The Filter^

BEER & BOOKS

I've a collection of several essays, handwritten, from those glorious days in Roscoe & Gladstone. The name sounds grander than it actually was, but you'll be pleased to know that the tutors remain total losers:

I'm in the third year of a Geology and Physical Geography degree. Apparently that means I enjoy looking at rocks. Not true!

Nice one Dave... The uninspirational tutors displayed a telling lack of scholarship - no culture of learning, and an absolute void of a collegiate atmosphere. And so, we created our own, a candle/conception that would become enflamed within the mad walls of 47 Greenbank Rd, and flickers still today here on The Filter^ (Thomas, James, Andrew and myself all lived together throughout university).

Conolly, on the right of Evans (rare)

I'd sit at my desk, back in 1999, writing essays, by candlelight, to the outside noise of vomiting and general debauchery. I'd turn up for lectures wanting to learn more, a condition that others found amusing. I still remember bumping into Stephen Lai, in The Cambridge, and discussing Cambridge economics, and really being glad to have found someone willing to tutor, teach, and encourage my unsophisticated enthusiasm.

Thus far, i've presented "our group" as being an enclave, on account of the seriousness with which we studied. A type of outcast, excluded from the rumble of the adolescent trouble flowing around us. But it wasn't like that - Randolph Quirk made sure that we were feeling the pulse of glorious intoxication. Strolling through the streets of Liverpool - pineapple in hand - like caged spirits, literally. It was in pubs that we thought, and planned. That's where the ideas came.

I've always been uneasy about the books vs beer distinction - the impression that work and play are at odds. In the words of Gavin Ekins, people who work hard and play hard wake up drunk! That's indeed true, but waking up drunk is better than going to bed sober.

All I'm trying to say, is that books and beer are compliments. My Rational Addictions are intertwined, and soothe and cojole any modicum of talent I possess. I had a slight book buying binge today, picking up Emile Durkheim, Selected Writings; Max Weber, by Reinhard Bendix; The Doctrine of Saint-Simon; Extraordinary Groups; Economics: An Awkward Corner, by Joan Robinson; The Economist as Preacher, by George Stigler; and The Thrust Toward Technique. And all for just $1! Usually it's the book fetish that costs me the most, and the alcohol intake that's relatively cheap. And there'll be a beer buying binge this weekend, because in my research I'm in need of a BLAST.

The process of Drunkeness is Schumpeterian: creative destruction, innovation, blazing thoughts rapidly cradled. Swirling along with geniune fear that these plans now being made might be lost, you can envision with clarity what you've always been groping for, as the flashing lights perspective  kick home. Dorset Police had anice flyer up in Bournemouth asking:

lively and intelligent?
or
lairy and intolerable?

WHICH ONE ARE YOU?

Ripped off the wall and in my back pocket, notes scribble all over the back, as I make my way home. For the morning...

The next morning begins with a slump - the hangover - the unfortunate aftermath of crouched back and gasps for water, a cup of tea, maybe a nice full English... According to convention the "night out" has two stages: being drunk, then being hungover. But if this were true it would be a fall less intoxicating experience - there's a third stage, called "ALERTNESS RETURNS".

As the physical body starts to recover, and you lie on the sofa with each blissfull stretch of limb, and permit the stretching of mind, all those plans and ideas generated vociferously return. You look through your trouser pockets and notice the little missives that trace out your night and map your lubricated thoughts. You respond to them, fulfill them, and align intention with action. A Kirznerian agent of arbitrage, you stroll through the scenes of mental devastion, tidying up, sorting, arranging. It's like knocking over a bookcase, repenting, and then returning items to the shelf.

And that is why BOOKS & BEER are bedfellows. How each impacts the other, to create the ebb and flow of mental tides. We all live within peaks and troughs, and there's nothing like a night on the lash to blast through monotony and stir up substance. Cheers.

Transitional Gains Trap

Tomorrow night Everton host Dinamo Bucharest, hoping to overturn a 5-1 deficit. In all likelihood it'll be our last stint in Europe for a while, but if we do manage the impossible we'll need two things to happen.

Firstly, an early goal. Football is all about momentum, and the best managers are those who stop ruts before they develop, and know how to sustain ones that do. Moyes seems willing to overlook recent results on account of our good performances - the assumption being that if we keep plucking away the rewards will come. Unfortunately that's a bad strategy, because before you now it 5 games have passed and you're bottom of the league. A good manager knows when we're dipping below the results that we need, and takes action.
To be fair to Davie he is changing things around. Not radically, but he's not persisting with the same forward line. We'd all like to see a return to 442, but to abandon it without the right personnel would be wrong. I don't think for a minute that David Moyes is as unconcerned about recent results than he's making out, and I praise him for that. Most football fans expect managers to act the same in public as they do behind closed doors. They think that football clubs should be transparent, since we the fans deserve honesty. We do, but public information can undermine efforts to reform. The best strategy for Moyes is to keep fans calm, claim all is well, divert any question of "crisis", whilst working to buggery behind closed doors at changing things around.
Tim Cahill, Marcus Bent, Leon Osman and Simon Davies have all looked capable of scoring this season. We're not firing on all cylinders, but there's a lot of pent up aggression in this team. If we can score an early goal I have confidence that there are at least 4 goals in this team.
So to win, we need an early goal. 2-0 at halftime, and anythings possible. That should be the aim.

But breaking through our goal-shyness requires another major factor: the crowd. When Goodison Park rocks it's inspirational and unique. Which is why we need a full house. The club, however, have incurred much wrath for having refused to sell tickets on the night, and kept them at the standard price of £25. Understandably there's a consensus among those who've yet to decide whether to go, that prices should be slashed to ensure a packed stadium.

The problem is that thousands of tickets have already been sold, and have been sold for £25. If the currently unsold tickets are reduced to £10 we might get twice as many fans, but those who've already spent £25 will be rightly annoyed that they've had to pay more. The solution might be to refund the difference, but £15 for every ticket sold is a hell of a lot of money for the club to refund. And this is the transitional gains trap. We can all see that starting from right now, we're better off if the club reduces prices. Unfortunately they've already sold a ticket worth £25, and those who bought them will want to protect the value of that purchase.

Similarly, we might look at the taxicab medallions. When the government handed out the rights to own and operate a taxi, it probably seemed pretty innocuous. But over time those medallions, and the right that they represent became valuable - due to a restriction in the supply of taxis. Forget what you learned at A-level economics that a monopoly is a single firm, a monopoly is the restriction of new entrants into an industry. So it might seem to make sense now to liberalise the taxi industry, and allow new entrants, but those with medallions would be willing to pay up to the value of their medallion (about $300,000 for NYC) to block such reforms. And who ultimately benefits? Well not even the medallion holders, since they'd have had to buy it at the market rate, and hence only earn normal profits.

So the granting of a certain rights can come back to bite you. An institutional barrier can prevent good ideas from being implemented, and should make us very wary of granting exclusive access to various streams of income.

As for Everton, they should just give fans that already have a ticket an extra one for free, and let them sell it on.

Lowdown on the Hoedowns...

It seems that I'm not the only person to be a little argumentative lately...

On the issue of racial undertones to the debate on South African land reform, it's Owen Barder vs this Samizdata post.

And the integrity of TechCentralStation is at stake in Our Word is Our Weapon's attack on Tim Worstall.

As ever, don't neglect the comments.

Matthew

Today I received this email in my hotmail inbox. Not junk or spam or anything, just straight in there alongside messages from my mum and tesco online. It came from Linda McFadyen and the subject was simply 'Matthew':

You still ok to get Matthew today?

I'm not at work as my car's not working so instead of taking him to your mum's i may need you to bring him over to mine.

Let me know you're still ok and i'll confirm later where to take him once you get him.

Linda

I know not who these people are, but there's something oddly sinister about that last line, don't you think?

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Defining the Polity

I recently criticised advocates of a National Health Service for being nationalistic, and alluded to my free-market tendencies. Although the distinction between capitalism and socialism remains valid, and those who promote centralised ownership must engage in that debate, I agree that it can be misleading to think in those polar terms.

I do think that government provisions that are serviced through taxation have a place in society, (and for the purposes of this article I am referring to government production, rather than redistribution). I am not advocating anarcho-capitalism. Where I differ from statists is that I object to "the nation" as being a starting point for such policies. The reason why the NHS applies to 60m people is not because that's the optimal user-level for the service, but because of wholly irrelevent population patterns that happen to occur within an arbitrary political boundary.

If government decisions are made at as local a level as possible, then we might hopefully see the benefit of Tiebout sorting. Local government, competing for the residency of a mobile population, will offer a mixture of local public goods and taxation, and the people are free to "vote with their feet". Those who are willing to pay a local tax for a clean beach will be able to do so, whilst those who'd rather the coastline were used for watersports will find a political entrepreneur willing to offer that service too.

The crucial point is that decisions are made locally, and benefits result from competing localities.

Tiebout's model doesn't deal with "national public goods", such as defense or law. For non-market provision, there would have to be a higher level of political power that has the right to decide how these things are financed and provided, but surely if we dispense nationalist thought, why would nations need different policies?

As we've become more interwined with our neighbours, and trading links have fostered friendships, we exist in a world characterised by global cooperation. Human rights are not nation-specific, and so entities like the United Nations can and should defend them. NATO demonstrates how national defense can be integrated with other nations, toward cooperative consensus. If we value freedom - free migration, free trade, free speach, Human rights, etc - then these values superscede national interest and imply global enforcement. National government only exists for trade policy to strengthen one's own countries special interest (e.g. the UK farmers) at the expense of worldwide consumers and competing (usually poorer), producers.

So governments are good for two things: the defense of universal freedom and law (which have nothing to do with location) and the provision of local services (which do). For the latter, there's no reason they should be produced at a national level with a top down authoritative approach, rather let's permit voluntary groups to emerge, allow people to opt out, and ensure that local politics is a fluid system that shrinks and grows based on the needs of it's users.

So in answer to Owen's question: What is Westminster Government For? my answer is simple: nothing.

George Boole (1815-1864)

Price of Gas

One thing struck me: after all the experts we've talked with, after all the research we've done, we still can't find out who exactly sets the price of a gallon of gasoline.  Which human being in America does that?

Bill O'Reilly (a big, blubbering vagina), is on a quest to find the person that sets the price of gas. Here's a nice lesson that points out his hopelessness, stupidity, ignorance and conceit.

Sporting Round-up

Aussie Rules:

After a great season the West Coast Eagles bravely lost the AFL final to the Sydney Swans. A thrilling game was decided by just 4 points.

Cricket:

Nottinghamshire beat Kent to clinch the county title, and ensuring that this weeks clash with Hampshire had nothing riding on it. Shane Warne was furious that Kent chased a win, and ultimately prevented a title clash at the Rose Bowl. Although only pride was at stake, Crawley hit 311 and the south coast team thrashed the new champions.

NFL:

It's week 3 and tie of the round is Patriots @ Steelers. Although American Football is stop start, as long as you anticipate the breaks in play and now when to take a swig of beer, and are watching it with someone else... i'm getting well into it.

The Nationalistic Health Service

Matthew and I are having a jolly good conversation about Healthcare. It's raised a rather fundamental problem I have with the NHS, and thought it worth mentioning in a seperate post.

The NHS fosters Nationalism.

Personally, I think healthcare provision tied to personal policies (as opposed to a socialized system) is equitable. It is fair, since we're not subsidizing the behaviour of others, and fair to the poor, since it'll be cheaper and of higher quality. This last point may sound a little sweeping, but rests on the assumptions that money will be spent more wisely, and that there'd be greater rewards for innovation. Hence a system of price being tied to usage.

Some people overestimate the number of poor, destitute, and ignorant citizens, and claim that a socialized system is the only way to ensure provision for all. Rather than a price tied to usage, they therefore advocate a system of income redistribution.

Of course the socialized system will inevitabley create the very people it's supposed to help, because when usage isn't tied to price people will overconsume. Smoking, alcoholism, obesity and countless other dangerous conditions are subsidized by the NHS, creating the very type of person the lefties claim that need an NHS! It's a vicious circle, and poor logic.

Hopefully a gradual system where private insurance makes the NHS unsustainable will help the vulnerable. But lets be clear about where they came from, and who's funding them.

So, I accept that the vulnerable exist, and hope Matthew accepts that subsidizing unhealthy behaviour might not be the best way to reduce their number.

But my question to Matthew is this: If you think the NHS is valid on the grounds that it redistributes income (and the gains from this function outweigh the gains from a system where the user pays), why should we only be helping British people?

Before I get accused of living in an Ivory Tower, and not understanding real poverty in Britain, let me make one small point: no English person has had greater experience of deprived social conditions, combined with exposure to good economics than me.*

There are no people currently living in England who face worse standards of healthcare and lower opportunties to prosper than the vast majority of the African continent. Although incapacity is a serious issue, if you are an English citizen capable of action, then you can afford to live a nutritious life.

This is not true in other countries, where deprivity is absolute, and not relative. The problem is not that some people have less than others, it's that they have nothing. So if the NHS is to be judged fondly on account of it's redictribution of income, then instead of redistributing from middle-class to working-class, why not take from the rich, and give to the poor?

To argue for a British NHS, (and the NHS is a service for British citizens), implies that "we" have a responsibility to help those living among us that doesn't extend to foreigners. Surely income redistribution would be higher if we introduced a private health insurance program in this country, maintained the same level of taxation, and sent the money raised to fund hospitals in the developing world?

I geniunely believe that private insurance is a better model to deliver affordable healthcare to the poor. But if you disagree, why should we value the lives of relatively wealthy British people above the lives of desperately poor Africans? Surely the only reason is that "we're British" - i.e. nationalism.

The point I wish to make is this. If redistribution is your goal, then why should we be redistributing to British people? Personally, I can foresee prosperity without social transfers. But if we have to have social transfers, then at least have the integrity to think in global, humanist terms.

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* I don't mean to divert attention to arguing this point... my basis is having worked for over a year in one of the poorest constituencies in the UK; and been taught economics at graduate level in a department with multiple Nobel Prize winners, with Mises on the syllabus. If you know of anyone else who can make this claim, i'll withdraw it.

Catallaxism

ATTENTION!

We will Rejuvenate the Romance of Commerce

By rejecting static motion, and embracing endogenous dynamism

Catallaxism: a fusion of art & austro-economics