Ideas Which Will Seem Preposterous In The Year 3000

July 14, 2013 § Leave a comment

There were certain instances in human history when society condoned practices and beliefs which seem incredibly crass, backwards, or just plain moronic by modern standards. Things like slavery, witch trials, and the concept of a “flat” earth, represent sections of history which most humans look back upon with disgust and confusion.

Despite the fact that human progress has given most of society the ability to look back upon these instances of folly as monumental mistakes to learn from, there remains a number misconceptions which linger amongst the human populace. These ideas disguise themselves as “common sense” but the only “sense” they appeal to is the emotion and fear of the most dull and uninitiated among us. These ideas are blatantly false, and are accepted as such by almost all professional academics. For whatever reason, large swaths of society cling to them relentlessly. On the whole these ideas are an affront to human progress, innovation, and understanding. Today we will start with three pieces of “common sense” which, with any luck whatsoever, will be thrown into the dustbin of history in the next millennium.

Immigration Laws

Laws which impede the free movement of individuals are a net negative to society. There is a large amount of research which shows that allowing unrestricted immigration to and from a country is beneficial to everyone involved. This could just as easily fit under the more broad title “nationalism”. Once individuals detach themselves from vague notions of “patriotism” (which typically confuses support for the state with supporting their actual homeland) this issue quickly fades away. Because practical arguments against unrestricted immigration fall flat on their face (see the above link), immigration laws necessarily depend upon xenophobic fears and support for ethnic purity. For the latter argument, the answer is to once again detach ethnic pride from state support.

Victimless Crimes

This is perhaps the most obviously backwards aspect of modern society. And thankfully, it already appears to be dying. The prosecution of individuals for drugs, prostitution, and other harmless voluntary exchanges is being second guessed and scrutinized by a large portion of western society. Recent state laws legalizing marijuana in Colorado and Washington mark a turning point in how society views drug use. My hunch is that most victimless “crimes” will be a thing of the past much sooner than the year 3000.

Price Controls

Essentially every professional economist on earth agrees that price controls are an absolute failure. Although this has long been an established fact, it hasn’t stopped governments from repeatedly disrupting the market with hair-brained attempts at “controlling” the price of goods or services. Price controls hurt those whom they were designed to help. It’s particularly ironic that the supposedly “fact based” left generally embrace price controls – mainly because rejecting them would require admitting the impotency of government power.

At some point governments will no longer be able to ignore the advice of economists and the members of the intelligentsia which don’t function as a self-serving arm of the state. Thanks to the internet, knowledge can spread at a much faster rate than ever before.  Ideas can quickly be debated and the general population can educate themselves with a level of ease that was once impossible. As technology continues to innovate, the speed at which ideas and facts can move through society will increase. The result can only favor the truth, and thus liberty.

Until then:

Tu ne cede malis, sed contra audentior ito

Time Preference and Evolution

July 10, 2013 § 5 Comments

I’ve come to the sobering conclusion that the evolutionary process favors the proliferation of the inferior ranks of humankind. If it is agreed that “intelligence level” is an inherited trait, then some conclusions can be drawn.

First, generally speaking, the poor tend to have more children than the rich. Thus, if wealth is a good indicator of intelligence, the less intelligent will proliferate at a much faster pace. It may be argued that wealth is not a strong indicator of intelligence. For instance, an American making minimum wage and living in low income housing is magnitudes wealthier than a peasant in some third world country. Perhaps wealth comparisons are only fair when comparing individuals living within the same country. But even within the same country, certain restrictions and regulations create barriers to entry such that wealth tends to concentrate into a few hands. Thus, it’s impossible to say that wealth is perfectly correlated with intelligence.

It’s clear that simply associating increased wealth with higher levels of intelligence will not suffice. Still, there has to be some explanation for the varying levels of success experienced by individuals with almost identical socioeconomic backgrounds. Almost everyone knows someone from their childhood that “made it”. Perhaps they moved out of the ghetto into a nice suburban neighborhood. Or perhaps they moved from a modest suburban neighborhood to a more upscale neighborhood. Whatever the case, we all have anecdotal evidence of some individuals bettering themselves. If intelligence is not the root cause, then what?

This question sort of nagged at me for a while. My intuition told me that there had to be some overarching trend – a sort of universal trait – which is associated with increased wealth. Then the other night I was listening to my dad ramble after having one too many glasses of bourbon.  He was going on about how I “did it the right way” and how, to paraphrase, I was much less impulsive and short-sighted than he was at my age. Then it hit me. Without realizing it, my dad was trying to explain an age old economic term: time preference.  Time preference is a term generally used to describe an individuals valuation of a good now versus their valuation of the same good in the future. For example, someone with a very high time preference is focused more so on the here and now. Someone with a very low time preference could be described as “future oriented”. They are willing to put off immediate satisfaction in order to make even larger gains in the future. Thus, an individual with high time preference would live a much more impulsive lifestyle. An individual with a low time preference would live life in a much more planned and responsible fashion.

It is my hunch that, ceteris paribus, a lower time preference leads to increased individual wealth over a lifetime. Sure, there are many instances wherein some of the most impulsive people become wealthy. But these people almost always obtain their wealth via luck or some genetic advantage (athleticism, intelligence, vocal abilities, etc.).

Yet, there is no way to prove that time preference is genetic. In fact, I highly doubt that to be the case. To the contrary, a low time preference is almost certainly a learned trait. Perhaps there is a link between intelligence and time preference. In any case, the world’s most powerful families are those who have managed to make a fortune and pass on the said fortune as well as the personal habits which led to its creation. Wealthy families which fail to teach their children about the importance of frugality, thrift, and whatever other traits helped build their fortune will quickly lose their wealth. Depending on the size of the fortune, this may take generations. Regardless, these learned traits are essential ingredients for prolonged, multi-generational wealth. Without them, only some form of state instituted/supported controls or regulations can preserve their wealth.

Generally speaking, it’s impossible to know exactly how evolution will affect the time preference of society as a whole. How strongly is a low time preference correlated with intelligence? Does the fact that poor families generally have more children than wealthier families mean that evolution rewards a high time preference?

This post was more rambling than I expected. In the end, I feel like I have more questions than answers. Story of my life.

Telecommunications and the State

July 1, 2013 § Leave a comment

A while ago I watched a satirical video which called out major telecom companies for their terrible business practices and piss poor customer service. The video was humorous and most average Americans would likely be able to relate to the subject matter. Unfortunately, the video placed all of the blame on the greed of private cable companies. At the time, the fact that the implicit assumptions made by the producers of the video were incredibly off base didn’t bother me much. Admittedly, it did annoy me that a YouTube channel with such a large audience would do such a poor job of checking their information. Regardless, the sad truth is that blaming the free market for the current state of the telecommunications industry is fashionable among just about everyone – even professional academics who should know better.

So at the time, I simply let it go. I’ve seen enough economic misinformation in popular media and press that a simple YouTube video wasn’t enough to push me over the edge. For a while, I pushed the video from my memory and continued on with my life.

Fast forward three months. I’ve just moved into a new apartment and I bought a new modem to replace the loaner modem which Time Warner Cable gives when you first move in. In order to remove the five dollar “rental” fee which Time Warner charges anyone using their loaner modem, I had to drive to the local TWC office and return it. No big deal. It should be easy, right?

Wrong. After driving twenty minutes to the nearest Time Warner Cable office, I opened the door to find a line that tightly weaved its way across every square foot of the building. At first I thought well, maybe the line will move quickly. Nope. There were only three windows open and the line was essentially at a standstill. In short, I found myself in a situation much more typical of the DMV than a private organization.

As I walked out of the building in disgust, modem in hand, I started thinking about that video. How many people in that building were grumbling to themselves about the perils of “corporate greed” or some other nonsense buzzword? How many understand the effects of geographic monopolies? How many of them knew that the current telecommunications market is so heavily distorted by government meddling that it could never be called “free market” by any economist worth their weight in overpriced loaner modems?

Put simply, how many people look at the telecommunications industry as a result of the free market? Perhaps more importantly, how do we go about showing them the truth?

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