A beautiful sight. Websites post these seals of approval without being forced to. It’s good for business.

Hayek: From what I’ve seen of the British National Health Service, my doubt and skepticism has rather been increased. No doubt that in the short run it provides services to people who otherwise would not have got it, but that it impedes the progress of medical services–that there, as much as anywhere else, competition is an essential condition of progress–I have no doubt. And it’s particularly bad, because while most people in Britain dislike it, everybody agrees it can never be reversed. (pg. 149)

I have to admit that a certain selfish part of me will be relieved if the bill passes. I don’t know what pre-existing conditions I might have or how much money I will be earning once I am no longer covered by my parents’ generous tax-payer-funded insurance. I am far less ambitious than most of my University peers when it comes to how much money I would like to earn after graduating from college. Regardless of what happens, my utility-maximizing level of effort probably involves more leisure (somehow defined) and less productive work (somehow defined). However, without Obama(/Pelosi)Care, I would be more likely to focus on earnings, to assure myself a minimal level of security in the event of a health-related catastrophe. If it passes, prospective low income-levels at which I would be subsidized under the plan will appear much more desirable. My incentives will be affected such that I will be less likely to look for more productive work. In other words, I will be less likely to do work that is probably more valuable to the bulk of society. At the margin, people in my situation will make a similar decision: to produce less value for other people and more value for themselves.

When I think of the less lucrative but more personally rewarding careers that may be open to me, my first thought is that I should try to find a job where I can focus all of my energy on limiting the expansion of the size and scope of the United States government. You could say that one unintended consequence of the passage of the bill might be to mobilize libertarians like myself to commit more time to personally rewarding careers in activism. Alternatively, this could represents an intended consequence of the bill: a change in the incentives with respect to the work/leisure trade-off. Those who disparage the American culture of consumerism probably delight in the idea of a society that is less focused on earnings, per se, and more focused on other pursuits. I doubt that they would be so pleased to know the effect it might have on me. Tyler Cowen noted this possibility a few months back while commenting on a back-and-forth between left-wing blogger Jonathan Chait and conservative Jim Manzi:

I’d like everyone to have a sign, which they would hold up when appropriate: “My policies seek to revise the internal culture of my country.”  That’s OK, but you’re raising the bar for your own ideas and don’t fool yourself into thinking otherwise.

I might be wrong, but I don’t think that the cultural-change argument would be a winning approach for liberals. Regardless of whether or not you think that Americans value earnings too much, the fact that they do makes everyone in the world better off. If upper/upper-middle class Americans want to work harder in order to afford expensive health-care, the entire world benefits from the innovation derived from the market for high-quality medical services. I think it’s unfortunate that trickle-down economics has gotten such a bad rap since the Reagan years. America is home of the best medical innovation in the world, hands down. While I stand to benefit in the short-term from a health-care overhaul, it is foreigners (as well as future generations) who will die as a result of technologies that will not be produced by American health-care providers looking to make a profit from high-risk, high-reward, innovative procedures. I personally will not choose to spend so much of my income on a “Cadillac” insurance plan, but what right does the government have to disincentivize this type of voluntary exchange?

In any event, I look forward to a life of subverting the government. Whether or not Pelosi and her gang of crooks chose to make it more comfortable for me to do so is in God’s hands now.

Note: Ideally, I will find some way to earn millions AND subvert the government. That way I can donate my money to like-minded individuals and organizations that share my passion for limited government.

• Thinking clearly about health-care reform.
• Book review of Albert Jay Nock’s Memoir’s of a Superfluous Man.
• My experience as it relates to Bryan Caplan’s microecomic interpretation of Thomas Szasz’s theory of mental illness. Do preferences and constraints represent two distinct categories or are the lines impossibly blurred? The answer portends a radically different way of thinking about ethics on both a small and a large scale.
• Examination of the obsession with income inequality over other forms of inequality which cannot be remedied by changes in government policy.

Stay tuned, won’t ye?

• My biases are deeply ingrained in my genetics, personal preferences, childhood development, or profound trust in my parents.
• Marx was right that the logical structure of one’s mind depends primarily on his class. As an upper-middle-class white American male, I think I am safe in labelling myself a poster-child for the modern Bourgeoisie.
• Others’ biases are deeply ingrained in their conditioning and preferences, perhaps due to a liberal media bias or the effectiveness of emotional arguments which the left wield so often.
• Both perspectives are firmly rooted in human biases which prevent anyone from having any degree of confidence in their beliefs.

If either the first two explanations are correct, then I have little hope of discerning any meaningful truth about the world. I should stop blogging, never discuss politics again, and try to find enjoyment in less intellectual pursuits. However, if either of the last explanations is correct, I think I have a great deal to contribute to the ongoing debates on the proper role of the state and of individuals within society. Supposing that the third explanation is the most correct, and that others’ biases are particularly egregious relative to my own, I can derive purpose from showing others a better method of thinking. Based on my experience, economics is a helpful tool for thinking clearly about all topics relating to human action. I can improve the world by educating others on the principles of economics and maybe even make a career out of it. If the last explanation is true, my optimal course of action is less concrete. However, I still maintain that I have the upper hand over most people, because of my unnatural concern for overcoming my personal biases.

A final possibility just occurred to me while I write this post. What if my tendency to root out my biases is proportional to the number of my active biases at work?

Ultimately, such discussions offer no hard solutions. Intellectual rigor and history-oriented empiricism seem to be the best ways to find the closest beliefs resembling truth. The name of this blog pays tribute to the fact that the human mind is, in all likelihood, fantastically inept at devising ideas that aim to increase worldwide prosperity on a large scale. I tend to favor a worldview that admits from the outset that scarcity is the greatest obstacle to achieving ends that individuals regard as desirable and then any worldview that tries to circumvent scarcity and find solutions rather than trade-offs is doomed at the outset. Again, classical economics seems to prevail as the best systematic method of seeking truth. If my faith in classical economics is misplaced, I hope to find another systematized body of knowledge which does a better job of explaining human action. If my faith is shaken and I do not discover a better method of truth-seeking, I have no option but to look for a different hobby.

Interesting stuff.

Welcome to the Club

I will always have a deep respect for Professor N. Gregory Mankiw for introducing me to the basic principles of economics. In my opinion, he is one of the most sensible and even-handed mainstream economists.
However, I have commented before on Mankiw’s seeming lack of self-awareness when it comes to patting himself and similarly accomplished academic economists on the back:

Here is a project for some ambitious blogger: Go to old ERPs, which list the CEA members and staff, and collate them with data on citations. That would provide one way to judge objectively (albeit imperfectly) the quality of CEA economists over time.

Here he goes again, judging the quality of a CEA by the number of citations and awards received. To call this an imperfect way to judge the quality of economists is an understatement. Suppose Mankiw is right, and an the number of citations in prominent academic economics journals directly correlates to the quality of policy advice. He still sounds like he is fishing for praise, or perhaps another political appointment. However, I am skeptical that Summers, Krugman and other established elites necessarily have all the right answers to our current predicament. They are still trapped in the mindset of trying to control complex macro variables, because there is demand in Washington D.C. for that kind of advice. Personally, I would like to see the CEA staffed with the likes of Donald Boudreaux, Bryan Caplan and David Friedman, who could set the administration straight on the government’s inability to create stable low unemployment. Still, even if past Nobel/JBC Medal winners are the best folks for the job, such blatant displays of self-congratulation only makes me suspicious of the self-interested motives that academic economists possess.

My Hansonian conditioning makes me wonder if certain signaling abilities that are necessary for academics to get published/cited also make them more desirable hires for positions as government yes-men. By signaling his respect for fellow distinguished (oft cited) academics, Mankiw appears to be building his reputation as someone who is very much willing to fall in line with the Harvard-Goldman filter. If the experts fail, say Mankiw & Co., we need better experts, not a distinctly different strategy.

The key to controlling spending is permitting more earmarks (sic).

Cowen asked readers to try to figure out what model Jones is using. Arnold Kling took a stab at it. Find out what he said below the fold!

1. Each Congressperson wants to use government spending to buy enough votes to be re-elected.

2. Targeted spending (earmarks) buys more votes per dollar than other spending.

3. Therefore, for every dollar of earmarks you take away, the Congressperson is going to have to add more than a dollar of other spending in order to buy the required number of votes.

This is not the only model, but it is a relatively simple one that gets the result.

I think that the model has to assume that a large percentage of the voting public will always vote for a candidate that they perceive redistributes wealth in their favor. With earmarks, those people could be easily targeted and easily won over, leaving politicians free to cast votes on sound principles like balancing the budget. Without earmarks, a politician must increase overall spending, at the expense of a balanced budget, to win those votes.

I’m not convinced. Earmarks only succeed because special interests tend to win out over diffuse interests. I think that getting rid of earmarks would wake people up to Bastiat’s great insight:

“Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.”

As long as everyone is forced to sacrifice some income to the state, people will generally reject unnecessary government spending.