Questions, please

All of these questions are based upon Mike's experience as department head of a political science department:

If you were to give advice to a young libertarian-type undergraduate student thinking about going to graduate school with the intent of becoming a professor, what advice would you give?

As you ten-year term as head of Duke's pol sci department comes to a close, any reflections on the political economy of being a departmental chair in academia?

Is it possible for liberty-loving individuals to claim a larger stake in academia? If so, how? If not, what are the incentive structures that are aligned against such individuals?

What future academia? Is the current economic crisis working to reshape how private and/or public higher ed institutions are managed? (Whilst I know Mike is at a private institution, he does have contact with many folks at public institutions.)

What's the role of morality in Adam Smith's "The Invisable hand"?

Get Krugman on the show! Munger vs. Krugman on Hayek. Now that would be interesting.

Why Duke, and is it turning into a free-market university? I have seen that Bruce Caldwell is also a professor there.

Could we have an EconTalk session on Chartalism?

Question: how will the huge debt accumulated in the economy (consumer, investor, government) ultimately be destroyed? Isn't this essential to recovery?

I have just discovered this site and find too much airy/fairy discussion by well educated people. We are in trouble on the basics of education and health care, why can't well informed podcastors comment insightfully on these areas - using real facts - for they are the No 1 & 2 issues in North America!

There is all sorts of room for differences of opinion, based on facts - so let's start with the simple facts re education curricula in grade 1, then move on to grade 2, etc. in comparisons with other nations; plus health care's No. 1 problem - obesity as measured by a BMI (body mass index) over 30

Why three students I met at the AEA conference today (graduate students, Americans) said they had never heard of Hayek.... seriously. How can we deal with this??

Government schools certainly have no interest in Hayek since he doesn't teach top down government control.

We've got higher priority than Hayek, get the ABC's right for incoming grade 1's in 2011 and keep them right, adding math and science in higher grades, that is at least the equivalent of what 10 million other students in each of our 1-12 grades are getting around the globe.

Students with the better education systems will prevail and right now Canadian and US systems rank in the high teens - globally. We can measure where we are with each grade 6 and grade 9 class with required exams, before grade 12's write their exams, so can check where we stand in lower grades vis-a-vis the 10 million "others" around the world in each grade.

I would like to hear a discussion on the topic of emergent systems that compares the phenomena in both government and the private sector as well as its impact and possible mitigations..

I found it interesting how the (highly regulated) Canadian banking system was favourably compared to that of the US in the recent crisis and during the Depression. How that buttressed the argument that bank failures in the US were due to government regulation is a bit mystifying.

Mark Steyn had an interesting comment on the radio today, something along the lines of Government is the only entity that cannot realize economies of scale. Why is that?

WE need facts to upgrade our local education systems.

You keep taking interesting pot shots at everything, but have no focused upgrade that you pursue relentlessly - like facts on quality of education that grade 12 graduates receive vis-a-vis the millions of Chinese, Indian and Russian students etc., finishing Grade 12 when the last numbers would be available. Then - when you have last 5 year US numbers by state, compare them with the 20% of US states that produced 80% of grade 12 graduates.

Also go back to Grade 9 to find the no. of dropouts between then and grade 12 - etc., etc., -

I would like to hear stories/narratives regarding the workings of government(s), what is said vs. what actually takes place/accomplished, using the Public Choice model to explain the mechanisms at work.

Would you say the expense tax write off for businesses causes an artificial incentive to increase business expenditures or fuel excess speculation? If so, does it help growth since the expenditures may be frivolous or excessive?

Textbook prices. Why are they so high and why do electronic textbooks cost almost as much?

Would a constitutional amendment restricting federal government spending to 15% of GDP combined with language that limits the ability of the federal government to coerce state governments to spend money be a good way to limit the scope of government?

What would the impact of a third (presumably Asian) settlement currency be on the US Dollar and American living standards in general?

My question pertains to the economic future of the U.S. What sort of policies do you see the U.S. Government enacting in the future? Will the U.S. remain a somewhat capitalist economy, will there be a change towards a more interventionist system, or is it possible for a push for a larger role for markets? I know my question may be extremely broad, but I am sure it is something many of us wonder. I would very much like to hear your thoughts. Thank you, and happy new year!!

What will our field look like in fifty years?

I would like to know your answers to the question:

If there are any, what services/products should be provided by governmental institutions?

1. How can we prevent regulatory capture?

2. What's the best way to define legislative districts?

What would be the ideal way to obtain government revenues for the public goods that people want and benefit from?

Should we flip economics education around so that undergrads learn less formula-based macro and more how to apply basic econ principles to observe the everyday world around us (e.g. opportunity cost, trade-offs, incentives)?

Mike:
1. What is your opinion on the role of non-for-profits in the market place and their usefulness to society? Should there be federal subsidies for them?
2. Farmer COOP’s? Good, bad, or indifferent? Do they lead to over consumption of finite resources? Do they put unwarranted downward pressure on prices?
3. Is one of the major problems in economics its overt reliance on the word ‘fact’ as opposed to the word ‘theory’?

What is the future of money? Will nations ever stray from fiat currencies? Will nations seek to create a world currency based on gold/silver or some other commodity?

I listen to the podcasts, and the reference to never running out of a resource struck me as interesting. Surely, we have run out of somethings: extinct animals (passenger pigeons, etc...). I know that we probably won't use all the coal and oil in the world, but with things like animals can we overuse the resource to the point of extinction?

1. Is economics complicated or simple?
2. Why isn't there competition for accounting standards? Would some corporations benefit by revealing more than required, instead of the perpetual controversy over whether they revealed enough?
3. Each day the newspapers report that the stock market went up or down because of "fears about the economy", "optimism about the economy" "dismal earnings reports" "positive earnings reports" "profit taking" "bad news from the middle east", and on and on. How do the reporters know? Do they poll market participants about the reasons for their buying/selling?
4. Does the market price of a common item, such as toothpaste, have a different meaning than the market price of a unique item? Can we say that lots of people think toothpaste is worth the market price, but that, considering that most houses are rejected by the great majority of potential buyers, most people think that a given house is priced too high?
5. Would Black and Scholes have been better off to keep their formula secret and used it as a basis for investment?

Given the unswerving tendency of government to expand its domain and power, how can we engineer mechanisms that create incentives in the opposite direction? In more practical terms, how could the American system realistically be modified to encourage Congress and the President to limit their powers and discourage them from extending their purview further?

The founding fathers did not trust the people to come up with the correct decisions as they were vulnerable to the persuasions of a demogog. We had election of Senators by the states, not the general public: we have electors to select the president, not the general public. With over 40% of wage earners not paying any income tax, why should they be allowed to vote on an increase is federally funded benefits to accrue to them. Why should they not vote for more bennies when they do not have to pay for them. Never look a gift horse in the mouth. They don't won't to know how rotten the teeth really are.

Why not offer substantial rewards for people who get through airport security with weapons of any sort? And similarly reward hackers who breach the security of law enforcement or national security computers?

1. Has any nation used inflation, such as by somehow increasing the adversary's supply of money, as an instrument of war? Might it work?
2. When we will learn the lessons of the recent economic crash and how to avoid future such crashes?
3. Do Keynesians argue that a burst of additional public spending increases the present value of all future gross national products? Or do they argue that it increases GNP in the near term at the expense of the longer term?

1. Why do colleges charge the same tuition regardless of the student's major, when some majors lead to higher paying jobs than others?
2. Is there any evidence that tenure improves productivity by college professors?
3. How do we know whether stores charging similar prices for identical products is evidence of competition or of collusion between the stores?

Why does my wife refuse to carry cash, on the ground that she might be tempted to spend it, but does carry a debit card giving her easy access, to, depending on the balance, thousands of dollars?

To what extent are one's views on Climeategate/Climatechange dependent on political beliefs? The reason I ask is libertarians/conservatives seem to be deniers and leftists are alarmists. Is this another one of those questions that is less about climate change and more about whether we should be more like France?

How do we re-establish proper feedback mechanisms in government and markets?

Right now, elections punish good decisions by courageous politicians. And regulatory capture beats innovation and productivity in markets.




(BTW - Barney Frank's seniority for example gives vastly disproportionate power to a few Massachusetts voters...)

Based on the following article
http://www.eastvalleytribune.com/story/148887
What are top three issues for you? Which ones would you address first and how? How could a case study of this story best be used to exemplify your position on government and convey to the masses where the actual problems reside and what solutions could be employed?

What is the single best action the US government could take to greatly increase economic growth? (This is includes activities the government should STOP doing)

My question is: It is obvious that our nation has continually debased the value of our currency, yet what would prevent the depletion of gold in a nation of such high debt if we were on the gold standard?

Many people promoting greater government involvement in healthcare often point out the increasing among of our GNP going toward healthcare, as to imply (but not defend) that that is a bad thing. I've not heard a discussion around what an efficient amount of GNP dedicated to healthcare might be.

Here's what I have observed: as a licensed RN (biased by a degree in economics), I notice that if people are poor enough, long enough, they will get sick. In addition, if one is sick enough, long enough, they will be poor, i.e. economics and healthcare are two sides of the same coin.

Question: Can a large portion of a nation's domestic economy dedicated to the health of it's citizens, be detrimental to the economy as a whole? At what percent should one be concerned?

Tom

Tom,

I think you are caught a bit in the correlation=causation fallacy - health is a bit more complicated and we have numerous examples of cultures without access to western medicine who have very long life spans and live at what you and I would agree are subsistence levels - ie poverty.

I tend to side with Nick Taleb on medecine being more art than science at least as we practice it in the West. Treatments will vary widely based on the doctor and/or hospital for rather common things like high blood pressure and less common major illnesses like prostate cancer.

As an economist you are certainly aware of the opportunity cost concept - each incremental dollar we spend on health care is a dollar we could spend on education - or better yet a dollar we could leave in tax payers pockets so they could spend it on themselves and their families [or if you prefer, a dollar we might choose to spend on health care research].

Thank you for your correlation/causation observation, nice pick-up! There are some pathologies closely correlated to poverty (cholera, scurvy) but by in large, most are not.

In addition, great that you bring up Taleb. I'm very appreciative his thoughts into the value of empiric medicine, which I've found to be very attractive, and very consistent with my personal experiences in healthcare. Not all medicine is amenable to double-blind analysis and some things just work. This is why I'm so troubled by Comparative Effectiveness as a new clearing hurdle to therapy adoption. My fear is that we will see an explosion of Type II errors, some with lethal consequences.

Thanks again for the observation,

What does Arrow's 1963 paper on health care actually say? I've heard pundits claim, to varying degrees, that he showed that a free market system cannot work for health care. How true is this? Given how bad the media is at translating technical papers into information non-specialists can understand, I suspect this isn't an accurate representation of the paper. So, what does the paper really say, and what does that mean for health care reform?

Why did claims of antropogenic caused climate change gain so much political power with so little basis in scientifically derived evidence.

Should there be a ban on text messaging while driving? Secondly, why would cell phone companies claim be in favor of such legislation? The details can be found in this article http://www.nytimes.com/2010/01/02/technology/02....

Thanks

Do we need term limits on Congress? Should politics be a career at any level?

As an addendum - my uncle claims that congressional problems stem from the reelection desire. Would instituting a single term limit solve anything?

I did not say that one term should be the the maximum. I meant to suggest that terms in congress should not be for life or for a career. It has been suggested that any combination of 12 years total for either the senate or the house or a combination of the two might well be considered a limit. I believe that the founding fathers would agree that it should not be a career. Given the power of incumbancy in elections, it is necessary to stop this advantage and make reason prevail and make a rule that has long been necessary. Remember the fate of the nobles in France as a beginning of a revolution. Perhaps we need such a remedy here as a final resort.

Q1. How come the US, even though it spoke about seeding democracy in Iraq and it was mentioned in the Iraq Study Group Report of 2006, did not help or force the implementation of the distribution of oil revenues to the Iraqi population on a per capita basis?

With oil revenues centralized in the government the resurgence of another Hussein, or worse, is just a question of time... and more so when they are talking about increasing the Iraqi oil production to 6 million barrels a day.

Does anyone believe that democracy can prevail when the government receives the largest part of its income from other sources than the citizens?

Cannot anyone visualize what a Hussein could have done with the revenues coming from 6 million of barrels per day?

Q2. How come the libertarians and all other that believe in the freedom of the markets did and do not scream out against bank regulations that set capital requirements based on the opinions of so few?

Q3. How come the libertarians and all other that believe in the freedom of the markets did and do not scream out against the discrimination present when bank regulations force a bank to have 8 percent in capital when lending to an ordinary unrated citizen, but that allows a 0 percent capital requirement at all when lending to the government.

A123: Libertarians and free-market believers are not what they used to be nowadays they are mostly libertarian and free-market operators running libertarian and free-market franchises for profits... or good salaries.

Why do terrorists seem to be obsessed with planes? (when there are other far easier targets)

That's an interesting question. Initially, I think, airline hijacking -- not explosions -- was a means to gain control of the aircraft and use it (or threaten to use it) as a missle [a train isn't easily manuvered off its tracks] thereby causing damage or as a means of causing terror/hostage situation to extort concessions. It's still probably the most effective way to cause terror in the minds of Americans as they imagine several minutes plunging to their deaths, fully aware of what's about to happen. These events also do not help prices in equities markets.

I believe the first time a train is targeted, most reasonable people will begin a long discussion on whether screening and preventing people from toting weapons onboard transports is even effective or maybe just a fool's errand.

It would be great to hear a discussion of the Triffin Dilemma. In 1960 Robert Triffin warned of the problems with a US dollar world reserve currency. Given the dollar carry trade and a likely dollar crisis in 2010-2012, it would be interesting to revisit his predictions on the subject.

I only just learned about the Triffin Paradox/Dilemma from a talk given by Martin Wolf, Associate Editor and Chief Economics Commentator at the Financial Times, London. Here is a link: http://www.tudou.com/programs/view/ZTeOwDjInXU Wolf presents a very lucid explanation of where we are headed. If you don't have time to watch much, skip to min 70:00 for an excellent concise discussion on the future of the dollar.

Here is an article that summarizes the talk: Do we need a new reserve currency: http://www.business24-7.ae/Articles/2009/12/Pag...

Interesting discussion by Wolf. I'd also like to hear Munger and Roberts discuss the future of the dollar as an international reserve currency.

What does "the dollar is the international reserve currency" mean exactly? Foreign central banks don't actually store stacks of dollars, I assume. What is bought and sold in dollars, and what is held in reserve exactly?

Suppose oil exporters stop accepting dollars and the Chinese and other states stop pegging their currency to the dollar and sell all of their Treasury securities. What would happen? The Fed would buy all of the Treasuries, I suppose, and China and other states would then buy something denominated in dollars, right? Could they buy U.S. real estate directly? Does anything prevent that?

How inflationary would this flight from the dollar actually be? Can we quantify that?

Martin,

The US dollar as international reserve currency means that if you are in Argentina and want to buy aluminum alloy from Iceland you can’t with Argentine Pesos because most commodities are priced in dollars. You first have to buy dollars (for a fee) to settle your account. The guy in Iceland then takes the dollars and holds them in dollar reserves or he could exchange them for Icelandic króna (also for a fee). Since Icelandic króna and Argentine Pesos are both (relatively) weak flawed currencies many in Argentina and Iceland keep their cash in US dollars. In many countries outside the Euro zone it is pretty common to find domestic banks that offer accounts in the national currency as well as in US dollars. In the US we have no comprehension of this because the international reserve currency is also our domestic currency. This all works great provided the US dollar reserve currency remains stable in value otherwise this creates havoc for those holding dollars and or trading in dollar denominated commodities.

Foreign central banks do hold actual currency however most of their reserves are used to buy US Treasuries while most foreign exchange transactions are handled by electronic transactions between banks.

Lots of countries including the oil exporters would love to stop accepting dollars and stop pegging their currency to the dollar and sell all of their treasury securities but until there is a better replacement, it’s not going to happen. At best they will try to slowly and quietly sell off their holdings.

If foreign central banks were to precipitously stop buying treasuries, what would happen? The Fed would buy all of the Treasuries which would devalue the dollar creating hyperinflation in the US but even more so worldwide because most commodities are priced in dollars and most foreign central banks reserves are held in dollars.
As far as China and other states buying something denominated in dollars, they already have with Commercial and Residential mortgage-backed securities. They could also buy U.S. real estate directly and get burned like the Japanese did in the 1990’s.
Niall Ferguson has aptly named the relationship between the US and China Chimerica. He wrote an interesting article in 2005: Our Currency, Your Problem that still holds true “for now” http://www.hoover.org/publications/digest/29394...
A really interesting contrarian view to the assertion that China will dump the dollar is that China will aggressively devalue the yuan following a deep 2010 downturn coupled with escalating trade wars: http://www.zerohedge.com/article/albert-edwards...

It makes a lot of sense for China because if China were to suddenly dump the dollar they would devalue their dollar denominated assets, destroy their export market and cause havoc in worldwide dollar denominated commodity prices. On the other hand by supporting the dollar and slowly devaluing the yuan they essentially import our inflation and export their unemployment to the US and even more so to the rest of the world.

…and then there is the dollar carry trade…

Unfortunately I think that policy makers in both China and the US are acutely aware of the situation and they will use it to further enrich themselves and their cronies at the expense of everyone else.

But then again,

What do i know?

The Fed would buy all of the Treasuries which would devalue the dollar creating hyperinflation ...

I hear that a lot, but would it really be hyperinflation? Can we quantify the inflationary pressure somehow? How fast could it happen, and what volume of dollars are we really discussing?

As far as China and other states buying something denominated in dollars, they already have with Commercial and Residential mortgage-backed securities.

That's another issue for Roberts and Munger to explore. Some pundits (including many libertarians) say that the MBS debacle was all about the Community Reinvestment Act, Barney Frank's pressure on Freddie and Fannie and cheap credit from the Fed. Greenspan and others say the debacle was as much or more about the Chimerica relationship and the resulting imbalance in dollar flows.

If China wants to gear its domestic resources toward producing goods for U.S. consumers, goods that Chinese consumers can't use because they lack adequate infrastructure, what should we do about it, besides printing dollars to buy the stuff? Is the structural problem here, with U.S. pressure to make bad loans to urban voters and U.S. monetary policy, or is the problem over there, with a mercantalistic trade policy that we exploit here because we can hardly do anything else? If China wants to buy endless reams of mortgage backed securities in the U.S, what else can we do with the cash but lend it to increasingly poor credit risks?

Is it really true that China has no use for its piles of Treasury securities, or does some rational expectation of future consumption from the U.S. exist? China's population ages much faster than the U.S. population, and its agricultural sector is much less efficient. What China really wants from the U.S. in the future is food, so its shrinking labor force can continue moving out of an inefficient agricultural sector without starving its burgeoning elderly population. Our labor force only stagnates in the next decade. China's labor force actually starts to shrink, and the Chinese labor force is spread across a far less developed landscape.

So why does China buy Treasury securities rather than U.S. farmland and shares of Caterpillar and Archer Daniels Midland? What structural impediments channel all of these dollars into the hands of politicians peddling entitlement to tax revenue from U.S. farmers instead? Why are my kids drawn into employment marketing Chinese imports, fighting the Orwellian War on Terror and producing incredibly inflated prescription drugs for old codgers coughing up votes for Congressmen? Why aren't they growing more food for export to China instead? My kids want those IPods produced in China, not more coughing from the codgers in the military-industrial-Congressional complex.

PS, please, none of that wish-wash culture stuff.

Is it possiple that our discussions of economic and political issues have become so stuck in abstractions and labels that we are no longer being informative? Are our discussions merely creating forums for the airing of our prejudices?

An example of what I mean would be the constant use of the terms "conservative" and "liberal", suggesting American politics is practiced on a linear continuum. In fact a visualization of our politics would be far more informative set on a triangle with pure government control at one corner, pure "for profit" corporate control at another, and pure human liberty at the third. (discussed a little further below)
The point is, by dealing with the labels we imagine we understand but don't, we all, regardless of party or philosophy, are no longer either learning or teaching.

To carry the triangle visualization a little further the line between pure government control and pure liberty would represent a desire to accomplish good without regard to practicality (what we now label as "liberalism") with the tension between totalitarianism and freedom.

The line between pure liberty and "for profit" (understanding that this, too, is simply a misleading label, as though government had not acquired resources and created its own capital infrastructure...) corporations would represent the desire to accomplish practicality alone, with a tension between a centralized control, similar to totalitarianism, and freedom.

The final line, between pure government control and pure "for profit" corporate control would represent the desire to centralize and control the actions of society, with a tension between matters of formal "ownership" of the results of the centralizer's actions.

I like this conceptual model because if you place people based on their desires and perceptions I think you'd find most "liberals" think the opposite end of their political continuum would be corporate totalitarianism, while most "conservatives" would think the opposite end would be government totalitariansim. In the meantime power is most easily concentrated by centralizers of any stripe, so the power structures of both parties are far closer to the line between pure government power and pure corporate power than the general populations of liberals and conservatives they represent.

Crisis, stimulus, debt, future, risk regulation:

1. Is the welfare state a kind of national Ponzi scheme dependent on future tax payers and inherently vulnerable, the Achilles heel of western society? Or, is it sustainable (as Peter Lindert suggests)?

2. Can governments realistically/legitimately reduce their workloads by informing citizens of the risks they take in market society as opposed to protecting them from these risks and/or rescuing citizens when they fail to self-manage risk?

The Fed has lowered the discount rate to zero. What happens at some point in the future when the Fed raises the rate to choke inflation?

1. If there were a hard cap on the size of the federal government, how big should it be 5% of the GDP, 15%, 25%, etc?

2. And, if a hard cap were in place, do you think it would lead to meaningful trade-offs? For example-- it could be proposed that the federal government pay for more healthcare or fund a war in Iraq by canceling social security.

1) Douglass North, Barry Weingast, and John Wallis have argued that a key to the transition from a "natural state" to a market economy is taking the diffuse access to the means of violence and consolidating them into a politically controlled group like the police and army. What are you thoughts on how the elites change from strongmen who compete on the margin of violence to merchants in open-entry markets who compete on the margin of the price and quality of their stuff?

2) Economics has ventured far from its traditional subject matter. Which of these adventures do you think best showcases the benefit of bringing the economic way of thinking to the topic? Which do you find so far unconvincing, and so where there still may be "low-hanging fruit"?

3) Within economics -- tradition or not -- where is the theory-to-case-study ratio undesirably high? That is, where could we make the most progress by leaving the blackboard within the ivory tower and going off to investigate what's up in the real world?

4) There has been an explosion in compassionate food -- grass-fed beef, free range eggs, butter from pastured cows, etc. The "about us" stories told on the packaging show that the firms compete for customers on the margin of how much they pamper their animals. What do you think are the strengths and weaknesses of this bottom-up, market solution to the humane treatment of animals, as compared to top-down regulation by the state?

5) Do you believe there is a bubble in higher education similar in kind, if not in degree, to the recent housing bubble? For example, the government seems to be pushing an *unnaturally* high portion of young people into college, and heavily subsidizing it as well, for the goal of bringing the American dream to "historically underserved" groups.

6) Academia has many market distortions, so there is less pressure to use trial-and-error to figure out what the best way to organize things is. Supposing it were instead more like retailing or consumer electronics, do you think individual academics would work mostly in firms (like departments) or in a be-your-own-boss setting?

Mr. Munger, the city of Detroit, Michigan has recently changed its system of electing city councilors to a 7-by-district, 2-at-large system, from an entirely at-large method. Portland, Oregon has an unusual city commission form of government, in which individual comissioners are assigned responsibility for different aspects of government and all are elected at large.

Would you be able to discuss the different incentives on the electorate and their representatives in these differing systems?

Mr. Munger: You have well illustrated in previous podcasts the problems inherent in our system of elections based on geographical districts. Would it be possible to alleviate some of these problems by for example changing the senate to be elected by proportional representation on the party-list method or choosing senators by some system of lottery. Might it be better to return the Senate to the previous method of selection by state legislatures?

Should libertarian be spelled with a capital L or not? Should an African alcoholic bibliomaniac who likes wee people in Gulliver's travels and also likes Soduko puzzles and is a libertarian, be called a libation cravin' no carrie nation, librarian, libertarian, labyrinthine, Lilliputian Liberian? Can you say that 5 times in row fast?

What is the current understanding in economics/psychology/sociology about the causes of speculative bubbles (ie tulips to tech stocks?)

Along the same lines, can we precisely define "bubble"? I think that there is a tendency to call things bubbles that may not be, which can be corrosive since the term strongly implies markets gone nuts. So was the real estate run-up a bubble or was it a reasonable response to market conditions - conditions that changed but conditions none-the-less.

Mike knows his Bastiat. Just have him talk on Bastiat for awhile...

That would suit me just fine.

Could he discuss the empirical evidence behind the broken window fallacy? Not everyone believes that it is not stimulative - in fact I think most people believe that it is stimulative. Are they flat wrong? Or does the increase in spending by a household partially offset the decrease in wealth (the cost of the broken window)?

Is there anything that can be done to facilitate economic development in poor (and poorly governed) countries?

Are most of the people you know happy?

What are the likely consequences of the legalization of prostitution (in some detail)? You can assume government licenses + sin taxes, or whatever regulatory regime you expect to be the most likely if prostitution is legalized.

Barry says:
"What is the role of patents in Genetic Engineering."

I ask:
"Is it hypocritical for libertarians to accept government handouts while at the same time arguing and lobbying for the elimination of all government handouts?"

What is the Libertarian viewpoint on government aid to the poor? While any Libertarian would clearly find current government programs excessive, should there be a basic safety net? If so, using Libertarian principles, how would that correct safety net be determined?

From a Libertarian viewpoint, what is an appropriate level of government regulation? In a truly free market environment, how can society appropriately limit the damage caused by externalities?

Is it right to blame unions for the budget problems of large institutions (government, large companies)? Or does the blame lie with those in charge of the contracts? Or are they only a rent-seeker like everyone else?

A few more questions for Mr. Munger (see my others):

----William Cohan has discussed how investment banks like Bear Stearns were allowed by the SEC to take on higher levels of leverage in exchange for more regulation and greater scrutiny. And yet, as Mr. Cohan points out, this greater regulation was not forthcoming (Not that it is clear that it would have done anything). Does Professor Munger believe that this is the same as a central bank acting in a time-inconsistent manner regarding the conduct of monetary policy? And if so, what would be the appropriate equivalent to a central bank's nominal anchor (behavioral rule(s)) in order to introduce a time-consistent financial regulatory regime.


----Many people, including GMU's own Tyler Cowen in an NYT op-ed, believe that creditors were protected (unlike shareholders) in the bailouts, and going forward, will continue to be bailed out and shielded from financial pain. Do you fancy Raghuram G. Rajan's proposal that highly leveraged financial firms be required to issue debt with covenants which automatically convert the bondholders and perhaps other creditors into equity owners to give them more incentive to monitor the behavior of the FI's to which they lend? Have you got any ideas about how to make the creditors pay a high price?


----Why do many of the Austrians fall victim to the inflation fallacy? Do they not know of the Fisher Effect? ARe they completely unaware of the rational expectations revolution which seriously changed macro?


----Have you got any ideas on the equity premium puzzle?

----Or the Feldstein-Horioka puzzle?


--Pingry

Why aren't voting districts geometrically similar, using squares or rectangles, with deviations for natural boundaries only?

How do you have your personal retirement funds invested?

Since the single most valuable factor of production is human labor, including the human ingenuity valuable throughout all productive processes and increasingly valuable in synergy with complex productivity enhancing technology, why do we discuss this fact so little these days? We seemed to discuss it more a decade or two ago, when it was decades in the future.

U.S. labor force growth falls practically to zero in the next decade.

An unprecedentedly large group of would-be retirees plan to retire in the next decade.

Ideally (in a free capital market), would-be retirees acquire title to productive capital as they work and later sell the use of this capital to younger workers when they retire.

The rate of depreciation of productive capital has never been so great. My computers become practically worthless (in terms of resale value) in a matter of years, not decades. Almost any "factory" (productive organization) built 20 years ago produces nothing I want today.

Shouldn't today's would-be retirees have increasing difficulty finding people willing to exchange a portion of their productivity for the use of productive means that the would-be retirees are entitled to sell?

Finance is all about predicting the future with extremely cloudy crystal balls. Shouldn't we see signs of this increasing difficulty before the unprecedented lot of would-be retirees actually retires?

When the Federal government buys securities above their market value by selling entitlement to tax revenue (Treasury securities), doesn't it substitute faux "capital" for real means of production, thus increasing the supply of "capital" for would-be retirees to purchase, regardless of any willingness of younger workers to exchange their produce for the use of real productive means?

What is the total value of all U.S. Treasury securities compared with the total market cap of all of the S&P 500 companies (which constitute 80% of the market cap of all publicly traded companies)? Are Treasury securities worth more or less? Is the ratio of the former to the latter rising or falling?

How many state, union and other pension funds held credit default swaps, or securities incorporating these instruments, sold by AIG?

Isn't free market capitalism pretty much a myth?

Jury Nullification, and Nullification in general. What are your thoughts/ anecdotes.

There has been much talk recently about government regulating business, stimulating the economy, creating jobs, etc. These government actions clearly infringe upon and stifle civil and economic freedom however Nobel laureate Paul Krugman has argued that: "Without the intervention, without the bailouts, as much as everybody hates them, I think we'd be looking at Great Depression 2," (GDP Shrinks Modestly: Is the Economy Bouncing Back?). How would you describe a healthy relationship between government and private business in general? And, does the perceived threat of a "Great Depression 2" warrant extraordinary government intervention"

if a policy is better for GDP but worse for freedom should that policy be pursued. If not in every case, is there a general rule that can be followed.

In reading the work of Don and Russ, and similar authors, and in my own discussions with others, I occasionally come across this paradox:
I like PJ O'Rourke's point that "wealth is not a pizza", but sometimes we discuss money and resources as if one person using less frozen turkey makes one more frozen turkey available for others.

When are resources and money like a pizza, and when are they not?

I would wonder why someone who does research on public choice theory thinks that running for governor as a third party candidate is a good use of his time.

I concur with Ben--Say's Law? Why should we care about it? Who thinks they've refuted it?

Take yer pick:

Interpersonal comparisons of utility: possible or not? I don't think this question could be answered in 6 minutes, but it would be great to hear Mike talk about it. Bryan Caplan believes they are possible... I'm not sold.

Why do people hate middlemen?--Or--When do people hate middlemen the most? Do they have it roughest in recessions, or are they vilified equally year-in, year-out, boom or bust?

What is a carry trade?

Why shouldn't we worry about a potential decrease in value of the dollar?

What's so bad about "fair trade"?

Is there a moral dimension to the argument for increased individual freedom?

a short discussion on Say's Law please :)

Suppose we were able to revise the tax code to a much simpler system. What possible incentive(s) or disincentive(s) could be put in place to reduce political risk that it would wind up right back where it is (complex and with loopholes and favors for special interests abound) after a few Congresses? Would a 'free' society even want to consider implementing these?


Alternately, is the Commerce Clause abused? If so, why haven't the checks and balances of our Gov't worked?

Federal government bills the individual states for federal services [population and/or landmass minus federal lands and/or median income as possible factors to determine a state's fair share of the bill]. States, in turn, decide how their residents will be taxed -- tax competition amongst the states and federalism regains its importance in the checks & balances.

I like your question but did want to throw in my own possible solution.

The judicial and regulatory system in the US represents a giant cost to our economy, when everyone involved in a dispute gets paid by the hour things take forever to get done. Is there a public choice based solution that could reduce this drag on productivity?

Are economic propositions testable hypotheticals or logical deductions from basic truths of human action?

Since MM just wrote a piece for Reason discussing the 'non Progressive' movement and the two directions that it may go, perhaps you two could discuss the incentives the political parties will have in reorganizing and reshaping their platforms to deal with the changing attitudes of the voters. It has always been my belief that third/fourth parties will never realize gains because the two major parties adopt these minor party platforms before they're threatened. I'm wondering if you two would get a solid and interesting six minutes from that topic.

What is the answer to the coffee cup tax question?

Claims:

1) One way to reduce the national deficit is for the federal government to "invest" in education, technology, infrastructure, and science. Is this plausible?

2) The repeal of the Glass-Stiegel act ushered in the financial crisis by allowing banks to act irresponsibly with other people's money. Is this true?

3) Free market advocates claim that private property rights could be used in place of a cap and trade system to solve the problem of negative externalities. How exactly would that work in the real world?

Thank you.

Can a Utilitarian defense of a Free Society alone be considered 'enough'?

Many on the left take great pride in their efforts to conserve nature's resources. Which system do you think more effectively conserves scarce resources: (1) a system that allows markets to set prices freely, or (2) a system where politicians encourage and discourage consumption and production using subsidies and taxes?

Obviously the market will. As a resource becomes scarce the cost increases which will provide capital to produce incentives for alternatives, or reduce consumption which will limit the use of the resource. When government gets involved as it did in ethanol incentives, it re-allocates the cost and creates a shortage elsewhere.

or, do you believe it's a problem that market determined prices typically exclude the difficult-to-quantify costs associated with negative externalities?

... and can politicians be trusted to accurately and honestly quantify difficult-to-quantify costs associated with negative externalities without promoting their personal self interests?

How effective do you think our college system is, compared to its potential? Is there enough competition between educational systems, and what would interesting alternatives to the college/university system we have now be?

There is a lot of talk about ways in which the market is than the government alternative. What government policies (or regulations) do you think have been effective, and why do you think they were successful? What government interventions do you see as a necessity for a prosperous country, if any?

There are a couple of other general topics I would like discussed- the structure of the average health care corporation, and corporate rights or how the law sees corporations.

I meant, in which the market is better than the government.

----Fractional reserve banking has been around before the Fed, a result of 'spontaneous order' of markets, and yet some libertarians who attack modern central banking as unfree and unconstitutional, advocate the outlaw of fractional reserve banking (no doubt by means of government force). Is this not a violation of one's liberty to freely engage in such a practice?


----The gold standard people who doubt that government will be willing to maintain the store of value function of money in the presence of a paper-based fiat currency regime make the error of assuming that the same government will be willing (and able, because fixed nominal exchange rates are a bad idea and hard to pull off in the longrun) to faithfully maintain the relationship to gold, or whatever metallic standard under which they 'operate.' After all, governments have cheated on the gold standard, so what gives with this? Is it a matter of a conclusion searching for a convenient, non-rigorous explanation?


----The theory of "The Fed held interest rates too low for too long" put forth by many (which, I think, is incorrect) to partly explain the financial crisis, like, say, John Taylor who has claimed repeated that the Fed made a mistake by violating the Taylor Rule. The other theory being that the low interest rate held at that level for an extended time (as a substitute for further cuts in the Fed Funds Rate) was justified on the basis of policy communication in order to avoid wage and pricesetters from coming to anticipate premature contractionary monetary policy in the future, thereby stopping an economic recovery. (See Woodford, Central-Bank Communication and Policy Effectiveness," NBER Working Paper No. 11898, December 2005;) Please discuss, because while I think the government played a large role in the financial crisis (think massive current account deficits a la Rogoff and Reinhart, as well as regulatory failure of commercial banking institutions a la Timmy Geithner and the Fed), monetary policy, I believe, did not contribute to this crisis, and we have data across countries to help demonstrate this point.

--Pingry

Is it possible that libertarians are truly a minority and no amount of advocacy will convince enough voters to support the libertarian candidate? As a libertarian, this is a conclusion I've been increasingly convinced of. I think that the majority of US citizens want less responsibility and more government. They truly want to be more like a European style social democracy.

Yes, we want a cooperative society and not an everyman for himself society.

Yes in Europe it is efficient such that they don't worry as much about health care and they take 6 weeks of vacation a year. They spread the wealth and benefits of society rather than concentrate it among an elite few. I mean why would you NOT want that?

And again, "cooperation" is not possible without an assumption of self interest. The word you are looking for is compliance. That is, you want "a compliant society and not an every man for himself society".

"I mean why would you NOT want that?"

Because I don't trust fascists, of course. I know from my study of history where fascism leads. Why do you trust them? As far as I can tell it must be either insecurity (lack of character) or an inabilty to distinguish propaganda from the truth.

It goes beyond not trusting facists. It involves the difference between self-directed incentives, (profit, health, emotional and spiritual well-being) and coerced incentives, (avoiding forfeiture of life or property, or receiving incentives coerced from others (tax benefits, government grants and yes government pensions). When we act in our self interest we often co operate, but that is not the goal. "I mean, why would you not want that?" Well that's the point, if you do not want it, the why is irrelevant, if I operate in my own self interest and you operate in yours your question is moot.

"if you do not want it, the why is irrelevant"

Good point, and well said.

When you say cooperative society do you mean people cooperating by choice or because they are required to under threat of force?

And why is it that when someone wants to keep the fruits of their labor they are called greedy, but when you want to take it from them you are not?

try to move, you will regret it in a first day..

>>Yes, we want a cooperative society and not an everyman for himself society.<<

Cooperation while maintaing self-interest has been covered multiple times. As usual, you did not internalize the feedback you got.

How about because they take over 70 percent of your income. No thanks. I work hard for what I have and I'm not interested in the gov't taking it to help some lazy person. And yes, I give lots of money to charity to help those who need help. So the difference is I decide who gets my money. You sir are greedy.

Oh well heck THAT explains it. Some one told you they take 70% of your income and you must have believed them. Probably you should check into things a little more. I wouldn't always take other peoples word out of hand.

http://en.wikipedia.org/wiki/File:Income_Taxes_...


So how many weeks of vacation do you take a year?

Oh yeah such a nice chart, the difference between the 60% shown and the 70% spoke of is just so huge; but with your usual lying ass self you put a chart from 2005 out there as if it is meaningful.

You see, most of us are aware that this year the European Union became a reality, meaning central government now levies taxes and collects them, there will be no more separate stats for individual old world countries.

Now, let's wait to see what the 2010 income tax is for the European Union before we dismiss AirFrank's point about taxes. I'll bet you my next months income against your average day's take that the rate will be as high or higher than the one shown for Belgium.

I wouldn't always take other peoples word out of hand.

As he takes wikipedia's word out of hand.

I take 4 weeks of vacation, 2 weeks of Holidays and 2 weeks of sick leave. So I get 8 weeks vacation every single year and only pay 33% income tax to the federals gov't. And I work for a corporation, not the gov't

But this chart does not include the VAT or the sales tax. I got the 70% figure from a young Italian software engineer who had to live with her parents at age 35 because she couldn't afford a place of her own.

But as a pure income tax comparison it's a pretty nice chart. Thanks for sharing it with me.

If libertarian principles and policies are so effective how come we do not see a flourishing of cities, states or nations that are so governed?

There are different brands of libertarianism ranging from those that border on anarchy to those that view the limited role of government as protection against illegitimate use of power. Just speaking for myself, my brand of libertarianism falls closer to the latter. I'm guessing Somalia falls closer to the former.

I do think societies that have practiced libertarian principles that fall close to the latter have done well. But, in all societies there are those who crave power and think they can plan from the top down. The problem is that all societies are susceptible to falling prey to such people. Top-down control seems more intuitive than bottoms-up, especially so when the planner seems so likable.

Actually muirduck's strawman claim that Somalia is libertarian is just that, a strawman.

Somalia does not practice libertarianism, it practices Xeer or Kritarchy, which is a totally different thing.

Libertarians believe in a small central government with the definite limited powers outlined at a minimum in the Constitution.

Xeer or Kritarchy does not have a central government, only a loose organization of tribes who are ruled (use the term loosely) by judges. Judges who are chosen, and agreed upon, by the plaintiff and defendant. The rulings of the judges are carried out by the communities.

Vast difference between libertarianism and xeer or Kritarchy.

Do your research people, don't let a dip-shit like muirduck lay that strawman crap on you.

Thanks vidyohs. I always appreciate learning something new.

Whatever you want to call it, I agree that muirgeo's argument is a strawman.

MHO, Seth, you understand just MHO; but everything I have ever seen muirduck write has been a lie. I lay it to his devout faith in the socialist scriptures.

Typically he is blatant in his lies, but once in awhile the lying twist he puts on things can be overlooked on the first go around.

I appreciate that vidyohs.

And how would you answer his question on why libertarian-governed societies are not more proliferate?

That may be a straw man as well, because it seems to me that there would be plenty of empirical evidence of a relation between the degree of individual liberty in a society and the relative standard of living achieved by that society.

But, the degree of liberty in such societies may swing around like a pendulum and the people of very successful societies may end up not valuing their liberty enough that they are seduced into willingly trading it for a number of things such as the relief from the slightest bit of uncertainty in their very well-to-do lifestyles, or perceived guilt-relief, politically correct thuggery or for the support of a likable dude.

I had given a loosely constructed answer upthread to DK, but I can do better. It will, of course, take more time which I am glad to spend but right now capitalism has my attention today as my video job starts early and it it runs to previous patterns on this case it will go until after dark CST.

I know what I want to say, it will just be a matter organizing so that I don't string out the explanation forever.

If I can e-mail you direct I can remind you that I have posted it. You can get to me through my vidyohs tag.

Plenty of Libertarians believe in no government control and there's nothing the government can do that the private markets can't. Of couse what happens if a country's Constitution allows for the government to commit crimes?

There is a difference between lowercase 'l' libertarian and the political party that calls itself Libertarian.
They are not the same thing.
The Libertarian party is little more than a bunch of stoned anarchists, while libertarians believe in limited government (not anarchy).

"Plenty of Libertarians believe in no government control ......"

Wrong.

Well, well, well, suddenly you're defending the government? You can't be looking to hard to miss Libertarians who describe themselves as 'anarcho-Capitalists'. They reasonably argue if you're for 'some government controls' then the slippery slope begins.

The answer is in your misunderstanding, by definition if a man believes in no government controls he isn't a libertarian.

I am not a libertarian for that reason, as I believe that any compulsion in the absence of a crime against natural law is wrong.

If a man describes himself as an anarcho-capitalist then he is telling you he isn't a libertarian. If you describe a man as an anarcho-capitalist it is probably your mistake but your label is not libertarian.

What is it that you put into your body? Note I am giving you credit for being functional at times.

Top-down control seems more intuitive than bottoms-up, especially so when the planner seems so likable.

And, when too much of the population believes (as Yasafi does) that only politicians can determine how much liberty a man needs in order to be free.

Great post, Seth.

Thanks Brotio. Good add.

There are two ways of interpreting this question. The first, which most closely matches the language used, is "why are states that are so organized not flourishing?" The second is, "Why aren't more states moving towards that model of government?"

My answer to the first would be to point out the close correlation between economic freedom and economic success. QED

The second question is more interesting, but it does not (as I suspect muirgeo would like it to) call into question the validity of the model.

Nasty!

http://en.wikipedia.org/wiki/Public_choice_theory

you should google "mike munger" after you read that.

We do.

The answer is simple. But, you know that as this is just your typical strawman input.

Being a libertarian requires personal effort, work in other words, while socialism just involves a willingness to let others do it for you.

No one likes effort until the other people's money runs out.

LOL...said the MinArcMan ..with his government pension. You crack me up... Do you take yourself seriously? Cause I sure don't.

That's okay muirduck, because only a couple of fools, one too young to have formulated an intelligent outlook on life at this point, and the other a doper Australian, take you seriously; mostly you draw irritation or laughter from the main body.

I love your stupidity about pensions, especially mine which you pay part of of LOL, just another of your stupid strawmen which makes up the entirety of your muddled responses to your betters.

So, you're now admitting that your long-running stupid claim of Somalia being a libertarian-organized country was just siomething to rile most of us?

No... Somalia is libertarian. But I said flourishing.

Somalia is libertarian.

No, Somalia is anarchy.
There is a difference between limited government and absence of government.

On this topic, I thought the stupidness (by you) was intentional. Thanks for showing me my error. I'm not getting riled any longer.

So you mean you ARE going to move to Somalia? NO TAXES... No men with guns imposing their rules on you, no tyranny of the majority as you now suffer from here.... you'll loooove it!

"No men with guns imposing their rules on you,"

LMAO

Well sure... because in a minimalist libertarian society the invisible hand strokes everyone into calm demeanor of non-violence and mutual cooperation. Millions of years of evolutionary human nature just suddenly melt away under such rules and everything works out perfect. That's what you believe right?

Oh, of course not, and it's hard to believe (although it is getting less hard as time goes by) that you actually think this is true. What you are describing as libertarian is actually much closer to the theoretical end-state of communism - the withering away of the state. But what can you say to someone who would confuse libertarianism and communism?

I can't say I've every been impressed by what muirgeo has ever said here, but this is a thought-provoking question.

"I can't say I've every been impressed by what muirgeo has ever said here, but this is a thought-provoking question."

It certain could be an interesting question. Unfortunately, in this case, the person posing the question isn't actually asking anything, it is merely rhetorical.

Even if they address the question on EconTalk I suspect he'll completely ignore it unless it confirms his 'libertopia' strawman he uses so that he doesn't have to address any of our actual ideas.

Coming out of the sticks, a world of brute force rule of one group over another, into a prospering civilization respecting the sovereignty of individuals has been a long and arduous journey. A journey which is not complete and will probably never be complete.

In fact, the way forward is by no means guaranteed as the 20th century battles against communism and fascism demonstrate. Which, by itself, reveals muirgeo's rhetorical question to be nothing more than a red herring.

You're simply wrong. The Age of Revolution... was not against communism but against capitalism and unbridled accumulations of wealth. The idea of communism was the idea to have NO leaders. Communism was the over-response to the excesses of unfettered capitalism. You guys are simply wanting a repeat of history. Your ideas have been done, tried , attempted and failed miserably AT A SOCIETAL level GREATER than communism. Communism still exist. Libertarianism, except for in Somalia, is as extinct as the Doo Doo bird.


Social democracy is the best form of governance to date and well regulated capitalism is the best of economic systems to date.

I'd like to recommend a book to you. I've been reading "Liberal Fascism" by Jonah Goldberg on this trip, and it is astonishingly good. Don't be scared away by the title. Goldberg doesn't apply the common meaning of the word Fascism, but its meaning from a time before it became associated with Hitler's insanity. In short, the evolutionary state. It discusses in detail the development of the system of exploitation we now live in, and the extent to which it has been studied and planned. I know that you will read it critically and attempt to tear it up line by line. That's okay. That's the way I read Marx. Still, I got something out of actually reading Marx, and I suspect that you will get something out of Goldberg. You are a supporter of the evolutionary state, so you really should understand what it is that your state is evolving into.

P.S., Muirgeo, one of the eye-openers in the book for me was discovering the reason why you come to this blog. To the fascist, someone who believes in the active will of the evolutionary metacommunity, the libertarian is more than just someone who who wants to be left alone. Rather, his very existence is a threat to the will of the state. To the fascist, the will of the state and the will of the individual cannot coexist, and your constant calls for libertarians to leave is a reflection of this belief.

The individual is the enemy of the collective.

From the List of Muirpidities:

3. "Suffice it to say individualism where ever it surfaces is ultimately self-destructive.”

Posted by: muirgeo | Mar 15, 2008 11:29:41 AM"

must be a long list

Extreme views on individualism ARE the enemies of functional society. And societal cooperative efforts ARE NOT the enemies of individualism.

"Extreme views on individualism ARE the enemies of functional society."

How? Let's take the most extreme of extremist individualism, the person who wants the state to leave him completely alone. How can such a person possibly be a threat to a collective? Answer; he can't. And yet the fascists continue to hound anyone who prefers any degree of individualism over obediance. It is a purely philosophical hatred. If the will of the collective exists, then the will of individual cannot exist, and must therefore not be allowed to exist.

"And societal cooperative efforts ARE NOT the enemies of individualism."

Cooperative efforts are not the enemies of individualism. But we're not talking about cooperative efforts. Cooperative efforts are what individuals do. What we're talking about is fascist coercion - the manipulation and exploitation of subject populations. Read the book.

I do a muirgeo and tell him to leave the statist land. Anyone who resides on U.S. soil is subject to U.S. law. Anyone who resides on U.S. soil cannot 'be left alone' from U.S. law. That's just plain squatting.

And I respond that what most call "the Law" is not composed of laws. A law is a fact of nature. Gravity is a law. Newton's laws of physics are laws. Supply and demand is a law. Oligarchy is a law. But what is commonly known as "the Law" is really just a set of rules enacted by those who rule.

This is my home and I am a human being. These are primary conditions that take precedence over the rules enacted by those who rule. I follow rules only to the extent that they are in my best interests, that is, to the extent that the rules comply with real law. To do otherwise would define me as a fool.

And societal cooperative efforts ARE NOT the enemies of individualism.

I actually agree with that statement. I wish you did, too. However, you don't believe in societal cooperation, you believe in societal compulsion.

Libertarians are not opposed to social cooperation, and you'll probably find that a good number of people here donate time and/or money to various cooperative enterprises, and may even be members of cooperative organizations, such as Masons, Elks, or Rotary.

Your definition of cooperation is, "Fifty percent-plus-one have decided that you should pay for the extermination of black babies via Planned Parenthood. You will cooperate and help pay for our societal vision, or you will be imprisoned."

When you talk of cooperation do you mean voluntary cooperation or cooperation with a government gun in your back?

You could really use a Holiday in Cambodia

"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.

We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain. "
--Bastiat

You, muirgeo, are an example of someone who does not understand the distinction between government and society.

You are a socialist.

See there sir, it wasn't a thought-provoking question at all, the answer was as apparent as his comment was easy to see as the strawman it is.

See below.

But, let's take it further just to hammer the point home.

Challenge muirduck to show us one single rich powerful productive forward moving society in the history of mankind that began as a socialist or communist society and remained so.

There are none, zip, nada, zilch, zero. Every society that has become infested with the disease of socialism/communism has immediately began a downhill slide into poverty of material things and a poverty of the soul as well. Complete and total devastation awaits any society that takes the socialist path......and this nation is no exception.

The colonies and then the USA operated wonderfully on conservative and libertarian principles from 1620 to 1900, it grew rich and powerful with government remaining out of the markets and people's lives. However, it seems as with all powerful societies, we allowed ourselves to be infected with European socialism with the influx of immigrants during the industrial revolution. Socialist are like cockroaches, they flock to where the crumbs are, and soon are demanding that they get as much for pushing a broom as the owner does from risking a start-up, building, and running the company.

Hence we have idiots like muirduck and others of his socialist faith, asking stupid strawman questions and who are no more than festering sores on what could be healthy body if we just excised them.

Re: "Challenge muirduck to show us one single rich powerful productive forward moving society in the history of mankind that began as a socialist or communist society and remained so."

It's not an issue of advocating socialism - it's an issue of disputing the value of libertarianism. Both of these "-isms" are dangerous.

I find your dating of American growth interesting. First, the government had been very active in the economy in periods prior to 1900: sometimes wisely, sometimes very inadvisedly. But let's leave that aside for now and go along with your idea that it was conservative/libertarian until 1900. I don't think we were "socialist" in the 20th century, but we were certainly less libertarian. But isn't the 20th century the most impressive period of U.S. economic performance? We were no longer a developing country, so growth rates have been lower than at earlier times. But it seems odd to make a case based on the idea that the U.S. has somehow dropped the ball after 1900.

Aren't you begging the very question at hand? Libertarians argue that growth is proportional to libertarianism AND that prosperity causes the descent of libertarianism. Ergo the lower 20th century growth rates of the West are explained by this theory.

Your claim appears to be that Prosperty leads to lower growth appears to be a bit of hand-waving.

Well my whole point was that pre-1900 wasn't libertarian at all. It's not "handwaving" to observe that growth rates for developing countries are higher than for the same country once they've developed. That's inherent in the term "developing country" isn't it?

Does China's current growth rate suggest that socialism is the way to go? Of course not. They're picking low hanging fruit. They're industrializing. They're developing.

With that distinction in mind, my point simply was that it seems pretty goofy to point to the performance of the U.S. in the 20th century as evidence that an important role for government in the economy is bad. After all, the U.S. fared amazingly well through the 20th century, particularly when you take my developing vs. developed growth rate point into account.

It's also worth noting that the arguments for state intervention in an industrial economy are very different than arguments for state intervention in an agricultural economy. While I'm sure there would have still been many differences between us, I'm guessing there would be more commonalities between vidyohs and myself if we found ourselves discussing the state together in the 19th century, rather than the 21st.

Dimples Kuehn,

Let me ask you oh sage of modern youth.......if you think pre 1900 American wasn't libertarian at all, please tell me what motivated so many people to move west into the farthest frontier they could find land to settle on and use?

That prompts two questions which are purely political questions based on historical anecdotes and actions.

Was it the collectivist strong central government that they knew would be there for them? Is this why Daniel Boone went over the Cumberland Gap? So he could live under a tyrannical government out there in frontier Kentucky? Did others become Mountain Men to enjoy the fruits of strong central government in the far Rockies pre-1900?

Or, could it have been to get as far away from central government as they could?

History shows us two motivations, Dimples, the first was land of their own and a close second was escape from the growing power of the government.

And, even the most radical rabid government supporter who meticulously combs the archives can't come up with the kinds of regulations and restrictions on trade and capitalism as was forced on Americans roughly beginning with the year 1900.

America pre-1900 was far closer to conservative side of libertarian principles than it was in any other way, and America grew rich and powerful on those ideas and practices.

America began to sink when we imported European socialism, and communism, and anarchy along with all those huddled masses.

There just isn't a lot of thumbsuckers or anarchist reported in American history until all those huddled masses brought their idiocy with them.

Sorry kiddo, but pre-1900 America was more libertarian or republican than anything else, but above all it was more conservative in its personal philosophies and principles, the philosophies and principles that propel a man out of bed in the morning dedicated to make a profit on his day through his own personal efforts.

With the huddled masses we got the men (and women) who were content to slide from bed in the morning dedicated to getting their hand in the business owner's pockets with as little effort as they could, and sadly they used the vote to do it.

RE: "America began to sink when we imported European socialism, and communism, and anarchy along with all those huddled masses."

Just remember that libertarianism is a European import as well. I prefer constitutional democracy, limited government, federalism, and self-government.

"I prefer constitutional democracy, limited government, federalism, and self-government."

And idiotic, self-righteous wonking, dancock!

Tsk Tsk, Dimples, again you just can't seem to cut through to the truth you have in front of you in your own words.

Constitutional Democracy guarantees that you will never have limited government, federalism, and self-government. You have the proof in the history of the USA for your data source yet you simply miss it. Youth, I guess.

They moved because they could make more money out West than they could in the East, where investment opportunities and markets were saturated.

Why are you talking as if there is libertarianism and tyranny, and those are the only two options? If I were to tell you "no - they didn't move West in search of a collectivist, strong central government" do you think that somehow demonstrates that the 19th century was a libertarian period?

Oh Oh, DK, really a very bad answer. LOL, just how much cash money do you think Daniel Boone stashed away on the Kentucky frontier, hell he wasn't even land rich. Influential, popular, a force on the frontier, and wealthy in the things that mattered to him, but investment opportunities and markets weren't his priorities.

First, I never said that's why Boone went West - I said that's why "people" did. Besides - Boone DID go to Kentucky and later Missouri to speculate in land, vidyohs. He wasn't that successful at it, and he had other priorities as well. I'm not even sure where you're going with this. Did you think my one sentence of one factor was meant to be an exhaustive account of the motives for going West? You didn't seriously understand it that way did you?

it's an issue of disputing the value of libertarianism. Both of these "-isms" are dangerous.

Absolutely. Nothing more dangerous than allowing people to come to their own private arrangements instead of allowing DK to do it for them.

So dangerous. So unsurprising that Daniel Kuehn would find leaving people unmolested by politicians sooooo dangerous.

Actually, there was no actual growth in the U.S. economy since 1900 but mere war and socialist redistribution. The apparent post-WW2 boom came from U.S. soldiers seizing Nazi gold in the final days of the war. Basically the U.S. has been living off the savings built up until 1900 and now they're running out.

And, sadly, Gil probably votes, too.

Just ask any Libertarian - they'll tell you the U.S. had stupendous growth throughout the 1800s but it went downhill from there.

No, oh blind boy of disingenuous consistency, "It is about muirduck advocating socialism as much as it is about him trying to denigrate libertarianism". It is about meeting advocates of socialism head-on anywhere and at anytime, no matter how they(you) try and advance their(your) evil specie of stupidity.

It is about the strength of the conservatism seen in libertarian principles that make the philosophy worthy.

Of all the different types of governments that man has tried or has had imposed and tolerated, only socialism and its other degenerate off-spring, such as communism and fascism, guarantee the vast majority of the society will degenerate into material and spiritual poverty.

Now, indeed, youngling, if you argue with that one you do reveal your ignorance. But, be my guest, it won't be the first time for you.

Re: "evil specie of stupidity"

Do you ever tire of this childishness, vidyohs? Evil speci of stupidity? Come on. Time after time when you don't feel up to the task of actually responding to a point, you just sit there and string together a bunch of melodramatic adjectives.

RE: "Now, indeed, youngling, if you argue with that one you do reveal your ignorance."

No - my whole point is I agree with that statement about socialism. Your problem is that whenever someone deviates from your enlightened worldview in the slightest, you become absolutely convinced that they're a closet socialist. I agree that socialism is materially and spiritually impoverishing, and you're too busy channeling the spirit of McCarthy to notice.

Your problem, youngling, is that you have proven over and over that you are stupid enough to think that "you" yes "you" can make friends with the weeds and the cockroaches and bring them into the society without harm, when the history you say you believe shows you that it is impossible to do.

Those who ignore the weed and let it into the garden thinking that it can do no harm, those who ignore the cockroaches and let them into the house unchallenged thinking that they can't foul anything up, are as guilty of the eventual destruction and degeneration as those idiots such as muirduck and yourself that do it deliberately.

Learn, twit.

I'm going to take a second to impress this upon you because I think it would really help you to realize it: I don' "let the cockroaches into the house". I am opposed to the cockroaches. Don't let the fact that I'm ALSO opposed to what you have to say confuse you into thinking that I support the cockroaches.

Words, Disingenuous Kuhen, just empty words. You'll be back to opening the door for the muirducks and other cockroaches of the world in the next thread.

BTW I am honored to be compared to Sen. Eugene McCarthy, people in my line of work knew he was dead on, and with the collapse of the Soviet Union and the release of KGB documents the truth came out.

Egg on your face, youngling, mucho egg.

McCarthy, like Bush the 2nd, learned just how deadly serious and entrenched the cockroaches are in this country and how intent they are on bringing it down. No one can appreciate the viciousness of the evil specie until they challenge it.

Your last two sentences there are vintage Disingenuous Kuehn, LOL, will you just look at what you wrote in the context of our analogy!

You're for exterminating the cockroaches but you don't support the immediate and permanent extermination of cockroaches......how fu.cking stupid can you get? What are you going to do, DK, love 'em to death, cuddle them until they expire from happiness, or just feed them until they explode from delight?

And, you think you can carry water with the likes of the people you debate here? Shhhhhhh chile, you is a intellectual pimple on the ass end of a piss ant.

You and your hairsplitting counterfactuals... you must be communist!

"The colonies and then the USA operated wonderfully on conservative and libertarian principles from 1620 to 1900." vidyohs


If only we could invent a time machine so you could go back to Libertopia circa 1799. Of course you couldn't take your government pension with you. But maybe if you explained yourself to John Adams he could get it re-instated.

Yeah well muirgeo points out that idyllic Libertarian values have no longevity either. Hence society floats in some sort of 'third way'.

Yeah well, like the muirduck, you're too ignorant and incapable of understanding or recognizing the reason(s) for thing(s) in general and the difference between strong and productive, and weak and consumptive.

If there be a limitation on libertarian longevity it is in the human tendency, found in what seems to be a majority, to relax and be less diligent once they reach the level of success with which they as individuals are comfortable.

Once that happens they begin to ignore the weeds and the cockroaches of humanity and allow the rot to set in. History has shown us that once we let the rot set in it requires massive struggle and many deaths to root it out again.

Socialists and the middle of the roaders are the death of productive societies.

Hence society does not float in some sort of third way at all, society sinks. How fast it sinks depends on how greedy the socialists are in raping the public treasury.

RE: "Yeah well, like the muirduck, you're too ignorant and incapable of understanding or recognizing"

Yes, we should all just defer to wise vidyohs to tell us the answers. Clearly if you disagree with vidyohs you're just ignorant

My reply to you is reflected in this reply to muirduck the intellectual teacup chihuahua:

That's okay muirduck, because only a couple of fools, one too young to have formulated an intelligent outlook on life at this point, and the other a doper Australian, take you seriously; mostly you draw irritation or laughter from the main body.

I love your stupidity about pensions, especially mine which you pay part of of LOL, just another of your stupid strawmen which makes up the entirety of your muddled responses to your betters.

BTW Daniel, here an online picture of vidyohs:

http://media.ebaumsworld.com/picture/ff1432/Int...

Damn, pretty good likeness, except I am too tough to smile or even grin.

Actually it looks much more like what muirduck has posted on his practice website. Dumpy and dopey. LOL.

Watch out Daniel, vidyohs is a hardcore wankster!

No, if you disagree with vidyohs you are a straw-man making, socialist, fascist, dictator, communist, cockroach, statist, lazy person who doesn't work for a living and just wants the state to give you the profits of hardworking people and their government pensions. And that's not about labeling and childish name calling meant to demean anothers argument because you can't provide counterfactuals. He of course sticks to the strict definitions of those words as found in the Merriam-Vidyohs- Oxford- Texas- Webster Dictionary.

It would be interesting to discuss some of Julian Simon's ideas:
1. Are things getting better for humanity? If so, why are neo-Malthusian theories still prevalent?
2. What does a "finite" resource mean? Are resources, like oil, finite in a way that is meaningful to humans? Are we running out of resources?

Do your interactions with your students (and other young people) give you hope for the future of liberty and sound economics?

1. Can you tax a business or is it passed on to consumers?

What are your impressions of trends in macroeconomic research? Where is the field going?

To what extent did fannie mae and other government backed debt have in the financial crisis?

About as much as The Smoot Hawley Act had on the 1930's economy.

Related point: I saw in the WSJ reference to an audit of the GSEs which showed that they were actually including Alt-A and sub-prime loans in CDOs that were supposed to include only Prime mortgages. The article held that the reason why these pools had AAA ratings from the agencies was because the GSEs had misrepresented what was in them, which led to the melt-down in that market when the default rates started to exceed expectations. If true, this would seem to be a pretty serious indictment of the GSEs and the government's role in the disaster. So, are you aware of this information, is it true and is it as damning as it appears?

And if it's not true then who's fault is it?

Of course, if it is a GSE, it definitely is not a fault of lion-hearted multimillionaire Crook Dodd.

Happy New Year, partner. Love you as always. Mmmwwwaaahhhh

Mike, if you were to have a "beer summit" with President Obama, what would you want to discuss with him? And what type of beer would you request?