What is Seen and Not Seen – Wesley James Young
Having spent some of my time criticizing the ideas of others and theorizing about the source of various flaws in our tutoring services, I feel it time to make clear from where my arguments originate.
There are many different labels that one could use to describe me: Liberal, Conservative, Smith-Hayek, and Quixotic. Such labeling fallaciously assumes a system of abstract ideals to describe my way of thinking. My views have a very simple basis: “if I know a man is determined to help me, I run away.” I am not against the idea of having a government but I am against the idea of treating it like Hercules. Rolling our responsibilities onto his semi-divine shoulders while we go apple picking, only to be tricked into having our own burdens plus a few more returned to our shoulders. A more concrete example would be minimum wage laws. If the lowest wage anyone would receive without such laws is $6 and the new law mandates $6.50, then You have made the guy with a job $.50 richer but you have also made the next employee $.50 more expensive which will lower employment and ultimately lower potential future growth (a burden). The increase in wages will translate to higher prices which will nullify that short term gain and translate into having the previous wage problems returned plus a reduction in employment.But I am a firm believer in taking things with a grain of salt, and so I supplement this article with one by Hugh Rockoff, a more learned economist than myself to support my reasoning: http://www.econlib.org/library/Enc/PriceControls.html. I know there are studies that support the existence of the minimum wage but I have yet to see a reason why that is consistent with the rest of economic theory. If you find a more convincing reason, let me know.
I am to the straw man commonly referred to as a “free market fundamentalist.” The ability for man to satiate his needs through truck, barter, and exchange has led to the wonders of the modern era. If the whaling industry and the protections that are given to ethanol producers and sugar mongers were not so inhibitory, perhaps today we would be driving whale powered cars–who can say? If there were higher taxes on whale oil, would petroleum have been discovered any sooner? Environmentalists claim that the market cannot get us off of oil fast enough, but why should I fuel up with hydrogen, if oil is cheaper? How many of the government advancements which have benefited the general public resulted from the intended purpose of government research? The internet was originally intended for defense department communication and Teflon was first used as a coating for missile nosecones. Companies invest in technologies that may increase their profits, legislators invest in votes and altruism. When a government project fails, a congress man gets another term. When GM fails, the CEO gets the boot. How long can we sustain such hypocrisy?
“The ability for man to satiate his needs through truck, barter, and exchange has led to the wonders of the modern era.”
You’re making this claim on the assumption that people seek their self-interest in a rational manner. I think recent events handily prove otherwise. Pure, unregulated capitalism inadvertently destroys itself.
“Environmentalists claim that the market cannot get us off of oil fast enough, but why should I fuel up with hydrogen, if oil is cheaper?”
Because oil 1) funds governments that aren’t necessarily friendly to us, 2) could run out by the end of the century and 3) has harmful by-products that hurt all of us.
No country, at any point in time has ever allowed people to trade with each other without some sort of regulation. If you consult the New York Times link below, government regulators encouraged the use of mathematical models that teneded to be somewhat unreliable. I could list other incidents of government culpability but I would not wish to digress into another article so soon.
Your second point is a list of reasons why you should not buy oil but I do not believe this because I am not convinced anyone would be better off if we did from Venezuela. I am aware that oil is a limited resource but so were whale oil and hoses and we replaced them with a more efficient power source. Factories were much more pollutive before the creation of the EPA and yet their levels were declining as one can see in the chart which I have posted a link to.
http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?_r=2&pagewanted=1
http://www.esm.ucsb.edu/academics/courses/210/Lectures/USPollution3.pdf
“Factories were much more pollutive before the creation of the EPA and yet their levels were declining as one can see in the chart wich I have posted a link to.”
Good for the private sector, they are acting with a sense of social responsibility! I’m not a climatologist (or an economist for that matter) so I don’t know for sure what standards for pollution are necessary, but whatever they are, I don’t trust the private sector to reach for those targets without the government pushing them to do so. Look at what happened with American cars and MPG standards (among other concerns about American cars). Because the government wasn’t telling car manufacturers to make more fuel-efficient vehicles, they didn’t do it themselves and inadvertently screwed themselves over, along with the rest of us.
“If you consult the New Yok time link below, govenrment regulators encouraged the use of mathematical models that teneded to be somewhat unreliable.”
Any mathematical model that involves people tends to be unreliable, since you cannot graph people – the one lesson I got out of Microeconomics in high school. Does this mean we throw out all of these models collectively? Of course not, we use them for what they are: tools for making predictions about the most difficult things to predict. It also depends on who’s doing the math, but that’s another discussion on its own.
“I am aware that oil is a limited resource but so were whale oil and hoses and we replaced them with a more efficent power source.”
And we’re working on developing those sources, the most promising of which seems to be Hydrogen for fueling cars. Re-powering America should also include biodiesel, wind, solar, and safer nuclear technology (more nuclear plants are even being built in Europe, and these aren’t the kind that will cause another Chernobyl).
Mathematical models that are used to predict risk suffer from an inability to predict rare events because they are so rare that the more frequent observations will give no indication of their existence. Nassim Taleb has written a few books in which he does a wonderful job of explaining this principle and you may find the interview I have provided a link for illumination.
I question the value of some of the proposed fuel alternatives because any biofuel would still require landmass and nery to produce and they still release some pollution. Wind and Solar energy require the building of batteries of a sort that do not yet exist. I am not disparaging the use of any of these technologies, I would take issue with government investment because I have already seen the results produced by ethanol subsidies and I would rather avoid the political problems of not throwing good money after bad.
companies change their pollution outputs for an number of reasons. In the 19th century the Rein river was so polluted that cholera and other ailments were a yearly occurrence but the village fathers found a solution, the incorporated the river. They measure how much and what was dumped in the river and charged dumping rates based on that principle. The federal government dealt with a similar problem with the Ohio river by mandating that certain technology had to be used by everyone who dumped in that river. It was cheaper for the government to monitor because they knew it worked but was a needless expense for those who already dumped at the proscribed levels. Putting trust in the government is asking for one point of failure . Trusting people means that multiple things have to fail at once for their to be a problem.
http://www.econtalk.org/archives/2009/03/taleb_on_the_fi.html
First, to Wesley, I took the liberty of correcting the spelling in your comments, which was atrocious…especially considering that there is a spell check function for this comment box!
But (unfortunately for you Dave) I generally do agree with Wesley here. The fact is that people make mistakes. And because of that fact, it is not desirably that we have people regulating the markets. As Dave says, there is no graph for people. If you’ve seen the new SP episode (which Mike discusses in his editorial) you’ll remember when Kyle was speaking to the masses from up on the hill. He said that the economy is simply a construct of people, of human interactions; it only exists because we have faith in it. Otherwise, it is simply plastic cards and paper money. In such a relationship, there is no economist who is going to be able to regulate the market. It is the FREE market, unhindered, which gives off the fairest balance. And for the record Dave, I must say, I am quite tired of hearing people blame this “crisis” on the free market. The market in this country has not been free for more than a century now, and it has been a long time since the dollar was sound money.
What we did when we established the Federal Reserve (a private bank) and gave them power over the money supply and the economy, was to strangle the free market system and transform our economy into a corporate state-capitalist system. This is, among a few other things, the reason for this, and several other economic crises since 1912, as I see it.
At the moment, science has not progressed far enough to implement the environmental shift this planet needs, and it will be slow coming, over the course of the next 20 years. Obama knows this, and that is why we will continue to station troops in strategic locations in the middle east, buffering the oil reserves against China and Russia. If we loose control of those oil reserves, there will be a serious problem in this country.
But it is certainly a good thing in my book that the government is seeking to promote the move to sustainable energy. While Wesley is right that government involvement is inefficient and ineffective in several areas, I do not believe that is the case when it comes to technology. In fact many technological advancements come down to us from the government, most famously the internet. Hopefully, Obama can kick start that development, which I really feel we need going forward. Whether or not Global Warming is a straw man or not is irrelevant; the point is that dependence on oil is geo-politically a bad, draining move. But for the time being, don’t expect me to drop mad loot on a hydrogen bat. Oil is still cheaper, I don’t care WHAT it does to the environment.
“..I would take issue with government investment because I have already seen the results produced by ethanol subsidies and I would rather avoid the political problems of not throwing good money after bad.”
Ethanol turned out to be a farce, I think everyone on both sides of the political spectrum have realized this and we should stop subsidizing it.
You guys obviously know a lot more about this than I do. I’m not that well versed in economics, as I am a religion/history major haha.
Leave it to Alex to correct someone else’s spelling.
Won’t even get into the irony of that one, although no one is above the odd mistake now and again.
But as for alternatives to fossil fuels, I think Wesley’s article is hitting a very important nerve. It’s so like those long-haired hippies (myself included) to bitch and moan about ruining the environment and talk down to you as they ride their bikes to Douglass campus instead of illegally parking their giant SUVs in ward 2. But the fact of the matter is that they wouldn’t be so high and mighty if A) They had a real job and could afford a car; or B) They had to go somewhere like, Newark.
Hell, I used to ride my bike everywhere until someone stole it from outside Brett Hall sophomore year, but you’re not going to convince me to give up my forerunner. Not only is the thing a beast, but it’s efficient–I mean that in the way that it is an efficient people mover, having the capacity to sit five legally and another three in the boot–and damn quick.
Of course I’ll trade her in for a Hybrid one of these days, but certainly not until I break the 100 K mile marker, and even then, it would depend on how many of the kinks they rubbed out of the newer generation of hybrid or battery powered cars (hint, battery power still has to come from somewhere, and the obvious choice is still fossil fuel or the hardly less damaging ethanol).
So as for Dave, the self-professed Socratic figure of the Johnson Family, don’t let anybody ever shut you up.
What I know is not the fruit of my major but the result of trying to be well read. It is the result of listening to the podcast I have posted links too, Econtalk.
I stand by my conviction that any service that needs to be fulfilled, can be full filled without regulation from elected officials. People buy used cars but the government did not nned to creat a department of used cars to replace Carfacts.
Good point. Carfax is an excellent resource.
If the private sector can do something efficiently without government involvement, let them do it. Government doesn’t have to do everything, but the private sector isn’t necessarily accountable accountable to the masses, where democratic government, at least in theory (the practice is always debatable), is.
Tax collection can be used to buttress your point. It was once a well establish practice for the crown to hire tax farmers to collect inland revenues. They would do so by paying the expected tax recipts upfront and then collecting their fee and a modest return from the country side. This was not condusive to a just outcome. That is why taxes are collected by permminant employees of the government.
http://www.adamsmith.org/smith/won-b5-c2-article-4-ss9.htm
Wesley, you are completely missing the most basic point of government. Government at its minimum is (read: should be) there to protect the collective when individuals don’t have the incentive to do so. That is, EXTERNALITIES and free riding. The advantage to any individual for polluting less is so minimal (is there any advantage at all?) that it’s not worth doing – even if you care about the environment – because you will have no effect on the overall results. Nonetheless, regulations need to be placed that require all individuals to act in a certain way (i.e. drive gas-efficient cars, R&D for alternative fuels) because the country (and world) as a whole benefits from it.
Thus, I will drive my car when it is convenient, but I support legislation that lessens the pollution that it puts out; the legislation has an affect; the action does not.
Thus, whatever you think about government, I don’t understand (at all) the extreme free market view. The free market doesn’t work. It leads to market power, which causes the entire economic theory of “invisible hand” and free-market being the best result to break down. It also relies on unreasonable assumptions of perfect rationality, and as we know that isn’t the case. Moreover, even basic theories have to account for group incentives that cannot be simply added up over individuals (my main point in this comment).
“Environmentalists claim that the market cannot get us off of oil fast enough, but why should I fuel up with hydrogen, if oil is cheaper? ”
Isn’t that akin to saying: “Why should I have to deal with my landlord when killing him is cheaper and easier?”
Because your wants and desire (though important) are not the only consideration worth taking into account. Learn to see the world as nuanced and you will learn that it is valuable to have some governing force there to withhold some amount of people’s individual liberties. Is that a real question!?!?! Even if you don’t think the reasons are strong enough to actually get you to change your actions, there are clearly reasons to consider.
Grace likes Ben Marino’s posts.
I am not arguing for no government, I am arguing for non centralized solutions to these problems. Car manufacturers made more fule efficent cars, not because of government regulation becazuse they knew they would sell well at the time they were made (that is why SUV’s are so rare). Alumninum can used to have so much aluminum that crsuging them was a feat of strength and a cart of cans could supliment a wage. Now, because it was cheaper, alumnimum can use less materials and are less costly than before.
Your landlord argument is flawed becuse that would involve infringing on the life of the landlord which is wrong. Also, stop assuming I am an anarchist because I argue for a smaller government. A government that does not remind one of the the suns fatal conceit of trying to comand the planets to reverse direction because they happen to orbit her.
So infringing on the life of a landlord is wrong, but infringing on the lives all people and animals on the planet is not wrong? Assuming that emissions are harmful to the ecosystem and animals on the planet, your actions do have an affect on the lives of people. I am not arguing (not right here at least) that there is enough reason to change your actions or support government regulation about emissions standards, but your actions do infringe on the lives of humans (caused by drought, flooding, war, and related effects of climate change), and the actions of the entire world (USA a large part of it) significantly affect the length and quality of life overall on the planet. Why are you so easy to dismiss the non-linear, non-simply obvious results of your actions? Is it okay to kill my landlord if I do it in such an indirect way that you can visibly track the action to me?
But car manufacturers won’t (or at least don’t) have the appropriate incentives to do what is needed to be done. As I argued in my first note, any individual’s actions are insignificant, so they don’t care enough about how they act, but they elect governments to act in a way that will have significant affect; otherwise, they are just harming themselves on the margin. It is too expensive (all else equal) to buy a car that is more gas efficient because its affects on the world will be – roughly speaking – nothing, and they cost more than other cars, and everyone else will be better off compared to you by acting rationally in the individual case. On the other hand, requiring all cars to have emissions standards (and of course factories, too) will have a significant benefit that will justify the additional costs.
Do you not see how it is at least in principle possible for it to be the case that manufacturers will not have the appropriate incentives because individually the incentives aren’t there but that overall it would be better off if they did act other than how they do based on the free market? As long as this is in principle possible, then there is a real question of whether pollution and emissions are of this sort of thing. I think it is pretty clear that this is the case with emissions, but even if this isn’t the case, if you will admit that it could happen as I described, then we really ought to worry that this is what’s happening here.
To make clear, I am not of the opinion that our government is running all that well. It is horribly inefficient, and it does some things that it really has no place doing, but that’s not what the argument was about. It was about this specific case and whether free-market actually works and takes care of the course of things appropriately. As I mentioned in a prior note, the free-market hypothesis is really based on flawed assumptions, and the argument is how much regulation is needed, not whether any is needed. Agreed?
The main issue in these comments seems to be the issue of aggregating individual actions. I think history clearly shows that people have a poor grasp of how their individual actions, when multiplied by however many people are doing it, actually impact their surroundings.
Borrowing from Agino’s comment, it is not like oil is a “free market commodity”. We subsidize the hell out of gasoline and oil – we take down oil exporting governments like its our business (and it is). My own two cents on the energy issue is that we need to develop our nuclear capacity. Nuclear power is efficient and can be done safely if we are willing to spend additional money on making it so. Unfortunately, it seems unlikely that these sorts of safety provisions would be included by private industry, which has the tendency to cut everything down to its bare bones to skim off overhead costs. Also, you make it seem like there were no economic business cycles before we instituted the Federal Reserve System and dropped the Gold Standard.
Further, a quick aside about the minimum wage example. Yes, you have made the next employee $0.50 more expensive (per hour of labor), but you have also expanded the budget constraint of that employee. It seems to me that everyone has forgotten that supply is only one half of the equation; you can produce all you want but someone still has to buy it (unless you transfer it back and forth between shell companies like Enron did). History shows that a thriving middle class that has disposable income to purchase stuff like durable goods is what drives the economy. By giving that employee more disposable income, he or she will consume more (and save more) leading to more demand and investment, which will ultimately lead to more employment.
My last comment to Mr. Young: please work on your spelling and grammar. As someone mentioned before – it is quite atrocious. You have interesting ideas that deserve to be discussed, but do a poor job of conveying them to others.
-When did I ever imply that there were no business cycles before the creation of the Federal Reserve?
-Yes the buying power of the employee is increased but that is only in the short run. The long run effect is to increase production costs on the products made and to raise the price of seemingly unrelated items to the point neutralizing the benefits of a price floor. Copy and paste into an infinite regression.
-I agree that regulation is useful but I am fearful of centralized, one-size-fits-all solutions that try to specify without regard to circumstance.
and now a I shall venture to tell you a “pretty tale:”
Once the belly told the arms and the limbs and the throne of reason that the body was fat. Formerly smooth and proud jowls had become gyrating waddles and the limbs seemed more fit for a flying squirrel. The belly pleaded for a less fatty diet. The hands blamed the legs, the legs blames the eyes and the ears and the finally the throne spoke. “In the future, we can have better food, but first we must work to get the money to pay for such food.” the belly responded by withholding a set portion of food from the body. The rest of the body responded by sending more food which begot more withholding until one day the food stopped coming and the belly screamed for better food only to have silence in return. thus was the body ruined.
The streets of New York were once filled with horse feces. We replaced the hose and buggy with the car and engine.Both emerged because mean saw profit to be made. There is profit to be made on oil’s successor and someone will find it.
-Also pollution can be dealt with through the court system rather than allowing a centralized solution. The counts used to deal with environmental cases all of the time. A paper mill opens up on a river and a farmers cow gets sick. The courts ruled that one does not have the right to impose harm on on another without his consent. It was the the normal result of such a case. A full discussion of this point can become rather nuanced so I shall refer you to the following interview.
http://www.econtalk.org/archives/2007/10/yandle_on_the_t.html
“Also pollution can be dealt with through the court system rather than allowing a centralized solution.”
Aren’t the courts part of the central government? Also, aren’t the point of laws to prevent the paper mill from polluting the stream in the first place?
Leave your response!
The JV Tweet
Login
Mailing List
Categories
Tags:
Archives
Calendar
Recent Comments
Most Commented
Recent Posts