Category Archives: Economics

Inane Arguments Against Wealth Creation, Supposed Exorbitance

I read an article the other day. The title of the article is “Huge Houses Are Morally Wrong.” I had to read it twice to make sure the author wasn’t pulling one over on me. In the end, I am left feeling both a sense of outrage and sadness. And here is why:

  1. On his mention of Bill Gates’ fortune, and the $30 billion he has given away to charity, the latter of which the author decided isn’t enough, I say this: $30 billion isn’t enough? Is there a “moral” number? Do you, dear author, give away 40% of your wealth? I doubt you do. And if you did, I don’t care. It’s none of my damn business. So, in addition to the $3o billion, which in and of itself is a tremendous value, what about the value Bill Gates has brought to the world with Microsoft? But no, the author doesn’t seem to think that the billions of people who have benefited from his company is a matter of importance. I say poppycock. I hope Mr. Gates continues to make tons of money. But, in the end (and which will be my main point here), I don’t give a darn what he does make or doesn’t make, or does do or doesn’t do.
  2. On his mention of Peter Singer and his argument that no one is entitled to live beyond $30,000/year. What a sick, depraved way to live. It’s these type of folk that want us to revert to a time wherein technologies were of the simplest and less impacting variety. The argument disregards all of the tremendous value (jobs, wealth, well-being, more efficient and less expensive production methods, etc.). But, again, who cares? If my bachelor neighbor decides to move out of his one-room apartment into a 3-room house, that’s his prerogative; that’s his right. But Hamilton’s argument would say that my neighbor should not do this; that it is of waste; and that it is immoral. That’s bogus. Let’s say I want to buy an Apple laptop. It may be a bit outside of my price comfort range, but I desire the product, its accoutrement and warranty program. Is it immoral to decide to ditch my $300 Acer in place of the $1,500 Apple? Of course not. My money is precisely that. Mine. What I decide to do with it is entirely on me.
  3. In the end, for me, all that matters is this: it is theirs. Their money. Their wealth. Regardless of how they acquired the wealth (it could be via hard work and determination or nepotism or whatever), it is theirs, and they get to decide what they do with it. They could just sit on it. Literally. They could exchange it for gold and sell it. They could travel. They could buy million dollar homes. It doesn’t matter. Not I or the billionaire has any moral obligation to live by certain socially constructed means.

I say stop whining about what isn’t yours. What others do with their money doesn’t concern you (unless, of course, they are using the money to inflict actual harm).

I say, dear millionaires and billionaires, please continue doing what you’re doing. You provide me with entertainment in the movies you create. You make it easier for me to do business, in the software programs you create and the social media websites you develop. You make everyday staples of living less expensive and easier to consume. Your homes, your wealth, your success and celebrity are the things rational, reason-minded, positive people aspire to achieve.

Live well. Live “ridiculously well.”

As for the Hamiltons of the world, go ahead and keeping thinking squalor is of some intrinsic value. That’s fine. As long as you give up the iPhone, the laptop, the vehicle.

For other tidbits of mine on this topic, go here and here.

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Your Rights As They Exist On An Island, By Your Lonesome

I saw a sign at the Occupy Wall Street protest that, well, sort of boggled my mind.

To Say That a Job is a Right is the Same Thing as Claiming You Have the Right to Enslave

How can you claim a job to be a right? Are you not claiming ownership over the product or service of another person?

And this is where the “rights on an island” scenario comes into play. My dear friend Justin used this analogy. Imagine if you were on an island and you were the only person there. No other human exists on this island. Additionally, there are no merchants or health care providers or attorneys or–yes, that’s right–employers.

Consider the way in which your rights exist in this setting. On this island, you have freedom to do as you please. If you wanted to spend time doing jumping jacks, that is your right. If you wanted to build a home* on this island, you could do that too. But your rights are limited to what you can provide for yourself, without infringing upon another.

You have the right to pursue (your own, unique, personal, individual) happiness. You have the right to liberty. That is all.

You do not have the right to another man’s product or service. Or, in the case of the employer, you do not have the right to a job. A job is a value the employer has created for themselves. They worked to achieve a status that affords them the freedom to hire. That is their achieved liberty. They can hire, and that is their choice.

You do not have a right to a job. A job is product that is created and carefully constructed; to be offered, only at the will and desire of the employer who created it. If they deem a candidate of worth and relevance for the job, then they have the liberty to choose said candidate.

Just as a job is a product, so is, let’s say, a lamp. The Lamp Store sells lamps. Do you have a right to the lamp? What about the dentist? Her product is dental care. Do you have a right to that?

No.

Remember, you are on an island. Your rights exist only as if you were on said island, all by your lonesome.

I don’t have a right to a job. I do have the right, however, to make myself relevant and of value to the employer. I do this by honing my skill. Gaining experience. Contacting people in the industry.

I own a small business. It’s new and, week to week, I work hard to build something that will, in time, be enough to support my family. It’s not easy work. It takes dedication. Toil. Sweat. Patience. Do I have a right to this job? Heck no.

I imagine a scenario in which I walk into the office of a local marketing firm and tell them that I have a right to procure a writing project from them. They’d laugh me out of their office and possibly call the police. And rightfully so.

So, please, don’t claim you have a right to a job. You don’t.

*The island is only metaphorical. It doesn’t exist. The home you build is also metaphorical. No private/public property arguments.

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Step 1: Destroy Neighborhood. Step 2: Replace With Dump.

Eminent domain is for looters and thugs.

From Timothy Sandefur, via Reason, comes more fantastic news about the Kelo vs. New London case of 2005. These people don’t care that they kicked people out of their homes, destroyed their houses only to replace the property with, well, nothing at all. 91 acres sit, untouched, overgrown with weeds. Oh, and the city of Trumbull has designated one particular area a dump site.

This is insane, is it not? Whatever it is, it infuriates me. To no foreseeable end.

How can a city, a government body, get away with us? They say it’s for the good of the town, for the people. How can that be? They take my private property, destroy it, and replace it with garbage. In other words, they take what is useful and plentiful and rationally implemented, only to replace with what is utterly devoid of usefulness, fruitfulness and rationality.

It makes me sick to my stomach.

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Sweatshops, Welfare and Poverty

As Ben Powell says, “defending sweatshops is not about defending corporate profits, economic efficiency. It’s about the welfare of the third world workers.” I think this has some merit. Sweatshops are notoriously lambasted for exploiting individuals, and/or providing “too little.” But I think it’s much more complex than that. To start, I’d recommend watching the below video. Ben Powell, PhD (from Suffolk University), along with the Institute for Human Studies, lends some insight into this:

To lend additional insight, for sake of argument, Professor Matt Zwolinski, over at Bleeding Heart Libertarians, says this:

Even if they are unfair, there is very good reason to believe that all of the exchanges described above are usually mutually beneficial.1  In other words, both parties come away from the exchange better off than they would have been without it.  This claim is supported, I think, by the rather impressive empirical data on sweatshop wages.  But even apart from the empirical evidence, there’s a fairly strong a priori argument to be made in favor of the assumption of mutual benefit.  After all, if workers didn’t expect to be made better off by working in a sweatshop – if they didn’t think it was all-things-considered their best available alternative – then why would they take the job?  And the poorer workers are, the more dramatic the impact on their overall welfare will be of even slight improvements to their material conditions.

So sweatshops are doing something to make poor workers better off.  On the other hand, I assume that most of us do nothing to make any serious improvement in the lives of people in desperate poverty.  We might give a few dollars to the Red Cross when a tsunami hits and makes the evening news, but most of don’t do anything on a regular basis that is going to have any real long-term impact on the lives of poor workers in the developing world.

I think this is a tremendous point. And yes, surely it sucks that they are making a choice between meagerness and starvation, but it’s a choice that they own. Hell, sometimes, “sweatshops are a dream.” But to ridicule the sweatshop owners isn’t going to do anything about the poverty, or the welfare of the workers.

I say keep up with the sweatshops. Let them be. I want to provide them with the choice. Meanwhile, as Kristof says, let’s “promote manufacturing” in these countries. Encourage imports and exports. Open up trade barriers. Set them free.

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Intellectual Property Musings

A few nights ago, I sat and listened to two of my friends have a conversation about intellectual property. One of the friends was on the pro-IP side, and one was on the anti-IP side. That is to say, one felt it unethical that people copy or share books, music, DVDs without paying for them. And one thought that copyright laws (as well as trademark and patent laws) shouldn’t exist.

I watched this, and only commented twice. Once to bring up Cory Doctorow and Nina Paley: two artists that believe very strongly in open source, data sharing, free information type of digital world. Cory publishes his books with a Creative Commons license, which essentially says that people can copy, share and use as much as they want. For Cory, copyright is an outdated system that illogically tasks the state to intervene as well as wrongfully diminishing and stagnating the growth of culture.

To him, it isn’t a problem of piracy, but of obscurity. He feels that if you cast a wider net, get your name out to the widest possible audience, the better it can be – for “culture” and for the author. Same is true for Neil Gaiman. See the video below where Neil speaks about Copyright, Piracy and the Web:

As for Nina Paley, she publishes all of her works and puts all of her animations online under a Creative Commons Attribution Share-Alike license, which you can read more about here. Nina explains a bit more of what this means on her website:

You are free to copy, share, sell, remix, modify, fold, bend, staple, and mutilate Mimi & Eunice but you may not prohibit others from doing the same with any resulting copies or “derivative works“. You may include Mimi & Eunice in larger, copy-restricted works (like textbooks, magazines, movies, TV shows, etc.) but the Mimi & Eunice parts must remain under the Share Alike license (aka Copyleft). This is easily achieved by marking the Mimi & Eunice parts “CC-BY-SA Nina Paley” or “copyleft Nina Paley,” even while the rest of your work is under copyright or whatever godawful restrictive license you use.

If you make any changes to Mimi & Eunice cartoons, you must take credit for them. Please do not draw “new” Mimi & Eunice cartoons and imply I created them. Please do not imply you, or anyone other than me, created existing Mimi & Eunice cartoons. The CC-BY-SA license prohibits fraud and plagiarism, but I really think you know better than to do those things even without the threat of legal force, if for no other reason than self-preservation and not wanting to ruin your credibility and become a laughingstock and pariah.

For commercial uses, I request (but do not demand or legally require) you share money with me.

Mere use of Mimi & Eunice cartoons does not imply my endorsement or approval. I strongly recommend obtaining my endorsement for any significantly commercial projects, as my endorsement increases the value of commercial copies. My endorsement is negotiated by contract the way “rights” usually are. Please contact me to negotiate my endorsement.

I tend to lean towards the thinking of Gaiman, Paley and Doctorow. I feel that copyright (and, in the same vein, trademark and patent) laws are inherently a form of censorship. Ideas are free. Alternatively, they are not scarce goods. Unlike, say, tangible private property, like a bookshelf.

Jacob H. Huebert speaks of this over at the Mises blog:

Land and tangible items are subject to becoming private property in this way because they are scarce. That is, they are limited in quantity, and one person’s use of a piece of property prevents someone else from using it. Two people cannot occupy the same space or eat the same orange. Without property rights, there would be irresolvable conflicts over who can use what land and objects, and how they may use them. With property rights, these conflicts are avoided. On the other hand, if certain things weren’t scarce — if we could reproduce them infinitely at no cost, or if they were somehow abundant — there would be no conflicts over those things and no need for ethical rules, property rights, or laws to govern such conflicts.

As it happens, ideas fall into this latter category. If two people want to have the same idea in their minds, or put that same idea to use, there is no conflict between them — they both can do it. And they can pass on an idea to as many people as they want without diminishing their own possession of the idea. Kinsella uses the example of a book:

[I]f you copy a book I have written, I still have the original (tangible) book, and I also still “have” the pattern of words that constitute the book. Thus, authored works are not scarce in the same sense that a piece of land or a car are scarce. If you take my car, I no longer have it. But if you “take” a book-pattern and use it to make your own physical book, I still have my own copy. (from Against Intellectual Property by Stephan Kinsella)

Check out this cool video Nina Paley put together that speaks to the idea that all “creative work is derivative” of another:

And, for a taste of some of the awful things that have come out of copyright, see the excerpt below from Ideas Are Free: The Case Against Intellectual Property by Stephan Kinsella:

  • There is a case where the seminal German silent film Nosferatu was deemed a derivative work of Dracula and the courts ordered all copies destroyed.
  • Shortly after the death of the author J.D. Salinger, author of Catcher in the Rye — courts banned the publication of a novel called Sixty Years Later: Coming Through the Rye. Banned it. Based on copyright.
  • Some get lucky though, and they say the work was a fair use. There was a parody called The Wind Done Gone which is an unauthorized rewrite of Gone With the Wind from another character’s point of view.
  • In another interesting case, fantasy author Mary Zimmer Bradley, who actually encouraged and allowed a lot of her fans to write fantasy without suing them for copyright infringement, came across an idea that fans had submitted to her that was similar to one she was using herself in a novel she was writing. So she wrote to the fan to tell her what was going on and even offered to pay her a little bit of money and to acknowledge in the book that they had come up with the same idea. But the fan replied she wanted full coauthorship of the book and half the money or she would sue. So Mary Zimmer Bradley scrapped the novel rather than risk a lawsuit; it was never written.
  • Sometimes lawyers who send cease and desist letters claim copyright in the letter and threaten to sue you if you republish it on the web [laughter].
  • The Australian band, Men at Work, was recently found guilty of plagiarizing “Kookaburra Bird” on their 1980 CD, Down Under. The judge held that a flute rift in Down Under bore an unmistakable resemblance to “Kookaburra Bird Sits in the Old Gum Tree,” a folk tune taught to Australian school children for 75 years [laughter].
  • RIAA wants a law passed that would impose a penalty of $1.5 million per CD copied.
  • Ford Motor Company has attacked Ford enthusiasts, claiming that they hold those rights to any image of a Ford vehicle, even if it is a picture that you took of your own car.
  • The NFL has prohibited churches from holding Superbowl parties on TV sets larger than 55 inches.
  • And, of course, there are recent extensions of copyright such as the Digital Millennium Copyright Act, or DMCA, which criminalizes even the mere possession of technology that can be used to circumvent digital-protection systems. But I say DVD ripping devices don’t steal; people do.

You can read Stephan’s entire book, Against Intellectual Property, for free online! Check out the PDF here.

I think, for me, I am very much still in the learning stages. I have much to learn about intellectual property, but I am looking forward to knowing more. I sympathize with authors, want to hear/understand their stories. But I also want to know more about copyright, trademark and patent, and how they help or hamper artists, producers, inventors and writers.

For more of my thoughts on intellectual property, go here.

Cory Doctorow - Photo Courtesy of Wikipedia

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Subsidized Bike Rentals in Paris – Failure

From the NY Times, via the Mises Blog:

Many of the specially designed bikes, which, when the system’s startup and maintenance expenses are included, cost $3,500 each, are showing up on black markets in Eastern Europe and northern Africa. Many others are being spirited away for urban joy rides, then ditched by roadsides, their wheels bent and tires stripped.

With 80 percent of the initial 20,600 bicycles stolen or damaged, the program’s organizers have had to hire several hundred people just to fix them. And along with the dent in the city-subsidized budget has been a blow to the Parisian psyche.

I’m going to go out on a limb and say that, while possibly well-intended, the bicycle sharing idea, with the lack of rules and measures of protection, is wholly irrational. Such is the case for many “well intended” government-subsidized ventures. Would such an operation exist in the real marketplace? Absolutely not. Without any of the proper, rational mechanisms to protect the investment in the product/operation (i.e. GPS, collateral, et al), it will invariably fail, as is seen in Paris.

Alternatively, if measures were put into place to prevent theft and hold both the business (the bike rental company) and the renter accountable, then there would be a stronger chance for success. Bureaucrats and government bodies can’t make decisions about business. And with the backing of said government, where is the incentive to make a profit, be successful? Businesses need to be mindful of the long-term. They need to understand their target audience, their market, and act accordingly. They need, above all, to be cognizant of what it is that makes them a successful, healthy, thriving operation.

This venture, sadly, is not one of these.

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