Public goods: Fallacy or not? Also, production of security

[Augustine2004]

More absurdities from our governments. In some or other places you have to get a license for recommending colors or filing nails.

http://www.lewrockwell.com/blog/lewr...es/020445.html

I bring that up because while the theory of public goods is not as absurd as those, I still think it's absurd.

[Augustine2004]

Here’s an article presenting some actual events that illustrates well some of the points made in this thread. It should not be at all hard for the free market to give us better justice than what we’re getting in the United States. “The Gibberish of Injustice” http://www.lewrockwell.com/orig9/potter3.html

[joel]

Here’s an article presenting some actual events that illustrates well some of the points made in this thread. It should not be at all hard for the free market to give us better justice than what we’re getting in the United States. “The Gibberish of Injustice” http://www.lewrockwell.com/orig9/potter3.html

I'm not so sure about that. For all we know, it is those same people who would be running the protection firms, not just prosecuting, but also deciding what their company's law will be at any given moment.

[Augustine2004]

I'm not so sure about that. For all we know, it is those same people who would be running the protection firms, not just prosecuting, but also deciding what their company's law will be at any given moment.

Usually prosecutors are not businessmen. Moreover, a prosecutor with a reputation of a Giuliani, a Nofziger, a Spitzer, would be unlikely to attract and retain customers. Yet again any set of laws offered for sale on the market would have to be crafted to attract a large number of customers. Actually, there would be no prosecutors (attorneys for the State) anyway.

Anyway, are you really sure M-world justice is likely to be worse anyway?

[Augustine2004]

Christian readers of this thread may find William Lane Craig's essay "The Revolution in Anglo-American Philosophy" interesting and somewhat relevant. You will have to register if you've not already done so http://www.reasonablefaith.org/site/...352&autologin=

[nomad]

Austrian economics IS traditional. Its roots go back a long way, long before Adam Smith. I can’t answer any further without an explanation what you think traditional economics is.

The statistical model economics you were complaining to Ryokan about. Guess it's not traditional, it's just what I think of as 'normal' economics.

Well, certainly statistical data ought to show whether Austrian economics conclusions are correct or not. However, the world, as you yourself have noted, is chaotic (in the scientific sense) and exceedingly complicated. Moreover, we don’t have the luxury of holding all but one variables constant, to see what effect that one’s variation may have.

This is true, but the stock market is a special kind of chaos. If someone did find an optimal algorithm for making money off the stock market (which is not logically impossible, I don't think (*)), tomorrow everyone will change to that algorithm and it won't work anymore. When you start getting that kind of feedback into your model, then you have to model hysteresis effects. So you'd have to not only find a money making strategy _today_, but figure out the impact of other people adopting your algorithm and then the entire market moving to a 'static state'.

Most other things aren't like that. The job of a social scientist is definitely more complicated than a physical scientist (even if you grant determinism in human action), but I don't think it's impossible. All economics rely on those assumptions anyways.

Suppose one analyzes statistical data and concludes that in the year after the minimum wage was increased, the poor in the aggregate not only had more jobs but had more money. Does that prove Austrian economics wrong? Nah, it could simply be because the economy did well in that year.

Yeah, I think we already talked about that. You would have to amortize over a large number jurisdictions (like John Lott did in his gun law analysis, which is still controversial even so!) but it's still difficult. However, people do make meaningful conclusions sometimes. And other times, you get Freud.

I already posted something on the problem of measuring economic effects. Didn’t you see that? Oh, right, I think it’s in the small-government thread. If you wish, I’ll look for those posts.

You don't need to, I am well aware of the problem. But I don't think it's insurmountable. And we should find a way to deal with it... otherwise, we can really say almost anything we like, and no one can 'prove' us wrong ('prove' being not the best word to use in any social science anyway... how about 'give us confidence our theory is wrong')...

(*) - I see the stock market a bit like the weather. Weather is pretty much considered one of those sciences that is impossible - not because we don't understand the physics behind it, we do, or because it's 'random', but because there are so many elements involved that interrelate, that it's easier to model as a chaotic system, somewhat. Does that mean it's impossible? There are people endeavouring to do this very thing (see the 'Earth Simulator' by NEC - one of the largest supercomputers in the world, dedicated to problems like this). For now, it is far too complicated to actually grind through all the math and take all the measurements to really predict it exactly. And yet, we are not too horrible about predicting the weather. A week before my saturday event, I was told a 70% chance of rain. By friday, that had gone up 100%, and it did rain. It's easy to look up at the clouds and say it will rain (and yet it doesn't always, and they understand when it will and when it probably won't), but a week ahead is not the same thing. The stock market is not that different - usually there a are number of general predictions you can make about it that are pretty safe, and a smaller number of specific predictions. The economy is like this too, to an extent. But it will be a long time before we can accurately model the aggregate effect of all those independent agents.

[nomad]

Here’s an article presenting some actual events that illustrates well some of the points made in this thread. It should not be at all hard for the free market to give us better justice than what we’re getting in the United States. “The Gibberish of Injustice” http://www.lewrockwell.com/orig9/potter3.html

I don't know what the two have to do with each other. Perhaps we should just have more oversight over prosecutors. Seems the most straightforward solution to what's in the article (and the comparison to Stalinist Russia? come on, we are not even CLOSE to that... I know you've probably read Solzhenitsyn).

Can you tell me how the free market takes care of these cases?

- Abuse of lawsuits (especially product liability lawsuits)
- Contracts made under duress

And what if I can't afford the justice that I would like to have?

[Augustine2004]

One main difference between Austrian School economics and ‘normal’ (your term) economcs is of course the reliance on statistics. Praxeologists do not eschew it. They will, as I’d said before, use them to check their conclusions. They also try to explain statistical data or elucidate what they mean. Then, they also use them to buttress their rhetoric.

Some if not most praxeologists believe that the choices that people make cannot be reliably be predicted. Any statistical data developed from a period of time and a local place cannot be reliably be applied to any other period of time and any other local place. To some extent one can assume persistence of phenomena or trend, or even their recurrence, but the timing is problematic. The problem is not just that there are now so many people to keep track of. Once again, not even you could predict what choices you will make say on July 20 three years hence. What hope have we, then, of predicting the choices of billions of people on that date?

You appear to think that people will interact in such ways that humanity in the mass will become somewhat predictable. Not so. Yet again, you may assume persistence of phenomena or trend, but that’s as far as you can go.


There's agreement among economists, not just A.S. ones, though, that because of economic costs and benefits, that States will persist. There may be some cases in which A.S. economists agree with other schools also, but I can't think of one right off, except minimum wages.

I thought Freud was pretty well discredited. IIRC though he still has some followers.


I suspect you didn’t read what I wrote on the measurement problems. I will prepare a post on the measurement problem for later, maybe tomorrow. See below!

Austrian School economists did find an explanation for the business cycle. It’s not exactly a prediction, in that you still can’t time the start and the end, but it’s an achievement no other school has made.


THE MEASUREMENT PROBLEM
First of all, economics is supposed to be value-free. While economists may warn of consequences of a particular policy, they are not supposed to make recommendations, unless they are also ethicists. For example, we can warn that imposing minimums on wages may make people lose jobs.

So, economics is not even going to consider what good and what bad a policy might do. That’s the job of ethicists.

Unfortunately, ethics have yet to come up with a convincing way of measuring the good and the bad of any course of action. AFAICS, ethics has not even come up with much of anything in the way of measuring the good and the bad.

Anyway, how do you compare the bad to the good? How do you know when the good outweights the bad?

What’s more, the world economy is of an unitary and interdependent nature. Make a change to one part of the world, and it may well have world wide effects over time. So, to thoroughly study the effects of the change, one needs to know what the world that occurs in which the change did NOT occur (call it the alternative world or the A-world). That’s the best way to know and study the effects of the change.

How do you know and compare two worlds? Surely that’s impossible.

In conclusion, then, the measurement problem, that of knowing whether a government policy will do more good than bad, is impossible.

[Augustine2004]

This blog is quite relevant here because

1) It shows how misleading safety statistics can be, because you have to evaluate the degree to which political motives drive government actions.

2) We should be also looking at public bads, something that was not much considered here.

I’m not sure I agree with the author’s last sentence. I think it’s just a ploy to make the government look good and the market look bad. http://www.lewrockwell.com/blog/lewr...es/020486.html

[Augustine2004]

I wrote something about ‘regulatory capture’. Here’s some evidence to show that something like that does happen even now. http://www.alternet.org/healthwellness/81659?page=2

[Augustine2004]

This blog is quite relevant here because

1) It shows how misleading safety statistics can be, because you have to evaluate the degree to which political motives drive government actions.

2) We should be also looking at public bads, something that was not much considered here.

I’m not sure I agree with the author’s last sentence. I think it’s just a ploy to make the government look good and the market look bad. http://www.lewrockwell.com/blog/lewr...es/020486.html

If you permit, please, an update. Apparently it is not what I had initially thought it was. http://www.lewrockwell.com/blog/lewr...es/020494.html

[Mr Arkadin]

I agree for the first one. But it's not a statement about the real world, per se; it's a statement about what being means. In other words, a definition. You cannot find a case where a being thinks, but isn't (say, a computer program), because by definition, if it thinks, it is (so, by cartesian logic, if it really thinks (say, passes the Turing test), then it's sentient, the meaning of 'am' above).

It seems your taking an Aristotelian line- I am therefore I think. However I believe I think therefore I am has true empirical (real world) content. It does prove your own existence and a sentient one at that. Yet existence does not always imply thought merely the fact that thought proves your own existence. If I don't think I exist I am in so doing thinking and must therefore have an apparatus to think- hence I must exist. Yet as is clear existence is temporally prior to thought but thought is LOGICALLY prior to existence and as such has real world content.

So, let's say that we find a person who acts apparently without purpose. What is the solution? One, say the action axiom is wrong in this case. This means it was an empirically testable statement, and NOT a priori true. Otherwise, it is impossible to be false.

What kind of action are you thinking of which is neither reflective nor purposeful? Also one could say that the axiom of action defines a human and if they don't act they aren't really human.

Two, we could say that the person did act with purpose, we just don't know what it is. In other words, we fit the new behavior into our definition of purpose. In other words, 'purpose' is either a fixed definitive thing we compare people's behavior to (and not a priori), or it is another way of saying 'why people do what they do' (and any cause is 'purposeful', whatever it happens to be, physical, spiritual, or mental). In the second case, it does not say anything about the real world; 'purpose' is defined as 'what makes people act'.

Saying that people act to attain the ends they choose, for what ever reason, is manifestly a statement about the real world.

I don't believe you can really bridge the gap between logic and reality. I don't think you can ever 'prove' reality, because it is theoretically possible (is this the right term? I can't remember... logically possible maybe?) for, say, gravity to work wrong way down tomorrow. We can't prove that the physical laws will work the same way tomorrow. We can only say it has never happened before. (but I won't belabor this point).

On physical laws you are correct however saying how it works and whether it exists are two different questions. Descartes proved reality and existence. What you then can prove following this is what is necessarily implied in existence which gives one the building blocks to investigate the universe. And since action is implied in existence since to try to prove existence requires action of a sort then one can deduce those necessary truths implied in certain actions; this does not say whether or not certain actions will take place but if they did what this tells us.

So to bridge the gap, I think we have to make assumptions based on empirically-measured data. These can never be proven, but we can hold a high degree of confidence in them.
The action axiom fits into this category, I believe. It is a useful axiom which fits common sense notions of how people act. However, it can never be proven, so it is an axiom, not a fact.

The question is how do you interpret the data when you get it? Further why did you collect certain data in the first place?

Joel, I'll get back to you as soon as I can. I've been away for the past few days on a conference.

[Augustine2004]

Christopher Westley presented an interesting table of fiscal data in his Free Market article ‘The Folly of Stimulus,’ which can be found in http://www.mises.org/story/2859. A problem with the table is that it’s not adjusted to reflect the inflation since 2000. I divided the 2007 data, where appropriate, by 1.4 (to convert 2007 dollars to its 2000 equivalent). Hence this table:


[column=Growth of Government versus Growth of USA population]

[row]
[break]
2000[break]
2007[break]
Change (%)
[/row]

[row]
US Population[break]
281.4 million[break]
301.6 million[break]
7.18[/row]

[row]
National Debt[break]
$5.67 trillion[break]
$6.34 trillion[break]
14[/row]

[row]
Unfunded Liabilities[break]
$33 trillion[break]
$38 trillion[break]
15[/row]

[row]
Military Spending[break]
$294.5 billion[break]
$314 billion[break]
7[/row]

[/column]

Military spending is probably vastly understated now, so the percent change may be much greater, perhaps 10% to 20%.

Even Ryokan himself said that he wants to see government growing more slowly than the USA population. I agree that would be good.

[Zeluvia]

Christopher Westley presented an interesting table of fiscal data in his Free Market article ‘The Folly of Stimulus,’ which can be found in http://www.mises.org/story/2859. A problem with the table is that it’s not adjusted to reflect the inflation since 2000. I divided the 2007 data, where appropriate, by 1.4 (to convert 2007 dollars to its 2000 equivalent). Hence this table:


[column=Growth of Government versus Growth of USA population]

[row]
[break]
2000[break]
2007[break]
Change (%)
[/row]

[row]
US Population[break]
281.4 million[break]
301.6 million[break]
7.18[/row]

[row]
National Debt[break]
$5.67 trillion[break]
$6.34 trillion[break]
14[/row]

[row]
Unfunded Liabilities[break]
$33 trillion[break]
$38 trillion[break]
15[/row]

[row]
Military Spending[break]
$294.5 billion[break]
$314 billion[break]
7[/row]

[/column]

Military spending is probably vastly understated now, so the percent change may be much greater, perhaps 10% to 20%.

Even Ryokan himself said that he wants to see government growing more slowly than the USA population. I agree that would be good.

Is this normalized for the war spending?

[Augustine2004]

Is this normalized for the war spending?

I'm not sure I understand. In any case, I don't know if it includes everything that has to do with military offense and defense, such as CIA cloak-and-dagger stuff.