… a large bureaucracy will, in approximately 100 percent of cases, become extremely wasteful, and essentially corrupt. It will perpetuate the “problem” that it was founded to solve, and at its most creative, invent new and quite imaginative evils. It will become a vested interest — an “economic player” in its own right — and spread, like a cancer, well beyond the flesh it first inhabited. Any attempt to restrain it will then engender new bureaucracies. The idea of a “humane” bureaucracy is a contradiction of terms. There is no such thing.
Gentle reader must understand that I am not speaking only of “guvmint”, but of bureaucracy, at large. The thing is not necessarily a government department. Any big corporation will quickly show symptoms. The only difference between “public” and “private” is in longevity. A private bureaucracy will kill its host, but thanks to the power of taxation, a public bureaucracy can be long sustained. It is also backed by law and police action, which even today is more effective than mere pointless rules and regulations. The latter, however, are more nimble in expansion, and prepare the ground for law — the full spiritual stasis.
David Warren, “Austrian schoolboy”, Essays in Idleness, 2019-09-17.
January 21, 2024
QotD: The life-cycle of bureaucracies
November 10, 2023
QotD: Economic distortions of slavery in the Antebellum South
This notion that slavery somehow benefited the entire economy is a surprisingly common one and I want to briefly refute it. This is related to the ridiculously bad academic study (discussed here) that slave-harvested cotton accounted for nearly half of the US’s economic activity, when in fact the number was well under 10%. I assume that activists in support of reparations are using this argument to make the case that all Americans, not just slaveholders, benefited from slavery. But this simply is not the case.
At the end of the day, economies grow and become wealthier as labor and capital are employed more productively. Slavery does exactly the opposite.
Slaves are far less productive than free laborers. They have no incentive to do any more work than the absolute minimum to avoid punishment, and have zero incentive (and a number of disincentives) to use their brain to perform tasks more intelligently. So every slave is a potentially productive worker converted into an unproductive one. Thus, every dollar of capital invested in a slave was a dollar invested in reducing worker productivity.
As a bit of background, the US in the early 19th century had a resource profile opposite from the old country. In Europe, labor was over-abundant and land and resources like timber were scarce. In the US, land and resources were plentiful but labor was scarce. For landowners, it was really hard to get farm labor because everyone who came over here would quickly quit their job and headed out to the edge of settlement and grabbed some land to cultivate for themselves.
In this environment the market was sending pretty clear pricing signals — that it was simply not a good use of scarce labor resources to grow low margin crops on huge plantations requiring scores or hundreds of laborers. Slave-owners circumvented this pricing signal by finding workers they could force to work for free. Force was used to apply high-value labor to lower-value tasks. This does not create prosperity, it destroys it.
As a result, whereas $1000 invested in the North likely improved worker productivity, $1000 invested in the South destroyed it. The North poured capital into future prosperity. The South poured it into supporting a dead-end feudal plantation economy. As a result the south was impoverished for a century, really until northern companies began investing in the South after WWII. If slavery really made for so much of an abundance of opportunities, then why did very few immigrants in the 19th century go to the South? They went to the industrial northeast or (as did my grandparents) to the midwest. The US in the 19th century was prosperous despite slavery in the south, not because of it.
Warren Meyer, “Slavery Made the US Less Prosperous, Not More So”, Coyote Blog, 2019-07-12.
October 11, 2023
QotD: A rational army would run away …
It is a thousand years ago somewhere in Europe; you are one of a line of ten thousand men with spears. Coming at you are another ten thousand men with spears, on horseback. You do a very fast cost-benefit calculation.
If all of us plant our spears and hold them steady, with luck we can break their charge; some of us will die but most of us will live. If we run, horses run faster than we do. I should stand.
Oops.
I made a mistake; I said “we”. I don’t control the other men. If everybody else stands and I run, I will not be the one of the ones who gets killed; with 10,000 men in the line, whether I run has very little effect on whether we stop their charge. If everybody else runs I had better run too, since otherwise I’m dead.
Everybody makes the same calculation. We all run, most of us die.
Welcome to the dark side of rationality.
This is one example of what economists call market failure — a situation where individual rationality does not lead to group rationality. Each person correctly calculates how it is in his interest to act and everyone is worse off as a result.
David D. Friedman, “Making Economics Fun: Part I”, David Friedman’s Substack, 2023-04-02.
September 30, 2023
August 29, 2023
QotD: Private versus public decision-making
Those who wish to turn ever-more decision-making power over to government – and, hence, to take such power from individuals operating in their private spheres (including, but not limited to, private markets) – believe this bizarre notion: when Jones has the power to spend Smith’s money and to order Smith about, Smith’s welfare is improved compared to when the power to spend Smith’s money and to determine how Smith will act is reserved to Smith, with Jones’s authority confined to his – Jones’s – own business.
In private-property markets each individual has the power to say “no”, and when each individual says “yes”, that individual spends only his or her own money. Also, in private-property markets each individual’s choices are significant: if Smith chooses to buy a new car, Smith gets the new car that he chooses; if Smith chooses not to buy a new car, Smith gets no new car.
These basic features of private-property markets, along with a handful of other features that are embodied in the common law, ensure not that markets operate “perfectly”, but that the market process is always in action to generally improve the operation and outcomes of markets.
The political marketplace is nearly the exact opposite. In the political marketplace, Jones spends Smith’s money, and Smith has no real power to say no. Nor [are] Smith’s choices ever genuinely significant (unless, of course, Smith becomes one of the relatively small percentage of people who succeed in grabbing hold of political power).
If a malevolent all-powerful being were intent on designing a market that is destined to abuse the vast bulk of people, that devil could do no better than to impose on his victims majoritarian politics largely unconstrained by constitutional rules. This devil – being, of course, ill-mannered, and evilly-intentioned – would seek to destroy private-property markets.
Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2019-07-31.
August 13, 2023
“It makes [Canada] look like some cheap, politically petty little kleptocracy run by a collection of self-serving narcissists”
Canada became a parody of itself so slowly that the legacy media barely even noticed:
There was a time when politicians steered very carefully around saying anything that could be construed as an attempt to influence a decision by one of Canada’s independent agencies.
Honest, there was.
There was also a time when, should a politician so much as nod or wink publicly to indicate a preferred outcome by, say, the office of the Commissioner for Competition, the nation’s leading media organizations would see this as a big story. Sixteen dollar orange juice big. Heads would roll.
Seriously, there was.
The reasons people like Francois-Phillipe Champagne, Minister of Innovation, Science and Economic Development are supposed to keep their yaps shut are pretty straightforward. Businesses, citizens, consumers, and investors need to know the processes at law enforcement agencies and regulators — such as the Competition Bureau and the CRTC respectively — are independent of the sordid manipulations of partisanship. They need to be able to trust that the rules are clear, their application is consistent and that they can have faith that the institution involved views matters before it in an objective fashion.
It’s Rule of Law 101 stuff and messing with it makes Canada look like something less than a first world country. It makes us look like some cheap, politically petty little kleptocracy run by a collection of self-serving narcissists.
Shortly after the CBC, the Canadian Association of Broadcasters and News Media Canada filed a complaint with the Competition Bureau over Meta’s decision to no longer carry news in Canada, Champagne seized the opportunity to show Big Tech who their daddy is.
“I am determined to use every tool at our disposal to ensure that Canadians can have access to reliable news — across all platforms,” Champagne posted on X (the platform formerly known as Twitter). “I fully support the complaint made to the Competition Bureau by Cnd media groups against Meta in their effort to promote a free & independent press.”
I don’t expect that many readers have hung around with cabinet appointees. But I have, and I’ve been one. And I can tell you that most of them — particularly the ones whose conditions of appointment mean they serve “at pleasure” as Competition Commissioner Matthew Boswell does — pay attention when the minister through whom their agency reports to Parliament, says anything, let alone things like that.
July 18, 2023
At some point we moved from “therapy for serious issues” to “it’s totally normal for everyone you know to be in therapy”
In occasional conversations with younger folks (mainly Millennials and GenZ’ers), it’s surprising how often the topic of “therapy” comes up. Everyone I talk to under the age of 40 seems to be in therapy for this or that … when did that change? I’m no iron man (ask any of my friends), but it would never have occurred to me to seek counselling for what appeared to be the ordinary kind of issues that everyone else was dealing with. Friends and acquaintances who did were almost always struggling with some out-of-the-ordinary concern and certainly weren’t eager to discuss the course of their sessions as part of casual chit-chat. Freddie de Boer seems to share some of my discomfort on this topic:
Ladies, is your man engaging in the method of quasi-scientific self-improvement that’s currently mandated by high-status urbanites aged 21-45? If not, run, girl.
Before you go worrying or lecturing over my title here, let me say my personal life has never been better, really. But my total alienation from what I take to be my culture and its various attitudes and assumptions just grows and grows. Every day, it seems, there’s a fresh horror, and nowhere does it smack me in the face more than with mental health.
The above advertisement, which I think premiered in 2022, takes the medical tool of therapy and renders it a bit of dating-market gamesmanship, something bros just have to get on board with in order to hook up with high-value gals. I don’t expect a 30-second advertisement to reflect the reality that therapy is a frequently-adversarial process, that it’s at times uncomfortable by design, that it only works for certain kinds of problems, or that there are times when it can actually exacerbate them. And while I certainly do hold it against them for contributing to the corrosive “everybody should be in therapy” attitude — which is little different from believing that everybody should be on antibiotics — I also know that a for-profit therapy company is going to be pushing that line. (A macro-problem with for-profit medicine lies in the fact that the financial incentive is always to go on treating a medical problem forever without curing it.) What really gets to me is how a therapy company is going out of its way to make therapy appear so trivial, how the characters appear deliberately portrayed as unserious people and therapy so unapologetically represented as just a dating-market football. The commercial is somehow both grandiose about therapy’s purpose and dismissive about therapy’s actual use.
I don’t know how it is that we’ve simultaneously spent so much time validating and honoring people who struggle with their mental health and at the same time made mental health as a topic so frivolous.
I appreciated this conversation about TV therapy from The New Yorker. In it, Inkoo Kang says “I feel like there’s this idea that therapy is easy. And then you actually go to therapy, and you’re, like, ‘Oh, this is actually the worst’. That particular realization is very rarely dramatized.” I would argue that if therapy never feels like the worst, then you probably aren’t getting as much as you could out of the therapeutic process. Part of what makes finding and sticking with a therapist so difficult is that it’s close to impossible to divide your sense of what you want from a therapist from a broader understanding of what you need from a therapist. Are you sure you don’t like your current therapist because you’re “just not vibing with them”? Are you sure you want to fire your therapist because they seem “toxic”? Or is it because you signed up for therapy expecting it to be a constant exercise in validating everything you think and say and instead you’re one of the lucky few with a therapist who actually does their job and sometimes calls you on your bullshit? Of course, some therapists really aren’t very good, or more commonly, you can be a receptive patient and the therapist can be a competent practitioner but you have communication styles that just don’t gel. These things can be very difficult to parse on your own, which is why I always tell people to give it more time than they think they need. But either way, nothing is served by this effort to make therapy just another elite checklist item that shows you’re an enlightened person, except maybe Betterhelp’s share price.
July 3, 2023
Schools fail their students when they try to teach things the students have no interest in learning
David Friedman has several examples of success in learning when the learner suddenly wants to learn the material:
One of the problems with our educational system is that it tries to teach people things that they have no interest in learning. There is a better way.
What started me thinking about the issue and persuaded me to write this post was an online essay, by a woman I know, describing how she used D&D to cure her math phobia.
How to Cure Mathphobia
I was failed by the education system, fell behind, never caught up, and was left with a panic response to the thought of interacting with any expression that has numbers and letters where I couldn’t immediately see what all of the numbers and letters were doing. The first time I took algebra one, I developed such a strong panic response that it wrapped around to the immediate need to go to sleep, like my brain had come up with a brilliant defense mechanism that left me with something akin to situational narcolepsy. (I did, actually, fall asleep in class several times, which had never happened to me before.) I retook the class the next year. I spent a lot of that year in tears, with a teacher who specifically refused to answer questions that weren’t more specific than “I don’t get it” or “I have no idea what any of those symbols mean or what we’re doing with them”.
Until she had a use for it:
The first time I played D&D, I was a high school student. My party was, incidentally, all female, apart from one girl’s boyfriend and the GM, who was the father of three of the players. We actually started out playing first edition AD&D, which I am almost tempted to recommend to beginners, just on the grounds that if you start there you will appreciate virtually every other edition of D&D you end up playing by comparison. I might have given up myself before I started, except that one of the players in the first game I ever spectated was a seven-year-old girl, and I was not about to claim that I couldn’t do something that a seven-year-old was handling just fine.
One of my most vivid memories of this group is the time we were on a massive zigzagging staircase — like one of those paths they have at the Grand Canyon, that zigzag back and forth down the cliff face so that anyone can reach the bottom without advanced rock-climbing. We saw a bunch of monsters coming for us from the ground below, and we weren’t sure whether they had climb speeds, but we didn’t super want to wait to find out. The ranger pulled out her bow to attack them before they could get to us.
“Now, wait a moment,” says the GM. “Can your arrows actually reach that far?”
“Well, they’re only, like, sixty feet away.”
“No, it’s more than that, because you have to think about height in addition to horizontal distance.”
“Yeah, but that’s, like, complicated?”
“Is it? Most of you are taking geometry right now, don’t you know how to find the hypotenuse of a right triangle?”
There were some groans. Math was hard. But we did know how to find the hypotenuse of a right triangle. We got out some scrap paper and puzzled over it for a couple minutes, volunteering the height of the cliff and the distance of the monsters and deciding that we could ignore the slight slope caused by the zigzagging stairways. We got a number back and compared it to the bow’s range per the rules. We determined that we could hit the monsters without a range penalty.
We killed the monsters. This wasn’t the real victory that day.
March 4, 2023
QotD: Profit margins in the restaurant trade
This is an old rule of thumb, no more, from an experienced waitron unit.
The table that orders a starter, main and a bottle of wine – that just about breaks even for the restaurant. You can mix and match this a bit. Dessert instead of the starter, that sorta thing. But the costs of the building, the staff, the electricity, the stock that goes off, the cost of capital itself, all those things, mean that the basic restaurant experience just about covers its costs.
It’s the having the one thing extra that makes the money, the profit. A drink before the meal, having both a starter and a dessert to add to the main. The second bottle of wine, or the digestif with the coffee. This is why the waiter is so eager for you to have any one or more of these “extras”. The margin over food costs – food costs usually being around 30% of menu price – on those additions is exactly what provides a profit to the business that is the restaurant.
As to why, well, it’s the same reason that the menu prices of some well known item are going to be roughly the same across restaurants. Competition is fierce in the business. That means headline prices are pushed down to where they only just, if even that, cover costs. On exactly the same basis as Ryanair charging you spit for the seat and then a fortune for the air you breathe onboard. You get the punter in with the £20 for two steak dinners then hope like Hell they order the vanilla soup and also the vegetable ice cream in order to make your nut.
Tim Worstall, “Bar Owner Complains Of People Drinking Tap Water – Oi! Where’s My Profits?”, Continental Telegraph, 2019-05-27.
February 28, 2023
QotD: Politicians respond to different economic incentives than the rest of us
Politicians in particular have a problem – in good times, people vote for them, and in tough times … not so much.
The temptation is to delay the tough times until your successor can carry the can.
Poor old Keynes inadvertently gave politicians the answer they were looking for – the idea that during the downturn, the government should spend money into the economy to keep it going along nicely. Making sure that those lifeguards sacked from the Skegness lido can swiftly get jobs working at a government Skegness lido prevents them claiming the dole, and keeps them in the economy earning and spending until the economy washes out all the malinvestment and starts growing again. At which point the government Skegness lido closes and the lifeguards go to work at a lido somewhere where the biting Easterly wind doesn’t sandblast your skin off. The government has bridged the gap.
There’s one problem.
The government has no money of its own, so where will it get the money for their lido?
Well, Keynes said it should run a surplus during the good times and stash that surplus money away so it can be used during the downturn – a national rainy-day fund, if you will.
But guess what? Politicians don’t run surpluses.
Why would they? Every penny spent making lives better for voters today makes it more likely they will vote for you. And every penny saved against a rainy day makes it possible for your rivals to win votes tomorrow, by doing the same once they are in power.
So politicians don’t ever HAVE a rainy day fund. But that doesn’t stop them wanting to bridge the gap.
So they borrow the money.
And now what they are doing is not Keynesian, or even neo-Keynesian, but pseudo-Keynesian
By bridging the current gap with borrowed money, they simply make sure that the next gap will be costlier to bridge. Because the interest on the borrowing means that the gap will be wider.
But that’s not even the biggest problem – the biggest problem is that the gap is intrinsically important. We NEED it, to give us pause.
Whereas bridging it enables us to carry on being silly and prevents the misallocations from being flushed out – a lido remains operating in Skegness despite having no customers, and the lifeguards continue to work. Their lifesaving skills (which should be fruitfully employed elsewhere) stagnate at a lido with no punters. Their customer service skills deteriorate as the customers disappear, and what they learn instead is how to sit in a chair and stare into space. Their skills are degrading. Hysteresis, technically.
And so by delaying the collapse of the Skegness lido in pursuit of benign conditions for the voters, the government destroys the skills of our workforce.
Sowell was right – the problems we battle today were caused by the government’s interventions yesterday.
Surely using government to solve our problems is like a man quenching his thirst with seawater?
Alex Noble, “Drinking Brine”, Continental Telegraph, 2019-06-14.
February 22, 2023
January 2, 2023
November 16, 2022
“Angertainment is unlikely the sole cause of US political polarisation, but it certainly hasn’t helped”
At Quillette, Claire Lehmann rounds up the rising distrust/disgust among the American public in their views of the legacy media:
In October, a study published in PLOS One provided some fresh insight into how and why American media has become so dysfunctional. Over the past 20 years, the study reported, headlines that convey anger, fear, sadness, and disgust have been increasing, while headlines conveying neutrality or joy have been in decline. These trends have coincided with a massive drop in trust in news journalism, particularly in the US.
According to Gallop polling, seven percent of Americans say they have “a great deal” of trust in the media, while 38 percent say they have none at all. As angertainment has increased, trust has decreased. As one political tribe provides angertainment for its loyal readers and viewers, the other becomes increasingly alarmed and disgusted. Angertainment may be profitable for journalism in the short-term but over the long-term it trashes the integrity of the profession.
Angertainment is unlikely the sole cause of US political polarisation, but it certainly hasn’t helped. Just as mad cow disease was caused by feeding bovine-meal to cows, angertainment feeds on polarisation which in turn feeds on angertainment. It’s a cannibalistic cycle.
[…]
The incentives for journalism are broken. This is not always the fault of individual journalists, although some strive for truth and accuracy with more sincerity than others. Nor is it solely the fault of media companies, although many of them prioritise profit and engagement over rigour and fairness. It is not even the fault of “Big Tech”, even though social media companies have built the machine on which these broken incentives run.
It’s the fault of all of us. We are the ones who devour angertainment and get high on watching our enemies suffer. We are the ones who want to see various idiots eviscerated and dismembered by the bayonets of Twitter. We are the ones who clamour after content which makes us feel virtuous, complacent, and like we belong. The 20-year incline in headlines denoting fear, anger, disgust, and sadness in American media would not have occurred if audiences had not been rewarding it. In a competitive eco-system, media organisations must adapt to their audiences, feed them what they want, or die. But like the cows feeding on the meat-and-bone meal of other cows, this feedback loop creates the cultural equivalent of a neurodegenerative disease.
I have been just as guilty of this as any other publisher, consumer, or creator of media. But in recent months I’ve largely stepped back from social media, stood outside this machine, and have watched it whir and whizz from the sidelines. It is possible to disengage and reconsider the machine from a safe distance, starving it of fuel. And every day at Quillette I am reminded by my writers and readers and subscribers that it is possible to publish and create journalism that is appreciated for its analytical and aesthetic value, rather than for the artillery it provides in a never-ending culture war. It’s a war in which facts and reputations exist merely as cannon fodder, and where truth is less important than tribe. The media’s incentives may be broken, but we as individuals do not have to be.
September 5, 2022
QotD: Why bureaucracies are inherently slow
It is important to remember that all government law enforcement agencies are bureaucracies. And all bureaucracies have certain behavioral tendencies owing to their institutional structure and the incentives that structure generates.
The great economist Ludwig von Mises analyzed these tendencies and incentives in his 1944 book Bureaucracy.
In that book, Mises identified “slowness and slackness” as among the inherent features of government bureaucracy that no reform can remove.
We have all experienced the “slowness and slackness” of government bureaucracy: with the post office, the DMV, the public school system, etc. That’s why the animated movie Zootopia had sloths working at the DMV and everyone got the joke. And police bureaucracies are no exception to this reputation.
Why is this so? In part, it is due to another indelible feature of bureaucracy: that it is, as Mises wrote, “bound to comply with detailed rules and regulations fixed by the authority of a superior body. The task of the bureaucrat is to perform what these rules and regulations order him to do. His discretion to act according to his own best conviction is seriously restricted by them.”
Sometimes a delay is simply due to the fact that the government employee is too tied up in red tape to respond in a timely manner. The timely response may be outright prohibited by the rules. Or the delay may be owing to Kafkaesque procedural mazes that first must be navigated or chains of command that must be climbed for permission.
[…]
Again, Mises considered such features of bureaucracy to be unreformable. Why? He argued that it is the only way that a government bureaucracy can be made at all accountable to the public. A bureaucrat with a free hand is even more dangerous than a bureaucrat with his hands tied.
“If one assigns to the authorities the power to imprison or even to kill people,” Mises wrote, “one must restrict and clearly circumscribe this power. Otherwise the officeholder or judge would turn into an irresponsible despot.”
Dan Sanchez, “How Bureaucracy May Have Cost Lives in Uvalde”, Foundation for Economic Education, 2022-05-31.
August 10, 2022
QotD: “Most academics [are] twitchy closet cases with the social skills of autistic badgers”
… Why aren’t there more bright, ambitious young men going into [professional football] coaching?
I say the answer is: Institutional incentives. I’m not a football coach, but I was an academic — there’s a surprising amount of overlap in their institutional structures. Let me explain: In both cases, working conditions for everyone except those at the very tippy-top are brutal. We’d all willingly endure them, I think, for the kind of money and bennies big league coaches / tenured professors get, but below that tiny handful of folks everyone works even worse hours for far less compensation. Even coaches at dinky little high schools in the middle of Flyover Country spend countless hours breaking down film — he might only have fifteen kids on the team, but he’s expected to win with those fifteen kids, damn it, and win now.
Consider, then, what type of person would willingly sign up for such a life. Leave aside the question of whether or not what academics do has any intrinsic value. The fact remains that simply writing one’s dissertation takes, at minimum, a year or two of grinding toil. I’m the laziest sumbitch in captivity, and nobody’s better than me at gaming the system (especially a droolingly stupid system like academia), but even I pulled more 80+ hour weeks in grad school than I care to remember. It’s simple economics: You’ve got X dollars in grant money to hit the archives. Archives are always located in expensive cities in distant states, if not on different continents. Your X dollars run out pretty goddamn fast in a place like London, even when you’re staying at the cheapest hostel, living on ramen noodles and water, walking everywhere. Given that, you work, for as long as they’ll let you in the building, for as long as your eyesight holds.
And all that is to complete the bare minimum requirement for the possibility — by no means anywhere near the certainty — of securing an entry-level job. I’d ask “Who in his right mind would ever do that?”, but the answer is obvious: Nobody in his right mind would. You have to either really, really want to be an academic (coach), or have absolutely no other choice. Most academics, of course, are the latter — they’re twitchy closet cases with the social skills of autistic badgers. But wannabe-coaches, I hypothesize, face a similar dilemma: You’re an athlete who has made his living off his body. And a nice living it was, too, while it lasted … but now you’re 35 and your body just can’t do it anymore. You have no other skills. What else is there to do, but try coaching?
Severian, “Organizational Behaviour in the Human Male”, Rotten Chestnuts, 2019-09-23.