As a reward for my sins, I read this review of Daniel Dennett’s latest, by David Bentley Hart. (My efficiently causal sin being: reading The Corner.) [click to continue…]
From the monthly archives:
December 2017
Prominent libertarian jurist Alex Kozinski has been accused of sexual harassment by six women, all of them former clerks or employees. One of the women is Heidi Bond. In a statement, Bond gives a fuller description of Judge Kozinski’s rule, sexual and non-sexual, in the workplace.
One day, my judge found out I had been reading romance novels over my dinner break. He called me (he was in San Francisco for hearings; I had stayed in the office in Pasadena) when one of my co-clerks idly mentioned it to him as an amusing aside. Romance novels, he said, were a terrible addiction, like drugs, and something like porn for women, and he didn’t want me to read them any more. He told me he wanted me to promise to never read them again.
“But it’s on my dinner break,” I protested.
He laid down the law—I was not to read them anymore. “I control what you read,” he said, “what you write, when you eat. You don’t sleep if I say so. You don’t shit unless I say so. Do you understand?”
The demands may seem peculiar, but the tyranny is typical. Employers control what workers read, when workers shit, all the time.
But Judge Kozinski has the added distinction of being one of the leading theoreticians of the First Amendment. And not just any old theorist but a libertarian theorist—he has a cameo in the film Atlas Shrugged: Part II—who claims that the First Amendment affords great protection to “commercial speech.”
Where other jurists and theorists claim that commercial speech—that is, speech that does “no more than propose a commercial transaction”—deserves much less protection than political or artistic speech, Kozinski has been at the forefront of the movement claiming that the First Amendment should afford the same levels of protection to commercial speech as it does to other kinds of speech. Because, as he put it in a pioneering article he co-authored in 1990:
In a free market economy, the ability to give and receive information about commercial matters may be as important, sometimes more important, than expression of a political, artistic, or religious nature.
And there you have it: Watching a commercial about asphalt? Vital to your well-being and sense of self. Deciding what books you read during your dinner break? Not so much.
Government regulations of advertising? Terrible violation of free speech. Telling a worker what she can read? Market freedom.
The Australian Parliament has just passed legislation establishing equal marriage. This was the outcome of a Byzantine process in which the bigots tried every possible trick to delay the inevitable, culminating in a non-binding postal ballot, which produced a 60 per cent majority for equality, following a nasty and bitter campaign. Having rolled the dice and lost, the religious right tried to negate the result with special protections for bigotry, but got nowhere. As a result, they have suddenly discovered a previously unobserved love for UN conventions on human rights.
At the same time, an election in my home state of Queensland has produced a win for the Labor party, which campaigned in support of public investment in renewable energy and belatedly announced its opposition to funding for a massive coal mine-rail-port project, proposed by the Indian Adani group. The opposition consisted of an alliance between the main conservative party, the LNP ,and the racist/Trumpist One Nation party. The LNP not only supported the Adani proposal but wanted to put public money into a new coal-fired power station. One Nation is hostile to greenies but also opposed Adani on xenophobic grounds. THe outcome supports my view that the right will face bigger problems than the left from the emerging three party system.
I gave a talk yesterday at a Colloquium organized by a group called Sort, on The Wasteful Economics in Resource Recovery, and I was asked to talk a bit about blockchain technology. That reminded me that I needed to take another look at the issue, and what has changed since 2015 when I wrote that
at most of the market value of a Bitcoin reflects the electricity wasted in the calculations needed to “mine” it, with the obvious disastrous implications for the global climate.
and concluded that the sooner this collective delusion comes to an end, the better.
As far as I can determine, the only thing that has changed is that the Bitcoin bubble has got massively bigger and that the associated waste of energy is now much more widely recognised than when I first wrote about it.
Despite the huge increase in the market value of bitcoins, they seem further than ever from becoming an actual currency. Unsurprisingly, there’s no sign that governments are willing to accept bitcoins as legal tender. Nor is there any sign that they are displacing standard forms of money. On the contrary, bitcoins now seem to be seen as a financial asset, with no real suggestion that they will ever be a general medium of exchange.
As a check on this, here’s a list of firms that accept bitcoin as payment, which fits easily on to a single page. Sydney readers who would like to buy a beer with bitcoin are in luck, or were back in 2014 when the Old Fitzroy got a bit of coverage for saying it would accept bitcoins. There’s another pub listed in London, and that’s about it as far as drinks are concerned. After nearly a decade, Bitcoin acceptance remains the stuff of publicity stunts, not a serious commercial option.
At least by repute, bitcoins are used more extensively in covert transactions such as those involving drug trading, tax evasion and money laundering. But that’s scarcely a good reason to bet on them being around for a long while. If the scale of the problem gets large enough to cause real problems, governments will act to shut the whole system down or regulate it to the point where the compliance costs make the whole idea unattractive.
At any rate, the durability and magnitude of the Bitcoin phenomenon, running for nearly 10 years and with a putative value of nearly $US 100 billion, provides us with a very sharp test of the Efficient (financial) Markets Hypothesis. If Bitcoin eventually becomes a currency, the EMH and its supporters will be vindicated, and I (along with quite a few other economists) will have a lot of egg on my face. If the bubble bursts, the roles will be reversed.
Finally, I should give a plug to Gridcoin. This is a project that aims to avoid the massive waste involved in Bitcoin by making calculations that are actually useful to science. This is a worthwhile idea. But with a current market capitalization of $21 million, it’s obviously got a long way to go.
There are also alternatives to the “proof of work” method of validating changes to the blockchain, such as “proof of importance”, which is analogous to Google’s page ranking systems. I’m still trying to find out more about these.
If you’re looking for a passive-aggressive Christmas gift for your upper middle class friends, whatever their politics, you could do worse than Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It
Reeves isn’t interested in the 1%, but in the 20%. The starting point is Obama’s aborted plan in January 2015 to abolish 529 plans. For those of you who don’t use them, 529s are tax sheltered college funds. The funds grow tax free. They are a complicated enough instrument that (almost) no one outside the top 20% uses them and, like all tax-shelters and deductions, are more valuable the higher your tax rate. Ted Cruz inserted a provision to the Senate bill which expands 529s so that rich people can pay for elite private k-12 schools with tax-exempt savings. A particularly wicked feature is that anyone – grandparents, uncles and aunts, family friends, etc – can contribute. So the more relatives with large amounts of disposable income you have, the more your college fund will grow, and the greater the cost to the taxpayer. In 2009 23% of households in the top quartile of the income distribution hold 529s, with an average balance of $32,000; just 2% of households in the bottom quartile had 529s, with an average balance of less than $1k. 529s are estimated to cost the federal government only about 5.8 billion in the next 5 years, but almost all of that will benefit families in the top quartile of the distribution (and those estimates do not account for the possibility that 529s will be useable for private k-12). And its not just that 529s effectively reduce the cost of college for affluent families but not for lower-income families: by increasing the higher education spending power of the affluent they, presumably, raise the price at the more selective end of higher education; thus rendering it less accessible to less affluent families.
Obama’s plan to abolish 529s, and replace them with a stronger and broader version of the American Opportunity Tax Credit, a credit for educational spending which is unavailable to families earning over $180k, was defeated not by Republicans, but by Democrats.
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Around November, I declare a ban on any new/borrowed books and try and finish all the books I’ve started that year. Slow-going, this year, as I was for some reason unable to read for much of October and November, and lots of the unread pile is non-fiction. Anyway, some highlights of the year, below. Another post to follow on what’s on the Christmas list.
A book that lingered in mind long after I’d finished it was Laline Paull’s fascinating The Ice (The Bees is still one of my favourite books of the last decade, and I pressed copies of it into two more people’s hands this year.) The Ice is set in the very near future, about the friendship between two men who each want to save the last bit of the Arctic. The chapters begin with excerpts from the memoirs and letters of others who have been obsessed with Arctic exploration, drawing out the historic roots of our drive both to explore and exploit.
Recently I listened to a LRB Cafe event podcast with China Mieville from about 2014. He mentioned something about “…extruded-literary fiction product which is about the calm, chapter by chapter decoding of a never very mysterious metaphor to clarify what life is a bit like, and the book ends with a ‘yes, that’s so true’, that is very wise’.” We all pretty much know what that is, when we see it. I can’t be the only one hungry for novels about politics, money, the environment, the movement of people and surveillance capitalism. Laline Paull’s The Ice grapples with several of these, and the world of work, which is quite rarely found in fiction, and the deals individuals make with themselves and the world they find themselves in, and whether we have any business holding onto hope. [click to continue…]
Max Sawicky has a piece in _Jacobin_, giving grief to Brink Lindsey and Steve Teles’ new book on rent seeking, _The Captured Economy_, and arguing that Dean Baker’s work presents a “left-facing” response to rent-seeking, while Lindsey and Teles’ book, instead, is “right facing.” It’s a little awkward to wade into this fight, since I’ve been around long enough that I’m friendly with Max, Brink and Steve (and, for that matter, Dean), but I think that Max is basically wrong. What Lindsey and Teles are doing, as Max says, is to set out their pitch for liberaltarianism, a fusion of liberalism and libertarianism that John Q. has written about here in the past. But even if liberaltarianism isn’t, and shouldn’t be mistaken for e.g. social democracy, it’s much more congenial to useful argument with the left than Max allows, or than old-style libertarianism ever was. [click to continue…]