Friday Hodgepodge

Blog Roundup

1. At Value for Value is a very interesting discussion of monopolies by Harry Binswanger in which he covers a few things missing from an article on the subject at the Foundation for Economic Education.

For example:

[L]ife is not a game. Production is not a game. A market is not a playing field. For one thing, sports are zero-sum. There's only one winner. Everyone else is a loser. And it matters little what the score is: 10 to 0 is a win, and so is 10 to 9. The 9 points scored by the loser have no consequence. In production for sale, the reverse is true: if Home Depot earns $10 per share and Lowe's earns $9, both can be almost equally happy. Nor is it the case that if Home Deport had earned only $1 per share, that would per se have meant Lowe's earned $18.

In business, every dollar of profit made is a positive good and that good is essentially unaffected by how much more or how much less competitors make.

The goal of business is profit, not beating others. [bold added]

This entertaining post is good as both a primer and a review.

2. At the blog of the Texas Institute for Property Rights, Brian Phillips credits the mayor of Boston, who is pushing rent control, with getting something right: The fact that "the status quo is not working."

There is a catch, of course:

In terms of essentials, Wu's rent control isn't a rejection of the status quo. It is a continuation and expansion of the status quo. If the status quo is not working, and it isn't, then rent control isn't going to work either. But to grasp this fact, one must first think in principles.

To Wu, the status quo is simply the current form of economic intervention. If that intervention isn't working, then the unprincipled solution is to try a different economic intervention. The advocates of such policies hope that somehow they will stumble upon the form of intervention that will work. They never will because the status quo is not working. [bold added]

Elsewhere in the post, Phillips is more explicit about the nature of the status quo Wu would have us believe she would up-end.

"Light bulbs ... were brighter, more convenient, and more pleasant than oil or gas lamps, but they also reduced the risk of fire." -- Jason Crawford (Image by KMJ, via Wikimedia Commons, license.)

3. I ran into this excellent discussion of safety and progress by Jason Crawford some time ago, but must have been perplexed about picking a part that might do it justice.

I eventually re-read it, and I think the following might be the best representative of it in a nutshell:

Sins of omission are more socially acceptable. If the FDA approves a harmful drug, they are blamed for the deaths that result. If they block a helpful drug, they are not blamed for the deaths that could have been avoided. (Alex Tabarrok calls this the "invisible graveyard.") [italics in original changed to bold, link omitted]

This comes from a listing of why we might get a tradeoff between safety and other values wrong -- and also illustrates the consequences of the myopia that is zeroing in on threat avoidance, as if other considerations don't count.

Safety is much more complicated and interesting than mere harm-avoidance, as the rest of this post shows.

I, who am so weary of the ninnies who seem to populate this safest time in human history, needed to hear this. In part, it's because these ninnies make it tempting to dismiss safety concerns too lightly.

4. It is from a couple of years back, but Ben Bayer's thorough demolition (alternate link) of that mantra of the socialist sympathizer -- Real socialism has never been tried. -- is worth a thorough read:

"Socialism" can only mean state ownership of the means of production. There is simply no evidence that there is a way of implementing or maintaining a universal system of worker co-ops without state enforcement. (Without a state, there is no way of maintaining any kind of social system. Anarchy is incompatible with even the semblance of a peaceful social coexistence.) This means that the Soviet Union, Communist China, Cuba, and the other catastrophic regimes of the twentieth century are the real meaning of the concept of "socialism" -- as is the democratically elected but now dictatorial Chavista regime in today's Venezuela. Socialists cannot escape this reality through wordplay or fantastic speculation. [bold added, links omitted]

This is just one aspect of what is wrong with this fallacy, which Bayer examines over history, as well.

-- CAV