Monthly Archive

Congress has subpoenaed the executive branch to get documents related to U.S. attorney firing scandal, and the president has refused to give the documents over, claiming executive privilege (link).

I am not certain how I feel about the president’s claim of executive privilege or even about executive privilege in general, but I am very happy to see fighting words between the executive branch and the legislative branch back in the news. Patrick J. Leahy (D-Vt), of the Senate Judiciary committee, has harsh words for the executive branch: ”This is a further shift by the Bush administration into Nixonian stonewalling and more evidence of their disdain for our system of checks and balances”, and Tony Snow, the whitehouse press secretary, responds with equally harsh language: “[the subpoenas] may explain why this is the least popular Congress in decades, because you do have what appears to be a strategy of destruction rather than cooperation.”

When the different branches of the government fight each other, they help keep any one branch from gaining too much authority. I am happy congress is trying to exert some ‘check’ on the executive branch again.

So says David Friedman in an article I found on his website. It covers the same theme as my very first post on this blog, albeit in a more compact and entertaining way. Particularly interesting for me was the comparison of private “governments” (condo/homeowners associations) to local governments. They don’t seem radically different (both allow free exit), but Friedman notes an important difference. If a city is formed by means of a vote, minority voters have a government thrust upon them; whereas condo associations usually exist prior to any residents moving in, so that each resident participates in the “social contract” by virtue of their choice rather than the majority’s will. Democracy is the tyranny of the majority.

If only a city could be formed in an area where no one lives. Perhaps it could be a for-profit corporation and own its land as private property. New residents who arrive would need to join a city association. There might or might not be some degree of democratic decision-making (like with condo associations), but the board would be elected by shareholders, not the residents (unless the residents decided to buy the corporation). Of course, to ensure that no one’s rights are violated and that state/federal taxes are collected, the higher levels of government would need to have a presence on the city’s land and access to every part of the city (perhaps this would be the role of the county government). There would still be government in the background, ensuring that rights are protected and laws enforced. But certainly most city functions could be handled by the profit-seeking corporation, like transportation, utilities, and city planning.

#1 - Bryan Caplan talks about voter irrationality in an an extremely interesting podcast interview, and has convinced me to read his book … eventually.

#2 - Greg Mankiw points to a brief by Gilbert Metcalf on a green tax shift that is designed to be both distributional and revenue neutral. His proposal is to use the revenue from a carbon emissions tax to give a lump sum exemption from the payroll tax of about $3,500. The brief has several very interesting tables on the effect of a carbon tax on the costs of different goods and the distributional effects of those added costs. I especially like lump sum of green tax shifts because they refund tax money in a way that closely matches the harm done by carbon emissions, i.e. everybody roughly equally.

I am happy to point out that the Green Party of Canada has advocated a very similar green tax shift (go to page 1 for quite a while now.

On Monday, the SCOTUS ruled that “schools may take steps to safeguard those entrusted to their care from speech that can reasonably be regarded as encouraging illegal drug use” (link). This decision explicitly gives schools the right to restrict student speech based on content, rather than the disruptiveness of speech.

The justices have it backwards when they defend the right of the school to restrict student speech that cannot “plausibly be interpreted as commenting on any political or social issue.” Students do not need to justify their speech to the government; the school needs to justify its restrictions. There is a clear reason for limits on disruptive student speech; if any one student is allowed to disrupt a whole classroom or school, public schools would simply not function most of the time, but there is no similarly convincing argument for restrictions on speech which advocate violation of the law, drug laws or any others.

The court argues by fudging the issues. Any public speech advocating the use of drugs must be either social or political speech. It attempts to argue that this is not so by citing the fact that the “bong hits 4 Jesus” student claims the banner was intended as a joke and not to make any sort of political or social statement, but the intent of the student is irrelevant. The banner could certainly be “plausibly interpreted” as advocating the use of drugs, which falls under “commenting on any political or social issue”. This is demonstrated by the fact that the principle did interpret it this way; she interpreted it as advocating the use of marijuana. Public encouragement of drug use can always plausibly be interpreted as either advocating that the use of drugs be decriminalized or advocating for people to use drugs, which is social advocacy and therefore protected speech. If you don’t be believe advocating for people to use drugs is social advocacy, consider advocacy for the opposite behavior; it is impossible to argue that advocating for people not to use drugs is not social commentary. How could advocating one social behavior be social commentary but advocating the opposite social behavior not be social commentary?

I would like to point out that in a voucher system, free speech rights would almost never come up, and the government would not have to restrict the free speech rights of students. If a family felt that a school’s controls on student expression were overly restrictive, they could simply choose another school.

I found a group that thought up the idea of direct representation long before I did. They even call it the same thing!

My only contribution to the idea of direct representation is that citizens should be able to give their vote to groups as well as individuals, which would allow, but not require, proportional representation style parties to form.

There are a few other small differences worth discussing, and I will probably do so in a future post.

I recently wrote about a system of representation I thought up based on a tradable vote (link). Basically, citizens have a vote they can give (through elections) to any one person. I called this “direct, representative democracy” but I think “direct representation” is more descriptive and catchy.

One problem with the system as I described it is that there is always the possibility that a candidate does not hold to the promises made during campaign. There would be little to stop this from happening except the loss of votes during the next election. This sort campaign lying is much less likely in systems of proportional representation based on official political parties because it is much more difficult for a large group to maintain a conspiracy.

One solution is to allow voters to give their vote to any one candidate OR any one candidate group, provided the group has a binding mechanism for the group to decide how it votes (which would include the possibility of splitting up its vote). This would allow for political parties to come about, if they are useful. The resulting political parties could actually be stronger than parties in proportional representation systems. For example, if a party decided to use a majority vote amongst some set of delegates to decide how it voted in the legislature, any delegates that wanted to rescind on the party campaign promises would probably be outvoted by most honest delegates and the party’s vote would be unaffected, whereas in a proportional representation system, some representatives might vote against the party. Parties could also be weaker, depending on how they were designed.

The one of the biggest advantages of direct representation lies in the flexability of its institutions. The way parties operate could vary from party to party and even change over time. Competing representatives and flexible institutions will cause legislators to be very responsive to voters.

Reading Liberals and Libertarians by Dr. Ernest Partridge over at Dissenting Voice prompted me to write this letter to Dr. Partridge in response:

Dear Dr. Partridge,

This is in reference to your May 17th, 2007 article Liberals and Libertarians published in Dissenting Voice. I think you have made a serious methodological error when attempting to prove the existence of “society” as an entity greater than the sum of individuals and their interactions, and since you mention that you devote two chapters of a book you are, writing I feel it is important to bring this to your attention. Read the rest of this entry »

Dani Rodrik points (link) to The Liberal Idea, a wonderful article on the roots and principles of liberalism. One of the main points of the article, which Rodrik emphasizes, is that “rights (including property rights) are defined and enforced by the state.” I find myself agreeing with this position more and more as time goes on, though it is a major departure from my old natural-rights based thinking.

Other passages I liked:

For the will of the majority to prevail, outvoted minorities must be willing to comply with electoral results. They must not resort to violence whenever they lose an election. To purchase minority compliance, the electoral majority must assure the electoral minority that its most precious values and rights will not be violated.

…

[...] the American Founders wrote our Constitution after a period of frustration with the weakness of central government. They aimed, therefore, not only to prevent tyranny, but also to create a sturdy government with the capacity to govern effectively and “promote the general Welfare.”

Here is a letter to the editor I wrote in response to this article over at Dissenting Voice: 

I am writing to respond to Ernest Partridge’s June 20th article Market Failure: The Back of the Invisible Hand in which he rails against what he sees as a common libertarian unwillingness to recognize market failures.

First off, it is quite disingenuous to call free-market fundamentalism “the dogma of the ruling elites.” Few politicians would qualify even as moderate libertarians. It is important not to confuse pro-business with free-market; subsidizing oil and farm businesses is pro-business but hardly free-market. President Bush could be rightfully called pro-business but not free-market. As a commenter pointed out, subsidies, tariffs and heavy handed regulations pervade much of the American economy; just look at how milk prices are regulated. Read the rest of this entry »

John mentions guest worker programs in a comment to my last post. He cites Dani Rodrik’s support for the idea. I also have been following the discussion Dr. Rodrik’s blog, as well as on George Borjas’s blog (Borjas has a very different point of view on the matter). Rodrik emphasizes that a guest worker program spreads around the wealth, by rotating in fresh workers eager to close that wage gap. Thus many more people enjoy the benefits of American wages. Part of the motivation here for Rodrik, I think, is that he is concerned about distributional effects in addition to aggregrate gains. Borjas counters that a guest worker program is not workable, in particular that some guest workers will inevitably become permanent workers. Rodriks thinks the argument is still good, though, even if some or all the workers don’t go home.

Rodrik: here, here, here, and finally sums it up here.

Borjas: here, here.

It has been a while since I have played the constitution game. 

I am not a fan of the American method of electing the legislature, especially its use of winner-take-all elections. I much prefer proportional representation systems and national elections because of increased policy influence for social and political minorities, but I have always been uncomfortable with official political parties, not least for elegance reasons, so for a long time I have tried to think up proportional representation systems that do not require official political parties. The best idea I have come up with is a system of proportional legislator voting, I’ll call it direct, representative democracy.

Here’s how it would work:

Voters cast single ballots in a nationwide election. All candidates become legislators, with a number of votes proportional to the fraction of popular votes they received, but only legislators who received a fraction of the vote above a certain minimum (let’s say .0025) would receive a legislator salary and the right to be in the legislative building. My minimum would allow for a maximum of 400 paid legislators, a little smaller than the House of Representatives, but the actual number would certainly be much smaller. Legislators who received below the cutoff would have the right to submit a sort of absentee ballot (by mail or otherwise).

This is essentially direct democracy, with a tradable vote. Direct democracy would result if everyone voted for themselves, but no one interested in actually affecting policy would do this because the costs of researching and voting often would certainly outweigh the benefits. Most people would choose a representative they generally agree with and give them their vote. Candidates with more popular views would recieve proportionally more voting power.

I would guess that the resulting legislative body would have several legislators with relatively large fractions of the vote, and many more legislators with a small fraction of the vote. The distribution should look something like a Poisson distribution.

What do I think advantages of direct, representative democracy would be?

•  It would achieve the benefits of proportional representation, such as reduced pork and increased minority influence, without a complex, artificial or distorting voting system.
• It would help shift more policy setting influence back to the legislative branch, where I think it belongs, because the legislators with relatively large fractions of the vote would have a much larger “public face,” which I think currently gives the president a significant amount of influence.
•  It would shift political power from congressional committees (they have a lot of power right now) and back to the majority which would reduce the power of special interests.

I don’t think this system is very likely to be implemented because at first glance, it seems very unfair since some represenatives would wield more voting power than others. I do think this is the ideal republican system, and if I could, I would replace at least the U.S. House of Representatives with a legislative body based on direct, represenative democracy.

I have been on the fence on the possibility of greatly increased immigration for a while. It seems stupidly nationalistic to not allow individuals to live and work where they please, but then I am also cognizant of the artificial incentives to migrate created by social programs and the dangers to social stability that might exist (if existing citizens see the migrants as “others” and do not identify them with the national community). Read the rest of this entry »

Jacqueline Passey has a very interesting post about her experience buying individual health care insurance, and comparing individual insurance against her employer’s health insurance. The result?

We decided against getting company health insurance because even with the tax savings (employer-provided health insurance is a tax-free benefit whereas individual health insurance plans must be bought with post-tax dollars) the premiums would still be too high compared to the premiums for individual health insurance plans.

I admit I haven’t looked into individual insurance since I’m still covered by my family (call it rational ignorance), but my father had pretty well convinced me that even catastrophic insurance was disproportionately expensive. When I buy my own insurance, I’ll be sure to research individual catastrophic insurance.

The Outright Libertarians blog, which I just discovered, points me to an amazingly well produced pro marriage-equality and strikingly libertarian ad campaign put together by MassEquality. The campaign is called “It’s Wrong to Vote on Rights,” and it basically argues for limits on how much democracy should be able to limit individual freedoms. Watch the T.V. ads; they are quite moving.

 UPDATE: Apparently, the ads were for the recent vote on the proposed constitutional amendment to ban same-sex marriage in Massachusetts. The amendment was voted down in the house, so apparently they were successful!

For a long time I have wondered why the fees that online ticket vendors charge are so high. I went to go see Architecture in Helsinki at Neumos recently. When I bought the ticket online, Neumos charged me $15, but TicketsWest, the online ticket retailer that the Neumos uses, charged me fees that came to $6.50 which is a very significant portion of the total ticket price. The large fees from TicketsWest are what I find interesting, and have so far been unable to explain them.

I find it very difficult to believe that the costs of running a ticket website are anywhere near 30% of the ticket price, because there are many other online retailers for different products that don’t charge fees nearly as large. Additionally, I remember paying much lower fees to TicketsWest just last year.

I would expect competition in the online ticket sale market to be strong because essentially anyone could start an online ticket sales site. Looking at the number of websites listed as competing with Ticketmaster on its Wikipedia entry, suggests the market is very competitive. Strong competition should make prices closely reflect costs because every online retailer will try to maximize their profit by reducing prices (fees) a small amount.

I found that competition is limited to two major players, so competition is relatively low. I looked at 8 different Seattle venues, and I found that except for Chop Suey, all the venues used either TicketsWest or Ticketmaster/TicketWeb (Ticketmaster owns TicketWeb). Chop Suey sold tickets to a very limited number of shows (3 when I checked) through both TicketsWest and Ticketmater/TicketWeb. Five of the eight venues sold through Ticketmaster/TicketWeb and three of the eight sold through TicketsWest (not including Chop Suey).

That at least one venue, Chop Suey, sells tickets through multiple retailers is strong evidence against the notion that selling tickets through multiple retailers is particularly difficult, but the limited number of tickets available TicketsWest is very confusing. I have difficulty imagining a reason why Chop Suey would sell tickets through both services for only a very limited number of shows. What confuses me more is that even when both retailers are selling tickets for a given show, they both charge large but significantly different fees.

Venues should find it easy to sell tickets through multiple online retailers, because the internet makes commercial transactions very inexpensive and repeatable. Even if it is very difficult to sell through more than one online retailer, venues should find it easy to switch to a different retailer that charges lower fees. One might argue that switching to a relatively unknown online retailer might reduce sales enough to make it unprofitable, but I find it difficult to believe that it would reduce sales by 30% in the long run (which would be enough to offset the increase in ticket prices a venue could enact due to much lower fees from the online retailer), especially since most venues have websites where they advertise their shows and usually link to an online ticket retailer. For some reason, however, venues appear to choose not to sell through multiple online retailers or sell through relatively unknown online retailers, but not because those alternatives don’t exist. This is what I am at a loss to explain. Does anyone have any insights?

In a thread on the Facebook group “Libertarians at the UW” someone asked “What is the perspective of libertarians concerning the funding of sciences by the government?”

This question started me thinking about the two different basic approaches to libertarianism that I see. The first is the moral approach, people who take this approach tend to call for less government on moral grounds, usually because they claim the government violates a set of natural rights in many ways. Ayn Rand is probably the most famous libertarian with this approach. The second approach is the practical approach. These libertarians usually advocate less government because of the difficulties they see inherent in central planning and the insights from public choice theory about government failure. Many of the libertarian leaning economist bloggers fall into this category. Moral approach libertarians will often argue that respect for natural rights inevitably leads to the most efficient outcomes, but this is dubious at best. As a general rule, I think those who take the economic approach tend to be less radical than those who take the moral approach. Those who take the economic approach often make exceptions for “public goods” and other “market failures”, but it is much more difficult for those who take the moral approach to make exceptions.

This is not to say people don’t switch or combine approaches; on the contrary, I think the most libertarians have an approach that falls somewhere between those two extremes. I think of Hayek as someone who combined both approaches, because he talked about when coercion is justifiable and when it isn’t, and his exceptions to the moral rule of non-coercion were practically based. I myself have mostly switched from a moral approach to a practical approach. I used to argue mainly from a natural rights perspective, but as I have become less convinced of the ethical justification for ‘natural rights’, I have switched to arguing from an economic perspective, even though I remain interested in what, if any, fundamental rights can be ethically justified. I suspect that similar transitions from a moral approach to libertarianism to a practical/economic approach to libertarianism are relatively common. I think one of the reasons Ayn Rand, who mostly takes a moral approach, is the way many libertarians become libertarian is because moral libertarianism is an easier position to understand.

To answer the question, I think moral-approach libertarians will tend to reject or at least be quite skeptical of government funded science because they see the taxation required to fund it as coercive, while practical-approach libertarians will tend to view science, especially ‘fundamental’ research like physics and chemistry, as a public good and therefore make an exception for it.

I’ve been pondering how internet content gets produced. By ‘content’ I mean stuff like wikipedia entries, economics blogs and news articles. The amount of free, useful content on the internet seems to be rapidly expanding. A lot of the content that is generated is funded by advertising. Websites that have useful content get a lot more traffic than those who don’t, and advertisers are willing to pay for people to see their ads, so websites that have ads have strong incentives to generate useful content. Advertising revenue explains a lot of internet content, especially content from commercial online news outlets like Yahoo News and professional bloggers like the numerous blogs that The Wall Street Journal runs.

Some useful internet content, like Amazon.com book reviews can’t be explained by advertising revenue. Most reviews are created by users, not by Amazon. I find the user reviews at Amazon extremely useful; whenever I am interested in a book or in learning about some new topic I go look up the book’s reviews or the reviews of several books on the topic I am interested in. Those reviews are often the deciding factor in if and what I buy. If we think about people as purely self interested, these user created reviews are hard to explain, because the authors don’t profit from better informed purchasing decisions, only Amazon and its customers do. The huge size of Wikipedia (the english language Wikipedia has almost 2 million articles) also cannot be explained by advertising revenue; wikipedia contributors don’t profit from writing entries despite the immense use that many entries get; even Jimmy Wales, the founder of Wikipedia is not a particularly wealthy man.

My explanation is that people are, of course, not exclusively crudely self interested. People do get a certain level of satisfaction out of helping other people. When the external benefits to ratio of personal costs is high (I’ll call this the charity ratio), this potential satisfaction makes some charity work make sense to individuals, meaning that if the benefits to other people from small act of charity greatly outweigh the personal costs, people are inclined to act charitably. Additionaly, since the decision of an individual to help others is based on the information they have about this ratio, better access to information about the benefits to others from helping them is likely to make them more likely to do so. When large benefits to others from small acts of charity are clear, people are more likely to act charitably. In the case of amazon book reviews, I would expect the ability of amazon customers to vote on reviews as helpful or not increases the quality and quantity of reviews, because it gives authors and potential authors more information about how useful reviews are to other people.

I think this explanation is applicable to the real world as well as the online world. Donations of second hand goods like used clothing to second hand stores and thirft shops, which are often operated by charities, are fairly well explained by a high charity ratio because the costs to the donor are low (they were probably going to throw away their old clothes if they didn’t donate them) and the benefits to others are high (the charity makes money and also provids low cost clothes and other second hand goods to the poor). In the online world, high charity ratios are probably much more common because creating content is often easy so the personal costs are small and because potential audiences can easily be very large so the benefits to others can be quite large.

Chris sums up my point better than I could: there is tons of free stuff on the internet because it’s cheap to make. After I wrote this, Chris also points out that I’ve come up with nothing new (hardly surprising), and he helpfully points me to an article which discusses the internet economy (link).

Tyler Cowen asks, “Should immigration be family based?” (link). I have mentioned before that the proposed senate comprehensive immigration reform bill will change immigration from family based to skill based immigration. I was and continue to be ambivalent about this change.

From a nationalistic perspective, skilled immigrants are desirable will impart more benefits than unskilled immigrants on the US, but physical proximity to family members also has value, although those benefits will accrue mainly to the immigrants instead of the country at large.

My current feeling is that while skill based immigration will give extra economic benefits, family based immigration could give social benefits and it certainly improves the welfare of immigrants to be able to move their family close to them, so immigration policy should try to recognize the value in both family ties and in skills. The proposed point system does incorporate extended family ties to a small extent (10% of the points) (link to point system and discussion), but the weighting seems low to me.