Tracing consequences both seen and unseen.
Justin M. StoddardA Flagging Stupidity
Posted at 4:23 pm on May 10, 2010, by Justin M. Stoddard

“The essential difficulty of pedagogy lies in the impossibility of inducing a sufficiency of superior men and women to become pedagogues. Children, and especially boys, have sharp eyes for the weaknesses of the adults set over them. It is impossible to make boys take seriously the teaching of men they hold in contempt.” — H.L. Mencken

For the most part, the out-of-proportion response to the suspension of five juveniles for wearing clothing emblazoned with American flags to school on Cinco de Mayo is all over but the shouting. Though this incident serves as incredibly effective fodder for the ever increasingly silly (and almost wholly invented) culture war being waged at the fringes, it also reminds those of us less prone to “the vapors” to recognize what’s important in cases such as these … and it is a central libertarian theme.

Sometimes we are put in the position where we feel obligated to defend stupidity.

Let’s not be coy about it. The act of donning over-the-top patriotic garb on Cinco de Mayo was an act of adolescent sophistry. Not that I’m opposed to such actions, were it aimed in the proper direction. But this was not an act aimed against an authority or unjust policy. It was simply aimed to, well … disrupt. Being such, it was impolite, uncouth, and a bit stupid. Certainly not an action that would elicit my sympathies. Until, that is, the Man stepped in and screwed everything up.

When the principal of the California school got involved, things got a bit surreal. Telling the students that they were welcome to wear such accoutrements any other day other than Cinco de Mayo, said principal immediately made himself out to be a bit of a buffoon. When he suspended the boys for the day and sent them home, he unwittingly thrust himself and the entire brouhaha into the national spotlight, proving to everyone in America what children have known for ages: A school administrator wielding arbitrary power is an irresistible recipe for ridicule.

Don’t let’s get caught in these culture war traps. What these boys did was silly and unwarranted, a feat begging to be ignored. Any intelligent school administrator would have recognized this stunt for what it was, and acted appropriately — that is, not at all. What we have now is a principal (and the school administrators who backed him) worthy only of ridicule and censure.

Race and immigration policies are tangential, here. This is about restraint (the wisdom of knowing when to wield and when to yield the power you have) and personal responsibility, two capacities for which individuals could stand to develop more.

[Cross-posted at Shrubbloggers.]


Filed under: Culture, Education, Nanny State
Comments: 2 Comments
 

Justin M. StoddardPop the Corn Bubble Burst
Posted at 7:45 pm on March 31, 2010, by Justin M. Stoddard

When first I saw the headline “Israeli MP plans ‘popcorn law’ for movie munchers’,” I was sure the corresponding article would have something to do with either taxing or banning popcorn at movie theaters because of supposed health concerns.

It turns out, the reason given was much less nuanced and rather refreshingly honest:

Carmel Shama, from the governing Likud party, plans to bring the “popcorn law” for a vote when parliament returns from its Passover break next week, the mass-selling Yediot Aharonot newspaper reported Wednesday.

“We have to put an end to this. The public should not have to mortgage their houses for a soft drink and a snack,” Shama told the paper.

A large box of popcorn usually sells for about five dollars (four euros) at theatre concession stands, more than double what it costs at a supermarket and 10 times more than it would cost to make at home.

When I say “refreshingly honest,” I mean that there are no hidden overtones here. Carmel Shama doesn’t appear to be overly concerned with health. This doesn’t appear to be a redistribution scheme, where the proceeds from taxed popcorn would go into some government coffer. This is pure, straight-up theft.

This does raise an interesting question, however. Why is popcorn so expensive at the movie theater?

Economist Steven Landsburg isn’t so sure that it is. In chapter 16 (aptly named, “Why Popcorn Costs More at Movies”) of his book, The Armchair Economist, Steven Landsburg goes through a number of explanations for why the price of popcorn is as expensive as it is. The reasons may surprise you.

Intuitively, we would guess that the price of popcorn is high because once we enter the theater, we are a captive audience. They have, in effect, a monopoly on popcorn, since most theaters won’t allow outside food onto their premises. But, as Mr. Landsburg points out, at that point, the theater has a monopoly on pretty much everything within the sphere of its influence. There are no other restrooms, for example, other than those provided. There are no other drinking fountains or front row seats, etc… And yet, all of these conveniences come gratis with the ticket price. The reason for this is easy enough. Any ancillary charges once inside the theater would make said theater less attractive to customers. In order not to lose those customers, the theater would have to charge less for the ticket price. In essence, it’s a wash.

And so it may be for popcorn, as well. We pay higher prices for popcorn in order to pay lower prices for our tickets. But, in order to make prices attractive to all (popcorn munchers and popcorn abstainers alike), a happy medium must be found. This may be a matter of one part of the theater subsidizing another. Not everyone, after all, partakes in popcorn. They are only paying for the ticket to the movie and are therefore taking advantage of those who buy popcorn at a higher price point so ticket prices can economically be lower.

Another theory put forth by Mr. Landsburg suggests that since most movie goers go to movies in groups, it follows that some of them will want popcorn and some won’t. If a theater offers low popcorn prices and high ticket prices, those that don’t eat popcorn may not want to go. The same follows, visa-versa. The trick is to get both the popcorn and the ticket prices to a level both groups can agree upon.

This is economic theory backed up by the very theater owners that would be affected by such a law:

Yaacov Cohen, the owner of one of Israel’s largest theatre complexes, said owners made virtually no profit from ticket sales and would be hard pressed to survive if food sales were limited.

“It would destroy the entire industry,” he told Yediot.

Also, as a parting shot, it bears remembrance that those who trade $5 for a medium popcorn value the popcorn more than they do the $5. Even if said bags of popcorn sold at $100 per, the same holds true. And although the New Paternalists may have something to say about that (waiting periods for high-cost items, etc…), it is still a voluntary exchange, of nobody’s business but the two parties involved.

One last unintended consequence. Carmel Shama may well succeed in making high popcorn prices illegal. If so, people will no longer have to worry about mortgaging “their houses for a soft drink and a snack”. They’ll be doing that just to buy a ticket. Either that, or a whole lot of movie theaters will be going under.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory, Market Efficiency, Nanny State, Unintended Consequences
Comments: 3 Comments
 

Justin M. StoddardNoncensus
Posted at 9:06 pm on March 29, 2010, by Justin M. Stoddard

If you’ve had occasion to listen to the radio for any amount of time recently, you’ve probably heard the slew of commercials about the ongoing Census. What you’ll hear, unfortunately, is not an explanation of the original purpose of the census, but instead a rather inane and commonly incorrect interpretation of basic economics.

The one I hear most goes something like this (and I’m paraphrasing):

Imagine you live in a growing city approaching one thousand people. Imagine a transportation system that has 3 buses. If you don’t fill out the census, how will we know if we need more buses? Do you want to be on a really crowded bus? Of course not! Fill out your census so we can know how many people live here so we can buy more buses!

I’m not as droll as the narrator of this piece, but I can attest that this is the thrust of the argument. If you don’t fill out the census, public transportation will become ineffectual because, well, apparently that whole “three overly crowded buses” in a small metropolitan area is not enough to signal to the powers that be that…”hey, we need more buses!”

Ironically, what this commercial hints at is the complete failure of centralized planning (a rather funny unintended consequence). A public transit system needs a form filled out every 10 years letting them know how many people live in the area in order to function? Really?

Would several competing, privately owned mass transit companies need this information? Of course not. Private companies pay attention to the ‘signaling’ their costumers telegraph their way. It’s not too difficult to literally SEE buses becoming overcrowded. What inferences would you draw from that observation? Perhaps it’s time to put another bus on the road?

If markets were more fully involved in supplying transit services, when people demand more buses, the market will provide more buses, until supply and demand meet at a parity. But that’s another post altogether. I just can’t tell if this propagation of incorrect economics is willful or just ignorant. Perhaps both?

Edit: Marginal Revolution just picked up on this phenomenon, independent of myself.

[Cross-posted at Shrubbloggers.]


Filed under: Economic Theory
Comments: 5 Comments
 

Justin M. StoddardRent-Seeking Potheads
Posted at 12:59 am on March 28, 2010, by Justin M. Stoddard

I honestly could not initially decide whether or not to post this, as I could not determine if it was a hoax or parody (a la The Onion). But the more I thought of it, the more plausible it seemed.

Outlaw pot farmers in Calif. fear legalization could actually hurt their business:

“The legalization of marijuana will be the single most devastating economic event in the long boom-and-bust history of Northern California,” said Anna Hamilton, 62, a Humboldt County radio host and musician who said her involvement with marijuana has mostly been limited to smoking it for the past 40 years.

Local residents are so worried that pot farmers came together with officials in Humboldt County for a standing-room-only meeting Tuesday night where civic leaders, activists and growers brainstormed ideas for dealing with the threat. Among the ideas: turning the vast pot gardens of Humboldt County into a destination for marijuana aficionados, with tours and tastings — a sort of Napa Valley of pot.

The irony is deliciously delicious…in so many ways. But, foregoing all that, this is basically an issue of rent seeking. People who deal in black-market goods are protected from the ‘legal’ market. Not only do the goods they are producing/trading have an unnaturally high price point, they are shielded from competition from the free market. If anyone can get into the pot growing business, prices will dramatically fall. Some of the former illegal growers will then be priced completely out of the market.

We see this type of rent seeking behavior every day. Groups from manicurists and hair stylists to HVAC repairmen to interior decorators insist on licensure laws as requirements to enter their professions.

Those doing the rent seeking will nearly almost always claim that these types of licensure laws are needed so that only qualified people get the job. It’s a safety issue. Or a quality issue. Or, well, pick your reason.

In truth, it’s none of those. Rent seeking protects jobs using the force of government by way of restrictive fees and time-costing measures. It protects the few at the cost of hurting everyone else by way of decreased competition, higher prices and fewer employed people. You have a limited amount of money and you want to become a florist? Do you have the right license? Have you paid enough fees and attended enough classes? Sorry, you’re now priced out of the market. Some select florists benefit; the aggregate suffers.

But back to the rent seeking pot farmers of Humboldt County, California. Not only are their actions unbelievably immoral, they’re frightfully hilarious. The whole thing reminds me of the Simpsons episode where Homer Simpson is bullied out of the chiropractic market:

Steve: [walks in] Simpson! You’re not a licensed chiropractor, and you’re stealing patients from me and from Dr. Steffi.

Homer: Boy, talk about irony. The AMA tries to drive you guys out of business, now you’re doing the same to me. Think about the irony.

Steve: [grabs Homer by the collar] You’ve been warned. Stop chiropracting.

Homer: Not unless you think about the irony.

As pot legalization becomes more likely, I would expect to see more of this type of behavior. Just remember, the behavior is equally ridiculous when applied to interior decorators or florists, or the nearly other 30% of the workforce that requires licensure.

[Cross-posted at Shrubbloggers.]


Filed under: Drug Policy, Economic Theory, Regulation
Comments: 7 Comments
 

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
 

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
 

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
 

Justin M. StoddardUnintended Consequences
Posted at 5:14 pm on March 23, 2010, by Justin M. Stoddard

It seems appropriate to start my first entry on this blog with a quote from Henry Hazlitt, author of Economics in One Lesson, which is the inspiration for the name of this new adventure.

“The most frequent fallacy by far today, the fallacy that emerges again and again in nearly every conversation that touches on economic affairs, the error of a thousand political speeches, the central sophism of the new economics, is to concentrate on the short-run effects of policies on special groups and to ignore or belittle the long-run effects on the community as a whole.”

By far, the aspects of economics I pay attention to the most are those of Unintended Consequences and opportunity costs. When Hazlitt talks of “the short-run effects of policies on special groups and to ignore or belittle the long-run effects on the community as a whole”, Unintended Consequences and Opportunity Costs come into play

Several such consequences/costs come immediately to mind when thinking of the current Health Care bill recently passed by Congress and signed into law by President Obama.

-We can probably expect new innovations in medical science to stagnate.

We can never know what amazing technology will never be invented simply because the money or the incentive no longer exists to invent that technology. This points to Bastiat’s Broken Window Theory Fallacy, which simply states that though a broken window may unexpectedly enrich the window maker, it impoverishes the person who must now replace the window. His money could have been spent on something else, entirely.

-We can probably expect a new wave of crackdowns on immigration.

Though I have some problems with Milton Friedman, he had it exactly right when he said, “You cannot simultaneously have free immigration and a welfare state.” I understand that ‘illegal immigrants’ are not explicitly covered under this new legislation, and there is a good deal of economic proof that immigration is a net boon to the economy, but we must face some inconvenient truths. There is a strong movement in this country to give millions of immigrants ‘amnesty’, meaning they will not only be in the country legally, they will be on the first step to obtaining citizenship.

Do not misunderstand me, I applaud the efforts to make this happen as I agree with open borders/immigration. However, as the majority of elected Republicans are against this, if it is passed, it will be because of the Democrats. I do not mean to be cynical here, but the legalization and naturalization of millions of immigrants as a political movement coming from the Left has to be repaid somehow. Namely, there will be millions more in the Democratic party 10 years hence.

This will cause a huge, irrational backlash against immigration. An ‘unintended consequence”. Instead of attacking the welfare state, Republicans and others from the right will score points by fear-mongering and know-nothingness. We can assuredly expect the passage of a National ID bill sometime in the near future, and that’s not even mentioning the hundreds of millions of more dollars that will go towards “protecting the borders”.

It is going to be interesting to see how this plays out.

[Cross-posted at Shrubbloggers.]


Filed under: Health Care, Unintended Consequences
Comments: 3 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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