Nuclear Proliferation: A Blessing or a Curse?
Is the nuclear proliferation a blessing? Yes it is. Why? Because things that are good for us are good for others. Terror equilibrium has been guarantor of peace in Europe during the Cold War. Without it Soviets could have a temptation to invade Europe. When there are no nuclear weapons there are classic wars, which can result in massacres comparable to the First World War. Iran/Iraq war was compared to the war between France and Germany. If both sides had nuclear weapons they would hesitate to enter the conflict, which would have saved millions of lives. Possession of nuclear weapons is a good and not a bad. Its dissemination is good and not bad. Indeed, the more countries possess such dissuasive weapon, the wider will be the territory of peace and stability, which we experienced in Europe throughout the Cold War. There have to be serious arguments used in order to prohibit certain country to use such means of dissuading potential aggressors. from http://lemennicier.bwm-mediasoft.com/col_docs/doc_55_fr.pdf Do you think Lemennicier is right here? Dan
Cost-plus financing
Do you know of any studies of cost-plus financing, especially as used by the US government in funding aerospace projects? I know this is one of the main ways NASA funds its projects and it would seem to increase the cost of any project. Regards, Dan http://uweb.superlink.net/neptune/MyWorksBySubject.html
Re: Neutral taxation?
On Thursday, January 16, 2003 4:06 AM Grey Thomas [EMAIL PROTECTED] wrote: even more than direct/indirect, you need to specify what is neutral. I don't think the definition of neutral in this context would be all that controversial. It would be one that would not impact any person or group more than any other person or group. I.e., there would be no redistributive effects from the taxation. This is what I thought Fred meant when he used the term. This is the way Sechrest defines it (p95 of the work cited previousaly and below:) -- and he's basically following Rothbard's usage here. I don't think a poll tax is neutral. That said, some taxes might cause less of a redistribution than others. Still other taxes might be more beneficial in terms of expanding production. I'm against taxation, but I don't think all types of taxes have the exact same impact. A poll tax, for example, would fall more heavily on the poor and historical experience seems to show it was used -- in the US at least -- to keep certain people -- namely, Blacks -- from voting. Therefore, it was not economically neutral, since this was a way of denying certain things to those who could not afford the tax. (You might think of the poll tax as the price of government, but that would only be the case if government did not enforce its monopoly on government services.) BTW, Larry Sechrest's essay Rand, Anarchy, and Taxes actually appeared in the 1(1) [Fall 1999] issue of _The Journal of Ayn Rand Studies_. Sorry for any confusion over that. Cheers! Dan http://uweb.superlink.net/neptune/ The factors that determine whether a family is well-functioning often are independent of the form that family takes, and have more to do with relationships among family members, dedication of the primary caregiver(s), and support from extended kin. Those sorts of considerations, and not form alone, determine how functional families are. Moreover, the form of families is often strongly a product of broader social forces, such as economic, cultural, and technological change. Most, if not all, of those changes are not reversible (nor would reversing them likely be viewed as desirable), so the real challenge is to understand how these new family forms function and to find policies that facilitate that functioning (and avoid policies that retard it), rather than hoping to turn back the clock. Any family form that creates attachment, socializes well, transmits moral rules and social norms and does so in environment characterized by love and trust, will function well. -- Steven Horwitz, The Functions of the Family in the Great Society, http://it.stlawu.edu/shor/Papers/Functions.htm
Neutral taxation?/was Re: questions about dividend tax cut
On Wednesday, January 15, 2003 7:11 PM Fred Foldvary [EMAIL PROTECTED] wrote: To achieve neutrality, unrealized gains should be taxed annually, and then we can forget about capital gains. But this assumes that taxes can be neutral. I would tend to agree with Larry Sechrest here -- viz., there are no neutral taxes. (Sechrest's position is laid out in his Rand, Anarchy, and Taxes in _The Journal of Ayn Rand Studies_ 1(2).) Do any of you agree? Cheers! Dan http://uweb.superlink.net/neptune/
Re: Dividend Tax cut
On Sunday, January 12, 2003 2:01 AM David Levensam [EMAIL PROTECTED] wrote: Fred Foldvary wrote: Too much financial capital, i.e. money, can cause a recession, by artifically lowering the interest rate, inducing excessive investment of those capital goods for which only a low rate of interest is profitable. Since intended consumption has not changed, consumers compete with investors for goods, driving up prices. The capital goods turn out to be unprofitable investments, and the diminution of investment leads to a downturn. This is standard Austrian business-cycle theory, which is why I said that too much borrowed capital can cause a recession. It also works under standard monetarist theory, with too much money driving up the general level of prices, causing a false boom, which then collapses into recession after peopel figure out that only nominal, not real, aggregate demand has risen. Actually, Austrian Business Cycle Theory (ABC) is a bit more sophisticated than that. It's closer to what Fred says above. It's not too much capital, but distortions in capital. To Austrians, capital is heterogenous not homogeneous -- not an undifferentiated blob of stuff, but a complex set. Looked at this way, certain sets of capital work better together than others. Add time into the mix and we have certain sets of capital working better than others to ultimately produce consumer goods and services. In ABC, the interest rate affects which capital structures will be chosen. In general, a lower interest rate allows for lengthier production schedules while a higher one makes for lower ones. In other words, lower interest rates allow for longer ranged planning and higher ones disallow that. The problem in ABC, of course, is not merely setting the interest rate -- else then why not have the government come in and mandate a zero or negative rate so we get increasing intensification of capital -- but having a sustainable interest rate, viz., one matching investment and saving decisions. Lowering the rate below the stock of savings -- below the natural rate creates an inflationary situation that is unsupportable in the long run -- leading to business cycles. (A higher than natural rate leads to a deflationary situation which involves a deintensification of capital.) If this were the whole story, it would be bad enough, but since capital is hetergeneous in more than just the temporal sense, the path inflation takes through the economy varies. So one can't necessarily predict ex ante how an inflationary boom will proceed. Generally, whoever gets the expanded credit first will get the most benefits from it and prices will rise in that industry first. For example, imagine an economy with 10 different sectors -- A, B, C, D, etc. Let's say industry A gets the influx of new credit first and that it buys directly from industry B while B buys directly from C and so on. Credit expansion will benefit A first, allowing it to buy more from B, driving up prices in B and, after a time lag, investment in B. B will buy from C, likewise driving up prices and investment after a time lag. This distorts the whole price structure because of the time/information lag. Since we're presuming the expansion is unsustainable, eventually there has to be a correction, but this does not necessarily recover all losses. I.e., it doesn't reverse all the damage. This scenario might be playing out now in the homebuilding industry. Low interest rates have given incentives for people to buy bigger mortgages spurring lots of new, expensive homebuilding. If the real estate boom lasts long enough to build the homes, the initial homebuilders will make a profit, but imagine a few months after that the market collapses. Later building projects will fail and also home buyers who planned to sell later will lose out and if this brings about another recession, some of them might not be able to meet the mortgage payments. Etc. There can be too much real capital invested in particular types of capital goods. Sure, because people aren't perfect prognosticators. If they were, there would be no economic problems period and no need to worry about this stuff or anything for that matter.:) To cause a recession, however, wouldn't such misinvestment have to be systemic? What would cause such systemic misinvestment--everyone making large mistakes at the same time--beyond government manipulation of the money supply? Government manipulation of the money supply -- through control of interest rates as well as reserve requirements, selling bonds, and even deficit spending (since that impacts market rates to a big extent because the government is a big debtor in most extant economies) -- is a large part of the story according to ABC. Malinvestments per ABC happen in basically the above fashion. Government interference in the money supply allows for widespread distortions in the capital structure and in planning for individuals
Re: In Praise of Pay Toilets
On Tuesday, May 28, 2002 12:25 AM John Perich [EMAIL PROTECTED] wrote: (Yes, I know, the Austrians on the list would kill me for assuming cost dictates price, rather than the other way around. But it's just awkward to state it the right way. :) ) Wouldn't it be more accurate to say that an entrepreneur must find a price above cost in order to make it worth her or his while to make the product? Of course, this is based on predictions -- that the price will be at or above the expected price and the cost will be at or below the expected cost -- which can be and often enough are wrong. I.e., a good or service won't be produced over the long run, if it can't sell enough above cost to make it worth someone's while to provide. This would apply to things like toilets where the cost is bundled with other good and services. The business owner still needs to make enough profit above the cost of the toilet to make it worth her or his while -- or, more accurately, believe this will be the case. This, I believe, captures the Austrian position, though I'm not sure if non-Austrians don't hold the same view. Any takers? Cheers! Dan http://uweb.superlink.net/neptune/ ... the goal for all art... is to explain to the artist himself and to those around him what man lives for, what is the meaning of his existence. To explain to people the reason for their appearance on this planet; or if not to explain, at least to pose the question. -- Andrei Tarkovskii
Securities analysis
Okay, since others have broached the subject of market volatility, what's everyone's opinion here on fundamental vs. technical analysis? (Maybe vs. is the the wrong connective to use here. After all, they reflect different trading styles, no?) Cheers! Dan http://uweb.superlink.net/neptune/
Re: Skeptical Inquirer-article address
On Monday, February 25, 2002 8:11 PM john hull [EMAIL PROTECTED] wrote: I'm not so sure I understand what D. McCloskey's piece is saying. When he remarks that, The result of reading 44 pages of hundreds of scientific results from the front line of applied economics was mainly that I believed surprisingly little of it, I am reminded about the old saying that new paradigms arise in science not because scientists become convinced, but because the advocates of the old paradigms grow old and die and are thus replaced by younger practitioners of another school of thought. I'be heard this bantered about a lot in philosophy of science circles, but, in one paradigmatic case, Lavoisier's oxygen hypothesis did eventually win over Priestly. In a more recent example, many doctors are now convinced that bacterial infection (by H. pylori) causes ulcers -- at least, a good portion of them. This was not the consensus a decade ago and around a decade before that, it was seen as outlandish -- except by a handful of researchers. (See Paul Thagard's 1999 book _How Scientists Explain Disease_ for an in depth examination of this particular case as well as some cogent thoughts on philosophy of science. I reviewed his earlier work _Conceptual Revolutions_ in 1996. That review is online at http://uweb.superlink.net/neptune/Concept.html) I think the claims of people going to their graves holding onto refuted ideas are a bit exaggerated. I'm sure one can find examples of such, but are there any decent studies of this? If it were true, change in any field would be at a crawl, since no one who has an established position would ever give way and only newcomers would ever come up with new positions. Prima facie, this is not what happens in most fields. In fact, it would seem the opposite is typically the case. People tend to change often -- and sometimes for, IMHO, faddish reasons. I bet the reason for the idea that people take their beliefs to the grave is probably more because of a few high profile cases, such as Einstein and his view of quantum physics. What probably happens is this. Most of us aren't part of debates outside our respective fields. I.e., we're laypeople with respect to them. So, we mostly see the high profile characters, especially the ones who make a splash -- like an Einstein or a Hawking. We don't have a context into which to put this. So, when someone sees Einstein going to his grave believing that quantum physics are fishy, it becomes easy to accept the view that people -- even geniuses -- wedded to outmoded theories. This doesn't refute the view, but it might explain should there be no confirming evidence. Cheers! Daniel Ust http://uweb.superlink.net/neptune/
Re: drink prices
On Sunday, February 03, 2002 1:49 AM Joel Simon Grus [EMAIL PROTECTED] wrote: Last night I went to a bar, and the woman in front of me ordered a large, fancy drink. It was poured, and the bartender said $13.00, at which point the woman objected. Sorry, said the bartender, once it's poured, there's nothing I can do. Why didn't she just walk? I'm sure the establishment wasn't going to a) beat it out of her or b) press charges on her. Many bars seem to have no price lists, and people generally seem willing to order without first asking how much the drinks cost. (1) Where else do people buy things without knowing the price first? (I've been thinking and have been unable to come up with any examples.) Some restaurants where some or all prices are listed. Usually, though, there's an expectation of a certain price level. (2) Why does this happen in bars? I'm not sure, but my guess is since people are likely to be having a good time and not want to be a party pooper or to be inebriated and therefore have impaired judgment, most are less likely to complain. Cheers! Daniel Ust http://uweb.superlink.net/neptune/
Re: the justification for urban planning
On Thursday, October 25, 2001 9:18 PM Ben Berry [EMAIL PROTECTED] wrote: Markets do very well at allocating goods like coffee or gasoline or clothes in the short term because of their flexibility in response to short term preferences. They don't do well in things like supplying housing in proper configurations and locations because housing is a durable good that once sold is relatively permanent (30-100 years or more). He had some statistics to argue that only a very small number of people purchase new homes and apartments. These people have strong preference for living in only *new* residences. Since they won't be living in the places more than 5 or 10 years they don't care if the place is ugly to most people or shoddily constructed. This leaves the rest of the population with only ugly and shoddy houses to choose from when they eventually need to move. Thus planners are needed to insure pretty neighborhoods, adequate transportation resources, etc. Preliminary answer -- because it's late and even I get tired every few months:) -- is that there isn't as much difference between this as one might think. Yes, houses are not exactly like coffee beans, but I've noticed most people like low quality coffee. At my previous job, people drank the coffee at work -- supplied by the business -- and said it was awful, but had more than one cup a day. Me? I will go out of my way for a good cup or coffee or do without. My only point with the above is that housing, neighborhoods, infrastructure come in high and low quality -- whether because they were built shoddily to begin with, not maintained afterward, or whatever -- too. Building good from the start, planning correctly, maintenance afterward all are economic goods. Okay, that my short answer for now. 'night! Daniel Ust http://uweb.superlink.net/neptune/MyWorks.html
Re: Excessive drinking
On Monday, September 24, 2001 2:27 AM Krist van Besien [EMAIL PROTECTED] wrote: My theory on this has always been that the incidence of alcohol overdosage goes up as drinking age increases (though I've never seen anything to support this, it seems logically sound). In Belgium, where I grew up, there is no legal drinking age, beer is part of everyday culture, and its consumption, even by young teenagers is socially accepted. Comparing the behaviour of Belgian teens to that of American teens seems to support your theory... Some libertarian thinker argued much the same in the early 1990s. I don't recall who he was -- I do recall he was a he:) -- but his reasoning was based on both comparing other, mainly European nations to the US as well as the US over the course of its history. He made the bolder claim that death by alcohol overdose is related to this. He believed that drinking oneself to death occurs so frequently in American colleges because the students have never learned how to drink responsibly. He argued that by starting to drink in the home environment and earlier, people tend to either avoid the heavy drinking phase or to get it over with much more quickly. Of course, against this notion, there is the fact that many Americans do start drinking quite young -- early teens -- anyhow. I don't know how widespread this phenomena is. I'm sure there must be lots of studies on it... Anybody else here recall that study? Cheers! Daniel Ust http://uweb.superlink.net/neptune/
Re: Handicapping the 2001 Noble Prize in Economics
On Friday, September 21, 2001 9:27 PM fabio guillermo rojas [EMAIL PROTECTED] wrote: Other nobel prizes have been awarded to individuals that weren't formally trained. Some literature winners were not fiction writers, a recent physics went to an engineer and medicine/physiology often goes to non-MD biologists. If people started thinking contribution to economic thought, then we might open it up to people in b-schools, psychologists and others. thne it might get interesting. Of course, there's no need to wait for the Nobel people to do that. You can always just form another award and hand that out on the criteria you feel are more relevant. I believe there are too many awards and too many awards ceremonies. I'm more interested in the work then the award or the awards process. I guess they are signaling devices, but some of them seem woefully distorted and I wonder what they really signal. (The Nobel Prize might be one of the better ones, in terms of this, BUT look at who gets the peace prize. In the past decade or so, it looks more like a popularity contest than anything else.) Cheers! Daniel Ust http://uweb.superlink.net/neptune/
Re: Excessive drinking
On Wednesday, September 12, 2001 6:49 PM Brian Keith [EMAIL PROTECTED] wrote: 2. The forbidden fruit argument might make sense, but I doubt that most drinking is about getting caught. People over 21 still drink and binge, though I would be interested to see how much in comparison to those under 21. I know of acquaintainces in my high school that drink, and they drink to get drunk, not to possibly get caught. I think the forbidden fruit argument could be a small part of the cause, but that the major reason is in my answer to #1. Forbidden fruit is not about getting caught. It's about doing stuff that is forbidden, taking risks, living dangerous, and the like. I think, also, there a huge social component involved in drug use and many other activities. Why do people drink? Some people drink to impress others. I've taken part in implicit drinking contests before. It was all about proving one person could outdrink the other. Now combine this last point with youthful inexperience and time preference. I don't think this necessarily provides an argument from economic rationality, but it does fill in some of the gaps. Later! Daniel Ust See Macroeconomics for the Real World at: http://uweb.superlink.net/neptune/Macro.html
SDAE Graduate Student Paper Competition
From: Peter Boettke [EMAIL PROTECTED] Sent: Sunday, August 26, 2001 12:39 PM Subject: [HAYEK-L:] SDAE Graduate Student Paper Competition The Society for the Development of Austrian Economics Graduate Student Paper Competition is to be held again. If a PhD students (preferably ABD) and interested in attending the SDAE meeting and presenting your work, please submit a paper and a cv to Peter Boettke by September 15th. The award is for $1,000 and there will be 3 prizes given out. Previous winners are not eligible. The $1000 is to off-set expenses to attend the meetings. This year the meetings will be held on November 17-19 in Tampa, FL, and as always in conjunction with the Southern Economic Association. For more information on the SDAE see http://it.stlawu.edu/sdae/ Electronic submissions are acceptable. Pete Dr. Peter J. Boettke, Deputy Director James M. Buchanan Center for Political Economy Department of Economics George Mason University, MSN 3G4 Fairfax, VA 22030 (703) 993-1149 fax (703) 993-1133 email: [EMAIL PROTECTED] homepage: http://www.gmu.edu/departments/economics/pboettke
Re: returns to higher education
On Thursday, August 23, 2001 6:25 PM Peter Boettke [EMAIL PROTECTED] wrote: Hirschleifer's intermediate book reports that reputation of the school matters significantly. This is an older study, but he suggests that it is not your SAT score that matters, but the SAT score of your entering freshman class. This supports the signaling theory of education, as opposed to either training or sorting. Also, I just saw a recent study on the news here in DC that reported that what mattered most was major. The return to education for engineering is still high, but the return for the humanities are low. Speaking from a position of near total ignorance, I would also think you might make connections at the better schools... Do the studies account for that? And, of course, if the incoming class scores high on SATs, this doesn't give us a way of judging how much value the school itself puts into the education beyond being around other high SAT scoring people. (This is not a bad thing, but I can imagine two schools using exactly the same teaching methods, curricula, books, etc. and getting differing outputs simply because one school had smarter students than the other.) Cheers! Daniel Ust http://uweb.superlink.net/neptune/ Censorship and Art is now online at: http://uweb.superlink.net/neptune/Censor.html One should judge a man mainly from his depravities. Virtues can be faked. Depravities are real. -- Klaus Kinski
