You are currently browsing the monthly archive for April 2007.

A constitution does two things: it establishes the structure of a government, and it establishes some of the overarching rules the government is to operate by. Anyone interested in good government should also be interested in discovering good rules by which the government is to operate.

I am obviously interested in good government so, as a game, I often ask this question of myself and others:
“If a new country were being founded and you had some say in shaping it’s constitution, what are some of the rules you would include?”

I find it easiest to start with the American constitution since I am reasonably happy with it and think of rules which would improve it. Here are a few of my answers:

  • All action the government takes involving specific quantities of money must account for inflation.
  • The government must keep a balanced budget except when congress declares war or other temporary emergency.
  • The government is prohibited from keeping secrets about policy, but not prohibited from keeping technical secrets vital to security from foreign enemies.
  • All legislation must explain explicitly how the rules in the governing constitution permit the legislation. In a constitutional challenge, the courts must either accept the reasoning or strike down the legislation.

What are some of your answers?

The New Hampshire legislature has passed bill offering civil unions to same-sex couples (link). They will be the 5th state to have either civil unions or same-sex marriage. It is good to see New Hampshire living up to its motto.

While the government has little business subsidizing or regulating marriage, if the country is committed to that, it should do so without discriminating on irrelevant criteria. Reasonable arguments for subsidizing raising children can be made, although I am very hesitant to take that position, but any such subsidy should done directly, and would have to apply to same-sex couples raising children as well. Marriage itself is a fundamentally social interaction, and government has no business encouraging, discouraging or restricting social interactions.

Posner of the Becker-Posner Blog has an interesting comment on marriage subsidies.

Mass transit in the 19th century, such as animal-powered omnibuses and street cars, was primarily a private enterprise. It played a big role in urbanization.

Mass transit appears in Greek mythology in the form of Charon, who ferries the souls of the dead to the Hades — for a price.

Read the rest of this entry »

This post continues from my last comment under my previous post about democracy (which nobody talked about!) and public transit. It provides an opportunity for me to make a point I’ve been wanting to make for a while.


“I guess the idea that I want to get across here is that I don’t think we should be providing everything they WANT but should rather be ensuring that they receive what they NEED.”

I would like to propose that need is not a basis for action, either in private affairs or in public policy. When I say “I need food,” what do I mean? Of course, I need food to survive, but it does not follow necessarily that I am going to get food. I will get food only if I want to. And my wanting food is contingent on my wanting to stay alive (or perhaps on my wanting to taste something or wanting to socialize with others over a meal). I don’t really “need” food. I want food, for various reasons.

Read the rest of this entry »

On Friday the 27th, the UW Student Labor Action Project (SLAP) is holding a rally in the quad against the UW’s use of sweatshop labor. SLAP aims to have colleges adopt the Designated Suppliers Program, which requires college apparel suppliers to “including the right to organize and bargain collectively and the right to be paid a living wage” amongst other things.

I am happy that they have chosen to try and influence the purchasing decisions of the UW directly instead of advocating legislation, but SLAP is quite misguided. Sweatshops are demonstrably good for 3rd world workers, and even if the existence of sweatshops does indicate a problem, critics should focus their attention on the causes and not the symptoms. If a worker chooses to work for a sweatshop, which probably has pretty poor working conditions, it means that all other alternatives were even worse. SLAP and others often advocate sweatshops paying a “living wage,” but this will inevitably create and insider problem, where already hired workers are paid very well, but other potential workers who would are willing and able to work for those wages or lower are unemployed. The usefulness of higher income decreases as income increases so, if anything, SLAP should implore sweatshops to hire as many workers as it possibly can instead of paying a privileged few higher wages.

Canada recently announced a ban on incandescent light bulbs which are significantly less efficient than fluorescent lighting (link). Such bans are getting more popular, California and other places are considering similar bans, likely because of concerns about global climate change and other pollution concerns.

This specific ban on incandescent lighting might or might not be a net gain for society; I won’t speculate, but bans on energy inefficient items don’t address the root problem. Inefficient use of energy isn’t inherently immoral; Inefficient energy use is a problem only because energy prices do not reflect the social costs of energy production. Most energy production releases CO2 and other more local pollutants into the atmosphere which harm bystanders, but producers don’t have to pay those harmed by those pollutants so energy prices aren’t affected. Environmental activism and legislation should focus on correcting this, charging polluters for the harm they inflict on others. Of course, this isn’t easy; a lot of research is required to figure out the costs of such pollution, and it is not as dramatic as banning sources of inefficiency, so there isn’t as much political capital to be gained, but result will be much more natural and doesn’t require undue arbitrary government intrusion into the private sphere. Such taxes will also help solve a host of related environmental problems, everything from poor engine efficiency to methane emissions from garbage dumps. Imagine how much more attractive wind power would be if the price of energy from coal doubled or how much less attractive an H3 would be if the price of gasoline were $7. Taxing pollution for the harm it inflicts on others will let society figure out works and what doesn’t instead of planning centrally what harm to allow and what to disallow. In the long run, pollution taxes will be cheaper and more effective than specific regulations and bans.

New York mayor Michael Bloomberg has proposed 3-year pilot congestion pricing program for drivers using the busiest parts of Manhattan during the busiest times (link), as part of his PlaNYC proposal package aimed at creating “A Greener, Greater New York.” The congestion pricing scheme, which would charge cars $8 and trucks $21 a day, is ironically the most controversial proposal in PlaNYC; of the proposals in PlaNYC, congestion pricing is the most clearly economically sound proposal.

Economists have long noted that road congestion is caused by the fact that drivers to not bear all of the costs of their decision to be on the road. Consider a highway through a city. When there are a small number of drivers using it, it is faster than driving on side streets, but each additional car driving on the highway slows down the other cars on the highway a small bit. Unfortunately, the costs, mostly in the form of time used in driving, that each driver experiences as a result of their decision to use the highway do not reflect the costs to other drivers, so as long as the highway is faster than using side streets, commuters will choose to drive on the highway over driving on the side streets. The result is that if there are a large number of people who want to drive somewhere, the driving on the highway will be almost as slow as driving on side streets, which is not what we would like. There is a equilibrium point, however, where the highway is still faster than taking side streets, but the net benefit to an extra driver on the road would be slightly less than the costs to the drivers already on the road. This is the state that congestion pricing tries to achieve. Charging additional drivers for the costs they impose on drivers already on the road allows drivers to make decisions that are good for everyone.

Such congestion charging already takes place in other cities around the world; Singapore, London and Melbourne and many other cities practice some form of congestion pricing. The systems vary in implementation a lot, but most if not all have shown marked improvements in road usage. The Singapore uses one of the more advanced systems (link), and more flexible systems based on GPS are being developed (link).

NYC is fortunate to have a mayor interested in good economic policy, even if it is initially unpopular.

Update: Here is a small summary of road pricing in different cities around the world.

Bryan Caplan of the blog EconLog has a new book, The Myth of the Rational Voter (some good comments over at MR).

I really need to learn more about public choice theory. I am studying economics and am often cynical about our cherished system of elected representation, so it would seem only natural. Churchill was partially right — democracy is better than other forms of government, but there is an even better way for most of the decision-making in society to be conducted, the market. To a large extent, putting more decision-making into private hands would improve this or any country. Some exceptions would be correcting externalities, national defense, and the legal system (though I’m always open to more radical ideas).

Read the rest of this entry »

This blog is going to be about economics and occasionally political philosophy. We are two undergraduate students at the University of Washington. We enjoy discussing economics so we decided to start this blog to share any questions, observations or insights we have.