Economics and Happiness

A commenter at Tyler Cowen's indispensable Marginal Revolution asks whether thinking like an economist results increases happiness, and then answers, well, yes, of course:

1. I cherish my consumer surplus. I value most of the stuff I buy way more than
what I have to pay for them; vanilla ice cream makes me happy beyond belief, and
the same is true for the music of Dream Theater and the (soon to be purchased)
Apple iphone. And what am I asked to pay for them? Peanuts.
2. I cherish my producer surplus. I am getting paid way, way more than the salary that would make me indifferent between supplying labour and staying at home.
3. I never have regrets: I did the best I could given the information available to me at the time. Judging I could have done better using information I acquired at a
later date makes as much sense as regretting the existence of gravity. On a
related topic, I understand the irrelevance of sunk costs.
4. While I do care for my welfare in relative terms, my welfare in absolute terms looms large in my utility function - and, boy, look how its value has been growing.
5. The selfishness of my fellow human beings does not make me anxious or depressed. Adam Smith (or was it Mandeville?) taught me that humans, selfish as they are, can make happy societies. And perhaps more to the point, they can make me happy.

I, for one couldn't agree more, even if I'm not an economist (though I do have at least some background in economics, so I'm not completely talking out of my ass). At the very least, attempting to evaluate the comparative value in every action or transaction makes you appreciate things a hell of a lot more, and take a hell of a lot less for granted.

On the other hand, as some of the commenters to Cowen's post point out, the fact that there are people who don't act and think like economists can be extraordinarily frustrating- but it's more the fact that you see people acting irrationally counter to their rational interests, and then watching as those irrational actions hurt not only the actor, but also other people (possibly including yourself).

Still, on the balance, basing your own decision-making and worldview on economics is pretty likely to increase your happiness. As Cowen himself notes:

Most generally, (good) economics insulates people from expecting the impossible, and that does make for greater happiness and contentment.

Fred on Executive Power

Andrew Sullivan is pleasantly surprised that Fred Thompson has a restrained view of Executive Power that seems to break with Cheney. Sully also makes note of Thompson's real (not faux) humility.

I want to say this much about Fred: despite my making fun of him here and here, I've had occasion to follow the former Senator's career a little more closely than other politicians. I once attended a guest lecture he gave where he made a last minute change of topics (from discussing the Clinton Justice Dept. to discussing campaign finance reform). Even though I completely disagreed with him on the issue, I came away very impressed with his candor and, yes, humility about the topic. He was one of the rare politicians who was willing to acknowledge a little bit of doubt that his position was correct, and to acknowledge the legitimacy of the other side- no railing against corporate lobbyists and special interests or anything of that sort. Just a rational discussion of what he thought was good and bad about McCain-Feingold, and why he may have been wrong.

When I saw that the die-hard conservatives were trying to draft him to run, I was more than a little surprised, given what I knew about his humility in general. In some ways, he is this year's Republican answer to Obama- just without the charisma. Generally speaking, Fred is a good man with a fairly well-rounded commitment to principle. I don't know that he would be a good President, but he'd be far better than Hillary or Giuliani, if only because of his more humble view of Executive Power.

Also- no matter what, it's about time we ended the string of electing people whose primary political experience has been in the Executive branch (whether it be federal, state, or local). If you ever wanted to know why federal power has grown so much in the last 40 years or so, you need look no further than the fact that Gerald Ford (who wasn't even elected) is the only President during that time period whose primary political experience was in the legislature (or, for that matter, the judiciary).

This isn't to say that a former Congressman won't expand Executive Power (see, e.g., LBJ), just that a former Congressman or judge is much more likely to have an actual concern for the Constitutional separation of powers and respect for the will of at least one other branch.

Lucky Dube, RIP

If you have never heard of South African reggae star Lucky Dube, then I am sincerely sorry- in my opinion, he was the greatest advocate of the freedom philosophy in music since at least Bob Marley. In some ways, I (a devout fan of Marley) think Lucky's music had more of an effect on my thought than Marley's.

Sadly, Lucky Dube was shot and killed last week in a carjacking attempt in Johannesburg, South Africa- by the very types of people he dedicated his life to fighting through his music. If you have never listened to him, you can listen to some short samples here, or check out his song lyrics here. What made him particularly powerful was that his advocacy of freedom did not change one bit after apartheid fell- he was every bit as opposed to racism against white people post-Apartheid as he was opposed to racism by white people during apartheid. There is also a strong undercurrent in his songs- both pre-and post-apartheid - that government is more often the cause of problems than the solution. This isn't to say Lucky Dube was a libertarian (I'm not sure he ever even heard of libertarianism), or even would agree with libertarians on a lot of important things (though "Taxman" is as libertarian a song as they come). But the underlying message of his music was one that was profoundly at the heart of a true libertarian philosophy: self-reliance, personal responsibility, a deep respect for others, a love of life, and a rejection of force. He also had some extremely personal songs about children, family, and love that are as beautiful and emotional as you will ever come across. Put another way, Lucky Dube's music is

as human and unselfish a portrayal of the freedom philosophy as you will ever find. The world is a little less bright without him.

Just a few of his most libertarian-ish songs included:

"Taxman", a song that talks about the government as legalized theft, and, in a sad coincidence, contains the lines "I pay for the police/To err..I don' t know why/'Cause if my dollar was good enough/There wouldn' t be so much crime/In the streets".

"Affirmative Action", about the tendency of people to look for government to save them rather than educate themselves and actually work for a living.

"Feel Irie", (NOTE: the "bother?" in the link should read "part of") about the fact that life is tough, but we shouldn't feel as if somehow others are immune to troubles; instead, people have it within themselves to make their own happiness. This includes two of my favorite lines of all time: "People had troubles since the Pope was an altar boy/People had worries from when the Dead Sea was only critical".

"Is This Freedom?" and "Mickey Mouse Freedom", about the false perception of freedom that results from replacing one form of particularly nefarious oligarchy with another.

"House of Exile", a particularly beautiful song the exact meaning of which I find difficult to express.

"Life in the Movies"- a post-apartheid song that includes the phrase: "Don't steal, the police hate competition."

"Sleeping Dogs Lie"- a song about the importance of individual happiness, and the need to let other people be happy. Includes a tale of tolerance and acceptance towards gays- a rarity in the reggae world, not to mention subsaharan Africa.

A few random questions for neocons and theocons

1. Can people really be forced to be free? If yes, isn't this a paradox? If no, how do you justify military action for the purpose of spreading democracy?

2. Isn't the core of a moral act the fact that you actively chose the moral act of your own free will? If so, then how does prohibiting immoral action (as you define it) increase morality?

3. Why do free market principles apply in the field of business and economics, but not in the field of moral action?

4. If God is omnipotent, why must he be protected? If God is infinite, how can you know for certain what his will is? Similarly, if God has a "plan" that we do not and cannot know, how can we know for certain how he wants us to implement his plan?

5. Why would it ever be rational for Iran to try to nuke us (or provide a terrorist with a nuke) if it is a virtual guarantee that we will always have way more nukes? In other words, if a nuclear attack on Israel or the US would result in the complete obliteration of Iran, why would Iran ever attempt such an attack? If, in fact, they are developing nukes, isn't it more logical that they are developing those nukes purely as an attempt to get leverage against us (and prevent us from attacking them)? If you agree that it is irrational for Iran to attack us, but believe that Ahmadinejad is irrational (because he wants to bring about the Apocalypse), do you realize that Ahmadinejad has very limited power in Iran's theocracy?

A few random questions for Progressives

These questions aren't meant to be snarky- I really am curious about the answers.

1. Why should the arbitrary fact that someone was born in the United States mean that they should be forced to pay for top-quality healthcare that is unheard of outside the West for someone in Hawaii, and in the process be prevented from spending that money to make sure that a family in Malawi is able to live on $5 a day instead of $1, or has access to a minimal level of healthcare? In follow-up, which of these two examples does more to make the world a better place?

2. Why do micro-loan programs work so much better than entitlement programs in bringing people out of abject poverty?

3. Which is more selfish- only helping those you care about, or forcing other people to help those you care about?

4. If, as I often hear Progressives claim, you believe in the (fundamentally libertarian) maxim that you can't legislate morality, how is forced charity (aka entitlement programs) not the legislation of morality?

5. Can someone who chooses to work be forced to work more and harder in order to provide food, shelter, and healthcare for someone who actively chooses not to work?

Something forgotten by the "Ticking Time Bomb" argument

I've argued before that torture, or "harsh interrogation techniques" (per the Bush-euphemism du jour) doesn't generally work particularly well. But, that isn't to say that it never works- just that on average it is less likely to get reliable intelligence than other methods, or is likely to produce so much bad intelligence as to overtax precious resources that could be used on pursuing more reliable intelligence.

Anyways, the argument of the pro-torture (or "harsh interrogation techniques") crowd often centers on the ticking time-bomb scenario. And, frankly, they're probably wise to do so- in an event where you are talking about an imminent threat of millions of people dying and where you know (or have ample reason to believe) that torture is the only thing that will get you the intelligence you need quickly enough, why wouldn't you torture? Therefore, the argument goes, the President (or appropriate officials down the line) should have discretion to make the call on when torture (or "harsh interrogation techniques") is permitted- without fear of prosecution.

Here's the problem with this argument, though- necessity, self-defense, and defense of others is an affirmative defense already recognized by every single common law court in the US, Britain, and- to my knowledge- the world. Having such an affirmative defense means that, yes, the authorizing official and (maybe) the interrogator, rather than the prosecutor, will bear the burden of proof if they are ever brought up on charges...but isn't that the way it's supposed to work? If you're going to cross the legal line, shouldn't you be required to have sufficient justification for doing so? Think of the affirmative defense as a post-sentence trial (for purposes of this analogy, the torture is the "sentence") of the alleged terrorist, but with a lower standard of proof (either "clear and convincing" or a "preponderance of evidence," rather than "beyond a reasonable doubt").

Why is this already existent way of handling torture issues insufficient to protect national security?

Groan!

I hate to continue with this string of comments about Townhall.com columns, but they've been particularly bad these last few days.

Today's Chuck Colson column has one of the most preposterous premises of any column I've ever read, and may be the penultimate example of the cringe-worthiness of mixing sports and religion. The premise of his column? People should root for the Rockies in the World Series, not because they are underdogs who put on one of the most amazing runs in baseball history, but because "The Rockies are the first major league sports franchise organized on specifically Christian principles."

First of all, the premise itself is deeply flawed- the Rockies are hardly the first team to screen players for "moral values"- this has actually been the operating premise behind a huge number of teams, some successful, some not so much. Additionally, while it is truly a kind thing that the Rockies have voted the widow of their minor league coach (who was killed during a game in a freak accident) a full playoff share, does Colson really think that just about any other team wouldn't have done the same? Finally, does Colson really think that the Rockies are "the first major league sports franchise" to post Bible quotes in their training facilities and have regular prayer and fellowship meetings?

Second of all-the Rockies are hardly the only successful sports franchise in recent years to have an emphasis on good character (usually referred to in sports as "chemistry"). For instance, would anyone say that the reigning Super Bowl champion Colts- led by hard-core Christians Peyton Manning and Tony Dungy, and all-around nice guy Marvin Harrison (who are run by the same guy who put together the 1990's Bills Super Bowl teams) have a lack of emphasis on character (though I'll admit, Peyton Manning's face makes me nauseous)?

Worst. Column. Ever.

It is amazing to me that, in this day and age, we still have columnists on widely-read sites like Townhall who continue to insist that the War in Iraq is justified as an attack against the terrorists of 9/11 or against closely aligned terrorists. I always love when columnists make the argument that the "Constitution is not a suicide pact", as if pre-emptive attacks (without a declaration of war) on nations that aren't an imminent (or even near-imminent) threat to the US are somehow necessary to prevent the destruction of the US.

Listen- if you don't like the way the Constitution is written, then it gives you a pretty good idea of what you should do: AMEND IT! This used to be the conservative position; now, though, conservatives have decided that the Constitution can just be ignored on the grounds that "it's not a suicide pact," so the plain meaning of the words can be altered to create enough ambiguity to allow the President to do whatever he wants to fight a couple of stateless terrorists.

I also love the common claim that "they" despise us (to the point of wanting to kill us) just because we exist and do not practice sharia law. Of course, this ignores the fact that there isn't just one "they", and that most of the "theys" have various different reasons for hating us. Some of "them" hate us because of the mess we made in Iraq; some because we're killing a lot of people in "their" region; some hate us because we have a military presence in their holy land; some hate us because of our pervasive culture; some hate us for our support for Israel; and finally, yes, some hate us because we're not them. Of course, the idea that a different response is required for each group of "them" requires an appreciation of nuance and a desire to ask the question: "Why?" And the idea that maybe we should try to take approaches that eliminate existing "theys" without creating new "theys" is, apparently, the equivalent of a "clearly written prescription for disaster." Or maybe Harris just believes that every single Arab is a terrorist just dying to attack the US, so no new "theys" can be created, and we only need to destroy the existing "theys"- if that is the case, though, then why isn't he advocating just blowing the whole region up with a couple of nukes?

The most staggeringly bad line of this staggeringly idiotic column is: "the fact remains that we were indeed attacked by a people, on our shores.(emphasis mine)" So, because we were attacked by "a people, on our shores," we can now attack just any people we wish?

In any event, not even Ron Paul wants to just stand idly by and allow us to be attacked by "them." While I am not 100% supportive of Paul's foreign policy (it is more isolationist than I am willing to go), the fact is that he did support fighting back in Afghanistan (if not the subsequent nation-building, which Republicans used to find abhorrent), and he continues to support a variety of non-military or quasi-military measures to get people who actually represent a threat to our national security- whether they be massive bounties, letters of marque (I always have to throw that one in- who doesn't love pirates?), or more appropriate law enforcement efforts. But it's not about curling up in the fetal position and letting "them" come after us- it's about asking why "they" want to come after us in the first place. Going over there and destroying a country in the heart of the Arab world might kill some of "them", but if it creates more of "them" than it kills, is it really a good idea?

To quote a once-widely respected (until he fought against the neo-con party line) Republican ex-General and Chairman of the Joint Chiefs of Staff, and Secretary of State:
"What is the greatest threat facing us now? People will say it's terrorism. But are there any terrorists in the world who can change the American way of life or our political system? No. Can they knock down a building? Yes. Can they kill somebody? Yes. But can they change us? No. Only we can change ourselves. So what is the great threat we are facing?"

Of course, Phil Harris' career as a software engineer in frickin' Nebraska (yeah, that center of terrorist targets Nebraska) makes him far more knowledgeable about military matters than a guy who waged perhaps the most successful war in American history.

Dennis Prager on Killing Internet Freedom

I've obviously been a pretty emphatic advocate of the need for civility on internet blogs, message boards, and e-mails to commentators. But Dennis Prager's column today strikes me as one of the best ways to attack the free speech triumph that is the internet. Money quote:

"There is not one good reason for any website, left or right, or non-political, to allow people to avoid identifying themselves. Anyone interested in serious political discourse, or in merely lowering the hate levels in our country, should welcome the banning of anonymous postings."

To sum up, Prager believes that the anonymity provided by the internet is responsible for all sorts of ad hominems and vitriol, making the comparison with a relative lack of ad hominems and vitriol in the letters to the editor section of the newspaper, where people must identify themselves with name and hometown. As a result, Prager advocates requirements that individual commenters and bloggers give their name and hometown for any comments they wish to post.

There are a number of huge flaws with this idea, though:
1. Incivility on the internet is a nuisance, but not a threat; if you are seriously offended and hurt by something said by an anonymous commenter or blogger, then you need to grow a thicker skin. Not to say you can't be seriously annoyed by this sort of thing- just that we're not usually talking about serious threats to someone's reputation or physical well-being. An ad hominem by an anonymous poster is hardly going to hurt someone's reputation, and it really shouldn't hurt their feelings. The primary effect of the ad hominem nuisance is often that it prevents the anonymous poster's legitimate arguments from ever getting a fair hearing from the "victim."

2. The anonymity provided by the internet, whether on comments or in the actual blogosphere, is one of the most essential elements of the internet. If you are able to maintain some degree of anonymity, you are much more free to advocate unpopular positions, or even just popular positions on divisive issues. This is a particularly important element point now that google gives employers and prospective employers virtually unlimited access to everything that exists on the internet- access that employers increasingly use to research job candidates. For instance, think of the effect of non-anonymity on an outright communist's willingness to engage in internet discussion if the communist is aware that his current or future employer will be able to tie him to his statements.

3. How would one enforce this anonymity policy? Would one be able to just put down any old name and town- in which case anonymity is essentially unaffected? Or would a poster's hometown have to be closely correlated to his IP address? Or would we have to have software that is tied to the name of the account owner (creating massive privacy concerns)?

4. Who says that tying one's name to a comment actually has an effect on civility? I've seen plenty of letter to the editor over the years that could be characterized as "ad hominems" or invective-filled. Moreover, how many letters to the editor containing ad hominems and invective don't get published at all because they simply contain nothing worth publishing (which is usually the case with any ad hominem)?

5. Regardless of anonymity, most sites already have editorial control over comments posted on their websites. When a comment shows up that is particularly lacking in substance and filled with ad hominems or invective, the site's owner has the ability to delete the comment- and frequently does.

Now, I have no problem with individual sites choosing whatever commenting policy they wish. Indeed, there are perfectly legitimate reasons why a site would wish to prevent anonymous comments. But there are also plenty of legitimate reasons why permitting anonymous comments is worthwhile. To ignore these reasons is just silly. An even scarier type of anonymity ban, though, would be on an abolition of anonymous blogging in general (rather than just commenting). Currently, the blogosphere is as close to a pure meritocracy as has ever existed- good blogs get the most traffic; bad blogs wither and die. What makes many blogs good blogs, though, is their willingness to express unique ideas; an anonymity ban would have a chilling effect on any blogger expressing unique ideas where the blogger's ideas aren't well-known to begin with (and where the blogger isn't already pursuing a career path surrounded by like-minded people).

The Internet, Nanotech, and the Obsolescence of Government

(WARNING- DORKY POST ON LIBERTARIAN POLITICAL/ECONOMIC THEORY)

Perhaps one of the most important- and legitimate- functions of government is as a sort of clearing-house for information sharing. For instance, government can claim a proper role in regulating lead content in paint not so much because one or two extra parts per million will automatically mean a catastrophic risk to children, but because citizens lack the ability to be all-knowing about the safety of everything that comes into their lives. Unfortunately, with many things, a customer can only find out the hard way that a product is unsafe. Similarly, government can claim a proper role in prohibiting or regulating drug use on the grounds that, by banning a product and enforcing that ban, it is preventing people from using unsafe products that may seem safe at first and are highly addictive (of course, the drugs chosen for this prohibition and regulation are completely arbitrary, but that's besides the point). In other words, the status that government gives to a product, person or action is intended to let the public know that the product, person or action is good or bad.

Libertarians are fond of pointing out that these functions can be performed just as well- indeed, even better - by private industry, like Consumer Reports. Unfortunately, this argument has been impractical- the costs of obtaining this type of information have historically been extremely high, particularly in terms of time required to research a product, person, or action.

So government regulation of some things that present legitimate hazards is perhaps legitimate. The problem, of course, is that few products, persons, or actions are bad for everyone, just as few are actually good for everyone. So, while the government policy may have a good intent (for instance, preventing people from becoming drug-addled criminals), it often has very arbitrary results as applied (locking up people whose casual use of "illegal" drugs causes no external harms). Indeed, government's decision to regulate something is almost never the result of a finding that something is 100% evil or good for 100% of the people, but is instead based on a finding of what does the most good for the group that is most politically powerful on an issue at a given time.

The internet, however, has the power to combine the best of the personal choice/well-informed consumer ideal of the Consumer Reports-type industry with the relatively lower opportunity costs (to the individual consumer/taxpayer) of government regulation. With the continued development of portable nanotechnology that can be brought anywhere, and the unlimited potential of the internet in terms of making information available, the need for government one-size-fits-all rules is decreasing. In other words, portable nanotechnology with access to the internet presents an opportunity for individuals to have almost zero cost (both opportunity and actual) in obtaining information about a purchase or action. Near-immediate access to this information will allow them to better decide for themselves whether their intended purchase or action makes sense for them specifically.

Under this scenario- which will certainly take many years to reach its full potential- the immediate access to information will obviate the need for government to impose an absolute barrier for or against the subject products or actions. To put it all another way: government action is unnecessary where all individuals have a zero or near zero-cost opportunity to learn for themselves whether something is right or wrong for them. Nanny-statism, to a large degree, loses much of its rationale.

What might happen if Giuliani wins

There have obviously been plenty of stories the last few weeks about the possibility that the theocons will run a 3rd Party candidate if Giuliani wins the Republican nomination. There has also been plenty of speculation (denied by the Ron Paul campaign) that Ron Paul could mount a third party candidacy after he uses the primaries to boost his name recognition. Even if Ron Paul does not mount a third party candidacy, his nomination campaign will likely have succeeded in creating a potentially permanent and irreconcilable divide between the libertarian wing of the party and the neocons.

Should there be two third party campaigns from the traditional Republican coalition (and assuming Hillary gets the Democratic nomination), we could be faced with the most historic election in many decades. Let us say, for the sake of argument, that the theocon candidate captures 10% of the overall vote, just about all of which would come from traditional Republican voters. In addition, let us say that Ron Paul captures 15% of the overall vote, with 2/3 of that coming from libertarian Republicans. These assumptions, I think, are pretty realistic given anti-war sentiment, the typical voting cohesiveness of the theocons, and the fact that Giuliani and Hillary are the libertarian anti-Christs.

This would mean that Giuliani would get- at best, I think- 25-30% of the vote in the general election. A performance of that nature would almost certainly have serious and long-lasting effects on the Republican Party. What kinds of effects? I think the possibilities are:
1. Complete disintegration, a la the Whigs post-1852. This is certainly a possibility, especially if the Republican Party does nothing in response to this (hypothetical) historically bad performance. This is most likely to happen if the Party just blames the election on the ever-popular BDS (Bush Derangement Syndrome), resulting in the formation of at least one somewhat viable third party that would ultimately drain the Republican Party.
2. The Republican Party is forced to completely re-invent itself as essentially a reincarnation of the Old Right in an attempt to entice the theo-cons and libertarians back into the fold. This would most closely parallel the response to the 1976 election, which of course led to the nomination of Reagan in 1980. Depending on Hillary's governing philosophy (which I suspect will not be much different from the neo-cons), this scenario could center on the Republicans turning themselves into very much a pure anti-war party, dumping the neo-cons in the process while bringing on board a bunch of angry Progressives.
3. The Republicans concede to additional "Campaign Finance Reform" in the name of "preventing corruption." As with previous Campaign Finance Reform, this would result in making life even more difficult for independent candidates, and would safeguard the Republicans from needing to do very much at all to keep their status in American politics.
4. Ron Paul makes a significant enough impact in the primaries that, when Giuliani goes down in flames, Paul becomes a major voice within the Party. By "significant," I mean 15-20% of the vote, which seems quite unlikely right now. This results in a scenario where the Republican Party is essentially pushed back to its positions of 1992-1994.

I'm sure there are plenty of other possibilities. All I know, though, is that a showing of 25-30% by a major party in this day and age would be catastrophic for that party. This is particularly true where almost all of the third party voting would be coming from that party's traditional base (contrary to popular belief, Perot voters in 1992 were almost as likely to be taken out of Clinton's support as Bush's).