Saturday, July 31, 2010

China accused of offering foriegn aid to America

One of the hidden benefits of internet communication is that you end up with a written transcript of your conversations. In reference to reports of China subsidizing its paper industry, my friend Chris recently asked me:

"According to Milton Freidman, the Chinese subsidizing paper for us to buy would be a good thing, because they absorb the extra costs and sell it to us cheaper (the same as his Japanese steel analogy). But, this is eliminating jobs here in the US. So, wouldn't you think that ultimately the most important thing is jobs? Apparently Congress things so. Wouldn't banning or placing tariffs on Chinese imports be a good solution to create jobs in the US again?"
Chris is referring to what Friedman said about allegations that Japan was subsidizing its steel industry, and what it would do to the American economy:

As Friedman said, channeling the wisdom of Adam Smith, Americans will simply get cheaper steel. The American steel industry will shrink, and steel workers will get other jobs in America. These jobs will be created because the Japanese will have American dollars to spend and will spend it on other American goods. Other American industries will grow, compensating for the loss of the steel industry. Meanwhile American consumers will benefit because their steel purchases were subsidized by the Japanese taxpayers. Friedman compared this to receiving foreign aid.

Chris was right to compare the two examples. Chinese paper will be no different. If it's true and Americans buy cheaper paper from China, the American paper industry will get smaller while other American companies get bigger as exports increase.

So the actual number of jobs will not change. The tariffs would make imported paper more expensive, so Americans will buy less of it. This means less American dollars abroad, so the increases to exports will not happen. The difference is that we will protect the visible jobs we can name, at the expense of the invisible jobs that will happen, but we can't say where.

A tariff is supposed to be a tax a company pays to import something to America. But in reality, a tariff is a tax consumers must pay for the right to buy things produced in other countries. If there is a $5 tariff for a unit of paper, the paper will cost the American consumer $5 more than it should. The paper company already paid that $5 to the government and will have to charge the customer for it.

Can tariffs create jobs?

The second part of the question is if tariffs should be used to create American jobs. Let me be clear, tariffs absolutely create jobs, just as blinding half the population would create jobs to take care of them, or burning Paris would create construction jobs.

But those are terrible things to do. Creating jobs is not a goal in and of itself. It's the creation of goods and services that make a society wealthy, not keeping people busy.

George Will has a Friedman anecdote that sheds light on this:

"He went to Asia in the 1960s and was proudly taken by the government to see a public works project. They were building a canal. He was struck everyone was digging the canal with shovels. Friedman says, why no heavy earth-moving equipment?

"They said, oh, this is a jobs program. So Friedman says, why don't you give them spoons instead of shovels?"
Who cares how many people are kept busy? It's productivity that matters. As an industry gets more productive, it doesn't create more jobs - it destroys them. As Paul Krugman wrote:

"The kinds of jobs that grow over time are not the things we do well but the things we do badly. The American economy has become supremely efficient at growing food; as a result, we are able to feed ourselves and a good part of the rest of the world, while employing only two percent of the work force on the farm. On the other hand, it takes as many people to serve a meal or man a cash register as it always did; that's why so many of the jobs our economy creates are in the food service and retail trade. Industries that achieve rapid productivity growth tend to lose jobs, not gain them."
Using tariffs to protect American jobs is not a new idea. It's not even a new idea during times of high unemployment. The Smoot-Hawley Tariff of 1930 was the exact same idea. Tariffs were established on some 20,000 imported goods. It did not work and the United States sank deeper into the Great Depression. Imports went down, as did exports.

As I've said before, reject any scheme to improve an economy or increase wealth by being purposely inefficient. Jobs should be created as a side effect of improvements to our society. If you aim to improve the quality of peoples lives by offering new goods and services, the jobs will follow.


Wednesday, July 28, 2010

The myth of the puppet resistance

I put a lot of work into demonstrating respect for the people I disagree with. Most of that work is fighting human nature and biases that tend to brush aside challenging views without really listening.

I've written before that people can disagree without one side being stupid, or evil.

But what about one side being a front?

There's a very strong sense of paranoia in some groups. The basic idea is that they are absolutely right, and no one actually disagrees with them. When people do speak up with intelligent, rational arguments to the contrary, it is because they were paid to say them.

This overlaps a lot with the post about evil opponents, and I'm going to recycle Penn Jillette's quote from 2008 about Democrats who believe:

"If you boil it all down, that Bush and McCain and Palin agree with the Democrats 100 percent on everything, and are then doing the opposite. They do not believe there is a disagreement. They do not believe that Bush is a person trying to do the best he can do, who is wrong."
The difference here is that this time people are supposedly lying not because they have evil plans, but because they have been bribed.

I encounter this all the time with the "Buy Local" crowd. The supporters are enthusiastic, but some are downright fanatical and reveal a lot of paranoia when their views are challenged. Just look at the comment section whenever the Freakonomics Blog posts a legitimate intellectual disagreement from an academic that pokes holes in the localist philosophy. It got so bad the first time that Stephen Dubner wrote:

"A blog post from a few months ago — titled “Do We Really Need a Few Billion Locavores?” — upset many eat-local fans. Among the many sins I committed were... being the kind of grump who hates all good things including nature, children, puppies, etc. (Believe that if you must; I hope it is not true.)"

But the comments in response to William A. Master's remarks about a realistic sustainable food system that uses industrial technology weren't just mad; they were accusations of fraud:

"I want to know who funds his research."

There there was:

"After reading his speech one of two things must be at play

"1) he is a robot and doesn’t required actual food that humans eat (or hasn’t ever actually tasted food, local or industrial)

"2) is paid by Monsanto / Cargill / etc…."

Three weeks after the post went up, this gem was added to the comments section:

"You know we are in trouble when sophistry is used to convince the public that what we all know is true from first hand experience is, actually, false. War is peace, hate is love, and if you just look deeper you are told that only highly concentrated industrial agriculture holds the key to health, happiness, economic prosperity, and the salvation of all mankind. Just eliminate common sense – and you will know the truth? I think Monsanto should spray our air with chemicals – since their air will be safer than the natural air we breathe. Then charge us for it."

Two out of the three named the scapegoat agricultural company Monsanto. If you swap "Monsanto" out for "The Devil" or "The CIA" whenever it appears in food Luddite literature, you end up with a text indistinguishable from doomsday prophecies or wild conspiracy theories.

It's very easy to reinforce a cherished belief by automatically rejecting all opposing views as a plant by a big corporation or the government. What these people need to ask themselves is, what if you are wrong and someone sincere tried to tell you so? How would you know the difference?


Sunday, July 25, 2010

Did Obama appoint a mercantalist to oversee trade?

Don Boudreaux certainly things so. Three posts in two days at Cafe Hayek are about nonsense Francisco Sanchez has said. Sanchez is the Undersecretary of Commerce for International Trade, which is a pity, as Boudreaux thinks Sanchez fails to understand international trade.

From a letter to the Wall Street Journal by Sanchez:

"What Sen. Johanns dismisses as "dither[ing]" on free-trade deals, is in fact Ambassador Ron Kirk's commitment to negotiating tough bargains, ensuring that when America gives other countries the privilege of free and fair access to our market, U.S. businesses will get the same treatment in theirs...

"We heartily agree that exports deserve to be a national priority because, as Sen. Johanns said, 'Increased exports mean more jobs for American workers and more dollars in American pockets.'"

Some of us don't heartily agree. As Paul Krugman wrote in what has become one of my favorite quotes:

"... Imports, not exports, are the purpose of trade. That is, what a country gains from trade is the ability to import things it wants. Exports are not an objective in and of themselves: the need to export is a burden that a country must bear because its import suppliers are crass enough to demand payment."
Free trade is not conducted like a peaceful end to a Mexican standoff, where both sides uneasily cooperate in hopes their opponent will do the same. We do not allow other nations to import to America as a compromise so that we can export goods to them, as I've written before. Instead, we benefit from imports directly because Americans can now buy cheap goods and save money, or as Sanchez put it, keep "more dollars in American pockets."

Sanchez certainly has a great resume for politics. And it certainly didn't hurt that he was an early Obama supporter and fundraiser. However, his expertise seems to be in negotiations and policy issues - not international trade.

Sanchez could learn a lot from
Boudreaux, who wrote:

"Exports, as such, are no more or less fundamental to a country’s economic prosperity than are, say, products that are yellow. Suppose that in competitive markets growers of lemons and sunflowers thrive, along with producers of yellow polka-dot bikinis. Would it therefore be wise economic policy for government – impressed by the profits earned by these yellow-thing producers – to artificially encourage the production of greater numbers of yellow things? Clearly not; such a conclusion is obviously unwarranted. Yet a similar error in reasoning is applauded when the products are labeled 'exports.'”
Looks like another case of a non-expert appointed to a planning role.

Thursday, July 22, 2010

What's wrong with limited-access goods?

People are upset that sometimes when they buy a video game, their consoles won't let them play all the levels unless they pay an extra fee. I argue that they're wrong to be upset and should save their outrage for something more earth-shattering, such as the president eating ice cream at a funny store.

I've written about downloadable content before, it's extra levels and items that players can purchase to expand a video game. The normal order of things is that a game will be built and released, and then extra pieces to the game will be made available to download. Some DLC is free, but most costs money.

But sometimes extra content is already on the disc. Take Dragon Age: Origins and Mass Effect 2, both developed by BioWare and both contain character and equipment on the disc blocked away until customers enter a special code or pay $15. New copies of the game include a one-time, one-console code to access the hidden material, presumably to kill the second-hand market for the games. This has made people upset. As they see it, customers already purchased the game, so they should be able to use everything on the disc.

As video game producer David Brickley put it:

"It’s quite simple to explain, but I do think players are entirely right – if the content is on the disc already there’s absolutely no justification for studios to offer DLC which is essentially an unlock key or something."
Well I think there is a lot of justification. Let's compare two realistic scenarios:

"Gorilla Wars" is released on Wednesday. On the same day, a $5 DLC is released to expand the game, possibly containing an extra jungle level and two more banana-themed weapons. The DLC uses 300 megabytes of the customers hard drive space.

Also on Wednesday, "War Gorillas" is released. Players can pay $5 to download a tiny 50 kilobyte file that will access a special jungle level and two more banana-themed weapons already on the disc.

Which game gets the most angry nerd forum posts?

War Gorrilas, of course, as all the information was already on the disc. Players assume that means they should be entitled to it for "free." But let's look a little closer.

The Gorillas Wars players is using 300 megabytes of hard drive space, while the "exploited" War Gorrilas player is using a fraction of one megabyte and playing the rest off the disc. It doesn't sound so bad now, and both players paid $5 for the same thing. It's as arbitrary a difference as correcting a test by starting with a score of 100 and subtracting a point for each wrong answer, or starting at zero and adding a point for each correct question. Both add up to the same thing in the end.

Moving levels to DLC for profit

As the previously-quoted David Brickley said, there is a debugging period of about 5 months between when a game is put together and when it goes on sale, which frees up team members to start working on DLC before the game is actually released. This can mean that a company can have DLC ready on day one without intentionally moving material off the disc and into the download queue for profit.

But what if they did? That's what some fans accused Ubisoft of doing when two levels from Assassin's Creed 2 were cut, but later released as DLC. A report on editorialized:

"The game has certainly enjoyed a positive reception and good sales, and few fans seem to complain that it's too short. Still, confirming that content was removed from the game and repackaged as DLC is a risky PR move, as it is bound to leave some gamers feeling short-changed."
A post on claimed:

"Portions of games being cut out and tagged on as DLC isn’t exactly commonplace, but it isn’t unheard of either. Gears of War 2 and Tomb Raider: Underworld are two example of titles that were cut short to earn some extra cash post-release, and now Assassin's Creed II is another."
Both posts quote game designer Patrice Desilets as saying that the levels were cut to get the game released on time without spreading the team too thin and because the game seemed too long already - not to make more money.

I recall an interview with a God of War game developer about one of the levels they designed but had to cut to get the game released on time. There was no DLC at the time, and a version of the level appeared in the sequel. Should fans have gotten mad, as they had to buy a second game to get the whole God of War experience as envisioned by the design team?

Of course not. Cut levels are liked deleted scenes in movies - a normal part of the creative process, not a plot to boost DVD sales or "earn some extra cash post-release." Players should be delighted that technology has given them access to deleted portions. If they don't think it's worth paying extra for, they can skip it and just play the core game.

Or, they can do what I'm doing and wait for a future version to be released with all the DLC included as a bundle.

Killing the second hand market

Back to BioWare and their codes to unlock content on the disc. I think the complainers on the Internet are correct - this is a move to kill the second hand market for console games.

Video games have a short shelf life of a few years. The price falls dramatically during the first year for most games. In addition, chains like GameStop sell used copies of games for about $5 less than a factory-sealed. Since the used games are guaranteed to work, a lot of people (like me) buy used copies whenever possible.

But by locking off content to everyone but the original user, BioWare has found a simple way to discourage players from buying used copies. The new copies are either a richer, larger game or players have to pay more in DLC then they would save with a used copy. (GameStop still discounts these used copies $5 as usual, but it costs $15 to get all the content on the disc without a code). I can see exactly why used-buyers wouldn't like this

But what if they did nothing and allowed the used market to cut into their sales?

One of the most important questions to ask in economics is "Then what?" I would expect profits to decline. This could lead to future games being made with less resources or game prices going up. Doesn't BioWare have a right to encourage customers to buy new copies by rewarding them with a better game? Used copies still work, they're just not as big and flashy.

In the grand scheme of things
, video games are a frivolous form of entertainment; not a life-or-death purchase. They're also a business and there's nothing wrong with companies giving customers more options. It's true that DLC started as a way to tack new parts onto existing games, but game makers are now thinking of DLC during the development process. Players shouldn't be scared of this change. It may keep game prices from inflating because companies have other sources of income.

Above all, players need to keep things in perspective and realize that buying a game doesn't entitle them to anything more than what they paid for, just like buying a Big Mac doesn't entitle you to fries and a soda.


Monday, July 19, 2010

Union hires scab protesters

Greg Mankiw linked a surreal story on unions hiring non-union workers to protest for them.

The Wall Street Journal reports that the non-union for-hire protesters are picketing a building because non-union workers are performing drywall work inside.

"For a lot of our members, it's really difficult to have them come out, either because of parking or something else," explains Vincente Garcia, a union representative who is supervising the picketing.

So instead, the union hires unemployed people at the minimum wage—$8.25 an hour—to walk picket lines. Mr. Raye says he's grateful for the work, even though he's not sure why he's doing it. "I could care less," he says. "I am being paid to march around and sound off."

The end of the story is just as amusing:

The union's Mr. Garcia sees no conflict in a union that insists on union labor hiring nonunion people to protest the hiring of nonunion labor.

He says the pickets are not only about "union issues" but also about fair wages and benefits for American workers. By hiring the unemployed, "we are also giving back to the community a bit," he says.

One of the slogans the protesters shout is "Low Pay! Go away!" By law, the drywall workers must be making at least minimum wage. But the protesters themselves are making exactly minimum wage. So at the very worst, they make the same amount of money.

If it counts as "giving back to the community" and hiring the unemployed to pay people to shout and march, than it must also count to give them jobs putting up drywall. In both scenarios, they are doing work cheaper than the union members are willing to. There is no world or economic model that would value the first job but not the second.


Friday, July 16, 2010

Good news: Maine lobster industry is doomed

No one likes to be replaced.

A report from the Maine Observer says the company that owns Red Lobster and Olive Garden restaurants may grow their own rock lobsters instead of paying fisherman to pick them from the sea.

This is bad news for the Maine lobster industry, as cheap rock lobsters - the kind with spikey wands instead of claws - will loosen the states domination of the market. However, the Maine Observer reports:
"Bob Bayer, executive director of the Maine Lobster Institute at the University of Maine, disagrees.

“'It’s not something that’s really competitive; it’s an entirely different lobster,' he said. Rock lobster has a much different taste, he said. 'It’s almost like a different market,' he added."

Keep in mind that Bayer's expertise is in biology, not markets. Different does mean lower quality - it just means, different. McDonald's, Burger King, Wendy's and White Castle do not sell identical hamburgers, but they sell items similar enough to be in direct competition. Rock lobsters are a substitute good and it'll be up to consumers to decide if any difference in taste and the aesthetics of lobster claws is worth the extra money.

If not, many Maine lobstermen will go out of business - just like blacksmiths, buggy-whip makers, slave-ship owners, whalers, carriage drivers, elevator operators and soda jerks. But their loss will be offset by a greater gain to the public, and resources will be freed up to create new jobs.


Monday, July 12, 2010

Left-wing politics trump science too

I don't like to focus posts on failed campaign promises, but this weeks LA Times story on the Obama administrations hollow promise to embrace science draws attention to an important issue: The myth that the political left consistently supports and believes in science.

Let me be clear. I am not defending the right's treatment of science, which has been an embarrassment. I am not saying I've tallied things up and found more anti-science on the left than the right. What I am saying is that scientific conclusions are often inconvenient to political ideologies, and progressives are not an exception.

From the LA Times story:

"'We are getting complaints from government scientists now at the same rate we were during the Bush administration,' said Jeffrey Ruch, an activist lawyer who heads an organization representing scientific whistle-blowers."
and later:

"The most immediate case of politics allegedly trumping science, some government and outside environmental experts said, was the decision to fight the gulf oil spill with huge quantities of potentially toxic chemical dispersants despite advice to examine the dangers more thoroughly."
This really shouldn't come as a surprise. Two stereotypes of West Coast culture are progressive politics and new age spirituality. New age is a gateway drug to all sorts of pseudoscience, as well as more mainstream nonsense like organic foods, naturalism and fear of genetically-modified organisms.

It was Iowa's Democratic Senator Tom Harkin who lead the charge to establish the National Center on Complementary and Alternative Medicine federal agency, and after pouring more than $800 million into it since 1991, Harkin wrote on his blog that he was disappointed it has failed to find the scientific conclusions he wanted:

"One of the purposes of this center was to investigate and validate alternative approaches. Quite frankly, I must say publicly that it has fallen short. It think quite frankly that in this center and in the office previously before it, most of its focus has been on disproving things rather than seeking out and approving."
The Huffington Post is a haven for medical pseudoscience. In addition to being a major player in the progressive blogosphere, it is the internet headquarters for the anti-vaccination crowd. A article revealed last year:

"In May, Huffington hired Patricia Fitzgerald, who had previously blogged on the site, to serve as Wellness editor. In Huffington's words, Fitzgerald will add "another layer to the vetting process for posts dealing with medical, health, and nutritional advice." Fitzgerald, an acupuncturist with a master's degree in traditional Chinese medicine and a doctorate in homeopathic medicine, is the author of "The Detox Solution: The Missing Link to Radiant Health, Abundant Energy, Ideal Weight, and Peace of Mind." Her posts had praised actress Jenny McCarthy for healing her son's autism with "biomedical intervention," a menu of "detoxification, and removal of interfering factors, such as yeast, food allergies, viruses, bacteria, and heavy metals," restrictive diets, expensive nutritional supplements and chelation therapy -- all unproven."
Let's not give the Obama administration a pass on the recent deepwater oil drilling moratorium. The administration cited a report from the Interior Department that recommended backing the ban. But it was revealed that the seven engineers who signed onto the report didn't agree with the ban, and they publicly stated that part was added after they had signed onto it. As Jonah Goldberg wrote:

"Needless to say, there is something ugly and hypocritical about glorifying the absolute authority of scientists and sanctimoniously preening about your bravery in “restoring” that authority — and then ignoring the scientists when politically expedient.

"But it is bordering on the grotesque to handpick scientists to give you an opinion and then lie about what they actually said and implement a policy they don’t endorse. (According to the Journal, the Interior Department has apologized to the scientists. But the administration refuses to publicly acknowledge it did anything wrong.)"
The Soviet Union's Trofim Lysenko demonstrated the grotesqueness that follows when politics shapes science, instead of the other way around. Lysenko used communist principals to craft agricultural techniques, such as planting seeds in bunches for solidarity. People starved when the crops failed and Darwinian biologists were rounded up and executed.

Science doesn't fit neatly into the political spectrum

In a way, science is both conservative and liberal. Science is conservative because it believes in the wisdom of past discoveries and is reluctant to abandon them. However, science is liberal because it will retire old ideas once enough evidence is found, and no idea is too sacred to be challenged.

Conservatism has the risk of holding onto old ideas too long, even when they've been disproved. Liberalism carries the hazard of adopting half-baked ideas without proper vetting. These positions can be balanced properly to get the best of both words, and the scientific world does a better job of finding that balance than the political world.


Saturday, July 10, 2010

Tax dollars headed for Wal-Mart

A great post from John Stossel this week revealed a scheme that will put tax dollars in the hands of Sam's Club, the concrete-floor warehouse stores of Wal-Mart Stores Inc.

Wal-Mart has been a magnet for anti-globalization, anti-corporation and anti-capitalist nonsense. Last month it was revealed rival retailers had been astroturfing community groups to block proposed Wal-Mart stores. I'm used to the Wal-Mart corporation being the whipping boy of small business protectionists, so it was interesting to see an actual example of the company using dirty corporatist political tricks.

Stossel quoted the New York Times saying Sam's Club will loan some customers up to $25,000, and the loans will be backed by the Small Business Administration - and by "backed" they mean the SBA will help pay back loans when customers can't. Stossel responded:

"This is just crony capitalism. Sam’s Club uses government to help itself, and compliant government rips you off.

"If Wal-Mart really wanted to loan its customers money to help them buy stuff at Sam’s Club, fine. But why the heck is the SBA involved?

"It’s involved because we sucker taxpayers allow the SBA to reimburse up to 85% of the loan if a borrower defaults. Sounds familiar (remember Fannie and Freddie’s guarantees?)."

So Wal-Mart gets more money coming in, small businesses take loans they otherwise wouldn't because the risk will be absorbed by the government, and when those loans default the tax payers will have to buck up. The corporation wins, the small business wins, the tax payers lose.

As Stossel said, it's the same thing that happened with Fannie Mae and Freddie Mac. Wall Street won (for a long time, and then the bailouts served as a mulligan to keep them from losing), new home owners won, the tax payers lost.

The most ironic part is Wal-Mart, often depicted as the destroyer of small businesses, will be propping up unfit small-businesses and using the government agency built to coddle them in a plot against everyone else. It's the polar opposite of what normally happens - Wal-Mart breaks up local monopolies and shuts down the uncompetitive small businesses that had been overcharging customers, and everyone else benefits.


Wednesday, July 7, 2010

The virtue of simple laws

One of the weirder criticisms I've heard of the print media is that newspapers write at a 6th-grade reading level. This is absolutely true, but I've never understood why anyone would have a problem with it - newspaper articles are accessible to most readers, as opposed to the crawling style of a textbook.

American legislation, however, seem to be written at a 20th-grade reading level. In addition to jargon, triple-negatives and run-on sentences, the bills themselves can be thousands of pages long. Here's a typical excerpt from last year's notorious 2,000-page health care bill:

(d) Preference- In awarding grants and contracts under this section, the Secretary shall give preference to entities that have a demonstrated record of the following:
      `(1) Addressing, or partnering with an entity with experience addressing, the cultural and linguistic competency needs of the population to be served through the grant or contract.
      `(2) Addressing health disparities.
      `(3) Placing health professionals in regions experiencing significant changes in the cultural and linguistic demographics of populations, including communities along the United States-Mexico border.
      `(4) Carrying out activities described in subsection (b) with respect to more than one health profession discipline, specialty, or subspecialty.
    `(e) Consultation- The Secretary shall carry out this section in consultation with the heads of appropriate health agencies and offices in the Department of Health and Human Services, including the Office of Minority Health.
    `(f) Definition- In this section, the term `health disparities' has the meaning given to the term in section 3171.
The full text is available here. Regardless of the merits and flaws of the bill, the actual text is daunting. It is unreasonable to expect a citizen to read it, along with almost any legislation passed.

Keep that in mind next time you hear the mantra "ignorance of the law is no excuse." When the official rules of a society are as complex, numerous and dynamic as the ones we live under, its reasonable to expect people to break some simply because they didn't know.

In opposition to that mindset, George Mason University's Don Boudreaux argues the Hayekian view that there is a difference between laws and legislation. Laws are universal rules that people discover, such as bans on murder, theft and arson, while legislation is something people decide upon, such as bans on inside trading, gambling and immigration.

Boudreaux argues that while ignorance of the law is no excuse, ignorance of legislation is a great excuse for breaking it. Should we expect Americans to head to city hall each week to check for new ordinances so they don't accidentally break one? What about state and federal laws; those change all the time too.

So what can be done about it?

Earlier this week Boudreaux posted a Wall Street Journal letter proposing a law requiring legislators to sign a statement saying that they have read any bill they vote to approve.

"Since 2004, candidates for public office are required by law to state that they have personally seen and approved any campaign ad. I think it would be reasonable—and truly should garner full bipartisan support—to demand a law which simply requires our legislators to read the laws that they pass.

"Suppose a "yes" vote also requires a signed statement, before the vote, that says, "I have personally read this law, in its entirety, and approve its content." Could any simpler idea have more profound impact in reversing congressional dysfunction and rescuing Congress from its dreadful approval ratings?"

Well that would do a couple of things if passed. It would slow down congress, which is good or bad depending on one's politics. It would improve the quality of laws passed.

But more importantly, it would give legislators an incentive to draft legible bills. Bills would end up shorter and readable by the general public.

And at the same time, it would destroy jobs in the legal field. There would be less call for lawyers, paralegals and such if the legislation was just a little bit easier to interpret.

That's a feature, not a bug.

As I've said before, destroying jobs is progress. Imagine if instead of making legislation easier to read, we decided to make it harder, and Latin replaced English as the language of American law. Now all laws are written entirely in Latin.

Law firms would be forced to hire Latin scholars to translate for the legal team. There would be some law and Latin experts, but you would expect a lot of two-man teams to do the job of one paralegal. This sounds really nice to window breakers, but the rest of us can see the price of legal services would jump and society would be made worse off.

But in a way, we already have laws written in another language - legalese - and some of it is actual Latin.With laws and legislation written instead in a legible form, ordinary people would be able to perform some of their own legal work, and the bar to get a job in the legal industry would be lowered.

Both of these changes would reduce legal prices and free resources up for other industries. The legal profession would shrink, but society as a whole would benefit because people could spend their money on more things they want, instead of legal fees.


Sunday, July 4, 2010

Holiday Hijacking

As the feminists try to take over Valentine's Day and Hanukkah is being transformed into the Jewish Christmas, localists want to turn Independence Day into Food Independence Day.

Food "independence" over America's cry for freedom? That sounds like clearing away a cathedral to make room for a hot dog stand.

Alexis de Tocqueville put it best when he said, “The Revolution of the United States was the result of a mature and reflecting preference for freedom, and not of a vague or ill-defined craving for independence.”

How could a couple of ripe cabbages ever hope to compete with that?


Thursday, July 1, 2010

Amazon and Wikipedia are both encyclopedias

It's always good to step back for a minute and ask yourself why you do some of the things you do.

When I mention a book in one of my posts, I typically provide a link in case the reader is unfamiliar with the book. I imagine when the link is clicked, the article about the book will be quickly skimmed to get a rough idea of the ideas of the book and its legacy.

Occasionally I link to the Wikipedia page about the book, but most of the time I link to the page. It wasn't until this week that I realized how weird this is. When I want a quick encyclopedia article for my blog, a merchant page is usually better than an actual encyclopedia.

I do not expect the reader to order the book to read simply because I mentioned it in passing. I would not be rewarded by Amazon if I did. Amazon recently introduced a program to do just that, but I haven't signed up for it. If I did, I wouldn't expect to make more than a dollar out of it in my lifetime.

Instead, my motivation is simply that Amazon provides the most useful page to showcase a book and its legacy. There is a summary and a series of reviews and short discussions on the book. Sometimes visitors can search through the book for a preview. This free service is a byproduct of the company's drive to sell more books.

In effect, Amazon is an encyclopedia about books. It provides a public good as a positive externality, as visitors do not need to be customers to view the information.

Other times I'll find a helpful Wikipedia page about the book and link to that. Wikipedia tries to be a public good and is paid for by donations with the intention of being an encyclopedia, instead of a side effect from a for-profit corporation. It's not as reliable as Amazon. Sometimes the legacy, context and impact of the book is listed, but it's usually not. Sometimes there is a discussion hidden under a tab, but on Wikipedia the discussion is supposed to be about the entry, not the subject itself.

If I want to provide a link about a book for my readers, I have two good choices from private firms. What I do not have is a helpful tax-funded site to link.

The natural choice for that role would be the Library of Congress. This isn't exactly what the Library does - it is an actual library that anyone can visit, but only members of Congress get library cards. Still, it has an entry on every book.

To show what the different book pages look like, I've chosen an important and well known book, The Road to Serfdom by Friedrich Hayek.

Amazon has a lot of information on both the book and Hayek himself. As always for political books, the reviews bulge around perfect scores (five stars) and lowest scores (one star). Unfortunately, most one star reviews are not actual reviews - they are complaints about the ideas of a book, often from someone who makes no claim to have actually read it.

Wikipedia has a great entry at this time. It includes the ideas of the book and it's legacy, which is perfect for me as a blogger. It also includes criticism of the ideas, a popular thing for Wikipedia editors to focus on. More obscure books have brief articles, or none at all.

Library of Congress provides some legal details of the publishing of the book, as well as the table of contents. There are tags to some of the themes of the book, such as totalitarianism and economic policy. This is exactly what you would expect the card catalogue of a library to include, but nothing more.

Barnes & Noble
has a synopsis and a few reviews. It's much less than Amazon, but it is enough for an observer to understand what the book is about.

Google Books has a lot of the text of the book in a searchable electronic format. However, it does not have a summary for a casual reader, so it wouldn't be helpful as an introduction.

In the interest of fairness, the Library of Congress and Google Books are not supposed to be encyclopedias. But, I will add, neither are Amazon and Barnes & Noble. They have simply created one while they were attempting to make a profit and sell books.

Because there is already a good private book encyclopedia available online, there is no reason for the Library of Congress or any government agency to craft one. It would be a waste of taxpayer money to ask the government to do what the market is already providing, and the results probably wouldn't be as good.