In a democracy we resolve our differences by trying to persuade each other and elections
17 Jul 2014 Leave a comment
The double dealing, sanctimonious peace movement prefers not to discuss how Hamas fights its wars
17 Jul 2014 Leave a comment
in laws of war, war and peace Tags: Alan Dershowitz, Hamas, Israel, laws of war, temporary doves, war crimes
Just war theory (jus bellum iustum) is split into two groups: “the right to go to war’’ (jus ad bellum) and ‘’right conduct in war’’ (jus in bello). Just war conduct should be governed by the principle of distinction:
Islamic militant terrorists — whether they are called al-Qaida, Isis, Hamas, or Hezbollah — all use similar tactics.
They target civilians while hiding among civilians in order to induce democracies to kill civilians so that the media will show gruesome pictures of dead children and blame these deaths on the democracy, rather than the terrorists who use children and other civilians as human shields.
The democracy is then put to the tragic choice of either allowing terrorist attacks against its own civilians or taking military action that risks the lives of enemy civilians.
…Israel has been very careful to try to minimize civilian casualties. They drop leaflets, make phone calls and even send noisemaking bomblets to warn civilians to leave areas to which rockets are being fired.
Mostly the civilians leave. Sometimes they don’t. When they don’t, the Israeli military does not fire at the rockets, thereby putting their own civilians at risk.
Yet some in the media describe the current situation in Gaza as a “cycle of violence.” The reality, of course, is that there is no such cycle. It is a one-way street that Hamas has driven down precisely in order to create the illusion of a cycle with equal blame on both sides.
There is no comparison — legally, morally, diplomatically or by any other criteria — between what Hamas is doing and how Israel is responding. Hamas is wilfully and deliberately committing a double war crime by targeting Israeli civilians and using Palestinian civilians as human shields.
The deliberate targeting of civilians, as Hamas admits — indeed boasts — it is doing, is a clear war crime. Hamas has specifically aimed its lethal rockets at Beersheba, Tel Aviv, Haifa, and Jerusalem. This is a war crime.
Moreover, it is firing these rockets from hospitals, schools, and houses in densely populated areas in order to cause Israel to kill Palestinian civilians. This too is a war crime.
Alan Dershowitz (2014)
The mirage of cost-push inflation
17 Jul 2014 Leave a comment
in inflation targeting, macroeconomics Tags: Bill Allen, cost-push inflation, lags on monetary policy
It does appear too many that rising costs push up prices, but this impression is an illusion caused by the way inventories delay the effect of money supply increases on retail prices.
When increased money growth causes total spending to rise more quickly, sales of particular businesses will increase. But sales fluctuate from day to day and week to week, so managers of these businesses cannot immediately know that this sales increase will last.
As sales continue to rise, restaurants will use up their inventories. Larger orders will then be placed with suppliers, and inventories of these suppliers will begin to shrink.
The retail price has not yet changed because inventories have absorbed the initial impact of the increased spending.
But as more orders to replace depleted inventories work their way down the chain of distribution, orders for too wholesalers also will rise faster.
The available inventories are inadequate to meet the rising amounts demanded at existing prices.
As a result, wholesale prices will rise as packers bid more intensely for scarce factory supplies. These higher prices then cause factories and other base suppliers to raise their prices; and higher wholesale prices cause retailers to charge more.
As higher prices work their way up the distribution chain to the consumer, they create an illusion that higher costs are pushing up prices.
But both costs and prices are being pulled up by the increased spending caused by a more rapidly growing money stock. Because the effects of more money and more spending are delayed by inventories, hasty conclusions about the cause of inflation can be deceptive.
HT: Bill Allen
The Devil’s Dictionary – definition of a revolution
17 Jul 2014 Leave a comment
in Public Choice Tags: Devil's dictionary, revolutions
In politics, an abrupt change in the form of misgovernment.
Specifically, in American history, the substitution of the rule of an Administration for that of a Ministry, whereby the welfare and happiness of the people were advanced a full half-inch.
Revolutions are usually accompanied by a considerable effusion of blood, but are accounted worth it — this appraisement being made by beneficiaries whose blood had not the mischance to be shed.
The French revolution is of incalculable value to the Socialist of to-day; when he pulls the string actuating its bones its gestures are inexpressibly terrifying to gory tyrants suspected of fomenting law and order.
Measurement and theory – can the facts just speak for themselves?
16 Jul 2014 Leave a comment
in Karl Popper, Ludwig von Mises Tags: Koopmans, Kyle Popper, methodology of economics, Thomas Kuhn
Measurement without theory is a futile and self-deceiving exercise. Our observations of the world are always selective and theory-laden (Popper 1963).
The number of factors which predate and lead to any event, past, present, or future, is indefinitely large, and knowledge of all of these factors is impossible, even in principle (Popper 1963).
In the social sciences, there is no laboratory where facts can be isolated and controlled and manipulated one-by-one. The facts of history are complex – the result of many causes including changing human motives and ideas, changes in relative prices and expanding technological possibilities. This rich tapestry of causes can be only isolated by theory, theory that is necessarily developed prior to these historical (including statistical) facts.
Every analyst must come prepared with a theory to tell them ‘what to look for’ (Koopmans 1947).
Our experiences and past knowledge selects, shapes, influences, organised, classifies and measures any phenomena we seek to understand (Popper 1963).
A theory allows us to think deeply and to figure out how to attain and verify knowledge about the world. The purpose of theory is to aid in the interpretation of experience and history. A scientific community cannot practice its trade without some set of received beliefs about what the world is like. These beliefs create avenues of inquiry, formulate questions, select methods to examine questions and define areas of relevance (Kuhn 1962).
The questions asked in any research and which data is to be reviewed or reconsidered are not random choices. The variables to be defined, and the specific data to be collated and interrogated are all chosen in light of past research findings. Empirical and theoretical anomalies and prior theoretical beliefs also decide what is relevant or not, where to start and when to stop, and how new findings are to be melded with and even justify overturning existing understandings (Koopmans 1947; Popper 1963).
Empiricists are able to believe that facts can be understood without any theory only because they failed to recognise a theory is already contained in the very linguistic terms involved in every act of thought.
To apply language, with its words and concepts to anything is at the same time to approach it with a theory. The choice is never between theory and no theory. The choice is between articulated and defended theory and unarticulated and non-defended theory.
Net Neutrality Regulation is Bad for Consumers and Probably Illegal
16 Jul 2014 Leave a comment
in economics
Capitalists do not exploit workers
16 Jul 2014 Leave a comment
in applied price theory, entrepreneurship, Marxist economics Tags: marxist economics, Marxist exploitation, surplus value
Workers exploit capitalists who start businesses that fail. Workers are paid more than they add in labour value to failed start-ups.
- A self-employed farmer scraping a living with the help of a part-timer is exploiting that worker while a manager who owns no shares on a salary of $500,000 a year is a downtrodden and exploited member of the proletariat!
- Elite athletes, celebrities and TV and movie stars are the most exploited of all proletarians. Itinerant workers with no income security at all. At the mercy of the selectors, record companies and studios. 15 minutes of fame is fleeting.
- Many capitalists scrape a living and often go bankrupt and lose their house and marriage after business failures while many workers are highly paid.
- The university educated are well-paid proletarians with low unemployment rates.
- How is your superannuation portfolio going? Riding high on the fat of the working class?
- Pension fund socialism was never a promise of long-run super-normal profits.
- Despite the majority of labour surplus now going back into the hands of workers in their retirement savings, the share market is still a dog or is it?
Thatcher’s brilliant critique of socialism and how it is happy for the poor to be poor
16 Jul 2014 Leave a comment
in comparative institutional analysis, income redistribution, liberalism, politics Tags: Margaret Thatcher, socialism
Introduction to Market Failures
15 Jul 2014 Leave a comment
in economics
Market failures are institutional arrangements which deviate from the neoclassical model of perfect competition. Any market outcome which is undesirable can be referred to as a market failure, although most economists are often disdainful of any use of the term which does not correspond to some deviation from the model of perfect competition. Wikipedia lists seven categories of market failures: Monopolies, Public goods, Natural monopoly, Externalities, Bounded rationality, Information asymmetry and Property right as right of control. Each of these categories falls into one of my categories below.
Market Power
Monopolies (natural or not) and cartels are cases of market power, which allows firms to price above marginal cost. If firms can collude to reduce the quantity produced, they can drive up the price and their producer surplus (see graph below). In a competitive environment, some firms would defect and produce more, driving the price back down, or…
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Utopia, you are standing in it! 
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