The Wild West ... the outback ... The new world of the 1800s was a time of true liberty. People stood on their own merits. They won or they lost and they reaped the rewards or swallowed the consequences. There were no cubicle dwelling civil servants hell bent on saving you from yourself. No planning permits no licenses no permissions no heritage overlay no bylaw no regulators no inspectors. And guess what ... it worked

This site is set up to provide a forum for a number of like minded professional economists to post and comment on contemporary issues. There are a number of regular contributors whose bios are made available on the site. Most if not all of these contributors use a pseudonym for the simple reason that they are practicing economists who must take into consideration the commercial implications of posting their opinions.

While some may feel that this is a bit of a gutless approach it is the only way we can ensure free and open discussion without jeopardising our paycheques.

Friday, February 26, 2010

Realestate deals in the USA

Wednesday, February 24, 2010

Writing speeches for Kevin (RR)

Its very surprising to find this article in the AGE ... its definitely worth checking out, and as you go through the comments you'll find it comes as no surprise to anyone that has worked in government previously.

However, i do differ from some of the comment in that i think the liberals empowered their ministers much more than kevin does.

thanks to IPA for pointing it out

Regulatory madness (RR)

Hows this for regulatory madness.

I just heard from a reliable source that work cover NSW is seriously considering regulating pall bearers so that they have to wear hard hats ... apparently an open grave means that the site is considered dangerous ... ergo hard hats.

Its sort of hard to pull off a sombre funeral when you have six blokes standing around the coffin in bright yellow hard hats ... or perhaps there will be special black ones .... or white ones with doves on them .... or sky blue ones with pictures of the pearly gates on the front.

or for that special funeral ... hardhats covered in flames.

Whats next ... is the priest going to have to throw a safety harness around the gravestone?

I would like to see their regulatory impact statement, in particular i would love to see the stats on falling into open grave related accidents.

Its about time someone introduced kill a bureaucrat day!!!!

Bagwhati on Moyo on Aid

Very good article from Bagwhati reviewing a book by Dambisa Moyo (an African economist)

If your interested you should also check out White Mans Burden

10 Questions for 2010: 6 to 10 (Roy Rodgers)

  1. Endangered species.... how do they get listed? Have any species ever come off the list .... that is, has any species ever been deemed to be no longer endangered? How often is the list reviewed, is it subject to independent assessment? Can you appeal a listing? Is it an effective way of protecting wildlife? What constraints does a listing have for commercializing a species? If preservation is the end goal, commercialization is the one sure way of achieving that outcome ... look at cows, do you think they are in danger of extinction? How does the definition of endangerment deal with changes in demand from humans and substitution or technical obselecence? Whales would be a good case study. Some species have had up to 50 years of protection, so how are they going? can they now be delisted? Do we now have enough blue whales? Are their current stocks sustainable given that we would no longer demand whale oil in anywhere near the quantities we did prior to the development of substitutes such as petroleum?

  2. This is a very Australian specific question ... when I turn on my digital tv and shuffle through my 400 available channels... what the hell is going on ... why are they basically all empty ... how come there are only four channels (sorry .. plus the extra re-hash ones that roll out the one program series for weeks on end!) ? Surely this is a massive government and policy failure. All that excess capacity just sitting there, all that opportunity for us to communicate, educate and entertain each other is just being wasted. How on earth does the commonwealth minister for broadband, something or other and the digital economy loudly and proudly declare that he will not let another any new entrants compete against the four incumbent tv channels .... why not? It's not as if there isn't enough space for a couple more? It's not as if competition would erode our appetite for such brilliant local content as funniest home videos and the 20 to 1... no way not under his watch. He seems to be boasting his credentials as a protectionist. Standing tall and screaming for all the world to hear ... Fk the consumer!!! And this guy is from the labour party.

  3. Afghanistan ... I just don't get Afghanistan. How can a little piece of unproductive rock with virtually no redeeming economic value cause such a massive headache to the world? Why has the world been fighting for centuries in this place .... How does this country come to have the ability to engage the most powerful countries on earth in war? The English, the Russians and now the Americans. What can economics tell us about the seemingly unique ability of Afghanistan to compel the most powerful countries in history to invade it.

  4. Why do heritage trams exist? You don't get heritage buses. How can there be any value in being forced to sit on a rickety, uncomfortable, unsafe tram? Why would you want to? Buses and trams are perfect substitutes (or as close to as you're going to get) Does the simple fact that trams run on rails while buses run on tyres mean trams are somehow more valuable, more endearing?

  5. One more ... economics, globalization and cuisine. I would like to know how food cultures react to various changes in the resource availability that accompany mass migration programs. The most obvious example is Chinese. How does a cuisine evolve once it migrates to another country and as a consequence is subjected to a whole new bundle of available resources ... what makes a cuisine successful in its new environment, how do some cuisines manage to maintain their essential characteristics? Australian Chinese is obviously very different from Chinese Chinese which is again very different from American Chinese.
Ponder on .....

Monday, February 22, 2010

why is it American cartoonists get it?

Wednesday, February 17, 2010

10 Questions for 2010: 1 to 5 (Roy Rodgers)

  1. We all love the dali lama ... but what would the political economy look like if he was actually in charge of Tibet. The dali is essentially a theological dictator, and while i understand hes reportedly a fairly compassionate guy do you really think you would want a religious leader of a strong monastic sect, with all that it entails in charge of government. How do you deal with a political leadership that sees the ultimate utility of a country as its devotion to a rigid religion and the realization of some form of spiritual enlightenment. Whatever fiscal or monetary policy these guys produced would have to be a complete farce. how would vested interests compete for policy outcomes. Do you really want a guy who believes in self denial and asceticism in charge of your essential infrastructure program. Very interesting public choice question.

  2. Queuing behavior when boarding and alighting from airplanes. Lets start with boarding. I'm always in awe of how they manage to get people to queue in the first place let alone stand in the queue for 10 minutes while they fumble with the boarding passes. It's not as if getting in line early and standing there is going to get you to your destination any faster, it won't even get you a better seat (as these are already assigned). And then there's the question of why every one jumps up as soon as the plane lands. Why? There doesn't appear to be any benefit from doing so. Planes empty row by row so you don't get off any faster, at best maybe you can push in front of one of the guys from the row in front of you, but again what's the point, you all end up at the baggage carousel where you have to wait 20 minutes for the bags to come out, by which time you've lost any advantage from your pushing to get off the plan. Chillax (as my 7 year old would say!)

  3. Why is popular media, particularly TV and the big screen, such a big bunch of lefties. Liberal media commentators are far and few between and liberal orientated movies are far and few between. I find this very perplexing especially when you consider that Hollywood would have to be one of the most merit based market sectors there is, why are businessmen always portrayed as greedy, and private companies as always corrupt. Why didn't Hollywood go the other way? What role does economics and incentives have and why isn't economics portrayed accurately.

  4. In a similar vein, I would like to know how rock stars reconcile the obvious tension between their anti-capitalist herding behavior and the fact that they themselves are the robber barons of the modern capitalist system?I love spearhead, but i often wonder why if micheal franti was so sincere he hasn't released the intellectual property associated with all their music into the public domain ... why are those that scream so loudly about social ownership the first to protect their own property. Should they lead by example? In another related question ... why does the left produce all the good music? why is it classical liberals have to make do with Country and Western.

  5. How come people are slow to realize the opportunity cost in their houses? By this I mean when you look at Sydney and Melbourne - two cities with the most unaffordable housing in the developed world ... how come there are still inner city suburbs like Footscray, where houses are worth 500 000 to 600 000 smacks and yet there are still heaps of bogans living in these expensive dilapidated shacks with their commodores parked dutifully on the footpath. Why haven't they realized the opportunity cost associated with their little shit heaps and buggered off? 500 000 buys a lot of cold chisel CDs.
I recently received some critical feedback from one of the two people (excluding fellow authors and associated family members) who follow this blog .... apparently I am a 'long winded bastard'. In the spirit of self betterment I've split the questions for 2010 into two separate articles ... so stay tuned and questions 6 to 10 will appear here soon.

Thursday, February 4, 2010

Ramirez on global warming

Tuesday, February 2, 2010

Green fallacies (Roy Rodgers)

Environmentalism has really picked up over the last couple of years. Its influence on public policy has become all invasive. Environmental outcomes are now pursued with scarce regard for the associated costs and impacts on the wider community. Simple concepts of public benefits tests and robust cost benefit analysis have all but disappeared. Who cares about the bang for our buck ... if we can save an endangered frog we must do it (whatever it is) ... further to that, who cares if we are not confident that the frog is actually endangered or indeed that the frog actually exists, we must do it regardless just in case there is a frog and it is endangered ... we must take a precautionary approach if we are to ensure that sustainability is achieved.

Well on your bike you dreadlocked, no soap, no shoe red ragged feral ... enough is enough.

The time has come for environmentalists to start justifying their policy prescriptions. The time has come for the greenies to defend themselves. No more easy rides or free lunches. The vast bulk of environmental pap that has to date been blindly accepted by governments must be put under the microscope.

As an active participant in the development of policy, its implementation and its ongoing operation I can only cheer what appears to be an awakening of the public consciousness to the dangers of blind acceptance of environmental agendas.

In that spirit I thought there may be some value in trying to identify the main fallacies that underlie allot of environmental argument. Those that deal with government either in a consultative role or in an operational role would have encountered one or more of these fallacies, probably a multitude of times over the last 5 or so years.

The fallacies

Some of the following fallacies relate direct to the the thesis of globally-induced man made warming while others are more broadly applied over the wider environmental agenda. All of them are well known to anyone who has studied logic and argument.

  1. Defending an argument by attacking your opponent personally is called a fallacy of abusive analogy which is a highly specialised version of the ad hominem argument. Basically the opponent or their behaviour is compared with something which will elicit an unfavourable response from the audience. It is a very simple tool for diverting attention away from the merits of the opponents argument.

    The demonisation of any dissenting view is a fallacious approach. Sceptics are not equivalent to holocaust denialists. Sceptics are simply questioning the science and at the end of the day scepticism itself is a cornerstone of modern science. We don’t hang scientists, we don’t draw and quarter them, we don’t expose them to social ostracisation simply because they disagree.

  2. Argumentum ad numeram wrongly equates the numbers in support of a contention with the correctness of it. Ideas which have mass support are no more likely to be right than those that don't. The validity of an argument is totally independent of the number of people who support its contentions.

    The assertion that there is a consensus in the relevant sciences is equally crap and irrelevant. There is now more than enough evidence that the idea of consensus is blown. Enough notable scientists have spoken up and enough sceptics petitions have been made public that anyone contending there is consensus is full of it. There is consensus about gravity, there is consensus about evolution, there is consensus about the existence of dinosaurs ... there is no consensus about man induced global warming. And in any case consensus doesn't matter. Science is not about everyone agreeing with each other, its about the discovery of truth. Truth is true no matter who believes in it, or who doesn't.

  3. Argumentum ad bullshitus. An outright lie ... a plain and simple false analogy.

    Carbon dioxide is air ..... its not carbon, its not soot, and its not dirt. Put your hand up if your sick of hearing some idiot mention dirty air or show pictures of some black sooty monster in the sky. Carbon dioxide is air, its an integral building block for life as we know it. As a simple experiment cup your hands in front of your face and breath into them. Now quickly have a look .... that’s the stuff that’s killing us ....air. I know its hard to believe but what you are now holding in your hands is literally the very stuff that all this current drama is about ... air.

  4. This is a modern fallacy so lacks a swank Latin title ... it is a mix of the fallacy of blinding them with science, with a bit of ex-post-facto fallacy (that the past dictates the future) and generous lashings of false precision. The false precision fallacy is an attempt to impart more confidence in the assertions than the evidence for them actually merits. The next time you read an article that says global temperature will increase by 3.5 degrees over the next 20 years, ask yourself why not 3.6?

    Models are right? As an economist i can tell you outright that anyone who believes they can model human behaviour and forecast it accurately over the long term ie the next 100 years has been sniffing too much glue. No one can accurately model human behaviour over the short term let alone the long term. Human beings especially those in modern capitalist democratic societies are unparalleled in history in terms of their ability to innovate and create. For example, consider fossil fuels or actually just consider one fossil fuel ... petroleum .... how many times have peak oil nut jobs had their say. Ever since the sixties there has been a steady procession of modellers predicting oil reserves to run out within the next 3 years (i don’t know why the always go for 3 years but they do). The reality is that oil is nowhere near being depleted.

    What these modellers fail to predict is the ability of the market to adjust to increased price ... growing scarcity ups price, increased price generate greater levels of investment which increase supply through innovation, price goes down. Despite the constant threat of depletion oil prices have remained relatively constant over the last half century (in real terms). The modellers shouldn't be ridiculed for not being able to predict oil prices but they should be ridiculed for not possessing enough self awareness to recognise the inherent inability to meaningfully model such technological development.
    The problem with man made global warming models is the unpredictability of the man made part which is only exaggerated by the long term view these models take.

  5. The fallacy of composition, what it true for one member of a set is true for all members and subsequently for the set as a whole. For example ignoring the south pole and focusing on the north implies that of course the earth is heating if the poles are melting ... self evident.Picking individual members of a set of environmental outcomes as indicative of the outcome for the set as a whole is fallacious.

    They seem to cherry pick their results. For example, a couple of weeks ago a group of principles IPCC authors released a paper (coincidentally just in time for Copenhagen). The report makes a big thing about low ice coverage in the arctic. However it gives no coverage to growing ice coverage in the Antarctic, I don’t know about you but for me to be convinced that the lack of ice in the north is global warming they need to explain why this is more important than the net global gain in ice coverage or the seeming exponential growth of ice in the Antarctic ... does the south not matter.

  6. The classic fallacy of reification. The environment is an abstract concept much in the way that a firm is an abstract concept. All a firm is, is a collection of of labour and capital, just as an environment is a collection of Flora and fauna. It fallacious to treat the firm as a thing. the firm doesn't think, the firm doesn't produce things, and the firm doesn't play soccer. High level executives may undertake strategic decisions, production line workers may use capital to produce products and both executives and underlings may play soccer. But the firm itself is nothing more than an abstract concept.

    Just as GIA is nothing more than an abstract concept. GIA doesn't weep, GIA doesn't morn the good old days when dinosaurs farted their way into global warming and GIA most certainly doesn't play soccer.

    The environment is not some big breasted female entity that is feeling slightly hurt because we have discovered intensive cropping techniques. The environment is a bundle of physical actualities regarding soil, water, weather, flora and fauna. It is not some god that needs to be worshipped. All animals seek to control and influence the environments they live in. The environment does not need to be saved or preserved as a moral imperative. We along with every other living thing should seek to manage our environments to the degree we can to benefit us as a species.

  7. The false dichotomy. Man Vs Nature. A dichotomy is a splitting of a whole into two non-overlapping parts. In set theory terms its basically taking one set and splitting it into subsets that are mutually exclusive and jointly exhaustive. In the context of an argument these sets are seen as opposites ... its either one or the other. As discussed, this fallacy totally ignores the fact that man is part of the environment ... we are in fact natural.

    Man is a part of the environment. We are the apex species. It makes absolutely no sense to proposition a world without man. We evolved on this planet, we didn't come here in big space ships. We are part of the environment. Given the existence of man the proposition of a world without man (nature) is an inherently unnatural thing to do. It doesn't matter how special we think we are, we are part of the ecosystem.

    When was the last time you turned on the discovery channel to find a documentary that considered the Serengeti without lions or the pacific without sharks ... obviously there would be more gazelle and more tuna ... but whats the point, sharks and lions are part of the environment and man is also part of that very same environment. That concrete tower I work in most days is no more unnatural than the big termites nests I used to always be in awe of every time i went bush with my dad as a young boy.

    Further, it makes absolutely no sense to proposition that nature without man is the optimal environment ... Optimal for whom? Definitely not for us ... is that also true of the pacific without sharks or western Queensland without termites.

  8. Celebrities are not climatology experts. Rock stars and actors have no more credibility when it comes to the environment than you or I. Just because they had a string of hits in the 90s doesn't mean they have their finger on the pulse. I personally cant stand the celebrity global warming attracts. Al Gore and Bono are wankas ... 100%.

    This is an extreme version of
    argumentum ad verecundiam. An appeal to false authority.... its an appeal to celebrity. Bono is an expert at rock music 90s style. Just because he is famous does not have any bearing on the validity of his statements in regard to the environment. Advertisers have long been aware of this fallacy, in fact its kept many Australian Olympic swimmers financially afloat long after they start to become fat and non competitive.

  9. Stop consuming or there will be nothing left for the rest of us. This fallacy is an economic one, its the fallacy of the the Malthusian trap. While the reverend Malthus is widely regarded by economists as somewhat of an embarrassment, his thesis that economic growth is not only constrained but ultimately unsustainable due to the physical availability of resources is to environmentalists as junk is to junkies.

    While on the face of it the Malthusian contention that we will all eventually starve may seem to have some merit, it makes the fatal error of treating resources and their associated productivity as static. It take no account of how markets operate to signal investment and depends on a very simplistic definition of scarcity that does not allow for innovation to drive changes in efficiency in use. The discussion under fallacy 4 in relation to peak oil also serves as a good example of the Malthusian fallacy.

  10. Risk aversion is better than risk neutrality or risk affinity. This is the precautionary fallacy, there is absolutely no reason a risk adverse approach will result in better outcomes.

    A perfect example is the banning of DDT, which goes something like this ... a whole mess of bureaucrats read a well intentioned book called silent spring, they all jump up off their collective backsides and declare ... wow we better stop spraying mosquitoes with DDT, otherwise it may be the case that we inadvertently kill innocence wildlife ... granted there's not a lot of data to support the idea, but hey we better ban it or we may just create an ecological disaster .... millions of Africans die from malaria. Who said being risk adverse didn't have costs.

    The other problem with the precautionary principle is just how precautionary do you want to be. Unfortunately in life everything has risk associated with it. Doing something may be risky, not doing something may also be risky. Ultimately someone has to pick what risks matter and what risks don't, and when they do the precautionary principle becomes nothing more than an expression of their own prejudices.

  11. The sustainability fallacy, there seems to be a growing contention that all natural resources need to be managed in a sustainable manner, otherwise we are creating inter-generational inequities. Rubbish, the desirability of treating a resource sustainably as opposed to just letting it deplete should be dictated by the net value associated with each approach. Its not inconceivable that some resources are just too expensive to treat sustainably or alternatively, that some resources run the risk of technical obsolescence and as such should be depleted as much as possible prior to obsolescence.

    Some resources by definition can't be treated sustainably ... eg oil.

  12. The doomsday fallacy, environmentalism is permeated with the idea that disaster is just around the corner. That if we don't act now we are stuffed. The doomsday fallacy is a fallacy simply because in real life as we converge on a true crisis point we inevitably invest more in addressing the issues and finding solutions or alternatives. That is free markets will if left to their own devises, just simply deal with it. Doomsday never arrives.

    The interesting thing about this fallacy is that Australia along most of the developed world has been aggressively implementing environmental policy for the last 30 years or so. If we are still dangling over the precipice of environmental collapse, this would imply that none of the previous policy was effective in any way. Have we just witnessed nye on 30 years of collective policy failure.

    Given that the vast bulk of these policies and prescriptions are the direct result of the lobbying of the environmental movement, we must ask both ourselves and the dreadlocked losser standing on my doorstep, all well intentioned in his chuck yagger rip offs , nose piercing and little shiny plastic green peace badge ... why in the name of all thats holy would we want to pursue more of the same.

    If what you are saying is true and we are all being flushed down the poo hole of environmental disaster ... you and your dreadlocks are not the answer, you are by your own admission part of the problem. So bugger off and lay your intellectual cable on someone else's doormat
Give it a burl

Now that we've identified a set of fallacies we should see if we can find some in action.

The following link references a forum on recycling. LINK (thanks to sparker for providing the link)

Its a great discussion. On one side you have a rational headed German engineer and on the other you have a couple of emotionally motivated greenies. See how far in you get before you can identify a fallacy. The most obvious one is the Malthusian Trap Fallacy . And this is a superb example of it being played for all its worth. The user of the fallacy has even brought in props to illustrate the point.

Its also worth watching because its one of the few forums Ive seen that actually has a critical audience with an intellect capable of participating in the discussion.