Overdrawn at the planetary bank

Are we?  Matt Ridley says "Nonsense."  Did Stone Age civilization collapse because people ran out of stone?  Contrasting "ecology" with "economy," Ridley finds that one little letter makes all the difference.  Despite our benevolent host's apparent conviction that the study of economics amounts to inquiries into the ways in which people can be induced to accept monetary bribes to tarnish their honor, the field really consists of examining the ways a society decides how to wield scarce resources for which there are multiple possible uses.  A market economy typically makes this decision by letting prices rise and fall according to the scarcity of the resource, together with the demand for it, as expressed by a large number of individuals exercising freedom of choice.  But supply and demand aren't static, even at a particular price point.  As a resource in high demand becomes scarce and costly, the pressure is on to find a substitute.  And human beings under pressure are remarkably gifted at innovating substitutes.

Our natural short-term perspective regards a price spike as a catastrophe--what if someone in need can't pay the price?--but a longer view suggests that a price spike often is just the impetus needed to discover a cheaper alternative.  As Ridley points out,

The best-selling book "Limits to Growth," published in 1972 by the Club of Rome (an influential global think tank), argued that we would have bumped our heads against all sorts of ceilings by now, running short of various metals, fuels, minerals and space.  Why did it not happen?  In a word, technology:  better mining techniques, more frugal use of materials, and if scarcity causes price increases, substitution by cheaper material.  We use 100 times thinner gold plating on computer connectors than we did 40 years ago.  The steel content of cars and buildings keeps on falling....

In many respects, greater affluence and new technology have led to less human impact on the planet, not more.  Richer people with new technologies tend not to collect firewood and bushmeat from natural forests; instead, they use electricity and farmed chicken—both of which need much less land.  In 2006, [Jesse Ausubel at Rockefeller University] calculated that no country with a GDP per head greater than $4,600 has a falling stock of forest (in density as well as in acreage).

Would any of those things have happened if the Global Department of Resource Justice had had the authority and the funding to prevent anyone from feeling the consequences of scarcity?  Human beings who care about the suffering of others experience a strong temptation to respond to price spikes by imposing price freezes.  (How dare those hoarders of valuable resources withhold them from the needy?)  While there may be good arguments in favor of the brief application of charitable relief to ameliorate an unusually abrupt transition from one resource to its substitute, we're not doing anyone any favors by subsidizing an economic choice about any resource that has begun to get scarce enough to be unaffordable. If that approach made sense, we'd be subsidizing the use of whale oil so that poor people could light as many lamps as the rich.  Or subsidizing stone tools so that no one had to figure out how to make them out of metal.

Saturday Morning AMV

I'm pretty sure this was just a refight of WWII. With an exciting new ending!!

Only Rarely Does Political News Make Me Feel Like Screaming

"Let's hope #Kremlin & @mfa_russia will live by the promise of hashtag"

These people represent you. They represent me. These are my representatives.

Or Maybe Not

President Barack Obama has declared any secession vote in Crimea illegitimate, and warned: “We are well beyond the days when borders can be redrawn over the heads of democratic leaders.”

The End, Beginning

A meditation on what it is to be a good man. To be a good woman.

Political will

President Obama scolded mid-east leaders:  "What we haven't seen is frankly the kind of political will to actually make tough decisions." Any comment I could make would only be bouncing the rubble.

For Our Gracious Host

As well as for anyone else, who like Grim, split your own wood.

http://www.geek.com/news/physics-exploiting-axe-splits-wood-in-record-time-1591725/

I think this is amazing.  And probably the first real advancement in what is an ancient tool in a very long time.

Warning Order: Bannockburn

It is now exactly two months until the 700th anniversary of the Battle of Bannockburn.



Prepare yourselves with due care.

Admirable brevity

Economist and Nobel laureate Thomas Sargent:

I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words. Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches. 

1. Many things that are desirable are not feasible. 

2. Individuals and communities face trade-offs. 

3. Other people have more information about their abilities, their efforts, and their preferences than you do. 

4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended. 

5. There are tradeoffs between equality and efficiency. 

6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse. 

7. In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation. 

8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made. 

9. It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore). 

10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation. 

11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves). 

12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.

H/t Maggie's Farm.

At ease

A sense of entitlement from having served in the military?  Really?

Tom Cotton cheerfully swats away Sen. Pryor's absurd criticism:

BLM II: Messing with Texas

Texas Attorney General Greg Abbott slammed the federal Bureau of Land Management’s claims that private property within the state now belongs to the federal government.

The BLM says the federal government owns a 90,000 acre piece of land along Texas’s Red River, despite it being maintained and cultivated by private landowners for generations and no law has been passed by Congress giving BLM ownership of the land.

...

“I am deeply concerned about the notion that the Bureau of Land Management believes the federal government has the authority to swoop in and take land that has been owned and cultivated by Texas landowners for generations,” Abbott wrote in a letter to BLM Director Neil Kornz.

"If A President Signs a Bill into Law, Must He Obey It?"

The answer turns out, of course, to be "no."  It is impossible to make the President obey the law.

Brian Boru's March

The Feast of St. George

April 23rd is the feast day of the patron saint of the mounted warrior, the Order of the Garter ("Honi Soit Qui Mal Y Pense") and many other orders of knighthood.  Here is an article on the life and myth of St. George, patron saint of the cavalry. New Advent has another piece.

The End, The Beginning

How to rebuild civilization, just in case.

Any Stick Will Do To Beat You

At some point, you might as well do it your own way. You're going to take the hit one way or the other.

State of Adventure

After 2,055 miles -- not counting side trips for gas or food -- the long ride has brought me home. I'll be around a bit more often for a while.

Liz Warren

Elizabeth Warren (whom you may recall I dislike far less than most of you guys) insists she's not running for President, but there's no doubt she's just put out a political biography timed to compete directly with the upcoming Hillary!^TM production.  Warren's views aren't all quite what you'd expect.  The New Yorker reviewer is horrified to find, for instance, that she supports the immediate imposition of unlimited public school vouchers:  “An all-voucher system would be a shock to the educational system, but the shakeout might be just what the system needs.”  "Yes," the reviewer sniffs, "that would be a shock.  It would also be reckless"--and of course doesn't bother to defend this assertion.

Warren previously wrote a book arguing that the two-income family is an economic trap that leads families to take on dangerous levels of debt.  Her own father died suddenly when she was a child; the family survived only because they were accustomed to living on his single salary, so that her homemaking, child-rearing mother was able to go out and get work to replace his paycheck.  This is not an argument that will endear her to many feminists, no matter how querulously the victim angle is spun.  She also has views on the subject of appropriating "other people's money" that are calculated initially to endear her to me, at least (which is to say, not to her target demographic), though unfortunately the only "OPM" context she seems prepared to analyze is that of greedy bankers who collect and re-invest the deposits of virtuous common people.  Evidently if benevolent congressmen do it it's all good.

The reviewer made the surprising admission that it's a bit ticklish for a wealthy U.S. Senator to write an autobiography about how tough the powers-that-be have made her life: "An argument that the system is rigged tends to be somewhat undermined, for instance, by the success of the person pointing that out."

It's a shame that Warren's shabby politics interfere with her considerable analytical skills.  I will never understand how people persuade themselves that other people force them to take on more debt than they can service.  Warren is unusual in her skepticism about debt as an engine of growth for the economy, a stance shared (in my experience) by many people who've made bankruptcy law their specialty, but she seems to think that more regulations on bankers will cure the problem.  Or possibly she believes people would borrow less if they were given more generous handouts, though how that can be squared with the experience of any culture in history is a deep mystery to your humble correspondent.

The $10K degree

Texas Governor Rick Perry is enjoying more irritating success with his troglodyte philosophy:

[W]ith his 2011 state of the state address, . . . Perry challenged Texas's public universities to craft four-year degrees costing no more than $10,000 in tuition, fees, and books, and to achieve the necessary cost reductions by teaching students online and awarding degrees based on competency. 

The idea met with skepticism. . . . Peter Hugill, a Texas A&M professor who at the time was president of the Texas Conference of the American Association of University Professors, posed the rhetorical question: "Do you really want a stripped-down, bare-bones degree?" .  .  . 

If these reactions suggested Perry was out of step with the higher-education establishment, the public's reaction suggested that defenders of the status quo had fallen out of step with students, their parents, and taxpayers. Baselice and Associates conducted a public-opinion survey commissioned by the Texas Public Policy Foundation, finding that 81 percent of Texas voters believed public universities could be run more efficiently.  Nationally, a 2011 Pew study found that 57 percent of prospective students believed a college degree no longer carries a value worth the cost.

Now that the program is solidly launched, showing some success, and being emulated in other states, critics fume that the degrees are substandard "applied science" affairs, as if that were a bad thing. Myself, I look forward to the trend gaining traction in a broader field of academia. My own college degree would have cost about $10K if my folks had had to pay cash (instead, it was a perk that reflected in part my father's modest salary). Admittedly, it was a diffuse liberal-arts kind of degree that left me ill-prepared to earn a living, but it got me into law school, where my subsequent degree cost only a few hundred dollars for each of three years, being, presumably, heavily subsidized by the backward state of Texas. Once I had that one, it was no problem earning a living.

It's true that this was thirty years ago and that there has been inflation since then, but inflation doesn't account for a 440% increase in tuition over the last quarter century, and anyway my university was expensive in comparison with state schools, even if it was a bargain next to the Ivy League. Nor am I persuaded that today's youth are receiving fabulous educations that are 4-1/2 times as valuable as my cut-rate affair, either from an intrinsic point or view or in terms of being able to get and stay employed.  Wherever the extra money is going, it's not making the difference between a good education and a "stripped-down degree."

As for where tomorrow's students are going to receive their essential political indoctrination, well, if the public primary education complex and the media can't find some way to pull that off, then there must be some progressive foundations that can cough up the necessary funding.

On a related subject, I'm enjoying Amanda Ripley's "The Smartest Kids in the World," about Finland's astounding success in catapulting its education success to the top of the world in only a few years. Did they do it by spending a bunch of money? Did their kids suddenly get smarter? Did they implement more and better tests and national curricula?  No, they started hiring teachers only out of the top quarter or so of their classes, then gave them a lot of autonomy. Magic.

Big, Hot, Cheap, and Right

An article about driving a Sriracha factory out of California and into the arms of Texas mentioned a book called "Big, Hot, Cheap, and Right," about the success of the Texas small-government model, which was surprising for two reasons.  First, it's written by Erica Grieder, who is identified as a "senior editor" at Texas Monthly, and I didn't think those people were allowed to entertain suspect political or socio-economic philosophy.  Second, my husband points out that it's on our shelf, where it's sat since he bought it some time ago, though neither of us has read it.  Another book to add to my pile!

A third reason for surprise, of course, is that the author uses the serial comma (a/k/a the Oxford or Harvard comma) in her title.  I'm a serial comma type myself, from way back, but in a decided minority.

In the linked article, Grieder addresses the familiar divide between libertarian and social conservatives in Texas politics, an issue of inexhaustible interest for me.