comparing apples to non-apples

Being an aficionado of most-goods Apple, it usually means that I come across some industry analyst opinion piece which attempts to compare Apple Computer Corp.'s offerings to those of the rest of the industry util-to-util.

While the money price is the indicator most of use to make comparisons of utility in the indirect-exchange economy, for better or worse, the money price is usually the only cost taken into consideration by these analysts.

The problem with that of course is that while you can compare physical features, dollar-to-dollar, you cannot easily integrate the psychic benefits provided into your utility comparison.

For instance, what price can an analyst quantify which would measure the benefit of not having to deal with computer trojans and viruses and the resulting peace of mind associated with that?

How many utils do you get from the use of a superior operating system which works as designed, hiberbates and awakes instantaneously, and almost never, never, ever crashes?

How do you compare the sheer aesthetic bliss from a unified graphical user interface, the ease of controlling its functions, and the neat integration of hardware to software (iPod <--> iTunes; iSight <--> iChat, PhotoBooth, iMovie; Apple Remote <--> FrontRow, etc.) ?

To ask those questions are to answer it, and the fact that Apple is sucessfully selling computers, and most importantly, profitting from their operation, proves that to the contrary of naysayers, Apple is providing a good which satisfies the consumer demand for computer equipment preferred over the next best alternative.

What I'm not saying is that price comparisons are entirely irrelevant; rather that I am attempting to stress that there are other values here, which although they cannot be legitimately quantified, they are at best approximated in the money price, and will require the economic actor to subjectively assess the ordinal utility so as to make the correct purchasing decision. However, to simply compare dollar value is a bogus operation, which yields the same in results (the GIGO rule)



I am neither a sociologist, nor a psychologist by occupation, but I would hazard that this erroneous view of what money is, emerged with the appearance of bank notes, and later reinforced by the unbacked, fractional-reserve type into what people believe it ought to be, but isn't.

Money we know, is a good we use mostly for its exchange value, but before that it first had to be desired for its use value. Precious metals, because of their relative scarcity, their durability, the ease of storage and divisibility historically led to it's wide-spread adoptance as money, the common-denominator good, which many people are willing to exchange for other goods, and to hold onto for later exchange. Logically it follows, that the more of it you have of this good, the more of it you can exchange for other goods for the benefit of your ultimate consumption.

The other side of the coin, so to speak, is the portability of money. Gold, although highly desired by many, is difficult to use in everyday, small transactions. Sure you can clip a coin into pieces, but it was rarely done so very accurately. Others still used gold for small transactions, by having ground into a fine, easily divisble dust, which had to be carefully tied up in a kerchief until you were rung up at the dry goods store's register.

Another problem you would encounter is that of safety. Clinking coins in your pocket or bag is a loudly announced appointment with your local cutpurse. And although a bullion can buy you practically anything, should it be misplaced or stolen, it will represent a very heavy loss of exchange upon the lossee, thus being a burden on the sound mind and wits of the holder.

To counter those problems, the notion of banks evolved, whence you would deposit your valubles, and recieve a warehouse receipt that acknowleged it. Indeed, you payed the bank for the privilege of safeguarding your money stock. Now, instead of lugging along a gold bullion to buy a house, you would simply hand the seller the receipt to the same good, giving him title to 'one gold bullion' at So-and-So Gold Warehousing Extraordinaires & Co.

Unfortunately, it was at this point, that along with convenience of light-weight paper specie, came the abstraction of money, psychologically setting it apart from other goods. It's now common belief that if you duplicate the paper certificate, you can create goods out of thin air (for practical consideration, please observe the Federal Reserve and the lesser smalltime counterfeiters who operate under this fallacy.) Due to my involvement in the real estate industry, I first observed signs of this fallacious nominal illusion, or the "nominallusion" as I like to shorten it.

The nominallusion is the faith by those who believe, that when you have a lot of numbers attached to a real estate transaction, it's indicative that the value of the transacted property has risen astronomically, when in fact, the value may have dropped in real terms, and it's only that the price of money has fallen significantly in real terms. However, the dogged insistence of comparing a historic price with present prices and arriving at such conclusions of value, when the vehicle of comparison (money prices) has been so tampered with as to make the information conveyed utterly useless, is quite and regrettibly pervasive.

The potential of moral hazard only looms larger under such illusions, especially when artificially low-interest rates spur entreprenuers and financial institutions into collosal malinvestment of capital.

To correct this mass delusion, we would have to educate-away the primitive nominallusion of money, and to reintroduce the concept of sound money. Until that time, we have the blind leading the blind in their quest to objectively compare apples to apples.

funcusion

Oftwhile, in the heat of internet discussion, one may be called out for not being "practical" and "realistic", as though the lack of an empirically encountered basis should bear significance when discussing both the ethical principles which are being ignored, and some of the overlooked ramifications of unsound policy.

For example, free marketeers are often asked of to prove the hypothetical posed by their understanding of economic theory. They ask, "Iceberg, where do these mythical unzoned cities exist?" or one of the old standard canardic "what if's..." followed by what they think is an unsolvable problem which would hence justify state sponsored aggression because they are incapable of thinking the 'problem' through.

As the topic of real estate is within the area of personal interest, my participation on preeminent R.E. blogs makes certain that no harmful governmental policy goes uncriticized and scorned.

Such was the case more than once this week. One may witness the full exchange here of one such discussion, but here were my final words:

I humbly await further explanation of your comments, as I have difficulty understanding what exactly is unrealistic, and why pragmatics matter in discussion of economic or urban theory.

The entire point of discussing theory is to engage in hypothetical and counterfactual speculation, to try and better understand if society is better or worse off due to government intervention into the marketplace, in its regulation of zoning, usage, landmarks, aesthetic, and construction method & materials.

There are reasons to oppose these regulations. First, because they tend to reward certain parties (those with lesser restrictions) at the expense of those parties with higher restrictions.

The restrictions, on their very own raise the bar of entry, hence monopolozing the industry in favor of the firms who are best at cutting through the bureaucratic red tape (i.e. Rockefeller was notorious for his support of industry regulations, in which his firm was more able to implement than other firms, thus helping him drive out his competition with government fiat).

Second, recognizing that no one, or small group of people are all-knowing, it will be impossible for them to divine the far-reaching ramifications of the policies they enact. For example, do the proponents of downzoning take into consideration that they are the foremost cause of driving out the middle-class from the city? Will they be willing to make that trade-off if they knew upfront that the price of housing will go up by x and y amount of people will not be living here because of this narrow-minded policy?

Aside from the economics, I am not too concerned with the arguments calling for "livible cities" or "sustainable development", because first, their arguments are not grounded in reality, but rather emotion, and second, the fault, if any would lie at the doorstep of the prior government interevention which brought about the market aberration they detest. If anything, these people should be clammering for the deregulation of the market to straighten things, not to further strangle and distort them.

I also happen to believe that developers, just like everyone else, usually intend to stay in the game for long-term, and thus are driven toward long-term profitability as their goal, and not short-term embezzlement or fraud.

That being the case, it would only make sense for developers to build the most attractive, livible housing stock as possible. Why you ask, when they could just as well build shoddy housing?

Well, if you would engage in just a tad of hypothethicals, and imagine that there is no artificial limits to how much housing any developer can build, you must imagine too that he will have very serious competition.

Why would they choose developer A's units, when developer B will give them a better unit for the same price?

Hence, it goes to prove that by artificially limiting the amount of buildable space, one of the ramifications is that developers are not competing* anymore in terms of quality, since there is a monopolized stock of which they control, and which is difficult for another developer to mitigate (witness the attempt by the Jack Parker Corp. to increase the housing stock in the west village.) In essense, the government's meddling has both decreased housing stock, housing quality, raises the prices, and later the costs, and the crowning glory- it makes the neighborhoods unaffordable to the middle and lower classes.

*In essense, we have a "market failure" even though the failure was caused by government intervention in the first place.

In a later post, someone labeled me a "free market Pollyanna", which is to say "a person regarded as being foolishly or blindly optimistic".

This title which I find humourous, probably stems from the mistake that we libertarians, like everybody else in the political world, have a "correct" answer to all issues and problems.

As we all know, it's certainly not the case.

The correct answer is that we don't know all the answers to all the "problems". We can't be sure if they are even problemetic. And we certainly don't think that government is the best vehicle to solve these "problems".

In any case, I wrote back:

Thank you, I will take that as a compliment coming from a monomaniac who makes false pretentions as to the astuteness of central planners who must be omniscient in regards to all the far-reaching effects of their policy recommendations.

If anything, I'm the one who is claiming not to have advanced or absolute knowledge of optimal urban planning. Anyone who claims it is possible, is the greater pollyanna and falls into the category of maintaining 'fatal conceit'.

I thought it appropriate that the very day before, Manuel Lora's "Libertarians Are Not Socialists, Prophets, Omniscient or Specialists in Everything" appeared on LRC, and here is my favorite bit:

The problem starts when the "viability" of freedom becomes contingent upon the "answer" to those questions. That is, if the "right" and fully satisfactory answer is not achieved (ignoring that no such answer could ever be 100% correct), then somehow the desire for liberty is lessened and statism creeps back in.

"How would roads work? How can a flu pandemic be prevented? What about organ trafficking? Would we need car insurance? How much? Who would determine that? What if drugs are cheap and widely available? I don’t want people to have AK-47s! What about licensing and standards? If everyone can make their own money, then it’s going to be chaos!"

So let me answer the question as clearly as I can. I am not a socialist!

an offer he couldn't refuse

I know this is but a tad late, but I couldn't help but post this little tidbit:

There was a recent breakthrough in the negotiations between the World Trade Center (WTC) leaseholder Larry Silverstein and the triumvirate of government. Just so we don't miss anyone, these parties would be

a) the Port Authority of NY & NJ,

b) the New York City government, its dictator, and its wholly-owned subsidiary, the Empire State Development Corporation

c) the clowning-glory, Governor Pataki and his goons, er.. administration

Basically, the story is that Mr. Silverstein was presented with two choices by the thugs-in-office:

A) Take this pittance of cash, give up your lease and walk away from the site

B) Give up ownership for the main site, and we will let you keep and build the few other sites, and even allow you to build the main site for us.

Of course, unmentioned as always was the threat of using eminent domain which only allowed Mr. Silverstein to choose between A or B, instead of perhaps C, which funnily was never mentioned.

Choice "C" was of course, recognizing that the property in question belongs to Mr. Silverstein, who clearly did not find either of the other two "choices" to be sufficiently appealing.

The weird thing is that the press never saw through this sham, and somehow treated it as though Mr. Silverstein is the party who is unwilling to negotiate, and therefore is an obstinate, unsavory character, perhaps undeserving to be the one chosen to build the Freedom Tower.

Although the eminent domain process was not used, the mere threat of using it accomplished the same result, which was to force a landowner into a deal that he was not interested in.

I guess this all goes to show that it's not the Onion, but rather government which is the greatest source of satire and irony, ever. After all, if the "Freedom Tower" is ever built, it will be on lands with a history of private property violations.

escaping the state

If I had the use of a time traveling machine, I could imagine going to meet an earlier version of myself. I'm sure I would try to engage my past self why in the future I began to fervently hate the state and why I support abolishing it. I'm afraid to admit it, but I believe that my earlier self would dismiss my future self as imbalanced and insane. In short, I wouldn't know how to recreate the act of getting my past self to be understanding and sympathetic to my future self's views, even though I will know that it's entirely possible since it already has occurred once before.

Thinking back on my own "enlightenment", of how I broke through and cast off the shackles of the state from my mind and conscience, I would only like to extend this courtesy to my fellow human beings. The question I guess has always been how to accomplish this.

I've only heard of one major attack against this meme; cognitive dissonance. The hope is that if one constantly points out how the state acts immorally, that most people will wake up to this and finally realize what really irks us libertarians.

The only other idea I've heard so far is Vache Folle's "Re-education Camps", which admittedly sounds like a reasonable proposal, due to the fact that it will only be consistent with the morality of the people jailed inside it. Once the inmates transcend the enslaved morality of statism, they will be free to come and go as they please. This I believe is 100% compatible with libertarian ethics, which operates similarly in the regard of which we would be acting consistent to treat thieves and murderers with the same principles they espouse (i.e., using force or coercion to take back one's property or compensation.)

Other than that, I've only recently been cognizant of the parallel between statism and the history of African slavery while reading Thomas DiLorenzo's The Real Lincoln. Now imagine yourself living 150 years ago. If you hold similar values to my own, you would probably support the Abolishment party's goal of ending slavery, although I couldn't tell you if I'd agree with the why this group were against slavery, the means they proposed to end it, and perhaps other political baggage that the group members supported.

Anecdotally, we find that many slaves themselves (colloquially, "uncle toms") inexplicably supported the very institution which oppressed them. I'm hoping that with a proper psychoanalysis of the many different individuals in America's history, we can begin to understand this desire to be enslaved.

Once before on this blog have I scoffed this mental illness as sadomasochism, but this in no way explains why it's the prevailing mentality, and more importantly, how it can be cured.

Listen, I'm all ears.

misnomers

I never liked the term "mixed-economy". Now I've thought of a good reason to reject it-- it's a self-contradicting term.

Just as a woman cannot be both pregnant and fallow at the same time, it borders on oxymoronism to label this state of political anarchy with a term which implies a combination of individuals being both free and unfree.

Individuals residing within a geopolitical boundry are either existing freely or they are existing unfreely. To the extent that individuals are not regulated does not mean they are free, since freedom is an all or nothing condition (only in the negative sense of the term though).

To assert otherwise would be akin to mocking a ball-and-chain inmate that he is truly free since he is allowed to breath, eat, etc.

The only question I have is, given the quantum nature of the universe, are all contradictions entirely plausible? Mu.

faux privatization

Being an anarchocapitalist means never having to be sorry. It's a label that you can safely use without having to side with the emotional baggage of either leftist egalitarianism or conservative corporatism.

It means one can defend Wal*Mart or other industry titans qua private business, without having to pacify the leftist voices which scream privilege and who are opposed to faceless, monolithic business per se, and for no other reason. Of course, it means that one will excoriate private business with equal vigor when it actively uses the help of the legitimated criminals who control the state monopoly of violence, to further monopolize their business interests.

With that short introduction, or disclaimer have you, I thought it prudent to raise a cry against the state of New York, of which several politicians have called to "privatize" the roads, bridges, tunnels, and other 'public' infrastructure. These politicians have greedily eyed other states, such as Illinois, which have already "sold" some of their turnpikes in excess of billions of dollars.

Mind you, the politicians will only lease the roads, not outright sell them, which I would have tolerated, and might have even encouraged, since it will move the care of the resource to private hands. The downside of that would be the 'fait accompli' in regards to the issue of non-recompensation of the tax payers who have been robbed again and again to pay for the very same infrastructure. It's not the best result, but I would probably forgive and forget if the roads were truly privatized.

But since this is not an outright sale, and thus I am very wary of ledes such as this:

When Gov. George Pataki delivered his budget to the Legislature in January, he unveiled a proposal to lease the Tappan Zee Bridge to private investors. Lawmakers balked, and when the final budget was passed months later, the Tappan Zee plan was left for dead.

In recent weeks, however, Mr. Pataki's top transportation officials have been pushing hard to revive it. They say the bridge is just one in a series of revenue-generating assets that the state could privatize in multibillion-dollar deals.

It's corporate welfare of this prominence that gives a bad name to the "free" market, and I think anti-statists of all colors, dimensions, directions, and economic schools can agree upon to oppose.

the free market fails to fail

One often hears of the term "market failure" as an excuse for unbridled statist aggression to rob, plunder and steal from her slaves unwilling servant class. It might be used to justify environmental policy; to fund canal digging; bridge, road, and railroad building; etc.

Alas, "there is no such thing as market failure - only lack of private property rights." Hence, externalities are the creature of the mixed markets, those in which government has preempted the common law of liability, with its own ineffective policies, in which some cases is a form of corporate welfare (logging industry, fishing rights, etc.)

Without delving further into the economics though, I'd like to state that such a claim is prima facie fallacious because the very notion that there exists an objective definition of what services and goods that billions of interacting individuals ought to offer one another is preposterous. If that weren't true, I humbly submit that there is a market failure to deliver styrofoam houses, bicycles made from gold, and teleportation machines.

Thus said, there is no market failure because one cannot argue that such goods or services ought to be provided by the market, only that they, strictly on a personal basis desire the provision to be made.

iceberg's law

With all due respect to Mike Godwin, and in recognition of the damage that his popular meme has caused to once-meaningful internet discussion, I propose a new law:

"As an online discussion grows longer, the probability of a comparison of one methodological individualist involving Ayn Rand or Atlas Shrugged approaches one."

I have often found the desire to express this law (and that's just on one blog alone!)

Hmm... is Mike Godwin an Objectivist?

More strange than that, he publicized the Secret Service raid on Steve Jackson Games' Chicago offices, and as we all know, Steve Jackson Games is a publisher for the 'Principa Discordia'. His involvement is later documented in Bruce Sterling's non-fiction book The Hacker Crackdown: Law and Disorder on the Electronic Frontier.

Guys, I think I have uncovered a member of the Bavarian Illuminati among us.

Gunfight at the J.L.S. Corral

Being a subscriber of the Journal of Libertarian Studies has its perks -- such as that you receive your hard copy before the e-book makes it to the interwebs. Due to error however, such is not the case, but yet I do not begrudge the non-subscribers the accidental treat of having access to the PDF before us subscribers got our first licks, and besides, "better that it be on the side of more information rather than less".

The JLS Winter 2006 edition is subtitled "SYMPOSIUM ON KEVIN CARSON'S STUDIES IN MUTUALIST POLITICAL ECONOMY" and features no less than seven articles.

I was so eagerly anticipating this issue, and it appears that it was certainly worth the wait (evaluating it using which ever method you devise to measure the value imbued through the disutility of waiting!)

For those of you who live in a bubble, Kevin Carson is either the DR. JEKYLL or MR. HYDE (or both, depending on whom you ask) behind mutualist.blogspot.com, a self-declared "free market anti-capitalist".

While I may disagree with the general attitude or conclusion of any of his particular blog posts, I still find it most enjoyable to studiously browse them; so if by any chance he reads this post, THANK YOU!

What I find that Mr. Carson brings to the table is serious, anti-statist critiques of existing political capitalism. Sometimes it's not enough to accept the status quo, and attribute its harshness, or seeming callousness to the free market -- as Mr. Carson likes to point out, the undesirable conditions may be in fact the result of existing, or even long-prior political-capitalism intervention.

At this point it's not difficult to disagree with Mr. Carson; after all, you may prefer to shop at Wal*Mart and other chain stores and personally dislike mom & pop operations. You may prefer to drive your gas guzzler even if you had to pick up the externalities tab. You may think that global warming is beneficial to humanity. You couldn't care less how much wealth other people have accumulated. In short, you would just be disagreeing whether the present arrangement of affairs is one which most people would choose to live under in the truly, unfettered free market in which they picked up all transaction costs.

The problem I find with Mr. Carson is his unwillingness to concede that there is some vague middle ground, a no-mans land so to speak, of which it's utterly impossible to divine what arrangements might actually prevail under the misty veil of the unknown free market ideal. I am even tempted to borrow the phraseology of the late Friedrich August Hayek, using what he termed "fatal conceit" to describe this willful egalitarianistic dream. [Not that I have anything against egalitarianism, other that I wouldn't want it imposed on me, and if people want to live under that principle, I wish them an 'equal' success.]

To me, attempting to calculate how many Wal*Marts would actually exist under free market conditions, is as fruitless as determining how many angels could dance on a pinhead. In Mr. Carson's idyllic free market, the wealthiest individuals would be as pebbles among sand, not boulders. And I would probably agree with his opinion, but the difference is that I won't conflate that with factual knowledge from which I would be comfortable dealing criticism.

For instance, Mr. Carson often alludes to the transportation subsidies (or "positive externalities" as P.M. Lawrence would say) which he alleges props up the inefficiencies of large-scale business operations at the expense of smaller mom & pops, and local artisans. On this basis, Wal*Mart and other international giants deserve a good, un-vulgar libertarians' scorn for taking advantage of the subsidy, and causing the disadvantaged firms and individuals to wither and suffer.

But how do we know that the positive externalities of the existent transportation system are not inferior to the free market ideal? I believe that we don't have such knowledge, and if one had to make a best guess, odds are that the political-capitalism variation of transportation costs more than would a free market system. However, one should at least concede the possibility of it being such.

Mr. Carson takes no such position, and as you will shorty see, nor does he adequately address the historical evidence which contests his claims of a free market unlikelyhood.

Not so long ago, on a thread titled "If It's Got a "Y" in It, It's Wal-Mart Day at Mises.Org", I wrote in response to an earlier commenter:

You bring up an interesting point. It's back to the old question of what is likely to occur under anarchy- cooperation or competition?

But you may find it interesting to note, that prior to government involvement in road building, there were hundreds of private road companies, just within New York state alone which were building private turnpikes left and right.

You may want to see Thomas DiLorenzo's "How Capitalism Saved America" which I read almost a year ago, so I don't exactly recall all the historical narrative that shows that private road building was possible without eminent domain. The explanation of how the cooperation occurred was that the landowners were offered a financial stake in the tolls, so that it wasn't much issue of acquiring land rights.

He also mentioned there, (contrary to what you mentioned) that the tolls fluctuated on the basis of tire width to vehicle weight, so that a heavy truck with wide wheels which generally smoothes out the road will pay less than vehicles with narrower tires which tend to rip ruts in the road.

His chapter on the North Pacific railroad also showed how a railroad company succeeded without huge land grants or subsidies and which privately funded their buyouts & buildouts.

Whether or not you buy Thomas DiLorenzo's argument, I still think it's a good enough question to make me hold back from criticizing transportation subsidies.

To which Mr. Carson kindly responded:

iceberg,

As Josh suggests, the profitability of shipping by truck depends in part on the fact that trucks are not currently taxed on the basis of their damage to the roadbeds. And while I don't doubt that it would be feasible to operate modest-sized highways on a free market basis, on preexisting rights of way, the lack of eminent domain would set severe limits on expanding their volume. Without ED, we'd probably have a network of 2-lane highways like those in the former USSR.

I haven't read Dilorenzo's book yet, so take this FWIW. But offering a high enough price to persuade every landowner, individually, to come on board would likely be considerably more expensive than the prices paid for condemned land under ED, and the resulting amortization costs would significantly raise the operating costs of the highway. In addition, the vulnerability of such arrangements to individual holdouts would raise all kinds of transaction costs.

Even we accept his assertion of this being an unlikely result in our modern day world, I would still leave the question open, since we don't know to what extent the demographical population density of today is the result of state capitalism. I'd also hazard that when roads were being built 100 years ago, vacant land, which would be considered available for road builder homesteading was certainly less scarce than it is today, and had those roads been built privately then, we would still be enjoying those goods today.

Alright, maybe so!

Joseph Sobran on Democracy

Quote of the day year:

"So when the wolf pounces on your lamb, just ignore the pitiful bleating and remind yourself that this is a democracy, where every sheep can freely express its preference for which kind of wolf it wants to be eaten by. Many sheep, perhaps understandably, prefer a wolf in sheep'’s clothing, which is after all the basic idea of democracy. So far it has worked pretty well. The wolves all agree on that, and they want to spread democracy everywhere."

Is there anyone else out there who agrees with my assertion that democracy is the dumberest thing since general macroeconomic theory?

Suckers, Patsys, and Friars

Here is a real howler. Via The Real Deal, comes this article in the New York Observer's real estate section.

The article states:

The Landmarks Preservation Commission's Web site recently posted a study by the Independent Budget Office that analyzed residential property values in the city's various historic districts. The report is not new--it's dated 2003--but its conclusions seem to back up preservationists' claims that historic districts increase property values.

Oh they do, don't they?

On face value, this is supposed to be a positive phenomenon, showing that wowwee, government planning actually works!

The question remains, do rising values necessarily imply a positive outlook on the housing market?* Has that truly been beneficial to everyone? Could it be possible that it's beneficial only to a select few, those who already are comfortable in their purchased homes?

Alas, that question is never answered, but worse so, it is never even asked.

Coincidentally, just last week, I fired off an email to a dear Austriomentor™, asking him:

If a home or business is designated a landmark, the owner suffers a reduction in property value, both for their personal use and when the owner attempts to sell, it will fetch lower prices since there isn't much use the next owner can expect to get out of it. At the same time though, since there is an intervention causing artificial scarcity of land uses, it will drive up the price of housing/business for everybody in the market.

In hindsight it's not such an intellectual obstacle to overcome in this perhaps seemingly counterintuitive example, and shortly after I sent the email, I was kicking myself in the pants for not being thoroughly convinced of its truth sooner.

While I'm tempted now to reword that question, I think the point comes through clearly.

Anyway, I fired off a quick rebuttal on the NYO's blog, mocking them for being the Landmark Commissions patsy:

Well duh! If government intervenes in the market and restricts supply, ceteris paribus, prices will rise! (zoning, landmarking, and other land usage restrictions place artificial and arbitrary constraints on supply)

It doesn't require any empirical research to prove this a priori fact.

Secondly, and less well understood is the fact that the affected property owners suffer unquantifiable losses when restrictions are placed on their property. For example, they might have wanted to add a penthouse on their roof, or changed what they think is an ugly facade. This is even before you tack on the costs of compliance with the property owners having to go through yet another layer of bureaucracy to make alterations to property they own in a nominally 'free' country.

*I'm now thinking that this whole confusion only begins because some people can't distinguish between prices and values. Costs, for that matter too.

**Friar is Israeli slang for biatch when used in the sense of "sucker"

fooling themselves

Earlier today, I was having a conversation with my mom, in which when she tells me that she is babysitting my niece, since my sister had to run a few errands. Presently, she mentions that she doesn't even have to watch her since my niece's therapist is working with her.

"What?!" I interject, "Why is a perfectly normal toddler receiving therapy? I don't know for certain, but I don't ever remember a time with so many children receiving therapy."

My mother presently concedes that in the last few years, therapy for various issues is being administered to more and more children. Even my wife's only two nephews, one who is age 4, the other one age 2, are also undergoing "occupational" therapy and speech therapy, respectively.

Maybe this is only some anecdotal phenomena, local to only my circles of influence, but nagging voices of economists long deceased tell me that this is probably the result of government setting the price to zero, a price floor needlessly causing overconsumption.

In any case, I admit that I can neither criticize from knowledge nor experience in the field of early childhood development therapy, but only that lately it seems that most young parents I know are utilizing the "free" services of a speech therapist because their 1-2 year old child isn't an effusive chatterbox socialite, and besides, the "government is paying for it anyway".

Which we know isn't true. Government has no wealth to speak of, only that which is has already confiscated from private holders or will do so in the future. But people tend to ignore costs and they irrationally adorn blinders to perpetuate a disconnect between low/no-cost services and goods provided, and the respective invoice.

What I'm afraid of is that therapists have made themselves comfortable that government insures them a steady flow of public-paid business. They will not have any objectivity in the matter when it comes to deciding whether a child requires therapy. I, for one would not trust the judgement of a therapist in such a case. If the price of the services rendered were paid for by the parties responsible, therapists would risk ruining their reputation by taking on clients who didn't need therapy, as the paying parents would find out upon doing their homework of getting a second opinion.

(The ideal in this case would obviously be to make each user responsible to pay for the services rendered in the private market. But in this case, the government has declared it free, and essentially is taxing the wealth of society to pay this boon to the industry. What can make this possibly worse is for the government not to pay it from current revenues, but to finance it with a bond, which only further abstracts the costs to taxpayers; which after all, taxpayers at some later date will have to pay back that bond with interest.)

One is only deluding himself to think that there are any goods which are free, and furthermore it's impossible to make a rational decision in such a case regarding the question of therapy, when the only indicator one could go by is the price system, which has now been tampered by government intervention on the side of costs.

"What could possibly be the harm?" you ask, "so there are children recieving unneccesary therapy, what could be so bad about that?" Well for one, you aren't acting in the child's best interest when you saddle him later with the costs of your foolishness. Secondly, you are at best only diverting resources, at worst you are taking present wealth and destroying it. I know people who won't dare waste a morsel of food, but in this case are content to delude themselves.

Vernon Smith (via this Cafe Hayek article) writes in the WSJ regarding healthcare and third party systems:

Here is a bare-bones way to think about this situation: A is the customer, B is the service provider. B informs A what A should buy from B, and a third entity, C, pays for it from a common pool of funds. Stated this way, the problem has no known economic solution because there is no equilibrium. There is no automatic balance between willingness to pay by the consumer and willingness to accept by the producer that constrains and limits the choices of each....

....if third-party deep pockets pay whatever is the price B charges A this year, the effect is to reinforce the incentive to raise the price next year. Spending escalates, which leads to a demand for cost control. In health care there is increasing control over access to medical services. Insurance companies disallow patient free choice of physicians, clinics and hospitals outside their approved network. Physicians and medical organizations face escalating administrative costs of complying with ever more detailed regulations. The system is overwhelmed by the administrative cost of attempting to control the cost of medical service delivery....

If there is a solution to this problem, it will take the form of changing the incentive structure: empowering the consumer by channeling third-party payment allowances through the patients or students who are choosing and consuming the service. Each pays the difference between the price of the service and the insurance or subsidy allowance. Since he who pays the physician or college calls the tune, we have a better chance of disciplining cost and tailoring services to the customer's willingness to pay.

Many will say that neither the patients nor the students are competent to make choices. If that is true today, it is mostly due to the fact that they cannot choose and have no reason to become competent! Service providers are oriented to whoever pays: physicians to the insurance companies and the government; universities to their legislatures. Both should pay more heed to their customers -- which they will if that is where they collect their fees.

I have always thought it was obvious, that third-party healthcare would become a nightmare for doctors and their patients. Doctors who bill insurance for treatment will pad up the bill, trying to see how much will 'stick' with the insurer. The insurance companies play the opposite game, trying to limit how much they are willing to pay for the services, and what services they will even cover.

Of course, every one knows that the price being quoted to the insurance company is significantly higher than what a patient would regularly be charged. But doctors, who are better suited to treating bodily ills must now become bold entreprenuers who have no idea of how much they can expect to be paid from the insurers.

How can a doctor rationally set a price, where there is barely any direct input from the consumer of these goods? Is it really that suprising that more and more doctors are dropping out of medicare participation and other third party systems?

Don't even think of talking me into a "national healthcare" system.

the real think tank

What is it about water that makes the human brain revv?

I'm pretty certain that I'm not unique to find that I do some of my best thinking in the shower. (Is it due to a psychological release of the conscious, allowing the murkiest of subconscious thought to float to the surface? I don't know, but I would love to hear from a more qualified individual on the matter.)

This being the case, I often find myself dictating grandiloquent ideas to be jot down by no one in particular while making use of my home's showering facilities.

It appears that there are inventors who have capitalized on this market. I have seen easels meant to be hung in one's shower as to capture the rapture of water-born ideas. I remember long ago watching a science program, I think it was called Discovery 2000, in which they demonstrated a waterproof notepad and writing implement invented by an eccentric Japanese scientist who often had eureka(!) moments while swimming in his lap pool.


Now only to come up with a reasonable explanation for my wife who will shortly be exasperated to learn that I shower with the some very feminine muses.

meme of fours

Zorks!

I've been tagged by Reformed Socialist-Kibbutznik, now-turned Mises Fellow, Anarchist-Extroadinaire B.K. Marcus the First of Charlottesville, VA by way of Morningside Height's God Box.

And now, without any further ado, I give you the 'Meme of Fours'.

Four jobs I've had:

1. Junior Highschool summertime employment as a corporate MIS/IT worker
   
2. Detergent & household cleaning products salesman
   
3. Property Manager and Investor Relations for a real estate firm
   
4. Commercial real estate broker/analyst

Four movies I can watch over and over:

1. Indiana Jones Trilogy
   
2. Back to the Future Trilogy
   
3. Star Wars Trilogy
   
4. Roman Holiday (yeah, I'm infatuated with Audrey Hepburn's timeless charm)
   

Four places I've lived:

1. Houston, TX (for half a year when I was 2 years old)
2. Long Beach, NY (2 years highschool dorming)
   
3. Baltimore, MD (1 year post-highschool seminary)
4. Jerusalem, Israel (1 year of post-highschool seminary

Four TV shows I love:

1. Seinfeld (I own the DVDs)
   
2. Lost (presently downloading the TV rips)
   
3. Firefly (I own the DVDs)
   
4. None, since I don't own a television set.
   

Four highly regarded and recommended TV shows I haven't seen at all:

1. 24
   
2. Grey's Anatomy
   
3. Sex in the City
   
4. Sopranos
   

Four places I've vacationed:

1. Panama City, Panama
   
2. Southern California (L.A., San Diego)
   
3. Israel
   
4. Las Vegas
   

Four of my favorite dishes:

1. 'La Suprise' cut of steak
   
2. Chicken Marsala
   
3. Pounded & Breaded Veal Chop
   
4. Eggplant Parmigiana
   

Four sites I visit daily:

1. Mises.org
   
2. Curbed.com
   
3. Engadget.com
   
4. Gizmodo.com
   

Four places I'd rather be right now: (Ok, I took a little liberty on this one)

1. Kicking back on an aged leather recliner in a plush old library with a good book
   
2. Snowboarding in Aspen
   
3. A product development manager at Apple or Google's R&D department
   
4. Relaxing in Central Park (NYC), sipping a cappuccino while listening to nature
   

Four new bloggers I'm tagging:

1. Vache Folle
   
2. Jon 'Brownstoner'
   
3. Brandon Berg
   
4. S.M. Oliva

a counterfeit bill of goods

(...or do I repeat myself?)

A principled anarchist is one that need not ever make the case that he objects to the necessity of common law, civilized order, 'public' goods or what not.

However a principled anarchist is one who rejects the unholy notion of an objective utilitarian or consequentialist doctrine, as he garbs himself in the robe of deontological ethics -- the consideration that all actions are to be judged on their own moral basis, and are not subject to a 'package deal', where one is permitted to perform actions which if performed on their own would be immoral, but when together they bring to fruition an overall, positive consequence, they are not considered immoral.

A principled anarchist who has some background in a Bastiatic† sense of economics will surely even deny the possibility of there ever being a positive, or even net gain of "good" to speak of when following the utilitarian doctrine, which for its part can never factor in the psychic and opportunity costs of disutility on the part of those who suffer a "well-intentioned" meddler's immoral actions.

Furthermore, an analysis of the goods that political anarchy (read: any government) makes pretense to deliver, whether it's industry regulation, industry standards, roads, common law, retributive and punitive justice, or a monetary and banking system, etc. are all faux goods in the sense that one could do better to obtain, instead of unwillingly exchanging life, liberty and property in pursuit of these couterfeit goods.

For example, in regard to industry regulation I have wrote in the past that:

The most valuable asset to an individual or business is their integrity, or good will. This seemingly trifle point is a big deal when the market is unhampered by regulations. As a motivating agent, it is by far the greatest incentive for people and businesses to provide the highest level of service and product. Regulations and punitive damages when instituted by third-parties, are too poor a substitute for the purpose of keeping businesses honest.

In other words, true regulation of industry can only come from within the individual firms themselves. The "regulation" we speak of in the governmental sense is but a faux substitute for this ideal of regulation.

A commenter on Catallarchy really drives this distinction of the regulation term home:

One of the confusions that all of this causes is often from terms.

As someone who has worked with “electricity", I can tell you that you must always regulate energy. What’s that you say, you are for regulation?

Well, not rules in the way you mean. Unregulated electricity would cause most of the electronics in your house to malfunction. (power surge), so, to a physics major, when you say deregulation, they think you are talking about lightning strikes.

secondly, most folks of an inteligent nature realize that when most folks are speaking of “derugulation” what they really mean is regulation that is more favorable to their own personal interests, not a lack of regulation.

Now, “real” derugulation is nothing of the sort. It’s getting out of the way of the self-regulation free market. Not an absence of regulations, but letting the market set them.

Looking back at Cali dereg, it was nothing of the sort. To this day, I don’t know what that was.

But, I have this (following) example to show me what deregulations actually means to many in this country(but it relates to content transmission rather than pure energy).

Years ago I lived in one of the first towns to have cable TV in IL. Because the market was unregulated, becuase the cable company required right of way on our land (we were a “self-rule” corporation, yes a village, but a self-rule incorporated village), we were able to get an excellnt deal with the company. I had a chance to meet one of the VPs from that company at the time, and I knew from him, they were very happy with the deal. They made profits, we allowed them the rights of way and other assistances that in cases where no deal had been agreed to, possibly been costly from a management perspective.

That is all gone now. Why? Well, you see we were deregulated. Now, we had to except national enforced mandates, rather than negotiate with the company directly. Should there be problems with the service, tough luck charlie. Previously, the free market was still open, and since we had helped build the infrastructure, we could make deal with a different company that would better service our market preferences.

I would much rather go back to that “regulated” state, that had no regulations other than the fact that two incorporated groups of people had agreed on.

So, in that case: Regulated meant contracts between individuals, negotiated without fed interference, while Unregulated meant that the feds would preempt our negotiations.

In regards to standards, I recently posted to the Mises blog this little rejoinder to a glib fellow calling himself "anti-lib" who argued that without government, we would have no system of enforceable standards, from which I take it that he believes it undesirable for people to make their own choices:

What I think also warrants a mention is that the only true standards are those which are voluntarily agreed upon by the market participants. Anything enacted through force or coercion is tainted with the possibility of being the less than optimal solution.

There are plenty of standards which didn't require the state to intervene. Graphic, motion and audio codecs have standardized baselines which are operable cross industry. For example Sony's DVD discs work on Toshiba set top players.

The lesson you draw from that is that manufacturers will often find it in their interest to market materials to their customers in standardized formats. While its not a rule, it seems the only time "standards" have been ignored is when consumers deem the misnomered 'standard' to be inferior to a non-standard alternative (witness the success of iTunes despite its proprietary lock to the Apple iPod). When success is not the case, the usual culprit will most likely be the results of a government-created monopoly which favors the current proprietary solution.

In any case, there never is an instance when standards should need to be imposed; for if the standard is truly the optimal, it probably will be whole-heartedly supported by market participants. If the standard is less than optimal, you will see the opposite. If coercion is needed to impose the standard, its probably less than optimal, and in all cases exudes elistism on part of the enforcer.

But what about roads?! No problem.

Common Law? Dispute Resolution? Collective Services? Pollution? Big deal! (Thank you Stefan Molyneux)

Justice? Hah!

Money and Banking?

I don't think I even have to explain how governments, and in the U.S.'s case, through its Federal Reserve and its cartelized banking system have taken monetary counterfeiting to a entirely new nadir of despotism and fraud.

You will also find that the principled anarchist is one who does not have the conceit to pretentiously guarantee the delivery of these goods in absense of the government. But he is ready to say that whatever is to society's optimal benefit will spontaneously arise in the absense of the state's coercive matrix, and that these goods, unlike the government's faux substitutes are the real deal.

Choose wisely.

† Bastiatic, after Frederic Bastiat, whose words remind us to encompass all the costs of any transaction, not just the visible ones we see before us. This would be in principle the antithesis of a Coasean, Pigouvian, or Kaldor-Hickian analysis which impossibly, yet falsely lumps subjective valuation of costs, into objective societal costs which could be studied to measure for efficiency.