It's about the journey not the destination

What happened after Toni Ko sold NYX Cosmetics to L'Oréal for $400 million. And an idea that's true for most entrepreneurs I suspect (Inc.com):

The next morning, I was a little bit confused. My life for 15 years had been waking up in the morning and getting ready and going to work. But I opened my eyes that day and realized I had no place to go and no reason to wake up. I just went back to sleep. That went on for several days. Soon, I was bored out of my mind. I didn't know what to do with myself. How many days can you spend on the beach? How many times can you go shopping? My life became very redundant. It was meaningless. I felt like I didn't have an identity. I felt like I wasn't adding value to my life or to society. I just felt like a loser, almost.

Eventually, I started an investment company, and then I started to build a real estate portfolio. I was never not doing something at any given moment. But nothing was very exciting or meaningful to me. I'm a products person--I need to be in an environment where I create products. That's when I have the most joy, fulfillment, excitement--everything.

Literally three days later, I started dreaming up other businesses. Eventually, I settled on sunglasses and, within months, launched a company called Perverse. It made me feel whole again. It gave me a reason to wake up in the morning.

Fallacy: Economic prosperity doesn't come from encouraging consumption

Nor should advocating for free(er) markets be conflated with arguing for more consumption (FEE.org):

The great irony is that leftists frequently argue that capitalism equals “consumerism.” They think defenders of free markets believe that more consumption promotes economic growth; thus we are charged with providing the ideological cover that justifies the consumerism they see as deadening lives and wasting resources. What the leftist critics miss is that economists never saw consumption as the driving force of economic growth and prosperity until the Keynesian criticisms of free markets became ascendant.

Thanks to Keynesianism, manipulating the elements of total income (consumption, investment, and government spending) became the focus of macroeconomic policy and economic development. It was the Keynesians’ theoretical framework that led to the development of the relevant national income statistics and that implicitly informs the popular arguments for more consumption.

For over 150 years defenders of free markets saw consumption as destroying wealth, and saving and production as creating it. They never argued that “stimulating consumption” was the path toward prosperity. Therefore they cannot be charged with justifying the “consumer culture.” And the same is true of twentieth-century defenders of free markets such as Mises and Hayek.

China's transition to higher value manufacturing

I'm skeptical that China's government(s) will manage this transition successfully (WSJ):

At the same time, however, China is pushing its companies to automate, boost research budgets and make more higher-value products. It has also encouraged companies to acquire European and U.S. rivals with advanced technology. Beijing has targeted 7% annual growth for manufacturing and a 15% jump in corporate investment to support industrial upgrades between now and 2018.

Its success so far in moving upmarket is seen in its machinery and transport-equipment exports, which grew to 46% of the nation’s total exports from 21% between 1995 and 2015, even while its share of lower-value exports declined, says HSBC.

If China succeeds at encouraging more-advanced industries, it could subject companies in developed countries to growing competition in once-secure markets. But the strategy carries risks. If China fails to shift from basic industry to high-end manufacturing and its costs continue to rise, it could get stuck in what some economists refer to as the “middle income trap.” That in turn could fan social tension in a one-party system that has staked its legitimacy on rapid growth and upward mobility.

Remarkable interview by CNN's Christian Amanpour

I can entirely understand how Brexit happened. What I find a bit bizarre is how there seems to be no introspection as to why anyone wants to leave the EU. It's like an article of faith despite its "democratic deficit" that you'd have to be a racist prick to want to leave.

I confess I very rarely watch CNN, but it's incredible how bad Christian Amanpour comes across not only as an interviewer but in how poorly she prepared for this interview with Daniel Hannan (knowing little if anything about him):

Amanpour writes a follow up article that James Taranto squishes in the WSJ.

Freemarkets != "right wing"

In the same way too many people confuse crony capitalism with capitalism(fee.org) - with discouraging examples from India and Poland.

The case against military interventions...

"Capitalism ALWAYS wins" (SovereignMan):

Rather than fight the war, the US government would have been a lot better off saying, “Oh you want to be Communist? Wonderful! You go ahead and enjoy that, and give us a call in 20 years once you’re totally impoverished…”

It would have saved a hell of a lot of time, money, and lives.

Capitalism always wins because people want the comfort and lifestyle that become possible when talented people have the incentive to work hard and innovate.

Can "Free Countries" emerge from "Free Cities"?

Something to watch: the Free Cities Initiative (via Reason).

Turnabout is fair play

This is heartening to see (NationalPost):

All too often, corporations, concerned about the potential damage to their bottom lines from any “controversy,” kowtow to media-savvy radical environmentalists. Thus the lawsuit brought three years ago by Montreal-based Resolute Forest Products against Greenpeace for “defamation, malicious falsehood and intentional interference with economic relations” represented a rare display of business backbone.

Greenpeace is still trying desperately to avoid its day in Canadian court, but now Resolute, under its arrow-straight CEO Richard Garneau, has upped the ante. On Tuesday, the company launched another suit — against Greenpeace and STAND (the environmental NGO formerly known as ForestEthics) — under U.S. anti-racketeering laws.

Greenpeace has been greenmailing companies for years - the only thing that's surprising that it's taken until now for someone to realize that it's not actually about influencing how companies operate but extracting money from them.

"As Venezuela craters..."

True: "there is nothing laughable about the almost incomprehensible degree of suffering that socialism has heaped upon humanity wherever it’s been tried" (HumanProgress). Read the whole thing.

Science: "Complaining Is Terrible for You"

It turns out having a negative outlook on life tends to have a negative impact on your physical and mental health (Inc). I'd say this was related to the last post.

2016: The Year Poverty Fell to a New Low

It's interesting to watch the differing world views being expressed in the media on the same data sometimes (HumanProgress). Should we celebrate or envy success? It would seem there are many who believe not only that it should be envied, but it should be actively taken away.

Democratic socialism?

Putting lipstick on a pig of a very old idea:

More here (HumanProgress): Socialism and Self-Delusion

New overtime rules in the US

"Unintended consequences" waiting to happen (WSJ):

Many salaried workers in the U.S. may soon be obliged to punch a time clock, thanks to the Labor Department’s proposed regulation raising the income level for workers to qualify for overtime. More overtime pay sounds great. But what Labor fails to mention—and its economists surely understand—is instead of paying more workers overtime, many companies will simply cut back their hours or lower their salaries.

Austin, post-Lyft and Uber

Demand doesn't go away just because of restrictive regulations. The events in Austin are instructive (Reason.com):

A majority of the 17 percent of Austin voters who turned out chose to stick it to big business—and to themselves. And Uber and Lyft pulled out of the city.

By all reports, the results have been a mess. About 10,000 drivers lost their gigs, bars are reporting a decline in business, and some honestly unanticipated hiccups have been reported, such as particular inconvenience for disabled residents who need to find new ways to get around.

And, ironically in the wake of a "victory" for pro-regulation forces, there's been a big surge in completely unregulated rides arranged by word of mouth, through closed social media groups, and through peer-to-peer services. On Facebook, Austin Underground Ride (currently around 6,500 members) urges former Uber and Lyft drivers to join. "You can post your availability and info on this page and continue making the money you need to feed your families and pay your bills. Riders can post here their needs for a ride as well. We don't need anyone. We can make our own deals as people and take care of ourselves.

Rising Tide Car Wash, Purpose and Autism

Fantastic story. Apparently, according to this video, there is a whopping 90% of people who have autism who are unemployed. This car wash in Florida was created around helping the autistic find purpose (YouTube):

Chile vs Venezuela

Because free(er) markets create a positive feedback loop (HumanProgress):

The story of Chile’s success starts in the mid-1970s, when Chile’s military government abandoned socialism and started to implement economic reforms. In 2013, Chile was the world’s 10th freest economy. Venezuela, in the meantime, declined from being the world’s 10th freest economy in 1975 to being the world’s least free economy in 2013 (Human Progress does not have data for the notoriously unfree North Korea).

Read the whole thing.

Before capitalism...

Yep:

Do we take free(ish) markets for granted?

Judging by the popularity of certain politicians, the answer is yes. But in places where they can't take them for granted, markets are overwhelmingly popular (WP via Cato):

Another Pew poll found that 95 percent of Vietnamese felt that people were better off in a free-market economy

Another irony is that while supporters of a certain politician have been touting "democratic socialism", claiming that this imaginary breed of socialism isn't the 'government ownership of the means of production', in practice, their vision of the world is more accurately described as "democratic fascism" (Thomas Sowell) - "government control of the economy, while leaving ownership in private hands". I'm guessing that doesn't quite have the same marketing ring to it. On a hopeful note though, from the original WP article:

Millennials tend to reject the actual definition of socialism — government ownership of the means of production, or government running businesses. Only 32 percent of millennials favor “an economy managed by the government,” while, similar to older generations, 64 percent prefer a free-market economy.

More: Tweet from Garry Kasparov:

When a managed economy begins to fail, the only direction is to manage it more & more. It's how "democratic socialism" leads to repression.

— Garry Kasparov (@Kasparov63) May 17, 2016

Why are [Americans] so rich?

Because "ordinary" people are allowed to pursue their dreams to get rich. For some perspective when you read the news (WSJ):

An American earns, on average, $130 a day, which puts the U.S. in the highest rank of the league table. China sits at $20 a day (in real, purchasing-power adjusted income) and India at $10, even after their emergence in recent decades from a crippling socialism of $1 a day. After a few more generations of economic betterment, tested in trade, they will be rich, too.

Actually, the “we” of comparative enrichment includes most countries nowadays, with sad exceptions. Two centuries ago, the average world income per human (in present-day prices) was about $3 a day. It had been so since we lived in caves. Now it is $33 a day—which is Brazil’s current level and the level of the U.S. in 1940. Over the past 200 years, the average real income per person—including even such present-day tragedies as Chad and North Korea—has grown by a factor of 10. It is stunning. In countries that adopted trade and economic betterment wholeheartedly, like Japan, Sweden and the U.S., it is more like a factor of 30—even more stunning. And these figures don’t take into account the radical improvement since 1800 in commonly available goods and services.

[...]Once we had the ideas for railroads or air conditioning or the modern research university, getting the wherewithal to do them was comparatively simple, because they were so obviously profitable.

If capital accumulation or the rule of law had been sufficient, the Great Enrichment would have happened in Mesopotamia in 2000 B.C., or Rome in A.D. 100 or Baghdad in 800. Until 1500, and in many ways until 1700, China was the most technologically advanced country. Hundreds of years before the West, the Chinese invented locks on canals to float up and down hills, and the canals themselves were much longer than any in Europe. China’s free-trade area and its rule of law were vastly more extensive than in Europe’s quarrelsome fragments, divided by tariffs and tyrannies. Yet it was not in China but in northwestern Europe that the Industrial Revolution and then the more consequential Great Enrichment first happened.

Read the whole thing.

The crazy potential of the Hyperloop

While most people are excited about travelling in the Hyperloop, it would be logistics and freight that pave the way for people travel that would come later (TechnologyReview):

[T]he upfront installation costs will be outrageously expensive, even compared with rail, and especially compared with Internet infrastructure, despite Hyperloop Tech’s favored analogy. “Laying optic fiber is not really pricey,” says Genevieve Giuliano, a transportation professor at the University of Southern California. “Laying Hyperloop tube is going to be pricey.” But she and the other economists and transportation experts I spoke to perked up when I explained Hyperloop Tech’s interest in freight. “The concept is right,” says Giuliano. Freight rail in the U.S. is already quite profitable and efficient (Warren Buffett invests heavily in it). But a high-speed freight backbone—broadband for goods—linking major population centers could make economic sense, she says.

How markets and competition - not unions - created better working conditions and higher wages

The ideas of weekends, 8 hour work days, a "living wage" and 5 day, 40 hour work weeks are ones we have Henry Ford to thank (in order to compete for the best workers at the time) - not unions.

Personally, I've always been a big believer in free association and have no issues with the formation of unions. I question though the monopoly they generally demand and wonder if they are an anachronism today. But maybe they always were (theFederalistPapers):

On this day in 1926, Ford Motor Company becomes one of the first companies in America to adopt a five-day, 40-hour week for workers in its automotive factories. The policy would be extended to Ford’s office workers the following August.Henry Ford’s Detroit-based automobile company had broken ground in its labor policies before.

In early 1914, against a backdrop of widespread unemployment and increasing labor unrest, Ford announced that it would pay its male factory workers a minimum wage of $5 per eight-hour day, upped from a previous rate of $2.34 for nine hours (the policy was adopted for female workers in 1916).

The news shocked many in the industry–at the time, $5 per day was nearly double what the average auto worker made–but turned out to be a stroke of brilliance, immediately boosting productivity along the assembly line and building a sense of company loyalty and pride among Ford’s workers.

The decision to reduce the workweek from six to five days had originally been made in 1922. According to an article published in The New York Times that March, Edsel Ford, Henry’s son and the company’s president, explained that “Every man needs more than one day a week for rest and recreation….The Ford Company always has sought to promote [an] ideal home life for its employees.

Is "organic" agriculture just a big lie?

Apparently new studies suggest that organic food, doesn't taste better, is a lot more expensive and can actually harm the environment (Delish). Apparently organic produce isn't even safer (2011) - and with the public recent recalls/"issues" with Chipotle and Costco, one wonders if it's used as an excuse to cut corners in food safety/prep? More from Forbes (2015). Personally, organic doesn't generally sway me at the counter - I usually go for cheap.

The limitations of economic models

From the host of EconTalk (WSJ):

The models have been run and the numbers crunched: Bernie Sanders’s presidential platform, if enacted, would create 26 million jobs and 5.3% growth. An economist has done the calculating, and there’s no use arguing with mathematics. CNN’s headline reads: “Under Sanders, income and jobs would soar, economist says.”

When I run that line by Russ Roberts, he replies with a joke: “How do you know macroeconomists have a sense of humor? They use decimal points.”

Would you trade $1 billion for having to live 100 years ago?

The choice isn't nearly as easy as you might think. Economist Don Boudreaux's answer (CafeHayek via HumanProgress):

Honestly, I wouldn’t be remotely tempted to quit the 2016 me so that I could be a one-billion-dollar-richer me in 1916. This fact means that, by 1916 standards, I am today more than a billionaire. It means, at least given my preferences, I am today materially richer than was John D. Rockefeller in 1916. And if, as I think is true, my preferences here are not unusual, then nearly every middle-class American today is richer than was America’s richest man a mere 100 years ago.