Buttinskies Get Vapours Over Vapes, Rx Pain Killers

29 Tuesday Oct 2019

Posted by in Prohibition

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Every now and then I have to grind my axe against reflexive prohibitionism and the misplaced blame for health issues that runs along with it. This time, my outburst is prompted first by a recent study of opioid deaths, and by developments in the vastly less horrifying vaping scare. Both of these issues are like red meat to the busy-bodies of the world, who just can’t stand to sit by knowing that someone might be doing something into which they might affect an heroic intervention.

Pain Is the Price

Pharmaceutical companies have been settling opioid lawsuits brought against them for failing to provide adequate warnings with opioid painkillers about the potential for addiction, for allegedly distributing quantities in areas with “vulnerable” populations, and for other aggressive marketing tactics. Purdue Pharmaceuticals filed for bankruptcy after agreeing to $12 billion in settlements. Many more cases remain for these companies. Settlements, of course, are not admissions of guilt. Rather, they are the least costly way for these companies to extract themselves from situations in which they have been scapegoated by the grieving families of victims, plaintiffs’ attorneys with instincts for deep pockets, and naive reporting by an uninformed news media.

This week came reports of a new study in Massachusetts that found only a small percentage of opioid deaths in which decedents had been prescribed an opioid. According to the researchers:

“The major proximal contributors to opioid-related overdose deaths in Massachusetts during the study period were illicitly made fentanyl and heroin. … The people who died with a prescription opioid like oxycodone in their toxicology screen often don’t have a prescription for it.”  

And as Jacob Sullum notes at the last link, this is in line with a number of other studies:

“A 2007 study found that 78 percent of OxyContin users seeking addiction treatment reported that they had never been prescribed the drug for any medical reason. Other studies have found that only a small minority of people treated for pain, ranging from something like 1 percent of post-surgical patients to less than 8 percent of chronic pain patients, become addicted to their medication. A 2015 study of opioid-related deaths in North Carolina found 478 fatalities among 2.2 million residents who were prescribed opioids in 2010, an annual rate of 0.022 percent.”

Most people who become addicted to opioids, and most people who OD, begin their use in pursuit of a high. There are issues over which the pharmaceutical industry can be criticized, but it does not deserve much blame for abuse of the medications it produces. Providing pain medications to health care providers for patients with legitimate needs should not be subject to such severe legal risk. This fraught legal environment has a chilling effect on the willingness of manufacturers to meet those needs, not to mention risk-averse physicians. You, too, are likely to suffer severe pain one day, and your plight will be made worse by these effective prohibitionists.

The Vaping Panic

The dangers of vaping are vastly exaggerated, and the tremendous benefits of vaping for those wishing to quit smoking cigarettes have seemingly been forgotten. Vaping products are far less dangerous than cigarettes, but it matters little to prohibitionists at the federal and state levels. This includes the Trump Administration and such Democrats as Rashida Tlaib and Debbie Wasserman-Shultz, who have jumped on the anti-vaping bandwagon with an opportunistic fervor.

Vaping has increased dramatically among teenagers. Flavored or otherwise, it is likely to have substituted for cigarettes among teens to some extent. Many adult vapers seem to like flavored vaping products as well. As others have noted, a ban on flavored vaping products will make little difference: vapers like the nicotine! And like any form of prohibition, vaping bans will lead to more dangerous varieties of product as buyers turn to the black market for vaping supplies, or simply smoke more cigarettes.

A recent proposal in the House Ways and Means Committee to tax e-cigarettes is also terribly misguided. If we’re going to “nudge” anyone, which in this case is to follow the traditional economic prescription to tax things that harm, then surely we ought to consider where the greater harm lies. Cigarettes are already taxed. Introducing a tax on a relatively new alternative constituting a far lesser harm is sure to have undesirable effects on public health.

Summary

It must be cathartic to identify someone or something to blame for tragedies for which the victims themselves are largely at fault. We know too that the enterprise of bringing legal action against corporate scapegoats is financially rewarding. Unfortunately, those scapegoats can have little confidence in the courts’ ability to reach objective decisions, so they feel compelled to settle with plaintiffs at still great expense. It’s a racket that leads to stunted development of new drugs and under-prescription of painkillers. Tort reform, potentially to include caps on damages and financial risks to plaintiffs attorneys, can mitigate these effects, and it is as important now as ever.

Alarmism over vaping creates risks of a different nature. Vaping is not free of risk, but neither is it a massive threat to public health. It is, in fact, a less harmful alternative than cigarette smoking. Authorities should be cautious in their approach to regulating vapes and e-cigarettes, lest they discourage attractive and safer alternatives to smoking.

Regulation, Crowding Out, and Malformed Capital

19 Saturday Oct 2019

Posted by in Big Government, Regulation

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Expanding regulation of the private sector is perhaps the most pernicious manifestation of “crowding out”, a euphemism for the displacement of private activity by government activity. The idea that government “crowds out” private action, or that government budget deficits “crowd out” private investment, has been debated for many years: government borrowing competes with private demand to fund investment projects, bidding interest rates and the cost of capital upward, thus reducing business investment, capital intensity, and the economy’s productive capacity. Taxes certainly discourage capital investment as well. That is the traditional fiscal analysis of the problem.

The more fundamental point is that as government competes for resources and absorbs more resources, whether financed by borrowing or taxation, fewer resources remain available for private activity, particularly if government is less price-sensitive than private-sector buyers.

Is It In the Data?

Is crowding out really an issue? Private net fixed investment spending, which represents the dollar value of additions to the physical stock of private capital (and excludes investments that merely replace worn out capital), has declined relative to GDP over many decades, as the first chart below shows. The second chart shows that meanwhile, the share of GDP dedicated to government spending (at all levels) has grown, but with less consistency: it backtracked in the 1990s, rebounded during the early years of the Bush Administration, and jumped significantly during the Great Recession before settling at roughly the highs of the 1980s and early 1990s. The short term fluctuations in both of these series can be described as cyclical, but there is certainly an inverse association in both the short-term fluctuations and the long-term trends in the two charts. That is suggestive but far from dispositive.

Timothy Taylor noted several years ago that the magnitude of crowding out from budget deficits could be substantial, based on a report from the Congressional Budget Office. That is consistent with many of the short-term and long-term co-movements in the charts above, but the explanation may be incomplete.

Regulatory Crowding Out

Regulatory dislocation is not the mechanism traditionally discussed in the context of crowding out, but it probably exacerbates the phenomenon and changes its complexion. To the extent that growth in government is associated with increased regulation, this form of crowding out discourages private capital formation for wholly different reasons than in the traditional analysis. It also encourages malformation — either non-productive or misallocated capital deployment.

I acknowledge that regulation may be necessary in some areas, and it is reasonable to assert that voters demand regulation of certain activities. However, the regulatory state has assumed such huge proportions that it often seems beyond the reach of higher authorities within the executive branch, not to mention other branches of government. Regulations typically grow well beyond their original legislative mandates, and challenges by parties to regulatory actions are handled in a separate judicial system by administrative law judges employed by the very regulatory agencies under challenge!

Measures of regulation and the regulatory burden have generally increased over the years with few interruptions. As a budgetary matter, regulation itself is costly. Robert Higgs says that not only has regulation been expanding for many years, the growth of government spending and regulation have frequently had common drivers, such as major wars, the Great Depression of the 1930s, and the financial crisis and Great Recession of the 2000s. In all of these cases, the size of government ratcheted upward in tandem with major new regulatory programs, but the regulatory programs never seem to ratchet downward.

While government competes with the private sector for financial capital, its regulatory actions reduce the expected rewards associated with private investment projects. In other words, intrusive regulation may reduce the private demand for financial capital. Assuming there is no change in the taxation of suppliers of financing, we have a “coincidence” between an increase in the demand for capital by government and a decrease in the demand for capital by business owing to regulatory intrusions. The impact on interest rates is ambiguous, but the long-run impact on the economy’s growth is negative, as in the traditional case. In addition, there may be a reallocation of the capital remaining available from more regulated to less regulated firms.

The Costs of Regulation

Regulation imposes all sorts of compliance costs on consumers and businesses, infringing on many erstwhile private areas of decision-making. The Mercatus Center, a think tank on regulatory matters based at George Mason University, issued a 2016 report on “The Cumulative Cost of Regulations“, by Bentley Coffey, Patrick A. McLaughlin, and Pietro Peretto. It concluded in part:

“… the effect of government intervention on economic growth is not simply the sum of static costs associated with individual interventions. Instead, the deterrent effect that intervention can have on knowledge growth and accumulation can induce considerable deceleration to an economy’s growth rate. Our results suggest that regulation has been a considerable drag on economic growth in the United States, on the order of 0.8 percentage points per year. Our counterfactual simulation predicts that the economy would have been about 25 percent larger than it was in 2012 if regulations had been frozen at levels observed in 1980. The difference between observed and counterfactually simulated GDP in 2012 is about $4 trillion, or $13,000 per capita.”

In another Mercatus Center post, Tyler Richards discusses the link between declining “business dynamism” and growth in regulation and lobbying activity. Richards measures dynamism by the rate of entry into industries with relatively high profit potential. This is consistent with the notion that regulation diminishes the rewards and demand for private capital, thus crowding out productive investment.

Regulation, Rent Seeking, and Misallocation

Some forms of regulation entail mandates or incentives for more private investment in specific forms of physical capital. Of course, that’s no consolation if those investments happen to be less productive than projects that would have been chosen freely in the pursuit of profit. This often characterizes mandates for alternative energy sources, for example, and mandated investments in worker safety that deliver negligible reductions in workplace injuries. Some forms of regulation attempt to assure a particular rate of return to the regulated firm, but this may encourage non-productive investment by incenting managers to “gold plate” facilities to capture additional cash flows.

Regulations may, of course, benefit the regulated in certain ways, such as burdening weaker competitors. If this makes the economy less competitive by driving weak firms out of existence, surviving firms may have less incentive to invest in their physical capital. But far worse is the incentive created by the regulatory state to invest in political and administrative influence. That’s the thrust of an essay by Wayne Brough in Real Clear Markets: “Political Entrepreneurs Are Crowding Out the Entrepreneurs“. The possibility of garnering regulations favorable to a firm reinforces  the destructive focus on zero-sum outcomes, as I’ve gone to pains to point out on this blog.

Crowding out takes still other forms: the growth of the welfare state and regulatory burdens tend to displace private institutions traditionally seeking to improve the lives of the poor and disenfranchised. It also disrupts incentives to work and to seek help through those private aid organizations. That is a subject addressed by James Whitford in “Crowding Out Compassion“.

Just Stop It!

President Trump has made some progress in slowing the regulatory trend. One example of the Administration’s efforts is the two-year-old Trump executive order demanding that two regulatory rules be eliminated for each new rule. Thus far, many of the discarded regulations had become obsolete for one reason or another, so this is a clean-up long overdue. Other inventive efforts at reform include moving certain agency offices out of the Washington DC area to locales more central to their “constituencies”, which inevitably would mean attrition from the ranks of agency employees and with any luck, less rule-making. The judicial branch may also play a role in defanging the bureaucracy, like this case involving the Consumer Financial Protection Bureau now before the Supreme Court. Unfortunately, tariffs represent taxation of consumers and firms who use foreign goods as inputs, so Trump’s actions on the regulatory front aren’t all positive.

Conclusion

The traditional macroeconomic view of crowding out involves competition for funds between government and private borrowers, higher borrowing costs, and reduced private investment in productive capital. The phenomenon can be couched more broadly in terms of competition for a wide variety of goods and services, including labor, leaving less available for private production and consumption. The growth of the regulatory state provides another piece of the crowding-out puzzle. Regulation imposes significant costs on private parties, including small businesses that can ill-afford compliance. The web of rules and reporting requirements can destroy the return on private capital investment. To the extent that regulation reduces the demand for financing, interest rates might not come under much upward pressure, as the traditional view would hold. But either way, it’s bad news, especially when the regulatory state seems increasingly unaccountable to the normal checks and balances enshrined in our Constitution.

Ideology and the Public School Monopoly

15 Tuesday Oct 2019

Posted by in Education

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I toured our local public high school not long ago after some renovations. It’s my old school and my kids attended there as well, though it’s been largely stripped of its old character. Our sweet tour guide, when asked about school security and whether any staff are armed, said no, and then proudly informed us that the temperament of the school was “pretty progressive”, and that sort of thing would not go over well. Later, as I stepped into the new library, I happened to notice a table right up-front intended to showcase several books. The first title I laid eyes on was “Social Justice”, a topic emphasizing all manner of grievances, current and historical, the identification of culpable parties (and their unworthy descendants), and presumed correctives. The latter include reparations, redistribution, control of speech, criminalization, and often shaming. At best, these correctives deliver palliatives to the aggrieved that must be forcibly extracted by the state from others, with little consideration for the predictably disastrous second-order effects they engender.

The prominent display of the social justice book and our tour guide’s attitude regarding security were unsurprising manifestations of the educational emphasis our kids get today: the public schools have become indoctrination camps. Of course, a good class in American history will leave no doubt about the injustices that have occurred in our nation over 250 years. There were many individual victims and many groups were victimized. We could say the same about a good class in European history, or the history of events in any region of the world. However, the social justice doctrine being peddled to our children today assigns blame for victimhood to anyone deemed not to be a victim, as well as the growth and very success of western civilization, including capitalism, this despite the unprecedented comforts available today across the socioeconomic spectrum. It’s as if the SJWs wish to convince our children that all economic gains are of the zero-sum variety.

The politicization of the curriculum in our schools is an extremely dangerous phenomenon. Many schools are banning literature, distorting history, subverting science in favor of politicized orthodoxy, and teaching “social justice math“, which I’m sure is heavy on zero-sum word problems. And how about this “Run from the cop” worksheet given to first graders in a Pittsburgh school! Federal and state education authorities are taking an active hand in much of this. For example, a new ethnic studies curriculum for California high schools proposed by the state Department of Education takes a notably anti-Israel perspective. At the federal level, there is the Common Core initiative (and see here) which, in addition to educational inefficacy, is a source of many of the same concerns cited above. President Obama’s school discipline policy, heavy in its emphasis on “disparate impact”, was perhaps even more disastrous (and see here).

Social studies textbooks today are increasingly written by leftist authors who distort U.S. history, present anti-science viewpoints on environmental topics, and promote the divisive tenets of multiculturalism. The U.S. history covered in this prominent textbook is subject to a variety of left-wing biases, but it is not unique in that regard. And it’s not only a matter of bias in favor of collectivist philosophy and leftist interpretations of historical events. For example, it’s way over the top to teach public school children that Christians are bigots.

But God bless the teachers, many of whom are indeed wonderful people, and many of whom are very good at what they do (my daughter being a prime example!). There is little doubt, however, that leftism dominates the faculty in most public schools. John Hinderaker writes of the political activism practiced by the faculty at a high school in Edina, Minnesota, where lessons about “white privilege” are part of the curriculum even in the feeder schools. It’s a travesty that many of our nation’s public school teachers are products of university schools of education with extremely low academic standards relative to other academic divisions within those universities. And these schools of education have been thoroughly politicized. Needless to say, a good many of their graduates are easily cowed by the typical “feel-good”, free-lunch, social justice arguments made by the Left.

In a sense, these civil servants are a local counterpart to the army of federal bureaucrats sometimes known as the “deep state”. They are funded by taxpayers and are often represented by powerful unions. Under-performing teachers are difficult to dismiss, and they are able to exercise great discretion in the messages they deliver to students. As Darleen Click writes, “The ‘woke’ want your children“.

The leftist thrust of public education today descends from a long evolution shaped by “progressive” education reforms, and most reforms receiving attention within today’s education establishment fail to address the single biggest problem: the public school monopoly. That inattention is reinforced by attempts to maintain ideological purity among participants in the debate over school reform. Social studies teachers Mike Margeson and Justin Spears, writing for the Foundation for Economic Education on the motives for establishing public education, say the following about historical reforms:

“The objective was to nationalize the youth in a particular mold. … From Luther to Fichte, the idea to use the coercive power of the state to force kids into schools and indoctrinate them was clear. Horace Mann became instrumental in importing this system and helping it spread throughout the United States.”

Breaking the public education monopoly is imperative to improving both the quality and cost of education. That means choice, in all it’s liberating glory. J.D. Tuccille has a great take on this issue: choice is the only way we can assure that our children are taught from a perspective that parents most prefer. Many parents know that they must take an active part in educating their children. That includes their role in selecting the school they believe will be best for their kids, as well as ongoing scrutiny of the school’s performance. A simple by-product of choice is that schools and their faculties might be more circumspect about shading their instruction with their own political agendas.

 

 

Another Flop at the Impeachment Playhouse

04 Friday Oct 2019

Posted by in Impeachment

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Listen, President Trump drives me crazy. His policy instincts often strike me as dangerous: trade protectionist, inflationist, and cronyist. I’m still suspicious that he might play ball with statists left and right on critical issues, when and if he perceives a political advantage in doing so. And Trump is hopelessly inarticulate and belligerent. Nevertheless, I will almost certainly vote for him in 2020 for several reasons, not least because the feasible alternatives are completely unacceptable. That view is reinforced by the behavior of the Democrat party in their effort to fabricate “high crimes and misdemeanors” on Trump’s part. That effort is not just dishonest, it is foolish, and they have a lot to lose. Their machinations are likely to blow up in their faces.

For one thing, the Democrats don’t seem to have much of a case. This time they are focused on a May 2019 phone conversation that took place between Trump and the recently-elected Ukrainian President Volodymyr Zelenskiy. The Democrats contend that Trump held up military aid in order to pressure Zelenskiy to investigate the Biden family’s activities in the Ukraine, a charge flatly denied by Zelenskiy. In fact, at the time of the call, the Ukrainians has no idea that military aid had been suspended, a fact first reported by The New York Times.

The Trump Administration released a transcript of the Zelenskiy call, which offers no evidence that a quid pro quo was offered by Trump. Even the text messages released this morning fail to support the claim. Joe Biden’s name came up during the call in connection with potential interference by the Ukraine in the 2016 U.S. presidential campaign. That’s reasonable in light of the events reported to have taken place, and it is certainly within the scope of presidential powers, as were Trump’s efforts to discuss election interference with Australia, the U.K., and other countries.

If you don’t know it already, a successful impeachment in the House of Representatives will not remove Trump from office. It will constitute a referral of charges to the Senate, which is controlled by Republicans, and a conviction requires a two-thirds majority. Ain’t gonna happen.

In the meantime, there really is no formal “impeachment” underway, despite what you think you’ve heard. This is a “proceeding” that House Speaker Nancy Pelosi really had no authority to initiate, and there is no set of rules or procedures guiding the spectacle. An impeachment investigation requires a House vote, but Democrats voted to table a resolution calling for such a vote because they really don’t want one, not yet anyway. Why? Because it would force them to go on record before they’re quite sure they want to, but more importantly it would demand due process for the accused. A House vote for an impeachment investigation would give House Republicans subpoena powers, something Democrats don’t want to take a chance on.

Again, the whole effort by the Democrats will ultimately be futile, and the trial proceedings in the Senate might be very ugly for them as well. It is likely to shed light on several matters that offer unflattering context for the impeachment effort and might well lead to criminal charges against prominent Democrats and their operatives:

These are all troubling questions that should be investigated. We may or may not get to the bottom of it before the impeachment vote in the House, if it ever occurs. Senate Republicans will undoubtedly be interested in pursuing many of these areas of inquiry, and Joe Biden will not come out of this unscathed. There is likely considerable evidence to support claims that he used political influence to gain his son Hunter favor in the Ukraine and China. 

This month, DOJ Inspector General Michael Horowitz is expected to release his report on the origins and conduct of the Russia investigation into Trump’s 2016 presidential campaign. including potential corruption of the FISA process. His report will reflect the findings of two U.S. attorneys conducting separate inquiries into various aspects of the matter. These reports are a potential disaster for Democrats. Perhaps the distraction of impeachment theatre seems desirable to them, but the longer they continue the fruitless effort to “get Trump”, which began well before he was elected, the more incompetent they look. They don’t seem to have noticed that the whole spectacle is strengthening Trump’s base of support.

Which brings me back to Trump’s belligerence, which I briefly decried above. And it’s true, I often wince, but then I often laugh out loud as well. His political opponents and the media are constantly aghast at his every unapologetic response to their attacks. I will readily admit that it’s deeply satisfying to witness him hurling the crap right back at them, right on the schnoz. In the case of the impeachment drama, his base of support and many others in the middle know the Dems richly deserve it.

 

The Leninists Among Us

29 Sunday Sep 2019

Posted by in Leftism, Marxism, Tyranny

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I suggested recently that the pursuit of zero-sum gains, and zero-sum thinking generally, is a form of social rot. How timely that Gary Saul Morson has offered this interesting essay on “Leninthink” in the October issue of The New Criterion. It validates my conviction that a zero-sum view of the world invites social brutalism and economic cannibalism. Vladimir Ilyich Ulyanov, better known as Vladimir Lenin, was of course the first premier of the Soviet Union after the Bolshevik Revolution in 1917. His philosophy was a practical derivative of Marxism, a real-world implementation of a “dictatorship of the proletariat“. Morson describes Lenin’s view of social relations thusly:

“Lenin regarded all interactions as zero-sum.To use the phrase he made famous, the fundamental question is always ‘Who Whom?’—who dominates whom, who does what to whom, ultimately who annihilates whom. To the extent that we gain, you lose. Contrast this view with the one taught in basic microeconomics: whenever there is a non-forced transaction, both sides benefit, or they would not make the exchange. For the seller, the money is worth more than the goods he sells, and for the buyer the goods are worth more than the money. Lenin’s hatred of the market, and his attempts to abolish it entirely during War Communism, derived from the opposite idea, that all buying and selling is necessarily exploitative. When Lenin speaks of ‘profiteering’ or ‘speculation’ (capital crimes), he is referring to every transaction, however small. Peasant ‘bagmen’ selling produce were shot.

Basic books on negotiation teach that you can often do better than split the difference, since people have different concerns. Both sides can come out ahead—but not for the Soviets, whose negotiating stance John F. Kennedy once paraphrased as: what’s mine is mine; and what’s yours is negotiable. For us, the word ‘politics’ means a process of give and take, but for Lenin it’s we take, and you give. From this it follows that one must take maximum advantage of one’s position. If the enemy is weak enough to be destroyed, and one stops simply at one’s initial demands, one is objectively helping the enemy, which makes one a traitor. Of course, one might simply be insane. Long before Brezhnev began incarcerating dissidents in madhouses, Lenin was so appalled that his foreign minister, Boris Chicherin, recommended an unnecessary concession to American loan negotiators, that he pronounced him mad—not metaphorically—and demanded he be forcibly committed. ‘We will be fools if we do not immediately and forcibly send him to a sanatorium.'”

The ruthlessness of Lenin’s mindset was manifested in his unwillingness to engage in rationalizations or even civil debate:

“Lenin’s language, no less than his ethics, served as a model, taught in Soviet schools and recommended in books with titles like Lenin’s Language and On Lenin’s Polemical Art. In Lenin’s view, a true revolutionary did not establish the correctness of his beliefs by appealing to evidence or logic, as if there were some standards of truthfulness above social classes. Rather, one engaged in ‘blackening an opponent’s mug so well it takes him ages to get it clean again.’ Nikolay Valentinov, a Bolshevik who knew Lenin well before becoming disillusioned, reports him saying: ‘There is only one answer to revisionism: smash its face in!’

When Mensheviks objected to Lenin’s personal attacks, he replied frankly that his purpose was not to convince but to destroy his opponent. In work after work, Lenin does not offer arguments refuting other Social Democrats but brands them as ‘renegades’ from Marxism. Marxists who disagreed with his naïve epistemology were ‘philosophic scum.’ Object to his brutality and your arguments are ‘moralizing vomit.’ You can see traces of this approach in the advice of Saul Alinsky—who cites Lenin—to ‘pick the target, freeze it, personalize it.'”

This offers a useful perspective on why it’s so difficult to have civil discussions with leftists today. They have inherited versions of Lenin’s polemic style. You’re more likely to be verbally attacked by the Left than to be engaged in a productive exchange of ideas, as I’m constantly reminded by observing the behavior of SJWs on social media. Leftist retribution is swift. Glenn Reynolds has mused, “As the old saying has it, the left looks for heretics and the right looks for converts, and both find what they’re looking for.” That might be too optimistic!

The richest source of zero-sum gains is through the levers of government, which possesses the necessary coercive power to achieve that aim. When coercive power is so ruthlessly exercised, the appearance of loyalty to those in power becomes paramount for survival. This can make it necessary to display an outward acceptance of fanciful claims:

“Lenin’s idea that coercion is not a last resort but the first principle of Party action. Changing human nature, producing boundless prosperity, overcoming death itself: all these miracles could be achieved because the Party was the first organization ever to pursue coercion without limits. In one treatise Stalin corrects the widespread notion that the laws of nature are not binding on Bolsheviks, and it is not hard to see how this kind of thinking took root. And, given an essentially mystical faith in coercion, it is not hard to see how imaginative forms of torture became routine in Soviet justice.

Dmitri Volkogonov, the first biographer with access to the secret Lenin archives, concluded that for Lenin violence was a goal in itself. He quotes Lenin in 1908 recommending ‘real, nationwide terror, which invigorates the country and through which the Great French Revolution achieved glory.'”

Morson provides this revealing quote from the madman Lenin himself:

“The kulak uprising in [your] 5 districts must be crushed without pity. . . . 1) Hang (and I mean hang so that the people can see) not less than 100 known kulaks, rich men, bloodsuckers. 2) Publish their names. 3) Take all their grain away from them. 4) Identify hostages . . . . Do this so that for hundreds of miles around the people can see, tremble, know and cry . . . . Yours, Lenin. P. S. Find tougher people.”

At least today the Lefties try to dox people first, rather than #2. The hanging might have to come later.

There is a real danger in encouraging such zero-sum notions as redistribution and class warfare. Even today’s preoccupation with identity politics is one of zero-sum emphasis. Furthermore, the concepts of mass victimization and social justice promote a delusion of righteousness, a necessary precondition to the kind of monstrous acts of a Lenin. Anyone truly interested in promoting an atmosphere of social cooperation should recognize the echos of Leninism we see today from Leftists on social media and in the streets. These tyrants must be resisted before we’re all on the wrong side of the ultimate zero sum outcome.

Memes, Satire, and Deception

26 Thursday Sep 2019

Posted by in Fake News

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Not long ago I wrote about how Snopes.com, the alleged “fact-checking” site, had become so politicized that its staff was rating posts on The Babylon Bee as false. Those posts were plainly written as satire. A related issue came to mind last weekend when I saw a meme on social media attributing the following statement to President Trump: “My crimes can’t be investigated while I’m president“. The meme used quote marks, but there was no link to a source.

It’s well known that Trump’s legal team contends that certain statements and actions he might take are protected by executive privilege and immunity. Given Trump’s frequent clumsy use of the language, I thought there was an outside chance that he DID say something like that! My uncertainty was ironic in the wake of my Snopes post! So I did a quick search and found an article in Vanity Fair headlined: Trump: My crimes can’t be investigated while I’m president, without quote marks. The opinion piece that followed was indeed a characterization of the Trump team’s legal strategy. The headline was obviously sarcasm and of course there was no attribution. Trump did not make any admission of criminal activity, contrary to the meme’s implication.

I knew the poster of the meme, whom I’ll call Dan, to be an individual who regards Trump with contempt, and certainly not the sort of guy who would bother to investigate the veracity of such a claim. Against my better judgement, I decided to tweak him a little. I asked if he could provide a source for the quote. He didn’t respond until late afternoon the next day, and not before one of his pals had attacked me for asking the question.

The crux of their defense was this: “It’s a meme! Don’t you know what a meme is?” There were other choice words from Dan’s pal… insults that is. The idea seems to be that memes can say anything and it’s okay if we say so. After all, they must think, people should know that such a misquote is fine because it illustrates the wrongheadedness of the Trump legal strategy… and Trump… via satire.

Do people know that it’s satire? No link. No source. Quote marks added. It was clearly intended to influence people, and I think it was intended to deceive as well. I’m not a Trump hater — more a critic of leftism having little choice other than Trump — but even I had to check on the quote! I’m pretty sure that lots of Trump haters and many non-haters would be duped. Not too many would bother to check, but at least a few did: I was surprised and delighted that Snopes rated the claim as false on Monday, and in a relatively straightforward way. Well, bully for Snopes!

Okay, the ridiculousness of it all! The idea that Trump would take ownership of alleged crimes, as in “my crimes”, an admission of guilt, is kind of funny, but mostly because it sounds like the kind of sloppy language he might have used. And of course people with a jaded view of Trump’s assertion of presidential powers might find the “quote” apropos. They should have their fun, but many of them know little about executive privilege, which is intended to protect the confidentiality necessary to carry out many presidential duties, or they give it short shrift, at least when a republican is in the White House. Less informed Trump detractors might be ready to accept the quote as fact without question.

What’s the difference between satire of the sort produced by The Babylon Bee and the fake quote? Again, posts from the Bee always link to its site, allowing immediate investigation for those who find the headline plausible. The story at the link always adds additional satire, usually so ridiculous that anyone should get the idea. But in case that’s not enough, the Bee clearly promotes itself as “Your Trusted Source For Christian News Satire“. Yes, the Bee has an edge and it is often political. It is designed to get a laugh, provoke thought, poke fun, and influence people. Some of the humor might be too close to the truth to suit observers on the Left, but perhaps that’s why it annoys them so much. Nevertheless, it is satire and it says so.

Humor has long been used as a political tool, but does good faith require some form of demarcation between purported facts and…  the joke? The problem is that many such distinctions must be understood from context, or at least from experience with the source. Cartoons are readily interpreted as humorous commentary. A comedian’s audience is generally under no misapprehension about the “facts” presented during the set. Parody and satire might or might not be billed as such. Much like a comedy club, the audience is probably uninterested in fact-checks. But what about internet memes? They often lack the context provided by a source. It’s still a relatively new form of commentary and an extremely effective means of spreading messages… and misinformation. People have an irrational tendency to believe things they see in print. Quote marks are meaningful, and they should lend legitimacy to a retelling of someone’s words.

Was the “quote” so outrageous that I should have known it was merely a sarcastic meme? Maybe not when the subject is Trump! Anyway, my real objective was to make sure before taking a little dig at Dan, the poster. I quickly concluded the intent of the meme’s creator involved deceit, and I still think so. It’s all too common, which is too bad, but let the social media user beware!

 

 

 

Doomsayers Batting Zero, Draft Kids To Cause

22 Sunday Sep 2019

Posted by in Environmental Fascism, Global Warming

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Empiricists, take note: The kids were out in the streets on Friday, skipping school to warn us of a climate doomsday fast approaching. Like Greta Thunberg, one of several teenage girls billed as modern-day Cassandras, they just know it. But wait, I think I heard the same thing many years ago… doomsday is nigh! In fact, I’ve heard it over and over through my entire adulthood. And here’s the empirical regularity: “Goose Eggs: No Climate Doomsday Warning Has Come True“. Ever. From the link:

     “Some examples:

    • 1967 — Stanford … expert Paul Erlich predicted “time of famines” in 1975.
    • 1971 — A top NASA expert predicted an “ice age” by 2021.
    • 1988 — It was predicted that the Maldives would be under water by last year.
    • 2008 — Gore said the Arctic would be free of ice by 2013.
    • 2009 — [Prince] Charles said there was just 96 months left to save the world.”

Here are a few other warnings that haven’t panned out:

“Within a few years ‘children just aren’t going to know what snow is.’ Snowfall will be ‘a very rare and exciting event.’” — Dr. David Viner, senior research scientist at the climatic research unit (CRU) of the University of East Anglia [March 2000]”

“[By] 1995, the greenhouse effect would be desolating the heartlands of North America and Eurasia with horrific drought, causing crop failures and food riots…[By 1996] The Platte River of Nebraska would be dry, while a continent-wide black blizzard of prairie topsoil will stop traffic on interstates, strip paint from houses and shut down computers. — Michael Oppenheimer in 1990″

There have been many others (also see here and here). Oh, but you just wait, they say. This time it’s different  and it won’t be long!. You know, people just love to worry. Even so, what kind of daft world do we inhabit with children and adults completely freaked out about “problems” that don’t approximate reality.

Predictions of a more clinical variety, such as upward temperature trends, have been way off on a consistent basis: much too high, that is. But here’s the key: all of the other calamitous developments said to be in our future are predicated on those temperature forecasts. The warnings are not based on data per se, but on on crappy climate models (and see here), which are simplifications of reality, loosely calibrated to capture a relatively short period of historical records. And the models are crappy because they often rely on one input, CO2 forcings. The modelers have difficulty addressing the empirical sensitivity of temperature to carbon, the net effects of radiative forcing, clouds, and ocean circulation. In many prominent cases they don’t even try. Hey look, we’re all gonna die!

A striking misconception one hears repeatedly is that we experience many more hot days, and they are hotter, hot days than in the past. Sure, extremely hot days are bad, but not as bad as extremely cold days, and probably worse than warm nights. The truth is, however, that nearly all of the warming experienced over the past few decades has been in nighttime lows, not daytime highs. More “seasoned” climate alarmists don’t seem to have any memory of the hot days of their youth, and the kids… well, they just fell off the turnip truck, so they have no idea.

One of the great perversions of climate alarmism is the notion that the private enterprise system must be heavily regulated or even abolished in order to put an end to global warming. Never mind that governments are directly responsible for a major share of environmental degradation. And as private economies flourish, the environmental efficiency of production actually improves. In fact, if one were to stipulate that climate change is a problem, as I will for just this one sentence, vibrant capitalism offers the best path to environmental solutions. There are several basic reasons. One is that economic growth and higher income levels give consumers the wherewithal to demand and pay for costlier “green” products. More fundamentally, economic growth facilitates development and investment in cleaner technologies by business and government.

Miss Thunberg doesn’t understand any of this, of course, but she’s a pretty good little scold:

“This is all wrong. I shouldn’t be up here. I should be back in school on the other side of the ocean, yet you come to us young people for hope. How dare you.”

Here’s Arthur Chrenkoff’s take on poor Thunberg and her message:

“[She] should be going to Beijing or Bangalore and staging her protests there instead of, or at least in addition to, Sweden or New York. She should be hounding President Xi and Prime Minister Modi about their shameful emissions. She should be leading throngs of Asian kids out of schools for her Friday student strikes. She should be castigating the industries and the consumers of the developing world for destroying the planet and killing humanity in the process. She should be doing all this if she were serious about the global nature of the problem.”

I especially like this quote from Scott Adams on the “child advocate” phenomenon we’re witnessing:

“Adults sometimes like to use children to carry their messages because it makes it hard for the other side to criticize them without seeming like monsters. If adults have encouraged you to panic about climate change without telling you what I am telling you here, they do not have your best interests at heart. They are using you.“

Of course, Thunberg is thoroughly propagandized and a useful theatrical tool for the alarmist establishment. She has made all sorts of ridiculous and unquestioned claims before the United Nations and elsewhere (e.g., people are dying from climate change (no); that she can “see” CO2 (okay, her mother said that, but what a hoot!). Don’t think for a second that “we have to listen to the children” is uttered sincerely by any adult climate alarmist. It’s manipulation. I feel sorry for Thunberg not least because she is probably deeply frightened about the climate, but also because she is a tool of a death cult.

You really can’t blame kids for being worried about bogeymen foisted upon them by foolish elders, but you can blame the adults for their own frightened acceptance of chicken-little climate augury. And that’s what the kids are being taught. The schools certainly won’t penalize them for missing classes. In fact, many of their teachers accompanied them to the protests.

The climate scare is part of a larger agenda to dismantle not just capitalism, but a host of innocent individual liberties. Scaring children and making teens into miserable pessimists will groom them as good (if neurotic) environmental soldiers for life. They’ll be fit as compliant subjects of a new, environmental fascist state, never to know the sweet freedom and growth possible without the needless bindings imposed by climate cranks. Children, the protection you’ve been told to demand isn’t necessary or worth it. You’re fighting for goose eggs!

 

 

Who Are the Zero-Sum Winners?

09 Monday Sep 2019

Posted by in Big Government, rent seeking

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Productive effort seldom goes unrewarded, but all too often rewards are directed to nonproductive activities and secured in ways that are outright takings of resources and rights from others. These are zero-sum propositions at best, as the rewards come only at equivalent or greater costs to others. Gains from zero-sum activities are often purely consumptive in nature and tend to foster more destructive behavior. A clear-cut example is outright thievery, but there are many cases in which, by matters of degree, the perpetrators are not even dimly aware that their gains bring harm to others.

Sadly, our society has undergone a transition to a state in which everyone collects ongoing streams of zero-sum rewards, which are, by definition, at someone else’s (and often our own) expense. The turbulence caused by this unnecessary and avoidable mix of costs and rewards is all too real for consumers and businesses, but again, they don’t always fully grasp its dysfunctional nature.

The Way To Positive Sums

Of course, there are winners and losers in almost any area of economic life. Even when two individuals engage in mutually beneficial exchange, an otherwise win-win situation, other traders might regret missing out on the deal. Pleasing buyers more effectively than one’s competitors might force those rivals to turn to other pursuits. That’s all for the best from a social point of view, unless they can come up with an even better idea to win back customers. In this way, things can keep getting better and better for everyone, even for the one-time losers who are free to compete in trades to which they are better suited. Winners, then, are defined by their success in creating value for others. These are the productive winners. But again, material success doesn’t always come so honorably.

Bobbing For Booty?

Purely “consumptive” or zero-sum winners might be simple crooks who are able to avoid apprehension, or perhaps they are dishonest business-people who sell goods with hidden defects or inferior workmanship. There are many degrees here: a talented salesperson with shoddy merchandise might compromise on price. A clever product manager might reduce the size of a package slightly without reducing price.

A simple gamble is zero-sum in a purely monetary sense, but both gamblers do it for enjoyment, so there are psychic gains involved. A successful gambler might be a zero-sum winner in a monetary sense, but luck usually runs out on honest players. A cheater qualifies as a zero-sum winner. Conversely, it’s not correct to say that casinos are strictly zero-sum winners, though the odds are always stacked in favor of the house and everyone knows it. Casino patrons enjoy the experience, including other amusements available in casinos, so they are often happy customers despite their losses. They are engaging in mutually beneficial exchange.

Private Affairs Made Public

A short-hand description encompassing much of our zero-sum havoc is “the public trough”. Many zero-sum rewards have arisen out of legislative battles, court cases, and regulatory actions restricting private decision-making and encroaching on private property rights. The unremitting tendency is for expansion of these kinds of actions. Where there are zero-sum winners at the public trough, or an opportunity to expand the trough itself, there are always more covetous seekers of zero-sum winnings, otherwise known as rent seekers. They are reliable promoters of “do-something-ism” relative to the outrage du jour through more legislation, lawsuits, and regulatory filings. The tragic thing about rent seeking is that the process itself consumes resources and undermines private incentives, thereby transforming zero-sum outcomes into wasteful, negative-sum outcomes.

Winners At the Trough

There are many kinds of zero-sum winners at the public trough. The winning and losing often occur separately and asynchronously, connected only by an enabling authority who sets rules and funds winners from proceeds taken from losers. For this reason, it is easy for citizens to lose track of the “zero-sumness” of the many benefits they receive. After all, the government can deliver things for “free”, right? And the connection between one’s obligations, losses, and the gains reaped by others is not always obvious.

All of the following involve some degree of zero-sum activity, and all attract rent seekers:

  • Public aid in exchange for no contribution to output, funded by zero-sum losing taxpayers.
  • Subsidies for politically-favored technologies that are otherwise uneconomic, funded by zero-sum losing taxpayers.
  • Farm subsidies when too much is produced and the output is not highly valued, leading to an overallocation of resources to agricultural activity and rents for farmers funded by zero-sum losing taxpayers.
  • Complex regulatory and tax rules generate income for compliance advisors such as attorneys, accountants, and consultants. Those are rents, pure and simple, paid for by parties who must comply under penalty of law.
  • Regulatory advantage conferred upon firms sufficiently large or dominant to afford compliance. That penalizes smaller competitors and undermines their market position. The additional profit large firms may earn as a consequence is a rent, funded by zero-sum losing consumers and weaker competitors.
  • The award of government contracts is often as much political as it is economic. Such a process is not subject to the market discipline imposed on private contracts, so there is ample opportunity for rents via cost-padding and graft, again funded by zero-sum losing taxpayers.
  • More generally, government purchases of any kind are subject to weak market discipline, like any buyer spending someone else’s money. Thus, government has a tendency to pay prices not supported by economic value, offering rents to suppliers, funded by zero-sum losing taxpayers.
  • The tax deduction afforded to employer-provided health care is a targeted subsidy that leads employees to over-insure. More fundamentally, these employees and their employers are zero-sum winners. It also creates profits for health insurers and drives up health care costs. The zero-sum spoils are to the detriment of other taxpayers and participants in the individual insurance market.
  • Drug prohibition drives up black market profits, creating zero-sum winnings at the expense and safety of users.
  • Social Security creates zero-sum winnings for those who will not or cannot save. But this is a mixed bag to the extent that some people are unable to save privately: their ability to do so is largely usurped via payroll taxes, both on them and on their employer. The many zero-sum losers would otherwise have no difficulty earning better returns on private investments.

There are many other examples. And almost everyone ends up on one side or the other of many different zero-sum outcomes. Show me a government action and I’ll show you zero-sum winners and losers. This is not to say there are no welfare gains associated with government action. Public aid, for example, is intended as social insurance and surely has some value in mitigating the risks of personal economic calamity. Nonetheless, the overextension and poor incentives of aid programs create a significant zero-sum component. Likewise, government spending on public goods creates social benefits, but government is insufficiently incented to economize, creating a zero-sum win for contractors and losses for taxpayers.

Not Zero Sum

While zero-sum winners collect economic rents, the existence of economic rents does not imply a zero-sum winning. For example, members of the so-called rentier class collect passive investment income. Those investments represent a supply of current resources to other parties hoping to transform them into a greater supply of future resources. That’s productive, and so the gains enjoyed by rentiers are not zero-sum winnings, but payments for the use of transformational capital.

Economic profits are those exceeding the owner’s opportunity cost, and they too are called rents. They should not necessarily be classified as zero-sum gains, however. Only sometimes. Successful innovators and first movers often earn economic profits as a reward for their efforts, as do alert entrepreneurs deploying their resources where they are most demanded. This “positive-sumness” applies to monopolists with a hot product just as surely as it applies to a firm facing nascent competition. But economic profits gained through political connections, outright graft, and government-enabled monopoly are zero-sum, enabled by non-market, authoritarian forces. Members of the political class tend to share in these zero-sum gains, and there are many losers.

Zero-Sum Psyche

Unfortunately, zero-sum thinking is deeply ingrained in the human psyche, despite our transition to a higher plane of social cooperation via markets. Even in those markets, certain outcomes might seem zero-sum in the moment. Witness the widespread denigration of the profit motive, which produces efficient outcomes in the long-run. As noted above, over time, the biggest winners tend to be those capable of creating the most value.

If you ask school children today how to get rich, many will say “win the lottery” without hesitation. I know, I know, government-sponsored lotteries are a relatively new phenomenon, and some of the lottery proceeds may benefit schools or other public programs, but the idea that a game of chance is so indelibly ingrained in the minds of children is a manifestation of the psychology of zero-sum success.

The Tangled Mess

So we have the zero-sum winners: successful gamblers, thieves, and rent seekers. The latter root deeply for gains made possible by government intervention in private affairs, actions that always leave room for enduring rents. They always lobby fiercely for new public interventions that might confer private advantages. And then we have the hapless public, stumbling through a series of zero-sum gains and losses made possible by the Leviathan they know and obey. They should look in the mirror, because every law and every program they have allowed their political leaders to hatch, reliably sold as good and just, creates more zero-sum activity to the detriment of long-term economic welfare. Roll it back!

Amazon Fire Fraud

02 Monday Sep 2019

Posted by in Forest Fires, Global Greening

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Leftist activists recently pounced on another opportunity to mischaracterize events, this time in the Amazon Basin, where recent fires were held to be unprecedented. The fires were also characterized as evidence of a massive conspiracy between capitalists and the new government of President Jair Bolsonaro to open the rain forest to commercial exploitation. Warren Meyer squares away the facts at this Coyote Blog post, which is where I found the chart above. Forest clearing in Brazil has been much lower over the past 10 years than during period 1988-2008. It stepped-up somewhat during the first half of 2019, but it still ran at a rate well below 2008. A key reason for the increase is fascinating, but I’ll merely tease that for now.

As for the fires, Meyer provides the following quote about this year’s fires from NASA in a statement accompanying a satellite photo:

“As of August 16, 2019, satellite observations indicated that total fire activity in the Amazon basin was slightly below average in comparison to the past 15 years. Though activity has been above average in Amazonas and to a lesser extent in Rondônia, it has been below average in Mato Grosso and Pará, according to the Global Fire Emissions Database.“

So what was the cause of all the alarm? Meyer points to a August 22 story in the Washington Post, though WaPo might not have been the first. The article was either poorly researched and “fact checked” or it was a deliberate attempt to raise alarm. The sloppy story was picked up elsewhere, of course, and distorted memes spread on social media condemning the Brazilian government and capitalism generally.

The burning that is taking place has been started by farmers preparing land for crops, a process that occurs every year. Meyer quotes the New York Times on this point, which noted that very little of the burning was taking place in old-growth forests.

What’s really ironic and crazy about all this is that U.S. environmental policy is responsible for some of the burning that is taking place in the Amazon. Meyer notes that U.S. ethanol mandates have subsidized a years-long trend of increased sugar cane production in the Amazon Basin. Of course, burning is a regular part of the normal sugar cane harvest. Moreover, that production has contributed to land clearance, offsetting some of the forces that have brought the rate of deforestation in Brazil down overall.

The whole episode dovetails with the ongoing narrative that fires are burning out of control across the globe due to climate change. We heard similar propaganda last year after several large fires in California. Michael Shellenberger does his best to set the record straight, demonstrating that the annual land area burned worldwide has declined by 25% since 2003. He contrasts that record with the hopelessly errant reporting by major media organizations.

As P.T. Barnum once said, a sucker’s born every minute. He might as well have been talking about the armies of well-meaning but gullible greenies who fall for every scare story told by the likes of Al Gore and Leonardo DiCaprio. And scare stories are exactly what these tales of a global conflagration amount to. Meanwhile, as Alexander Hammond explains, global reforestation has taken hold. In what is apparently a paradox to some, this is largely the result of economic growth. Hammond discusses the logical connections between economic development and environmental goods, including reforestation and biodiversity. The bottom line is that the best policies for reforestation are not those imposing obstacles to growth, as the environmental Left would have it. Rather, it is policies that promote development and income growth, which are generally more compatible with individual liberty, that will encourage growth in the world’s forests.

“Recycling Is Largely Fake”

30 Friday Aug 2019

Posted by in Recyclng, Social Costs

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The quotation headlined above is from Duke University economist Michael Munger, and it’s essentially what I’ve contended for years (see “When Is Recycling Not Wasteful?“). Munger’s latest essay on this subject is entitled, “For Most Things, Recycling Harms the Environment“. The reasons are very basic: resource costs. As Munger says, the degree of economic and environmental justification for recycling varies, depending on the item, but few supporters of recycling ever bother to look into the details.

First, a very basic economic point: resource conservation is beneficial for the environment. Sometimes there are technological trade-offs between conservation of different resources, but costs are always a matter of resource use: less use, lower total costs. Resource conservation is synonymous with lower costs. Indeed, that is why we are told to recycle, and that is what most people think they’re doing when they recycle.

But while recycling always conserves some resource more or less directly, the mere process of recycling uses other resources. This includes the costs of rolling trucks to collect the items, including fuel, labor, machinery and labor for sorting, water, chemicals, more distant shipping, and separate processes to convert the items into usable goods. In its entirety, then, recycling often does not conserve resources.

Voluntary consumer-recyclers seldom face the marginal costs of recycling directly. This highlights the general nature of environmental problems that arise in any society: external costs are often borne by parties external to the activity in question. And here is where the story of recycling’s poor economics gets interesting. Recycling advocates would have us believe that our private use of products, for which we generally pay full cost, imposes external or social costs on others unless we recycle all recyclable components of the product and it’s packaging. In fact, the opposite is often true!

Therefore, governments, fully on-board with popular recycling myths, often mandate recycling, which is another way of saying that you are not free to make your own decision based on costs and benefits. So the costs of recycling are on you, but you are unimpacted at any margin along which you can make decisions. You are forced to internalize some part of the costs that are presumptively avoided via recycling according to the myth. You pay taxes to fund the collection of materials at the curb, but governments often require citizens to clean and sort those materials. That carries significant costs that governments prefer to remain implicit.

This is to say nothing of the actual net value of the recycled materials, which is often negative. Certain items require so much processing and produce materials of such low quality that no one wants them. Virgin materials are often cheaper than fully processed recycled material, and usually yield better quality, or both. Far better, then, to pay the cost of transporting these kinds of discards to landfills and paying for the low-cost landfill space, which is plentiful, contrary to greenist propaganda.

Munger provides examples of such wasteful-to-recycle materials. For instance, attempts to recycle glass bottles are often completely non-productive relative to landfilling. That’s due to cost factors, lousy quality after processing, and weak market prices for recycled glass. Plastics are of questionable value as recyclables as well: huge quantities had been shipped to the Far East, but the volume was too much for the Chinese (and too dirty, they claimed), so it often ended-up in landfills anyway. Last year, the Chinese banned imports of recyclable plastics from several countries, which means that our plastic materials are probably headed for our own landfills. Yet we still go to the trouble of preparing and collecting them for recycling.

According to Munger, aluminum cans are worthwhile to recycle relative to landfilling. So are certain types of cardboard (though the Chinese don’t want some of those either). Also, scrap metals are privately recycled via active markets for the materials.

Private parties who can internalize costs in their voluntary decisions are wise to abide by the following:

“I have sometimes suggested a test for whether something is garbage or a valuable commodity. Hold it in your hand, or hold a cup of it, or tank, or however you can handle it. Consider: Will someone pay me for this? If the answer is yes, it’s a commodity, a valuable resource. If the answer is no, meaning you have to pay them to take it, then it’s garbage.”

Of course, society as a whole must internalize costs. There’s no way around it. Therefore, governments should behave as if they internalize costs as well, though they hardly ever do. They would sooner mandate recycling when they know full well that the simple economics outlined above don’t support it. That means an unnecessary consumption of resources is attributable to the recycling charade, which is environmentally unsound by the strictest of Green standards.

I am not quite so hard on government recycling mandates when there exist significant external costs associated with sending uneconomic trash to landfills, or when there are real efficiencies associated with recycling. Landfills must price their space efficiently, collecting sufficient fees from users to pay for environmental mitigation as well as the payoffs necessary to mollify those nearby who might happen to harbor NIMBY-ism. But recycling mandates offer strong evidence that the economics of recycling are not worthwhile. So please, whenever you are told that recycling is virtuous, be suspicious. As Munger says, it’s largely a fraud.