Ace of Spades writes, in response to a NYT article on the death of a homeless woman:
In Sunday’s NYT there is a long article about a homeless woman who lived on a grate near Grand Central Terminal. She was seemingly intelligent, a Williams grad, and had a promising future snuffed out by mental illness....
What is ironic is that the majority (probably all) of the people involved and interviewed probably support the deinstitutionalization craze that has gripped America since the 1970s. I wonder whether a firm public policy of forced commitment would have helped this woman. My suspicion is that it would have. That is not to say that our institutions were wonderful, but an all-or-nothing approach makes no sense. We have moved the mentally ill out of sometimes awful psychiatric facilities into the revolving door of the street, prison and an early death.
I was among those who has opposed forced institutionalization. The practice used to be rife with abuse, and when it was really being challenged in the 1970's it was with recent knowledge of how institutionalization for supposed mental health issues had been used in the Soviet Union as a tool against dissent. And in a world where political partisans still routinely assign negative mental health diagnoses to their political enemies and have even suggested using mental health diagnosis-from-a-distance to unseat the current President, there is still a lot of possibility for abuse. But seeing that most of those who would have been in state mental hospitals are now in prison or living (and dying) on the streets, I am open to having made a mistake. I am still not sure, though, who advocates for such people who are without friends and family and would help guard against their abuse.
This article about pronouns on campus embodies all that is wrong with social justice warriors today, but perhaps not for the reason you might guess.
I personally have no particular problem if you want to identify as a male or a female or gender 6 or a zebra. But here is the real problem: When I write about you, I don't know how you self-identify. And when I write about a random hypothetical person, gender is effectively meaningless. I want one simple third person pronoun that can be applied to everyone. I currently use "they" even for the singular, rather than the more awkward "he or she" or just picking a random one each time, though this usage is still controversial. I don't care what the damn word is, just let's agree on one. The shift in the 1970's from using Mrs. and Miss to just using Ms. was awesome -- if you have ever struggled with trying to guess gender from a name like "pat", think about what a pain in the butt it was to try to guess marital status before addressing someone. The only thing that would be an improvement would be to just go to M. for everyone, male or female.
But the proposal in the article has, at my count, 11 different third-person pronouns. Ack. This is going in exactly the wrong direction. It is the same thing that social justice warriors have done on race. Twenty years ago, perhaps even 10, most everyone would have agreed the ideal goal was to have post-racial or race-blind society. Sure, celebrate your ethnicity and cultural uniqueness, but when dealing with each other we should think of each other first and second and third as humans, with race being as relevant to how we react to people as hair color. But of course we have gone in the opposite directly, with Progressives actually arguing for more and more separation and barriers between the races. So now we are doing the same thing on gender.
The whole point of the pronoun things seems to be not to get us to some sort of harmony but just the opposite, to create new opportunities to shame and abuse people. After all, if we launch tidal waves of outrage at people for picking the wrong pronoun out of two choices, imagine how much vitriol we can vent with 11 choices to get wrong.
Pigouvian taxes are taxes meant to help markets and prices better account for certain externalities that wouldn't otherwise be priced in. A good example is that to the extent one thinks that CO2 is having a deleterious effect on the environment, a carbon tax would be a pigouvian tax. This brief note at Cato discusses some problems with Pigouvian taxes. This note reminded me of another issue: in real life, Pigouvian taxes are more likely to reflect biases and faulty assumptions and virtue signalling of politicians rather than real science and economics. Here are two situations that come to mind, presented without comment:
I love Mark Perry's blog but I think he missed an opportunity to point out something awesome in this chart:
We spend a lot of time discussing how Uber and its app-based peers are upending the traditional taxi monopoly. And no one enjoys seeing a government enforced crony monopoly overturned more than I. But let's not miss the other story here, which is the tremendous increase in customer well-being and mobility. Forget the mix for a second and add the two lines. Monthly passenger rides, which were stuck in the 12-13 million a month range for years, have almost overnight doubled to about 25 million rides with the advent of ride-hailing and the entry of many ordinary folks without taxi medallions into the drive-for-hire business. This is amazing!
I continue to marvel at the nearly 100% positive press Elon Musk gets for his Hyperloop project. For those who do not know, that is his concept for a high speed transportation system that can achieve high speeds in part because it is in a vacuum sealed tube. Here is an update on the project and a picture of a prototype below:
So here is the story so far: We know that the main barrier to high speed rail projects is that they are astonishingly expensive to build and maintain given the high cost of the right-of-way acquisition and building track to the very high standards necessary to support safe high speeds. See for example California high speed rail, which is following some sort of crazed Moore's law where the cost estimate doubles every 18 months.
So we are going to fix the cost problem by ... requiring that the "track" be a perfectly smooth sealed pressure vessel under vacuum that is hundreds of miles long? What about this approach isn't likely an order of magnitude more expensive than rail? The prototype above which allows only one way travel cost about a billion dollars per mile to build. And with a lot less functionality, as current prototypes envision 10-20 person sleds, one step beyond even the worst airline middle seat in terms of likely claustrophobia, and less than half the capacity of a bus. It would take 15-20 of these sleds just to move the passengers from a typical aircraft. Not to mention the fact that there is no easy way to do switching and a return trip requires a second parallel track. All to reach speeds perhaps 20% higher than air travel.
Sure, I can be wrong. For example, if the hyperloop handled grades better than a train, that would reduce costs somewhat. But why does no one seem to ask obvious questions like this? It's like Musk exudes some sort of skepticism dampening field around him (look at Tesla: the company is fraught with issues and the stock price was falling until Musk did one of his hand-waving presentation specials at SXSW and the stock goes back up 30 points). But if you read carefully, most of the hyperloop progress in the article linked is for getting handouts from government (something Musk excels at) including money for scoping studies of lines that will never exist and money for new buildings and workshops.
Jeff Skilling was convicted of fraud and fined $50 million dollars and given 20+ years in jail. Elizabeth Holmes -- for fraud that is way more obvious and for which she is clearly directly accountable -- will get no jail time, a fine of a half million dollars, loss of some voting shares in the company, and a ten year moratorium on being a director or officer of a public company. From the SEC press release:
The complaints allege that Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry. In truth, according to the SEC’s complaint, Theranos’ proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others.
The complaints further charge that Theranos, Holmes, and Balwani claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014. In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.
These are only the highlights of the many, many repeated knowingly grossly fraudulent statements made by Holmes over a span of several years, and this does not even include her harassment of whistle blowers who tried to go public with the fraud. This isn't a case of creating an offshore JV that shifted some debt off the balance sheet -- its the case of lying blatantly about the company's technology and financials for years and years.
Don Boudreaux and and Mark Perry have been doing a great job making the case against Trump's trade sanctions. But it is always a danger only to learn about opposing views from those who disagree with you, so in the spirit of Bryan Caplan's "Ideological Touring Test" I wanted to address directly some of the arguments in support of Trump's sanctions.
I followed several links to this article by Spencer Morrison. After reading the whole thing, I fear I have made the intellectual error of choosing a poor representative of the opposing side's argument, but I am committed now, so here goes.
Consider that China steals more than half a trillion dollars in American intellectual property every single year. This is one of the reasons America’s trade deficit with China is so massive. For example, in 2010 Chinese companies stole high-speed rail designs from American firms, thereby depriving them of hundreds of billions in potential revenues. Such theft occurs in nearlyevery industry, whether it’s software programs or branded consumer goods. And the worst part? We let it happen.
I find the author's figure absurd, and likely untrustworthy given his example. Following his high-speed rail design "theft" link one quickly finds that 1) Americans were not involved at all, which is not surprising since we really don't have high-speed rail manufacturing industry or expertise in this country; 2) the technology seems to have been acquired or copied legally; and 3) the real competitive issue for non-Chinese companies seems to be that the Chinese have extended and improved the technology.
This one paragraph essentially summarized the theme of the article, that technology is the key to increased well-being and that the US is poorer when they cannot monopolize the best technology. The first is true, the second is dead wrong and flies in the face of 200 years of history.
I won't spend time on the mass of the article where describes the economy in very production-based terms which I don't totally agree with, but his basic point is one I can partially accept -- that real economic growth over time comes from productivity growth. I agree that technology is part of the productivity equation, but unlike the author I also see other drivers such as trade (which he calls "noise"). Trade is a critical factor in productivity improvement as specialization and comparative advantage greatly increase productivity.
But where I think he really goes off the rails is to say that because technology is wealth-creating, we need to monopolize that technology in the US.
The core issue remains: we continue to offshore our advanced industries at an alarming pace, which will only increase the likelihood that the “next big thing” will be invented abroad. If we do not reverse this trend, we will soon be on the outside looking in.
It would be entertaining to discuss the origins of the American textile industry in the late 18th and early 19th century with the author, which were largely based on spinning jenny and powerloom designs that were literally stolen from manufacturers in the UK (countries don't own technologies, only individuals and their companies do). The UK at the time had strict technology export restrictions of which I am sure the author would have been approving.
So did the UK suddenly become poorer as America built a lively cloth industry? No, in fact the UK boomed along with the US. It turns out that spreading new technology and productivity techniques around more widely made everyone richer. This only makes sense. Would the West really be wealthier if they had kept all technology from spreading, and thus were surrounded by countries dominated by subsistence farming and medieval crafts? A skeptic might argue that the UK did eventually become poorer relative to the US and upstart Germany, but Andrew Carnegie could have told you why at the beginning of the 20th century. He went back and toured manufacturers in his old home and was horrified at how little they reinvested in new technology.
Which brings me back to Chinese high speed rail, the example he started with. Clearly the Chinese have a growing high-speed rail manufacturing industry, and they DIDN'T invent the technologies originally in China. This is what trade is all about. Rather than keep technologies locked up in a secret underground bunker in the Rockies, as the author seems to prefer, it spreads technologies around the world. Production then shifts around the world based on a variety of factors such as comparative advantage in ways that are hard to predict, but seldom has a strong relationship to the country in which the technology was first invented. One place production does NOT shift, though, is towards countries whose government has artificially raised critical raw material prices through border taxes on its consumers called tariffs.
Which reminds me, if the problem is China "stealing" things like high-speed rail technology, then why in the hell are we imposing steel and aluminum tariffs? What the heck does this have to do with technology transfer? In fact, if the US really had a high-speed rail industry we were worried about, or if one were exclusively concerned with the auto industry, the author is essentially telling them "we are sorry you had your technology stolen so to help you out we going to substantially raise the prices of your two largest purchases (steel and aluminum) so that you can be even less competitive internationally." Ahh, I can feel the economic growth from that already.
If the author wants better intellectual property protections for US companies and individuals, I am generally supportive of efforts to achieve this (as long as we don't over-specify intellectual property and end up again with endless patent troll suits). For all its flaws, though, joining the TPP seems to be a better path to this end (it actually addresses, you know, intellectual property protections rather than just raise steel prices for consumers).
To conclude, I love this quote from his article because, despite being anti-trade, he in fact is echoing the pro-trade observation by Steven Landsburg.
Yet our trade policy does exactly the opposite. After the North American Free Trade Agreement took effect in 1994, U.S. corn exports surged, as did our imports of automobiles. The problem is that automobile manufacturing is much more likely to benefit from disruptive technology than is growing corn—under NAFTA, the preponderance of long-run benefits went to Mexico, not the United States. The same is true with America’s trade relationship with China: America’s advanced goods trade deficit with China now tops $120 billion. Meanwhile, our biggest export is soybeans.
Free trade is, quite literally, turning America into China’s mercantile resource colony: we buy their value-added, manufactured products, and we sell them raw materials.
This is freaking awesome! We grow and sell soybeans and get back advanced technology products. Brilliant! No wonder we are the richest nation on Earth.
Postscript: So to save the time clicking through to Steven Landsburg, here is a part of what he said (via Carpe Diem):
There are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa. Everybody knows about the first technology; let me tell you about the second. First you plant seeds, which are the raw material from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships eastward into the Pacific Ocean. After a few months, the ships reappear with Toyotas on them.
International trade is nothing but a form of technology. The fact that there is a place called Japan, with people and factories, is quite irrelevant to Americans’ well-being. To analyze trade policies, we might as well assume that Japan is a giant machine with mysterious inner workings that convert wheat into cars. Any policy designed to favor the first American technology over the second is a policy designed to favor American auto producers in Detroit over American auto producers in Iowa. A tax or a ban on “imported” automobiles is a tax or a ban on Iowa-grown automobiles. If you protect Detroit carmakers from competition, then you must damage Iowa farmers, because Iowa farmers are the competition.
The task of producing a given fleet of cars can be allocated between Detroit and Iowa in a variety of ways. A competitive price system selects that allocation that minimizes the total production cost. It would be unnecessarily expensive to manufacture all cars in Detroit, unnecessarily expensive to grow all cars in Iowa, and unnecessarily expensive to use the two production processes in anything other than the natural ratio that emerges as a result of competition.
That means that protection for Detroit does more than just transfer income from farmers to autoworkers. It also raises the total cost of providing Americans with a given number of automobiles. The efficiency loss comes with no offsetting gain; it impoverishes the nation as a whole.
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