And The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel goes to…

We do not know that yet…the announcement will be made Monday, October 15th, 1:00PM CET. BUT, at Thomson Scientific, they believe they can make some predictions. Thomson Scientific’s predictions for the 2007 Nobel Prize in Economics are:

A description of the selection process can be seen here and an explanation of how the Citation Laureates are chosen can be found here.

Thomson Scientific even conducts a poll and it seems that froggie, …oops, I mean Jean Tirole is ahead in the poll.

Here are who I would like to win the Nobel Prize in Economics without any particular order (and do not tell me they won’t get it because they are too young, too old, not nice enough, lack diplomacy, too uncompromising, or whatever…I DO NOT CARE…THEY SHOULD GET IT period!):

  • Armen Alchian and Harold Demsetz "for their contributions to the economics of property rights."
  • Gordon Tullock "for his innumerable contributions to Law & Economics, Public Choice (yes, you are not mistaken, I did write that G.T. should get the NP for his contributions to Public Choice…and not a certain J.B. who got it in 1986), and the Political Economy of Rent-Seeking, concept that he first articulated in his 1967 article entitled: "The Welfare Costs of Tariffs, Monopolies and Theft" (Western Economic Journal, Vol. 5. No. 3. P. 224-232)." What about Anne Krueger? What about her? She should not get the prize for coining the term "Rent-Seeking." Why? Because who cares she coined the term! And, she never mentions Gordon Tullock in her 1974 article "The Political Economy of the Rent-Seeking Society" (American Economic Review, Vol 64, No. 3, pp. 291-303). No further comment.
  • Israel Kirzner "for his contributions to economics of entrepreneurship."
  • Paul Romer "for his contributions to growth theory."
Published in: on October 3, 2007 at 11:25 pm  Leave a Comment  

Immigration is bad for ….the environment!?!

Last week, my friend, economist Benjamin Powell, was in Denver to talk about what will be the hot topic of the 2008 elections: Is immigration a good or bad thing for the U.S. and what should we do about it? The high-point of his visit was the debate with former Governor Richard D. Lamm. The debate that took place on the Auraria campus was broadcasted on internet. It will also be downloadable on the MSCD’s website and on iTunes(c) and a Spanish transcript will be available as well.  Ben who has discussed this issue several times prior to his visit to Denver received some press notably in the Denver Post, the Rocky Mountain News, and ColoradoBiz Magazine following this event.

Allow me to give some personal thoughts on the debate.

After all the economic arguments and facts Ben Powell gave to Richard Lamm to explain why immigration is a good thing for the United States, the best thing Richard Lamm came up with to counter Powell’s arguments was immigration is bad for the environment!!!! According to Lamm, allowing more immigrants into the country will aggravate the overpopulation problem the U.S. seems to be suffering right now. We will end up using up the nation’s natural resources and will aggravate the global warming problem, ice will be melting, and this will be the end of all humanity. That type of arguments sounds very familiar… was there not a famous economist who argued something quite similar? Yes, there was Dr. Padilla. His name was: Reverend Thomas Malthus. Malthus, famous for writing "An Essay on the Principle of Population" (1798), also argued that overpopulation will result in the depletion of natural resources and massive starvation. Today, 200 years later, the world population is about 6.6 billion people and natural resources are yet to be depleted and the massive starvation predicted by Malthus has not happened, at least not as a result of population growth. The reason why Malthus failed in his predictions is that he underestimated the importance of technology and the ability of human beings to find substitutes. Moreover, Malthus forgot that individual’s needs and wants also change over time so some resources are no longer needed when individuals satisfy their needs for them and they move on to new needs. Of course, despite Malthus being wrong, his thesis still inspires many followers. There is not a day without some doomsayer claiming that we are killing Mother Earth, depleting natural resources, overfishing, overhunting, overproducing, overconsuming, overdriving, overbreathing, overeating, overdrinking, etc. And, of course, we are still awaiting to see those Nostradamuses of the world acknowledging that they are wrong…which is never going to happen because, according to them, they just misestimating their predictions by a few years, decades, centuries….millennia?

Ben Powell did accurately replied to former Governor Richard Lamm’s arguments on resource depletion resulting of overpopulation by mentioning in addition of what I have said above the famous bet that took place between Julian Simon and Paul Ehrlich in the 1980s. Julian Simon bet that the price of a basket of 5 metals will fall between 1980 and 1990. Guess what? He won and Paul Ehrlich in October 1990 mailed a check to Julian Simon for an amount of $576.07.

If I had to make a bet between who was more convincing between Ben Powell and former Governor Richard Lamm, I would have to bet Ben Powell…Sorry Dick…but I still do not understand how you succeeded to be elected Governor? …Hmmm, maybe Bryan Caplan is right after all about The Myth of the Rational Voter…or is it because we economists are so smart?

More to come on this immigration debate…I am not done yet… 

Published in: on October 2, 2007 at 12:10 am  Leave a Comment  

Magna Carta For Sale

One of the most important documents in the history of the human civilization, Magna Carta, is for sale.

Magna Carta means literally "Great Paper." As mentioned in the NYT article, there is no doubt that it provides a "real rallying point for emphasizing the importance of individual liberty and the rule of law." As Winston Churchill wrote in The Birth of Britain (1956):

…here is a law which is above the King and which even he must not break. This reaffirmation of a supreme law and its expression in a general charter is the great work of Magna Carta; and this alone justifies the respect in which men have held it.

A translation of the 1297 version of Magna Carta can be found here.

Published in: on September 25, 2007 at 1:06 am  Leave a Comment  

Shocking revelations about the political failure of libertarianism – Part II

After rereading Ms. Hymowitz’s very enlightening piece, I decided to add one more remark or two…

Ms. Hymowitz argues that libertarians are utopians thus making it ipso facto unpopular or doomed to fail in the mundane world of American politics.  Libertarians according to Ms Hymowitz are dreamers who dream of a world "liberated from family, from the past, from tradition, from biology, and perhaps even from the earth itself." What?! Please pinch me! Did I just read this or was it just a dream?

First of all, most libertarians are not against the family, do not wish to be liberated from the past and certainly not from tradition! Tradition is very important to libertarians because traditions and customs are fundamental and essential in the generation of rules of conduct and behavior in the society as opposed to government-created rules and laws that have no ground in past traditions and customs.

Now, it’s true some libertarians are utopian but they do not represent a majority. Most libertarians are pretty realistic and do not believe human beings are perfect and a world with less or no government will be perfect. Most libertarians argue that such a world will be LESS imperfect but certainly do not argue it will be PERFECT. That’s the problem here. Trying to argue that we, libertarians, believe in perfection and the possibility of a Aldous Huxley’s Brave New World is total nonsense. What’s utopian is to believe, as Ms. Hymowitz, that a world with government or more government will make the world a better place. Believing that the government is the solution to all our problems, that’s utopian! And those Democrats (who I suspect Ms. Hymowitz might be) who believe that socializing medicine will solve the problem of health care costs and the increasing number of insured, that’s not utopian! Another one, let’s increase minimum wages to $15/hour and poof! the problem of poverty in U.S. will belong to the past! That’s not utopian! Nooo….I can give you hundreds of utopian examples that non-libertarians give us every single freaking day! (after all, this is the main reason newbigprinz and I started this blog)

What’s utopian is to believe that one day every single person on this planet will be more economically educated. It’s to believe that finally every single human being would have learned that there are such economic laws as the law of supply and demand and the law of comparative advantages, incentives matter, and there is no such thing as a free lunch. That, ladies and gentlemen, is utopian! What? I can’t dream now?

Published in: on September 23, 2007 at 11:27 pm  Leave a Comment  

Shocking revelations about the political failure of libertarianism – Part I

Kay Hymowitz offers us with what she believes are some (cultural) contradictions within the Libertarian philosophy.

I am personally tempted to repeat what Mike Munger posted in his own blog, Kids Prefer Cheese,  about the same piece but I am going to attempt to make some additional remarks.

My first observation is related to the first statement delivered by Ms. Hymowitz:

More than perhaps any other American political group, libertarians have suffered from the blows of caricature. For many people, the term evokes an image of a scraggly misfit living in the woods with his gun collection, a few marijuana plants, and some dogeared Ayn Rand titles, and a battered pickup truck plastered with bumper stickers reading "Taxes = Theft" and "FDR Was a Pinko."

First of all, I consider myself a libertarian and none of this description applies to me or my libertarian friends (and given that there are supposedly only few libertarians in US or the rest of the world, my friends and I probably are pretty representative of what a libertarian looks like). We do not smoke marijuana, we clearly do not live in the woods (even though living in Denver, I sometimes believe I am living in the woods), we like fancy restaurants, we do not drive trucks (I drive an Audi, and my other friends drive BMW, Porsche, Jaguars, Ford Mustang, WV) and clearly our cars do not carry some loser bumper stickers protesting against the state, FDR, the war, etc. We leave that to liberals and hippies. More importantly, Ms. Hymowtiz should do a little research on those famous libertarians she mentions because none of them actually fit the description either. Ayn Rand, Murray Rothbard, Friedrich Hayek, Ludwig von Mises, or Milton Friedman clearly never lived in the woods (Murray Rothbard was famous for suffering from panic attacks as soon as he stepoed out of NYC), clearly never drove a pick up truck, and most likely never smoked marijuana. Hmmm, I think she clearly must confuse libertarians with hippies who clearly are not libertarians…OR maybe she smoked too much dope herself and clearly should consider quitting.

Now, more seriously, as an economist, I believe that people are (rationally) ignorant and, therefore, when it comes to politics, they like to summarize each political group”s "philosophy" by using some stereotypes based on what they believe the members of this group advocate. It does not matter if we talk about Libertarians, Republicans, Democrats, the Greens, etc. This being said, there is a difference between believing and knowing and, personally, I could care less what people believe. If people want to believe that libertarians are potheads, gun freaks, freedom lovers, and government haters, that’s fine by me. Like Mike Munger (and my partner in crime, NewBigPrinz), I do not like people anyway  and given that they are most likely to be ignorant by choice, it’s most likely not worth wasting my time trying to explain to them what libertarianism is about because they have decided to stay ignorant. Why would they listen to me if in the first place they already decided to stay stupid…sorry, I mean rationally ignorant?

In her piece, Ms. Hymowitz mentions that the "Libertarian Party’s paltry membership has never reached much beyond the 250,000 market, and polling numbers for Ron Paul, the libertarian candidate for the Republican presidential nomination, remain pitable." A few lines later, she adds: "A recent New York Times survey found increasing support for government-run health care, and both parties are showing signs of a populist resurgence, with demands for new economic and trade regulation." All I can say is: I AM SHOCKED! What? People do not support the Libertarian party! Quite the opposite actually, they want more government! Shocked, shocked, shocked! I can find at least two explanations that go beyond to what the author is saying.

First, let’s come back for a second. What’s the stereotype about libertarians again? Oh yeah, they hate the government and believe taxes = theft. Given that my personal belief based on introspection is that people are naturally lazy, the question that must follow would be: Why would they vote for people that basically tell them: sorry but, if we get elected, you are going to have to work harder, be paid at the market price (translate that most likely way below what YOU think your productivity is worth), and if it happens that consumers prefer foreign products because they are cheaper than domestic products, you might have to close doors and people will lose theirs jobs or they will have to accept lower wages to be able to compete with those damn foreigners? In short, if we Libertarians get elected, you better quit whining because the time where the nanny government was here to keep your lazy ass on life support at the expense of taxpayers, meaning people who are actually competitive and producing is OVER!!!! Would you vote for people who tell you that you have to work more, be paid less, and there is no guarantee that this is a lifetime job?

Still do not get it? What do you think most people vote for? They vote for people who are going to offer policies that are going to benefit them the most at the lowest possible cost. Obviously defenders of the libertarian philosophy clearly do not support subsidizing laziness, irresponsibility, and parasites. Traditionally, in general, libertarians support entrepreneurship, hard work, responsibility, and morality (yes you might not like it but taxes = theft; when you are coerced to give away some of your property, the fruits of your labor, it’s called theft; it does not matter what are the justifications the government use to defend its activity, it’s still theft!). How can you think for a second that the Libertarian Party has a chance to get elected or even to attract many members? It does not matter if people actually agree with what libertarians are saying in principle, the problem is that the government is the one who deals the cards and, therefore, as a voter, it is not in your interest to take the high road and follow those libertarian principles because it’s most likely that nobody else will.  In other words, when the government is the one dealing the cards, there is no incentives as a voter for being a libertarian, none!

Let me conclude on this nice quote by a famous French (nobody is perfect!) Classical Liberal thinker, Frederic Bastiat discussing the nature of the government in an essay entitled the State:

The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.

Ms. Hymowitz should read Bastiat, she might be able to understand what libertarianism is truly about and maybe she would actually understand why libertarianism is not popular…oh nooooo, I forgot about rational ignorance…she won’t…bummer! 

Published in: on September 19, 2007 at 10:33 pm  Leave a Comment  

The World IS a Better Place because of…

Last night I was hanging out at my favorite beer place in Denver (it’s also the best), The Falling Rock Taphouse, where they just tapped the 2007 strong ale edition of the Avery‘s The Beast. The 2007 Beast is a 16.42% alcohol by volume beer (last year, it was only 14.6% abv). That’s what they (and I) call a strong ale, not as strong as Samuel Adams‘s Utopias (25.6% abv), but definitely as tasty if not tastier. I wouldn’t know where to start when it comes to express how tasty this strong ale is. How about that? It’s delicious, heavenly, demonic, it’s just great!!!!! Clearly, the world is a better place because of …. The Beast!!!!!

Published in: on August 18, 2007 at 3:32 pm  Leave a Comment  


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Published in: on August 2, 2007 at 3:51 pm  Leave a Comment