Archive for Economics

Quotation of the Day

Dave Killion — January 5, 2014

“… given that Deirdre McCloskey is correct in noting that the way we talk and what we say matters, at least as strong a case can be made for legislation to forcibly shut the mouths and freeze the keyboards of those who scream about the dangers of income inequality as can be made for legislation to forcibly take from ‘the rich’ in order to give to ‘the poor.’”

Don Boudreaux, Questions About and For Those People Obsessed With Income Inequality

Boudreaux goes on to counsel against any such legislation.

To the extent that the wealthy attain their wealth thanks to coercive state regulation, I object to that inequality on the grounds that it impoverishes the rest of us. But that inequality which results from hard work, innovation, inspiration, or luck doesn’t bother me in the least. As Thomas Jefferson said, it neither picks my pocket nor breaks my leg. To view matters differently is to indulge in envy, and pointlessly so. Bill Gates may be ten thousand times richer than me, but his food doesn’t taste ten thousand times better, his bed isn’t ten thousand times more comfortable, he isn’t ten thousand times healthier and happier, and he isn’t going to live ten thousand times longer.

In the Business of Making Happiness

Dave Killion — December 22, 2013

imagesNow and again, some journalist proposes awarding a Nobel Peace Prize to WalMart. There have certainly been less-worthy recipients, but I understand WalMart is a supporter of increasing the minimum wage, mandated provision of health care, and has turned to local governments for assistance in acquiring desirable properties through the political process.  Still, the notion of honouring a commercial organization for benefiting humanity has some merit, and if I were looking for a Canada-specific example, a more worthy nominee than UsedEverywhere would be difficult to find.

 

In the past year, UsedEverywhere (more specifically, UsedVictoria) has increased my well-being several times. Through their website, I have gotten free fence panels, firewood, pallet racking, and more. In addition, I have saved literally thousands buying second-hand items for my business, and some frivolous things that I would never indulge in at full price. The people from whom I got these things have been able to rid themselves of unwanted items, not only saving themselves the time and trouble of hauling them away, but even making a few bucks. These mutually beneficial arrangements have come at no cost to my trading partners and me, all thanks to the self-interested conduct of the UsedEverywhere operators. Their actions have enabled a great deal of happiness where none was possible before, and caused harm to no one.

If only there was a medal for making this kind of win-win-win possible.

Chinese Entrepreneurs Vs. Canadian Currency

Dave Killion — December 13, 2013

Sell! Sell!

Sell! Sell!

Just over two years ago, I told you how I was having fun collecting nickels of a certain date. At the time, the melt value of those coins was in the vicinity of 12¢ each, and I have accumulated about (face value) $200 worth. How has my investment fared? Not so well. As of this writing, those nickels have a melt value of merely 6¢ each! There was a time when I was buying rolls of nickels from the bank and sorting through them, but now it’s hardly even worth the effort to check my change every day and pull the ‘good’ nickels out. How has this come about? Reed Watson and Greg Sauer of the Property and Environment Research Center have the answer

“The price (of nickel) peaked in 2007 at $50,000 per metric ton, up from $10,000 just a few years earlier. Responding to the scarcity, Chinese entrepreneurs figured out how to substitute a lower-grade nickel known as “nickel pig iron” in the steel manufacturing process. As a result, the price of nickel plummeted to $14,000 per metric ton, and China became a leading nickel producer.”

Despite the devastating effect these Chinese entrepreneurs have had on my speculative ambitions, I’m glad to see yet another concrete example of innovation overcoming scarcity.

Oil Spills Indicate A Need For New Pipelines

Dave Killion — May 11, 2013

The Christian Science Monitor reports that foes of the Keystone Pipeline claim that a recent oil spill bolsters their opposition –

“The rupture of an ExxonMobil pipeline that sent a gooey black stream of heavy Canadian crude oozing across lawns and driveways in suburban Mayflower, Ark., (on March 29) has been seized upon by opponents of the Keystone XL pipeline as proof that the controversial project should be halted.

The break in the more-than-60-year-old Pegasus pipeline, environmentalists and homeowners say, illustrates the inability of oil pipeline companies to prevent spills that can wreak havoc on local environments, including important water aquifers along the 1,700 mile Keystone XL’s projected route. An Obama administration ruling on the pipeline is expected sometime this summer.”

If someone protests the construction of new oil pipelines, and insists that oil companies rely on pipelines that are getting older and older, which would you say that that person wants: fewer spills or more spills? And regardless what that person wants, what do you think they’ll get?

Another Country Without Rhinos

Dave Killion — May 5, 2013

O, pardon me, thou bleeding piece of earth,                                                 That I am meek and gentle with these butchers!(275)   “Julius Caesar

It is possible, I suppose, to be a libertarian and yet not think rhinos are awesome, but you wouldn’t be the kind of libertarian I could be friends with. But if you love rhinos ( as all good libertarians do), you will be broken- hearted to hear that the last known rhinos in Mozambique have been killed by poachers

“The 15 threatened animals were shot dead for their horns last month in the Mozambican part of Great Limpopo Transfrontier Park, which also covers South Africa and Zimbabwe.

They were thought to be the last of an estimated 300 that roamed through the special conservation area when it was established as “the world’s greatest animal kingdom” in a treaty signed by the three countries’ then presidents in 2002.”

And now they’re all gone. Had those rhinos been privately owned, one of them could have been sold to a trophy hunter, and the money used by self-interested businessmen to protect and breed the remainder. Mozambique could have had more rhinos, but instead, they have none. The prohibitionists had their way, and 15 rhinos have been slaughtered to the benefit of poachers, who will likely spend a fair bit on prostitutes, booze, and drugs, and nothing on conservation. Such a waste.

Graphic Economics

Dave Killion — May 4, 2013

The Victoria Libertarian Book Club has set aside books for awhile, in favour of discussion of pre-selected topics. We’ve had a look at corporate personhood, and technology and liberty, and drones. We’re going to have a movie night in a couple weeks, but if you (like me) enjoy having a book on the go, let me recommend to you the graphic novel  “How an Economy Grows and Why It Doesn’t”. Here’s a sample page –

6

True fact: author Irwin Schiff (85) is the father of well-known-to-libertarians Peter Schiff, and is also a noted tax protester. Sad to say, he is currently serving a 13-year sentence for “tax crimes,” and not due for release for another 3-4 years.

Read this work online here, or download a PDF here.

Canada Defends American Consumers

Dave Killion — April 10, 2013

Here’s a letter to the Calgary Herald –

Your article concerning the determination of Canadian cattle and hog producers to fight against new U.S. regulations for labelling meat (March 12) fails to note that this is a battle not only on behalf of Canadians, but also for American consumers and American workers whose occupations benefit from lower-priced Canadian meat products. Indeed, aside from a few U.S. politicians and the special interests that support them, it is a battle on behalf of all Americans.

It’s true that some of the least competitive U.S. cattle and hog producers will lose business, and some may even have to close down and lay off their employees. But in Canada, every resource that goes into producing meat is a resource that can’t be used to grow cotton or oranges, build wooden boats or furniture, or cater to Canadian tourists traveling abroad. Likely, Canada will turn to the U.S. for help in acquiring these goods and services, and the market will quickly find mutually profitable use for all the resources recently freed from U.S. meat production. Consumers on both sides of the border will benefit from less-expensive goods and services. This is the nature of trade; that the elimination of any barrier is not a zero-sum game, but rather, a win-win proposition.

Blood Money

Dave Killion — March 31, 2013

If the federal government approves a licence application to open three clinics, willing Canadians may soon be able to make up to $40 a week by selling plasma to Canadian Plasma Resources. Self-interested parties eager to keep market competition out of health care are not supportive

“The chair of Canadian Doctors for Medicare said she was shocked by the news that a company in Ontario was planning to pay for plasma.

“The critical issue here is opening up our blood services sector to for-profit companies who have an interest in providing a profit to their shareholders that at times could conflict with the imperative to maintain high quality health standards for Canadians,” Dr. Danielle Martin said in an interview Wednesday at Women’s College Hospital, where she is a family physician.”

Given that about 20,000 Canadians who received tainted blood products from U.S. sources contracted HIV and Hepatitis C, and that those U.S. sources paid for donations, one might think Dr. Martin has a point. One would be mistaken. Although the Canadian system was extensively revamped after the Krever Commission, market forces had already put key players (such as Health Management Associates) out of business. Furthermore, Canada has continued to use products from for-profit companies, to no ill effect –

“…officials distinguish between two uses of plasma. Plasma used for transfusions is always donated as part of an extensive screening and testing system.

Plasma can also processed and purified into therapeutic products using technology that inactivates viruses. For this stream, Canada uses products made from U.S. paid donor plasma.”

In a world where a free market in organ donations is desperately needed, it is depressing that there is even a debate concerning for-profit blood donation. It is doubly depressing that so much of the opposition comes from the medical community, which is bound, by oath, to do no harm. Cross your fingers, and hope the feds do the right thing here.

Regulation Makes Good Things Into Bad

Dave Killion — February 17, 2013

Already challenged by human overpopulation, black-market wildlife trading, global warming, and habitat loss, the Slow Loris makes matters worse for itself… by being too darned cute

“According to the study, wildlife photographers in Thiruvananthapuram – the capital city of Kerala- pay Rs. 500 to 1500 to the indigenous Kani tribes in the areas to capture Slender Lorises and arrange photo shoots. The practice occurs despite the fact that the animal is protected under Schedule I of The Indian Wildlife (Protection) Act, 1972.

Apart from capturing and keeping it, the Lorises are often tightly held on short branches and prodded so that it won’t move during a photo shoot; to help the ‘professional wildlife photographer’ get enough good pictures. Moreover, the poor animal will be illuminated with torches aimed at it, says the study. It is a known fact that aiming strong light sources like torches and camera flashes at Slender Lorises for longer, will be irritating to the animal since it has very sensitive, large eyes to help their nocturnal life.

The study team has also noted that the animal captured for such photo shoots are not returned to the place from (which) it was collected.”

Sounds rough. But consider the Yorkshire Terrier.

Survival Of The Fittest

Unlike the Slow Loris, there is no habitat in which Yorkies can survive unassisted, under any circumstances. Yet not only does cuteness fail to handicap the Yorkie as it allegedly does the Slow Loris, it is, in fact, a Yorky’s chief asset. Indeed, without cuteness, the Yorkshire Terrier would not exist at all. What explains the difference? It is this – because there is a largely free market for Yorkies, breeders can produce as many of them as the world desires, with no fear of criminal penalty, but the only way to acquire a Slow Loris is to have it stolen from the wild. The former practice increases and sustains a population, while the latter diminishes it. All in all, a pretty good example of how regulation turns assets into liabilities.

 

Hat tip: The dependably ridiculous Boingboing

Breaking News: Tariffs Make Things More Expensive

Dave Killion — February 10, 2013

The Canadian Senate spent over a year hearing from 53 ‘experts’ (special interests?) before producing a report on price differences between the U.S. and Canada. The results fail to impress

“Bruce Cran, president of the Consumers Association of Canada, roasted the report.

“Consumers are generally disappointed with the report,” said Cran, who’s based in B.C. “There’s no real remedies and there’s no new knowledge there.”

Hey Senators! Here’s a remedy for you: except for enforcing prohibitions against the use of force and fraud, the government should remove itself from every aspect of trade.

As to the report containing no new knowledge, I defer to Mr. Cran’s superior awareness. However, I have to confess that there was an item of which I have been unaware. You see, I have always thought tariffs were in place to protect domestic producers. But in some instances, that is no longer the case

“The senators noted hockey equipment as one area where it doesn’t make sense to have tariffs, including an 18 per cent mark-up on hockey pants imported from China. Americans face only a tariff of 2.9 per cent”….”Maybe we were trying to protect a Canadian manufacturer years ago, but they’re all coming from outside now” ….”The senators said they don’t believe any Canadian company still makes hockey pants.”

Well, isn’t that interesting. All this time, one of my arguments against tariffs has been that they may protect domestic industries, but they do so at the expense of domestic consumers. But now we have evidence that, at least in some cases, they do not even protect domestic industries. Which means they are simply another means of fleecing consumers. I guess I’ll have to add that little tidbit  to the intellectual pantry.

The good news is that a tariff review is under way, and it may turn out that consumers will be permitted to retain a little more of their hides. Won’t that be nice.