Jesus was not born in a stable. That’s not to say the birth wasn’t attended by farm animals — the Gospel of Luke tells us twice the baby’s first bed was a feeding trough — but rather that the animals lived in the house.
Peasant homes in first century Bethlehem were designed with what we would today call an “open concept.” They typically had one large room with the nicer living space in an open loft or on the roof, while the main floor area was where the family’s animals would be brought for safekeeping at night. The guestroom that was unavailable to Jesus, Mary, and Joseph was that loft or roof space, and the big room where they stayed instead served as the kitchen, living room, dining room, and farmyard all at once. The defining feature of Jesus’ birthplace was not isolation, as we often tend to think, but an utter lack of privacy: Mary delivered in a crowded farmhouse with few, if any, interior walls.
And that was perfectly normal, if not exactly desirable, for our modern fixation on the open floor plan is a historical anomaly. It flies in the face of literally millennia of consensus that more rooms is better, and it is a dreadful mistake. The last 70 years of open concept construction and remodeling has left us with dysfunctional houses, homes that are less conducive to hospitality, less energy efficient, and more given to mess.
Bonnie Kristian, “Open concept homes are for peasants”, The Week, 2019-05-12.
June 18, 2019
QotD: The birth of Jesus and the open concept house
June 15, 2019
The real explanation for our lack of moonbases/Concorde 2’s/great walls/pyramids
Homoitalicus Blog responds to a new book [At Our Wit’s End by Edward Dutton and Michael Woodley of Menie] that concludes that we (western civilization) are headed toward a similar fate as the western Roman Empire:
The reason that these staggering feats of engineering haven’t been repeated is more to do with economics and politics than with any perceived lack of engineering Genius in the population. The authors fail to reflect that emerging from the massively centralised wartime economy of the West there was an enormous technological infrastructure of scientists and capable administrators just sat there with no more Nazis to fight, communist megalomaniacs to support, Atom bombs to build and test, or greatest seabourne invasions in history to plan and implement.
This was probably the greatest concentration of intellect ever harnessed to a single cause and hopefully we’ll never need to see its like again
With the war done and dusted some new purpose needed to be found for all this talent, the way of government being what it is, returning all these geniuses to normal boring peacetime activity was never an option.
Newly nationalised aircraft industries took the wartime inventions of jet engine and the rest and evolved them with massive amounts of financial input from the government into Concorde, truly a magnificent aircraft but one which could uncharitably be described as using taxpayers’ money to ferry plutocrats from one side of the Atlantic to the other. Whether it ever really paid for itself is a moot point and the unseemly haste with which it was dumped after the crash tends to imply that its 50-year-old airframes were becoming a burden, and the economic case for making a new generation of supersonic planes is weak – luckily the will in the west for another taxpayer-funded effort doesn’t seem to be there. That is progress.
Likewise the man on the moon, possible only because of the Cold War space race.
The authors might as well explain the fact that we haven’t build another pyramid of Giza or Great Wall of China.
Their assertion that a general decline in the amount of creativity (which is correlated strongly with g) is justified by the observable decline in the quality of the output of the BBC. However other possible reasons for this are the infestation of Cultural Marxism and its baleful handmaid, Political Correctness, which really mitigate against creative thought. It is impossible to imagine making The Life of Brian, or The Sweeney or countless other shows which we enjoyed in our youth nowadays largely for reasons of PC and the fact that the BBC’s mission is now brainwashing rather than entertainment. State broadcasters the world over will suffer from the same problem, as does (worryingly) the world of academe in which speakers of truth or opinion which lie outwith accepted and very tightly bounded acceptability, are routinely no-platformed or summarily sacked. The teaching of history and the humanities generally has been debased, and only the STEM subjects seem to have resisted (excluding the question of Climate Change which has taken on the trappings of a religion rather than serious science).
As a consequence it is impossible to separate the effects of CM from the mooted results of a generalised decline in intelligence, and the authors are wrong not to point this out.
They don’t consider either the likely effect of the 20th century’s great blood letting in the fields of Flanders. A substantial proportion of the best and brightest of a generation were ground into the mud there before being able to procreate. I would be surprised if that had no effect on the quality of the gene pool.
H/T to the Continental Telegraph for the link.
June 14, 2019
Eliminating the trade deficit
A few weeks back, Robert Higgs explained why President Trump’s concerns about the trade deficit are, at best, misplaced and how “fixing” it would lead to a much worse situation:
Donald Trump addresses a rally in Nashville, TN in March 2017.
Photo released by the Office of the President of the United States via Wikimedia Commons.
So, let’s consider the president’s trade policy in, as it were, its very best light. Suppose, then, that the government succeeded in eliminating the trade deficit entirely. Residents of the USA would continue to sell huge quantities of goods to foreigners but buy nothing at all from foreign sellers. The trade deficit would be not only diminished but wiped out and replaced by a huge trade surplus. Trumpian triumph!
Note, however, that such an outcome would be impossible to sustain for long even if it could be attained (which in fact it could not). Foreigners would be spending huge quantities of dollars to purchase goods from Americans, but they would have no means of earning dollars because Americans would not be buying anything from them. Foreigners could continue to make such purchases only if they received dollar credits from foreigners. But lenders would have no incentive to lend dollars to the Chinese, say, when they knew that the Chinese would have no ability to repay the loans because they would have no means of earning dollars in the future by sales to Americans. So a big U.S. trade surplus requires that totally implausible assumptions be made about international transactions in general and international lending in particular.
But apart from such practical difficulties and impossibilities, a Trumpian trade triumph, even if it could be achieved, would be a horrible objective to attain. Americans would be employing labor services, natural resources, and other productive inputs to produce goods and shipping them to foreign buyers. In exchange, they would receive nothing but bank account balances. Such a deal! Surrendering huge volumes of valuable goods and receiving in return larger numerals in people’s bank account statements, more dollars that could not be used to purchase anything, no matter how important or desirable, from abroad — all such purchases having somehow been stopped by a harebrained government and the economic ignoramus in charge of it.
“[P]eople aren’t really arguing about the existence or logic of the Laffer Curve they just hate the empirical answer”
The Laffer Curve is one of those ideas that drives some people mad, because if it’s true (and empirically it appears to hold most of the time), it militates against raising taxes on the wealthy:
That working out where the peak of the Laffer Curve is is difficult is entirely true. That it’s going to be different for each tax in each different legal and societal set up is also true. But that doesn’t excuse drivel like this:
The ends of the curve are basic enough – at a tax rate of 0, the government will raise $0 in revenue, and at a tax rate of 100, the government will still raise $0 in revenue because people won’t work without take-home pay. At the extremes, the Laffer curve is correct, but that doesn’t tell us anything about the points in the middle. Laffer’s idea, however, was that a “tipping point” existed on the continuum in between, where people’s incentives to work and invest decreased because tax rates were too onerous.
If the end points are true – something admitted – then it’s a matter of simple, pure, and true logic that there are one or more revenue maximising points inbetween. For it’s simple enough for us to observe that there are tax rates which do raise revenue. And if we have tax rates which raise no revenue and tax rates which raise some then there are those one or more rates which raise the most.
So, please, can we stop the drivel?
Sure, Art Laffer himself is incorrect when stating that all tax cuts always pay for themselves through increased economic growth. But that doesn’t invalidate the logic of the curve, only the use to which it is put.
Fifty-four percent. That’s approximately it: the tax maximizing point on the curve when you include all of the taxes on income (including the things they often don’t call taxes — social security, unemployment insurance, and other non-tax taxes — but which are still withheld from paycheques or payable at tax deadline time). Go much above that and the government’s take begins to decrease, defeating the purpose of raising the tax rate in the first place. (Unless the real purpose is just to harm the rich … which might be true in a number of cases.)
June 12, 2019
The fantastic notion that Donald Trump is “at heart really a free trader”
Guest-posting at Catallaxy Files, Don Boudreaux explodes the farcical notion that President Trump is using protectionist tools with an eventual free trade goal:
Donald Trump addresses a rally in Nashville, TN in March 2017.
Photo released by the Office of the President of the United States via Wikimedia Commons.
In the case of Donald Trump, the claim that he is at heart really a free trader who raises tariffs today with the aim of bringing about lower tariffs tomorrow — and all because he is committed to achieving free traders’ ideal goal of maximum possible expansion of the international division of labor — is especially preposterous.
Trump has pontificated on trade for decades, and every word out of his mouth clearly reveals a man who knows nothing about the economics of trade and who is as clichéd an economic nationalist as can be imagined.
Behold this line from a 1990 interview he did in Playboy: “The Japanese double-screw the US, a real trick: First they take all our money with their consumer goods, then they put it back in buying all of Manhattan. So either way, we lose.”
Let’s examine this unalloyed gem of economic witlessness.
Overlooking Trump’s outrageous exaggerations, such as his claim that the Japanese buy up “all” of Manhattan, we start by stating an obvious truth: the voluntary purchase of a good is not a transaction in which the buyer is “screwed” or has his or her money “taken.” Instead, the buyer’s money is voluntarily spent. While every person of good sense sees a foreign seller who makes attractive offers to domestic buyers as someone who improves the well-being of each buyer who accepts the offer, Trump sees this seller as a con artist or thief.
And so Trump ignores the value to Americans of the imports we purchase. In typical mercantilist fashion, he believes that the ultimate purpose of trade is to send out as many exports as possible in exchange for as much money as possible — money that in Trump’s ideal world is never spent on imports. His view on this matter is even more bizarre than that of ordinary mercantilists. For Trump, imports are not merely costs that we endure in order to export, they are actual losses. (Although it goes without saying, I’ll say it nevertheless: Trump does not understand that imports are benefits and that exports are costs.)
Furthermore, by describing the money spent on imports as “our money,” Trump reveals his belief that money earned by each American does not belong to that individual but, instead, to the collective.
Also in the fashion of the typical mercantilist, the presumption is that the nation is akin to a gigantic household whose members all share in and collectively own its money. And just as Dad justly superintends little Emma’s and Bobby’s spending to ensure that they don’t dissipate the family’s wealth, Uncle Sam must superintend his subjects’ spending in order to ensure that we don’t dissipate the nation’s wealth.
One other flaw in the above quotation from Trump’s Playboy interview is notable: he believes that foreign investments in America inflict losses on us. He doesn’t pause to consider that when we Americans sell assets to foreigners we regain ownership of some of the dollars that Trump, in his previous sentence, lamented are lost to Americans when we bought imports.
Nor does he ask what the American sellers of these assets do with the sales proceeds. Perhaps we invest some or even all of them. And if so, perhaps these new American investments will prove to be more profitable than are the investments made in America by foreigners. (By the way, contrary to another mercantilist myth, Americans are not made better off when foreigners’ investments in America fail. Quite the contrary.)
An even deeper error infects Trump’s “understanding” of foreign investment: he implicitly — and, once again, like all mercantilists — assumes that the amount of capital in the world is fixed. Only then would it be true that each American sale of assets to foreigners necessarily reduces Americans’ net financial worth (which is presumably what Trump means when he says that “we lose” when the Japanese purchase Manhattan real estate).
June 9, 2019
People who call for higher taxes are almost always hypocrites
And the numbers prove it:
There are many people who tell us that taxation in the UK is too low. Just think of all the gorgeously bureaucratic things that could be done if only the government had more money! Then there’s the number of people who actually do pay more tax on the basis that they think the government should have more money. The second being a rather smaller number than the first.
Which does bring us to that basic point that economists do insist upon making. Revealed preferences are a much better guide to what people do in fact believe than are expressed. Or, as folk wisdom has it, talk is cheap. That many shout that taxes should be higher – usually to insist that them over there should be taxed more – is interesting and amusing. But the actual number of people who really believe taxes should be higher is the number of people who voluntarily offer up more of their own hard earned to the government.
Which means that, according to the aggregate views and actions of the population of Britain taxes last year were too low by exactly the amount of £11,069. Everyone else is just virtue signalling:
Donations to the Treasury have dwindled in recent years, however, even as the country’s debt remains relatively high. There were just 14 donations and bequests to reduce the national debt in the 2018-19 tax year, totalling £11,069, the UK Debt Management Office said.
That is the revealed preference of us all in aggregate.
It’s not just the UK where the number of people demanding higher taxes don’t actually put their own money where their mouths are — it’s true in Norway, the USA, and even the City of Toronto.
For ultra generous Canadians, Her Majesty will happily accept your donations here. To prove that you’re even more devoted to the challenge, you can even forego the tax credit, too!
QotD: What is economics?
To me, economics is that approach to understanding behavior that starts from the assumption that individuals have objectives and tend to take the acts that best achieve them. That is what economists mean by “rationality,” and it is the assumption of rationality that is, in my view, the distinguishing characteristic of economics. What I am looking for are works that tell us something interesting about the implications of that assumption.
Someone at some point suggested Orwell’s Down and Out in Paris and London. It is an interesting book, although much too long for my purposes. But what makes it interesting, economically speaking, is not the vivid picture of poverty in the period between the wars but particular details relevant to implications of rational behavior.
I can give, by memory, an example. Orwell observed waiters in a fancy Paris restaurant, out of sight of the diners, spitting in the dishes they were going to serve. In an idealized market context, the waiter would never spit in the dish unless the value to him of doing so was more than the disvalue to the patron he was serving, which is unlikely. But throw in the inability of either the patrons or the waiter’s employers to monitor the waiter’s behavior and any benefit to the waiter of expressing his hostility is a sufficient incentive to make him do it. That suggests the further point that, when you cannot monitor someone’s behavior, his preferences matter — you want the job he is doing for you to be done by someone whose preferences are close enough to yours so that he will want to do what you would want him to do — even if nobody is watching.
Economics is not the study of the economy. A picture of poverty, or unemployment, or wealth, or economic growth, however accurate and vivid, does not in itself teach you any economics. A story such as Poul Anderson’s “Margin of Profit,” which deals with a wholly fictional future, does, because it demonstrates in that world an important implication of rationality that holds in our world as well — that in order to prevent someone from doing something you do not want him to do it is not necessary to make it impossible, merely unprofitable.
David Friedman, “Thoughts on Literature, Economics and Education”, Ideas, 2017-05-01.
June 8, 2019
The sad economics of recycling
Kim du Toit on the actual economic value of most recycling efforts:
Turns out that aluminum cans are actually worth recycling — in that they are 100% recyclable (requiring nothing other than melting and reformulating) and it costs less — much less — to recycle than to produce new aluminum.
That’s almost true of newsprint too, except that while pulping it is fine — hardly any energy is used for that — the pulp also has to be bleached, and in the pulping / bleaching process, about 15% of the original paper is lost. And as raw paper production (i.e. from logged wood) has become more efficient over the years, and as trees can be grown to replace those felled, the only real benefit from recycling paper is that overall paper production is less vulnerable to hiccups in supply of fresh wood — such as caused by forest fires, disease and drought.
And, he added, when it comes to recycling other stuff, glass is little better than plastic — which surprised me, but it actually costs much more to recycle glass than simply to produce it new. And the old “plastic into park benches” spiel is likewise stupid, because it costs so much to produce such stuff, and creates so much atmospheric pollution thereby, that it’s easier just to toss plastic into a properly-lined landfill and let nature take its course.
Knowing all that, I’ve always been skeptical of the benefits of recycling — it’s always been about feeewings rather than utility
June 6, 2019
New paper on minimum wage effects is bound to be mis-used
In the Washington Examiner, Tim Worstall explains why a new well-researched paper on the minimum wage will be misunderstood and then used to “prove” things it doesn’t actually say:
None of this changes the standard intuition that when there’s a heavy such bite then there will be ill effects. What it does do is then lead us to trying to calculate what is a wage that does have that snarl, that bite? What is a minimum wage that is “too high” in the sense of having an excess of those ill effects upon employment? This is where I predict — no, not fear, not posit, nor surmise, but predict — this paper will be misused.
Our thinking is that the effects come from the relationship between the minimum and median wages. If we insist that wages cannot be lower than more than we already pay half the people, then we really are going to have problems. A minimum wage of 100% of the median wage isn’t going to work, that is. That ratio is called the Kaitz Index. This paper shows us that there are few to no such bad things happening up to 0.59 on that Kaitz measure. We can have the minimum wage at 59% of the median wage and know that we’ll have the good effects and only trivial amounts, at worst, of the bad.
You can see what’s going to happen next, can’t you? The Economic Policy Institute tells us that the median wage is about $22 this year, and 59% of that is $13. A bit of rounding and some aspiration, and why not go for a $15 minimum wage?
Except there are two median wages. Part-time and seasonal wages tend to be lower than full-year and full-time ones. The Economic Policy Institute is using that higher full-time one. The one for all jobs is quite a bit lower, $18.58 per hour. Take 59% of that and you get a rather lower level of $10.95 an hour. That’s around and about what McDonald’s, Walmart, and similar establishments pay as entry-level wages, which does seem about right, doesn’t it?
So, the new research paper, from esteemed researchers, published in the world’s top English language economics journal, tells us that minimum wages up to a certain level cause few to no problems. They’ve shown this for up to 59% of median wages. But which median do they mean? Dube himself told me they mean that lower one — specifically, the “median wage of all workers, not just for full time.”
But we all know how this is going to be used, don’t we? As proof that $15 an hour won’t cause any problems — which isn’t what the paper shows at all. Rather, it says that a $10.95 an hour minimum wage shouldn’t cause any problems of note.
The new paper is good empirical work. The fault is in what people will argue it says, not what it does.
June 5, 2019
QotD: The almost unknown economic good news since 1800
Dierdre McCloskey, “How Growth Happens: Liberalism, Innovism, and the Great Enrichment (Preliminary version)” [PDF], 2018-11-29.
June 3, 2019
The state of US academia in juxtaposed tweets
American universities have problems, but the solutions they choose do not seem to be addressing those problems (screencapped, in case the tweet doesn’t load correctly):
June 1, 2019
QotD: Orwell’s fear of private monopolies
Professor Hayek is also probably right in saying that in this country the intellectuals are more totalitarian-minded than the common people. But he does not see, or will not admit, that a return to “free” competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.
George Orwell, “The Road to Serfdom by F.A. Hayek / The Mirror of the Past by K. Zilliacus”, Observer, 1944-04-09.
May 27, 2019
Game of Theories: The Great Recession
Marginal Revolution University
Published on 5 Dec 2017Tyler Cowen puts Keynesian, monetarist, real business cycle, and Austrian theories to work to explain a downturn from recent economic history: the Great Recession of 2008.
May 26, 2019
Game of Theories: The Austrians
Marginal Revolution University
Published on 28 Nov 2017Austrian business cycle theorists argue that the central bank could be distorting market signals for entrepreneurs. How does this contribute to booms and busts?
May 25, 2019
History Summarized: Late Dynastic China
Overly Sarcastic Productions
Published on 24 May 2019Signup for your FREE trial to The Great Courses Plus here: http://ow.ly/diiG30oC0Lk
In a shocking twist of fate, China stays in one piece for a majority of this video. The unfortunate side-effect is that when it does collapse, it collapses HARD. Find out how in this tour through the Yuan, Ming, and Qing dynasties!
Further Reading: China, A History by John Keay
PATREON: https://www.Patreon.com/OSP
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