More on Sweden

Good post on quasi-moneterasim. According to the article, Sweden is trying nominal GDP targeting. And its leading to an economic recovery.

Again, let's have an accurage view of the state. We can oppose it without disorting its record.

Rothbard's Cluster of Errors

Rothbard says:

"why is there a sudden general cluster of business errors?"

He goes on:

"How, then, do we explain the curious phenomenon of the crisis when almost all entrepreneurs suffer sudden losses"

and later confidently announces:

"In the purely free and unhampered market, there will be no cluster of errors, since trained entrepreneurs will not all make errors at the same time."

But of course Rothbard is wrong. The large cluster of errors exists because many businessman and workers have the same set of cognitive biases that creates the phenomenon of sticky wages. With a large pool of qualified unemployed workers, a rational world would advice all workers to accept lower wages. Instead, wages fall slower than prices and many businesses go under.

Eventually something happens which reverses the process. (An increase in aggregate demand or perhaps an eventual "catch up" of declining wages in respect to prices). Businesses become profitable and we enter the boom period.

Another Reason to Be to Greatful

If you're not a sex slave, thank your stars.

Can we find it in our hearts to do more to help them?

The first volley

Here I take on the Austrian Ancaps, and challenge them to be more flexible in their thinking.

As much as I may hate the federal government, do I really want mass unemployment? Why go after the Fed, why not go after the violent institutions that give for us to use the fed's currency? (IRS, FBI, etc).

Let's open people's eyes! You can be an anarcho-capitalist and throw out the childish Austrian economics.

Tolstoy on Shakespeare

While looking at Tolstoy's wikipedia page I saw this quote:

During his life, Tolstoy came to the conclusion that William Shakespeare was a bad dramatist and not a true artist at all. Tolstoy explained his views in a critical essay on Shakespeare written in 1903: "I remember the astonishment I felt when I first read Shakespeare. I expected to receive a powerful aesthetic pleasure, but having read, one after the other, works regarded as his best: "King Lear", "Romeo and Juliet", "Hamlet" and "Macbeth," not only did I feel no delight, but I felt an irresistible repulsion and tedium.."

I showed it to my father, English major and his response was:

"well a lot of american students have a similar reaction. It's not enought to read the plays. You really need to see them acted. Perhaps tolstoy was reading a bad translation, or , if he was reading in english, had difficulty with the language."

What interested me was how subjective art is. Nobody can really dispute that Michael Jordan was a great basketball player. They can quibble about whether he was better than Magic Johnson, but nobody would call him mediocre. But even the absolute most popular man from western literature, Shakesepeare, can be discounted by a great mind like Tolstoy.

Of course you can measure the popularity of art. And that's exactly what Charles Murray did in his book Human Accomplishment.

But in art, as in business, success breeds success. So there's a real question between how well popularity correlates with quality.

Should We Root For The State To Fail

Saw this article today:

I agree with the quasi-monetarist position that nominal NGDP targeting could stabilize economic growth and employment levels.

I think Ron Paul's "End The Fed" is like a campaign to "End The Military" or "End The Police". Ok, as long as people understand that we are open to new institutions replacing the oppressive ones to do the job better.

Unfortunately, the Ron Paul types are pushing a high unemployment, deflationary agenda. The man on the street is not going to accept this message. Granted, some might accept the idea of Austrian economics, but that's a whole other type of snake oil.

Instead of trying to end the fed we should be trying to end the legal tender laws, legal system and system of taxation that essentially force people to use American currency.

Tolstoy

Tolstoy inspired Gandhi, Gandhi inspired Martin Luther King. So Tolstoy is the Original Baby Gangster Pacifist.

But reading Tolstoy's wikipedia entry did little to inspire me. One other aspect of Tolstoy is his extreme advocacy of celibacy.

This isn't to say that celibacy doesn't have a certain charm. But it gets close to a Schopenhauerian view of the world that we'd be better off if life never existed, if no children were ever born. What does Tolstoy say about procreation? I don't know, will read more.

Looking Into Gandhi

Lately I've had an interest in Gandhi, so I've started in the first place I could read up on him, wikipedia. I have no doubt his pacifism was too extreme and there are also some strange rumors...well, about him and young girls. But I'm not really looking for a savior.

I liked this part of the article:

"The pivotal and defining element of Gandhism is satya, a Sanskrit word usually translated into English as truth, whose literal meaning is 'what actually is' (deriving from the root verb as meaning 'to be'). The principle of Satya as espoused by Gandhi needed that Truth must pervade all considerations of politics, ego, society and convention. Gandhi did not consider himself to be a pacifist, socialist or on any definable spectrum of politics. He professed to adhere to the pure, existing facts of life to make his decisions.

Gandhi’s commitments to non-violence, human freedom, equality and justice arose from his personal examination."

I'm still learning, so its a bit early to say too much about Gandhi. What I admire him for, more than so many others, is his skepticism towards violence. Too often in life we become passionate with a cause and move to demonize whatever group is opposing our cause. And then the dehumanization and violence comes in.

This quote only raises my opinion of Gandhi. "Personal examination" or at least examination of our own beliefs, is the method by which we avoid offensive dogmatism.

Family Plug

PLUG ALERT! Sorry...

Here's a plug for a family member's website:

http://www.pebblestoneconstructionanddesign.com/

Krugman Disses Red States

Ok we get it, Republicans are dying sooner. But all this raises the question, is longevity something to proud of anyways? Do we really want a society with so many old and frail malingering on? Especially if it requires an expensive redistribution of resources from the young to the old, aka Medicare and Social Security?

The Race Thing

Here is an example of a narrative of black oppression. It doesn't impress me, in fact I couldn't read it.

I'm curious how much patience others have for the rage of the racially "oppressed", or white guilt pieces for that matter. Is 20 the median age where one outgrows these things?

Capitalism=Cooperation

One of the big problems with the discourse on capitalism is that it focuses too much on the word "competition".' Is that what really defines capitalism?

Yes, there is competition. But it is competition within the boundaries of respect. It is a rivalry for the heart of the consumer. This love triangle between Company A, Company B and the consumer may cause friction. However, it stops being a free market when Company A violates the property rights of Company B.

And for that matter, one could argue that this "competition" is really all about listening to the consumer. That is, if Pepsi is making sweet soda and Pepsi sees its sales go up, Coca-Cola can make its soda sweeter. Thus by analyzing the actions of their purported enemy, Pepsi, Coca-Cola is indirectly listening to the needs of those who purchase carbonated beverages. Key word: Listening

And of course, what of the basic contractual transactions that occur in capitalism? The contract, whereby a consumer can turn over money for soda. This necessitates cooperation between two parties. Key word: Cooperation

So you can say that capitalism is driven by competition all you want. But the spiritual values of respect, listening and cooperation seem to capture the core truth of our free markets.

From Liberal to Libertarian: The Power of Compounding

Why do some on the left evolve into libertarians? In one word, "compounding".

Leftists tend to think that the huner of the impoversihed is more important than economic growth. So they support programs that penalize incentive, therby making the poor better off and total share of the pie smaller than it could be.

But when on studies economics, one can understand the importance of economic growth moving at 4% rather than 2%. An economy growing at 2% will double in approximately 35 years. An economy growing at 4% will double in approximately 17.5 years.

So think about that, that's a much bigger pie. A pie so large that much more will be donated to charity. An economy with no safety net growing at 4% will eventually donte more to charity than the entire social welfare net of an economy growing at 2%. If not in 17.5 years, 35 years, then perhaps in 100 years.

That's the power of compounding.