October 2007 Archives
Johnny Rotten from the Sex Pistols says hello to Ron Paul. Awesome!
Ron Paul & The Sex Pistols on Jay Leno
Add to My Profile | More Videos
I'm pleased to announce that Claudia Williamson and I have won the Don Lavoie essay contest this year.
Claudia is doing fascinating work on the empirical differences between formal and informal institutions and their influences upon economic growth and development through the development of secure private property rights. To make a long story short she concludes that informal cultural norms are more influential on the security of private property rights rather than formal codifications of private property.
Congrats to Claudia and thank you to all of the judges.
Not quite a live video but I'll take it. Hat tip to Jeff Tucker.
In The Perils of Regulation: A Market Process Approach, Israel Kirzner writes:
A realization that the market yields knowledge -- the sort of knowledge that peple do not at present even know they need -- should engender among would-be social engineers who seek to replace or to modify the results of the free market a very definite sense of humility. To announce that once can improve on the performance of the market, one must also claim to know in advance what the market will reveal. This knowledge is clearly impossible in all circumstances. Indeed, where the market process has been thwarted, in general it will not be possible to point with certainty to what might have been discovered that has now been lost (ibid., 1985, p. 131).
This 1989 Washington Post article takes Martinson's classic "nothing works" conclusion to task. It implys that Martinsons method was short sighted and overly stated. What seems to be the understated implication of the Post piece is that political support of rehabilitation programs does not necessarily translate into effective rehabilitations (a conclusions Martinson would most surely have agreed with). In other words, maybe Martinson meant "nothing the political apparatus can do will work to rehabilitate." The innovative techniques of psychotherapy and community based rehabilitation program require hard budget constraints to be discovered and applied efficiently.
Though I wish Kling had mentioned Austrian-ness as an essential quality of Masonomics I was glad to read this:
Why do Masonomists blog so avidly? I think it is because there is a sense that we are onto something, and we want to ramp up the conversation among ourselves as well as communicate with a wider audience.
Very similar to the way Klein and I interpreted the prominence of blogging at GMU in our paper.
[Charles] Logan [in "Crime Stories"] notes, it is commonly claimed that "increasing freedom brings with it increasing crime. Liberals respond with proposals that would decrease economic freedom: conservatives respond with proposals that would decrease social freedom." Both types of proposals tend to involve more government and less liberty. But in reality, crime is likely to decrease through greater emphasis on the tenets of individual liberty, because there is a "corollary of freedom: individual responsibility." Thus in contrast to widely held beliefs, reductions in liberty (limits on people's ability to use private property in the pursuit of happiness while recognizing an obligation to respect others' private property) are associated with increased crime, because both reflect the same attitudes toward property rights (Benson, 1996, p. 98).
In honor of Al Gore winning the Nobel Peace Prize, I invite everyone to watch "The Great Global Warming Swindle" its a great documentary on climate change. Alongside "Mine your own business" these are a hard hitting duo against the anti-development consequences of the modern environmentalist movement. Hat tip to Michael Thomas for the great reference.
David Friedman has a great post about the predictable content of laws under market anarchism. What's to keep law in market anarchy libertarian rather than oppressive?
This is similar to an argument I've been grappling with in my dissertation. Theoretically we can imagine a state that creates a restitution-based criminal law, and a market-provided legal system that promotes retributive punishment. They would not be impossible, but they would be unlikely and prone to change. In each case the motivations and rewards of shifting to the alternative criminal justice paradigm is preferred by the actor (the state in one case and individuals in the market in the other case). The following two by two matrix might be helpful:
The off diagonals are stable equilibrium, they are self-reinforcing. The rewards to states of using retributive punishment are higher than if they were to create restitution norms. So the state-retribution norm is self-reinforcing. Vice versa for the market system and restitution.
I'm very excited about the current project I'm working on with fellow GMU student Diana Weinert. We are in the process of data to take stabs at some very interesting questions concerning the international use of prisons and criminal justice.
One of the two papers we're working on, I hope to use for the third section of my dissertation. To what extent do state sponsored criminal justice systems suffer from rent-seeking and capture? We're using prison populations, police expenditures, and populations for legislatures and judiciaries to develop proxies for the size of the corresponding criminal justice institutions in various countries. These are the underlying institutional variables that induce outcomes of two kinds.
Our intuition is that countries with larger criminal justice systems are correlated with larger state power, taxes, regulation, and the other complementary institutions of criminal justice. But size doesn't always matter. Big institutions for criminal justice doesn't necessarily mean quality institutions. We then look at the correlations between those foundational institutions and the actual social phenomenon they are claimed to promote: peace, prosperity, property rights, etc. Looking at a first few runs of correlations it looks like the relationships between big prisons, police forces, judges, and law makers are not negatively related to crime rates and functioning property rights but weekly related at best.
The data implies that larger criminal justice institutions are more correlated with large states than they are correlated with low crime rates.
In my recent comments about the now infamous UF incident, I argued that it could partially be explained as a back lash response of over anxious campus police in the wake of the Virginia Tech massacre. Now I'd like to pose a hypothesis concerning the rise of tasering as a law enforcement technique in general. To put it breifly, I am prone to believe that the rise in the use of tasers (after and aside from their technological innovation) is correlated with an increase in the amount of female police officers.
Guns are a great equalizer of physical force. When people live in a diverse world, where some are strong and others are weak, the weak are at a great exploitable disadvantage compared to the strong. At any time the strong can simply take all they want from the weak. But with cheap and accessible hand guns, even the scrawniest of midgets armed with a Smith and Wesson can put up a good fight against the surliest of giants. Thus the costs and potential rewards of violent crime radically changes in the presence of fire arms.
Tasers and non-lethal weaponry was innovated to minimaize police liability when confronting unarmed civilians. Often times civilians are unarmed because of gun regulations and prohibitions. The typical argument in favor of non-lethal weapons is that they are non-lethal, i.e. preferable to lethal weapons. If confronted with the choice to be tasered or shot with a normal gun, I'd rather be tased -- seems obvious. But the trends of tasing and police shootings don't seem to support this argument. Rather than tasers being used as an alternative to traditional firearms, rates of police shootings with traditional firearms has remained constant since the innovation of tasers, while the use of tasers has steadily increased.
It seems like the alternative to tasing is physical force rather than traditional firepower. Using a taser has similarly non-invasive consequences as physical force but it's much easier to apply and use. The costs of imposing physical force are dependent upon the available resource of force at the disposal of an officer. Big guys can use force cheaply and easily, scrawny officers face a bigger challenge in tackling and physically detaining suspects.
Through human history criminal populations have been mostly men compared to women. Some explanations concern, IQ, socio-biological predilections to violence, and opportunity costs. This trend has weakened significantly since the rise of the drug war. Criminality is no longer defined along margins that parse in favor of women. The difference in drug use between men and women is far smaller than the difference in committing violent crime or property crime. Also prosecuting wives and girlfriends of drug lords has served a useful bargaining device in bringing male drug offenders to trial and conviction.
Police forces attempt to diversify their officer populations to be more responsive to the communities they service. It's a big help to have an officer who speaks Spanish in a dominantly Hispanic neighborhood. Maybe the same is true for female officers dealing with female suspects. With the rise in female criminality from the drug war, there has been a push for and subsequent rise in female officer hirings. If on average, women are physically smaller and weaker than their male counterparts then is it reasonable to assume that female officers will use tasers more often? The UF student was tased by a female officer.
Pete Boettke repeatedly drives this mantra into our heads. "When history defies what logic dictates," that's what makes a paper topic or a research project. Here are a few:
(1) The United States scores exceptionally on the Economic Freedom Index, this would imply a large role for free enterprise alongside a stable and reliable administration of justice. Yet at the same time, the US incarcerates more people than the world has ever known. A first response would be that the incarceration trend is in fact an integral foundation of the economic freedom, i.e. justice, law enforcement and secure property rights allow for economic freedom. But shouldn't the ordering of the countries match for the top scorers on both economic freedom and prison populations if this were true?
(2) In the late 1980s economists and criminal justice researchers expected the 1990s to be a youth crime wave. Criminals were apparently harder and younger than in times past, yet in the US the 1990s were a time when violent crime plummeted. On the other hand the UK does not seem to be sharing the drop in crime. Culture and generational effects seem far less influential compared to policies, institutions and the incentives they create. What specific policies are driving the radically different crime rates observed in the economically similar US and UK settings? No I don't think all the violent criminals in the US moved to the UK.
My website: danieljdamico.com has just been updated. The latest versions of my CV, older working papers, and some new working papers are up as well, so be sure to check it out.
When ever I'm in a book store, I spend most of my time in the social science section. Amidst history and current politics, I've stumbled across some fantastic authors who I never would have found without thumbing the shelves: Studs Terkel, John McPhee, and many others. But there's always that abrasive Naomi Klein. Her book No Logo looks so radical and akin to the anarchist cookbook, that I just can't picking it up and taking a look. Over the years I must have picked it up a dozen times, read a sentence or two, found its contents appalling, and slammed it back onto the shelf. Time goes by and the next time I'm in a book store I repeat the vicious cycle.
Klein has a new book out, Shock Doctrine, which I admit to have not read. But it seems to be getting a lot of attention (Here's Tyler Cowen's book review and comments from Pete Boettke 1 and 2).
My first reaction is, why do we (the economics profession) even give this woman the time of day. Here's how my ideal conversation concerning her work would go. An interested person strikes up a conversation, "Oh you're an economist, have you read Naomi Klein's new book?"
The economist responds, "Who?"
"You know it's like a best seller."
"Where does she teach, where's her degree from, what school of thought does she subscribe to?"
"I don't know but she gives a devastating critique of Capitalism."
"I guess I should look for a new line of work."
If there's no real theory behind the work, it must be riding to success on some alternative content: it's plea to the public's bias against capitalism, Klein's emotional appeals, or her own form of shock doctrine.
Take the interview that I posted above. Klein tells the audience that free-market think tanks actually had a "meeting" after Katrina, to formulate a response plan. Oh no! you mean that the people who consider themselves experts on capitalism, business, production, distribution, development, and growth actually held themselves accountable to be relevant to the problems of the real world. Heaven forbid.
In this interview she spins the story of Katrina to sound like some conspiratorial effort is behind the growth of market institutions in the wake of Katrina. She doesn't even entertain the fact that the alternative institutions failed at their very intended tasks. The schools, the transportation, the health care, all publicly provided, were bumbling nightmares after the storm, while Wal-Mart, Lowes, and Home Depot had trucks on the move with real productive materials and equipment ready to rebuild. The story is not one where capitalists exploit catastrophic opportunity at the expense of civic society. Instead the story is one where capitalism provides individuals with the durability, strength, and control to rebound and rebuild in ways that central planned institutions could never hope to keep up.
Why does the public like her book? Why are society's biases aligned in her favor? She makes it sound like the half government, half market hybrid is the natural order, the way things have always and always should be. Nothing can be farther from the truth, the growth and dominance of central-planning and government control over infrastructure institutions like transportation, criminal justice, education, health care, etc., is a very new phenomenon. The alternative arrangements of these institutions evolved over thousands of years, but in the last 75 years or so the hubris of planning has run away with itself and Klein gets to be a best seller.
The private military firm Blackwater has been getting a lot of media attention lately, some good and some bad. In libertarian terms the case is not cut and dry. One part of my libertarian inner economist wants to say that private firms are better than the state at providing international defense services. David Friedman once similarly wrote that the incentives produced from a volunteer or paid army yield preferable quality outcomes compared to forced conscription and a military draft. On the other side of the debate there are some human rights issues to be concerned about. As Hart, Shleifer and Vishny (1997) have noted concerning the contracting out of prison services, private managers are often promoted to degrade quality by cutting costs to maximize profits. Benson (1994 and 2003) has similar concerns.
On net I think the market wins out on this debate but not necessarily the current so-called private firms we see today. Private companies should be more responsive to quality standards that take note of the excessive use of force compared to governments. The fact that current private firms appear to be liberal with their applications of violence is not necessarily due to their private-ness.
When governments use excessive force in international conflict they are only held in check by additional levels of international bureaucracies and governments, private firms on the other hand should be directly liable under their domestic tort systems. Unfortunately firms like Blackwater are receiving degrees of immunity specified in their contracts from American governments.
What seems obvious and affirming to my market-preference for international involvement is the fact that if the federal government were to revoke these immunities then Blackwater would conduct itself more prudently. Raise the cost to frivolous violence and it will be committed less frequently.
