Sunday, April 25, 2010

Re An Education

You'll probably have to click on the title of this post to read the whole thing. Beware, there are plenty of spoilers after the jump.

Sunday, April 18, 2010

An Education

  1. We watched the movie An Education this weekend, and I thought it was very good. I want to say a few things about it, but it will ruin the movie. Everyone watch the movie this week and I'll blog about it next week.
  2.  One more thing about a conflict of visions (for now, anyway). I think it kind of informs the Public Choice theory I was talking about two post ago (the outcomes of elections being mostly random). One of Boudreax's points in that podcast is that political candidates are a combination of different positions, such that any politician you vote for is likely to hold a number of positions you don't support. And you cannot desegregate the positions; you have to compromise and pick the candidate that best represents your thoughts, taking the good with the bad. But one thing I think does help the situation is that people more or less fall into two camps. They have either a constrained vision (Republican) or an unconstrained vision (Democrat).  I think this undercuts Boudreaux's point because even though when we vote we have to choose a bundle of positions, Sowell's point is we are actually very likely to have preferences that strongly align with one of two bundles.
  3. Let me see if this situation strikes you as a paradox like it did me. In the church we can get baptized if we are accountable, but there is no need if you are not accountable. In fact, you may not be permitted to be baptized if you are not accountable. But of course, if you were never accountable--say you are mentally handicapped--then that is no drawback because you are not responsible for your sins. But what if you are accountable, but then become unaccountable? Well, you probably can't get baptized can you, because baptism is a covenant, and you have to enter by choice, but you are not capable of making that choice. But you also are still responsible for your sins. It's kind of a catch 22--your accountable for your sins, but you can't do anything about them. Well, the one safety valve on this scenario is that once you actually die, a baptism for the dead can be performed for you. So you own body can't be baptized, but a surrogate's can. It all works out, but it's kind of strange, that you have to die so that someone else can be baptized for you, and then you can choose to accept that baptism in the after-life, as opposed to just getting baptized yourself and choosing later.
  4. You can read some of my thoughts on using U.S. military power, here. And you can comment on this post, if you don't want to comment at B v. E.
  5. It's getting late, but I still wanted to write something about vouchers. This study could be better (click through for a summary), although this reply makes some good points. I initially felt a huge let down. Based on first principles, it seemed to me any school choice program had to improve education. On further reflection here are few thoughts on why that doesn't seem to be the case or on what the study might mean:
    1. Education has improved but we may not be measuring how it has improved.
    2. Surrounding public schools may be competing for students, so an overall improvement in the education of students in the area may be a result of competition, with no significant variance between the quality of public and private schools.
    3. Home and family environment are obviously the most important factors in education. Maybe vouchers improve education, but perhaps the effect of a modest or even significant increase in school quality is simply drowned out by other factors playing into education,  like home, family and friends. (I did, however,  kind of think that giving parents some control over where their children went to school would encourage parents to be more involved.)
    4. School vouchers don't improve school quality. Suppose for a second that vouchers make absolutely no difference in education. Well that means they haven't hurt education. And now parents have a choice. It seems to me like giving people a choice, even one that doesn't make much of a difference, is still a good thing. It could make a difference down the road? And it at least makes parents feel better about the education their kids are getting. (Or is that just deception?)

Friday, April 2, 2010

Seen and Unseen

I think one of the hardest things to do when thinking about economics is to take into consideration the hidden consequences of actions and policies. Here's and example of that in the fallacy of the broken window.

If you didn't know better, you'd think a hoodlum breaking a window creates a bunch of economic activity, and so is actually good for the economy. But of course, the unseen is the economic activity that would have happened anyway as the butcher spends the money, not on a window, but on some other good.

The same problem arises in the debate between free trade and protectionism. We feel bad for people losing their jobs when their jobs go oversees. We see the jobs leaving, and think that they aren't going to come back. But of course, we've had a similar free trade policy for a a couple decades now, and in actuality our unemployment rate hasn't gone up as a result. But real income (when taking into consideration benefits) has gone up. (you can see an hour long, but good debate between Don Bordreaux and Thea Lee here making these points) What we don't see is the net benefit to consumers through lower prices because it's not immediately apparent.

The benefits of past economic growth are also hidden in plain sight. Here's a pretty funny and insightful clip of comedian Louis CK pointing out how far we've come, and how little we appreciate it.  Brink Lindsay makes a similar point in a very interesting but more academic way in this podcast. Basically he talks about how like, 100 years ago 99 percent of us would have been poor farmers toiling day-in, day-out to make ends meet. People talk about how we have meaningless work, but unless you wanted to be a farmer (which is still a possibility), we have endlessly more opportunities for self realization and interesting and meaningful work. We also have 6 hours more free time a week for self realization. Even the poorest of us have a lot more money to buy books, music, musical instruments, to give to charity and to do all sorts of things to make our lives more meaningful, not to mention longer and more convenient.

My final unseen is what is going to happen in the future. Or more specifically what could happened had we pursued a different course. I understand in the early 50s France and the U.S. had approximately the same GDP per capita. That is people made about the same amount of money in each country. Now the U.S makes about $13,000 per person.(and I've read elsewhere that the gap is even larger). It's generally accepted that higher taxes mean less economic growth, and that is exactly what France (and Germany, who has a similar story) have had for the last several decades). We now are now on an unsustainable path of taxes too low to pay for all the great benefits we've promised people. At some point we're going to have to raise taxes. That'll mean less money to invest privately. It'll also mean less incentive to innovate an create new technology, which is really the driving force for economic growth. So we see the immediate benefits to the money that is spent on  benefits, but don't see the companies that were never started and the technology that was never invented.

These four fallacies are so common because people assume that what they see is all there is to reality:

  1. We see that inefficient spending stimulates economic activity, but don't see that the money could have been spent in another more efficient way.
  2. We see that people lose their jobs to outsourcing, but don't see that trade creates new jobs, and that trade lowers prices for consumers.
  3. We see current economic problems and blame them on our economic system, but we don't see, or we take for granted all the progress and benefits our less-than-perfect economic system gives us.
  4. We see the current benefits of spending, and we see the path the economy actually takes, but we don't see the opportunity cost of that spending. We don't see technological breakthroughs and innovations we have lost or would have enjoyed earlier with faster economic growth.