Sunday, April 09, 2006

A good point, based on a misunderstanding

Sometimes the Left hits the spot, but normally it happens for the wrong reasons. Logic and reason don't bring out the logical and reasonable from the Left. Slogans and misunderstanding does - sometimes.

An Icelandic Leftist-site, Murinn.is, is the star of the Icelandic Leftist-weblogs. Today, an attempt is made to disregard the whole free market-philosophy because some supporters of the free market talk about investments as something that the nation or country does, rather than an individual or certain groups of them.

If economists really believed in the invisible hand, they would never advise any man on the issue of economics, let alone practice economy-management. It hardly suits the idea about the laws of the jungle to practice while being subject to constant interference and social healing in order to maintain economic growth [..] instead of letting the laws work [uninterrupted] and watch their course.
The point is valid - there is of course no such thing as the "nation" investing, buying and selling. Individuals buy and sell, and pointing that out is only good.

But of course the valid point is not sprung from a solid ground of logic and reason. The author claims the "laws of the jungle" are what identifies the free market, and that just like David Attenborough watches lions eat zebras, free market economists should simply sit by and watch the rich eat the poor (or I assume that's to be read between the lines).

The free market is not the laws of the jungle. On thee contrary,

The truth is that economic competition is the very opposite of competition in the animal kingdom. First of all, it is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth. Unlike the lions in the jungle, who must compete for a limited supply of nature-given necessities, such as zebras and other game animals, which they have no power to enlarge, competition among business firms is competition in the creation of new and improved products and more efficient methods of production. ...

As the result of its basic nature, so far from being a process of survival of the fittest, economic competition is the foundation of the survival of practically everyone, including those who from a purely biological point of view are not at all very "fit."...

Furthermore, as Ricardo and von Mises have shown, because of the law of comparative advantage there is room for all in the competition of a capitalist society, including those whose productive abilities are modest in every respect.
It would seem strange to believe otherwise. Those who oppose the free market and follow the doctrine of wealth-distribution act very much in accordance with the laws of the jungle. Wealth that is created by one and, with State-coercion, is distributed to another tends to shrink with time. This is no mystery or hidden secret. But the Left will continue to distribute until all wealth runs out, just like a fox (giving the opportunity) will continue to kill chicken until there is no more (although the fox will have the good sense to bury his gain for harder times).

So yes, economists should renew their knowledge in the Austrian-style economics and discuss the different acts of different parties on the free market from an individual perspective. Nations don't buy or sell. Individuals do, although they usually carry passports that state some nationality or another of its holder.

Wednesday, April 05, 2006

The warming of a debate
A clever remark about the debate of global warming:
In an age where many of us believe that science has all the answers, while others believe that religion has all the answers, a clever mixture of science and religion can be very powerful. (#)
Greenie Watch gets the credit for the hat tip.

And why this extreme passion around the issue of (possible) human-induced effects on the Earth's climate? It has been demonstrated that fighting the real or imagined human-induced climate changes is not only an extremely expensive and impoverishing act, but also as close to hopeless as possible. Put in another perspective, by fighting climate change by punishing humans for their lifestyles will create poverty (or stop enrichment) and change nothing for the Earth's climate. And since this is the case (and the Warmers don't refute this as much as they try to create panic), why not use the resources on something a little more constructive? Drilling holes for water and pumping money into the HIV- and malaria-campaign are obvious examples. Why not shift the focus from something vague and mysterious to something that kills people every day? Why this passion for the climate change-debate?

One could present a theory to explain this complete lack of perspective: By fighting malaria, thirst and hunger, one does not gain political influence in the rich West. The Red Cross and Amnesty International don't promote politicians. The institutes promoting the human cruelty towards Earth's climate do. The Warmers can beg for money and influence to "prove" that humanity is sending humanity into the Global Warm-age (or Ice-age, depending on the decade we look at). The politicians can say that they understand that "action" is needed, and "action" does, of course, mean increased tax-funding to those who shout the loudest.

But of course this is just a theory. Who knows why global warming, out of all the real or unreal problems of the world, receives this attention, let alone political attention.

Monday, April 03, 2006

A necessary reminder

The Third Industrial Revolution is a nice little article about the changes that will increasingly come about with the (ever-going) globalization-process. Things are put into perspective in language that could even be fit for the average newspaper-reader (who seldom wants to see the big picture and is more obsessed with who writes, rather than what is written). Two quotes about the same phenomena - wages versus productivity, or, job-creation versus job-protection:

Moreover, the New Deal and Fair Deal introduced labor legislation that hastened the expansion of the service industry. It enabled and encouraged industrial labor unions to raise the cost of labor above its productivity, which has given rise to an unnatural economic phenomenon: mass unemployment. Unemployed factory labor has been seeking productive employment in the service industry ever since; it functions like a large net, legal and illegal, that can put all willing labor to productive use.
The forces of political intervention, in order to shield and benefit labor, are likely to increase labor costs, which invariably causes unemployment. After all, every penny of labor cost that exceeds labor productivity is bound to create unemployment.
This is saying it in human language that even the Left can understand (or can it ever?).

The French protests clarify the picture. Last fall, thousands of desperate immigrant-descendant young people filled the streets of France, protesting an impossible unemployment-rate that hits those the hardest who have the least skills, training and experience (in short, young immigrants). This spring, thousands of well-educated native-French people are protesting a decreased law-enforced job-protection. Two sides of the same coin. Both sides are unhappy. The rulers loose votes on both events. Artificial job-security, and its partner in crime - huge unemployment, fight with car-torching and violence. Who's the villain? Hardly Villepin.

A friendly reminder to the Left:

If A thinks that the "impersonal market" is not paying him enough, he is really saying that individuals B, C, and D are not willing to pay him as much as he would like to receive. The "market" is individuals acting. Similarly, if B thinks that the "market" is not paying A enough, B is perfectly free to step in and supply the difference. (#)
And wouldn't that be a peaceful solution to the "injustice" of free trade and capitalism?