Showing posts with label free markets. Show all posts
Showing posts with label free markets. Show all posts

Saturday, March 19, 2022

Who You Gonna Call? Trustbusters!

David Henderson has written two very good pieces recently at the Hoover Institution's Defining Ideas. They are a two-part discussion on antitrust: Let Freedom Rein In Big Tech and A Populist Attack on Big Tech. I particularly like his conclusion:
The more regulations there are to enforce a government official’s idea of competition, the more likely it is that those regulations will hamper actual competition. Companies that give their own products and services an advantage in the marketplace are simply harvesting the value of an asset that they took big risks to create. Competition is dynamic, not static. But heavy regulation will make markets more static. Let’s keep competition dynamic by not penalizing successful competitors but by leaving the market open to alternative business models.
Do read the whole thing in both cases. 

He makes many excellent points--ones that I myself had in some notes for a future piece on antitrust. (Of course, he makes them much better and more fully than I could.)

Sometimes one must be patient for competition to work it’s magic. Just because a monopoly, oligopoly, or other sinister market-dominant firm seems entrenched today, does not mean it will always be or that the cost of immediate correction is worth bearing. Forced correction may not even be feasible. 

At any one point in time there are a lot of reasons the world is the way it is. The challenge for the trustbuster is to know with very-high certainty that the current state of the market is suboptimal ("inefficient" is the eye-of-the-beholder term of choice) and that a better world can and should be achieved through government action. 

It is easy to conjure up a hypothetical better world because only in the wild through real-world experience, the so-called market test, do we truly discover all the constraints and tradeoffs. Comparing the unicorn to the horse is always subject to bias--imagined reality almost definitionally engages in willful blindness. But the trustbuster's Dunning-Kruger problem does not end there. The "can be achieved" is naively assumed through hand-waving theory. The "should be achieved" is generally ignored altogether.

In the realm of current worry, Big Tech (dunt, dunt, duh!), see MySpace, Yahoo!, and AOL along with InternetExplorer, Mapquest, Garmin, Blackberry, et al. Then consider Twitter, Facebook, and TikToc, along with Google, Apple, et al.

Also, remember when the government broke up IBM? Yeah, I don’t either. Apologists for activist government regulation will tell you the threat posed by the 13-year case that went nowhere is what reined in the highly-successful company, but this theory only works by willfully ignoring the fabulous work performed by IBM’s various marketplace competitors. Those quick to point out “you didn’t build it” rely on their own wishful agency when the real work is being done by those actually in the field. 

Why in antitrust do we grant so much benefit of the doubt to regulators and so little deference to the world as it is? Are we just that willing and hopeful that a white knight can remake that which we suppose is in error? Is it just because we don't listen to master Yoda?




Saturday, July 10, 2021

What Does NIL Imply for Parity in College Football?

The evil empire known as the NCAA has now finally relaxed its rules on amateurism allowing college athletes to earn compensation off of their name, image, and likeness rights (henceforth, NIL). How sweet of them. It only took a rare 9-0 shutout loss at the Supreme Court to get them to change their ways. 

Cue the pearl clutching as the latest moral fear becomes a moral panic--God forbid someone in America would make money off of their talent.

Yes, times they are a changin', and for the better. There will be losers, though. Eventually, it is likely the ones losing advantage will be all of those who have been profiting off of players not being compensated. This list somewhat in order includes: coaches, administrators, athletes in all sports other than football and men's basketball (mixed bag here as there will be lots of NIL opportunities for many of them), fans, and the universities in general.

For this post I'd like to briefly discuss how this might affect competitive balance (aka, "parity") in college football and men's basketball. 

If by parity we mean anybody can beat anybody (i.e., "any given Sunday"), then the initial and perhaps enduring apparent result will be increased parity.*

If by parity we mean league continuity, then the apparent result will be decreased parity.

Let me explain. Allowing NIL compensation adds a dimension along which teams can compete. A classic analogy is when the CAB under the Carter administration ended price controls allowing airlines to compete on price. This was very good for consumers in the long run and very disruptive to airlines in the short run. 

In this same way NIL comp will add a competitive dimension to the competition for college athletes and thereby increase variance in those athletes' sports. An increase in variance means instability. That instability will have two features:
  1. It will give new and added opportunities for lesser, secondary teams to challenge incumbent blue bloods. Potentially Oklahoma State now has more opportunity to challenge Oklahoma in football.
  2. It will open up more risk of failure especially for lesser, secondary teams. This failure can be in the more obvious form of shutdown but also in the harder-to-perceive version of loss of status. Hypothetically the difference is Temple dropping football altogether or going down to a lower, true-amateur level versus Penn State falling from prominence. 
The first case will look like more parity. The second case will look like less to the causal observer. This is why I referred above to these being the "apparent result". I would guess that the second will come to dominate the narrative as many will long for the good old days when anybody could compete in college football and men's basketball. You know, back when Alabama always played Clemson for the national title . . .



*If you think complete parity is in any way desirable in sports, you don't understand sports in the least. Nobody gathers around to watch guys flip coins.




Saturday, May 22, 2021

Most Charity is a Failure


I know you want to do good, and I know you want to think that wanting to do good combined with doing something results in doing good. Unfortunately, you are very likely and in most cases completely wrong. 

I suspect that most people will either reflexively disagree with and disregard my position on this or accept it at face value as a necessary consequence of human social failure. I also suspect that most people who have extensively studied this area as well as most people deeply involved in this realm will either strongly agree or disagree with me. 

For this post I imagine each of these four constituencies as potential audiences. 

First of all understand that charity isn’t always about doing good as Robin Hanson would tell us. Often it is a bundled good which combines a desire to dream altruistically and be recognized as altruistic with little connection to outcomes.

Second of all note that government action (i.e., forced collective action) is usually worse in all regards. At the very least with a failed charity we can more easily delude ourselves that what we are doing is on net beneficial and not resource or happiness destructive. And then there is the side benefit that we did it basically through voluntary agreement and persuasion rather than the threat of ultimately deadly force. 

Third of all let us distinguish between charity and other not-for-profits.* A charity is looking to benefit an underserved beneficiary. There are other not-for-profits that are actually just tax-favored gifts to one's own hobbies and personal enjoyments. The focus of this post is charities as commonly understood.

The problem with not-for-profits in general is that they are responsive to donors rather than customers as Arnold Kling elaborates

Donors and customers both have desires they want met. To understand if they are satisfied the donor is presented the answer while the customer largely gets to judge for himself. The marketing to donors strongly tends to be aspirational and promise-based whereas customers have to consider the actual outcome and experience. Additionally, donors have two biases at play further constraining their willingness and ability to be critical: selection bias (they already are supportive of the cause ex ante) and confirmation/endowment bias (they want to believe they made good choices).

Sam Harris makes great points in this podcast like how charities don’t stop existing often enough—they can be failing or have completely succeeded but they still are in operation, which implies they are wasting resources.

Just like in the fine art market where no participant has a strong reason to discover much less publicize a forgery and does have powerful incentives to suppress such information, participants in the not-for-profit sector are incentivized to self-promote and cross-promote the whole edifice as being successful. 

The challenge for charities are the classic problems of the seen versus the unseen, moral hazard, conflicts of interest, and the law of unintended consequences. 

This TED talk on African orphanages has elements of all four problems. 

ProPublica has been reporting for years on the failings of the American Red Cross.

TOMS Shoes has faced forceful criticism about its charitable program of donating a pair of shoes to a poor child for each pair of shoes purchased. In a rare case of reversal TOMS now donates 1/3 of its profits directly to "grassroots" efforts. This may be much better than their prior famous-cum-infamous program that had the unintended consequence of displacing development in poor countries. 

New York not-for-profit hospitals asking their patients for donations makes one wonder just how not-for-profit they really are. 

There are unintended consequences for heartwarming charities like Make-A-Wish, et al. When resources are directed to one thing, they cannot also be used in any other area. There are always tradeoffs.

Add to the classic problems listed above the simple element that good intentions are not sufficient for successful solutions. Case in point would be food drives where the obvious need is not the obvious solution.

It is possible to bring strong doubt to the ultimate value of any charitable organization. The fact is most do not stand up to scrutiny.

Yet we want to do good; so what is a good doer to do?

I am a weak proponent of effective altruism. It is a way to distinguish between what works and what does not. To quote admirable, strong effective altruism advocate Peter Singer, "Effective altruism is based on a very simple idea: we should do the most good we can." He goes on to explain:
Effective altruism is notable from several perspectives. First, and most important, it is making a difference to the world. Philanthropy is a very large industry. In the United States alone there are almost one million charities, receiving a total of approximately $200 billion a year, with an additional $100 billion going to religious congregations. A small number of these charities are outright frauds, but a much bigger problem is that very few of them are sufficiently transparent to allow donors to judge whether they are really doing good. Most of that $200 billion is given on the basis of emotional responses to images of the people, animals, or forests that the charity is helping. Effective altruism seeks to change that by providing incentives for charities to demonstrate their effectiveness. Already the movement is directing tens of millions of dollars to charities that are effectively reducing the suffering and death caused by extreme poverty.
Second, effective altruism is a way of giving meaning to our own lives and finding fulfillment in what we do. Many effective altruists say that in doing good, they feel good. Effective altruists directly benefit others, but indirectly they often benefit themselves.
Third, effective altruism sheds new light on an old philosophical and psychological question: Are we fundamentally driven by our innate needs and emotional responses, with our rational capacities doing little more than laying a justificatory veneer over actions that were already determined before we even started reasoning about what to do? Or can reason play a crucial role in determining how we live? What is it that drives some of us to look beyond our own interests and the interests of those we love to the interests of strangers, future generations, and animals?
Finally, the emergence of effective altruism and the evident enthusiasm and intelligence with which many millennials at the outset of their careers are embracing it offer grounds for optimism about our future.
It would be nice to have a roadmap and a good introductory guide. Given all of this, effective altruism seems like the way to go. So, why am I only a weak proponent?

Well, it turns out the world and its problems aren't quite so simple. Consider Peter Singer's famous thought experiment on the drowning child from his book The Life You Can Save (taken here from a Vox interview):
Imagine you’re walking across a park. Somewhere in that park there’s a pond. You know the pond is quite shallow, but you see something splashing in the pond. When you look closer, you’re shocked to find that it’s a small child who seems to have fallen into the pond and is flailing around because it’s too deep for this small child to stand. So, you look around for the parents or the babysitter, but there’s nobody. There seems to be only you and the child. Your next thought is, I better run down to the pond, jump into the pond, and grab the child. Not hard to do. No risk to me because the pond is shallow.
But then it does occur to you that [saving the child] is going to ruin your most expensive shoes. You’ll be up for some hundreds of dollars to replace them and other clothes you might ruin. So, you think, why shouldn’t I just walk away and not have to go to the expense of replacing my shoes? Now the question for everybody is: If somebody did that, would you think that was really the wrong thing to do? Would you think that you had done something seriously wrong in leaving the child very probably to drown? Most of the people who I ask this of say that would be an awful thing to do — it would be terrible to allow a child to drown because you didn’t want to go to the expense of buying new shoes, even if they were expensive ones.
The point of the thought experiment is to then switch to the situation that we really are in. We live in an affluent society where we often have considerably more than we need to meet all our basic needs, enjoy life, and make reasonable provision for the future. We also are living in a world in which there are millions of children who die each year from preventable causes and there are effective organizations that would gladly accept a donation from you that would increase their ability to save some of these children. So, if you’re not helping to save some of these children, then are you really all that different from the person who walks past the child in the pond?
This is a compelling story and a powerful argument in an of itself. However, there is something bigger going on here. Why is this child drowning? As an analogy for children suffering, dying in fact, on a daily basis, where are the parents? Why are these children dying when they could so easily be saved? Why are they repeatedly falling into the pond to drown? The deeper question becomes what is the institutional, societal, cultural failure that has brought this about. 

Effective altruism has a blind spot. It does not do much more to seek to correct the underlying causes of problems than do all the other na├»ve approaches to charity. It may have a better rate of attaching bandages to wounds, but they are still just bandages. 

Perhaps that is too uncharitable. I don't mean it to be so harsh. Yet the fact remains too often organizations that pass the effective altruism test are not addressing underlying causes of problems. 

It is an illusion that lives can be bought like cars. For a start, the evidence is nearly always in dispute. The alleged effectiveness of the Deworm the World Initiative—which, at the time of this writing, ranked fourth in GiveWell’s list of top charities—runs contrary to the latest extensive review of the evidence by the Cochrane Collaboration, an organization that compiles medical research data. Maybe Cochrane is wrong, but it is more likely that the effectiveness of deworming varies from place to place depending, among many other things, on climate and on local arrangements for disposing of human waste.
More broadly, the evidence for development effectiveness, for “what works,” mostly comes from the recent wave of randomized experiments, usually done by rich people from the rich world on poor people in the poor world, from which the price lists for children’s lives are constructed. How can those experiments be wrong? Because they consider only the immediate effects of the interventions, not the contexts in which they are set. Nor, most importantly, can they say anything about the wide-ranging unintended consequences.
However counterintuitive it may seem, children are not dying for the lack of a few thousand dollars to keep them alive. If it were so simple, the world would already be a much better place. Development is neither a financial nor a technical problem but a political problem, and the aid industry often makes the politics worse. The dedicated people who risked their lives to help in the recent Ebola epidemic discovered what had been long known: lack of money is not killing people. The true villains are the chronically disorganized and underfunded health care systems about which governments care little, along with well-founded distrust of those governments and foreigners, even when their advice is correct.
I consider effective altruism as a second-best solution. What would the first best be? Something as unpalatable to most as it is highly effective: economic growth through a pro-business environment that embraces free trade of all kinds and open borders in all places. 

Production vastly outworks charity. That is the way to escape poverty of all dimensions. 

It is a big world with complex and complicated problems. There is a role and a need for charity. Part of that is the moral and spiritual benefit bestowed upon the giver. Part of that is the actual good delivered to the beneficiary. 

We should strive for charity that is effective and efficient--that accomplishes the goal and does so without an unnecessary use of resources. A very big part of that is properly defining the goals long before and continually as we evaluate the options, analyze the progress, and retire the accomplished. 

The natural state of man is abject poverty. Charity does not and cannot solve that. Charity is funded from production to smooth out that which production illuminates as a temporary and undesirable shortcoming. Put another way: Charity fills the gaps we can at least hope to fill by virtue of production until production can eliminate them altogether. 


P.S. Alternatively, perhaps you're interested in ineffective altruism?


*In the debate between the terms 'not-for-profit' and 'nonprofit' I think I believe nonprofit (or non-profit) is the worse term as all entities earn profits, or at least they should. The critical distinction is what the entity can do with the profits earned and if profit is the ultimate goal.  A for-profit firm is and should be ultimately concerned with maximizing profit (we can litigate another day how Milton Friedman was completely right on this). A not-for-profit is not primarily driven to generate or maximize profit. It is driven to achieve outcomes but do so in an efficient manner (not destroy more resources than it creates). Being nonprofitable is prima facie bad since that organization is more explicitly in the pursuit of achieving particular outcomes without doing so profitably. 

Saturday, March 27, 2021

A Paradox of Choice

When well-meaning fools lament the plethora of choices we have in a free market society, they make a crucial mistake. They ignore the necessary condition for which those choices emerge and simply assume a result. 

I can imagine a very well constructed study done that proves, truly proves in a way that most all could agree, that ~99% of why a consumer chooses A versus B comes down to irrational affiliations or random luck. For example the determination of what car one chooses to buy between a Honda Accord and a very similar Toyota Camry would be shown to be nothing more than stuff like a person's prior cars happened to be Hondas or their parents bought Hondas or they buy the car they last saw an ad for or their favorite color is red and the car the dealer first showed them was red, etc.

The incorrect conclusion a well-meaning fool might jump to is that we have unnecessary redundancy in our free market economy. We should stop wasting resources on the competition because the differences between these artificial choices are illusory. Just build the Acamry and be done with it!

The fact that there are minor, subtle, and hidden differences between all such choices are lost on those drawing such conclusions. But more importantly they are making a dangerous mistake to neglect how we got to the magnificent state of the world where we have such amazing choices that a purchase decision settled by a coin flip likely leaves the consumer equally well off. 

There are no instructions from the universe for how to build the optimal mass-consumer sedan. We need a process to discover this and continually rediscover and improve upon the outcome. We need the right incentives to reward incremental success, punish incremental failure, and fully stop efforts going down a bad path. The capitalist free market is this process. It is the sine qua non for progress--as broadly defined as one can imagine it.





PS. Or maybe this is optimal?

Sunday, December 13, 2020

I Was Desperate. Honestly Afraid. And Completely Helpless.

At first it was gradual, and then all of a sudden it was acute. I could be blamed for putting myself in such a position--at least it was somewhat my fault. But live long enough and you'll inevitably find yourself at the mercy of those around you, willing and desperate to take their help, and completely without options. 

It was late. Very late. And I was on a rain-drenched highway. Tired. Unable to go farther. And very hungry. 

I hadn't called ahead because I hadn't planned to be there. But there I was on a highway in the middle of nowhere Texas. To say I was between large cities was both true and meaningless. The middle of the Pacific Ocean is between large civilizations. 

I am a strong believer in the power of the consumer--that if you shop around and negotiate, you can drive a great bargain. But I was at the mercy of the supplier--a mere price taker that night. 

A warm meal, a dry bed, a safe place. My needs were a short list. Yet not fulfilling each would be critically bad. Drive on and the risks grew exponentially. Try to negotiate a better deal, and my only options might evaporate before my desperate eyes. 

Any slightly observant person could see my position of weakness. Any slightly opportunistic person could sense my vulnerability. So how bad did it get?

Not too bad at all under the circumstances. The motel owner had stayed up late, as it turns out, just for me on the off chance I would be there in need of his accommodations. His accent made clear he and I were not born and raised in the same place. I was a stranger on his doorstep, but he welcomed me as one would a good, long-time acquaintance. I paid him $159 for a room with a hot shower and comfortable bed I would use for the next 8 hours. After, he (or his staff) would have to clean it up restocking and doing laundry. I would leave without saying goodbye. 

Before that shower, I needed food. Two in the morning is not when many meals are served as evidenced by the many closed restaurants. No one ever starves missing one meal, but it can be quite unpleasant to do so. And good decisions are not made on an empty stomach and a poor night's sleep from the same. The 24-hour restaurant made sure that wasn't my fate. I was their only customer in the 45 minutes I spent. At least three people (couldn't tell if there were more in the back) gave me nourishment and quiet companionship all for the price of $23.

The morning sun brought a new day and a fresh outlook. My car was safely waiting untouched for my departure. I grabbed coffee and a Danish set out for me at the motel before dashing out the door. A quick fill up at a gas station meant I could be on my way not needing to stop for hours. 

I felt slightly uneasy leaving so abruptly that morning. Guilty would be too strong a word, but I was dashing off having taken so much from so many who were so generous to have provided it for so little in return. I can't imagine I'll ever be back on that same highway, and even if I am, it is unlikely I'll ever stop in that little spot again. I hope someone else can do a little more someday to take care of the people who took such good care of me.





P.S. This post's story is truish. It is a amalgamation of true prior experiences in my travels for the purposes of making a point. Life is tough--use markets.

Sunday, December 6, 2020

Walter Williams, R.I.P.

 

Walter Williams, one of the greatest communicators and expositors of freedom and economics, passed away this week. While I never had the pleasure of being in his classroom, he was quite certainly a teacher to me. My first encounters with his work were reading his articles in The Freeman and his republished op-eds in the Conservative Chronicle as well as attentively listening when he would fill in for Rush Limbaugh. Over time as I became enlightened, with no small part guided by Dr. Williams, it was only his moments filling in for Rush that I would find that show meaningful.

He was a teacher directly to many teachers I have had including ones who entered his classroom avid Marxists and exited passionate free-market capitalists. 

I strongly encourage you to read Don Boudreaux's tribute to him in the WSJ as well as watch the short documentary, Suffer No Fools.

For more tributes, see this list.

May he rest in peace, and may his great work, wonderful spirit, and inspirational message live on.

Friday, August 7, 2020

What To Root For

In late summer every football fan begins to dream about the season to come with aspirational hopes for one's team and general excitement for what autumn will bring. That is every normal late summer. 

But this is 2020. So, here we go. 

I am torn as to what I should want to see happen. On the one hand I do not think cancellation of the season is the prudent choice from a health perspective. I would rather see options kept alive as the developing situation continues to play out. And this is strengthened by two underlying convictions as controversial as they may be: the health risk is generally minimal and people should have the liberty to choose for themselves what risk they wish to face. 

Note that there is a wide gulf between being completely back to a regular football season and no football season whatsoever. Minimal fans with abundant spacing and many other procedures can be a prudent compromise. No fans initially with potentially many or full fan attendance later in the season is also a possibility (keep your options alive). 

The pandemic is not completely understood, but we know A LOT more about it today than 6 months ago. And we are a lot further along all the curves including toward herd immunity. In just about every action we take we are potential externalities for our fellow man. And do remember that those run in both flavors (positive and negative externalities) and to many varying degrees. Magnitude matters. 

Are we so certain that this disease is too misunderstood, too deadly or otherwise too harmful, too contagious, and simply too terrible for people to make their own choices about exposure? For many people the answer to that question is yes, which raises interesting questions about many other activities and diseases. I do not believe the evidence supports this point of view. If we cannot have football in any manner, then how different should the rest of our lives be? Trust me, I know how some are willing and eager to answer that question. 

My threshold for the use of force is much higher than that. Like Bryan Caplan, "I accept a strong presumption in favor of human liberty. You cannot rightfully shut businesses and order people to 'stay at home' out of an 'abundance of caution'. Instead, the burden is on the advocates of these policies to demonstrate that their benefits drastically exceed their costs..."

Who am I to say an elderly man living with terminal cancer should not come to a football game? I am referring to a specific, very devoted fan and personal friend. I believe he should have the freedom to make that choice. I am a strong believer in freedom, fair dealing, and justice. 

Deciding for others is an invitation for injustice. Unfair bargaining is a method of unfairly restricting the freedom of others. All of which brings me to the other hand . . . The players.

The general data for the typical college age-person shows very low health risk associated with COVID. While particular individual players very certainly have underlying conditions or other circumstances like close contact with at-risk people, most do not. For those that do, accommodation and excuse from the risk is very much the right thing to do. 

It is not the player's health risk per se that I believe gives rise to an "other hand" concern, but rather it is the general injustice of players not being compensated with the added burden of a health concern bringing this disparity into sharp relief. 

Most people when confronted with this idea ask the wrong question--"Why should we pay players?" The correct question is the opposite--"Why should we NOT pay players?" The default presumption in a free society is that people should be paid for their labor. If you want the services of another person, you should expect to do so by reaching a mutually agreeable arrangement.

"But the players have agreed to play, and they are paid. Haven't you of scholarships?" is the typical response. That response is as wrong as it is common. That "agreement" is made repeatedly in a very one-sided deal between the individual player on one side and a very powerful buyer of services on the other--college universities. These colleges act in concert under the rubric of a pure cartel organization--the NCAA. This is not a pejorative, emotional charge nor is it name calling. It is a very well established factual depiction. And the power and extent of the NCAA is supported explicitly and implicitly by government action at every level. This shouldn't be a surprise as cartels do not withstand the inevitable forces of competition and free markets without state support.

As a cartel the NCAA and its member institutions conduct themselves as a single buyer of college athlete services--the technical term for this is monopsony. This affords them considerable economic power and leverage, which they use to enforce an arrangement that is very good for themselves at the expense of the athletes. The reason why college football and basketball programs are limited to what they can provide athletes is because doing otherwise would unleash that terrible scourge upon the Earth unto the halls of college sport purity--the free market with its evil property rights and competition. More specifically, the athletic departments and universities and all those who individually benefit financially from the current arrangement would have to share. 

The most succinct way to explain why athletes are not currently paid what they are worth is to simply ask why would NCAA regulations on what athletes can earn be necessary if they were currently earning their market wage. The more detailed way is to do the economic analysis as sports economist Dr. David Berri among others have done repeatedly

About those scholarships . . . There are two very strong arguments against the common refrain that they’re getting a college education. The first is that that college education is something they could attain anyway and do so with little to no expense. Most of these players would be eligible for need or merit-based scholarships as well as grants that would cover the cost of college. The second is that that college education is in fact not worth very much to many of them. For many people college is not the right decision. We push way too many people through the college system inside and outside of sports. For many a different route through trade school or other education or flat out immediate pursuit of a job would be a better option.

There are many other bad arguments made in defense of the system that we know. These include:

What will happen to the schools who can't afford to pay? and This will just mean that football ends at many places and only the biggest programs will survive. While a radical change may and probably will result in a lot of disruption, the market is more dynamic than its opponents' imaginations. Plenty of room exists for true amateur and other types of football aside from a professional college league. And it is very wrong to assume that Alabama, Ohio State, Oklahoma, and other blue bloods in football as well as Kentucky, Duke, Kansas, and other blue bloods in basketball would benefit from a world where direct, open payments were able to be made to players. These programs benefit the most from a limit on the very important competition dimension of wage compensation. Alabama does not hurt for the top talent in football. Paying players would be a pure expense for them with little to no incremental benefit. Oh, and are you soooooo sure players aren't already being paid in many cases. Black markets of illicit payments to athletes are alive and thriving in this world of prohibition. And they do so with all of the horrible consequences associated with black markets.

How will they be paid? Will it be a free-for-all? Will players make different amounts? I don't know and I don't have to solve this problem to be correct about much higher compensation being the rightful world to strive for. I don't know how much the local grocery employee should make. I don't know how much the CEO of Exxon should make. Hell, I am not quite so certain about how much I should make. The market is a marvelous process that reveals this knowledge to us and constantly refines it. Let the market work.

No one wants to see college kids make that type of money. While this is not true as professional sports, entertainment in general, and many other areas of life attest--IT DOESN'T MATTER. An unfair deal is not made fair because a beneficiary (direct or indirect) prefers it. 

They aren't worth that much. Supposing you have ignored the vast research in this area including that referenced above, let me give you a simple example using a different sport as this will also defeat some of the false arguments that relate to worries about other sports and athletes. At my favorite university, The University of Oklahoma, Patty Gasso is an extremely good coach of the extremely good OU softball team. Coach Gasso makes about $1.2 million per year for her services. Of her many talents, two of them relate directly to athletes--recruitment and player development. So I ask, how good do you think Gasso's OU softball team would be if she were required to randomly pull her players from the pool of all female OU students and how well would the team do if the women selected to play were redrawn at random before each game? More to the point, how much would Coach Gasso be paid in this hypothetical? To the degree players add value above random replacement we get some idea about the added value talented players bring and are worth.

Title IX completely disallows this in fact or in economic result. This is Myth #6 in economist Andy Schwarz's 13 Excuses, Not Reasons: 13 Myths About (Not) Paying College Athletes

There are other bad arguments. Many play upon our biases and jealousies. These too must be called out for what they are. Two wrongs don't make a right. Frustration that there are great rewards for great, rare talents is common but unjustifiable. There is no reason or virtue in adhering to the rules of the past when those rules are revealed to be wrong for today.

Simply put, any argument justifying the current arrangement must address the central question--why should we NOT pay college athletes.

If ever there were a season to make a change, this is it. Beyond the pandemic and all the economic and health disruptions, we of course are in the midst of an opportunity to take a major leap forward in the name of justice. Perhaps 2020 will eventually come to be remembered as the year when significant racial progress started. When old institutions were challenged and remade. When we realized it doesn't just have to be this way because it has always been this way. 

This is another example of my theory that the pandemic has accelerated already present trends. In this case we may be witnessing some version of the universities of the Power 5 conferences separating themselves from the NCAA and beginning of the dissolution of the NCAA cartel. Let us hope a new cartel does not rise in its place. My optimism for change is tempered and I know that any new result will be with its flaws. Don't let the perfect be the enemy of the good. Don't forsake progress for the fear or even the certainty that change will be flawed.

Perhaps a lost season is not required. Compromise with true pre-commitment to reform could be a way out. Let the universities call the players bluff, but also let the universities come back to the table with solutions. Make them put up contractual commitments, earnest money, and public promise of specific and explicit change. The road map at this point of the journey is quite blurry and very undecided. The most we can expect is to have a destination, boundaries for the eventual route to be found, and a burning of the bridge of retreat once the journey begins.

That is what I am rooting for.

I stand with the players. 

Saturday, May 2, 2020

The Competitive-Efficiency Paradox

A more competition-friendly society will be more efficient (extract more wealth from a given level of resource consumption) which will make it wealthier which will allow it to have more inefficient production. For example, my ability to more cheaply purchase furniture from the finest woodworking craftsmen in the world allows me to myself dabble in woodworking at an uncompetitive, amateur level.

There are two sources of this effect:

  1. My own wealth growing--call this the personal-income effect.
  2. Society's wealth growing--call this the production effect.

I am generally concerned here with the second of these; although, the first is a derivative of the second thus it is in play as well. There are countless examples throughout culture and industry.

Think about this in capital markets. In the past few decades retail-investor trading costs in stocks have plummeted to now be explicitly zero. (Note: if your broker is still charging you a commission for trades, you might need to explore your options.) This massive reduction in cost has allowed a lot more trading to happen--both more traders especially amateurs and more frequent trading. Did this result in increased price-discovery efficiency? Probably some up until a point. But the next new person trading AAPL (Apple Corporation's stock) probably is not bringing new insight into the market. More likely that person is lowering average accuracy ever so slightly. Otherwise, why weren't they trading before this point There is probably enough liquidity in Apple stock so that is not a benefit of an additional trader's trades either.

Here we are suggesting another aspect of this paradox: without easy market entry/exit, we cannot maintain competitive markets. Yet, the next entrant into a highly competitive market is probably likely to be uncompetitive. Ban additional trading or traders for Apple stock and you will unravel quickly the efficiency we have come to enjoy in this highly-competitive market.

Back to the original paradox, is there more efficiency or less? To resolve the problem we should consider it as a continual process as opposed to being linear and finite. We should also expand our understanding of what ends we are achieving. The socialist's fallacy would be to look at two firms both producing cereal and declare this inefficient. "Obviously we could eliminate the duplication as well as the advertising costs by combining the firms," they would proclaim. But this would break the very process that allows for the desired efficiency (higher and higher production at lower and lower cost).

Imagine how disastrous a true socialists should view a marketplace like Etsy. Here the line between hobbyist and profitable craftsman is magnificently blurred. Magnificent because it is the essence of a culturally and materially rich society where experimentation is both allowed and enabled. A society that embraces competition necessarily invites dynamism. This is a foundational principle and an essential characteristic of growth. It is Schumpeter's creative destruction. It is a gift not a curse.

Wednesday, April 1, 2020

The Defining Debate of Our Time

The most important debate we should be having and must have eventually is under what circumstances, to what extent, and by whose authority shall we "lockdown", "shutdown", "shelter-in-place", "stay home", and otherwise stop allowing others to live life.

I applaud those thinking critically about this. We need more. Here are some examples:

Roman Pancs via The Big Questions

John Cochrane

Arnold Kling

The Reason Roundtable - this is where I really expect a long-term best efforts, and this might finally be The Libertarian Moment.

Tuesday, March 24, 2020

Stupid Questions Can Yield Brilliant Results

Consider:

  • Are some populations less susceptible to (severe) infection?
  • Is there a genetic, cultural, experienced condition that could be used to thwart the virus? What about dietary practices?
  • Does a person’s specific pH level factor into infection and symptom risk?
  • Should we expect latitude or altitude to help especially in regard to humidity and average temperature?
  • How would a plumber fix a leak behind a wall without ripping down the wall?
  • What counterintuitive action might aid treatment and recovery? Forced activity? Forced suppression?
  • Is quasi-herd immunity the next line of defense—i.e., identifying those with antibodies or simply recovered people and having them be the non-social distancing economic/logistical conduits for a while.

THIS IS JUST A PARTIAL LIST! We need everyone adding to it and (responsibly) acting on it in the real world.

Imagine going back in time to 50, 100, 500 years ago and asking dumb questions:

  • Are we sure we should drain the ill person’s blood to release the bad humors? (no)
  • Maybe a severe sunburn will cure this fever? (no)
  • Perhaps a small, very small, creature is causing this? (yes)
  • Maybe interaction with lots of people including those in outlying areas is a problem? (no)
  • Should we wash our hands between patients? (yes)

In the midst of COVID-19, we need lots of experimentation. We need to harness and leverage creativity and experimentation. The private sector working in a free market is unmatched in this capacity. Frankly, a catastrophe-risk, global threat is no time to rely on government. In the current context this includes everything from suppressing and replacing the FDA to “radical” ideas like not nationalizing supply chains.

For every challenge to a medical practice, prescription, and diagnosis we have to ask a critical question: Is this bloodletting or is this hand washing?

From truly dumb questions we can derive amazing successes.

Sunday, March 15, 2020

Emergency Situations Call For Proven Failed Policies

The pandemic of the novel coronavirus (SARS-COV-2) is upon us. But rest assured; our fearless leaders are here to help by making sure we keep reality at bay. I'm talking about an old favorite of head-in-the-sand, wish-it-all-away virtue signalers--price gouging laws (aka, price controls).

Because it worked so well exactly never but makes those who don't like an certainly very bad and difficult (but nevertheless necessary) change feel like something is being done, we shall inflict self harm.

Let's turn this into a partial list of things to remember about price gouging laws:
  • Price controls that limit market clearing prices don't change the reality that suddenly and acutely certain goods and services are more scarce--demand has risen while supply is temporarily mostly or entirely fixed.
  • They don't allow us to efficiently allocate goods. I hear you cry, "But what pray tell is so great about efficiency in a crisis?!?" Okay, okay, I sneaked in some technical jargon. When economists speak of efficiency, they are sorta saying how can we do the best for the most. We have to get what we have (water, ice, lumber, medical supplies, etc. depending on the disaster) to those who need it most. Most is key. While we always want to satisfy this to the best of our abilities, in a crisis it becomes crucial. What substitutes do we have for allowing prices to gauge who wants/needs it most? We could use:
    • First come, first served
    • Personal, arbitrary preferences
    • Non-price competition (to the beautiful, the rich and powerful, the special interest, etc. go the spoils)
    • Government or other authorities trying (honestly trying) to determine who should get what (more on this fantasy world below)
  • All other methods listed above have SUBSTANTIAL costs associated with them. And there is very little reason to believe they would outperform the price dimension. They are all subject to manipulation (both malicious and innocent; intentional and accidental). They waste resources including time when resources are especially scarce. They encourage hoarding and black markets (more below). The best they possibly can do is match the outcome price would achieve while avoiding some of the dreaded downsides of allowing prices to rise. But just how bad and realistic are those downsides?
  • The downsides to letting prices rise to the new equilibrium levels are hypothetical straw men. If you are worried or distressed by the idea that someone, somewhere will profit off of a bad situation you need to realize that is a reflection of your own envy and a mischaracterization of who actually is in a position to provide goods and services. If you are worried that only "the rich" will be able to get the precious thing(s), then you are ignoring the fact that "the rich" always will have access, ignoring the charitable impulses of most everyone including those with more wealth, and ignoring that your wrongheaded description of "the rich" still leaves "the not rich" without access--store shelves get emptied when prices don't rise properly (see the Art Carden link at the bottom).
  • Black markets will spawn and propagate where markets in the light of day are prohibited. If you think you are ending the high prices "problem" by stopping prices in stores, etc. from rising, you are woefully naive. Those same "greedy" people who would otherwise raise their price up to the market-clearing, too-high-for-your-comfort level will simply take the items off the shelves and sell them in the alley at a more reasonable (given the new economic reality) level. And who do you think is buying in the alley? I can assure you, it is not the Boy Scouts.
  • Demand is not the only curve that can change. Supply very crucially can and will if we entice it. As also indicated in the next bullet point, one must answer the always important question: "And then what?". Allowing prices to rise sends signals literally worldwide that scream: "HEY, STOP WHAT YOUR DOING! THOSE [goods and services specific to the given situation] ARE DESPERATELY NEEDED ELSEWHERE. Help us reallocate them there. And help us make more of them!" The Mike Munger links at the bottom have a lot on this very important point. In a dire situation I don't just want some (water, medicine, etc.). I want all we can get including that for which it has not yet been economical to access/build/develop. I want the best pharmaceutical firms and minds working on a vaccine today--not just the most altruistic. I want the best doctors out of their personal quarantines and on the front lines--not just the most altruistic or frankly those with lower opportunity costs. If you have a severe, acute, and emergency back injury, you don't want to be paying only enough to entice a chiropractor to help you.
  • Think past the first level--there are strong incentives (social and economic) for businesses to not allow prices to fully rise or to themselves supply the charity we would want to make sure those without means can get the goods and services they truly need.
  • It is a very bad way of forcing charity as it imposes the cost of charity on those supplying goods and services as well as those who otherwise would have access to those goods and services. Think of the guy who really needs ice for baby formula or a nearby hotel room to keep his job but who showed up later than the guy who didn't need those things so badly but wasn't deterred from taking them because the price wasn't giving him the crucial information that somebody else needs it more who isn't yet here to say so.
  • It is immoral as it denies the property right that the owner of the resource has and it disallows her from most easily finding the person who needs it most and it punishes her for having been there in the first place to supply it. In a disaster we want the church to have been built and maintained for Easter Sunday. That is expensive. One way to get that insurance policy against pain in a disaster is to allow those who bear it 99% of the time to reap the reward for having bore it. 
  • Lastly, you want to substitute a market process with a government process in a time of desperate need. Do you really, really, really think those in government are in a better position (access to knowledge, incentives and feedback effects, corruption temptations, organizational structure, etc.) than the market to do the job? I would not trust a group of (non-government) people to have the judgement, knowledge, and ethics to dictatorially make the best decisions. Why would that change for those same people if I simply put them into a government system?
Links to more thorough sources:

Wednesday, January 22, 2020

A Radical Idea

I'm going to propose something that is completely crazy. . . Hear me out on this.

I think we should get the government completely out of the manufacturing and distribution of automobiles. We should fully and completely privatize autos.

I know, I know, this sounds crazy. But I truly think that the free market can best provide automobiles for people.

Oh, I hear your complaint, "But Steve, you're crazy. Many people cannot afford cars." As hard as might be to conceive, I believe the free market could do a much, much better job. I also think that we should give people the trust and respect and dignity by expecting that they can actually make the best choices for themselves and their families. 

It is my firm conviction that if we completely got the government out of the business of making and allocating cars, say over a five-year period, that we would get cars at a third the price if not better. After accounting for quality improvements and specialization of needs met, we might see prices effectively a tenth of what they are today.

Imagine a world where cars are not one size fits all. Imagine that we have various sized trucks and sport utility vehicles. Imagine we have sports cars and family cars; we have cars that are small and highly fuel-efficient. All this would be possible if we would let the free market help people figure out what is best for them. 

And yes I hear the objection: some people simply would not be able or be willing to get themselves an automobile. I hear the concern that some people won't make great choices in this regard. For those people we can come up with other solutions. But there is no reason to totally sacrifice all of our well-being just to try to address the very nuanced and isolated problems of particular cases.

For those people that simply can't or won't provide for their own automobile needs, we can provide a bus service; we can provide funds for taxi and ridesharing; we can help organize carpools.  We see the free market work so splendidly in so many other regards. We don't question its ability to provide for our needs in so many countless ways.

Just imagine if you will some alternate universe where we had a public school system. Imagine in this crazy world we decided that because some people won't make the best choices for their children and some people very truly cannot on their own come up with the resources to get their children's educational needs met, that we force everyone to pay for a government-run, public school system. Imagine how inefficient that would be. Imagine how large the cracks would be in that one-size-fits-all world.

Even if we allowed private school alternatives, we would still be mightily restraining the free market by forcing resources into this public school system. It would also be subject to powerful political influences that would shape the school in ways that were at best suboptimal and at worst abject failure. It is easy for us to see how having the government run education would not in any way address the needs of the most needy. It is easy to conceive of how there would be very large disparities in education between the Haves and the Have Nots that couldn't be rectified and corrected because the market process would be thwarted.

All I ask is that you think about this clearly and realize the same is true of automobiles.

P.S., Thanks to Don Boudreaux and Bryan Caplan for the inspiration.

Saturday, May 18, 2019

Partial List of Serious Problems We Won't Solve


Partial list of serious problems where too many of us are unreasonably unwilling to accept the clearly best solutions*: 
  • Climate change/energy efficiency - nuclear power
  • The need for kidney transplants - a free market in organ transfers
  • Higher levels of economic growth -  free movement of people across borders
  • Too little affordable housing - allowing more housing to be built
  • Inner-city education failure - getting government out of the provision and design of schooling via vouchers (case in point of why this is on the list)
  • Health care cost - removing regulation against competition in insurance provision and required components of insurance along with removing tax advantage for employer-provided insurance (updated to add: eliminating at least FDA's efficacy requirements if not the FDA altogether and allowing unencumbered competition in health care supply (i.e., eliminating certificate of need laws, et al.))
  • High unemployment and underemployment within the underclass - remove occupational licensing (also helps in health care and legal work markets among others)
  • Social Security insolvency - sun setting of future obligations by means (for near claimants) and age (ending the scheme for all those below a certain age)
  • Drug-related crime, violence, and social disruption - full legalization of all currently illicit narcotics
  • Geopolitical conflict (aka, war) - embrace and default to pacifism
  • Taxation distortions and inequalities - Replacing income-based and all other resource-creation-based taxation with consumption-based taxation such as a VAT
*These are not necessarily completely sufficient solutions, but they are at least the most complete way these problems could be greatly alleviated.

Saturday, May 4, 2019

Help Me Find a Difference


What is the logical difference in the following statements. In other words, why should I agree with some but not all or disagree with some but not all? 

To my children’s teachers: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my garbage manI really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my dentist: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite restaurant’s cooking and waitstaff: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite college team’s athletes: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite college team’s coaches: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To tease this out explicitly - being consistent would require either market-based wages for coaches and athletes or highly-restricted wages for both. Perhaps Dabo Swinney should make as much (and only as much) as the lowest-paid college football coach.


Also, arguments about the "competitive market" being an unrealistic ideal compared the "real world" are not relevant for the point I am making here. Yes, there are all kinds of problems with wages being less than optimal from an idealized competitive market perspective. So one could easily use this same implied argument to rally against the state's monopolistic control of education, cronyistic contracts for municipal sanitation, medical and other occupational licensing laws, minimum wages, etc.

Saturday, April 15, 2017

The Cure for What Ails American Trade

Trump wants to “win” international trade, and he is considering renegotiation of finalized deals and taxes (for imports) and subsidies (for exports) to accomplish the feat. Those won’t work. Here is what will.

You have to make America lousy, again for the first time. Cue the action plan—do them all for the full interactive effect (links are in some cases NSFW):
  1. American assets are too attractive to foreigners. Require that U.S.-based assets cannot have more than 25% foreign ownership.
  2. The dollar’s too damn high! We have to make import purchases less desirable and export sales more desirable. Inflation is the tool for the task. Announce and begin immediately paying off all U.S. government liabilities (interest, salaries, and debts) with newly created money. Hey, we just cured the national debt as well. 
  3. Rates of return are too good. Increase taxes especially on savings/investment. Take the current rates, and double them.
  4. Importing is too easy. Prohibit customs processing for imports on days that begin with the letters “W” or “T” (for “Win Trade”).
  5. Reduce property rights. The security investors enjoy knowing that American assets are relatively secure in title and protected from theft and abuse is making investment in America too desirable. Start with strong asset forfeiture confiscation and regulation which effects de facto takings. 


This is just a start. If we really put our minds to it, we can certainly screw this place up.

P.S., I can’t believe I just linked to Krugman. See what Trump has done to this country!

Wednesday, January 25, 2017

Walls? Walls! We don't need no stinkin' walls!

Partial list of nations and empires with famous walls:

China: The Great Wall
Germany: Berlin Wall
Israel: Israeli West Bank barrier
Roman Empire: Hadrian’s Wall
Roman Empire: Walls of Constantinople
Jerusalem: Western Wall (AKA, Wailing Wall)


Partial list of great American bridges.

Golden Gate
Brooklyn
Chesapeake Bay
Seven Mile
Rio Grande Gorge
covered bridges in Madison County
Multnomah Falls footbridge


You can argue about which actually make it in the list. Name the great American walls. The Vietnam Wall is the only one that comes to my mind--a wall very different than walls as we think of them.

We have always been a nation that built bridges. Freedom works. Trade works. Immigration works.

Sunday, December 20, 2015

Highly Linkable

Let's start with a trip out of town. Got your playlist ready? Sherman, to the Way Back Machine!

Read Jeffrey Tucker's sensible, thoughtful perspective on terrorism and its two great horrors.

Speaking of terrorism, here comes Adam to ruin everything. (HT: KPC)

A top candidate for the most disruptive technological breakthrough of the the next two decades is driverless (or less human driven) cars. The Atlantic has a good discussion of the two approaches driving this disruption.

Scott Sumner summarizes much of what is misunderstood in thinking about monetary economics. This is a bit wonkish, but keep in mind this: getting monetary policy correct is very probably VASTLY more important for your well-being than who wins the next presidential election. The combination of [insert the major candidate you are most opposed to] and good monetary policy is >>> [insert your favorite major candidate] and bad monetary policy. It is not even close.

The Market is a beautiful wonder, and the benefits of free exchange are truly immense. Consider as Cato at Liberty's Chelsea German points out discussing Andy George's projects how expensive a suit or perhaps a simple sandwich would be if we didn't have market exchange. When we limit The Market, we should do so with careful concern and minimal impact.

Assuming we cannot find a strongly compelling reason to prohibit an exchange, a good rule is: If you may do it for free, you may do it for money as Jason Brennan and Peter Jaworski point out. This would include some outcomes that we might at first glance find troublesome but upon further inspection would analyze to be quite beneficial (albeit counterintuitive) as Liberty Street Economics points out when considering payday lending.

One of the key ways the market works its magic is through the price system. An effective market needs an effective price system. It is a remarkable method of capturing cost. Substitutes for that system are quite inferior as in the case Arnold Kling points out discussing locavorism.

Sunday, June 28, 2015

Choice: When Less Is More

Last week I attended the annual Morningstar Investment Conference in Chicago, Illinois. Of course, I didn't wear my sunglasses (a little inside money management humor).

Just a brief observation. At breakfast the second day I commented to my colleague who had made the trip with me, "Not to channel Bernie Sanders, but I appreciate the limited selection of this morning's breakfast. At free-buffet-style events like these too many choices allow my eyes to be bigger than my stomach--and I tend to over eat."

To be sure it wasn't Venezuela-level restriction. There were the typical bran, blueberry, and banana-nut muffins, a combination of egg with cheese on an English muffin by itself, with bacon, and with sausage, a little bit of fruit, and yogurt. All coupled with juice and coffee. This breakfast was thorough and well thought out.

So it wasn't vast choices I truly wanted to avoid. I just wanted someone else making them. I wanted curation, and to my estimation that is what I received. That said, as I approached a trash can to discard my empty plate, another attendee converged with me upon the same task only his plate was mostly full. Despite not knowing me, he made plain his opinion of the meal, "What a shitty breakfast!"

Capitalism can't win. If the consumer has to make the choices, they are overwhelmed (according to the likes of Sanders). If someone makes the choices for them, some leave unhappy--no doubt spoiled by the unrealistic cornucopia that other experiences in a capitalistic system have brought. One man's curated meal is another man's shitty breakfast.

Sunday, April 19, 2015

Highly Linkable

Want to know how much better life is? Look to the Easter Bunny.

Water, water everywhere . . . before you get caught up in the hyperventilating panic, read this and listen to this. Thirsty for more? Try this and this and don't miss this including the block quote at the bottom from a reply to Mother Jones.

They weren't wanting for water at Woodstock as these rainmakers played on. (HT: Tyler Cowen)

Jeffrey Tucker blends up market confusion.

Arnold Kling offers some brief but vital points on sustainability properly considered under the wisdom of economics.

While we're on the subject of the environment, Ronald Bailey asks a great question with wide applicability, but in this case he focuses on global warming. I could make my thoughts on this a much longer post, but for now allow me to make four points:

  • Climate change is a fact! Well, yes. But that is not the debate of substance. No serious thinker believes the climate is static. Many in the environmental movement seem to take as a given that the climate should not change, that species should not go extinct, that man most certainly should not alter his environment . . . in extreme conflict with evidence and reason. This emanates from a status quo (change-hating) bias in opposition to the scientific viewpoint of adaptation. The serious questions are more subtle. 
  • It is important to understand what we can know versus what we most certainly cannot yet prove. Is the climate changing (evolving)? Yes. Are the actions of man partially responsible? Yes. Do we know how much? Not with any reasonable amount of precision. Can we make confident predictions of how the climate will be in the future? No, at best we can make a range of predictions resting on high sensitivity to a host of assumptions. Can we "solve" climate change? No, this kind of question is intellectually bankrupt.
  • There are many implications behind possible climate futures. The good news is we won't be simply thrust into one via time warp. We will have time to continue to discover solutions to various problems including adapting to climates different than what we have become accustomed to as opposed to the impractical luxury of always avoiding those climate changes. Much of Florida might be underwater in 100 years. It is not obvious that Florida as currently conceived is morally superior to things that might significantly affect Florida in the future--assuming we even can pinpoint what those causal things are. Regardless, the future generations will most likely be fabulously wealthier than we are today. They will have resources that we cannot possibly dream of to resolve climate changes. 
  • Beware top-down, all-powerful solutions. This is good advice almost always. Especially this is true when the problem is multifaceted and ill-defined. 
David Henderson has a very good grasp on freedom of association and its implications.

Here's an idea: take a super-powerful organization that is failing at two things and give them a third important task to fail at. Brilliant!

Megan McArdle shows two examples (one for the young and one for the old) where government is making systematic errors that WILL have colossally bad effects.