want to subsidize us. 
Baker: No, no, no they are full cost. They are full cost to cure. 
Roberts: Oh, because they are cheaper. 
Baker: Yes. 
Roberts: Or even higher--110%.
Baker: Yes, give them a premium, absolutely; you'd make it worth their while. So, let's just throw some numbers out. Let's say it cost $6000 a year to give a person over 65 care in the United Kingdom, and let's say it cost $15,000 here. So, we'll give them $7000. A thousand to pocket. $8000 left. So, someone goes to the United Kingdom to get their care, they get $4000 and the U.S. taxpayers save $4000. 
Roberts: That's going to be hard to implement, obviously, because most people don't want to go to the United Kingdom for their health care--for a bunch of reasons. 
Baker: Understood, but a lot would. 
Roberts: Because you'd let them pocket the difference. That's clever, interesting.
It's a clever idea, but don't hold your breath for budget-maximizing bureaucrats in the U.S. to drive such innovation.

Thursday, July 7, 2011

Marginalism, inequality, and security costs

An article from Anna Morgenstern, cited by a comment on Reddit, claims that massive capital accumulation in anarchy is impossible because:

  1. States subsidize police protection of private property, making possible absentee ownership of property over large geographical areas. Without state-subsidized police protection, absentee ownership would be impossible.
  2. A self-interested militia raised in anarchy for national defense, comprised of the middle class, defending from an aggressor state, would not protect the property of billionaires.
  3. The state creates fractional reserve banking, which enriches the wealthy at the expense of the public.
  4. Central banking enriches the wealthy at the expense of the public.
  5. Intellectual property is a state-imposed rent.
Claim 1 almost sounds plausible at first blush, but it's actually glaringly wrong, because it denies marginalism. As people grow their wealth, they are constantly bargaining with others for command of resources. Employees benefit from a business owner's investment capital, on the margin. An employee benefits from each additional unit of labor and skill they sell on a free market. We should expect that their salaries and wages will be competed up to how much value they create in the firm. The antagonism between employees and owners in leftist and syndicalist thought is overstated, because employment decisions incorporate opportunity cost.

Employees aren't always on the brink of seizing business assets from an owner, and a state police force isn't the driving deterrent. Employees benefit on the margin from their own employment. If employees really sought to seize business assets, why wouldn't they simply open shop with their own investment capital? Entrepreneurs serve their employees by taking on risk and offering up their own investment capital so that more risk-averse employees don't need to.

Police forces, whether state-run or private, exist to take advantage of the division of labor, and as such, coordinate economic activity far beyond any one economic agent's scope. A spontaneous order coordinates more activity than a planned order, and a public police force doesn't provide the Pareto-efficient amount of protection, but it does offer gains above and beyond autarkic production. It's the division of labor in protection provision that allows for absentee ownership, not distortions from the state, and absentee ownership is desirable because it allows capitalists to generate more wealth.

Claim 2 is trivially false. National defense is not a coherent concept for a stateless region. There cannot be national defense for a nonexistent nation. To introduce an aggressor state into the thought experiment is theorizing outside the scope of anarchy, but the same denial of marginalism from Claim 1 also underlies Claim 2. Free economic agents allocate the efficient amount of protection of private property, on the margin, whether to defend against jealous employees or external aggressor states. If a militia can form at all, and members of the militia are motivated by the protection of private property, the militia would protect the assets that people find valuable on the margin, which includes assets owned by billionaires.

The falsity is the idea that the wealthy just hoard their wealth. In reality, wealth isn't so liquid. Wealth is used by people other than the owners to profit through investment.

Claim 3 is a bizarre old Rothbardian myth, which Selgin has thoroughly debunked.

Claim 4 is almost true. Central banking is a way for the politically connected, not the wealthy per se, to extract rents from the public.

Claim 5 is plausible.

Saturday, June 4, 2011

Why Teetotalism?

I don't drink alcohol or take any drugs recreationally, and never have. I realize that that puts me in a fringe minority of the population, especially because it's not for any kind of religious reason. The drive to use psychoactive substances is nearly universal, so I'm an outlier. Why do I value personal teetotalism?

I consider Penn Jillette an inspiration for this decision. Penn's libertarianism obviously doesn't imply personal or political teetotalism, but personal teetotalism does offer a solid rhetorical point for libertarianism: that one can choose not to consume even a legal substance like alcohol highlights that the primary basis of a choice to use a drug isn't the law. Having this rhetorical point isn't a reason for Penn or me to choose teetotalism, but it is an additional compatible argument that disconfirms the omnipresent claims that libertarians advocate for drug legalization only out of a selfish, personal desire to use drugs.

One core reason for Penn's teetotalism is simply that he wants to be smarter, and using psychoactive drugs recreationally obviously makes you stupider, even if just temporarily. James Randi, who is an inspiration to Penn Jillette for his scientific skepticism, is also a teetotaler. Randi articulates part of my justification for teetotalism: having control over your mind and understanding and addressing reality as accurately as possible. This is a big part of my justification. Once you study a bit of the literature on heuristics and biases, you'll realize that your own map of reality is already hopelessly flawed. It seems base to me to handicap myself even more.

It is often said that the young drink to rebel. I just never picked up this habit. Maybe it was just to express my own individuality, rebelling against the popular notion of youthful rebellion? I have always been weirded out by conformity.

It's not just that as a utilitarian I want to appreciate and understand every precious moment of my own existence. It's also that as a materialist atheist I recognize that consciousness arises from a physical process in the brain only. Taking a psychoactive substance isn't modifying the access point to the mind; it is modifying the mind itself.

How does this play out socially? I find that drinkers roughly fall into two categories, those who use alcohol as a substitute for experience, and those who use alcohol as a complement for experience. I should caveat that obviously one person can be a different kind of drinker at different points in time.

Some people drink as a substitute for meaning and happiness. Unsatisfied with their classes, jobs, careers, or personal lives, they drink for a temporary escape. These kinds of drinkers have little to look forward to other than a break from an otherwise unfulfilled life.

Others use drinking as a complement to their own lives. Already having attained, or at least successfully striving for meaning, purpose, and value in their lives, personal and professional, they use alcohol to enhance their lives, enjoying the physiological effects for their own sake, enjoying the taste of the drinks for their own sake, and perhaps using alcohol as a social lubricant.

I think that substitute drinkers often suffer low self-esteem, and that they have a hard time socializing with principled teetotalers like myself. In a social situation, a substitute drinker feels threatened by a composed, happy teetotaler who doesn't use alcohol as a crutch. By juxtaposition, the teetotaler's very presence calls attention to the substitute drinker's void by not validating the substitute drinker's behavior. Since they're Insecure, substitute drinkers more often seek to socialize with other substitute drinkers to validate their decisions. Humans, after all, do have biological drives for conformity.

There's a habit among substitute drinkers to use the nuances of drinks as a vehicle for vacuous conversation. I find excessive deliberation about a drink's attributes, or talk about what a drink says about a person, endlessly insipid.

Complement drinkers on the other hand, well-adjusted and secure, can socialize with teetotalers quite well, because complement drinkers are not threatened by teetotalers. Complement drinkers can be interesting, can abstract, and can carry on conversations about more interesting things than the drink they're holding and what exists only in their immediate vicinity.

Exclusively socializing with other non-religious teetotalers would be a quixotic task, since there are too few, so I do my best to seek out complement drinkers instead of substitute drinkers.

Cross-posted to Whiskey and Car Keys

Tuesday, March 22, 2011

The Individual Mandate Is Unconstitutional

My entry for the Independent Women's Forum contest:

Three Ways to Fix U.S. Healthcare

Jeff Miron explains well.

Monday, January 17, 2011

Recent Media Diet

My recent media diet has consisted of:

Comments and suggestions are welcome.

Sunday, August 29, 2010

A couple of the many reasons why libertarianism and socialism are at odds

Ross suggests that libertarianism and socialism may not actually be at odds.

So, I have a couple of objections.

  1. One libertarian goal Ross posits is realizing a world in which people retain the full value of their labor. I fear that this is based on Kevin Carson's modern advocacy of the Labor Theory of Value. I haven't read Carson yet myself, but his basic idea as described to me is intriguing. It is plausible that it would be strategically productive to focus on the unjustness of rents captured through statist legal arrangements, but why ignore the Austrian contributions of subjective value? Advocacy for workers to retain the value of their labor doesn't make much sense, since it's not labor that's valuable; such a standard would be arbitrary, since the Labor Theory of Value is simply not true.

  2. Class warfare is wildly wrong. Yes, there is economic inequality among different groups of individuals, but this is the wrong analytical tool to evaluate societal welfare and social mobility. In the United States, if you track the poorest quintile in different time periods, then you will seem to notice a class of people who are stuck in poverty. However, If you actually track individuals from the lowest quintile and follow those individuals into future time periods, you'll see a high degree of mobility into richer quintiles. Assessing the group is fallacious. It would be like checking to see what percentage of second-graders could do calculus in 1990, and comparing that to the percentage of second-graders that could do calculus in 2000. What you want to check in 2000 is the percentage of high school seniors, who were the second-graders in 1990, and see what percentage of those seniors can do calculus.
Aside from these quibbles, I do admire Ross's good will. One phenomenon that Penn Jillette has noticed is for folks to believe that their political opponents actually agree, but advocate the opposite because they're evil. Thomas Sowell has attributed that as characteristic of the unconstrained vision. Ross certainly does not fall into this trap. I admire the socialist drive to do good, but it is misguided, since it is generally ignorant of economics.