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Anti-Capitalists Prescribe Third-World Phlebotomy

12 Monday Oct 2015

Posted by Nuetzel in Free Trade, Human Welfare

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Benjamin Powell, Economic Development, Fair Trade, Huffington Post, International Food Policy Research Institute, James Bovard, Johan Norberg, Penn Jillette, Protectionism, Sweatshops, Texas Tech University, The Freeman, Third-World Wages, World Bank

nike-sweatshop-cartoon3

Working conditions and wages in the third-world usually look so undesirable to observers in developed countries that we commonly use the term “sweatshops” to describe production facilities serving global markets in developing countries. Those facilities, however, are relatively modern by their domestic standards. The wages and working conditions are far superior to traditional opportunities available to the workers, offering them a rare opportunity to get out of poverty. But it is not uncommon to hear a narrow view that these workers are “exploited”, as if shutting down those operations was a better alternative. Calls for boycotts and other measures to punish firms with ties to those facilities are a common refrain from the Left, but if successful, the real victims of such activists would be the very workers whose interests they claim to represent.

Johan Norberg makes this all too clear in the Huffington Post, in “How Your T-Shirt Saves the World“, citing reports from the World Bank and the International Food Policy Research Institute: 

“The number of extremely poor in Bangladesh fell from 44 to 26 million between 2000 and 2010, despite the population growing by 15 million. Since 2004, the level of poverty in Cambodia has more than halved, from 52 to just over 20 percent. It is ‘one of the best performers in poverty reduction worldwide’, according to the World Bank.

This is a stunning success in the countries that need it the most, and the export sector has been instrumental in bringing it about. It increases the workers’ productivity, and therefore also their wages and working conditions, which has been especially important for women. In a study from the International Food Policy Research Institute, the researchers show that the increase in Bangladeshi wages from the garment sector ‘dwarfed’ the rise attributed to government programs. …

Obviously even the best jobs in very poor countries look bad compared to what we are used to in Europe and America, but that is not the alternative in an economy at a low level of capital and education. As a worker I interviewed in Vietnam once put it, the main complaint to management was that she wanted the factories to expand so that her relatives could get the same kinds of jobs.“

This is a very basic lesson in the process of economic development, and no one pretends that it’s easy. In this interview of Professor Benjamin Powell of Texas Tech University in The Freeman, he quotes Penn Jillette of Penn & Teller:

“The way Penn … put it once when he interviewed me is that ‘it’s better than tilling the soil with Grandpa’s femur.’ That is a bit crass . . . but true. Wishing away reality doesn’t give these workers better alternatives. Workers choose to work in sweatshops because it is their best available option. Sweatshops, however, are better than just the least bad option. They bring with them the proximate causes of economic development (capital, technology, the opportunity to build human capital) that lead to greater productivity—which eventually raises pay, shortens working hours, and improves working conditions.“

When you hear anyone talk about “exploitation” of workers in the third world by capitalists, ask them what alternatives they have in mind for lifting those workers out of poverty. Chances are they will pretend that firms can offer pay at levels far exceeding the current productivity of the workers — a prescription for closing the operations. Or they might offer naive suggestions that rely heavily on government as a benefactor, which are unlikely to succeed in ending poverty. They might even advocate for “fair trade”, which is leftist ear-candy code for protectionism. Nothing could be worse for first-world consumers or more harmful to the cause of economic development in the third world. As Norberg says of the so-called “sweatshops”: “The world needs more jobs like these, not fewer.“

Will ET Be a Socialist?

19 Wednesday Aug 2015

Posted by Nuetzel in Capitalism, Socialism, Space Travel

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B.K. Marcus, Capitalism, Carl Sagan, central planning, Colonizing Mars, Elon Musk, Enrico Fermi, Extraterrestrials, F.A. Hayek, Fermi Paradox, Huffington Post, Interstellar Travel, io9, Large Hadron Collider, NASA, Neil deGrasse Tyson, Planned Society, Private Space Exploration, Public goods, Self-Replicating Machines, SETI, Socialism, SpaceX, The Freeman, The Great Filter, Tim Urban

image

If we are ever visited or contacted by agents from an extraterrestrial civilization, what kind of society will they come from? The issue is given scant attention, if any, in discussions of extraterrestrial life, at least according to this interesting piece in The Freeman by B.K. Marcus. The popular view, and that of many scientists, seems to be that the alien society will be dominated by an authoritarian central government. Must that be the case? Marcus notes the negative views taken by such scientific authorities as Neil deGrasse Tyson toward laissez faire capitalism, and even Carl Sagan “… could only imagine science funded by government.” Of course, Tyson and Sagan cannot be regarded as authorities on economic affairs. However, I admit that I have fallen into the same trap regarding extraterrestrial visitors: that they will come from a socialist society with strong central command. On reflection, like Marcus, I do not think this view is justified.

One explanation for the default view that extraterrestrial visitors will be socialists is that people uncritically accept the notion that an advanced society is a planned society.  This runs counter to mankind’s experience over the past few centuries: individual freedom, unfettered trade, capitalism and a spontaneous social order have created wealth and advancement beyond the wildest dreams of earlier monarchs. Anyone with a passing familiarity with data on world economic growth, or with F.A. Hayek, should know this, but it Is often overlooked. Central planners cannot know the infinitely detailed and dynamic information on technologies, resource availability, costs and preferences needed to plan a society with anything close to the success of one arranged through the voluntary cooperation of individual actors.

Many of us have a strong memory of government domination of space exploration, so we tend to think of such efforts as the natural province of government. Private contractors were heavily involved in those efforts, but the funding and high-level management of space missions (NASA in the U.S.) was dominated by government. Today, private space exploration is a growth industry, and it is likely that some of the greatest innovations and future space endeavors will originate in the private sector.

Another explanation for the popular view is the daunting social challenges that would be faced by crews in interstellar travel (IST). Given a relatively short life span, a colonizing mission would have to involve families and perhaps take multiple generations to reach its destination. There is a view that the mini-society on such a ship would require a command and control structure. Perhaps, but private property rights and a certain level of democratization would be advantageous. In any case, that carries no implication about the society on the home planet nor the eventual structure of a colony.

A better rationale for the default view of socialist ETs involves a public goods argument. The earth and mankind face infrequent but potentially catastrophic hazards, such as rogue asteroids and regions of strong radiation as the sun orbits the center of the Milky Way galaxy. These risks are shared, which implies that technological efforts to avert such hazards, or to perpetuate mankind by colonizing other worlds, are pure public goods. That means government has a classic role in providing for such efforts, as long as the expected benefits outweigh the costs. The standard production tradeoff discussed in introductory economics classes is “guns versus butter”, or national defense (a pure public good) versus private consumption. IST by an alien civilization could well require such a massive diversion of resources to the public sector that only an economically dominant central government could manage it. Or so it might seem.

As already noted, private entrepreneurs have debunked the presumed necessity that government must dominate space exploration. In fact, Elon Musk and his company SpaceX hope to colonize Mars. His motives sound altruistic, and in some sense the project sounds like the private provision of a public good. Here is an interpretation by Tim Urban quoted at the link (where I have inserted a substitute for the small time-scale analog used by the author):

“Now—if you owned a hard drive with an extraordinarily important Excel doc on it, and you knew that the hard drive pretty reliably tended to crash [from time to time] … what’s the very obvious thing you’d do?
You’d copy the document onto a second hard drive.
That’s why Elon Musk wants to put a million people on Mars.”

Musk has other incentives, however. The technology needed to colonize Mars will also pay handsome dividends in space mining applications. Moreover, if they are successful, there will come a time when Mars is a destination commanding a fare. Granted, this is not IST, but as technology advances through inter-planetary travel and colonization, there is a strong likelihood that future Elon Musks will be involved in the first steps outside of our solar system.

While SpaceX has raised its capital from private sources, it receives significant revenue from government contracts, so there is a level of dependence on public space initiatives. However, the argument made by Marcus at the first link above, that IST by ETs is less likely (or impossible) if they live under a socialist regime, is not based primarily on recent experience with private entrepreneurial efforts like Musk’s. Instead, it has to do with the inability of socialist regimes to generate wealth, especially the massive wealth necessary to accomplish IST.

Discussions of ETs (or the lack thereof) often center around a question known as the  Fermi Paradox, after the physicist Enrico Fermi. He basically asked: if the billions and billions of star systems, even in our own galaxy, are likely to harbor a respectable number of advanced civilizations, where are they? Why haven’t we heard from them? My friend John Crawford objects that this is no paradox at all, given the vastness of space and the difficulty and likely expense of IST. There may be advanced civilizations in the cosmos that simply have not been able to tackle the problem, at least beyond their own stellar neighborhood. No doubt about it, IST is hard!

I have argued to Crawford that there should be civilizations covering a wide range of development at any point in time. In only the past hundred years, humans have increased the speed at which they travel from less than 50 miles per hour (mph) to at least 9,600 mph. The speed of light is approximately 270,000 times faster that that! At our current top speed, it would take almost 50% longer to reach our nearest neighboring star, Alpha Centauri, than the entire span of human existence to-date. With that kind of limitation, there is no paradox at all! But I would not be surprised if, over the next 1,000 years, advances in propulsion technology bring our top speed to within one-tenth of the speed of light, and perhaps much more, making IST a more reasonable proposition, at least in our “neighborhood”. There may be civilizations that have already done so.

Answers to the Fermi Paradox often involve a concept called the Great Filter. This excellent HuffPo article by Tim Urban on the Fermi Paradox provides a good survey of theories on the Great Filter. The idea is that there are significant factors that prevent civilizations from advancing beyond certain points. Some of these are of natural origin, such as asteroids and radiation exposure. Others might be self-inflicted, such as a thermonuclear catastrophe or some other kind of technology gone bad. Some have suggested that the Large Hadron Collider in Switzerland could be a major hazard to our existence, though physicists insist otherwise. Another example is the singularity, when artificial intelligence overtakes human intelligence, creating a possibility that evil machines will do us in. The point of these examples is that some sudden or gradual development could prevent a civilization from surviving indefinitely. These kinds of filters provide an explanation for the Fermi Paradox.

More broadly, there could be less cataclysmic impediments to development that prevent a society from ever reaching an advanced stage. These would also qualify as filters of a sort. Perhaps the smart ETs lack, or failed to evolve, certain physical characteristics that are crucial for advancement or IST. Or their home planet might be light on certain kinds of resources. Or perhaps an inferior form of social organization has limited development, with inadequate wealth creation and technologies to transcend the physical limitations imposed by their world. On a smaller than planetary scale, we have witnessed such an impediment in action many times over: socialism. The inefficiencies of central planning place limits on economic growth, and while high authorities might dictate a massive dedication of resources toward science, technology and capital-intensive space initiatives, the shift away from personal consumption would come at a greater and greater cost. The end game may involve a collapse of production and a primitive existence. So the effort may be unsustainable and could lead to social upheaval; a more enlightened regime would attempt to move the society toward a more benign allocation of resources. Whether they can ever accomplish IST is at least contingent on their ability to create wealth.

Socialism is a filter on the advancement of societies. ETs capable of interstellar travel could not be spawned by a society dominated by socialism and central planning. While government might play a significant role in a successful ET civilization, one capable of IST, only a heavy reliance on free-market capitalism can improve the odds of advancing beyond a certain primitive state. Capitalism is a relatively easy ticket to the wealth required for an advanced and durable civilization, and conceivably to the reaches of the firmament.

Unfortunately, there is absolutely no guarantee that capitalistic ETs will be friendly  toward competing species, or that they will respect our property rights. They might be big, smart cats and find us mouse-like and quite tasty. Their children might make us perform circuses, like fleas. In any case, if ETs get this far, it’s probably because they want our world and our resources. My friend Crawford says that they won’t get here in any case. He believes that the difficulty of IST will force them to focus on their own neighborhood. Maybe, but on long enough time scales, who knows?

I would add a caveat to conclusions about the strength of the filters discussed above. A capitalistic society might reach a point at which it could send artificially intelligent, self-replicating machines into space to harvest resources. Those machines might well survive beyond the end of the civilization that created them. Conceivably, those machines could act autonomously or they could take coordinated action. But we haven’t heard from them either!

For a little more reading, here is SETI‘s description of the Fermi Paradox, and here is a post from io9 on the Great Filter.

Will SCOTUS Grant Executive License To Rewrite Laws?

07 Saturday Mar 2015

Posted by Nuetzel in Obamacare

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ACA, Consequentialism, Executive license, Huffington Post, Jonathan Adler, Jonathan Cohn, King v. Burwell, Obamacare, Real Clear Politics, SCOTUS, Sean Trende, statism, The Joy of Cooking, U.S. Supreme Court, Zero Hedge

congress-obamacare-cartoon

Can a piece of legislation say any old thing, leaving the executive branch as the arbiter over what the law “should” say?  Can the executive decide a law means one thing ex ante and another ex post? That would be bizarre under the U.S. Constitution, but the Obama Administration has arrogated to itself the role of legislator-in-chief in its implementation the Affordable Care Act (ACA), aka Obamacare, effectively rewriting the law by repeatedly granting waivers and delaying key provisions. And the apparent legal doctrine of “executive license” to rewrite laws would be affirmed if the Supreme Court rules for the government in King v. Burwell.

The case, which was argued before the Court this week, revolves around whether the ACA allows subsidies to be paid on health insurance purchased by qualified consumers on federal exchanges. The plaintiffs say no because, in the “plain language of the statute”, subsidies can be paid only for health insurance purchased on exchanges “established by the state”. A ruling is expected in June.

The provision in question was intended to incent state governments to establish their own exchanges. Most states chose not to do so, however, instead opting to allow their citizens to purchase insurance on a federal exchange. Subsequently, the IRS overrode the provision in question by granting subsidies for purchases on any exchange. The case will be historic if the federal exchange subsidies are overturned, but if not, the ruling will still be historic in setting a precedent that the executive branch can enforce a view of Congressional intent so divergent from written law.

The most interesting aspect of the SCOTUS hearing was Justice Kennedy’s expressed concern that a ruling for the plaintiffs would create a situation in which the federal government coerced states into establishing exchanges, posing a conflict with principles of federalism. The Wall Street Journal was fairly quick to point out that the subsidies were intended as an incentive for states, not unlike many other incentives for state participation incorporated into a wide variety of federal programs:

“If Governors decline to establish an exchange, their citizens are not entitled to benefits, but that is not coercion. That is the very trade-off that is supposed to encourage states to participate. If the subsidies will flow no matter what, few if any states would become the partners the Administration wanted.

More to the point, federalism is supposed to protect political accountability. Two-thirds of the states made an informed decision to rebuff ObamaCare, but if voters prefer otherwise, they can elect new Governors who won’t. If federal subsidies flow no matter what, then states aren’t presented with a real choice. That isn’t how federalism works in the American system. As Justice Kennedy rightly noted, the exchange decision was partly ‘a mechanism for states to show they had concerns about the wisdom and workability of the act in the form that it was passed.’”

Jonathan Adler has some thoughts on the same issues here and here. At the second link, Adler gives a more detailed explanation of Kennedy’s concern, which involves additional regulatory implications for the states. Adler also  covers some court precedents for the kind of “coercion” at issue in King. On one case, New York v. United States, Adler says:

“In the very case that established the current anti-commandeering doctrine, the Court said there was no problem with Congress using its regulatory authority to encourage state cooperation.”

The Court would be reluctant to rule for the plaintiffs based on a principle contrary to so many of its own previous rulings. Such a justification would appear to undermine the existing extent of federal direction of state activity — a possible silver lining to a ruling for the government. But Adler also notes that what is so unique about the ACA relative to earlier precedents is that so many states decided to opt out, and there is plenty of evidence that they did so with their eyes wide open. The loss of the federal subsidies was not the only consideration in those decisions:

“… while states that choose to forego subsidies are exposing their citizens to an increase in one regulatory burden, they are relieving their citizens of others, and at least some states are perfectly happy to make that choice.”

An amusing analogy to the distinction between federal exchanges and state-established  exchanges is made by Jonathan Cohn in the Huffington Post. He contends that federal and state exchanges are comparable to the the choice between butter and oil in a pancake recipe from The Joy of Cooking. You get pancakes either way, says Cohn. Therefore, he asserts that the case against the government in King is based on a specious distinction. Sean Trende at Real Clear Politics point out that the two kinds of pancakes are not the same. If Congress wishes to reward the use of butter, then one should expect the government preserve that distinction in distributing rewards.

Trende points to another distinction missed by Cohn: suppose Congress also said that the batter must be whipped by a blender at 300 rpm. In the case of Obamacare, Congress stated that an exchange must be established by a state to qualify buyers for subsidies, and it did so with the full intent of gaining cooperation from states in shouldering the administrative burdens of the law. Of course, different pancakes might be close enough, but in the end, specific language was used by Congress to create incentives for the use of certain ingredients and a particular mixing technique. The meaning of the pancake law is clear enough and is independent of whether administration officials can dream up substitutes, even if they are right out of The Joy of Cooking.

The four statist justices (some claim they are liberal) emphasized the dire consequences that a ruling for the plaintiffs would have on the insurance market and on individual buyers in states using the federal exchange. While the impact could be mitigated by the Court in various ways, the impact itself has been exaggerated by Obamacare supporters. This piece at Zero Hedge examines the likely impact in detail, but it fails to discuss a few significant benefits related to the employer and individual mandates to residents of states without their own exchanges.

Justice Kennedy is unlikely to side with the government in this case, despite his concerns about coercive federal policy. Justice Roberts was silent for almost the entire hearing, and it is not clear whether he will side with the consequentialists, find another avenue for upholding the subsidies, or defer to the plain language of the law. The Court might engage in a form of avoidance, finding  a way to dismiss the case on unexpected grounds such as a lack of standing (though few consider the plaintiffs’ standing to be an issue). That would effectively grant the administration carte blanche in rewriting legislation.

Pesticides Preferable To Pests, Damaged Crops

08 Thursday Jan 2015

Posted by Nuetzel in Uncategorized

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Tags

Autism, Biofortified, Coyote Blog, Discover, Facebook GMO Skepti-Forum, Glyphosate, Huffington Post, Kevin Drum, MIT, National Public Radio, pesticdes, Stephanie Seneff, Synthetic vs. natural pesticides, Warren Meyer

10269496_10152643243618460_6812219241634879386_n

The chart above is something of a joke, but it has a serious point: it provides evidence every bit as solid as some research making the rounds on social media. Bad science finds easy footholds on the internet, but more shocking is the ease with which it is tolerated and even promoted within academe. But according to Warren Meyer, we live in the age of “post-modern science“:

“It means that certain data, or an analysis, or experiment was somehow wrong or corrupted or failed typical standards of scientific rigor, but was none-the-less (sic) ‘accurate’. How can that be? Because accuracy is not defined as logical conformance to observations. It has been redefined as ‘consistent with the narrative.’”

Here is a particularly egregious example of scientific swill that I have seen posted several times over the past few days: “MIT Researcher: Glyphosate Herbicide will Cause Half of All Children to Have Autism by 2025“. The headline itself is more than sufficient to sound the BS alarm. This MIT “researcher”, Stephanie Seneff, is not a biologist, chemist, or geneticist. As it happens, she is a computer scientist (with advanced degrees in electrical engineering) who specializes in “text mining.” Her work, apart from serving as an activist, involves finding correlations between the appearance of words and “adverse outcomes” in reports and literature. She has a reputation in the scientific community as a bit of a “quack”. In this case, HuffPo goes so far as to say that her glyphosate research is “dumb.” Discover has also objected to Seneff’s work, and MIT’s tolerance of it.

A frequent refrain in critiques of research is that correlation is not causation, a fact that is demonstrated by the chart above and Seneff’s research. At best, Seneff presents evidence of correlation between the uses of certain words, the selection of which may be subject to severe bias. In addition, there is no convincing evidence that autism is increasing, but there is plenty  of evidence that the definition and diagnosis of autism have expanded dramatically. There is increasing evidence that autism is often of purely genetic origin.

Here are a couple of other useful links debunking Seneff’s work:

“Medical Doctors weigh in on Glyphosate Claims”

“Stephanie Seneff: Following the Geiers dumpster-diving in the VAERS database”

Synthetic pesticides like glyphosate are applied to crops in low concentrations that are unlikely to cause harm. So-called natural pesticides are often applied more heavily because they are less effective at controlling pests. It is not clear that one is safer than the other. Here is a nice piece on synthetic vs. natural pesticides.

Kevin Drum has asserted that the internet contributes to “cognitive inequality”. That is, it “makes smart people smarter and dumb people dumber”. The spread of disinformation like Seneff’s research via social media is a good case study of the latter part of Drum’s claim.

A big hat tip to members of the Facebook GMO Skepti-Forum for many of the links above.

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