North Korea

You could watch this whole program, or this one. But you don’t have time. So skip to 3:30 in this video:

When you’re trying to develop a working definition of “evil,” it’s helpful to start with things that you are certain are evil, even if you’re not sure why, and try to figure out what are their fundamental characteristics.

How Economists Write

In the passages I’ve quoted from Alchian and Allen, there’s been some question over whether or not we can take these guys seriously. The important thing to realize, when you’re reading economics, is that proper “economic analysis” of a policy deals only with effects, not motivation. It’s somewhat analogous to the “behavioralist” idea in psychology, in which they said, basically, theories of mind are useless. It’s not quite the same as saying that motivations don’t matter. They may matter, but at least for the purpose of economics, they are useless. That is, a policy can be put in place for any number of reasons, but if it’s the same policy, it will have the same effect in each case.

Anyway, let me put up another example of this sort of “economist’s style” of writing, from another of my favorite economics books, Tim Harford’s The Logic of Life:

They call Doula “the Armpit of Africa.” [..] I don’t know who first applied the “armpit” label but I wouldn’t be surprised if it was Cameroon’s Ministry of Tourism. We all know that in most countries the Ministry of Defense is in charge of attacking other countries and that the Ministry of Employment presides over the unemployment lines. Cameroon’s Ministry of Tourism is in that noble tradition. Its job is to discourage tourists from getting into the country.

One colleague had warned me that the Cameroonian embassy in London would be so obstructive that I’d have to go to Paris to get my tourist visa. In the end I had less trouble because I had a man on the inside: a friend in Cameroon paid the equivalent of a half-day’s wages to get me an official stamp of invitation. Armed with this official stamp, I paid another five days’ Cameroonian wages to get my visa, in a process that required only three trips to the embassy and some mild groveling. Funnily enough, my companions and I did not meet many tourists in our three weeks in Cameroon.

But I don’t want to give too much credit to the Ministry of Tourism. Discouraging tourists is a real team effort. According to Transparency International, Cameroon is one of the most corrupt countries in the world. In 1999, it was the most corrupt country surveyed. When I visited in 2001 it was the fifth most corrupt, an improvement much celebrated by the government. A moment’s reflection should tell you that earning the title of “Most Corrupt Country in the World” takes some effort. Because Transparency International ranks countries based on international perceptions of corruption, a winning strategy is to concentrate on screwing bribes out of foreign businessmen– for instance, at the airport. But the Cameroon authorities have spread themselves too thin, because Cameroon is massively corrupt at every level and does not just target foreigners. Perhaps it’s this lack of focus that caused them to slip from the top spot. [pp. 166-167]

So you might ask, “Does Harford really think that the Cameroonian government is trying to be ranked ‘Most Corrupt’?” and the answer would be, “Maybe not, but to an economist, it doesn’t matter.” Economics strives to be as objective as possible, and that means, in part, avoiding speculation about what people’s intentions are when they make decisions.

It’s funny and perverse  to imagine that men are cleverly advocating these laws to protect their jobs or that the Cameroonian government is competing for the top spot on the corruption tables, and it would certainly be an easy explanation for why certain policies exist, but economics, qua economics, doesn’t attempt those kinds of questions.

The goal of economics, first and foremost, is to answer the question, “What will happen if we institute policy X“? So to do a contrast, “If we impose a minimum wage, employment among low-skilled workers will be lower than it otherwise would be,” true or not, is an economic statement. “Imposing a minimum wage is a bad idea” is not.

Even More Alchian & Allen

Why not? It’s that kind of week, and like I said, this is probably the best book I’ve ever read on economics.

Wage differences often reflect differences in employees’ abilities and in working conditions, yet such compensating differences in wages are not always welcomed. One of the classic methods of trying to eliminate them is to try to apply the maxim “equal pay for equal work”– on the presumption that equal work is easy to identify and that nonmonetary differences among services by employees or by employers should not count.

The person who has what some people consider to be inferior features dislikes being paid less for the same work, even though the wage difference is what enables the person to offset a personal nonmonetary disadvantage. Popular people complain that compensating wage differences allow those less popular to compete for jobs. Men may be hired because an employer prefers them as workers, but that preference is made more expensive by the excess over the lower wages the employer could have paid for equally valuable work by women. The employer pays more to hire men. Males cleverly advocate equal pay for equal work — of course, at the higher wages paid to men. The effect is to protect men’s employment by reducing the opportunity for women to underbid the men.

More Alchian & Allen

Any one passage from this textbook will be confusing if you don’t have a feel for how they write. So, as a public service, I’m offering up another serving:

It is a tribute to the intelligence and economic acumen of union leaders that they know that the right to strike is crucial to a strong union.  To be effective the strike must, as already emphasized, succeed in preventing other people from competing for the jobs.

When a union prevents nonunion workers from working for less than the wages it seeks, does it differ from the medical profession, which prevents a free market for medical services?  One difference is that the medical profession has more successfully defended its actions, in the name of higher quality of (a smaller quantity of) medical service.  That it also enables doctors to get higher wages is not a difference.  The second difference is that the medical profession does not have to rely on strikes and private intimidation of competitors who would sell their services at lower prices.  Instead it has a licensing law which is enforced by arrest, and possible prosecution, of the competitor.  If laws prohibit the sale of workers’ services by anyone except a “licensed” (union) person, or prohibit training except in approved schools, then the union can keep the supply small and wages higher.  Where the public police force is available, gangsters and hoodlums, the specialists in intimidation, would be of less value.  All union officials would be as free of the “undesirable elements” as are the officers of the medical and legal associations and public utilities, to name only a few closed monopolies. [p. 332]

The theme of the two passages I’ve quoted so far is a Chomskian one that Thomas ought to love. Every law has some reasonable argument in its favor, but often these rationales mask the fact that they are there to serve the interests of a powerful elite! Down with the legal fiction that is the corporate form! To each according to his needs!

Lest you think I’m attacking a straw man, observe the response when you suggest to the average person that the FDA be abolished.

BTW, I really like that line about “specialists in intimidation.”

The Wisdom of Alchian and Allen

My textbook for Microeconomics this semester was written by Armen Alchian and William Allen, and is called Exchange and Production: Competition, Coordination, and Control. It’s out of print for reasons that I cannot fathom. This may be the best book I have ever read about economics. Anyway, here’s a good excerpt:

It is hard to know when people who profess to be acting only to protect other people are being sincere and when they have ulterior motives. (For example, do you regard the remainder of this paragraph as sincere?) Like health, wealth can be ruined by carelessness. A broken leg can be reset; a broken budget can’t be. Wealth, like health, must be protected from personal ignorance. If a person invests $1,000 in some business and loses it, the person’s family suffers. Therefore, before making any investment, every person ought to be required to consult a licensed, certified economist, who would prescribe how wealth should be invested. Without this safeguard millions of people every day make foolish investments and irrevocably lose their wealth and harm their families. Many people follow the advice of economic quacks – stockbrokers, politicians, friends, and writers of tip sheets. They overinvest without consulting economists, who could prevent their going too far into debt or buying in the wrong area or taking the wrong job or the wrong kind of insurance.

 

Let me try that again…

I can’t really describe this post as anything but a failure. I didn’t communicate my message very well at all, and then, having failed at that, I started rambling about libertarianism, thus distracting even further from my main point. So I’m going to try again.

One point on which the author of that Post article seemed particularly emphatic was that parents whose actions lead to the death of their children should be receiving long jail sentences. I wanted to write a post in order to ask, “What would be the point of that?”

A possible justification for long jail sentences would be for its deterrent effect, thereby helping to prevent such deaths in the future. Of course, I do accept that if you tax an activity, you’ll get less of it. On the other hand, there were two factors that made me think that the threat of longer jail sentences wouldn’t have much of an effect on behavior. First, for parents, the cost of their child’s death is already very, very high. This is the principle on which ransom is based. “Perform action X, or we’ll kill your daughter,” is so bad that “we’ll kill your daughter, and you’ll go to jail for five years” isn’t that much worse. On top of that, there’s the cost in terms of social ostracism, when you choose to get medical treatment for your daughter’s condition even though all of your friends and family believe that it is morally wrong.

Second, perhaps more importantly, even if it were well-known that parents will definitely be sent to jail if their children die, it still wouldn’t have affected the behavior of these parents much, because they didn’t believe that their daughter was going to die. The idea was, prayer was supposed to heal her.

So I don’t think deterrence is a goal likely to be accomplished by giving longer prison sentences to the parents in this case. What about another justification, that regardless of whether it deters other such cases, the parents in question simply deserve to be punished for what they did? The tone of the article implies that this is the author’s true belief, but again, I think that it’s misguided.

The question of desert comes down to a question of mens rea; yes, the daughter died because of what her parents did or failed to do, but did they act with a criminally “guilty mind”? When Turley writes that parents should not be allowed to use religious belief as a defense in such cases, he’s clearly implying that he doesn’t buy the defense: it’s just an excuse. And this is why I quoted The Brothers Karamazov in the intro to my post yesterday. We simply cannot allow ourselves to believe that people with good intentions can be responsible for evil. That would imply, among other things, that we ourselves could potentially be responsible for evil. And that’s no good. So I think it’s from this impulse that we turn these parents into villains, whose daughter is dead as a result of their callous neglect.

My reaction to the article was that longer jail sentences wouldn’t serve any purpose, so it’s weird that he’s advocating them as a solution.

Crime and Punishment

Oh, with my pathetic, earthly, Euclidean mind, I know only that there is suffering, that none are to blame, that all things follow simply and directly one from another, that everything flows and finds its level — but that is all just Euclidean gibberish, of course I know that, and of course I cannot consent to live by it! What do I care that none are to blame and that I know it — I need retribution, otherwise I will destroy myself. And retribution not somewhere and sometime in infinity, but here and now, on earth, so that I see it myself.

-The Brothers Karamazov, Part II, Book Five, Chapter 4, “Rebellion“

That’s the passage I think of when I read articles like this one, about children who die because their parents failed to take care of them in some way. In this case, a girl died because her parents refused to treat their daughter’s diabetes, in the belief that prayer would heal her. A few years back, I remember a case in which an infant died after her father forgot about her and left her in his car on a hot summer day. I can’t help myself, I always find suggestions of jail time in these cases to be a sort of absurdist humor. The main suggestion in today’s Post article is that these parents got off too easily: they should go to jail for 10 years instead of 6 months.

I wish it were that easy to feel good about cases like this one. It would be great to see this child’s death as the result of the callous indifference of her parents to her suffering. Of course, the underlying problem would still be there, but at least I’d be too distracted by her parents’ villainy to think about the unfixable injustice of the situation.

I’m going to make a libertarian point now. It’s wrong to believe that the criminal legal system in this country should be responsible for bringing about justice in the world. To me, it seems clear that there’s no good reason to believe that our government is set up to deliver the result we are looking for. And, in fact, I believe that having the general attitude that government should be responsible for justice leads to many of the terrible excesses of government decried by non-libertarians (e.g. the “War on Terror”). Unfortunately, when you’re involved in politics, you think the solution is for your side to get in charge and start doing things right.

In the end, we have one of those parallels that you find in movies about criminal masterminds, where the detective is a good detective because he is so similar to the criminal. The parents in this case believe that their faith and prayer will save their daughter’s life. Jonathan Turley, the author of this article, has faith in the criminal justice system, that if it is administered just right, would have saved their daughter’s life. They both want to believe that, as terrible as the situation seems, somehow justice prevails.

Armistice Day

I guess I’m doing remembrances this week, so today I’ll remember November 11th, 1918.

Negotiations to end the first World War began on November 7th, 1918, and at that time, both sides pretty much knew that their negotiations would end in an official armistice. According to this website, the German delegate wanted to declare an immediate end to the fighting, knowing that within a few days the war would officially be over. I haven’t been able to find any support for this claim from German sources, so I don’t stand by their quote.

What is sure is this: on November 11th, at 5:10 am, the armistice was signed, but that didn’t stop the fighting, either. The American marines suffered 1100 casualties on the morning of November 11th, prior to the official end time of 11 am.

Apparently, an advance across the Meuse river had been planned for several days prior to the signing of the armistice. On the 11th, the generals received a message informing them that an armistice had been signed, and that the war would be over at 11 that morning. The message gave no instructions as to whether the planned advance would still happen or not.

Acting on their own discretion, some generals decided that the attack should proceed. And that’s how 1100 American were killed or wounded on the last day of World War I.

Günter Schabowski

The new regulations regarding travel from East Germany to the West were announced at an international press conference, and the man who announced the new rules was Günter Schabowski. An interesting and oft-told story about this conference is that Schabowski was not properly briefed on the rules, and thus gave the incorrect answer to the question about when the new rules were supposed to take effect. “As far as I know,” he said, “this is effective immediately.” That was incorrect, which is why the border guards were not prepared for the hundreds of people who showed up at the wall checkpoints.

I’ve been listening to an interview with Schabowski conducted in April of 2009. It’s quite interesting. Partial transcript below:

GS: Das ist ein Titel mit dem ich nicht ganz einverstanden bin. [..] Es sieht so aus, als hätten wir eine reihe gute dinge gemacht und dann eine reihe schlechte Dinge und haben die sich gegeneinander gewogen so wurden sie gewogen und dann kommt man zum Schluss „Also letztlich war es negativ.“ Das ist ein falsches Bild der DDR. Die DDR ist nach einem falschen Rezept gebaut worden, errichtet worden.

Und die Fehler die denn also fur das Ende verantwortlich [sind]… die liegen schon in dem Grundrezept.

Und das Grundrezept ist sozusagen, eigentlich ein Ökonomisches Prinzip. Un zwar, die Vergesellschaftung des productiven Kapitals wie das so schön bei Onkeln[?] Marx heißt.

Also und das war der Schritt der Zwangläufig über zehn, zwanzig, oder vierzig Jahre ins verderben führen musste.

Interviewer: Kulminierend viellecht in der Frage: Was ist ein System eigentlich wert, das seine Bürger dann, wenn sie das Land verlassen wollen, tot schießt?

GS: Ja, das ist eine der Konsequenzen. [..]

Das diese Ausgangspunkt den ich schon nannte, also die Vergesellschaftung, führt also zu einer Wirtschaft die nie sozusagen die Ziele realisieren kann die dieses Politische System sein Bürgern verheisst, und daraus resultiert zum Beispiel, also eine permanente unzufriedenheit der Menschen. Und dann wächst daraus ein anderes Unterdrückungsprinzip. Zum Beispiel das Prinzip Stasi. Wenn man ein Volk ständig zur Ordnung rufen muss, und aufpassen muss, dass es nicht irgendwie ausartet in contra-revolutionäre Handlung, dann braucht man eben ein Instrument wie die Stasi, sozusagen. Also die Ökonomie führt letztlich auch die Umvolkung der Ökonomie also zu einer solchen institution wie der Staatsicherheit der massenhafte Bespitzelung der Menschen.

My translation:

GS: That’s a title that I don’t completely agree with. It makes it look like we had a certain set of good policies and a certain group of bad policies, and we weighed them against each other and came to the conclusion, “OK, in the end it was negative.” But that’s the wrong way to think about the DDR.

The DDR was built from a flawed foundation. The mistakes that were responsible for the end were already there at the foundation. This foundation was, basically, an economic principle: the collective ownership of productive capital, as Uncle Marx put it so beautifully[?]. And it was this step that, over ten, twenty, forty years, would inevitably lead the system to ruin.

Interviewer: So then a culminating question is, what is a system really worth that, when its citizens attempt to leave, would shoot them dead?

GS: Right, that’s one of the consequences. [..] The fact is, this starting point that I talked about before, collective ownership, leads to an economy that can never achieve the goals that it has promised to its citizens, which in turn leads to a state of permanent dissatisfaction. And from that comes another principle: suppression.

When you have to constantly call people to order, and watch that their dissatisfaction doesn’t somehow lead to counter-revolutionary action, then you need something like the Stasi (secret police). So it was the economy that led to the institution of the Stasi and the widespread surveillance of citizens.

————————-

Okay that’s all I’ll probably post on Berlin today. There were parts of the interview that I definitely did not understand, but I did my best on this one.

History in the Making

Twenty years ago today, the DDR Politburo announced its decision to institute a new set of rules, in which East German citizens could obtain a visa to visit West Germany immediately upon request, and without fulfilling the conditions that had until then been necessary. The language of the announcement was somewhat opaque, but East German citizens understood the implication: they would be allowed to cross the border to West Germany, including West Berlin.

Nowadays if you search youtube for “Fall der Mauer” and related terms, you can see all kinds of well-edited montages about what happened next, invariably with music and voice-over narration explaining the significance of the event.

But I prefer this video, the news report from that evening. This is the opening of the border before it’s “The Fall of the Berlin Wall and the End of Communism.” In this one (w/ English subtitles), you can see the story coming together. The crowd is still in chaos but the narrators understand what’s going on.

Another thing that I particularly liked is that the newcasters always ask people why they are coming over to the West. The most cited reason, as far as I can tell, is a variation on “I heard the announcement on the news and just wanted to see if it was really possible.” Pretty mundane stuff. I guess the point is, history is cool when people aren’t quite aware of what’s happening.