Tracing consequences both seen and unseen.
Justin M. StoddardEnvironmental Polylogism
Posted at 7:04 pm on March 26, 2010, by Justin M. Stoddard

Does cognitive brain function determine your belief in anthropogenic global warming? Or, rather, do your political beliefs determine your cognitive brain function? George Lakoff, professor of Cognitive Science and Linguistics at UC Berkeley would like you to believe so.

Over a span of several articles on the subject, Professor Lakoff attempts to explain what he calls global warming denial as problem of ‘framing’ the discussion; meaning, well…several things:

In a May, 2009 article on the Huffington Post titled, “Why Environmental Understanding, or “Framing,” Matters: An Evaluation of the EcoAmerica Summary Report,” Professor Lakoff says:

How the environment is understood by the American public is crucial: it vastly affects the future of our earth and every living being on it.

The technical term for understanding within the cognitive sciences is “framing.” We think, mostly unconsciously, in terms of systems of structures called “frames.” Each frame is a neural circuit, physically in our brains. We use our systems of frame-circuitry to understand everything, and we reason using frame-internal logics. Frame systems are organized in terms of values, and how we reason reflects our values, and our values determine our sense of identity. In short, framing is a big-deal.

All of our language is defined in terms of our frame-circuitry. Words activate that circuitry, and the more we hear the words, the stronger their frames get. But if our language does not fit our frame circuitry, it will not be understood, or will be misunderstood.

That is why it matters how we talk about our environment.

It’s worth it to read the entire article to really see what Professor Lakoff is driving at, here. Framing is a ‘big deal’ because it is basically the storage space where ‘input’ is translated into ‘output’. Apart from the first sentence, regarding the environment (I’ll get to that in a bit), I have no particular argument with this line of thinking since, admittedly, my knowledge of cognitive scientific theory is spotty, at best.

I do, however, know a little bit about praxeology, being a rational person (in an economic sense) who voluntarily interacts with other rational people (a society!). Where Professor Lakoff loses me (and veers off into dangerous nonsense) is when he abandons hard science for pseudo-Freudian theory.

In February, 2010, Professor Lakoff wrote the following in: A Good Week for Science (Or, What Eating Worms Reveals About Politics):

All three results follow from a cognitive science study called Moral Politics, which I published in 1996 and was reprinted in 2002. There I observed that conservatives and liberals had opposite moral worldviews structured by metaphor around two profoundly different models of the ideal family, a strict father family for conservatives and a nurturant parent family for liberals. In the ideal strict father family, the world is seen as a dangerous place and the father functions as protector from “others” and the parent who teaches children absolute right from wrong by punishing them physically (painful spanking or worse) when they do wrong. The father is the ultimate authority, children are to obey, and immoral practices are seen as disgusting.

Ideal liberal families are based on nurturance, which breaks down into empathy, responsibility (for both oneself and others) and excellence — doing as well as one can to make oneself better and one’s family and community better. Parents are to practice these things and children are to learn them by example.

Because our first experience with being governed in is our families, we all learn a basic metaphor: A Governing Institution Is A Family, where the governing institution can be a church, a school, a team, or a nation. The Nation-as-Family version gives us the idea of founding fathers, Mother India and Mother Russia, the Fatherland, Homeland Security, etc.

Apply these monolithically to our politics and you get extreme conservative and progressive moral systems, defining what is right and wrong to each side.

There are a couple of ideas put forth here that strike me as wrong-headed. We of ‘conservative’ political ideology (I’m assuming Professor Lakoff is lumping anyone who is not ‘progressive’ into this realm, which, in effect, is a false dichotomy, and rather meaningless as there are plenty of Republicans who don’t have a conservative bone in their body) tend to believe that Liberalism* is a philosophy that cannot help but lead to overly patriarchal forms of government. (Communism, Socialism, Fascism, Stalinism, Maoism, etc… are all movements from the Left). That, essentially, is what we are always railing against.

*The word Liberalism is used here to describe a leftest ideology. I do notice, however, that Professor Lakoff has cleverly ‘framed’ his own language throughout his writings. He consistently refers to Liberals as Progressives (never the left-wing). Conservatives are still conservatives and often the “right-wing”. Historically aware people may find this a bit curious as the term “Progressive” was once proudly used by the most racist, war-mongering, intolerant group of people our country has ever witnessed. 100 years ago, “Progressives” got us into World War I, outlawed dissent, outlawed alcohol, banished African Americans from federal employment, purposely starved to death thousands of Germans after the November 11 armistice was signed, censored newspapers and the mails and generally acted like the worst kind of abusive parent. Not to mention their “enlightened” view on eugenics, an idea supported by a majority of scientists and politicians of the day (sound familiar?). A policy so repugnant, it led directly and irrevocably to the gas chambers in Hitler’s Germany.

I would be wary to hitch my wagon to such a term.

Secondly, this strikes me as an example of polylogism; the “belief that different people or groups of people have different forms of logic.” This is a collectivist idea most famously used by Karl Marx when he referred to proletarian logic vs. bourgeoisie logic.

Ludwig von Mises addresses this form of polylogism in Chapter 2 of his book, Human Action:

Marxian polylogism asserts that the logical structure of the mind is different with the members of various social classes. Racial polylogism differs from Marxian polylogism only in so far as it ascribes to each race a peculiar logical structure of mind and maintains that all members of a definite race, no matter what their class affiliation may be, are endowed with this peculiar logical structure.

There is no need to enter here into a critique of the concepts social class and race as applied by these doctrines. It is not necessary to ask the Marxians when and how a proletarian who succeeds in joining the ranks of the bourgeoisie changes his proletarian mind into a bourgeois mind. It is superfluous to ask the racists to explain what kind of logic is peculiar to people who are not of pure racial stock. There are much more serious objections to be raised.

Allow me to rewrite that last paragraph in more modern terms, with apologies to Lugwig von Mises:

There is no need to enter here into a critique of the concept political belief as applied by these doctrines. It is not necessary to ask the Progressives when and how a leftist who succeeds in joining the ranks of conservatism or libertarianism changes his liberal mind into a conservative/libertarian mind. It is superfluous to ask the Progressives to explain what kind of logic is peculiar to people who are not of pure progressive thought. There are much more serious objections to be raised.

In any case, this is all a pretext. To get back to the original intent of this article, what astonishes Professor Lakoff the most is the simple fact that there are individuals out there who are skeptical (he uses the blanket term ‘deniers’) of anthropogenic global warming.

Professor Lakoff is further quoted in this article:

“It relates directly (to global warming) because conservatives tend to feel that the free market should be unregulated and (that) environmental regulations are immoral and wrong,” Lakoff said.

“And what they try to do is show that the science is wrong and that the argument is wrong, based on the science. So when it comes back to science, they try to debunk the science,” Lakoff said.

On the other hand, he added, liberals’ cognitive process allows them to be “open-minded.”

“Liberals say, ‘Look seriously at the science and look at whether people are going to be harmed or not and whether the world is going to be harmed,’” Lakoff said.

Lakoff, however, said that “99.999 percent of the science is final” on global warming and, in fact, the term “climate change” should be changed to “climate crisis” to more accurately describe the phenomenon.

“Climate crisis says we had something to do with it and we better act fast because that’s the reality,” Lakoff said

There are plenty of excellent reasons to be highly skeptical of Professor Lakoff’s claim that “99.999 percent of the science is final”. (How do you empirically come up with such a statement about science, anyway?). Trying to explain all this away by claiming conservatives and liberals are cognitively different smacks of metaphysical desperation.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Environment
Comments: 4 Comments
 

Jen PierceThings that might seem obvious
Posted at 3:56 pm on March 26, 2010, by Jen Pierce

Eric suggested that, as a relative newcomer to libertarian philosophy, I have some recent insight into the process that the average person goes through when considering these ideas for the first time. I’m sure everyone’s introduction to libertarianism is different, but having now been on both sides of the debate, I wanted to share a couple of common themes I’ve noticed in people who are having their first conversations about free-market policy. The first is something I run into very consistently, which I’ve come to know as the “oh… you don’t eat babies after all” moment.

The number one concern I hear from people with left-leaning viewpoints is that, under a capitalist system, the poorest and weakest among society will be overlooked. The homeless, the sick, the mentally challenged, and the poor in general will have no resources, no assistance, and no hope. The core of the libertarian response to this, as I understand it, is that if private charity is allowed to take the place of government programs, they will be run more efficiently and, even if the overall financial contribution is smaller (as compared to current government spending on public aid programs), more aid will be delivered to more people. I’m speaking in extremely general terms here, because there are infinite rabbit holes into which one could plunge at this point. I will, however, share one specific example of this line of thinking, from a recent conversation about health reform. A friend of mine with a four-year-old daughter is ecstatic about the new health care bill, because she previously had problems with doctors refusing her daughter treatment because they were afraid it wouldn’t be covered by insurance. She stated, “Anyone who is opposing health reform would change their mind if they’d seen my little girl suffering from double pneumonia last winter.”

This is a great example of a fundamental misperception about economic conservatives. Lots of people assume that anyone who is arguing for less government intervention in business is just out to make as much money as possible. Which might be true, but they fail to understand the deeper premise – that we care just as much about that sick daughter, and because we understand that the market is the fastest way to get the most benefit to the most people, we campaign passionately to leave the market unhindered, to let it do its job. They don’t understand that profit represents a well-run business effectively providing goods and services. And, who can blame them? The average person hears stories about corporate corruption or abusive monopolies, chalks it up to greed, and decides that consumerism is evil, to be avoided at all costs. They don’t necessarily look deeper, to understand the role that lobbyists and government intervention play, or to realize that more freedom for business leads to more competition, which is always in their best interest.

This is old hat to everyone reading this, which is all the more reason to occasionally remember that this is not the way most people see the world. The majority of people aren’t used to thinking in terms of mathematical systems. Emotion, sympathy, and a personal sense of what seems fair are decision-making tools that can pretty much get a person through his day, for pretty much his whole life. And, someone who is concerned that libertarian policy ignores the human equation can easily find reasons to be concerned. Respectable economists make serious arguments that real-world data should be completely ignored when deriving policy. Asking someone to embrace, or even to consider, this idea is demanding that they make some fundamental changes in their understanding of how the world works.

Speaking from my own experience, I find that I’m a lot more inclined to trust a libertarian argument if a couple of things are true. First, I like to hear concessions up front. In the absence of government health care, will there be a section of people who are too high-risk to insure and will be dropped? I want to know about them. I’m still willing to consider that this might be superior to a government-run system. Too often, I find that libertarian crusaders try to gloss over uncomfortable points like this; the more energy I have to spend rooting out the worst-case-scenario, the less I trust or care about their argument.

Secondly, and this is my primary point here – when talking to someone who is really new to this stuff, it’s essential to establish common ground. Everyone basically has the same goal here; provide as much as possible for as many people as possible. Create circumstances that allow for the best quality of life you can have. For libertarians, there’s the additional criterion of interfering with others’ definitions of “quality” as little as possible. But the point is, without spending a fair amount of time seriously considering these ideas, people may legitimately not understand that libertarians don’t burn down orphanages and eat babies in the name of profit. It’s worth taking some time to emphasize the seemingly obvious common goal, and then stressing that we are simply arguing for a better way to get there.


Filed under: Uncategorized
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Christine HarbinThe Lesson Applied to My Car Window
Posted at 9:22 am on March 26, 2010, by Christine Harbin

On Monday I experienced Bastiat’s parable of the broken window in the most literal sense: somebody smashed the front passenger window on my car while it was parked in the (gated!) lot at my apartment. I played in the role of the storekeeper whose window was broken, and I can attest that no wealth was created for myself or the Saint Louis community.

Ce qu'on voit!

In chapter 2 of Economics in One Lesson, Henry Hazlitt explains:

Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit.

When I went to bed that night, I had a passenger car window again, but I was about $500 poorer. In addition to the $250 that I spent on replacing the car window, I will have to pay to replace the items that were stolen too, including: a 16 GB ipod Touch ($250), a universal car phone charger ($18), ipod case ($15), the cost of gas for driving to auto glass changer, and lost productivity. Like the storekeeper, I have to be content with the window only.

If we think of him as a part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

In my case, the Saint Louis community lost an Apple iPad that would otherwise have been bought. Ce qu’on ne voit pas. If I didn’t have to pay to replace that window, I would have used the money to buy one. Or, I could have saved the money in my bank account, where it would generate interest, and I would spend it at a later date. I cannot spend the money that I spend at the window repair shop in any other way.

Some people would argue that, had nobody broken my window, the window repairer would be out of a job. This is fallacious because it ignores the fact that the window repairer could develop skills or apply his existing skills to a different activity that would actually encourage productive economic growth. He could work at an Apple store, for example, and sell me an iPad.


Filed under: Economic Theory, Unintended Consequences
Comments: 1 Comment
 

VromanGross Misesian Product
Posted at 11:20 pm on March 25, 2010, by Vroman

In Human Action and elsewhere, Ludwig von Mises asserts that GDP and other aggregate economic data are meaningless; furthermore that economics is categorically not an empirical science; no economic experiments are worthwhile, and no intertemporal comparisons between transactions can be validly made.

Mises insists that the whole of economic theory can be derived logically from correct standard axioms, without relying on real world proof.

Mises makes the analogy between Galileo rolling marbles down ramps with consistent results, and then converting this data into laws of motion; as compared to the very muddled, psychologically sensitive, reality of human behavior, whether concerning finances or any other matter.

However, if I were a 17th century Natural Philosopher, I could take Galileo’s marble data and then come up with an answer for the speed of light, and be derided for using ‘meaningless’ numbers since I would surely be orders of magnitude off, and would be missing entire categories of subtleties like the reference frame paradox, etc.

The point is that there is a definite speed of light, though the tools available at the time were grossly insufficient to precisely nail it down. Just so, I hold that it is possible to empirically prove economic theory, we simply are not able to cost-effectively achieve the necessary level of precision. Because economic theories can only be demonstrated by people practicing them, and if the theories are incorrect, those people will endure possibly extremely miserable conditions. And then you get a bloody coup de’tat and your whole experiment is ruined. Thus it is not feasible to run strictly controlled nation-wide econ experiments, though not necessarily impossible.

On the other hand, I certainly am sympathetic to the Misesian conclusion that economic data should not be trusted currently. The problem with economics as a science is that it directly impacts the standard of living of those espousing competing theories. Select groups of people have much to gain or lose from which theory is put into practice, so have huge incentive to twist data, if that is the deciding framework. If we’re trying to determine the speed of light via marbles and the naked eye, and group X somehow stands to win a free ride in life, depending on the answer, they will come to a different conclusion than scientists genuinely interested in c for its own sake. So group X shows up to conferences with skilled lobbyists and a propaganda barrage to confuse the debate among laypeople, and insert tremendous amounts of unnecessary emotional morality play theatrics every step of the way.

Thus in practice I am a firm supporter of Mises’s idea that economic theory should be provable by internal logic, and outside data isn’t necessary, but only because this is the best we can do at the moment. While I certainly appreciate the manipulability and questionable methodology of CPI and such, I disagree with Mises that such numbers are fundamentally unknowable. In the long run the transaction costs for data collection will diminish. For example, as online commerce becomes an increasingly large part of total economic activity, it will be cheaper and cheaper to number crunch the whole of human transactions, and eventually come up with “real” real GDP, et al.


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Lee SharpeCurrency Devaluation
Posted at 3:34 pm on March 25, 2010, by Lee Sharpe

A recent NPR podcast discussed how Paul Krugman and other economists are criticizing the Chinese bank for increasing the supply of its own currency, thereby deflating it relative to the dollar and other currencies.

As the podcast correctly evaluates, the result of this is that Chinese exports are cheaper to consumers in other countries, and goods China imports are more expensive for consumers there. Chinese exporters understand this phenomenon all too well, and realize they are going to increase their market share and profit if the currency is devalued, and probably lobbied the Chinese government to make it happen in the first place.  Chinese politicians and the general Chinese public can feel great about this wonderful plan to increase Chinese industry and provide jobs!

Naturally, some in the United States are upset because American producers of the same goods are now at a competitive disadvantage with Chinese producers, costing the American producers money and costing them jobs. Sounds like the United States government needs to do something about this, right?  You’d certainly get that impression from listening to the NPR podcast.

Alas, this evaluation is exactly what Henry Hazlitt warns about in the lesson from which this blog derives its name.  It ignores the other results of China’s actions. Chinese currency devaluation means that Chinese goods are cheaper in the United States.  This is wonderful news for American consumers!  (And, for that matter, everyone else in the world except China, but I’ll focus on the United States.)  Meanwhile, Chinese consumers are forced to deal with more expensive imported goods into China.  American consumers are now helping the U.S. economy more, since they can buy more goods with the same amount American money, creating employment to meet the new demand.  Conversely, Chinese consumers will be buying fewer goods with the same amount of Chinese money, meaning that domestic industries in China (Chinese producers selling to Chinese consumers) will be hurt, which is worse for both parties. This is because devaluing currency is really inflation, and this is what inflation does: makes goods more expensive than they otherwise would be, slowing economic growth.

Why is the Chinese government devaluing its currency, then, if this is so bad for them?  Because those to whom the currency devaluation benefits (Chinese exporters) favor it because they stand to profit substantially from it.  Therefore, if they believe the government will go along with them, they have every incentive to lobby the government to help them.  The politicians, meanwhile, even if they understand the economic realities of the situation (which is unlikely), have on the one hand a small number of lobbying exporters who are helped a great deal, and many consumers who in the aggregate are hurt a great deal but individually are hurt comparatively little, and therefore have no real incentive to counter-lobby.  This means that the politicians have the incentive to not anger the only group with substantial individual stakes, while taking the economically correct action likely won’t anger anyone.

The United States taking a “retaliatory” measure (by deflating the dollar) to balance out the Chinese action is a road to disaster for the exact same reason that it’s a bad idea for China to do it for itself. If China wants to devalue its currency, the United States should be happy it has access to cheaper goods allowing it to more easily grow its economy, and not damage its own economy by doing the same.


Filed under: Economic Theory
Comments: 6 Comments
 

Justin M. StoddardWe Are All Children, Now
Posted at 12:46 pm on March 24, 2010, by Justin M. Stoddard

Like I said yesterday, when everybody is responsible for everybody else, the logical outcome is, well, this:

Proposal to ban toys in unhealthy kids’ meals

“One in three kids are overweight or are obese, and we’re finding out more and more that if you’re obese as a child, you’re going to have health problems your entire life,” said Yeager.

In an effort to combat the nation’s epidemic of childhood obesity, Supervisor Yeager is proposing Santa Clara County create an ordinance regulating fast food restaurants’ ability to offer toys or other incentives with kids’ meals.

“Ten out of 12 meals that are associated with the promotional toys are the high-caloric, high-fat, high-sodium meals,” said Yeager.

No empirical scientific data is alluded to. We are to take it at face value that giving toys away with children’s fast food meals is…bad. According to Mr. Yeager, it’s bad because these meals are “high-caloric, high-fat, high-sodium meals.”

Here’s a list of proposed questions for Mr. Yeager:

-What scientific studies have been conducted proving a correlation between fast-food toys and childhood obesity?

-If no scientific studies have been conducted, are we just talking about a feel-good, anecdotal trope, here?

-What experience to you have, personally, with the science of nutrition and obesity?

-What other items that are ‘bad for you’ are you willing to ban?

-Do you feel you have a right in assisting me in determining the choices I make for my children?

-If yes, why?

-Do you lay awake at night, fists clenched, with the knowledge that somewhere, somebody is enjoying themselves beyond your scope of control? (My apologies to H.L. Mencken).

The article ends thusly:

Supervisor Yeager expects such a public health ordinance banning fast-food toy incentives could draw a challenge from the California Restaurant Association, but that it would legally fall under the health and safety codes.

If it is passed, this would be the first such legislation in the nation.

It will be the first, but it most assuredly will not be the last. We are all children, now.

[Cross-posted at Shrubbloggers.]


Filed under: Health Care, Nanny State, Unintended Consequences
Comments: None
 

Wirkman VirkkalaThe Giffen Weed
Posted at 12:27 pm on March 24, 2010, by Wirkman Virkkala

John W. Payne’s contribution, yesterday, on this very blog, “More Bans Won’t Deter Use, but Will Increase Costs,” raises a serious issue directly tied to the theme of this blog. The issue is Supply and Demand — that is, the working out of incentives and disincentives throughout the vast network of individuals that makes up society.

People sort of understand that if you raise the price — or, by legal interdiction, radically increase costs — of a good, use of that good should go down.

This is, after all, a standard economic notion. Very basic.

So, what is working against this? I mean, in the case of marijuana we have an economic good that could be nearly free (it grows easily almost anywhere; it requires little complicated processing — even stoners can learn how to nurture and harvest the psychoactive agents in the plant) but has been raised in price because of legal actions by the federal government and all of the states. Still, despite the vast network of state agents directed against the plant and those who use it for pleasure, usage has remained fairly steady, and, by long trend, has grown. Why?

The cost rises and the usage rises? This defies economic law, you might say.

Mr. Payne writes as if it were obvious that this should be the case. And he has reason to: Experience. This has been the modern experience, and not just with marijuana.

But what of economic theory?

The standard answer is that marijuana is an inelastically demanded good. That is, it is so high on some people’s value scales (demand schedules, if you must) that increases in cost to obtain the good do not deter consumption. Indeed, marijuana may be that much-discussed rarity, a Giffen Good, an economic good that, with increases in price come increases in purchases.

Giffen goods, an anomaly in simple price theory, occur because of income effects. Limitations of income (or , more broadly, resources) mean that, if a highly valued good increases in price, lower valued goods must be forgone to maintain satisfaction from that higher-valued good.

The trouble with understanding such goods is psychological. Most of us do not attribute as much importance to the good in question as some few do. I, for instance, drink less alcohol as the price goes up. I like my whisky, anisette, port, and the occasional glass of wine. Sure. But not enough to continue to buy them in the same amounts when their prices rise. I prefer a cold Diet Coke™ or a cool glass of water. And when my income goes down, I swap the Coke for more water. A standard behavioral scenario.

And most people are like me. They cannot imagine buying more of a luxury like a psychoactive pick-me-up (or put-me-down) like alcohol or marijuana, and so they continue to give credence to the idea that prohibition of such goods makes sense.

But prohibition does not make sense if they are, in fact, Giffen goods. Not to everybody, but some.

And then we hit some interesting social factors not often discussed in economics: The divergence of markets by social stratification. Making a good illegal puts merchants and purchasers of the good outside the law, outside of “polite company,” so to speak. In the black market, trades are more dangerous, risk is everywhere, and representatives of law tend to be nowhere in sight.

This divorces illegal drug users from normal society, and puts them in a complete different social world. Expectations about behavior begin to change. Violence is just one aspect of this world. It is often not pretty.

And it traps some of those who enter it. They sometimes find it increasingly difficult to navigate normal society, find it harder to maintain an honest job, for instance.

But just the Giffen Good aspect has notorious side-effects. If you buy more drugs because the drugs have increased in price (because of the War on Drugs), then your income does not allow many other things. Like, perhaps, good food. Or toothpaste. Or a car. With fewer resources, you can be increasingly trapped from any possibility of upward mobility.

This scenario helps explain some of the horror we see regarding meth addiction. But, of course, to it we must add the sheer power of meth: It is the ultimate “Giffen Pleasure,” robbing other pleasures of their purchase in the human soul . . . and since life proceeds on little pleasures and little pains guiding our prudential action, those who partake of this drug can quickly ruin their lives. They don’t maintain the pleasure mechanisms that allow the rest of us to brush our teeth, comb our hair, bathe, and go to work. All the little pleasures have been burnt out.

Marijuana, on the other hand, is a much more mild psychoactive substance, though heavy users tend to reach a point after many years that mildly mimics the downward spiral often seen in meth addicts. Still, most users are moderate users.

And yet moderate users still use it, despite the possibility of getting caught. Indeed, people in all walks of life use it. What gives?

Here we have a market maintained, I think, by a core set of people who treat it as a Giffen Good. This market allows those who treat it more casually to continue to use it. (This works rather like Early Adopters who “subsidize” tech development: Their enthusiasm for new devices funds efforts to improve technology so that, as each tech device develops over time, and prices drop, others can afford it. Similarly, core marijuana users have maintained a market, against the official suppression, allowing casual users to access it for occasional purchase.)

Apparently, the only way to eradicate the market is to eradicate availability of the plant, as meth has been mostly eradicated in Oregon, according to the drug warriors most enthusiastic about Oregon’s full-scale war on the production of same (by stringent regulation of Sudafed, a key ingredient).

Not likely, for marijuana. It hasn’t happened yet, except for short, dry periods in some cities.

To summarize: The widespread use of marijuana by enthusiastic users and casual users alike challenges the most simplistic formulations of economic theory. But economics can still, I think, explain what is actually happening, and why simplistic formulations of supply and demand are inadequate to predict the outcomes of legal suppression of drug usage.

Further, it’s worth bringing up a point outside of economics: Widespread marijuana usage by both enthusiasts and casual users, in the face of both legal and illegal violence and risk, suggests that the right to self-medicate is a “right retained by the people.” The Ninth Amendment should surely apply here.

There is an old rule of Jeremy Bentham’s that would help de-inkblot America’s Constitutional interpretation on such matters. If you cannot, without enforcement, get at least 80 percent (Bentham may have said 90 percent) compliance on a rule, then the rule is wrong, not the people. Both utilitarianism and the American Constitutional tradition suggest that marijuana prohibition is a horrendous injustice put upon American society.


Filed under: Drug Policy, Economic Theory
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John W. PayneMore Bans Won’t Deter Use, but Will Increase Costs
Posted at 10:51 pm on March 23, 2010, by John W. Payne

Early last month, Missouri Supreme Court Chief Justice William Ray Price Jr. called for reforms of our criminal justice system, including incarcerating fewer nonviolent offenders. Price argued that such changes would both decrease recidivism and save the state money by decreasing prison budgets, and he was widely applauded by editorialists across the state for his stance. However, when a bill to ban K2, a chemical used as a synthetic substitute for marijuana, received its first public hearing little more than a week later, newspapers were equally eager to support the restriction. It should not be necessary to point out that increasing the number of nonviolent offenses is not obviously compatible with decreasing the number of nonviolent offenders behind bars. Furthermore, although enforcing a ban on K2 would require spending additional tax dollars, it is unlikely to lower the rate of drug use significantly.

According to Harvard economist Jeffrey Miron, federal, state, and local governments spend more than $44 billion per year in their attempts to stop people from using certain drugs. It is difficult to determine exactly how much money is spent on specific drugs, but given that there were 847,863 arrests for marijuana during 2008 — half of all drug arrests — it is safe to say that spending on marijuana enforcement is higher than for any other drug, and far out of proportion to the dangers of a drug that is relatively innocuous in comparison to most others. Still, despite the billions of dollars spent and millions of people arrested over the years, legal restrictions on marijuana appear to have had little to no impact on decreasing its use.

Although exact statistics for the period during marijuana’s initial prohibition are impossible to come by, when it was first outlawed in 1937, its use was confined almost exclusively to Mexican immigrants in the West and only a tiny proportion of the population had ever smoked it. Marijuana use skyrocketed during the 1960s, when simple possession still typically triggered jail time across the country. As use of the drug continued to increase throughout the 1970s, some states began decriminalizing marijuana possession, indicating that marijuana use tends to influence the law — not the other way around. The 2008 Monitoring the Future Survey, published annually by the National Institute on Drug Abuse, concedes that “A study of the effects of decriminalization by several states during the late 1970s found no evidence of any impact on the use of marijuana among young people, nor on attitudes and beliefs concerning its use.” The report does go on to note that some more recent studies find that teens living in states where marijuana possession is decriminalized are more likely to smoke marijuana, but this correlation does not indicate causation. As noted earlier, the idea that higher use rates drive decriminalization is a better fit for the timeframe, and it could also be that a third variable — such as wider adoption of more socially liberal views — help to cause both decriminalization and higher rates of marijuana use.

As of 2009, 102 million Americans — a third of the population — have used marijuana, according to estimates from the Substance Abuse and Mental Health Services Administration. Almost all of them did so after marijuana was made illegal 73 years ago. Clearly, the law does not stop people from obtaining and using marijuana. Usage rates have changed dramatically over the years, but those changes are driven far more by wider social changes and shifting attitudes than by any law. Only politicians could be so vain as to believe their dictates are the guiding force in the lives of millions of people.

A ban of K2, or of any similar drug, will not stop people from becoming intoxicated in some politically incorrect way. In fact, given that K2 is being sold primarily as a legal substitute for marijuana, banning it may simply send K2 users back to marijuana use, an outcome that I do not believe the bill’s supporters intend. However, if people truly enjoy K2, no law passed by a legislature will ever repeal the law of supply and demand. Market forces will provide consumers with the goods they want — even illicit ones. Banning K2 would increase the already stratospheric costs of enforcing our drug laws, without making an appreciable dent in drug use. Reasonable people would laugh such proposals out of the legislature, but when it comes to the war on drugs, we abandoned reason a long time ago.


Filed under: Drug Policy, Regulation
Comments: 2 Comments
 

Paul JacobWe Told You So
Posted at 10:03 pm on March 23, 2010, by Paul Jacob

Say it with me: We told you so.

Over the years, I’ve tried to help citizens regain control over their prodigal representatives. Sometimes I got called a radical for these activities. An extremist. But I think of myself as a moderate, as someone promoting moderation.

In government spending, for example.

Among the most moderate of these many statewide initiatives have been what are sometimes called the Taxpayer Bill of Rights, or TABOR, initiatives. These proposals are designed to limit spending increases to a formula of population growth-plus-inflation.

Sometimes we succeeded. Too often we failed.

The consequence of our failures, of each defeat at the hands and promotional budgets of groups that called us, of all people, extremists?

Now, state after state has become what Reason magazine dubs “Failed States.” They did what politicians demanded, spent at rates far greater than moderation would allow. And now that we’ve hit hard times, and state revenues have drastically fallen, how the politicians whine! Indeed, they demand bailouts.

Say it with me, you who’ve voted for TABOR in the past: “We told you so. Lacking our measures, the states have become part of the out-of-control federal deficits and ballooning debt.”

And remember, you who opposed our moderate measures to limit state spending: You are the radicals. You are the ones who helped set our country on its current, self-destructive course.

This is Common Sense. I’m Paul Jacob.

[Originally posted at ThisIsCommonSense.com]


Filed under: Government Spending, Taxes
Comments: None
 

Justin M. StoddardUnintended Consequences II
Posted at 9:19 pm on March 23, 2010, by Justin M. Stoddard

I wrote earlier this evening about some possible unintended consequences of the newly signed health care legislation. While attending my daughter’s orchestral debut, I thought of a few more.

-An increase in the Nanny State.

I first heard this argument put forth in my Junior year at high school: “Seat belts should be mandatory because we pay for the uninsured drivers who would get hurt without wearing them.” Since then, this argument has taken on more manifestations than I care to acknowledge. We need to regulate trans-fats, salt, cigarettes, cigars, MSG, butter, alcohol, fast cars, ad infinitum…for the same reason.

It’s about to get a whole lot worse. ‘We’ not only pay for the uninsured, now, ‘we’ pay for everybody. Since ‘we’ pay for everybody, ‘we’re’ now responsible for everybody’s health.

This is in no way hyperbolic. It’s happening right now: Brooklyn Dem Felix Ortiz wants to ban use of salt in New York restaurants.

As absurd as this sounds (and we’ve all had our laugh), his reasoning is ominous:

Ortiz says his bill is designed to save lives, just like laws that ban the use of trans fats and require chain restaurants to post nutrition information.

“It’s time for us to take a giant step,” Ortiz said yesterday. “We need to talk about two ingredients of salt: health care costs and deaths.”

He claims billions of dollars and thousands of lives would be saved if salt was taken off the menu altogether.

On second thought, perhaps this consequence won’t be so unintended, after all.

-People are going to get sicker and more obese

There is good reason to believe that the fault of our country’s current “obesity crisis” can be placed directly at the feet of well-intentioned governmental interference based on incorrect science. If we can expect the government to have an ever increasing role in what we can and cannot put into our bodies (see above), it follows that people will be lead to the conclusion that the way to maintain a healthy diet is to decrease fatty foods (red meats, butter, natural fats, etc…) and increase the intake of complex carbohydrates in the form of grains (whole wheat breads, cereals, rice, oats). This is most certainly the exact wrong thing to do.

There is enough on that subject for a whole different post (one that I believe Eric will be undertaking, soon). For the purposes of this post, it will have to suffice to say that the current model (the government backed food pyramid) is based on wildly outdated and faulty science. But, even if you don’t believe that a low-carb, higher fat diet is the road to health, at least you had a choice in the matter. Doctors have slowly been coming around to the notion that low-carb lifestyles have terrific benefits. Can anyone doubt that obesity patients (and patients with Diabetes, blood sugar problems) will soon be robbed of those choices? If the government backed model is X, you can bet that when the government pays doctors who treat obese/diabetic patients that X will be the prescription. The result will be an inescapable negative feed-back loop.

-When everyone is forced to have health care insurance, only criminals won’t have health care insurance.

As snarky as that may sound, this legislation will make criminals out of a whole new class of people. It’s really rather simple. There are no provisions for those who want to opt out. If you’re a woman and you don’t want maternity coverage…tough. If you don’t want mental health coverage…tough. If you don’t want coverage at all, for reasons that, quite frankly, are none of anyone’s business…tough.

Oh, we’re assured (wink, wink) that nobody will actually end up in jail for not buying coverage, but don’t you believe them. The end result is always the same. It’s always force.

-We will see a sharp increase in mental health cases in this country.

Everyone must now be covered for mental health. This can be as innocuous as a couple of trips a year to your therapist or as serious as treatment for Schizophrenia or OCD or ADD. Psychotropic drugs (Prozac, etc…) will also be covered.

When something is universally offered at a price below market value, people are going to naturally take advantage of that something. I imagine we are going to see a rather steep incline in the number of people seen by mental health professionals. This, of course, leads to a whole separate Pandora’s Box of unintended consequences. How much more money will be funneled into mental health, thus creating another negative feed-back loop? More people see more mental health professionals, triggering more federal money pouring into the field of mental heath, triggering more people seeing mental health professionals, etc…

Also, will more people be forced to take psychotropic drugs either based on bad advice or against their will? That, too, may be a subject for a future post.

Unintended consequences are a powerful thing. I wish more people were able to think deeply about them before jumping on bandwagons, however well intentioned they may be.

[Cross-posted at Shrubbloggers.]


Filed under: Health Care, Unintended Consequences
Comments: 4 Comments
 

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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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