Voice of Reason on the Internet

On the Hidden Benefits of the Coronavirus Epidemic (yes, there are some!)

2020-03-28T03:43:00.000-07:00

Boy am I going to get slammed for this post! Oh, well, time to be unpopular.

The job of economists is to focus not just on visible costs and invisible benefits but also hidden costs and hidden benefits. Nowhere is this more important than now as we debate reopening the economy. I would say right now that too much has been made of the visible costs and benefits that would accrue from opening the economy or keeping it closed and not nearly enough is being said about the hidden costs and benefits. As to the hidden costs of maintaining the stay in place orders, we are likely going to see increased mental health issues arising from social distancing and isolation. We are a social species and denying us physical human contact can have a deleterious effect on our health. One study suggested that not holding your baby could lead to issues that span into adulthood by negatively impacting their DNA: https://www.miamiherald.com/news/nation-world/national/article186889938.html

That being said, I want to focus on the hidden benefits that are accruing to us. With fewer cars on the road, we can see the impact on demand for gas with the plunging gas prices (I just paid $1.25 a gallon for gas yesterday). This is good news for most Americans but horrendous news for workers in the oil industry but, on balance, the good that arises from lower gas prices for a country such as ours likely outweighs the ill effects. However, with fewer cars on the roads, we also get fewer traffic accidents. With more social distancing, we were see fewer cases of influenza, a disease that also kills tens of thousands of Americans each year (please note that I am not dismissing the coronavirus epidemic at all-the problem with coronavirus is that it is more virulent than the flu, more deadly, and, unlike the flu, we do not yet have a vaccine for it, but the point is that what works to stop the spread of the coronavirus also stops the spread of the flu). With fewer factories operating, we have lower carbon emissions, which should alleviate concerns (whether they are valid or invalid) over climate change. With more people working at home, we dramatically reduce commute times and with more parents at home, children are receiving better supervision than if they were in the care of others. All of these things benefits from social isolation need to be considered before we reopen the country for business. That being said, the negatives are stark and real as well. We are currently experiencing the greatest reduction in productive capability in world history, an outcome that, in the short-run at least, will dwarf that of even the Great Depression, so no, I am not making an argument to maintain these orders to stay at home.

That being said, however, we need to be careful about when we lift these orders and let data drive our decision-making rather than emotions. We can replace income lost from idling production for a short period of time (now if this goes on for more than a few months, we are definitely going to be in trouble but all indications are that we will be able to relax these restrictions if we can flatten the curve and thus contain the spread of the virus). We cannot replace lives that are lost or time that is lost from being with our children. So use this time that you are staying at home productively and re-connect with your kids if you have been lax about that. The time we spend with our children cannot be replaced, it cannot be deferred, and it will not accrue with compounded interest, unlike your income or wealth.

Why we need to stop worrying about the deficit (for now), stop worrying about who gets paid (for now), and just pay everyone (for now)

2020-03-28T03:15:00.001-07:00

Regular readers of this irregular blog know that I am very concerned about the deficit and want government first and foremost to be fiscally responsible. I do not want to spend money unnecessarily and I want us not to waste it by paying people who do not need it. However, there is a good, a bad, and an ugly way to do this when you have a crisis such as we are in now. The ugly way is to try to balance the budget on the backs of those who are suffering (and indeed to try to have a balanced budget at all -- that is such a horrific idea in a crisis that few, if any, would embrace such a position at this point unless they were required to do so by low - for further details on this, see my original blog positing back in 2011 on "Why No No Taxes and 'Cut, Cap and Balance' is a Horrible Idea (from a Conservative Perspective)" but I digress). The bad way is to target relief to only those who "truly need it" such as we are currently doing. The good way is to pay everyone and then tax back the gains from those who do not need it at a later date as opposed to designing a large bureaucracy to figure out who is "deserving" and who is not.

Part of this is because there really is no good reason to develop such a bureaucracy in the first place. All that bureaucratic tape is wasteful, almost by definition, especially since you can tax back the gains on the other side and it introduces severe distortions and disincentives known as "benefits cliffs" that need to be approached with caution. Furthermore, the government can not know a priori what is happening right now. They can only now in arrears. However, circumstances can change quickly and if you give out aid to everyone and simply tax them after the fact you can account for that. Trying to determine whether someone needs it before the fact is much harder to do and introduces the problem of adverse selection with people engaging in behavior to make them APPEAR to be needy when they are not.

In crisis times, such as we are having right now, this problem is only magnified. Paying people based on their 2018 or even their 2019 incomes does not account for what their current income is and it is their current income and only their current income that matter right now. Another key issue has to do with the alacrity by which you deliver relief and with targeted relief the issue is that the more you target relief, the more bureaucratic red tape you have to go through, and the slower the actual gets out. As for why we should not just give money to the unemployed, there are people who still have jobs but who have had their hours (and incomes) cut as a result of this unprecedented crisis. While in 2007-9, we could point fingers at individual companies who caused it, this time the collateral damage is much greater and a lot of it has been caused by government orders that have shuttered 60% to 80% of all businesses in this country. That is not to blame the government. They did what they had to do to contain the virus (although they could have acted quicker both with the orders and the stimulus and if they had we might have already been emerging from this. However, they didn't and everyone else is left holding the bag).

What we really need to do is pay everyone a basic guaranteed income for the duration of the crisis and then figure out who didn't need it after all is said and done by making people pay it back over the next 3 to 5 years if they did not need it. Of course, in addition, we will all be paying it back for the next generation due to the larger budget deficit, which is why I am upset that we do not have guardrails on regarding the deficit during good times. I actually warned about this back in 2011 when I argued that "Why "No New Taxes" and Cut Cap and Balance is a Horrible Idea (from a Conservative Perspective)" but my fellow conservatives did not listen. As soon as they got into power, they merely decided to one-up Democrats and become the only truly fiscally irresponsible party in our country because fiscal irresponsibility onlyexists when you blow up the deficit during a fiscal expansion (for all the Democrats talk about being fiscally irresponsible by proposing socialistic ideas when they are out of power, they really do not act fiscally irresponsible when they are in power, unlike Republicans who talk a good game when they are out of power but who refuse to play it once they get into power - the utter hypocrisy of Republicans on this point makes me sick).

Now none of this means that I support Democrats in their policy aims because they are even more interested in simply providing targeted relief than are Republicans but unless and until the Republicans turn away from Trumpism and re-embrace conservatism by becoming fiscally responsible and promising to attack the deficit with a vengeance once this crisis is passed and only if they they actually follow through on that promise, I won't be voting for Republicans in the upcoming election. Not going to lie, I won't vote for Democrats either (I will vote Libertarian) but I would be happier with the Democrats in power since in recent history they have been better at fiscal conservatism than Republicans have been (though even Democrats need to be a lot more fiscally conservative going forward if we are going to extract us from this mess).

For those who want to read what I had to say about the last time we got ourselves into this mess (and thus prove to everyone that I am, in not anything, quite consistent on this point), see http://voice-of-reason-on-the-internet.blogspot.com/2011/07/

Why the "Abortion is Murder" Position can be Problematic

2019-03-05T17:42:00.004-08:00

I happen to be pro-choice but I think I should lay out the legal problem faced when anyone argues that “abortion is murder” but then turns around and tries to argue that it is acceptable in the case of rape, incest, saving the life of the mother, ensuring the health of the mother, or for birth defect reasons. Perhaps I am missing something that people who are pro-life think, but do believe that it is important to deal with this from the standpoint of the law and why the “abortion is murder” argument is highly problematic for those who want some exceptions (it is perfectly consistent if you demand that there be absolutely no exceptions whatsoever regardless of the circumstances, though this does lead to a different problem and that is the denial of the mother’s agency, but I will leave that for another time and place).

Necessity is different from self-defense. One can never murder a person simply in order to survive even if the only way to survive is to terminate the life of one of the individuals. For example, if you were in an escape room with eight others and the only way to escape the room is to have one person murdered (you are not allowed to kill yourself to save the others), the law would treat this as a murder, even though, by necessity, the only way for seven of you to survive is to kill one.

On the other hand, if someone does try to kill you so as to escape the room, you are permitted to defend yourself since self-defense is a valid defense to murder. Thus, ironically, the only way out of such an escape room is to kill the person who is trying to kill you.

Since fetuses do not try to kill their host mother, self-defense is not a valid defense even to save the mother’s life. However, if the mother were to try to kill the fetus, the fetus would under the law be allowed to then kill the mother in self-defense. This presents a problem, of course, since the fetus often cannot survive without the mother.

Hopefully, this comment helps people understand the issue that pro-life individuals need to face when dealing with the exceptions of rape, incest, and saving the life of the mother, which is why there are really only two tenable positions in the pro-life/pro-choice debate: either you believe that abortion is murder, in which case there can be absolutely no exceptions, or you believe that abortion is not murder. If you believe that abortion is not murder, you may still set limitations on abortion but these then must be based on public policy arguments (i.e., likely a utilitarian calculus).

To understand from where I get the “necessity is not a defense to murder” argument, please see the court case of R v Dudley and Stephens (1884).

The Complicated Story of How Much Twenty Dollars Actually is with Respect to the 7th Amendment to the US Constitution

2019-03-04T08:10:00.001-08:00

The 7th Amendment to the US Constitution provides that "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."

So what does this mean? Well, going by the Coinage Act of 1792, that established a dollar as being at parity with the Spanish dollar (after considering the wear and tear on the coin), it might be that we ought to use the current rate of silver to establish what a proper value is in interpreting the clause. However, there is a problem:

The Constitution actually says “twenty dollars”, not 20 dollar coins. Why is this important? Well, the same Coinage Act of 1792 allows for the minting of $10 GOLD coins (called Eagles) that weigh 16.04g pure or 17.5g standard gold. So there is actually a discrepancy and thus it is subject to interpretation whether in a world where the value of silver and gold fluctuate relative to one another (sorry – the US Constitution really cannot change that singular fact). Given the current world price of Gold and Silver, we can EITHER choose to use gold OR silver. I think it is best to choose gold. As I write this, the value of silver is a mere $0.49 per gram of pure silver based on federal reserve notes (I will leave the Constitutionality of fiat for another day but let’s just say that we are using our current fiat money for sake of argument). That leads us to a value today in terms of the 7th Amendment of $0.49/g x 24.1 x 20 = . $236.18.

Oh, and the coinage act allows us to use copper for pennies, which at $0.01/g x 17.1 x 2000 = $342.00

Finally, we can use gold, which based on today’s value would lead us to a value for the 7th Amendment of $41.63 x 16.04 x 2 = $1,335.49.

Now let’s compare that to what the value would be in dollars based on inflation rates (and thus allowing for fiat currency and a strict literal reading of “dollar” but placing it in terms of real value from the Coinage Act of 1792):

$100 in 1792 is equivalent to $510.67 based on the data from this website: https://www.officialdata.org/1792-dollars-in-2017

Hmm….maybe our fiat money isn’t so bad after all in terms of holding up its value relative to gold, silver and copper as we might at first think.

Oh, but it gets EVEN MORE INTERESTING. Why? Well read Article I, Section 10 of the US Constitution that states:

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

So the Federal government was issuing a coin (in copper) that could not be used as “a Tender in Payment of Debts” in any state. Hmm…. Seems like those copper coins were a problem….

In any case, though, it makes sense to use gold, not silver, as the basis for addressing the 7th Amendment because there literally is nothing in the US Constitution that says that we ought to base these decisions on the price of silver. This is also true because a twenty dollar GOLD coin (called a Double Eagle) was used in Spain at that time. The whole “regulate the value thereof” clause was designed to maintain a silver coin’s parity with gold, since you can really only have one standard, not a bimetal standard unless the price of gold and silver are in a fixed exchange rate. Unfortunately, they are not and they cannot be made to be in a fixed exchange rate.

Indeed, the mere fact that the $10 coin was a gold coin argues that the Constitutional provision should be read with gold, rather than silver, in mind.

Can a completely free economy that conforms to the classical liberal ideal be successful?

2018-03-07T08:00:00.000-08:00

There are two problems with this question. The first problem is the definition of the word, “successful”. What do you mean by that? The second problem is the conflating of two similar, but nevertheless separate and distinct, ideas: “a completely free economy” and “Classical Liberalism.".

While the answer to whether it will be “successful” depends on your definition of success, the problem of your conflation of the two ideas means that “a completely free economy" cannot be a “Classical Liberal” economy. Classical liberalism traditionally requires some laws regulating trade, though these the minimum actually necessary to do so, and that furthermore such laws are neutral ones with respect to trade. That means that while a classical liberal economy would not provide for a minimum wage law or for anti-cartel legislation, it also would not prevent the formation and functioning of labor unions. Here is what Adam Smith wrote on cartels but which equally works for labor unions:

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”

Now read this carefully because it isn’t something that most conservatives want to admit but this passage applies equally well to business cartels or to labor unions. Both are anathema to liberty and yet legislating against either would also be anathema to liberty. Instead the government should neither favor the producer nor the consumer in such matters. As John Stuart Mill wrote:

“[T]rade is a social act. Whoever undertakes to sell any description of goods to the public, does what affects the interest of other persons, and of society in general; and thus his conduct, in principle, comes within the jurisdiction of society... both the cheapness and the good quality of commodities are most effectually provided for by leaving the producers and sellers perfectly free, under the sole check of equal freedom to the buyers for supplying themselves elsewhere. This is the so-called doctrine of Free Trade, which rests on grounds different from, though equally solid with, the principle of individual liberty asserted in this Essay. Restrictions on trade, or on production for purposes of trade, are indeed restraints; and all restraint, qua restraint, is an evil...”

Yet, even still, what to do about what we refer to as “natural monopolies”, those ones that naturally would arise out of a monopoly? Well, Adam Smith has an answer there as well:

“A monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly under-stocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate.”

Now notice what this would entail if carried forth properly. There could be no government monopolies granted, such as you see in cable television, water, sewer, etc. So does that mean that we have a “completely free economy”? It certainly sounds like it, right? However, go back and read what Mill write, “under the sole check of equal freedom to the buyers for supplying themselves elsewhere.” Where monopolies do arise, for whatever reason, there is definitely a right asserted under classical liberalism that such monopolies can be regulated. Thus, while governments ought not grant monopolies, I see nothing in Smith, Mill, Ricardo, or any other proponent of classical economics and classical liberalism that monopoly power cannot be checked to some degree.
There are further limitations placed by classical liberalism on trade even though it is not something we always put forth. Classical liberalism does not allow for force or fraud in economy dealing or political matters. Certainly if I am not allowed to defraud you that is a limitation on my “freedom” but that is because freedom itself cannot be used to infringe upon the freedom of others. Similarly, you do not have the “freedom” under classical liberalism to break contracts without being liable to being hauled into court and forced by the government to provide compensation based on the harm that you caused the other party. Classical liberalism in these regards simply does not allow for a “completely free economy.”

So let’s get back to your original question, as asked. Yes, an economy based on classical liberalism absolutely can thrive and indeed, the ideals of classical liberalism are found (for the most part) in America’s founding document, the US Constitution, and these same ideas were present in Great Britain during the first half of the 19th century. The problem occurred not with classical liberalism but rather from deviations from it. The major industrial companies that rose in the latter half of the 19th century obtained their monopolies through government intervention initially by the railroads (countermanding the express argument that monopolies ought not be granted by government). Interestingly, the classical liberals had a solution to such matters as well. Please read Adam Smith, once again, on infrastructure. If you read this carefully, you will find that Adam Smith, while preferring private ownership to public ownership, nevertheless did not allow such infrastructure to be billed out without some regulation as to its pricing:

”When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tunnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works.”

So that helps us take care of bridges, highways, and railroads. Note that even if private owners were
put in charge of such things, classical liberalism definitely allows for regulation of the pricing of infrastructure.

What about “natural monopolies”, those parts of infrastructure that naturally would occur and how do we deal with the case where individuals cannot pay the costs of such infrastructure, what then? What about, for example, individual streets within a city? Does it make sense to set up a toll road everywhere? How about the provision of water or sewer service where we wish to provide it to the poor for purposes of health and safety and yet the poor cannot afford it? Once again, Adam Smith provides the answer:

“Even those public works which are of such a nature that they cannot afford any revenue for maintaining themselves, but of which the conveniency is nearly confined to some particular place or district, are always better maintained by a local or provincial revenue, under the management of a local and provincial administration, than by the general revenue of the state, of which the executive power must always have the management. Were the streets of London to be lighted and paved at the expence of the treasury, is there any probability that they would be so well lighted and paved as they are at present, or even at so small an expence?”

So, we have taken care of the problem of monopolies (do not grant them or if you cannot avoid them due to the natural monopoly occurring, do not allow their monopoly to be used to fleece the public but instead require their monopolies to be in service to the public). We have also now placed capital and labor on equal footing by allowing both cartels and unions and thus checking each group’s power against one another (though we should not encourage the formation of either). We have stopped trade based on fraud or misrepresentation. What else is there?

Are you worried because workers aren’t going to be paid enough to live? Whose fault is that? Do the workers not have the right under classical liberalism to form a union? They do such a right. Do the workers not have the ability to work elsewhere? They do have such an ability. Furthermore, do not forget that if you set up a law that provides that workers are guaranteed a minimum income, what about the workers who work for themselves? Should they not be guaranteed a minimum income? Why are they disadvantaged in such matters merely because they work for everyone rather than for one person? What about the capitalists? Why are they not guaranteed a minimum profit? After all, most owners of businesses today make little or no more than workers do because businesses are small sole proprietorships.

Are you worried that people will not be able to rent? You should know that classical liberals detested landlords arguing that “they made money in their sleep.” Yet how would you deal with it? If you regulate the rent to be charged, the landlord can merely refuse to rent but instead will sell. That will ensure less space for the poor and more for the rich. Once again, do people not have the right to move elsewhere? Do people not have the right to buy their own property? Do people not have the right to do with their property what they will?

It is the fundamental restrictions on liberty that leads to economic desolation. Look at what happened after “land reform” in Zimbabwe - the bread basket of Africa became a wasteland of famine.

Zimbabwe's Man-Made Famine

Really, my question would be to turn this whole question around: is it really possible to say that societies that have eschewed classical liberalism can be successful?

The fact is that prior to classical liberalism become the mainstream political thought in the 19th century, living standards for ordinary people worldwide had been stagnant for thousands of years. The ordinary Londoner in the 1750s was only marginally better than the ordinary Roman at the time of Jesus:

“Until 1500, as best we can tell, there had been next to no growth in output per worker for the average human for millennia. Even in 1800 the average human had a material standard of living (and an economic productivity level) at best twice that of the average human in the year 1. The problem was not that there was no technological progress. There was. Humans have long been ingenious. Warrior, priestly, and bureaucratic elites in 1800 lived much better than their counterparts in previous millennia had lived. But just because the ruling elite lived better does not mean that other people lived any better. Only after 1800 do we see large sustained increases in worldwide standards of living.”

Source:
Delong - Economic Growth and History

What happened when classical liberalism was in ascend during the 19th century was astounding and it continued well into the 20th century:

“Average rates of material output per capita, which grew at perhaps 0.15 percent per year between 1500 and 1800, grew at roughly 1 percent per year worldwide between 1800 and 1900 and at an average pace of about 2 percent per year worldwide between 1900 and 2000.”

Now it is properly noted that classical liberalism was in retreat in many nation states between about 1930 and 2000. However, it remained the major force for global trade restriction reductions that have driven economic growth in most countries and have propelled our worldwide income increase in the past 70 years. Today, we are starting to see the manifestations of a retreat not only at the nation-state level but also on the global level in terms of free trade. This should worry all of us because it is the (fairly) unfettered ability to trade freely that has lifted economic standards for billions.

You might not like the distributional consequences of classical liberalism but no system is perfect. Yet, all classical liberalism actually did was unleash economic growth. How that growth was distributed was the result of societal structures that transcend the classical liberal framework. Yet rather than rectify these societal structures that have little to do with classical liberalism, we create laws that restrict the very economic growth that has lifted billions out of poverty. Those of us who are classical liberals would argue that the cure for such distributional consequences may be worse than the disease.

So how would this classical liberal “fix” the distributional consequences? The easy and desirable answer from my perspective is not to do it at all. Distributional consequences are a natural byproduct of liberty and is it not better to have more than you otherwise would (and we all have more thanks to the ability to freely trade) even if your neighbor has much, much, much more? Why are you so concerned with what other have rather than just be thankful that you have more than you would have under a system that restricted, or even worse, eschewed, individual liberty?

However I realize that is not a satisfactory answer for most people. That is why I favor, if I must do something about it, the promulgation of a negative income tax (aka guaranteed minimum income). What I am not willing to do, however, is provide bountiful public services and subsidies across an array of goods because I personally think that the poor ought to have them. Give them money and allow them to decide for themselves what they want, whether it be healthcare (beyond certain minimums such as provision of vaccines that protect us all and emergency care that really is not a transaction between a willing buyer and a willing seller, both able to go to a competitor if a meeting of the minds cannot occur), food, or shelter, all of which are now provided to some degree by the state through direct intervention, subsidization, or voucher programs. If someone wishes to have a smaller living space in order to eat a little more, who am I to say otherwise? Who am I to dictate that one must eat a certain proportion or amount of foods and if those foods are not to nutritional standards, even if they are still food, who am I to say that you cannot have such food? After all, I do not place restrictions on what the middle class may procure so why am I assuming that just because someone is poor that somehow they are also mentally incompetent? Similarly, who am I to dictate that you may not reside in a particular home because I deem it of squalor when I am not willing to preclude everyone regardless of income from doing the same. When we place restrictions on what one consumes, solely on the basis of income and the fact that someone is granted something from the public purse, is this not the very height of arrogance and hostility to the poor?

Would your answer change if you were somehow legally obligated to those 200 people? Say you were a doctor who was in charge of those people?

2018-03-07T07:44:00.001-08:00

My thanks to dhruv on a most excellent question!

That does APPEAR to pose a problem, doesn't it? However, then the question is a Hobson's Choice: you clearly have a legal obligation to your own family as well!

Let me pose you a different question: would you save one of your children over another given that if you do not choose, you lose them both?

Can you be found morally wrong for choosing one life over another when you cannot save both? I actually do not think that you can.

Such was the issue in the movie, Sophie's Choice, and her choice haunted her for the rest of her life. However, the choice to give up the daughter rather than the son to the Nazis was not the real dilemma. It was her willingness to engage with the vile Nazi in the first instance. By attempting to curry favor with evil, she caused the loss of her daughter.

Still, what you ask is an excellent question. I am not a believer that one should merely do things because the law demands it - after all, the law itself could be immoral. If I strictly chose to follow the law in all matters, that would have made me a deontologist when it comes to ethics. Instead, I evaluate things through three different lenses and ask three different questions:

1. What does the law require of me? In the case of your question, the law requires that I save both but I cannot save both. If I help the 200 random strangers, I have actually committed murder of my child. If I help my child, I have actually murdered 200 random strangers. While one has more people than the other, the piling on of murders is, strictly speaking, not a legal question but rather a question of consequences, which I will detail in the next question I would ask. As such, the law's requirements are immaterial. DEONTOLOGICAL ETHICS DOES NOT HELP ME HERE. Note, however, I would still argue that under natural law, I owe a greater allegiance to my own kin than to any stranger, so deontological ethics actually STILL suggests that the very question itself is wrong - I cannot owe a greater legal responsibility to others than to my own flesh and blood but, for the sake of argument, I will allow us to consider this equal balancing of responsibilities and see how it plays out.

2. What about the outcome of it all? Pure utilitarian ethics suggests that I ought to save the 200 random individuals, I am obviously not a pure utilitarian. Still, the problem is that I now have a legal obligation to both groups. Having earlier rejected the saving of 200 random strangers, we now must weight carefully this decision. From that utilitarian calculus, it would strongly suggest that we ought to value 200 lives over 1. CONSEQUENTIALIST ETHICS SUGGESTS HELPING THE 200 PEOPLE.

3. Could I respect my decision later? If I were to choose the random strangers over my own child, I could not respect that decision. I would consider myself to be a bad person for having done so. I would not in the least regret the loss of life of 200 to save my 1 child provided I have merely refused to assist as opposed to actively decided to kill. VIRTUE ETHICS SUGGESTS SAVING MY CHILD.

So now I have the ultimate issue for me: I use a three-legged stool (deontological ethics, consequentialism, and virtue ethics) approach to ethics. When all three are in alignment, I know that what I am doing is ethical. When two of the three are in alignment (as in my previous example), I know that it is more likely than not that it is the correct decision. When I have a split, ethical considerations suggest that neither side is more ethical. It ceases (for me) to be an ethical question at all. That means that I would still choose my child. If it is not a question of ethics, then it is not unethical to do so.

Yet, your question does pose an interesting alternative scenario: why I am willing to allow 200 people to die but not to even actively murder even 1? Let us return to how this differs from when I said that I would not murder another to save my child:

The real point would be whether I am legally obligated for the murder of my child or not if I refused. I a madman is holding my daughter hostage and demanding that I kill someone else or else he will kill my daughter and assuming that I literally cannot take action against the madman (always the preferable course of action!), then the question is: would I be legally responsible for her murder if refused to carry out the murder of say ONE people to save her? The answer from a legal perspective is clear: I would not. Thus in that case deontological ethics says "don't murder", consequentialist ethics is neutral (one life is no different than another - but note that if there is the murder of more than one, the calculus decidedly goes in favor of the strangers), and virtue ethics also says "don't murder" because while I would love to have my daughter in my arms, I would definitely not be able to respect my decision to murder 200 people even to save my own child.

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Finally, let us consider the perverted regime where the law and morality are not in alignment. This is really the only scenario where I make an "unethical" choice from the perspective of my ethical framework:

You see if my legal obligation is to strangers MORE than my own kin or even EQUAL to my own kin, I would have to say that the "law is an ass" in the case. I would now have to appeal to natural law over manmade law. Once again, under natural law, I owe nothing to others except in the special relationship that exists within the family. As such, I would never owe a duty to 200 strangers that could possibly override my duty to my own family. That is how I would "solve" this "problem".

From Adam Smith, The Theory of Moral Sentiments:

“Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity.

He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquility, as if no such accident had happened.

The most frivolous disaster which could befall him would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others?

It is not the soft power of humanity; it is not that feeble spark of benevolence which Nature has lighted up in the human heart that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration.

It is from him only that we learn the real littleness of ourselves, and of whatever relates to ourselves, and the natural misrepresentations of self-love can be corrected only by the eye of this impartial spectator. It is he who shows us the propriety of generosity and the deformity of injustice; the propriety of resigning the greatest interests of our own, for the yet greater interests of others, and the deformity of doing the smallest injury to another, in order to obtain the greatest benefit to ourselves.
It is not the love of our neighbour; it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.”

Would you rather save your child and let 200 random strangers die, or save the strangers but let your child die? Why?

2018-03-04T08:17:00.002-08:00

I save my child. Every single day I “let” thousands of people die because I do not save them. That doesn’t mean I could save them but I still did nothing to try to stop them from dying and I do not think a second about them. However, my children are precious to me and I would do anything I could to save them that does not involve murdering another*. If I am in a position to save a person at no risk to anyone else other than myself I will try to save them but if I am asked to choose between one or more individuals, I refuse to employ an objective utilitarian calculus based on pure numbers. If I have to choose who to save it is based solely on their relationship to me. If the two groups are of no importance to me, I will choose the group that is easier for me to save. If saving them requires equal difficulty, my choice will be whichever group is to my right (because I am right-handed), even if that group is smaller in number. After all, the life of those 200 strangers you saved could include a child who grows up to be just like Hitler while the child would died would have grown up to be just like Gandhi and if you consciously saved Hitler and allowed Gandhi to die using a utilitarian calculus based on the greatest number of individuals to be saved, how could you live with yourself?

*Refusing to intervene to save someone is not murder in most cases. I have no legal duty to save the life of another person except for someone who is legally connected to me such as my child. In other words, my legal (as well as moral) duty is to save my child and not the 200 random strangers.

You have 10 minutes to go back in time to talk to a younger you. What do you say?

2018-03-01T21:13:00.003-08:00

I don’t. While it might be great to tell myself what the winning lottery numbers are or about what stock to pick or how to deal with relationships, simply talking to my younger self could invoke a serious time paradox that would cause the entire universe to be destroyed. After all, the action of talking to myself would have one of five consequences:

I listen to myself and thus change my life in such a way that there is no reason for future me to talk to past me, so that future me does not talk to past me, so that past me does not hear from future me, and the whole exercise never happened in the first place.

2. I listen to myself and thus change my life in such a way that there is STILL a reason for future me to talk to past me, so that I have to do this whole episode AGAIN and we stay in this loop until either outcome 1 or outcome 3 occurs.

3. I do not listen to myself and do everything the same anyway, which means I just wasted 10 minutes of my future life.

4. My past self listens to my future self but this causes a creation of multiple universes with my past self doing really well but my future self never realizing any such benefits because I did not affect my past self in this universe but merely spawned a new one.

5. The entire fabric of the space-time continuum collapses onto itself resulting in everything falling into the void.

My money is on the fifth outcome.

Press a button and a child dies but the world lives. Don't press the button and everyone dies. Which one would you choose?

2018-03-01T21:06:00.000-08:00

Yet another Quora Answer:

Let’s think this through logically, okay?

The child dies as well if you don’t press the button. Hmm…. First of all, how long do I have and why can’t I just convince the child to press the button himself or herself by pointing out that it really isn’t suicide when either way you die. It isn’t like the child can live if the button isn’t pushed and that way I do not have to condone murder. Nope, that’s not satisfactory.

Another possibility is that I will somehow figure out how to switch places with the child so that when I press the button, I take only my life and Everyone Else Lives™. After all, I truly have only the right to kill myself and no other. Still, that does seem rather unsatisfactory.

No, actually I think that the best way to solve this problem is to call the bluff of the person who claims that failing to press the button will somehow cause everyone to die. The person who designed such a evil question must surely have realized that he himself/she herself and all of his/her progeny will die. That means that there are only five possibilities here that in my time-limited state I can properly assess and give subjective probabilities to so that I can assess how I should react:

(1) the person is an incredibly smart individual to have figured out such a device and also realizes that he/she wants to live and so the entire button pushing exercise does not actually kill everyone. Thus all I have to do is find the person who designed the contraption, figure out how he /she saves himself/herself and then replicate the world over. Thus Everyone Lives™

(2) the person is an incredibly smart individual to have figured out such a device and WANTS everyone (including himself/herself to die) but since not everyone is ALREADY dead, the person should have realized that he/she had not yet figured out a foolproof way to kill everyone and so it is unlikely that the device will actually work (come on, admit it, how many inventions in real life actually worked as expected on the very first try? The answer is very few — I will take my chances here). The chances that Everyone Lives™ is very high regardless.

(3) the person is a psychologist who did not properly vet his/her human subjects experiment with his/her relevant Institutional Review Board. Such an experiment is undoubtedly fake and so Everyone Lives™

(4) the person is incredibly smart and just wants me to have to make an immoral choice but is not so evil as to actually cause someone to have to die. Once again, I refuse to participate and Everyone Lives™

(5) the person hasn’t really properly thought all of this through. That means that contrary to my original belief that they are incredibly smart, they are actually incredibly dumb and I do not have to worry about the button at all. Everyone Lives™

In other words, I just shake my head at all of the highly immoral, evil individuals on this planet who would push the button and I REFUSE to push the button under any circumstances. I didn’t kill everyone and I didn’t kill the child. The evil person who designed this experiment did the immoral killing. Why if I had access to such a button, I would just . . . never mind. That highly immoral, evil thought just exited my brain because I just can’t bring myself to do it.

What Would I Do If Everything Were Free for 10 Minutes?

2018-03-01T19:03:00.000-08:00

I recently wrote the following on Quora in answer to the question, "If everything was free for 10 minutes, what would you buy?" I actually think this is one of my better answers on that forum:

Everything is free, right?

Let’s start with the assumption that I can only have things that you CAN really theoretically acquire and hold because someone already owns it (so no, I can’t take the world’s air, world’s water, sun, etc.). Let us further assume that I get to keep everything I acquire. Then the answer is simple:

I take over every world government as well as acquire all weapons on the planet and then install myself as World Emperor.

What? You are saying I can’t do that? Sure I can. How do you think world leaders come to power? The only difference here is that I would be the ONLY world leader.

Of course, I will be a dictator. But I will be a benevolent dictator. There will be no more wars because I will own all government. Now everyone has to work together. Everyone will, of course, give me 100% approval ratings in all polls. Oh, and all government debt is hereby abolished. I need a clean slate. What? You don’t want to approve of my rule? That’s okay. This will still be a free world. Just remember, if you don’t agree then you do realize that I also own all the nuclear weapons, so don’t argue with me or Everyone Dies™. I see you are all in agreement now.

First thing we do is get rid of all those pesky tariffs and trade barriers. We are all one world now. No more borders. No need to worry about all those immigrants coming over to “your country” because there aren’t countries any more. There is just one world government. Under me.

Next, everyone is getting capitalism. None of this communist or socialist stuff. You want something, you have to pay for it. Except for me. I can have anything I want because I have the resources of every world treasury. Yes, I will pay you for your things. I am not a cruel dictator. Still, it is good to be World Emperor.

I am going to be reducing taxes by a LOT. Remember I have all the weapons. I don’t really need that much defense spending any more. Don’t really need too much law enforcement. I suppose we still need a little law enforcement but things will be much easier for a while without anyone having any guns. Yeah, I know my friends all thought I was a big supporter of the 2nd Amendment and all that but hey, if I’m the world emperor I don’t want anyone getting any ideas and shooting me or anything. Sorry gang, you can’t have any more guns. On the plus side, you probably don’t need them because the criminals don’t have any guns either. Remember, I took ALL the weapons.

Oh, and feel free to smoke all the pot you want. All drugs have been legalized. Prostitution as well. Same with gambling. All liquor laws except for those that allow those under the age of 21 to buy liquor are hereby abolished. Those of you in Quebec and Ontario, stop complaining about me raising your drinking age. Don’t worry about the Mafia, the Triads, the Yakuza — remember I took ALL the weapons, so organized crime no longer exists. But don’t get any ideas about marrying underage girls because the age of marriage is now 21. NO EXCEPTIONS. At first I was going to raise it to 18 but I really want to ensure that all women in my new empire get an education and are able to live on their own without having their families pressure them into marriage. The key to reducing population growth and increasing world income is to have highly educated women.

Speaking of education, I will return education to local control. Yes, that means I will let you all have local government. Not national government, mind you. There are no national governments and no state governments. Only my one world government. But I can’t literally do everything for everyone, so almost everything is being returned to local control either at the city or county level or both. However all tax revenue has to come to the central world government for redistribution strictly on the basis of population. Remember I got rid of all borders so people can go anywhere they want now. Knowing that your tax dollars will automatically be redistributed to every corner of the globe might ensure that all of you see fit to adopt my new libertarian/classical liberal philosophy that government is best that governs the least even at the local level.

Similarly, health will be returned to local control. Well, except for two things. I’m sorry but everyone has to have vaccinations. I just can’t have global pandemics in my new world order. Also the government will provide emergency medical care free of charge but only for real emergencies. Anything that can go to the urgent care unit goes to the urgent care unit.

I will honor all current pensions and retiree health benefits but we are going to start changing this system. I own everything and I do not want to have to raise taxes on all of you to pay for it. You all need to start taking care of yourselves going forward unless you are already in the system or over the age of 50. Those between 50 and 55 will get a 75% reduction in future benefits. Those between 55 and 60 get a 50% reduction. Those between 60 and 65 will get a 25% reduction. I can’t really ask you to play catchup as much then but those of you under age 50 certainly can. Remember I am also eliminating all social security/Medicare/Old Age Pension, etc. systems.

We are getting rid of income tax. I never liked filing taxes and I think that VATs are more effective. It will be on EVERYTHING and at a single LOW flat rate (probably about 10%). That’s so that we do not have efficiency issues. I know, you are thinking that isn’t enough to run government but look at all the stuff I eliminated from government (and read ahead for even greater reductions). I will probably generate a surplus every year. Of course, I do not have to pay any VAT. We are also going to have a death tax. Sorry folks but that which you tax you get less of and I want less death. I will start the death tax out at 10% of all assets. The death tax may be paid out in cash or in company stock if you have a business. Remember if too many of you are dying, I will be forced to conclude that the death tax is not high enough, so I might have to raise it. I, therefore, suggest keeping death to a minimum. It is good to be World Emperor.

Local governments may only institute a single tax on land, not property. That is the most efficient type of tax.

Oh, and I don’t want any more internal squabbles. Freedom of speech? Sure there will be freedom of speech. Maybe not so much freedom AFTER the speech if you criticize my policies, but . . . Just kidding. Well, sort of kidding. You can criticize anyone else but not me. Remember, I am World Emperor.

All websites must now install Be Nice, Be Respectful rules. That, of course, means that no lèse-majesté (insulting or showing disrespect to me) under penalty of Everyone Dies™. So glad that everyone is nice and respectful, at least towards me.

Oh, I know what you are thinking. Here I am invoking Everyone Dies™ and I do not own the trademark to it. So what? Is David Consiglio Jr. going to sue me? He can’t. I can invoke sovereign immunity to all lawsuits. Nope. I get to do whatever I want. Laws do not apply to me. It’s good to be world emperor.

Businesses? You all can have businesses. I am going to massively deregulate and eliminate all labor laws with the exception of worker safety laws, but don’t take advantage of the situation by trying to defraud people or refusing to pay workers what you promised them. I am a believer in contracts and contracts will be enforced. You are going to have to have clear labelling and tell people EXACTLY what you are selling. Stop whining about that. Business taxation is gone except for the single tax on land and the VAT. Don’t like the level of your single tax on land? Take that up with your local government.

No more welfare or unemployment or the like. I massively deregulated businesses. There are lots of jobs available. I will not pay you not to work. Go for it. Plus I also eliminated a whole bunch of taxes, so there should be a lot of charity available for the poor.

Religion? Hmm. Well, I think they all have to register with me. I will still allow people to have religion but no criticizing my rule from the pulpit or trying to install your religious laws at the local level. Oh, and you will have to stop with this ridiculous notion that people of other religions are going to hell. You can think it but stop trying to convert people with that nonsense. Come to think of it, stop trying to convert people, period. If someone wants to join a religion, they go to you from now on, you don’t go to them. I will let you advertise of television or in print, but none of this door-to-door stuff or trying to instill prayers in places other than your places of worship. Remember, criticize me and Everyone Dies™.

What about Laws? All laws that are based on offense to others (with the exception of lèse-majesté) are GONE. All laws based on harm to self - GONE. All laws based on harmless wrongdoing - GONE. Well almost gone. I do intend to protect the children, so no contract can be entered into by any child under 21 and children may not be prostituted or given drugs or alcohol. Parents will be responsible for their children until age 21. Come on people, I am a classical liberal libertarian, not an anarchist. Heck, I can’t be an anarchist. After all, I am World Emperor.

You should probably hope and pray that I never actually get the ability to be World Emperor (hint: it isn’t just me — you do not want ANYONE to become World Emperor because power corrupts and absolute power corrupts absolutely. Unless you want me to have that power. Then, of course, hope and pray that I get it. After all, life could be a whole lot worse. Most people would not be anywhere near as kind as I am, as you can see from many of the other answers to this question.

Luckily, however, I have some great news! I have been to the future and have seen what the future actually is. This entire exercise was quite prescient in a way. Everything I tell you WILL come true in time. Therefore, I strongly suggest that you state your total and absolute agreement with this answer. Don’t believe me and plan on not state your total and absolute agreement with this answer? Not a very good response I would say. This is really the ultimate Pascal’s Wager - and you know that I exist. Just remember, when I become World Emperor I will go back and see who state your total and absolute agreement with this answer and you will be favored. Fail to state your total and absolute agreement with this answer and bad things will happen.

You see, I am keeping a list of people who view this but who fail to state your total and absolute agreement with this answer. Anyone who fails to state your total and absolute agreement with this answer needs to understand that if I ever become World Emperor, I will use that list. Not telling you for what. But let me give you a hint about it: Everyone Dies™

--------------------------------------------------------------------------------------------------------------------------If you want to purchase a really funny book, I strongly suggest you purchase Spoiler Alert: Everyone Dies™: The Lighter Side of Global Annihilation. I didn't write the book (I wish I had!) but I do think that it is one of the best books I have read in a long time. You can purchase it at:

https://www.amazon.com/Spoiler-Alert-Everyone-Lighter-Annihilation/dp/154289302X

Sorry, Trump Supporters, but Hillary Isn't Getting Locked Up (Anytime Soon), Free Trade Isn't Going Away (And Those Overseas Jobs Aren't Coming Back), and Mexico Isn't Paying for the Wall (Though It Still Will Be Built)

2016-11-09T07:45:00.001-08:00

Donald J. Trump become our 45th President this morning and I congratulate him on a well-fought campaign. Many of the things that I would prefer will likely come to pass but not because Trump was elected but rather because the Republican majority in the House and Senate will come together to implement an agenda that I would honestly prefer to see. I don't much like Obamacare, preferring either going to a single-payer system or going to a system in which more competition between insurance companies helps to bring down premiums. I don't like the fact that we don't enforce our immigration laws, preferring instead that we either have open borders or a immigration system that has some teeth. In both of these cases, we will be getting the latter, rather than the former policy.

I would prefer less regulation, lower taxes, a downsized government, free trade, entitlement reform, a dismantled Federal Reserve System, and a military that is not trouncing around the world trying to enforce democracy or otherwise intimidate other countries into kowtowing to our interests. It looks like I will be getting at least some of these things although I doubt a Trump presidency will provide meaningful reductions in the size of government, engage in entitlement reform, or dismantling of the Federal Reserve System, and that definitely concerns me because it signals that we will likely do very little with respect to the clear and present danger of the growing national debt. Still, one cannot have all things and so while I supported Gary Johnson in his quixotic attempt at the Presidency, I cannot be entirely unhappy.

That doesn't mean that there aren't other things that concern me, especially with regard to the hateful and oftentimes egregious rhetoric that came from our newly elected President's mouth during the Presidential campaign. Unless President Trump can figure out how to put the djinn of division back in the bottle and unite our country, the demographic reality suggests that Republican control of the country will be short-lived.

However, President Trump did something truly Presidential when he took the stage as a winner of this Presidential contest: he sought to bury the hatchet and not in the neck of his opponent. When history looks back on President's Trump's legacy, it will be this moment in time that will uniquely define it. I firmly believe that Trump's narcissism is, at this point in time, his greatest strength. He wants to be loved by the American people and we should let him. To that end, the rhetoric surrounding his opponents must end. Calling for Hillary to be locked up or for Mexico to pay for the wall are simply untenable positions. We do not have a national tradition of punishing our political opponents at the federal level nor can we act as a bully when it comes to other countries and not expect that such imperialist tendencies will be rejected and rebuked by the world community. Similarly, I do not think that President Trump will fundamentally roll back free trade, preferring instead to ensure that our existing trade agreements, like our immigrations laws, are followed. We respect of all things the rule of law above all else. Unfortunately, for many, that will mean having to come to terms with the fact that many of those jobs that have gone overseas will not come back, which will cause many of his supporters in the Rust Belt to feel betrayed. They should not feel this way. Even if free trade could be dismantled, the resulting loss of national income that comes from a reduction in trade volume and freedom would effectively cancel, and indeed completely reverse, any minor gains we would get from autarkic policies.

Similarly, Trump will not be deporting 12 million people from America nor will Mexico pay for the wall, though I do believe it will be built and we will pay for it. Instead, Trump will take a measured approach that insists that our laws are followed and that people who wish to legalize their presence in the United States will have to return to their home countries and go through the proper channels. As the son of one legal immigrant and the husband of another, I would expect nothing less. He will likely build a wall that will cost us $40 billion and will be much more symbolic than actually effective but the symbolism is important and it what he can effectively do. Deportation on such a grand scale would cost far too much, not only in terms of monetary cost but also in loss of fundamental freedom as legal residents and citizens would otherwise be forced to prove their status in this country on an almost daily basis if he were to truly attempt to go through with such mass deportations. On the other hand, the current system that gives employers an effective "slap on the wrist" and allows sanctuary systems to "turn a blind eye" to illegal activity will end. Ironically, this simply means the continuation of the actual increase in deportations that has occurred under the Obama administration but remember that symbolism is important and that is what he is doing.

Likewise, there will be no "total and complete shutdown of Muslims entering the United States" and, in fact, Trump himself walked back that proposal some months ago but I do expect an enhanced and more rigorous vetting process that takes into consideration that in some parts of the world it is more difficult to verify information, which is an somewhat overdue policy change.

One of the reasons for these changes is that Republicans will not go along with his more extreme rhetoric. The Republican Party needs to play the long game and that requires more nuance and less demagoguery. In some ways, we would probably be thankful that Donald Trump is our next President. If he had not succeeded, who knows who would have come next because extremist populist sentiment is difficult to eradicate. Perhaps it will take a man like Donald Trump, beholden to no special interest other than himself, to purge us of this underlying current of divisiveness that threatens the very core of our glorious republic.

I am thus cautiously optimistic because Donald Trump, though he rode the wave of populist sentiment, is no ideologue and that means that is someone who can be brought to the table to negotiate. Indeed, that aspect of him is precisely what he has signaled time and again that his rhetoric is merely a negotiating tactic to leverage a better deal for America. So long as he remembers this, he could very well become one of our greatest Presidents. If he forgets this and instead echoes the populist desires and prejudices that propelled him to the White House, may God help the United States of America for we will have lost the very essence of what makes America truly great, indeed, exceptional, as a nation.

Chicago Principles on Freedom of Expression Adopted by Winston-Salem State University

2015-09-25T11:01:00.000-07:00

Winston-Salem State University (WSSU) became the fourth university in the country, the second public university, the first historically black college or university (HBCU), the first university in the South, and the first university that does not offer a Ph.D. degree to adopt the Chicago Principles when its Faculty Senate passed a resolution in favor of adoption by a vote of 36 to 0 with one abstention on September 10, 2015. Two weeks later, on September 24, 2015, the General Faculty of WSSU reaffirmed this decision, voting 100 to 8 in favor of the Chicago Principles.

I would not have even known about the Chicago Principles were it not for the activities of the Institute for Humane Studies at George Mason University and the chance invitation that I received to be a part of the Academic Freedom Seminar in July. Along with that invitation came a recommendation to read up on the Chicago Principles, which I wholeheartedly endorsed though I thought for a while that they were almost self-evident and thus should not require a discussion at all. Indeed, much of the time the nuances of speech codes, trigger warnings, and microaggressions appeared to be more about common courtesy until I discovered to my dismay that they were actually being enforced against individuals in direct violation of First Amendment guarantees at public universities.

For me, the Academic Freedom Seminar awakened a realization that our freedoms are not stripped from us in one fell swoop but rather slowly chipped away and that any restriction needed to be examined with the greatest possible scrutiny and allowed only when it served to ensure the proper functioning of the university or when it fell under the banner of unprotected speech in a legal sense and, even then, such restrictions needed to be formulated so that they impeded such discussions in the least intrusive manner and were not based on the content of the speech itself. Public universities, even more than private universities, need to protect the freedom of expression as they must be cognizant of the fact that they are instruments of the government and thus actions undertaken by them directly contravene First Amendment protections when they go further than government itself is allowed to go. It is for this reason that passage of these Principles are critical to the survival of the public university. I still remain committed to common courtesy but one must never forget that common courtesy must be a choice. When it is enforced on others, it no longer is courtesy but is instead a mandate and that mandate silences all who oppose it. The university must resist this temptation because without freedom of expression and the full and open dialogue on any topic that may come up in polite conversation or otherwise, we cannot advance the state of knowledge.

This is especially true for an HBCU, for was it not only a little more than 50 years ago, when common courtesy dictated that African-Americans move to the back of the bus or excuse themselves from the lunch counter when a white person sought a seat? What would have happened if Rosa Parks or the Greensboro Four had politely accepted that "common courtesy" and had not uttered that one word that strikes fear into the hearts of all who would oppress, "No"? The answer is as simple as it is obvious: when we allow common courtesy to become a shackle in such a way that it no longer is our personal choice to do so but rather becomes obligatory, we end up with second class citizenship for those of a different race, gender, occupation, opinion, political party, age, social class, sexual orientation, religion, birthplace , or any other difference of which you may consider, and such a surrender of the basic principle that one person should not be able to dictate how another thinks or expresses themselves leads inextricably to authoritarianism and a complete breakdown of the guarding principle of what has come to be known as Western Civilization.

Mr. Erik Lindberg of Transition Milwaukee Fails to Understand My Position

2014-09-24T21:12:00.004-07:00

In a blog post entitled "The End of an Illusion" posted on the Transition Milwaukee website (transitionmilwaukee.org), Mr. Lindberg continues the tired Peak Oil mantra by FINALLY making the critical admission that, in fact, we will never run out of oil:

"Or as economist Zagros Madjd-Sadjadi tries to explain it, 'We will never run out of non-renewable resources simply because the price will rise to make extraction cost-prohibitive. At that point, we will have to switch to renewables simply because of the cost. Furthermore, because of those price signals, entrepreneurs will come up with new ways to reduce the use of fossil fuels and other non-renewables.' (http://www.resilience.org/stories/2011-02-28/steady-state-economy-does-not-imply-zero-economic-growth). If we look closely, we will see that Madjd-Sadjadi is sliding stealthily between two meanings of “run out.” According to the logic of extraction, it is true, the cost of rare and buried minerals or fuels does become prohibitively high before they are entirely depleted. No one will bother to drill 3 miles beneath the North Pole to extract the last barrel of oil. We won’t actually run all the way out of oil, but will leave the last and most expensive oil in place. But the fact that we won’t run out of it or other resources in this, more technical sense, doesn’t mean that we won’t run out in a more practical sense. When they become too rare and expensive to extract, we will have in fact run out in any normal sense of the phrase. Madjd-Sadjadi is hoping that no one, including himself I would imagine, will notice that the logic of resource depletion and the way it shows how we will never “run out” does not makes it inevitable that there will be some equally good renewable that we can “switch to” when the moment arises. Groggy and groping in the dark for some sort of switch, like many economists, he doesn’t seem to entertain the fact that many switches simply toggle between on and off. The whole proposition depends, at any rate, on some sort of quasi-magical belief that high cost itself can reliably synthesize raw materials as some sort of automatic price-generated feverish wish-fulfillment. The American Dream indeed."

Mr. Lindberg claims that we "won't run out of it in a more practical sense. When they become too rare and expensive to extract, we will have in fact run out in any normal sense of the phrase." There is no such thing as a "normal sense of the phrase." Things means precisely what they mean, no more and no less, and there is only one definition of "run out" that can be applicable in this case and that is to literally have no more left. When you run out of food, it isn't that you still have a can in the pantry but don't really care for it, it means that you have actually no food left. Period. So, therefore, he agrees with me that at some point we will no longer wish to continue to pump oil out of the ground and that there will still be oil in the ground at that point. We will not have "run out" of oil because, at some future time, when the costs are no longer so prohibitive, we might choose to go back and extract some more. The fact that this is the case is seen in the current extraction of shale oil, which once was cost-prohibitive but now, through enhanced technology and due to a high equilibrium price for oil, is now cost-competitive.

Then he goes on and says, "Madjd-Sadjadi is hoping that no one, including himself I would imagine, will notice that the logic of resource depletion and the way it shows how we will never “run out” does not makes it inevitable that there will be some equally good renewable that we can “switch to” when the moment arises. Groggy and groping in the dark for some sort of switch, like many economists, he doesn’t seem to entertain the fact that many switches simply toggle between on and off."

Wrong! First, I do not state that it is "inevitable that there will be some equally good renewable that we can "switch to" when the moment arises." I simply said that we would switch to renewables. The fact that we are not currently using these renewables is a testament to the fact that they are not "equally good"! If they were "equally good", we naturally would have switched before but they must be inferior to oil at the current price point simply because if they were "equally good", we would be indifferent at the current price between them and oil and thus would switch over as soon as the price of oil rose (but we didn't even when a barrel of oil was hovering 20% higher in cost than it is today). Might we end up with something that is worse than our current situation? Possibly. But will it be catastrophic and mean the world is coming to an end? Absolutely not. You see, Mr. Lindberg, I am not relying on us not to have some transition pains nor that we will not find ourselves with hardship. However, unlike you, I am not "Groggy and groping in the dark for some sort of switch" when the lights go out. I have a flashlight already in my hand and, while it isn't as good as my electricity, it will make do until I can locate the fuse box and replace the blown fuse. Oh, and what happens if the blown fuse cannot be replaced? So then it cannot. However, it doesn't mean that I will stay in the dark. I also have matches, candles, and a whole host of other options. Just because it isn't necessarily going to be as good as oil doesn't mean that it isn't going to be adequate for a time and, once I realize I do not have oil available at a competitive price, I can always switch to something else, even if does mean some minor (or even major) inconveniences for a time.

"The whole proposition depends, at any rate, on some sort of quasi-magical belief that high cost itself can reliably synthesize raw materials as some sort of automatic price-generated feverish wish-fulfillment."

Wrong again! If the price rises high enough, we already have the technology and the know-how to switch over. In petroleum-poor societies (such as Germany in the 1920s and South Africa during apartheid) oil was made using the Fischer-Tropsch process. Today we have buses running on natural gas (and there is a lot greater supply of natural gas that we can still tap) and cars running on electricity (which is usually generated by coal and we have an even greater supply of that). If we do not have energy in the future it will not be because nature denied us, it will be because we chose to limit ourselves (by deciding that we shall not drill in certain areas, that we shall not have nuclear power, that we shall not dig for coal, we decide to dramatically reduce carbon production, etc.).

These options may not be as energy efficient as oil but it hardly means that we should worry about oil not being easily available. There is nothing magical about the fact that people will do whatever they can to save time and money using technology that actually exists now and they will do their best to find new ways to save time and money through innovation.

The essential difference between Malthusians and those of us who refuse to buy into their doomsday scenarios is that we have far more faith in human ingenuity and rationality than anyone in their camp does.

The Real Truth About the Debate Between Neo-Malthusian Environmentalists and the Rest of Us

2014-07-22T19:27:00.001-07:00

QUESTIONS FROM NEO-MALTHUSIANS ANSWERED BY THE VOICE OF REASON ON THE INTERNET

1) Question: Have we reached the asymptotic limit to growth?

Answer: The asymptotic limit actually describes what will happen AFTER we reach the stationary state of a fixed capital-labor ratio with stagnant technology. We have not yet reached that state, so we are not having to deal with the asymptotic limit. If we limit growth in natural resources by fiat or because of natural limitation, we will start in our progression towards the asymptotic limit to growth (unless technology saves us, which many Malthusian Environmentalists do not believe). So the real question is: have we reached the natural limits of resource extraction?

I believe that from a purely technical perspective, the answer is no, for all the reasons I will shortly enumerate. However, from a holistic perspective, the answer is yes, that we are probably approaching it. In other words, I suspect that we will decide that we do not wish to continue resource extraction ad infinitum for at least some of the reasons the environmental movement itself was born: we like to have pristine venues; our prosperity has awakened us to desires beyond our immediate needs; and we have realized that there are at least some resources for which we cannot maintain the current level of extraction.

As to why, technically, we are nowhere near the limit of (total) resource extraction possibilities:

* There are certain resources that we do not have to worry about conserving (solar power, silicon).

* There are other resources that are likely reaching the plateau of production and thus we will have to find substitutes in those cases where we utilize these resources extensively (gold) or we will have to discontinue their use in favor of alternative technologies (uranium). However, we have such substitutes available.

* There are still other resources where we once had limits but, due to changing technology, we can now create these resources and thus its limits are actually expanding rather than contracting (diamonds, oil).

* Then there are those resources for which we have exceeded our ability to extract them responsibility, chiefly due to the "tragedy of the commons" which can be solved by better allocation of property rights and improved awareness and regulation of externalities (fish).

* Only in the latter case, where we have already exceeded sustainability do we have to worry about limitation on the resource and only in the case where there are no good substitutes. However, there are substitutes for almost everything except the broadest of classes of goods and there are no such broad classes of goods (including energy) that are in imminent danger of complete and total collapse.

As noted, oil is really a case of a resource with expanding limits because of our ability to synthesize it from other materials (coal, natural gas, oil shale). In addition, we can often convert our oil-based products to alternative fuels (cars have run on power from the electric grid and even solar power).

As to the question of increased resource usage, I would argue that is a red herring. We really do not need increased resource usage to grow the economy. When we are faced with limited resources, we find other ways around these limits (using human ingenuity). In the face of an economy that could not generate sufficient finances to import petroleum in the aftermath of onerous conditions imposed on their country by France after World War I, German scientists developed the Fischer-Tropsch process to synthesize petroleum from coal. When diamond production threatened to limit industrial production (diamonds being a important resource used in machine tools), scientists successfully synthesized the diamond.

The interesting thing is that necessity (so to speak) is the mother of invention, as the saying goes. So I would not in the least object to doing everything in our power through selective taxation to make resources that pollute the environment or appear to be extracted at an unsustainable pace more expensive. In such a manner, we will spur innovation.

In addition, we should look at having a separate resource usage tax based on waste. The more you waste of a resource, the higher your tax rate. This will create the proper incentives to conserve and recycle. For example, here in North Carolina, I find it abhorrent that the government charges the same rate for garbage regardless of how much garbage you create and provides no credit for those who recycle. Indeed, when I decided to acquire a larger recycling bin (specifically so that I could reduce the amount of garbage going into the city landfill), the city made me pay the same price for that recycling bin as they charged for someone to purchase a garbage can. Furthermore, even though our household disposes less than the equivalent of one 13 gallon trash bag a week of garbage, recycling everything else that comes into our household, I pay the same rate as those who put 20 times that amount into the landfill and who fail to recycle at all. It is public policies such as this, not the economics profession, that is to blame for our wastefulness (indeed, it amuses some of my colleagues in the economics profession to no end in that I derive absolutely no individualistic benefit from my action and actually have driven up my costs because of my proclivity to recycle).

As to pollution, in point of fact, economic growth has proven to be a boon to the environment. As shown by Grossman and Krueger (1995), while economic growth at lower stages of development is harmful to the environment, after an economy reaches a certain point (a little over US$10,000 in per capita income), the process reverses and environmental quality improves with economic growth. One of the reasons for this is that once a population a certain threshold of prosperity, they can devote more resources to emissions control (prior to that point, other objectives tend to outweigh environmental concerns for the populace).

Now as to the question of an environmental tipping point, we very well might reach one with regard to CO2 emissions and, on that point, I believe that we need to do everything we can to keep a lid on those. However, that does not require the shuttering of our economy. Indeed, by reducing payroll and income taxes while simultaneously introducing a carbon tax, we solve two fundamental problems in our economy: creating incentives for work while reducing incentives to pollute. Indeed, if we do this by reducing predominantly rates at the lower end of the economic spectrum (perhaps by granting exemptions from taxation on the first $50,000 of income), we can accomplish a politically popular objective that both conservatives (who want lower taxes on business and individuals) and liberals (who want the tax burden transferred to the relatively affluent, which it would be in both cases since it is the affluent who would tend to pay the carbon tax and the poor who would receive the largest benefit from the raised tax exemption) could embrace. It will also likely promote economic growth even as it reduces global greenhouse emissions.

2) Question: Are we are currently far into ecological overshoot and must therefore drastically reduce the physical inputs to the economy in order to come into balance with the environment so as not to risk the collapse of our society?

Answer: We DEFINITELY disagree on this point. The reason is actually why I keep arguing that Neo-Malthusianism is pointless. You see, from my perspective, if we are "way into ecological overshoot and must . . . drastically reduce the physical inputs to the economy" it really sounds to me like we need something on the order of a reduction of 80% in our resource usage within the 10 years (or some similar reduction/time frame), which I believe is not achievable without mass extermination (which we all agree is not a viable option).

However, maybe I am misinterpreting the call for reduction because of the doomsday warning attached to it. So we need to be careful and define EXACTLY how quickly and how fast we need to reduce these inputs. You see, neo-Malthusians are arguing that we are essentially on a runaway train with the tracks out ahead. Therefore, it sound like they want us to slam the breaks. Now slamming the breaks is not without its problems: it tends to cause a lot of injuries along the way so we don't want to slam them if there really is no reason to do so. On the other hand, if we are too far-gone already to be able to do anything about it, there is no point in slamming the breaks either. Why cause panic? We are all goners anyway. Thus, my question to you is: why can't we slowly (say cut in half over 50 years) reduce consumption of those resources that have harmful environmental consequences owing to their production or consumption? If we can do this, why the doom-saying? There are plenty of good reasons to reduce the consumption of these resources without doom and gloom. If we can't do that, tell me how fast we have to reduce them. The problem is that if we have to reduce them too fast we will cause, at best, the very collapse that you wish to avoid or, at worst, the killing off a good chunk of the population. Neither of these are viable solutions to the problem.

That being said, I do not object to the concept of eliminating waste in resource usage and engaging in greater conservation and recycling efforts (especially as you have apparently conceded that we do not have to mandate a reduction in our economic growth). What I really have trouble with is the neo-Malthusian "sky is falling" attitude. We all seem to asking for policymakers to the same thing (reduce things that are bad for the ecosystem) but how you say something is often just as important as what you say. If you argue that economic growth ITSELF is a problem and that it must be controlled directly, you alienate a large segment of the population. Furthermore, you have all but admitted that this is not a necessary condition for your end result. Indeed, I would go so far as to argue that if you place artificial limits on economic growth so as to actively seek to stifle it, the result will backfire as a retrenchment of economic growth is inimical to your stated goals.

That being said, is it the case that taxation will reduce economic growth. It is possible but it is not guaranteed. That was my key concern. The problem that I saw with the argument Neo-Malthusians first put out was that economic growth itself is NOT the cause of any of the ills in our society, although economic growth is sometimes associated with those ills. For example, economic growth can lead to environmental degradation when a company engages is strip mining. At the same time, economic growth can actually lead to environmental rejuvenation when strip mining operations are required to account for their negative externalities by paying taxes on their activities that will (1) fund adequate land reclamation after their mines close (and the key is ADEQUATE, not the half-baked schemes allowed under current US law) and (2) pay for the externalities that they cause because of their operations on other parties during the operation of the mines (for example, but not limited to, paying for the cost of effluent treatment so as to not pollute water supplies and requiring mining companies to acquire the surface rights as well as the substrata rights for the entire breadth of their mining operations so that you do not have the problem as in Pennsylvania wherein homeowners and businesses are potentially endangered by having mine sinkholes develop under their properties).

The point is that we can come up with revenue-neutral tax systems that will penalize heavily all of the activities you do not like while reducing taxes on other activities that do not cause the harm over which you are justly concerned. In so doing, we can not only maintain economic growth but, in the long-run, we can actually INCREASE it because of the reduction in human health costs (and a consequent increase in human productivity).

You see, I don't have a problem with environmentalism when it framed in a win-win situation because it gets buy-in and makes us realize that we can utilize free-market capitalism (although guided in its direction via taxation of undesirable activities) as the engine for ecological change. Indeed, one of the major reasons for utilizing the taxation approach instead of the banning approach is that it will typically lead not only to more revenue but also increased compliance (see Prohibition in the United States for a good example as to why the banning approach is not as effective as the tax and let the free market decide approach).

All that is a roundabout way of saying, "yes AND no" to your question of whether we need to drastically reduce our resource inputs. We certainly have to drastically reduce CERTAIN inputs (those that cause environmental harm and those which are unsustainable in their extraction levels) but we don't have to drastically reduce ALL inputs for the reasons stated earlier.

Furthermore, HOW we choose to reduce them matters: a free market taxation-based approach will simply move our economy faster in the direction that we wish to take it and thus is the same type of positive modern state intervention that I have advocated for years. It also matters HOW FAST we choose to reduce them. Certainly, I doubt that most Neo-Malthusians advocate an complete abolishment of our oil consumption by, say, 2020. No, instead, we should seek to reduce our consumption levels and slowly increase taxation levels (or reduce cap and trade levels) so that we can reduce oil consumption at a manageable pace. Very small but steady reductions in our current consumption patterns will achieve large reductions in the not too distant future without causing severe pain to the economy (2% reductions each year in conventional crude for 25 years = 40% lower consumption of that resource) and can be achieved exclusively using higher taxation of such resources. Furthermore, this raising of the price of such resources will encourage the development of alternatives and the rapid introduction of new technologies so I prefer to give a positive spin on the whole thing and point out that there are good reasons to tax that have NOTHING to do with "running out of oil" (overreliance on trading partners who do not hold our same ideals, a trade imbalance that threatens our economic stability and the dollar, and the environmental damage caused by oil spills and increased CO2 emissions that is not paid for because of inadequate property rights regimes).

So, it isn't really true that going with my vision of the future will get us anywhere differently from the Peak Oil enthusiasts (at least with regard to oil). However, scaring people into thinking that the world (or at least our society) will end, I do not believe is the proper mechanism to motivate people and, furthermore, I do not believe that such a calamity will ever come to pass no matter what happens because as I've stated before, I believe that technology will find a way out. That means that even if we do nothing, eventually, the environmental issues will get to be so great or the cost will get to be so great for the resource (due to an imbalance between current production and consumption that cannot be met by drawing down inventories) that, like in Germany in the 1920s, scientists will find a way to substitute for another resource.

There are two dangers, however, with a neo-Malthusian approach that imposes non-market based solutions that are not present if we use a positive argument for economic transformation. First, we might panic into going too far too fast the other way is that the incentive mechanism for coming up with innovations will break down and we will find ourselves with a collapse of the economic system and no mechanism in place to save us. Thus, arguing that technology can't save us and that we are in imminent danger of economic collapse unless we put the breaks on economic growth has far greater potential for destroying our society. The second danger is that because we have heard the neo-Malthusian argument repeated for 210 years without ever having its dire predictions come to pass, many will simply ignore you as they currently are doing and thus you will get nowhere fast. The fact is that if we let the free market work, the price mechanism will cause resources to increase in price when their extraction rates are no longer sustainable and evidence from fisheries suggests that rather than complete worldwide cataclysmic collapse after years of rising production, we will instead see an undulating plateau for quite some time (and one of the reasons that fish stocks face the potential of collapse in the next 50 years is a lack of enforceability of property rights whereas if there were adequate property rights, better management of the resource would likely occur).

3) Question: Can we grow population for some time?

Answer: We MUST grow population for some time unless you want to engage in a mass extermination program (which I would hope all Neo-Malthusians would be completely against). There really is no alternative (well, I guess there is also mass sterilization but I would gather they are against that approach as well). The developing world is still rapidly growing (although at a lesser rate than before, due to enhanced economic opportunities and literacy, especially for women, and greater access to contraception). Even in cases where fertility has dropped precipitously, it will take a long time for this to translate into population reductions. For example, China, with its one-child policy, won't see a stabilization of its population until 2030.

Even in the developed world, where we have been below the replacement ratio for more than a generation, it will take at least another generation in many countries to see a dramatic decline in population. Lets look at a country like Japan (a country that has no net migration and only 1.3 births/woman, which is WELL below replacement rate), we find that the population is projected to drop by only 30% over the next 50 years.

4. Question: Can we grow resource usage for some time?

Answer: I think that the real question is: what do you think the carrying capacity of the Earth is and how fast do we need to reach it? The answer to that question dictates a wide range of policies. If we are way over the carrying capacity and we need to change things fast, it sends the wrong message to those in power to start thinking about genocide in order to achieve the goal of rapid reductions in resource usage (and we both agree that isn't a good solution). After all, it would take more than a century to cut the world population by 75% by 2100 even if tomorrow we were able to reduce the total fertility rate to the Japanese level (all of this is assuming that we reduce death rates in the developing world at the same time--if we don't improve their medical care and allow them to continue to die at current rates, especially as infants, in some countries of the developing world the fertility rate could be as high as 3 or more births per woman in order to achieve the demographic transition due to high infant mortality).

If we are only just above it or we can afford to engage in a short waiting period (say a generation or two) to start worrying about these limitations, we will achieve the demographic transition and our days of worrying will soon be behind us. After all, Japan's total fertility rate dropped in HALF (from 4 to 2) in a span of just 5 years in the 1950s and was basically steady for a generation before starting its precipitous decline in the 1970s. If we can get the growth rate up in the rest of the developed world, just as had happened in Japan, we could see our world population leveling off a lot quicker than anyone realized.

References:

Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.

Why 'No New Taxes' and Cut, Cap and Balance are Horrible Ideas (from a Conservative Perspective)

2011-07-28T11:50:00.000-07:00

Conservatives should be ashamed of themselves with their insistence on Cut, Cap and Balance, for a balanced budget and a pledge of no new taxes (as it is currently envisioned) will lead to the rise of the regulatory state and even more tax expenditures, ultimately ushering in a new socialistic entitlement state the likes of which have never been seen before. Remember to beware getting that which you wish for as there are always unintended consequences.

Let's take each of these concepts in isolation and see why they are such bad ideas. The idea of cutting government expenditure itself isn't a faulty one but how do you define government expenditure? For example, suppose that we look at the Earned Income Tax Credit. Is that an expenditure or merely a tax cut? Does it only become an expenditure when it results in a refundable credit? If not, what about things like the mortgage interest deduction?

What is the difference between a charitable contribution deduction or tax credit and simply giving the charity the money out of government coffers? In the end, very little. The charity has more money. The individual who gave to the charity has less. The government is merely the pass-through agent. Now, some would say that the difference is that when an individual gives to charity, they are directing the money to that purpose, whereas when government does the same, they are robbing everyone to accomplish the same goal. That is one way of looking at things. However, at the same time, if money goes to charities through private giving, there is less of a "need" for government redirection of funds. As such, government expenditure goes down but it is merely replaced with private expenditure. The biggest difference is that individuals, rather than the voters, are making the decisions as to the allocation of funds. Thus, it is equivalent to giving more votes to those with more money rather than based on 'one person, one vote.'

At first, this seems like a good conservative principle. After all, what could be better than having each individual decide what is best to do with his or her own money. Yet, by giving a tax credit or deduction, what really happens is that everyone else is forced to pay for the charitable contribution. Think about it for a second. If we reduce government spending to what conservatives believe it should be: national defense, maybe the department of state, a few public works projects, and that's about it, tax credits and deductions represent a regulatory state gone amok. It basically favors certain types of behavior over others and, by creating these incentives to reduce your taxes, those of us who do not believe in such activity are left holding the bill for the things that we all truly do need (national defense, etc.). However, this all begs the question: why is government regulating through an incentive mechanism private behavior at all? Furthermore, why should you get to pay less for national defense because you are giving to your church, while I don't?

In addition, the truly insidious and onerous aspect of government isn't that it taxes, but that it regulates--and regulation can occur even if the government doesn't tax at all! Why bother giving subsidies for 'green energy', just ban 'non-green energy'! Why worry about redistribution of income through the tax system if you require everyone to tithe or go to jail? These may be extreme examples but the government can get almost anything it wants done through regulation, including things that it could not accomplish through taxation.

Now what about cap and balance? Sounds like a good idea, doesn't it? We need to balance our family budget, so why not the government? Shouldn't we cap government expenditures?

Actually, the answer is 'no'! We should instead cap government revenues but let government expenditures rise and fall with the business cycle. Furthermore, we should not cap at 18% but rather during good times we should be saving about 20% of GDP (and if the public won't do it, the government should)--and that doesn't even include government expenditure on the military and public works (which should be no more than about 10% of GDP or so)! Where did I get this idea?

Well, God told me.

Even God himself has dictated that 'cut, cap, and balance' is a bad idea (and, if conservatives believe in anything, it is God). Indeed Keynesianism, if properly practiced, is conservative thought and anything different is, well, sinful. So sayeth the Lord in the story of Pharaoh and Joseph:

Genesis 41:17-40 (New International Version):

¹⁷Then Pharaoh said to Joseph, “In my dream I was standing on the bank of the Nile, ¹⁸ when out of the river there came up seven cows, fat and sleek, and they grazed among the reeds. ¹⁹ After them, seven other cows came up—scrawny and very ugly and lean. I had never seen such ugly cows in all the land of Egypt. ²⁰ The lean, ugly cows ate up the seven fat cows that came up first. ²¹ But even after they ate them, no one could tell that they had done so; they looked just as ugly as before. Then I woke up.
²² “In my dream I saw seven heads of grain, full and good, growing on a single stalk. ²³ After them, seven other heads sprouted—withered and thin and scorched by the east wind. ²⁴ The thin heads of grain swallowed up the seven good heads. I told this to the magicians, but none of them could explain it to me.”
²⁵ Then Joseph said to Pharaoh, “The dreams of Pharaoh are one and the same. God has revealed to Pharaoh what he is about to do. ²⁶ The seven good cows are seven years, and the seven good heads of grain are seven years; it is one and the same dream. ²⁷ The seven lean, ugly cows that came up afterward are seven years, and so are the seven worthless heads of grain scorched by the east wind: They are seven years of famine.
²⁸ “It is just as I said to Pharaoh: God has shown Pharaoh what he is about to do. ²⁹ Seven years of great abundance are coming throughout the land of Egypt, ³⁰ but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land. ³¹ The abundance in the land will not be remembered, because the famine that follows it will be so severe. ³² The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God, and God will do it soon.
³³ “And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. ³⁴ Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. ³⁵ They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. ³⁶ This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.”
³⁷ The plan seemed good to Pharaoh and to all his officials. ³⁸ So Pharaoh asked them, “Can we find anyone like this man, one in whom is the spirit of God^[a]?”
³⁹ Then Pharaoh said to Joseph, “Since God has made all this known to you, there is no one so discerning and wise as you. ⁴⁰ You shall be in charge of my palace, and all my people are to submit to your orders. Only with respect to the throne will I be greater than you.”

However, note what the story says: we must save during the good years to spend during the bad years. We must balance the budget, not yearly, but rather over the business cycle (in the days of Pharoah, the business cycle followed the grain cycle). And how much should government take? Look at Genesis 41:34: "Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt." So "cut, cap, and balance" is a horrible idea and so is the balanced budget amendment. It would lead to us squander our treasure during our feast years, only to starve during our famine years.

So ideally, from a conservative perspective in good times, government should take 30% of our GDP and be required to SAVE 20% of GDP (so that would mean a $2.8 trillion budget surplus). In bad times, 0% (yes, cut all taxes to zero during recessions--I mean they are recessions, right?) and run a budget deficit of whatever it takes to generate full employment during recessions. Now that's a good conservative prescription for success.

Only one potential problem (and it is a big problem -- probably fatal to this plan): how do we know we are in good times or bad times? Unfortunately, too many people think it is the famine time even when it is the feast time. Oh well.

More on Corporate Personhood

2011-04-14T08:36:00.000-07:00

By dispensing with corporate personhood, we simultaneously get rid of two important things: limited liability and the corporate income tax.

After all, if the corporation is not a legal separate person, funds flow directly to the shareholder (similar to a partnership or sole proprietorship). Now we could create a legal structure to allow these funds to be held at the corporate level by arguing that each person really simply owns a certain percentage (share) of the corporation and can only realize gains or losses by selling. This would treat corporations as what they really are: assets of the owners.

While many conservatives would like to rid themselves of the corporate income tax, they simultaneously do not understand that if they do this, they lose the rationale for limited liability. Limited liability is a benefit but not as great as it might at first appear. What it really does is help not the common stockholder (who can always sell before his or her stock value goes to zero) but rather the last stockholders who is left holding the proverbial bag. Yet what limited liability does is exaccerbate the asymmetry between short sellers and long buyers. Short sellers already have unlimited liability (theoretically) and limited potential benefit (when the stock price goes to zero). Long buyers have limited liability and unlimited potential benefit. Eliminating corporate personhoood will reduce this asymmetry.

Here are a few questions that I have received concerning this proposal:

Couldn't companies simply get limited liability through contract?

The answer is no. While a company can negotiate limited liability with suppliers and customers, third parties who are injured cannot be so casually dismissed.

Couldn't executives simply find a way around these restrictions?

Well, they could purchase insurance but who would insure them? Since they are the ones making the decision that would lead to the corporation's demise, it would be foolish to provide insurance. After all, you would be stepping directly into moral hazard. They, of course, could also reduce their exposure below the 1% threshold provided they resign their office immediately. However, they cannot keep their office and their benefits without incurring the costs. Receiving reward without risk is immoral and must not be allowed to continue.

The point is that those who want the rewards should take the risks. No risk = no reward. It works for shareholders. Why not corporate executives?

The Evils of Corporate Personhood (and the legal solution)

2011-04-11T14:30:00.000-07:00

The fact that corporations have personhood and not limited liability is the root of the problems with respect to modern capitalism. Limited liability actually emanates from this idiotic idea because one person cannot be responsible for the debts of another unless that person co-signs on the loan application. Yet, while limited liability leads itself to the problem of excessive risk-taking (because you gain all of the upside and limit your downside), it is corporate personhood that is actually even more problematic.

As I sit here in the Wyhdham Resort and Casino in The Bahamas typing this blog, I am reminded of something I tell my students in my classes about the problems of corporate CEOs receiving stock options. Since they receive only upside (stock prices can only go to zero in the extreme on the downside), it would be like handing $50,000 to each of them and telling them to go to the casino and whatever they win with my money we will split but if they lose the money, they are not liable for my losses.

I would want them to play Blackjack -- they will go for Roulette and the Slot Machines. By going for the riskiest games, they increase their chances of large scale gain. After all, it isn't their money.

What personhood does for the corporation is allow it to declare bankruptcy even before it destroys its common stock. Thus, corporate stockholders get effectively two bites of the apples -- no, actually three, for they can always turn around and sell to another sucker in the market (only the last one holding the stock has a 100% loss). Of course, eliminating limited liability entirely might prove too drastic a step for those who wish to be market participants but who have little in the way of actual assets. We can solve this problem by limiting limited liability only to shareholders who hold less than 1% of the overall common stock and who do not hold a senior management position at the C-level (CEO, CFO, CIO, etc.) or above (e.g., President, Chairman). Such di minimus participation is incompatible with being able to fundamentally alter the overall course of the business.

Furthermore, do not allow senior managers to be senior managers unless they have at least 1% of the overall common stock (make them have "skin in the game", so to speak) and then apportion the excess of limited liability to those senior managers. Sell so that you drop to less than 1% and you have to immediately resign your senior leadership position.

Now the personhood issue can actually be put to bed quite easily. After all, the US Constitution prohibits slavery and involuntary servitude (13th Amendment). If corporations are persons and they are owned by other persons (stockholders), isn't the corporation by definition a slave to the stockholders? Wasn't that outlawed by the 13th Amendment except in cases of punishment for a crime? I think that you cannot make a case that corporations are slaves because of such punishment, ergo, corporations are illegal in the United States. I rest my case (at least in the US case).

Property Rights are All Important: The Economics of The Lorax

2011-03-30T06:33:00.000-07:00

While there have been lesson plans written around Dr. Suess's The Lorax, they have tended to centre around what liberals see as the fundamental tension between capitalism and the environment. However, I think that they are mistaken here. The issue is actually all about property rights and thus what is needed is more capitalism, not less.

Yes, it is true that Dr. Suess saw this story as such a parable, buried within its text is the evidence for the opposite. Consider this quote at the end (emphasis added in boldface and italics), which is what is supposed to be the true lesson:

"You're in charge of the last of the Truffula Seeds. And Truffula Trees are what everyone needs.Plant a new Truffula. Treat it with care. Give it clean water. And feed it fresh air. Grow a forest. Protect it from axes that hack. Then the Lorax and all of his friends may come back."

The only way that someone can "protect it from axes that hack" is by property rights. Unless you own something you have no right to tell everyone else that they cannot use it.

We note that at first the Lorax attempted to exert property rights (emphasis added in boldface and italics), "What's that THING you've made out of my Truffula tuft?"

The problem is that the Lorax makes two critical errors. First, he failed to emphasize that the Truffula tuft was owned by the Lorax. Instead, he concentrated on the Thnead that the Once-Ler made. Second, the Lorax attempted to appeal to the Once-Ler's altruism by showcasing the damage caused by Thnead production. But why should the Once-Ler care about this? Let's showcase what Adam Smith says about altruism versus self-interest in The Wealth of Nations:

It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

The Lorax has this reversed. He attempts repeatedly to address the Once-Ler's humanity, not his self-love.  So, naturally, the Once-Ler would not listen.

What The Lorax should have done was sue the Once-Ler for theft or, in the absence of responsible government, he should have shot the Once-Ler (never brings a knife/ax to a gun fight!).  However, he apparently did not have a property deed nor a gun (believe me, however, launching a lawsuit is far more preferable to taking matters in your own hands).

Of course, the Lorax does make several property claims. He talks about "my trees", "my poor Bar-ba-loots", and "my poor Swammie Swams." But he makes no attempt to enforce those claims besides blistering talk. Yet without enforcement of property rights, the rights mean virtually nothing.

Indeed, by not enforcing his property rights, he allowed the Once-Ler to argue as follows:

"All you do is yap-yap and say, Bad! Bad! Bad! Bad! Well, I have my rights, sir, and I'm telling you I intend to go on doing just what I do!"

You see, folks, it is important to have property rights but it is equally important to enforce those property rights-- and that is the true lesson we should take from The Lorax, not the feel-good environmentalism about what we should do.  After all, even the environmental movement requires that force be applied against those who would seek to cause harm to the environment but how do we know how to balance the needs of the environment and the needs of the economy? You can argue until you are blue in the face that the environment should take precedence but you would end up only being blue in the face. What matters is whether you have the authority to force others to respect your decision and that can only come from one of two sources: authoritarian command and control (i.e., Communism) or freedom with property rights (i.e., Capitalism). I'll take Capitalism every time.

Of course, those on the Left will argue that it is "unfair" that those with so much will be able to run roughshod over those with so little but they are mistaken in their critique. For those with so much always run roughshod over those with so little whether under Communism or Capitalism. The difference is that if you can acquire wealth under capitalism, the capitalists will freely respect and uphold your right to do with your property as you wish. However, no one will respect your rights under communism -- you must uphold them by force.

Why the Chances for a Double Dip Recession Are Close to 100%

2011-03-27T21:17:00.000-07:00

The global supply chain is broken and the falacy of "just-in-time" inventory control has revealed itself. Welcome to the Recession of 2011. Historians will date the cause of this to the earthquake and tsunami in Japan a couple of weeks ago but it will be dated by the economists as starting in the April-June quarter of 2011.

When one piece of a global supply chain goes down, it takes down the rest of the chain and it is all because of a really stupid idea called "just-in-time" inventory, a concept trumpeted by neoclassical economists as being the ultimate in allocative efficiency but which should cause them to go back and reevaluate their theories in light of this calamity.

The problem is that neoclassical economics has no proper conception of time. Oh, for certain, there is a conception of time but it is a logical time that concerns itself with sequencing rather than the temporal distance between sequences. It is one that allows for the "short-run" and the "long-run" and which treats technology as a non-stochastic process that marches on from one "period" to the next without defining how long a period actually is.

It is a theory that explains how competitive industries (perfectly or otherwise) operate and how monopolies operate but cannot explain how competitive industries turn into monopolies or vice versa.

Yet the world is wrought with stochastic processes, such as the earthquake in Japan and those stochastic processes end up wrecking havoc with the models. After all, whenever you introduce a random shock into a model, it is important to determine how long that shock will last, the 'persistence' of it, if you will.

The problem is that since random shocks are just that - random - companies that use economic theory to help decide on how to maximize profit tend to ignore them. Yet the random shock may reverb for a longer period of time with some decisions than with others. This earthquake is just one such example.

By attempting to excise all "inefficiency" from the system, we create inefficiency. Engineers fundamentally understand that, as do systems designers. Neoclassical economists often do not. Redundancy in engineering is not inefficient; it is a mechanism to reduce overall failure. Tolerance is not efficient; it is a mechanism to ensure reliability. Yet the global supply chain exhibits neither of these two important characteristics and it is especially problematic when we are dealing with high-value parts that take a long time to fabricate (in some cases, months--and even a brief interruption in power can send you back to step 1).

The irony is that many of the actual plants where these parts are made have redundancy and tolerance build in to them -- it is the global supply chain itself that lacks these characteristics. That is because the plants were build by engineers, while the global supply chain was created by neoclassical economists.

When we ignore redundancy and tolerance, we end up maximizing returns in the short-period, but end up sacrificing the long-run. Of course, as Keynes said, in the long-run, we are all dead. However, I would add that we all live in the long-run, not the short-run and that should be the lesson that the great Japan earthquake and tsunami of 2011 teaches us.

Unfortunately, what it will take for us to learn is another recession and that is exactly what will happen. This will be the first "made in Japan" global recession for two critical reasons.

First, all because that country is the hub of activity for the world's high-tech needs and because everything is high-tech these days. Automobiles will be the first to drop in terms of their productive capacity but the ramifications will be felt in other industries as well: computers, video game consoles, televisions, kitchen appliances--if it has a Japanese part in it, it is affected.

Second, and perhaps more importantly for the US, Japan's need for funds to rebuild will cause pressure on US interest rates as Japanese savers stop investing in our bonds and start repatriating funds home. It will also cause a large exodus by insurance companies from various investments as they must liquidate positions to pay claims. To the extent that these investments are in US treasuries, it will also cause a rise in US interest rates.

Third, although US construction companies are salivating at the prospect of rebuiling, much of the expenditure will be in Japan and, to the extent that they must delay or scrap building projects in the United States, this activity will lower construction spending in this country.

We have met the enemy -- and it is us. Just as I urged back in 1995 when the Great Hanshin earthquake hit Kobe and first exposed cracks in the global supply chain, I am going to urge this again: we must build in redundancy and tolerance into our supply chains before it is too late.

The Miracle of Compounding Interest (and Economic Growth)

2011-03-27T04:27:00.000-07:00

Mitch McConnell tried to put $1 trillion into perspective when he told a crowd that if you spent $1 million a day every day starting on the day that Jesus was born, you would not reach $1 trillion. That seems like a lot, doesn't it? However, if you invested just $1 on the day that Jesus was born and received only 1.4% per year (less than what I earn on my certificate of deposit even in these low-inflation/low-interest times), you would reach, are you ready for this? $1.368 trillion.

That is the miracle of compounding interest. However, reduce the interest rate by only 0.4% down to a mere 1% per year and your total take would drop to -- are you ready for this? $485 million. Still not a bad take but notice that a difference of only 0.4% compounded over 2,010 years and you end up more than an order of magnitude away.

This insight has important implications for economic growth. Notice that if we increase our growth rate by a mere 0.4% (or reduce it by the same), over two millenium we reach of level that is over 2800 TIMES greater. To put that in perspective, it is the difference between someone making $84.6 million a year and someone making $30,000. Since no economic system, even capitalism, has such large disparaties in wealth for more than a few outliers in society, any economic system that can increase economic growth by even an infintessimal amount is automatically superior to all others regardless of the wealth disparaties within it.

Yet, the only way to do this is to protect and extend private property rights. Why would I produce if I did not gain (most of) the fruits of my labors? Everyone understands this and yet too many are tempted by the evils of those who would take these rights away. Communism seems easy: from each according to their ability, to each according to their need. But it fails in practice. It really becomes: from each according to their ability to do as little as possible, to each according to their ability to convince the powers that be that they have "need".

I teach at a university. If I graded by the Communist mantra, everyone would automatically pass even if they did not deserve to do so. Each would work to their ability without being motivated by grades. How realistic is that?

No, people act not out of kindness but out of regard to their own self-interest -- and we have a better society because of it. From Adam Smith: "It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

And that, boys and girls, is why even small inefficiencies must be excised from our economy and why proposals for abolishing private property, such as those made by Communists, are nothing more than the purest form of evil.

Is Being a Libertarian and Working for the Government Hypocritical?

2011-03-27T04:20:00.000-07:00

Hypocrisy is the act of saying one thing while doing the opposite. So, is being a libertarian at a public university hypocritical? The answer is no. Just because one does not believe that government should be involved in some activity does not mean that working for the government is hypocritical. It would be hypocritical if a libertarian urged others not to work for the government and then did but the mere act of being employed by the government is not a hypocritical act for the following reasons:

(1) Everyone is working for the government. You read that right. Everyone works for the government. We all are required to follow government mandates and pay taxes, so while some people are more directly working for the government, everyone works for the government in some fashion.

(2) Corporations are (almost as) every bit as much creatures of the state as are government agencies. After all, they get their charters from the government. The only difference is that they are not completely controlled in their actions by politicians: instead, private companies have limited flexibility to craft independent policies.

(3) There is a difference between advocating for a change in a rule and advocating actual breaking of a rule. I believe that we should eliminate the state income tax (income taxation is notoriously volatile so I want it eliminated on both efficiency and volitility grounds) but I still pay my state income taxes and urge all of my fellow state residents to do the same. This is not hypocritical because I do not believe that we should ever break the rules of a legitimiately formed government, even if I do not agree with the rules in the first place.

(4) I work for a state university but although I might prefer the university were privatized, I am not adverse to the state running a public university system because I do believe that there are significant positive externalities and that it is important to provide opportunities for all concerned. However, even if I worked at a private university, that university would be receiving a cash infusion from the state government. I oppose vehemently the Legislative Tuition Grant to private universities. After all, this only serves as a subsidy for private enterprise, which distorts the pricing mechanism that (still) exists in this country.

The Four Fundamental Errors of People Who Advocate for Steady-State Economics and the One Fundamental Error of Economists

2011-03-26T01:40:00.000-07:00

Neo-Malthusians/Steady Staters are forever attacking economists for absolutely no good reason, mostly because they misunderstand the terms that are used in economics. I tried to educate several of them recently and was met with attack after attack simply because they are so ill-informed about our profession.

FUNDAMENTAL ERROR #1: MISUNDERSTANDING ECONOMIC GROWTH

Let us begin with a very simple definition, that of economic growth. Well, economic growth is simply an increase over time in Gross Domestic Product. Gross Domestic Product is a constant-dollar measurement of the monetary value of all final goods and services produced within the borders of a country. But what does that mean?

Well, final goods and services are goods and services that are sold to firms, consumers, or the government for any reason other than as a part of another good or service. Thus, goods and services that you and I consume or that companies use to produce goods and services are final goods but goods or services that are part of another good or service are not. Thus, my book, Modern State Intervention in the Era of Globalization, is a final good but the paper that makes up the book is not. This distinction is necessary to avoid double counting.

So far, so good. But doesn't that mean that the total amount of stuff has to increase for us to have economic growth? Not at all. This is why ecologists are simply wrong about economists and wrong to argue against economic growth.

What is necessary is that the value of goods and services increases, not necessarily the quantity. Higher quality goods are an example of an increase in the value of goods and services without increasing the quantity.

So long as we can figure out a better way of doing things, we can do this forever, even with the same amount of inputs and this is even part of their own admission! From the website of the Center for the Advancement of the Steady State Economy (CASSE):

"Myth

Technology and progress will grind to a halt in a steady state economy.

Reality

A strong incentive for technological progress exists in a steady state economy because of the drive for better goods and services. With stabilized material and energy inputs (as would occur in a steady state economy), technological progress becomes the main source of higher quality outputs."

Okay, wait a minute. Read the definition of economic growth as given by economists. "Higher quality output" with the same amount of output is economic growth because it represents higher valued output. Remember, you get economic growth either by growing the amount of "stuff" or the quality of "stuff" or both. If their argument is simply that there is a limit on the physical amount of "stuff" that we have, they will have absolutely no argument from anyone in the economics profession because economic growth is not about the sum total of physical goods, it is about the value of those goods (and also our services, which the steady-staters tend to ignore).

Yet, we can also theoretically grow the amount of "stuff" too, which brings me to their next error:

FUNDAMENTAL ERROR #2: NOT UNDERSTANDING INFINITE GROWTH DOES NOT NEGATE A CEILING ON GROWTH

Zeno's paradox of motion states that we cannot move because to move from location A to location B would require us to pass through the midpoint (C) but to pass through the midpoint would require us to pass through the midpoint between A and C (which will we call D) and to pass through that midpoint would require us to pass through the midpoint between A and D, etc. ad infinitum. Since we would be crossing an infinite number of midpoints, we cannot move. But, we can. Thus, the paradox.

This is similar to what steady-staters argue. They cannot understand that infinite growth can have a finite sum. I will state that again: infinite growth can have a finite sum.

Let us illustate how this works: What is the sum of 1 + 1/2 + 1/4 + 1/8 + 1/16 + 1/32 + 1/64 + . . .?

The answer is 2.

Each time, we grow the sum closer and closer to the final point. Now if steady-staters want to argue that there is a theoretical limit, I have no issue with them. However, they are arguing for a practical limit to growth and that is just plain wrong.

Why they are wrong is instructive.

From the website of the Center for the Advancement of the Steady State Economy: "Some economists think that, because a particular production process can become more efficient (more output per unit of natural capital), there is no limit to economic growth."

No, we don't think that. We know that. However, bear with me for a second and we will see the steady-state error.

Let's continue with their argument: "These economists and 'technology optimists' are disregarding the second law of thermodynamics, the entropy law, which tells us that we cannot achieve 100% efficiency in the economic production process."

Can't any of these steady-staters see the inherent contradiction in their position? Economists are not disregarding the second law of thermodynamics -- steady-staters are! Of course, we cannot achieve 100% efficiency in the economic production process. We can only get closer and closer to it. The irony is that we are dealing with the infinite sum problem. We approach the limit of growth but we do not reach it. Thus, by definition, we are still growing, even though they think we are in a steady state.

Yet, steady-staters persist in not understanding this basic concept. Here is their error in focus (from the CASSE website): "Thermodynamic laws also tell us that we cannot reach 100% efficiency. When the limits to efficiency have been reached, the only remaining way to grow the economy is by using more natural capital (including energy), which is limited in quantity." How exactly will we reach "the limits to efficiency"? I maintain that we cannot because efficiency will naturally not be reached due to human imperfection. Instead, what we can do is systematically keep reducing the waste that is due to human imperfection but we can only approach the limit, never actually reach it. There is always some more efficient way of doing everything. Indeed, not a single day goes by that I have not been able to find ways to reduce the amount of time that it takes for me to do various tasks. This increase in efficiency is a technical sort of efficient that can continue forever simply because there is no way for me to eliminate my imperfections. The problem that steady staters do not understand is that these imperfections are what is standing in the way of their nirvana of a limit to efficiency.

The error is that we economists are like Zeno in that we are talking about the movement from location to another, while the steady staters are arguing that we have already arrived. While that works fine with the motion paradox, it doesn't work with infinite sums. You see, the dirty little secret is that you do not reach the infinite sum until . . . infinity. You approach the limit but never reach it and, therefore, you can always have growth.

This brings us to the third error of the Steady-Staters:

FUNDAMENTAL ERROR #3: THE PROBLEM OF SERVICES

Goods, obviously, have physical limits. There is a physical limit that is countable on the number of iPads. However, services cannot be counted in that manner. Of course, one could use "man-hours" (or the more politically correct "person-hours") but that doesn't really get at what services are. Economic growth is mostly found in the service sector, which does not have resource issues that steady-staters rail against.

Total energy use in 2009, according to Lawrence Livermore Laboratories was lower than it was in 1997, yet economic activity was 30% greater. What is the cause? The answer is, of course, better energy usage but also a shift to services. More than 60% of GDP is simply services. What are services? Well, my teaching is a service. My fitness coach provides a service. My doctor when he sees me provides a service. If my doctor improves the speed at which he makes a diagnosis (and assuming that his quality of diagnosis does not go down), he gets paid the same amount but his hourly compensation increases since he is seeing more patients (if the quality of diagnosis declines, however, he might make less because fewer patients will want him for a doctor). If my fitness coach can get me to my wait loss goal quicker, I am willing to pay more per hour for that service. These are increases in the value of the service and thus represent real economic growth and yet they have absolutely nothing to do with energy consumption or other resource factors. Simply figuring out how to do things better generates economic growth. Indeed, if my doctor can see twice as many patients and cuts back his hours by 25%, the "physical input" (man-hours) actually declines while growth occurs. This type of economic growth can be sustained ad infinitum by the mere fact that we will never reach 100% efficiency but can only approach it (and we will always continue to approach it because we are constantly improving our techniques).

Finally, we have their fourth error, which serves as a misapplication of economic theory:

FUNDAMENTAL ERROR #4: MISUSE OF JEVONS' PARADOX

Jevons' paradox is used by steady-staters as an argument for why economic growth is unsustainable. It is a fundamental misuse of the paradox. The paradox states that technological improvements in efficiency tend to increase consumption by more than the technological improvement in efficiency. This is completely true for all normal goods and it really isn't a paradox. Instead, it is simple application of price theory. As price drops, revenue increases for all normal goods (those with a price elasticity greater than 1). From economic theory, we know that cutting the price in half will more than double consumption (thus insuring that revenue increases) for all normal goods and a technical improvement in efficiency is equivalent to a price cut because it represents a reduction in the overall input cost. That increase in consumption means that we will have greater demand for the input than we had before. So increasing energy efficiency fuels increased demand which can overrides the efficiency. I say can override because the increase in demand for fuel depends crucially on the percentage of the overall input cost that is represented by energy. Thus, if energy is 5% of the overall cost and energy consumption is cut by 50%, this represents only a 2.5% reduction in costs and it is unlikely to spur increases in consumption that would ultimately increase energy usage.

On the other hand, if energy is 50% of the overall cost and energy consumption is cut by 50%, that represents a 25% reduction in costs and that very well might cause increases in energy usage that exceed the original levels.

It should also be noted that Jevons Paradox may appear to be present when it is not. After all, suppose that we did not conserve energy at all but we still had an increase in demand for energy because of a growing population. That would be an increase in usage that had nothing to do with the Paradox. Now combine the two and you will see that we might get an increase in demand for energy due to a growing population rather than because of price reductions triggered by technical efficiency improvements.

But what happens when we limit the input absolutely? The answer is that you cannot surpass the limit! For example, suppose that I am making widgets and that each widget requires 1 gallon of fuel. I figure out a way to cut my fuel use in half and thus drive down the cost of producing widgets but suppose that I face an absolute limit on the amount of fuel that I can acquire. At that point, technical barriers limit growth and there is nothing I can do about it. Thus, if there is only 100 gallons of fuel in the market, I can never exceed the 100 gallons of fuel no matter how efficient I become in terms of reducing its use in my widgets. Indeed, at that point, Jevons Paradox cannot apply and increases in technical efficiency automatically translate into increases in output with no increases in inputs. Voila! The steady-state economy produces economic growth!

Now that I have conclusively demonstrated the errors of steady-staters, I now turn to the big error of the economics profession:

FUNDAMENTAL ERROR #5: ECONOMISTS ARE SLOPPY

Instead of listening to our definitions and attempting to take us on in our world, steady-staters want to have their own world with their own definitions. That is fine but they cannot have it both ways. They cannot argue that we are wrong in our analysis but then use their definitions for their debating points. According to the Center for the Study of the Steady State Economy, economic growth is: "an increase in the production and consumption of goods and services." That simply is an incorrect definition. Economic growth is the increase in GDP and, as we have seen already, GDP is the constant-dollar monetary value of goods and services, which could imply simply that goods and services are increasing in quality or that we are approach the limit, the two cases that I have already shown are consistent with steady-state economics and which are also completely consistent with neoclassical growth theory.

The problem is that too often economists use the term "an increase in the production and consumption of goods and services" as well. The sloppiness is that economists are not necessarily referring to the physical amount of goods and services when they state this. Indeed, they really mean the value of goods and services but simply omit those terms.

There is an additional issue in that economists oftentimes refer to economic growth as being "per capita economic growth" and, of course, with a rising population, that does mean more "stuff" in most cases. Yet, we have reached the demographic transition in many countries and population is actually falling in some. As population falls, we can have increases in per capita economic growth while maintaining the same overall amount of goods and services or even cutting those goods and services.

It is important to have these discussion and for both economists and steady-staters to be open-minded in their approaches. We can reach out across the aisle if steady-staters give up their inaccurate portrayals of economics and actually listen to us instead of merely trying to score debating points through straw-man arguments. Unless they understand economics, they should stop with their silly attacks and come to understand why economic growth can occur even in their steady states.

Indeed, if they would focus on exclusively limiting inputs instead of attempting to limit outputs, steady-staters would find that economists have no quarrels with them. It is their focus on output rather than input that has earned them the universal scorn and disdain of the economics profession and for good reason. Their preoccupation with the output belies their political and economic liberal orientation and their disdain for capitalism.

Zagros Madjd-Sadjadi, Ph.D.
Associate Professor of Economics &
Chair, Department of Economics and Finance
Winston-Salem State University

Why Allen Hunt Is WRONG About Islamic Immigration to the United States

2011-03-26T01:33:00.000-07:00

Allen Hunt, a radio talk show host who claims to have the only radio program in America that deals with right versus wrong rather than right versus left is simply factually wrong on the notion that Islamic immigration to the United States is a problem that can be ended legislatively, either practically or legally. Moreover, he is morally wrong on the notion that Islamic immigration to the United States should be ended legislatively.

Mr. Hunt believes that any Muslim who is not a US citizen should be removed from this country (at least he understands that one cannot remove US citizens who are Muslim but that is of little comfort to those here who are Muslim but who are not citizens). His position with regard to those currently in the United States is, by itself, unconstitutional. Even during the period of the odious Chinese Exclusionary Act, those Chinese currently in the United States could not be removed simply on the basis of being Chinese.

There are two sections of the United States Constitution that, when operating together, prohibit Allen Hunt's desired result of kicking non-citizen Muslims out. The Equal Protection Clause of the US Constitution prohibits states (and, according to more recent Supreme Court rulings, the federal government as well) from "denying to any person within its jurisdiction the equal protection of its laws." The problem for the Allen Hunts of this world is that such a policy would run afoul of the notion that "Congress shall make no law . . . prohibiting the free exercise thereof" of a religion. Obviously, any law that targets non-citizen Muslims who are currently present in the United States is a law that prohibits the free exercise thereof of Islam (since such free exercise would subject them to deportation). This is clearly unconstitutional.

But what about those who wish to immigrate? Can they not be prohibited if they are Muslim? Such a policy would be completely unwise from the standpoint of strengthening the economy even if it might pass constitutional muster. After all, the first reaction from Muslim oil states would be to stop selling the US oil and our economy would crash and burn as a result. Furthermore, what would prevent terrorist Muslims from simply lying about their religion? Once the US makes it clear that it is waging war against Muslims as opposed to radical Muslims, it will simply drive Muslims underground. Besides, the last time a government waged a war against a religion it didn't turn out well for anyone concerned (World War II -- Hitler v. the Jews). In addition, there is that pesky religion clause in the US Constitution again, which probably would prohibit the type of immigration law that Mr. Hunt advocates.

Instead, a return to the national origins system would be more likely to pass muster constitutionally, but that too carries with it serious problems: it is likely that Muslim nations would react in a hostile manner to such an implementation and we would see a repeat of the oil crisis of the 1970s. Hardly a plan that helps our economy. Your policy is one of knee jerk reaction and is poorly thought out, Mr. Hunt.

So why does Mr. Hunt persist in his quixotic quest to quash Islam in America?

It is for the same reason that people like Robert Spencer do: he is an unrepentant bigot and needs to be called out on it.

Such individuals love to question why American Muslims don't take forceful steps to condemn terrorism. But we do! However, individuals such as Robert Spencer want their cake and eat it to (and I presume, though I am unaware if it is in fact the case, that Mr. Hunt is similar) in that when American Muslims condemn terrorism, we are then accused of Al-Taqiyya, which means that we are permitted to do the impermissible under certain circumstances. Mr. Spencer has characterized this is allowing (or even requiring) Muslims to lie about Islam and conceal their status as Muslims. He further states that Islam if fundamentally in disharmony with other religions and requires Muslims to make war (Jihad) against those of other faiths. Indeed, according to Mr. Spencer, Muslims who reject the principles of dhimmitude and holy war are not good Muslims.

This is a deliberate misinterpretation of Islam. It is not up to Mr. Spencer to judge whether I am a good Muslim based on their flawed understanding of my religion. It is up to me to judge it for myself truth or errancy under Islamic jurisprudence and for Allah to determine if my judgment is sound and in accordance with the faith.

Instead, what is the solution is what Daniel Pipes refers to as moderate Islam, which rejects the radical Islamic jihadist agenda. Yet banning Muslims from the United States would only strengthen radicalism by making it appear as though the US in uninterested in engaging and promoting moderate elements. Is it any wonder that Muslims choose not to speak up when they find themselves being lambasted by both radical Muslims and critics such as Mr. Spencer as being un-Islamic? Furthermore, if we are going to be accused of being deceitful when we denounce terrorism, why should we bother to denounce it at all even when we do not agree with it? It does us no good and could attract unwanted attention from the radical elements within our own religion.

Indeed, moderate Muslims have much to hate and fear about individuals such as bin Ladin. The number of Muslims killed by radical Muslim insurgents is far greater than the number of Christians killed by these individuals. When Christians ask "why don't Muslims condemn terrorism against Christians by radical Muslims?", moderate Muslims may just as well argue "why don't Christians condemn terrorism against moderate Muslims by radical Muslims?"

Yet, by denying moderate Muslims safe haven in places such as the United States, they force moderate Muslims into closer quarters with their radical brethren and thus place moderate Muslims in an untenable situation: radicalize or die. Now how can that be the right position, Mr. Hunt?

No, the solution is not unilateral and total bans on Islamic immigration. It is not to argue that all terrorists are Muslims so we need to screen out all Muslims (a blatant lie--according to the most recent National Counterterrorism Center Terrorism report [covering all of 2009] found at of the 14,971 deaths due to terrorism worldwide in that year, approximately 62% of all such deaths were caused by Islamic Extremist terrorists (those who use Islam as a cover for their terrorist actions) but 7% of all such deaths were caused by Christian Extremist terrorists (those who use Christianity as a cover for their terrorist actions). Another 14% were due to secular/political/anarchist terrorists. At the same time, however, if we were to examine those killed by such terrorists, the disparity between Muslims victims and Christian victims would be far greater. Ironically, a Christian American in the United States is probably more likely to be the victim of a terrorist who happens to be Christian than a Muslim terrorist (provided we take out the obvious exception of 9/11), whereas a Muslim in a Muslim-dominated country is far more likely to be the victim of a Muslim extremist terrorist.

Furthermore, given that the total number of Muslims in the world exceeds 1 billion and that those within the United States is around 5 million, it is clear that there is no reason to fear that Islam itself is a threat to our way of life. By encouraging secular and moderate Muslims and rewarding behavior that is characteristic of the same, we promote this element within Islamic society.

A Pox On ALL Thy Houses

2011-03-26T00:17:00.000-07:00

I am an agnostic theist. There, I said it. I am agnostic, as any well reasoned individual must be because I truly do not know if there is a God or not. I certainly hope that there is and believe that there is and that is why I am also a theist, which means that I believe that there exists at least one god (or, if you really want to pin me down, I am a believer in one God but I will not go any further in this article as to my actual religious affiliation since it is not germane to this argument).

Recently, militant atheists have attempted to disprove God (Dawkins, Smith, Hitchens, Harris, Dennett, etc.) and condemn religion. These attempts are doomed to failure for the same reasons that the various proofs of God are doomed to failure. God exists outside the system and thus cannot be proven from within it. While it may be possible to disprove a God that intercedes in the physical world at least in the here and now or who has left evidence of such tampering in the past (in the sense that He violates the laws of nature to cause action), it is logically impossible to disprove a God that does not.

Similarly, while it is possible to prove a God that intercedes in the physical world, no such proof has thus far been offered and, if it were offered and accepted, the very act of doing so would destroy faith. Since faith is necessary for the existence of religion, such an action would destroy religion as well.

More to the point, if there is a God (and if He has the attributes that we ascribe to Him), it is highly arrogant of us mere mortals to think that we will ever be able to find such proof at least in the sense that there is no other possible interpretation. Continuing with the assumption that God does exist, God may make Himself known but He has not done so in such a manner as to completely obviate all other possible conclusions. The skeptics will remains regardless of how many times and ways that we ascribe that we have found irrefutable proof.

Irrefutability, it seems, is in the eye of the beholder. Yet perhaps this too is all in God's plan (if God exists). The arrogance of man is to believe that God will show himself in such a manner. Yet while individual humans lack perfection and thus will eventually reveal their faults, if God is God as we have come to portray Him, then He has no such faults. As such, he can certainly cover any tracks that might be left to us. Since He is all-knowing and all-powerful, then He knows how to ensure that the Richard Dawkinses of the world will never find the "proof" that they seek.

So why would He do that? Why would He deny to the Richard Dawkinses of the world such a revelation. The answer lies in free will.

If God were to reveal Himself, there would be not only no faith but no free will either. Although free will is, to some extent, an illusion, it is a useful illusion only when there are those who do not believe. Since God knows what has happened and what will happen and since He is not bound by time, He knows what we will do in the future but since we are bound by time and do not know what will happen (or even completely what has happened), we make decisions using our free will that leads to our predestination.

Let me say that again: we make decisions using our free will that leads to our predestination.

We often think that these two concepts are polar opposites when, in fact, they are the logical outcome of all that exists. Our decision-making process is always and absolutely to do that which brings us what we believe at the time to be the course of actions that we most prefer to take. No one (except for those who like to be miserable) wakes up in the morning saying, "Gee, I want to mess up my life and make myself miserable. What can I do to mess up my life and make myself miserable?" Of course, in the case of those who like being miserable, well, since they like it, then they too make decisions that they most prefer to take!

Does this mean that we act always in ways that are in our best interests or that will lead to the conclusions that we desire? Of course not. People engage in all sorts of highly destructive behavior. Yet they engage in this behavior because they are trying to reach a result that they believe they will prefer (at the time of making the decision) over all other possible results that can foresee with other possible actions. Now that result might be very short-term (as in the person who wants to experience the "thrill" of a near-death action that could very possibly end their life) but it is still something that they prefer. Even the person who kills himself or herself has revealed a preference for death over the alternative.

By revealing Himself as God, God would take away this fiction. We would no longer be "free" to engage in our behavior because we would know that our lives are not our own. We would no longer have free will because we would be led in the course of our existence to a foregone conclusion. Thus, God requires faith, not because God needs it but because faith is fundamental to our ability to practice free will.

Proof that Science is a Religion

2010-06-05T13:34:00.000-07:00

Zagros: Why is it that you don't accept intelligent design?

Scientist: We hold that all supernatural causes are not part of science.

Zagros: So, therefore, if something is supernatural, then it is not science, correct?

Scientist: That is correct.

Zagros: And, science holds, matter is neither created nor destroyed.

Scientist: That is an oversimplification because it has to be in a closed system and . . .

Zagros: Okay, but generally speaking, it is true, and if I am talking about the universe as a system, then can we accept it as a basic premise?

Scientist: Well, not exactly, it is the law of conservation of mass, not matter, they are different.

Zagros: I am a little confused.

Scientist: That is because you are not a physicist.

Zagros: Okay, fine, then mass is a universal constant.

Scientist: Well, in a closed system . . .

Zagros: What happens in an open system.

Scientist: Well, since energy can escape in an open system, we can lose mass.

Zagros: Wait a minute, I thought you were talking about mass, where did energy come about?

Scientist: I don't have time to explain it all but energy equals mass times the constant (speed of life) squared.

Zagros: Einstein's theory of relativity says that mass can be converted into energy.

Scientist: Well, actually it states that they are equivalent through this formula.

Zagros: Okay, now, then how about me? If mass is neither created nor destroyed, then the mass that is me has always existed, right, but I was born on . . .

Scientist: Okay, I see where you are going here. That is an incorrect assumption. Your mass was neither created nor will it be destroyed on your death, it is mere reconfigured.

Zagros: So, what you are are really saying is that everything that is me is something called mass that was reconfigured from somewhere else and then become me?

Scientist: Yes, you take in mass (food) and that mass is transformed into energy and that energy fuels your growth (mass)...

Zagros: But that implies that energy is not mass, so wasn't energy created by destroying mass. I'm a little confused.

Scientist: Well, in a closed system, energy may be converted to mass. It is documented in Einstein's Theory of Relativity: E=MC².

Zagros: Whatever. So what created mass?

Scientist: Excuse me?

Zagros: Yeah, what created mass. I mean it had to come from somewhere, right?

Scientist: No, it is neither created nor destroyed.

Zagros: So then mass is God.

Scientist: Where do you get that from?

Zagros: Well, it has always existed, right? It reconfigures into various stuff, right? Isn't that God?

Scientist: But God is a supremely intelligent being that configures the universe.

Zagros: So, you admit that there is a God.

Scientist: No, I am telling you what God is.

Zagros: That requires that you admit that God exists.

Scientist: No, I am telling you that the concept of God is such that . . .

Zagros: And this can be proven scientifically?

Scientist: No, this is the concept of God as given by religion . . .

Zagros: I don't accept that.

Scientist: What?

Zagros: I don't accept that. I only accept what science provides. I just defined God scientifically as the uncreated mass. I said nothing about intelligence -- you did.

Scientist: Fine, but every other person in the world . . .

Zagros: I am not every other person in the world. I am me and I say that the universe is God. After all, God is everywhere and in everything.

Scientist: How do you know that?

Zagros: God told me.

Scientist: How?

Zagros: Does it matter?

Scientist: Yes, it does, because I want to know . . .

Zagros: What? If I believe in the Bible, the Qu'ran, the Torah?

Scientist: Exactly.

Zagros: Why?

Scientist: So I can show you the error of your statement.

Zagros: How?

Scientist: By demonstrating to you that the Bible, the Qu'ran, etc. do not have a God like that.

Zagros: Oh really? So, give me an example of my error.

Scientist: Well, God grants prayers.

Zagros: Did I say that?

Scientist: But those books say that.

Zagros: Okay, define "granting a prayer".

Scientist: You ask and God causes something to happen that otherwise would not have happened.

Zagros: So, that would make me God then right? Because, through prayer, I can command God to . . .

Scientist: No! None of your books say that you can command God to do anything!

Zagros: Okay, so prayer is useless, so . . .

Scientist: No! Your books suggest that God answers some prayers . . .

Zagros: Oh, so God is picky and choosy about which prayers to answer. They answer my prayers but not yours, right?

Scientist: Whatever.

Zagros: How about God does answer all prayers? God answers 'yes' to some, 'no' to others, and 'you have got to be kidding' to the rest.

Scientist: Okay, that's fine.

Zagros: Then science says that a scientist prays to God and he grants them but he only grants some prayers to believers.

Scientist: What?!? Where the hell did you get that idea from! Scientists don't pray!

Zagros: Because you are atheists?

Scientist: No! Some of us are and some of us aren't . . .

Zagros: So some of you pray and others don't is what you are saying.

Scientist: Yes, and . . .

Zagros: So God grants the prayers of the scientists who are believers . . .

Scientist: No, scientists don't pray . . .

Zagros: But I thought you said they did.

Scientist: No! Scientists do not pray as scientists. They may pray as religious people but not as scientists.

Zagros: Okay, only the prayers offered by the atheistic and theistic scientists who are praying as scientists are answered and those offered by them as religious people are not.

Scientists: You aren't listening. We aren't praying as scientists!

Zagros: Oh really? What is a prayer?

Scientist: It is a request to God to do something.

Zagros: You mean, . . . like an experiment?

Scientist: No, you have to get down on your knees, close your eyes, and . . .

Zagros: I don't pray that way.

Scientist: Well, however, you do, you have to ask for divine intervention and . . .

Zagros: I don't pray that way.

Scientist: Well, then, how do you pray?

Zagros: I pray by doing things and God's will be done.

Scientist: No, your will be done.

Zagros: But God is everywhere and in everything, so God's will be done.

Scientist: But God is intelligent and . . .

Zagros: And you are saying that I am not?

Scientist: I have serious doubts. Wait a minute: are you saying that you are God?

Zagros: I didn't say that.

Scientist: Yes, you did. I can play your game too! You implied...

Zagros: I did not state. Your implication is that because I implied, I am.

Scientist: Okay, I will grant you that but . . .

Zagros: No buts. I am no more God than you are.

Scientist: So then I am God, you are saying, as well.

Zagros: I did not state that either. I am simply stating that you and I are expressions of God's will. After all, we were made by God and God knows everything, so therefore whatever God wills, will happen.

Scientist: But I thought we have free will.

Zagros: You do, as far as you are concerned but God knows in advance what you will do.

Scientist: So I do not have free will.

Zagros: No, you do.

Scientist: But God knows what I will do so...

Zagros: Hmm... let me use science to explain it to you.

Scientist: Huh?

Zagros: Yes, does a quantum have free will?

Scientist: Of course not.

Zagros: Okay but if I observe the quantum does it change its behavior?

Scientist: Yes, that is the observer effect in quantum mechanics.

Zagros: So, my will (action of observing) caused the quantum to change.

Scientist: I guess but that is a proof of determinism, not free will.

Zagros: So, my will be done. But how is it determinism?

Scientist: Because your will determined that it would change.

Zagros: So I determined where it would go, so I can determine where it will be in . . .

Scientist: No, you cannot. Quantum mechanics says that one cannot predict . . .

Zagros: Oh! So quantum have free will since the quantum determines . . .

Scientist: (sigh) What does this have to do with . . .

Zagros: So, quantums have free will in a deterministic system and scientists pray to God to get . . .

Scientist: Wait a minute. Scientists don't pray to God.

Zagros: But you said that some do . . .

Scientists: They don't pray to God as scientists!

Zagros: Yes, they do.

Scientist: No, they don't.

Zagros: Yes, they do.

Scientist: No, they don't. Look, you cannot prove anything through argumentum ad nauseum.

Zagros: I agree, but scientists do pray to God when they conduct experiments.

Scientists: No, they don't.

Zagros: They do through their actions, they are praying that the actions will occur....

Scientists: Stop right there. We know this to work because of cause and effect.

Zagros: And this is different from prayer, how?

Scientists: Well, it always happens, for one, provided all initial conditions are the same and the activity is replicated precisely.

Zagros: Okay, so when scientists pray, they have a ritualistic prayer (experiment) that must be precisely undertaken to generate the result (what they hope to achieve).

Scientist: It isn't a prayer!

Zagros: How so? Is the rain dance a prayer?

Scientist: Yes.

Zagros: Why is it undertaken?

Scientist: To get rain to fall.

Zagros: How does it work?

Scientist: It doesn't work. It is just a stupid superstition.

Zagros: So science maintains that prayers of all other religions are just stupid superstitions, while their prayers to their one true God (nature) are not.

Scientist: You are hopeless.

Zagros: Why thank you. Luckily science isn't according to you, since you obviously believe in it.

Scientist: The difference is that even if you don't believe, it happens.

Zagros: Wow! What a powerful prayer! Even a non-scientist can do it!

Scientist: It isn't prayer!

Zagros: Why do you say that?

Scientist: Because it isn't! Look, darn it! We don't have a God that rewards the good and punishes the wicked!

Zagros: Yes, you do.

Scientist: No, we don't.

Zagros: Sure, if you violate God's laws, you sin and you are punished, right?

Scientist: Finally, we are getting somewhere.

Zagros: So, when you violate a physical law, you are punished, right?

Scientist: You cannot violate a physical law.

Zagros: Wow! You do have a powerful God!

Scientist: Nature isn't a God!

Zagros: Okay, so when you ignore a physical law, you are punished. Like walking off a cliff, you are punished for attempting to disobey the law of gravity.

Scientist: You really are hopeless.

Zagros: And you really have a religion.