Don Boudreaux correctly points out that those who do not believe in a Laffer-effect in taxes should also not believe in a (reverse) Laffer-effect in subsidies:

...many of the same people who ridicule the idea that private-sector output is meaningfully reduced by higher taxes are convinced that private-sector output is meaningfully raised by higher subsidies.

And that’s why markets are usefull and necessary:

At the University of Chicago, economists lean to the right of the economics profession. They are known for saying, in effect, "Markets work well. Use the market."

At MIT and other bastions of mainstream economics, most economists are to the left of center but to the right of the academic community as a whole. These economists are known for saying, in effect, "Markets fail. Use government."

Masonomics says, "Markets fail. Use markets."

Somewhere along the way, mainstream economics became hung up on the concept of a perfect market and an optimal allocation of resources. The conditions necessary for a perfect market are absurdly demanding. Everything in the economy must be transparent. Managers must have perfect information about worker productivity and consumers must have perfect information about product quality. There can be nothing that gives an advantage to a firm with a large market share. There cannot be any benefits or costs of any market activity that spill over beyond that market.

The argument between Chicago and MIT seems to be over whether perfect markets are a "good approximation" or a "bad approximation" to reality. Masonomics goes along with the MIT view that perfect markets are a bad approximation to reality. But we do not look to government as a "solution" to imperfect markets.

Masonomics sees market failure as a motivation for entrepreneurship. As an example of market failure, let us use a classic case described by a Nobel Laureate, which is that the seller of a used car knows more about the condition of the car than the buyer. Masonomics predicts that entrepreneurs will try to address this problem. In fact, there are a number of entrepreneurial solutions. Buyers can obtain vehicle history reports. Sellers can offer warranties. Firms such as Carmax undertake professional inspections and stake their reputation on the quality of the cars that they sell.

Masonomics worries much more about government failure than market failure. Governments do not face competitive pressure. They are immune from the "creative destruction" of entrepreneurial innovation. In the market, ineffective firms go out of business. In government, ineffective programs develop powerful constituent groups with a stake in their perpetuation.

The Economist reports:

SOME folks in Texas recently decided to start a new community “containing 100% Ron Paul supporters”. Mr Paul is a staunch libertarian and, until recently, a Republican presidential candidate. His most ardent fans are invited to build homesteads in “Paulville”, an empty patch of west Texas. Here, they will be free. Free not to pay “for other people’s lifestyles [they] may not agree with”. And free from the irksome society of those who do not share their love of liberty.

Cynics chuckle, and even Mr Paul sounds unenthusiastic about the Paulville project, in which he had no hand. But his followers’ desire to segregate themselves is not unusual. Americans are increasingly forming like-minded clusters. Conservatives are choosing to live near other conservatives, and liberals near liberals.

A good way to measure this is to look at the country’s changing electoral geography. In 1976 Jimmy Carter won the presidency with 50.1% of the popular vote. Though the race was close, some 26.8% of Americans were in “landslide counties” that year, where Mr Carter either won or lost by 20 percentage points or more.

The proportion of Americans who live in such landslide counties has nearly doubled since then. In the dead-heat election of 2000, it was 45.3%. When George Bush narrowly won re-election in 2004, it was a whopping 48.3%. As the playwright Arthur Miller put it that year: “How can the polls be neck and neck when I don’t know one Bush supporter?” Clustering is how.

County-level data understate the degree of ideological segregation, reckons Bill Bishop, the author of a gripping new book called “The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart”. Counties can be big. Cook County, Illinois, (which includes Chicago), has over 5m inhabitants. Beaverhead County, Montana, covers 5,600 square miles (14,400 square kilometres). The neighbourhoods people care about are much smaller.

Americans move house often, usually for practical reasons. Before choosing a new neighbourhood, they drive around it. They notice whether it has gun shops, evangelical churches and “W” bumper stickers, or yoga classes and organic fruit shops. Perhaps unconsciously, they are drawn to places where they expect to fit in.

Where you live is partly determined by where you can afford to live, of course. But the “Big Sort” does not seem to be driven by economic factors. Income is a poor predictor of party preference in America; cultural factors matter more. For Americans who move to a new city, the choice is often not between a posh neighbourhood and a run-down one, but between several different neighbourhoods that are economically similar but culturally distinct.

For example, someone who works in Washington, DC, but wants to live in a suburb can commute either from Maryland or northern Virginia. Both states have equally leafy streets and good schools. But Virginia has plenty of conservative neighbourhoods with megachurches and Bushites you’ve heard of living on your block. In the posh suburbs of Maryland, by contrast, Republicans are as rare as unkempt lawns and yard signs proclaim that war is not the answer but Barack Obama might be.

At a bookshop in Bethesda (one of those posh Maryland suburbs), Steven Balis, a retired lawyer with wild grey hair and a scruffy T-shirt, looks up from his New York Times. He says he is a Democrat because of “the absence of alternatives”. He comes from a family of secular Jews who supported the New Deal. He holds “positive notions of what government actions can accomplish”. Asked why he moved to Maryland rather than Virginia, he jokes that the far side of the river is “Confederate territory”. Asked if he has hard-core social-conservative acquaintances, he answers simply: “No.”

Groupthink
Because Americans are so mobile, even a mild preference for living with like-minded neighbours leads over time to severe segregation. An accountant in Texas, for example, can live anywhere she wants, so the liberal ones move to the funky bits of Austin while the more conservative ones prefer the exurbs of Dallas. Conservative Californians can find refuge in Orange County or the Central Valley.

Over time, this means Americans are ever less exposed to contrary views. In a book called “Hearing the Other Side”, Diana Mutz of the University of Pennsylvania crunched survey data from 12 countries and found that Americans were the least likely of all to talk about politics with those who disagreed with them.

Intriguingly, the more educated Americans become, the more insular they are. (Hence Mr Miller’s confusion.) Better-educated people tend to be richer, so they have more choice about where they live. And they are more mobile. One study that covered most of the 1980s and 1990s found that 45% of young Americans with a college degree moved state within five years of graduating, whereas only 19% of those with only a high-school education did.

There is a danger in this. Studies suggest that when a group is ideologically homogeneous, its members tend to grow more extreme. Even clever, fair-minded people are not immune. Cass Sunstein and David Schkade, two academics, found that Republican-appointed judges vote more conservatively when sitting on a panel with other Republicans than when sitting with Democrats. Democratic judges become more liberal when on the bench with fellow Democrats.

Residential segregation is not the only force Balkanising American politics, frets Mr Bishop. Multiple cable channels allow viewers to watch only news that reinforces their prejudices. The internet offers an even finer filter. Websites such as conservativedates.com or democraticsingles.net help Americans find ideologically predictable mates.

And the home-schooling movement, which has grown rapidly in recent decades, shields more than 1m American children from almost any ideas their parents dislike. Melynda Wortendyke, a devout Christian who teaches all six of her children at her home in Virginia, says she took her eldest out of public kindergarten because she thought the standards there were low, but also because the kids were exposed to a book about lesbian mothers.

“We now live in a giant feedback loop,” says Mr Bishop, “hearing our own thoughts about what’s right and wrong bounced back to us by the television shows we watch, the newspapers and books we read, the blogs we visit online, the sermons we hear and the neighbourhoods we live in.”

Shouting at each other
One might ask: so what? If people are happier living with like-minded neighbours, why shouldn’t they? No one is obviously harmed. Mr Bishop does not, of course, suggest curbing Americans’ right to freedom of association. But he worries about some of its consequences.

Voters in landslide districts tend to elect more extreme members of Congress. Moderates who might otherwise run for office decide not to. Debates turn into shouting matches. Bitterly partisan lawmakers cannot reach the necessary consensus to fix long-term problems such as the tottering pensions and health-care systems.

America, says Mr Bishop, is splitting into “balkanised communities whose inhabitants find other Americans to be culturally incomprehensible.” He has a point. Republicans who never meet Democrats tend to assume that Democrats believe more extreme things than they really do, and vice versa. This contributes to the nasty tone of many political campaigns.

Mr Bishop goes too far, however, when he says the “big sort” is “tearing [America] apart”. American politics may be polarised, but at least no one is coming to blows over it. “We respect each other’s views,” says Mrs Wortendyke of the few liberals in the home-schooling movement. “We hate each other cordially,” says the liberal Mr Balis.

And of course clustering is not only happening in the real world, but also in the virtual online world of the internet. Both kinds of clustering tend to reinforce each other. It could well become unstoppable. Now the critics are right: clustering will be a problem for a democratic state. A democracy cannot work when there isn’t enough moderation among voters and politicians. A democracy needs a (civil) dialogue which could well become impossible if polarization continues. So clustering can mean the dead-knell of the nation-state. Now there are two answers: authoritarianism or the revolution. The state can strike back and try to counter clustering. Or we can always abolish the nation-state of course. That won’t, however, be easy if even someone as libertarian as Ron Paul does not seem to like what is happening.
(Hat tip: Chris Dillow)

Bill Gates:

---- Original Message ----

From: Bill Gates
Sent: Wednesday, January 15, 2003 10:05 AM
To: Jim Allchin
Cc: Chris Jones (WINDOWS); Bharat Shah (NT); Joe Peterson; Will Poole; Brian Valentine; Anoop Gupta (RESEARCH)
Subject: Windows Usability Systematic degradation flame

I am quite disappointed at how Windows Usability has been going backwards and the program management groups don’t drive usability issues.

Let me give you my experience from yesterday.

I decided to download (Moviemaker) and buy the Digital Plus pack ... so I went to Microsoft.com. They have a download place so I went there.

The first 5 times I used the site it timed out while trying to bring up the download page. Then after an 8 second delay I got it to come up.

This site is so slow it is unusable.

It wasn’t in the top 5 so I expanded the other 45.

These 45 names are totally confusing. These names make stuff like: C:\Documents and Settings\billg\My Documents\My Pictures seem clear.

They are not filtered by the system ... and so many of the things are strange.

I tried scoping to Media stuff. Still no moviemaker. I typed in movie. Nothing. I typed in movie maker. Nothing.

So I gave up and sent mail to Amir saying - where is this Moviemaker download? Does it exist?

So they told me that using the download page to download something was not something they anticipated.

They told me to go to the main page search button and type movie maker (not moviemaker!).

I tried that. The site was pathetically slow but after 6 seconds of waiting up it came.

I thought for sure now I would see a button to just go do the download.

In fact it is more like a puzzle that you get to solve. It told me to go to Windows Update and do a bunch of incantations.

This struck me as completely odd. Why should I have to go somewhere else and do a scan to download moviemaker?

So I went to Windows update. Windows Update decides I need to download a bunch of controls. (Not) just once but multiple times where I get to see weird dialog boxes.

Doesn’t Windows update know some key to talk to Windows?

Then I did the scan. This took quite some time and I was told it was critical for me to download 17megs of stuff.

This is after I was told we were doing delta patches to things but instead just to get 6 things that are labeled in the SCARIEST possible way I had to download 17meg.

So I did the download. That part was fast. Then it wanted to do an install. This took 6 minutes and the machine was so slow I couldn’t use it for anything else during this time.

What the heck is going on during those 6 minutes? That is crazy. This is after the download was finished.

Then it told me to reboot my machine. Why should I do that? I reboot every night -- why should I reboot at that time?

So I did the reboot because it INSISTED on it. Of course that meant completely getting rid of all my Outlook state.

So I got back up and running and went to Windows Update again. I forgot why I was in Windows Update at all since all I wanted was to get Moviemaker.

So I went back to Microsoft.com and looked at the instructions. I have to click on a folder called WindowsXP. Why should I do that? Windows Update knows I am on Windows XP.

What does it mean to have to click on that folder? So I get a bunch of confusing stuff but sure enough one of them is Moviemaker.

So I do the download. The download is fast but the Install takes many minutes. Amazing how slow this thing is.

At some point I get told I need to go get Windows Media Series 9 to download.

So I decide I will go do that. This time I get dialogs saying things like "Open" or "Save". No guidance in the instructions which to do. I have no clue which to do.

The download is fast and the install takes 7 minutes for this thing.

So now I think I am going to have Moviemaker. I go to my add/remove programs place to make sure it is there.

It is not there.

What is there? The following garbage is there. Microsoft Autoupdate Exclusive test package, Microsoft Autoupdate Reboot test package, Microsoft Autoupdate testpackage1. Microsoft AUtoupdate testpackage2, Microsoft Autoupdate Test package3.

Someone decided to trash the one part of Windows that was usable? The file system is no longer usable. The registry is not usable. This program listing was one sane place but now it is all crapped up.

But that is just the start of the crap. Later I have listed things like Windows XP Hotfix see Q329048 for more information. What is Q329048? Why are these series of patches listed here? Some of the patches just things like Q810655 instead of saying see Q329048 for more information.

What an absolute mess.

Moviemaker is just not there at all.

So I give up on Moviemaker and decide to download the Digital Plus Package.

I get told I need to go enter a bunch of information about myself.

I enter it all in and because it decides I have mistyped something I have to try again. Of course it has cleared out most of what I typed.

I try (typing) the right stuff in 5 times and it just keeps clearing things out for me to type them in again.

So after more than an hour of craziness and making my programs list garbage and being scared and seeing that Microsoft.com is a terrible website I haven’t run Moviemaker and I haven’t got the plus package.

The lack of attention to usability represented by these experiences blows my mind. I thought we had reached a low with Windows Network places or the messages I get when I try to use 802.11. (don’t you just love that root certificate message?)

When I really get to use the stuff I am sure I will have more feedback.

Tim Worstall explains:

In certain circumstances, the faster the economic growth the faster pollution (and or emissions, to taste) will fall. The assumption is that there is indeed some new(ish perhaps) technology which is more efficient. That we get what we want from it with fewer emissions, just as an example. Clean coal perhaps, cost effective solar PV, whatever.

OK, great, so now we want to try and roll this out over the economy: the odd thing is that the faster the economy is growing, the faster said technology will get rolled out.

There’s two parts to this, the first simply being that a fast growing economy has more new technology in it: if the economy is 8% larger than it was a year ago then clearly, 8% of the economoy must be driven by equipment and technology installed in the last year.

But there’s another side to it to. High growth rates increase corporate profits and corporate investment as well (the two are linked but not necessarily the same). Thus we see, in a fast growing economy, faster technological turnover, the faster scrapping of old plant and their replacement by new.

Which leads us to this slightly counter-intuitive point: once (I’m convinced we will get there, so if isn’t right here) we’ve got a low carbon generation technology that is cost competititve with fossil, then it’s actually in the environmental interest for the economy to be growing quickly, rather than slowly.

I find this somewhat surprising:

I find that where government owns a larger share of media outlets and infrastructure, regulates the media industry more, and does more to control the content of news, citizens are more politically ignorant and apathetic. Where the media is less regulated and there is greater private ownership in the media industry, citizens are more politically knowledgeable and active.

I can imagine the link (but the paper does not establish a causal relationship - as the author admits countries supressing the media tend to supress other political freedoms as well) between control of the content on the one hand and political ignorance and apathy on the other. Still, the results remain somewhat surprising. Private television does not appear to make citizens more political active and knowledgeable. Maybe it does in former communist countries but all in all in Western-Europe it’s public television which informs us more about politics. Private broadcasters concentrate on amusement. However, I gather that television could be the exception to the rule. Government intervention could well be detrimental in radio, the printed media and the internet.

William Easterly and Tobias Pfutze have studied the best and worst practices in foreign aid. The results are not pretty:

Our findings on aid best practice tend to confirm a number of long-standing complaints about foreign aid, notwithstanding the aid agencies’ perpetual claims that they are fixing past problems. The aid effort is remarkably splintered into many small efforts across all dimensions—number of donors giving aid, number of countries receiving aid from each donor, and number of sectors in which each donor operates. A lot of aid still goes to corrupt and autocratic countries and to countries other than those with the lowest incomes. Aid tying, the use of food aid-in-kind, and the heavy use of technical assistance persist in many aid agencies, despite decades of complaints about these channels being ineffective. In addition, some agencies have remarkably high overhead costs. The broad pattern that emerges from our evidence is that development banks tend to be closest to best practices for aid, the UN agencies perform worst along each dimension, and the bilaterals are spread out all along in between. Explaining why each of these patterns persists over time raises an interesting agenda for research in political economy. The aid business now spends $100 billion dollars a year of money each year, seeking to help the world’s poorest people. It is a sad reflection on the aid establishment that knowing where the money goes is still so difficult and that the picture available from partial knowledge remains so disturbing.

An example:

fragmentation is extreme for even the smallest aid agencies. In the extreme, this leads to such tiny worldwide flows in 2004 as the $5,000 Ireland spent worldwide to support nongovernmental organizations, the $20,000 Greece (despite its high overall ranking in avoiding fragmentation) spent on worldwide post-secondary education, the $30,000 the Netherlands spent on promoting worldwide tourism to developing countries, the $5,000 Denmark spent on worldwide emergency food aid, or the $30,000 Luxembourg spent on conflict, peace, and security. (Remember, these small sums may have been split even further among country recipients.) The same observation holds regarding flows from donor to recipient countries. For example, in 2004, Austria spent $10,000 in each of the following: Cambodia, the Dominican Republic, Equatorial Guinea, and Gabon. In the same year, Ireland spent $30,000 in Botswana; Luxembourg spent $30,000 in Indonesia; and New Zealand spent $20,000 in Swaziland. When aid is this small, it’s hard to believe it even covers the fixed costs of granting and receiving it, much less any operating costs of actually helping people.

Read the whole thing.

Ah. I see that Europe has reduced its emissions of greenhouse gasses in 2006. But the decrease is slight and almost only due to a reduction in nitrous oxide. There is no reduction in carbon dioxide. There are some ironic trends in the report of the European Environment Agency. The fact that 2006 was a warm year reduced the needs for heating, thus contributing to lower emissions. It almost seems that global warming will be self-correcting, at least when housholds are concerned. Second ironic fact: high gas prices are good for the environment. Then why are especially the Greens and the Social-Democrats clamouring for lower gas prices? Isn’t it better to leave those high prices were they are, even if gas companies make high profits because of it? Last ironic trend: there is something rotton in the state of Denmark. The darling of the environmentalists because 20% of its electricity generation comes from wind power. And no nuclear. Here is what the Agency reports:

Denmark and Finland experienced the biggest relative increase in GHG emissions (with 10.9 and 16.3 % respectively), due to heavier use of solid fossil fuels for power generation

Now maybe everyone can see why at least Finland is building a new nuclear power facility. And by the way, while average European elektricity prices have been stable since 1995, prices in Denmark have increased between 1995 and 2006 so that that advantage of 45% has been reduced to a mere 7%. Energy policy in Denmark does not seem to be pretty good neither for consumers nor for the environment.

Many conservatives support the military. It’s indeed considered a patriotic duty always to support our troops in time of war and in time of peace. That support of course is not only moral, but also financial. Nevertheless, it remains a mystery why conservatives necessarily should be in favor of the military.

First, consider the fact that another conservative value is that of small but efficient government. But, as Richard Hofstadter (1) pointed out decades ago, "the American public pays heavy taxes to maintain an immensily expensive military machine with vast and unprecedented powers of destruction and to sustain military and economic operations around the globe, and yet year by year if finds that its expenditures and efforts yield neither decisive victories nor final settlements". What was true when he wrote these words, is of course even more true today. And it is a particular conservative president who has presided over an unprecedented expansion of the military machine without a decisive victory or final settlement. One will say: yes, but he did lower taxes didn’t he? For the rich, not the ordinary American public. And to sustain public expenditure taxes will very likely be raised again in the future. Anyway, support for the military did not lead to an era of small government, on the contrary.

Now Hofstadter was an intellectual with left-wing liberal credentials. Let’s consider then the fact that yet another conservative value is that of the family. Here we have conservative writer Bill Kauffman (2) showing that both supporting the military and the family is not a logical preposition. (Kauffman also shows that the practice of withholding a portion of one’s wages by the government was a wartime innovation.)In fact, war and the army are the great destroyers of families. Kauffman writes:

The pernicious effect of militarism on the American family has long been known. Though intensified during wartime, the pressures of the armed services upon the family are present in peacetime as well. Even before the war, young military couples were "64 percent more likely to be diverced by age 24 than comparable civilian couples".

Others likened the removal of a family member due to war or conscription to "an amputation". One can always argue of course that family values are not that important. That it is not wrong to drag young members away from their families or that high divorce rates are not a serious problem. But I don’t think that that is the conservative view. So how it is possible for a conservative to reconcile this (and other - Kauffman goes on and on) evidence with support for militarism remains a mystery to me.

The point is that the same conservatives who are highly critical of welfare polities that are detrimental for the traditional family, at the same time enthousiastically support the warfare state which has exactly the same malign effect on family live.

(1) Richard Hofstadter: The Paranoid Style in American Politics
(2) Bill Kauffman: Ain’t My America. The Long, Noble History of Antiwar Conservatism and Middle American Anti-Imperialism

More prove that copyrights are becoming obsolete:

One early darknet has been termed the “sneakernet”: walking by foot to your friend carrying video cassettes or floppy discs. Nor is the sneakernet purely a technology of the past. The capacity of portable storage devices is increasing exponentially, much faster than Internet bandwidth, according to a principle known as “Kryder’s Law.” [7] The information in our pockets yesterday was measured in megabytes, today in gigabytes, tomorrow in terabytes and in a few years probably in petabytes (an incredible amount of data). Within 10-15 years a cheap pocket-size media player will probably be able to store all recorded music that has ever been released — ready for direct copying to another person’s device.

In other words: The sneakernet will come back if needed. “I believe this is a ‘wild card’ that most people in the music industry are not seeing at all,” writes Swedish filesharing researcher Daniel Johansson. “When music fans can say, ‘I have all the music from 1950-2010, do you want a copy?’ — what kind of business models will be viable in such a reality?”

Well, not excactly invented. But the idea of a global netwerk of computers originated in Belgium. In Mons to be exact. And the idea came to Paul Otlet even before we had something like computers. In 1934! Wow. Talk about a visionary:

On a fog-drizzled Monday afternoon, this fading medieval city feels like a forgotten place. Apart from the obligatory Gothic cathedral, there is not much to see here except for a tiny storefront museum called the Mundaneum, tucked down a narrow street in the northeast corner of town. It feels like a fittingly secluded home for the legacy of one of technology’s lost pioneers: Paul Otlet.

In 1934, Otlet sketched out plans for a global network of computers (or “electric telescopes,” as he called them) that would allow people to search and browse through millions of interlinked documents, images, audio and video files. He described how people would use the devices to send messages to one another, share files and even congregate in online social networks. He called the whole thing a “réseau,” which might be translated as “network” — or arguably, “web.”

(...)

Although Otlet’s proto-Web relied on a patchwork of analog technologies like index cards and telegraph machines, it nonetheless anticipated the hyperlinked structure of today’s Web. “This was a Steampunk version of hypertext,” said Kevin Kelly, former editor of Wired, who is writing a book about the future of technology.

Otlet’s vision hinged on the idea of a networked machine that joined documents using symbolic links. While that notion may seem obvious today, in 1934 it marked a conceptual breakthrough. “The hyperlink is one of the most underappreciated inventions of the last century,” Mr. Kelly said. “It will go down with radio in the pantheon of great inventions.”

Read the whole thing about the Belgian government (the idiots) losing interest in Otlet’s idea and the nazi’s finally killing off his dream and vision. And the fact that some of his ideas would be an improvement upon today’s world wide web:

For one thing, he saw a smarter kind of hyperlink. Whereas links on the Web today serve as a kind of mute bond between documents, Otlet envisioned links that carried meaning by, for example, annotating if particular documents agreed or disagreed with each other. That facility is notably lacking in the dumb logic of modern hyperlinks.

Otlet also saw the possibilities of social networks, of letting users “participate, applaud, give ovations, sing in the chorus.” While he very likely would have been flummoxed by the anything-goes environment of Facebook or MySpace, Otlet saw some of the more productive aspects of social networking — the ability to trade messages, participate in discussions and work together to collect and organize documents.

Some scholars believe Otlet also foresaw something like the Semantic Web, the emerging framework for subject-centric computing that has been gaining traction among computer scientists like Mr. Berners-Lee. Like the Semantic Web, the Mundaneum aspired not just to draw static links between documents, but also to map out conceptual relationships between facts and ideas. “The Semantic Web is rather Otlet-ish,” said Michael Buckland, a professor at the School of Information at the University of California, Berkeley.

To Mons, just like Google.

Thanks to CO2 we have one now. But will it continue? Lawrence Solomon:

Planet Earth is on a roll! GPP is way up. NPP is way up. To the surprise of those who have been bearish on the planet, the data shows global production has been steadily climbing to record levels, ones not seen since these measurements began.

GPP is Gross Primary Production, a measure of the daily output of the global biosphere –the amount of new plant matter on land. NPP is Net Primary Production, an annual tally of the globe’s production. Biomass is booming. The planet is the greenest it’s been in decades, perhaps in centuries.

Until the 1980s, ecologists had no way to systematically track growth in plant matter in every corner of the Earth — the best they could do was analyze small plots of one-tenth of a hectare or less. The notion of continuously tracking global production to discover the true state of the globe’s biota was not even considered.

Then, in the 1980s, ecologists realized that satellites could track production, and enlisted NASA to collect the data. For the first time, ecologists did not need to rely on rough estimates or anecdotal evidence of the health of the ecology: They could objectively measure the land’s output and soon did — on a daily basis and down to the last kilometer.

The results surprised Steven Running of the University of Montana and Ramakrishna Nemani of NASA, scientists involved in analyzing the NASA satellite data. They found that over a period of almost two decades, the Earth as a whole became more bountiful by a whopping 6.2%. About 25% of the Earth’s vegetated landmass — almost 110 million square kilometres — enjoyed significant increases and only 7% showed significant declines. When the satellite data zooms in, it finds that each square metre of land, on average, now produces almost 500 grams of greenery per year.

Why the increase? Their 2004 study, and other more recent ones, point to the warming of the planet and the presence of CO2, a gas indispensable to plant life. CO2 is nature’s fertilizer, bathing the biota with its life-giving nutrients. Plants take the carbon from CO2 to bulk themselves up — carbon is the building block of life — and release the oxygen, which along with the plants, then sustain animal life. As summarized in a report last month, released along with a petition signed by 32,000 U. S. scientists who vouched for the benefits of CO2: “Higher CO2 enables plants to grow faster and larger and to live in drier climates. Plants provide food for animals, which are thereby also enhanced. The extent and diversity of plant and animal life have both increased substantially during the past half-century.”

(...)

Lush as the planet may now be, it is as nothing compared to earlier times, when levels of CO2 and Earth temperatures were far higher. In the age of the dinosaur, for example, CO2 levels may have been five to 10 times higher than today, spurring a luxuriantly fertile planet whose plant life sated the immense animals of that era. Planet Earth is also much cooler today than during the hothouse era of the dinosaur, and cooler than it was 1,000 years ago during the Medieval Warming Period, when the Vikings colonized a verdant Greenland. Greenland lost its colonies and its farmland during the Little Ice Age that followed, and only recently started to become green again.

This blossoming Earth could now be in jeopardy, for reasons both natural and man-made. According to a growing number of scientists, the period of global warming that we have experienced over the past few centuries as Earth climbed out of the Little Ice Age is about to end. The oceans, which have been releasing their vast store of carbon dioxide as the planet has warmed — CO2 is released from oceans as they warm and dissolves in them when they cool — will start to take the carbon dioxide back. With less heat and less carbon dioxide, the planet could become less hospitable and less green, especially in areas such as Canada’s Boreal forests, which have been major beneficiaries of the increase in GPP and NPP.

Doubling the jeopardy for Earth is man. Unlike the many scientists who welcome CO2 for its benefits, many other scientists and most governments believe carbon dioxide to be a dangerous pollutant that must be removed from the atmosphere at all costs. Governments around the world are now enacting massive programs in an effort to remove as much as 80% of the carbon dioxide emissions from the atmosphere.

If these governments are right, they will have done us all a service. If they are wrong, the service could be all ill, with food production dropping world wide, and the countless ecological niches on which living creatures depend stressed. The second order effects could be dire, too. To bolster food production, humans will likely turn to energy intensive manufactured fertilizers, depleting our store of non-renewable resources. Techniques to remove carbon from the atmosphere also sound alarms. Carbon sequestration, a darling of many who would mitigate climate change, could become a top inducer of earthquakes, according to Christian Klose, a geohazards researcher at Columbia University’s Lamont-Doherty Earth Observatory. Because the carbon sequestration schemes tend to be located near cities, he notes, carbon-sequestration-caused earthquakes could exact an unusually high toll.

Amazingly, although the risks of action are arguably at least as real as the risks of inaction, Canada and other countries are rushing into Earth-altering carbon schemes with nary a doubt. Environmentalists, who ordinarily would demand a full-fledged environmental assessment before a highway or a power plant can be built, are silent on the need to question proponents or examine alternatives.

Earth is on a roll. Governments are too. We will know soon enough if we’re rolled off a cliff.

...but the scientific consensus fails to support you:

Belching from smokestacks, tailpipes and even forest fires, soot—or black carbon—can quickly sully any snow on which it happens to land. In the atmosphere, such aerosols can significantly cool the planet by scattering incoming radiation or helping form clouds that deflect incoming light. But on snow—even at concentrations below five parts per billion—such dark carbon triggers melting, and may be responsible for as much as 94 percent of Arctic warming.

Soot, not greenhouse gases cause the melting of the Arctic. And now the consensus fails Gore twice. No need to be alarmist and make big costly plans:

simple steps, such as fully burning fossil fuels in more efficient engines and using cleaner-burning cooking stoves, could help preserve the dwindling Arctic snow cover and ice (...). Even changing the timing of such soot emissions could play a role. "If you have to burn dirty fuel, you can do it in the fall or winter" when it will be buried under subsequent snowfall, Zender says. "If you can time your emissions so they have the least impact then you will not trigger these very sensitive regions to start warming by this ice albedo feedback process."

A classic:

Henry Farrell critizises the undemocratic critics of the Irish rejection of the Lisbon Treaty:

let me just note how appalling some of the responses from politicians in other EU member states – not so much ‘the people have spoken, the bastards,’ as a Brechtian ‘let us elect a new people.’ In particular, German parliamentarian Axel Schäfer’s comment that “With all respect for the Irish vote, we cannot allow the huge majority of Europe to be duped by a minority of a minority of a minority,” would have a bit more credibility if, you know, the majority of the majority of the majority had been given a chance to vote on the Treaty themselves.

Now that the majority of the Irish have voted no on the Treaty of Lisbon it would be wrong to consider them as a bunch of ungratefulls. It’s true that Ireland has recieved lot’s of European subsidies and of course it’s part of the internal European market. But it’s downright extraordinary to consider those subsidies as the reason of Ireland’s economic succes. Consider Sicily. Part, via Italy, of the internal European market and a major recipient of European largess as well. But Sicily is still poor, while Ireland is the richest country in Europe. Or, closer to home, take Walloon. For a long time, the French speaking part of Belgium, has recieved more subsidies from Europe, than Flanders. And of course both regions are part of the same internal market. But Flanders is still forging ahead. Thus, the manna from Europe cannot be a sufficient reason for Ireland’s growth. It even could have been a net drag on it.

The economic success of the Celtic Tiger has probably more to do with it’s economic proximity with another major market - that of the United States. Here Ireland indeed has been fortunate as it has been an attractive place between the two most important markets in the world: the U.S. and the European Union. Thanks to low corporate taxes and the English language it has been the recipient of American largess as well. But in this case it was not subsidies, but foreign investment, which is more likely to be favorable for economic growth. So if the Irish should have been gratefull, it should have been towards the United States, not the European Union.

Paul Krugman - rigthly I think - argues that technology is definately undermining intellectual property. It’s time that the intellectual property industry gives priority to finding new business models and stops fighting the pirates. They are going to win anyway, except when the (grateful) dead hand of government keeps on supporting dying industries:

In 1994 (...) Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”

For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because “enough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.”

Indeed, it turns out that the Dead were business pioneers. Rolling Stone recently published an article titled “Rock’s New Economy: Making Money When CDs Don’t Sell.” Downloads are steadily undermining record sales — but today’s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through “publishing, touring, merchandising and licensing.”

What other creative activities will become mainly ways to promote side businesses? How about writing books?

According to a report in The Times, the buzz at this year’s BookExpo America was all about electronic books. Now, e-books have been the coming, but somehow not yet arrived, thing for a very long time. (There’s an old Brazilian joke: “Brazil is the country of the future — and always will be.” E-books have been like that.) But we may finally have reached the point at which e-books are about to become a widely used alternative to paper and ink.

That’s certainly my impression after a couple of months’ experience with the device feeding the buzz, the Amazon Kindle. Basically, the Kindle’s lightness and reflective display mean that it offers a reading experience almost comparable to that of reading a traditional book. This leaves the user free to appreciate the convenience factor: the Kindle can store the text of many books, and when you order a new book, it’s literally in your hands within a couple of minutes.

It’s a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books.

How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won’t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.

Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.

Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won’t work equally well for everything. To take the obvious, painful example: news organizations, (...) have spent years trying to turn large online readership into an adequately paying proposition, with limited success.

But they’ll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we’ll have to find business and economic models that take this reality into account.

It won’t all happen immediately. But in the long run, we are all the Grateful Dead.

The peer review process goes bust:

On 18 November 2004, Isabelle Chuine and co-workers published a research paper on global warming. The paper appeared in Nature, the world’s most highly-regarded scientific journal. And it gathered some publicity. Chuine et al. claimed to have developed a method for estimating the summer temperature in Burgundy, France, in any given year back to 1370 (based on the harvest dates of grapes). Using their method, the authors asserted that the summer of 2003 was by far the warmest summer since 1370, in Burgundy.

I had been following global warming studies only as a disinterested outside spectator (and only occasionally). Someone sent me the paper of Chuine et al., though, and wondered what I thought of it from a mathematical perspective. So I had a look.

To study the paper properly, I needed to have the authors’ data. So I e-mailed Dr. Chuine, asking for this. The authors, though, were very reluctant to let me have the data. It took me eight months, tens of e-mails exchanged with the authors, and two formal complaints to Nature, to get the data. (Some data was purchased from Météo France.) It is obviously inappropriate that such a large effort was necessary.

Looking at the data made it manifest that there are serious problems with the work of Chuine et al...
[...]
That is, the authors had developed a method that gave a falsely-high estimate of temperature in 2003 and falsely-low estimates of temperatures in other very warm years. They then used those false estimates to proclaim that 2003 was much hotter than other years.

The above is easy enough to understand. It does not even require any specialist scientific training. So how could the peer reviewers of the paper not have seen it? (Peer reviewers are the scientists who check a paper prior to its publication.) I asked Dr. Chuine what data was sent to Nature, when the paper was submitted to the journal. Dr. Chuine replied, “We never sent data to Nature”.

I have since published a short note that details the above problem (reference below). There are several other problems with the paper of Chuine et al. as well. I have written a brief survey of those (for people with an undergraduate-level background in science). As described in that survey, problems would be obvious to anyone with an appropriate scientific background, even without the data. In other words, the peer reviewers could not have had appropriate background.

What is important here is not the truth or falsity of the assertion of Chuine et al. about Burgundy temperatures. Rather, what is important is that a paper on what is arguably the world’s most important scientific topic (global warming) was published in the world’s most prestigious scientific journal with essentially no checking of the work prior to publication.
[...]

Finally, it is worth noting that Chuine et al. had the data; so they must have known that their conclusions were unfounded. In other words, there is prima facie evidence of scientific fraud. What will happen to the researchers as a result of this? Probably nothing. That is another systemic problem with the scientific publication process.

You should not die or kill for your country because the president says so. Sheldon Richman:

Why do people get upset with Barack Obama for not wearing a flag pin on his lapel or with Michelle Obama for suggesting she’s not been proud of her country until now? Why is failing to “support the troops” regarded as a sin?

Because it’s a secular blasphemy to do or say anything that suggests you don’t love your country. But why should you love your country? Most people would say our country has done so much for us that we should show our gratitude.

But what has “our country” done for us? An even better question is: what is “our country”?

A country is not one concrete thing. It’s many things, and frankly, not all of them are lovable. One’s country is one’s home and perhaps birthplace. Nothing wrong having a fondness for those things.

A country is also its people. But can anyone love all the American people? I can think of quite a few that I don’t love.

The country, moreover, is its history and culture. One certainly can love some things about America’s history and culture. The philosophy expressed in the Declaration of Independence is worthy of affection. The abolitionist movement should be admired. Any genuine struggle for liberty and against tyranny should command our respect.

But there’s a lot about American history and culture that any decent person should hold in contempt: slavery, Jim Crow, the oppression of Indians, racism in general, the demeaning of women, Hiroshima and Nagasaki, conscription, mercantilist privilege (which stifles economic opportunity and harms the poor most of all), and lots more.

The government is also part of the country — and in that regard there’s much to dislike, as the list above shows. The U.S. government’s record largely has been one of domination at home and abroad. But love of country being blind, most people won’t see it.

One can’t help thinking that those who loudly profess their love of the country — those, for example, who must display the American flag on everything from their lapel to their car — actually worship the nation and state as though they were mystical god-like entities. When they demand patriotism of others, they really are demanding nationalism. Nationalism is more than affection for one’s home or a felt bond with people who have a common history or set of ideals. It’s a source of identity — and therein lies the danger: it’s also the source of suspicion of the Other. American nationalism is an especially virulent strain, since the United States is considered by its “leaders” and citizens an exception among nations and unbound by the normal rules.

Nationalism is a secular religion — and a collectivist one at that. Idealizing “service to the country,” as both Obama and John McCain do, ill-suits a free society because it inevitably means service to, or defined by, the state. (If it simply meant doing good for one’s fellow human beings, the profit-seeking entrepreneur would be praised for his service.)

The antiwar dissident Randolph Bourne understood that the state comes into its own during war and the conduct of foreign policy generally. Unsurprisingly, it is war critics who most often are accused of not loving their country. In contrast, if you enlist to fight, you reap the highest praise. And if you die “for your country,” you have made the ultimate sacrifice, which the rest of us are obliged to honor.

Nonsense. Why is it noble to permit yourself to be ordered to invade other countries without question by any politician who happens to occupy the White House? Why is dying — and killing — in such a cause an occasion for honor? Why must any criticism of “our country’s” military operations be tempered by expressions of respect for the president and support for the troops?

For the nationalist, the answer is that the nation — and its worldly representative, the government — are to be worshipped and trusted. Radical criticism — that is, criticism that goes to the root — is blasphemy, perhaps to be tolerated, but just barely.

Insisting on the alleged virtue of loving one’s country mainly serves to give those in power a blank check. The alternative, though, is not to hate one’s country, for this would merely be the other side of the same fallacy. A country per se should be an object neither of love nor of hatred.

So on this there is virtually no difference between Obama and McCain. Not even between McCain and Obama’s disavowed mentor.

The final nail in the coffin of the food miles hysteria. Many greenies seem to think that we should eat local foods, so that we can cut food miles, in order to cut emissions of carbon dioxide. But now we have this:

The line, then, is that the prudent environmentalist will eat local in order to cut down on greenhouse gas emissions. Intuitively, that makes a lot of sense. Bananas shipped from Brazil can’t be good for the environment. But two Carnegie Mellon researchers recently broke down the carbon footprint of foods, and their findings were a bit surprising. 83 percent of emissions came from the growth and production of the food itself. Only 11 percent came from transportation, and even then, only 4 percent came from the transportation between grower and seller (which is the part that eating local helps cut). Additionally, food shipped from far off may be better for the environment than food shipped within the country -- ocean travel is much more efficient than trucking.

A view on libertarianism, from a libertarian. Pro Hayek, Friedman, Buchanan. Contra Von Mises (in part), Rand, Rothbard. And now the battle against communism/socialism is won, the cultural affinities between libertarians and the left are coming to the forefront again. The alliance between libertarians/conservatives is becoming a thing of the past. But let’s turn the mike over to Will Wilkinson:

Here are the sort of political/economic thinkers whose substantive views I find most congenial: Friedrich Hayek, Milton Friedman, James M. Buchanan. If I tell most highly-educated people that these are the thinkers whose views of desirable institutions are most like mine, they might infer that I am some kind of rabid libertarian ideologue. But when I actually defend something like the arguments for an economic safety net each of these giants of libertarian thought actually set forth, lots of libertarians accuse me of not really being libertarian at all. And many liberals act surprised, as if I’m being saucily iconoclastic by wandering so far off the reservation. I can tell them that Hayek was actually in favor of a guaranteed minimum income and that Friedman basically invented the idea behind the EITC, but they’ll still think I’m some kind of congenial squish. But what I am is a market liberal just like Hayek, Friedman, and Buchanan — the same intellectual role models who make me a rabid libertarian ideologue. So, which is it?

Frankly, “liberaltarianism” and “progressive fusionism” don’t really amount to much beyond what Hayek, Friedman, and Buchanan thought anyway. So the fusionism here isn’t really a fusion of anything. It’s just seeing our way back to a pre-existing economically literate political liberalism.

Here’s my conjecture about why this now looks more like an attractive position than it might have a few years back.

The 20th century libertarian-conservative alliance was based on anti-communism/socialism. The reasonable, sophisticated consequentialist pragmatism of the great 20th century market liberals seemed an insufficient bulwark against the slippery slope from the liberal, capitalist welfare state to full-on illiberal, totalitarian socialism. (Indeed, Hayek himself made the slippery slope argument powerfully, though unsoundly.) So there was a good deal of motivation for radical anti-socialists to coordinate around strongly categorical prohibitions against state coercion.

Misean economics, disinfected of the open-minded empirical consequentialism of Mises’ Liberalism, and filtered through Ayn Rand and Murray Rothbard’s peculiar views of rights and coercion delivers a powerfully moralized brief for capitalism that calls into question even taxation for the purpose of financing genuine public goods. That Rothbardians and Randians have wasted so much time fighting with each other on the question of the minimal state versus anarcho-capitalism obscures their unity on a rights-based bulwark against the slide from the welfare state to socialism. Sadly, “libertarianism” has become identified rather strongly with this ideology — an ideology some of the thinkers most strongly identified with libertarianism, like Hayek and Friedman, never shared.

The death of socialism as a viable competitor to the liberal-capitalist welfare state makes continued slippery-slope-to-socialism thinking look densely anachronistic. Other liberal welfare states, like the UK, Sweden, Denmark, Australia, New Zealand, etc., have moved in a rather more market-liberal direction, becoming rather less of a soft-socialist middle-ground between the American model and full-on economic socialism. The question these days is whether the U.S. will have the good sense to adopt more rational market-based old-age pension policies, like Sweden or Australia, or lower corporate tax rates to a level more in line with the rest of the wealthy world. Slightly higher personal tax rates and slightly more redistribution is a possibility, but a slide into socialism just isn’t on the table. In this context, the negative income tax looks much less like a dangerous concession to the world-historical forces of evil.

Meanwhile, with the obsolescence of the anti-communist alliance with conservatives, many libertarians have sloughed off much of their previously tactically useful sympathy for socially conservative initiatives. Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right. And this leads naturally to seeing more clearly their ideological affinities with welfare liberals. And then you read thinkers like Hayek, Friedman, and Buchanan, and you think: Oh, yes. This is extremely sensible. And now that the welfare-liberal elite has become rather more economically literate and is no longer sighing over five year plans, there is no reason to think they cannot find this sensible, too.

So that’s where I’m at. An old-fashioned market liberal who thinks Hayek, Friedman, and Buchanan get it right, and who thinks Rawlsian welfare liberals should be able to recognize themselves in these thinkers.

But Bryan Caplan thinks Hayek, Friedman (in part), and Buchanan, who thus did not wanted to abolish the safety net, got it wrong:

Will’s right about Friedman, Hayek, and Buchanan, and right about the slippery-slope argument. But I still think that welfare-state abolitionism has the force of argument on its side.

First, though I’m not going to win Will over to "Ayn Rand and Murray Rothbard’s peculiar views of rights and coercion," the welfare state is an area where it’s particularly apt. Almost no one thinks you should be legally required to financially assist your relatives - even your indigent parents who raised you. The welfare-state abolitionist can fairly ask all of these people a tough question: If your parents shouldn’t have a legal right to your help when they really need it, why should complete strangers?

Second, and probably even more compellingly, the existence of welfare state is one of the main rationalizations for undercutting the greatest anti-poverty campaign the world has ever known: immigration. (Friedman said it most clearly: "You cannot simultaneously have free immigration and a welfare state." But Krugman’s in full agreement). And unlike the welfare state, immigration has and continues to help absolutely poor people, not relatively poor Americans who are already at the 90th percentile of the world income distribution. There’s no reason for libertarians to make apologies to social democrats: Libertarian defenders of immigration are the real humanitarians in the world, and the laissez-faire era of open borders without the welfare state was America’s real humanitarian era.

Now I’m the first person to say that there are better ways to save the welfare state than curtailing immigration. If that’s your worry, let immigrants come as guest workers - entitled to work but not collect welfare. At the same time, though, the presence of guest workers does reveal the hollowness of the standard rationales for the welfare state. It’s hard to keep prating about how much you love "the poor" while insisting that the elderly Haitian who shines your shoes shouldn’t get a dime.

He’s against biofuels mandates and support:

The assertion by American officials that biofuels have contributed only 2-3 percent to the rise in food prices is consistent with estimates of the impact on food prices in the United States, where most foods are processed and the value of the crop in the final retail product is a tiny fraction. In poor countries, where minimally-processed staple grains make up a much larger share of calories consumed, the impact of recent food prices is much larger.

Nor is it true, as asserted by congressional defenders of ethanol subsidies, that corn-based ethanol cannot have a large effect on food prices because it uses feed corn, which people do not eat. That is true, but people do eat poultry, eggs, and dairy products from animals fed on corn; increased production of corn also means reduced production of other crops, thus raising their prices, and high corn prices lead people to substitute other food products, again putting upward pressure on other crop prices. Mark Rosegrant of the International Food Policy Research Institute estimates that increased biofuel production contributed 30 percent of the rise in grain prices through 2007. (...)

Moreover (...) the level of biofuels mandated by Congress in last year’s energy security act that can be derived from corn would rise sharply and would require roughly 40 percent of total US corn production. It is simply folly to believe that would not have an impact on food prices. Far from defending US subsidies for corn-based ethanol, President Bush should order the Environmental Protection Agency to suspend the biofuels mandate, as requested by some states and by Senator John McCain (R-AZ) and 23 other Senate Republicans (...)

Fast food does not make people fatter:

It’s become a truism that more people are eating out, and that the higher caloric content of food consumed at hamburger and pizza joints is making people a lot chunkier than they used to be. In fact, a number of studies have found a strong correlation between body weight and eating out.

But as any statistician will tell you, correlation doesn’t prove causation.

To investigate the link, Matsa and Anderson turned to a natural experiment unknowingly created by the government decades ago. The Federal Highway Act of 1956 paved the way for over 42,000 miles of turnpike to be constructed in the United States. One of the unintended consequences of the new Interstate system was that, in rural areas, shopping centers that wanted to attract traveling drivers began to cluster around highways. For the residents of those areas, this development meant easier access to restaurants.

To see if this new supply changed obesity rates, Matsa and Anderson compared the Body Mass Index levels of those living close to highways (0 to 5 miles) with those living farther away (5 to 10 miles) and had less access to restaurants. Using survey data from 11 states, Matsa and Anderson found no difference in the number of overweight, normal, and underweight people in the two areas, suggesting that access to restaurants was not making people fatter.

How can this be? If people are eating out more, and eating more high-calorie meals, why aren’t they getting chubbier than those without easy access?

Matsa and Anderson next looked at data on individual eating habits from a survey conducted between 1994 and 1996. When eating out, people reported consuming about 35 percent more calories on average than when they ate at home. But importantly, respondents reduced their caloric intake at home on days they ate out (that’s not to say that people were watching their weight, since respondents who reported consuming more at home also tended to eat more when going out). Overall, eating out increased daily caloric intake by only 24 calories. The results for urban and suburban consumers were similar.

Other research into the causes of rising obesity has centered on the role of technological change in modern economies. This paper from Darius Lakdawalla of RAND and Tomas Philipson of the University of Chicago estimates that 40 percent of the rise in obesity from the 1970’s to the 1990’s can be attributed to cheaper food thanks to a more efficient agricultural industry. The other 60 percent was chalked up to more sedentary lifestyles.

Matsa and Anderson’s findings suggest that New York City’s move to force many restaurants to list the caloric content of menu items will likely have little to no effect on obesity levels.

The findings also suggest that I shouldn’t feel so bad about having Taco Bell for dinner three times a week.

Another certainty going down the drain. What’s next? Global warming? The certainty that states are only here to tax things (like fast food)?

Bryan Caplan, back from Europe, is in shock. It now appears that the U.S. is a police state. The cops are everywhere:

In Germany, most highways have no speed limits at all. In France, all highways have speed limits, but there appears to be virtually zero enforcement. I was on the roads of France for almost a week, and I never saw a person getting a ticket.

The contrast with the U.S. couldn’t be sharper. On our highways, the police are everywhere, and they hand out tickets like spammers. It only takes a week abroad to realize that the U.S. is literally a police state. There are police all over the place, and people are afraid of them.

So what? Isn’t it possible that all those tickets do some good? Perhaps, but even on pragmatic grounds, I greatly prefer the Franco-German approach. I’d rather get where I’m going at 160 kph, and watch the road instead of my rear-view mirror, even if my life expectancy slightly falls. In fact, the case for Franco-German policy is stronger in the U.S. because the country is less scenic; when you’re stuck in traffic in Burgundy, at least you’ve got a nice view.

It reminds me of the fact that in some parts of Los Angeles the police is watching you from their helicopters.

Many corporations are making lot’s of profits these days. In the United States for instance we see that productivity is 35% up since 2000, while wages have stagnated. This can only result in rising profits. So why then is someone like John McCain proposing to cut corporate taxes. Isn’t it now the time to raise them? No, it isn’t. Greg Mankiw explains:

The most basic lesson about corporate taxes is this: A corporation is not really a taxpayer at all. It is more like a tax collector.

The ultimate payers of the corporate tax are those individuals who have some stake in the company on which the tax is levied. If you own corporate equities, if you work for a corporation or if you buy goods and services from a corporation, you pay part of the corporate income tax. The corporate tax leads to lower returns on capital, lower wages or higher prices — and, most likely, a combination of all three.

A cut in the corporate tax as Mr. McCain proposes would initially give a boost to after-tax profits and stock prices, but the results would not end there. A stronger stock market would lead to more capital investment. More investment would lead to greater productivity. Greater productivity would lead to higher wages for workers and lower prices for customers.

Populist critics deride this train of logic as “trickle-down economics.” But it is more accurate to call it textbook economics. Students in introductory economics courses learn that the burden of a tax does not necessarily stay where the Congress chooses to put it. That lesson is especially relevant when thinking about the corporate tax.

In a 2006 study, the economist William C. Randolph of the Congressional Budget Office estimated who wins and who loses from this tax. He concluded that “domestic labor bears slightly more than 70 percent of the burden.”

Mr. Randolph’s analysis stresses the role of international capital mobility. With savings sloshing around the world in search of the highest returns, he says, “the domestic owners of capital can escape most of the corporate income tax burden when capital is reallocated abroad in response to the tax.” When capital leaves a country, the workers left behind suffer. (According to Mr. Randolph, however, some workers do benefit from the American corporate tax: those abroad who earn higher wages from the inflow of capital.)

A similar result was found in a recent Oxford University study by Wiji Arulampalam, Michael P. Devereux and Giorgia Maffini. After examining data on more than 50,000 companies in nine European countries, they concluded that “a substantial part of the corporation income tax is passed on to the labor force in the form of lower wages,” adding that “in the long-run a $1 increase in the tax bill tends to reduce real wages at the median by 92 cents.”

Despite these findings, a corporate tax cut as a way to help workers may strike some people as needlessly indirect. Why not just pass an income tax cut aimed squarely at working families, as Senator Barack Obama proposes?

The answer is that while most taxes distort incentives and shrink the economic pie, they do not do so equally. Compared with other ways of funding the government, the corporate tax is particularly hard on economic growth. A C.B.O. report in 2005 concluded that the “distortions that the corporate income tax induces are large compared with the revenues that the tax generates.” Reducing these distortions would lead to better-paying jobs.

Still, isn’t the evolution of the past years just proof that "trikle-down ecnomics" isn’t working? At least not at the moment. Lot’s of investment indeed has given rise to productivity. But wages did not follow...Maybe profit sharing by workers - exempted from taxes of course - could be a better idea.

No taxation without representation. Everybody knows the expression. It was the slogan of the first American patriots while dumping tea into Boston harbor on December 16, 1773. The Boston Tea Party. The first anti-tax revolt. A revolt for independence and democracy (“we want representation”). Or so the story goes.

The historian Arthur Schlesinger Sr. (father of the same named advisor to J.F. Kennedy) called it the “uprising against the East India Company”. William Bernstein says it’s the first American anti-globalization rally. It can also be described as a mercantilist plot against the public. Adam Smith put it best:

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

In a nutshell, this is actually what happened. Indeed, it was not an anti-tax revolt. Taxes on tea were actually quite low. There was an import duty of 10 percent but this was already in place six year before the Boston Tea party. The modest tax was circumvented by smugglers so that only 5 percent of consumption was actually declared to the British crown and taxed.

So taxation and the lack of representation were not the reason for the riots. What was it then? The uprising has a distinctively modern flavor. The reason was that the Boston merchants – the upper class – found themselves up against the competition of the East-India Company (EIC). In May 1773 the British parliament passed the Tea Act, allowing the EIC, for the first time, to import tea directly from Asia into America. The act cut the price of tea in half. Obviously a boon for American consumers who consumed tea in spades: 2,5 pounds per capita per year.

But of course the middlemen – local smugglers and tea merchants – were cut out. Their solution? To conspire against the public. For the first time we could hear the cries of dumping, unfair trade and unfair foreign competition. The Boston Tea Party was indeed an anti-globalization rally. But not from the usual suspects. This time it were the local merchants – not consumers, not workers – who were protesting. In fact they asked for protection against a “foreign” company. In the 1980’s we heard the cries against a foreign takeover of the American economy by the Japanese. A few years ago the same thing happened with the Chinese. In 1773 it were the British who were poised to take over all American commerce. So they said.

History repeats itself, many times over.

So the anti-globalization movement was actually born in the United States in 1773. And they used the same language as we hear today: unfair trade, the threat of a foreign take-over of the economy and so on. Only their members were different.

This is not to condone or defend the actions of the East-India Company. It’s behavior in India was often brutal and sometimes downright criminal. It ruled the country as a private monopoly for decades. And as Adam Smith also pointed out a private monopoly is the worst kind of government. The job of government was to look after it’s people and to ensure competition between companies for the good of the people. Of course a private monopoly just wanted to avoid that. It’s was a recipe for disaster. And indeed the EIC restricted the rice trade in Bengal precipitating a famine that killed one-sixth of the population.

On the other hand, at the time the British Crown was to take over the rule of India from the EIC (in 1859), one John Stuart Mill came to its defense (as an employee of course, but it was his deeply held personal conviction). He argued that the governmental record of the EIC compared favorably with the rule of the British in America. At least the EIC held on to its empire while the British government lost hers. Neither was the rule of the British government in India really much better. The EIC, the first corporation, also was a creation of the Enlightenment, and was interested in the pursuit of knowledge and reason.

But we digress…in Boston the merchants formed a private cartel poised to keep competition out. Private cartel or private monopoly, there is no difference in essence. That was the real goal of the Boston Tea Party. Not taxation, with or without representation. Consumer interests were not represented, and they were the ones who had to pay the price.

Sources:

William Berstein: A Splendid Exchange: How Trade Shaped the World
Richard Reeves: John Stuart Mill