By dwelling on inequality, the pope is promoting envy. The Catholic Church, I had always understood, disapproves of envy, deeming it one of the seven deadly sins. . . . Jesus, when asked to remedy inequality, turned the focus back on envy and greed.Reynolds goes onto note: "Charity is good for the soul. Exercise is good for the body. Forced redistribution is not charity, and will do no more for your soul than making someone else lift weights at gunpoint will do for your biceps."
Wednesday, December 18, 2013
This is exciting: Unitus is raising $3.3 million to fund for-profit firms to fund startups that will fight poverty in India - but I'd worry about reduced expectations in managing and measuring portfolio firms (TechCrunch).
Monday, December 09, 2013
In other words, is it a bad thing for a country to have some really rich people? Again, it depends on how they got rich.
Sutirtha Bagchi of the University of Michigan’s business school and Jan Svejnar of Columbia’s School of International and Public Affairs studied how inequality correlates with economic growth. In general, more inequality meant slower growth, and less inequality meant faster growth.
But in many countries, over various time periods, growing inequality had no effect on economic growth. The new study suggests that an increase in inequality hurt the economy when the rich were getting rich through political connections.
That is, inequality hurts the economy when “a large share of the national wealth is held by a small number of politically connected families,” as the authors put it. . . . When a country’s wealthiest people got their wealth as Pangestu and Fridman did, inequality places a drag on the economy. When a country’s wealthiest got wealthy through market means, the resulting inequality has no negative effect on economic growth.
This jibes with what we know about free markets. If people can get rich by providing valuable things at good prices, then society will get more valuable things at good prices—and people across the income spectrum benefit. But if people get rich by pocketing subsidies and using the state to crush competitors, then they gained their wealth at the expense of everyone else.
Saturday, December 07, 2013
Updates on the Progressive Auto X-Prize and some wider implications (Wired via Instapundit):
You might argue that Edison2 and Illuminati Motor Works are small outfits with no hope of ever putting their cars into production. But to me, their smallness is exactly the point. They didn’t have armies of engineers and designers and coders and marketers. They didn’t know any billionaires. They were working in the depths of a severe economic recession, maxing out credit cards. Yet they solved a hard and important problem. These mere mortals had three years to reach 100 miles per gallon and 200 grams of carbon dioxide per mile. That was their race. And they won it. They prove that we can do better.
Friday, December 06, 2013
Pretty cool and instructive story of the three trends of Desktop Fabrication, the Power of Code and Cloud-based Services that have allowed the former editor-in-chief to become the co-founder of a manufacturer of Unmanned Aerial Vehicles (UAVs) (Popular Science).
Thursday, December 05, 2013
As much as China has on the surface appeared to embrace capitalistic reforms, the cronyism and concentration of power amongst state owned firms suggests otherwise. Things may be changing according to a survey of China's top brands (WSJ):
Support for private enterprise is also gaining momentum, Ms. Wang said. The majority of new entrants in the study—which was expanded to 100 brands from 50 in previous years—were from market-driven companies. They accounted for 34 new entrants to the list, compared with 16 new state-owned entrants, the study said.
To be sure, state-owned companies still dominate the country’s top brands, accounting for eight of the top 10.
Aside from propelling private enterprise, other government initiatives appear to be reflected in the brand rankings, Ms. Wang said. Alcohol brands’ value has fallen amid an austerity effort, curbing lavish bureaucratic banquets and the consumption of pricey spirits. White-spirit brand Moutai’s value dropped 19% on-year, while alcohol company Wu Liang Ye dropped 66%.
A proposal from Rand Paul (WashingtonExaminer).
Update: More here (DailyCaller)
Update: the DetroitNews likes the ideas, thinks it might create some unintended consequences but notes the real problem is (in)action. (DetroitNews)
John C. Goodman on the War on the Poor (PsychologyToday):
One of the biggest differences in how the left and the right view the world concerns the welfare state. Currently, the federal government spends about $1 trillion a year on 126 means tested welfare programs. That amounts to almost $22,000 for every poor person in America, or $88,000 for a family of four.
What difference does all this spending make?
Among people on the right, there is little doubt. These programs are destroying the culture of the recipient communities. They are replacing a culture of self-reliance and self-help with a culture of dependency. Amazingly, a record 91.5 million people of working age—almost one third of the entire population—are not working and not even looking for a job.
Tuesday, December 03, 2013
Saturday, November 30, 2013
First, throughout history, free-market capitalism has been a great driver of economic growth, and as my colleague Ben Friedman has written, economic growth has been a great driver of a more moral society. (Amazon)Update: Glenn Reynolds makes a good point - "I think the key factor here is that he’s from crony-capitalism-capital Argentina, and that he has mistaken what goes on there for the operation of free markets."
Second, "trickle-down" is not a theory but a pejorative used by those on the left to describe a viewpoint they oppose. It is equivalent to those on the right referring to the "soak-the-rich" theories of the left. It is sad to see the pope using a pejorative, rather than encouraging an open-minded discussion of opposing perspectives.
Third, as far as I know, the pope did not address the tax-exempt status of the church. I would be eager to hear his views on that issue. Maybe he thinks the tax benefits the church receives do some good when they trickle down.
Whether international or domestic, inequality becomes intolerable when individuals who have gotten ahead for whatever reason use their power to pull further ahead—and even to render others worse off in absolute terms. When successful people—businessmen, lawyers, traders, doctors—use their success to change the rules in their favor, by lobbying or funding politicians, that success is no longer something to be celebrated.But the author goes off the rails with the following claim:
When they push for what they see as important without perceiving that others have different priorities—the rich have little need of public health care or public education, for example—they undermine the provision of public goods on which the rest of us depend. When they make it hard for those without wealth (or not beholden to wealth) to fully participate in society, they undermine the democratic process.In fact, well intentioned policies often have the exact opposite effect. Take rent control and the housing crisis in San Francisco that threatens to get even worse (Reason):
With the area economy rebounding, San Francisco is in the midst of a housing crisis as many residents are evicted from their apartments. “It is a situation rooted in limited housing stock and surge in demand that has pushed the median rent up from $2,968 in 2010 to $3,414 this year…,” reported the San Francisco Chronicle.The same is true of policies like minimum wage, public education, and even public healthcare.
The median home price has soared to nearly $900,000, which helps explain why nearly two-thirds of the city’s residents are renters. So the rent hikes are particularly acute—and have put the city’s tough rent-control laws in the spotlight. As property values have rebounded, an increasing number of San Francisco owners are getting out of the rental business and cashing out their properties to turn them into co-ops.
While the city’s rent-control ordinance places strict limits on the ability of landlords to increase rents, a state law called the Ellis Act allows property owners to take their property off the rental market after providing tenants with a 120-day notice (and much longer for elderly or disabled tenants).
Following a 170 percent increase in such evictions, some Bay Area legislators are calling for changes to the state law. And San Francisco tenant activists recently proposed new regulatory and financial burdens on property owners who want to sell or move into their own properties.
Friday, November 29, 2013
Wednesday, November 27, 2013
It's a topsy turvy world that there exist so many hero worshippers who idolize Che Guevera (TheLibertarian via Instapundit).
Real aid, starts with trade. Personally, I see this as just fiddling around the margins over what has been disastrous and expensive policymaking (DevEx via Chris Blattman):
Amid pressure to cut costs in an industry largely funded by public money, aid agencies are increasingly hard-pressed to make the case to shareholders, contributors and other constituents that business class travel for staff is worth the cost. It can also be difficult to rationalize the expense in a sector that commonly references mantras such as “value for money.”(While they don't seem like they're in a position to speak from moral authority, at least you know you're doing something wrong when the Obama Administration is telling you, you're spending too much of other peoples' money on frivolous things...)
The Obama administration, for instance, has publicly rebuked U.N. staff in New York and Geneva for recently spending nearly three-quarters of their air travel budget on business class fare.
More here: "Fighting Poverty With Actual Evidence" (Freakonomics)
Quote of the day: "Detroit is a case of the parasite having outgrown the host." (Ed Driscoll via Instapundit)
Related: Should we bail out Cities? (Megan McArdle). Not if you're sane. In a way it's sad the question even needs to be asked.
Monday, November 25, 2013
Marc Andreeson on why driverless cars will win even though many of us like driving cars (Forbes via AVC):
Ask a kid. Take teenagers 20 years ago and ask them would they rather have a car or a computer? And the answer would have been 100% of the time they'd rather have a car, because a car represents freedom, right?
Today, ask kids if they'd rather have a smartphone or a car if they had to pick and 100% would say smartphones. Because smartphones represent freedom. There's a huge social behavior reorientation that's already happening. And you can see it through that. And I'm not saying nobody can own cars. If people want to own cars, they can own cars. But there is a new generation coming where freedom is defined by "I can do anything I want, whenever I want. If I want a ride, I get a ride, but I don't have to worry. I don't have to make car payments. I don't have to worry about insurance. I have complete flexibility." That is freedom too.
It's a whole new world, and magic carpets have nothing to do with it (WashingtonPost via Instapundit)
If there’s one thing that New Space has going for it, it’s that Old Space is in trouble. Old Space and New Space turn out to be symbiotic. New Space companies need NASA contracts, and NASA needs New Space companies to pick up the agency’s slack.More: on SpaceX's coming commercial geostationary launch (USAToday)
The true believers imagine that, someday soon, robotic vehicles will mine asteroids for precious metals, including gold and platinum. Moon dirt will be transformed into rocket fuel for missions to Mars. Closer to home, FedEx will send a package from New York to Tokyo, via space, in half an hour.
Saturday, November 23, 2013
I think there's little doubt that technology - particularly software is changing how we interact and organize (Wired). I'm a bit skeptical that location will be irrelevant but it's difficult to argue that it won't be considerably less so:
Technology is thus enabling arbitrary numbers of people from around the world to assemble in remote locations, without interrupting their ability to work or communicate with existing networks. In this sense, the future of technology is not really location-based apps; it is about making location completely unimportant.
A sentiment I share (TechCrunch). Note the important distinction the author also makes between "aid" and "disaster relief". I am considerably less supportive of his proposed alternative which does not differentiate between one time grants with ongoing payments (effectively welfare paid for by foreign governments) bypassing corrupt governments and bureaucracies.
There are a number of interesting takeaways from this experiment (Bloomberg). On the other hand, the libertarian version of this operates through a reverse income tax that also replaces other benefits (YouTube). Personally, I favor a reverse income tax only if it is allowed to replace the plethora of regulations meant to "help" the poor(er).
Friday, November 22, 2013
Sunday, November 17, 2013
Chris Blattman sadly beclowns himself asking "Do Republican Presidents kill babies?" Perhaps a bit ironic considering he gently chides Bill Easterly for being "provocative" only a few posts earlier (Chris Blattman). He should be reminded that there's that little thing called Congress that many armchair statisticians seem to have also forgotten when looking at the relationship between the stock market and the American Presidency (theLibertyProfessor).
Thursday, November 14, 2013
Maybe (Paper by William Easterly and Ross Levine) but more probably as Chris Blattman points out, it's the colonialists that brought ideas like rule of law and property rights that led to development.
Tuesday, November 12, 2013
At least according to communiques (Sinosphere):
“The core issue is properly handling the relationship between the government and markets,” said the communiqué of the meeting, which was summarized by the state-run news agency, Xinhua.Some entrepreneurs remain skeptical...
“Give markets a decisive role in resource allocation and give better play to the role of government.”