Sohn Kee-chung: Korea's Olympic Hero

I live just around the corner from a park and gym honoring Sohn Kee-Chung, a national hero (and justifiably so) here in South Korea, but virtually unknown to anyone outside of this country. Hell, I can't say that I even knew much about him before moving to my current neighborhood. Fortunately, the Guardian has an excellent piece on the fellow and his significance not only in Korean sports but to the country's national identity. Consider that picture above:

You may not have seen it, but Sohn is the man at the centre of one of the iconic photographs of Olympic history. It is more understated than the snap of Tommie Smith and John Carlos giving the black power salute at Mexico '68, but just as powerful. It was taken on 9 August 1936, at the Olympic Stadium in Berlin. It shows three athletes on the podium during the medal ceremony of the Olympic marathon. At the back is the British silver medallist Ernie Harper. He is standing tall, shoulders back and head held high, a proud smile on his face. In front of him are two Korean runners, Sohn, gold medallist, and Nam Sung-yong, bronze medallist. Their heads are bowed and both are staring at their feet in, what they later called, "silent shame and outrage". Sohn is clutching a young oak tree to his chest. Nam would later say how envious he was of his team-mate. Not because of colour of his medal, but because unlike Sohn he had no oak tree to cover up the Japanese flag that was emblazoned across his shirt.

We remember the 1936 Olympics for Jesse Owens and his four gold medals. Sohn's was just as defiant a victory. And if history has forgotten that, it is because it was many years before the wider world realised the significance of what he did. Between 1910 and 1948 Korea was part of the Japanese empire, who suppressed the indigenous culture and language. The flags that were raised and the anthem that was played to salute Sohn and Nam were not Korean, but Japanese, and the press and the IOC did not award or record the victory as a Korean triumph, but a Japanese one. Sohn was not even allowed to compete under his own name, but went by the Japanese transliteration, Son Kitei.

Read the rest of the story here.

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Does Free Oxygen Make Us Poorer?

Speaking on this week's edition of Left, Right and Center, Chrystia Freeland remarks:

...one of the problems that American and western developed nations are facing right now is that the kind of innovation that Steve Jobs has pioneered...hasn't been generating a lot of jobs in America, and that's the tragedy of Silicon Valley in some ways. Silicon Valley innovation creates almost no terrific middle class jobs, whereas Henry Ford innovation did, and I think that's part of the reason that America is in such a tough place right now.

Freeland is certainly correct that Silicon Valley - and, by extension, web activity in general - is not a great generator of new jobs. Tyler Cowen, writing last year in his important book The Great Stagnation, said much the same thing:

Most Web activities do not generate jobs and revenue at the rate of past technological breakthroughs. When Ford and General Motors were growing in the early part of the twentieth century, they created millions of jobs and helped build Detroit into a top-tier U.S. city. Today, Facebook creates a lot of voyeuristic pleasure, but the company doesn’t employ many people and hasn’t done much for Palo Alto; a lot of the “work” is performed more or less automatically by the software and the servers. You could say that the real work is done by its users, in their spare time and as a form of leisure. Web 2.0 is not filling government coffers or supporting many families, even though it’s been great for users, programmers, and some information technology specialists. Everyone on the Web has heard of Twitter, but as of Fall 2010, only about three hundred people work there.

We must not forget, however, that these technologies do enrich our lives, even if they create not a single job (a point which Cowen understands, though I'm not sure Freeland does). To illustrate this point, just imagine if the iPhone had not been invented by humans at all, but instead had simply fallen out of the sky and into our hands, requiring no human effort whatsoever. Would our society be richer or poorer by getting iPhones at a lower cost (of labor, time, materials, etc.) than even Apple can make them? Or, consider oxygen, which exists naturally: are humans poorer because we don't have to hire people to staff an oxygen factory? The answer to these questions should be obvious.

The more important question, of course, is this: what is standing in the way of new entrepreneurial activities that could absorb the labor not needed by Silicon Valley or the non-existent oxygen factory?

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Picture of the Day

Regular readers will know why I find this picture so funny and so insightful:



Via Carpe Diem

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On the Success of Steve Jobs

Some 35 years after founding Apple (with Steve Wozniak and Ronald Wayne), Steve Jobs stepped down as CEO of his tech empire today. The question most people are thus asking is the obvious one: will Apple, absent Jobs, thrive? Stagnate? Shrivel?

Of course, no one knows, because as someone (maybe Niels Bohr, maybe not) once said, "predictions are difficult, especially about the future." What we can do, though, is look to the past, and around the world, which is what Ira Stoll does as he writes:

Where else, and under what other system, could someone without a college degree, whose biological father, a Syrian professor named Abdulfattah Jandali , gave him up for adoption, build a company so successful that it that amassed a greater store of cash than the U.S. government,and annual revenue approximately twice the annual GDP of the entire country of Syria?

Individuals like Jobs are clearly exceptional in that most people with his background, regardless of their birthplace, don't set the world ablaze with smartphones, iPads, and Macbooks. Still, there is something in the American cultural DNA that makes room for such people in a way that other countries - e.g. South Korea, more on which in a moment - do not. Just have a look at this list of the top 100 entrepreneurs who hold no college degree, which includes Ray Kroc (founder of McDonald's), Larry Ellison (Oracle), John Mackey (Whole Foods), and Mark Zuckerberg (Facebook), to name but a few. And these are simply folks whose names we all recognize. I'm sure we all know of people in our own lives who've had great success in life without holding a college degree, or despite hailing from backgrounds just as peculiar as Jobs'.

I'm not sure, however, what it is about the United States that allows the country to produce such a disproportionately large number of this type of successful person. Perhaps it's a cultural embrace of failure as the path to success, or maybe it's a tolerance for individual attempts to figure the world out on one's own. I don't know. Whatever it is, though, I wish I could bottle a bit of it and peddle it in South Korea. Given the bubble in college education in these parts, the challenges faced by immigrants in Korean society, traditional attitudes against adoption, narrow attitudes about what constitutes success, and an underdeveloped venture capital system, I can't help but wonder what would have become of Steve Jobs if he'd been born in South Korea.

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Reading Chang Ha-Joon (Ch. 3)

 Chapter three of 23 Things They Don’t Tell You About Capitalism finds Chang Ha-Joon just hitting his stride in a marathon of misrepresentation and unfounded assertions. In chapter one, Chang declares that the free market does not exist (though he nevertheless seems awfully scared of it), and in chapter two he argues, in essence, that owners of companies should not be allowed to control their firms.

And now, in chapter three, Chang wants you workingfolk in rich countries to know that you don’t deserve the salary you receive for doing your job because you don’t have to compete against armies of rustic immigrants from poor countries. Moreover, writes Chang, few economists who defend open international markets in trade, services, and capital ever discuss open borders for labor:

While they complain about minimum wage legislation, regulations on working hours, and various ‘artificial’ entry barriers into the labour market imposed by trade unions, few economists even mention immigration control as one of those nasty regulations hampering the workings of the free labour market. Hardly any of them advocates the abolition of immigration control. But, if they are to be consistent, they should also advocate free immigration.

Of course, Chang never stops to mention that, actually, defenders of free market economics quite often advocate for open borders. Indeed, as Mark Pennington writes: “If one takes the economics department at George Mason University as one of the major hubs of contemporary free market thinking then most of its economists –Boettke, Coyne, Leeson, Klein, Boudreaux, White, to name but a few, are passionate supporters of the free movement of people.” For further discussion of immigration by free market economists, I direct your attention to this talk by Gary Becker, or this one by Bryan Caplan.

Chang also declares – sans supporting evidence, of course – that “the wage gaps between rich and poor countries exist not mainly because of differences in individual productivity but mainly because of immigration control. If there were free migration, most workers in rich countries could be, and would be, replaced by workers from poor countries.” By Chang’s logic, the great influx of immigrants into the United States over the past 100 years should have thrown all “native” Americans out of work and made the country, on net, poorer. But did this happen? For an answer, I hope you’ll read this piece by Russ Roberts (yet another free marketeer who favors greater immigration). Roberts writes:

If immigration lowers the wages and standard of living of people already here, do increases in labor force participation and population lower them, too? Yet labor’s share in national income is rock-steady at 70% for the last 50 years. Our standard of living is many times higher.

Would Native Americans (not native-born Americans, but American Indians) be wealthier if they had the American continent to themselves?

Would New York City (or any other city) be richer today if it had held its population to what it was in 1850? 1900? 1950? 1980? Does the inflow of people into New York lower the wages of the people already there? Does it make them poorer? Does it matter whether rich or poor people, high-skilled or low-skilled people are the ones moving into New York?

The evidence seems to be that, by limiting the movement of talented, creative people, we’re leaving “trillion dollar bills on the sidewalk,” in the words of Michael Clemens. Humans are a resource, and as Adam Smith famously noted, more people means more specialization, more trade, and ultimately greater wealth for market participants.

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Wealth Can't Buy Happiness. Or Can It?

Here's a letter to the Joong Ang Daily.

The so-called “Easterlin Paradox” (named for the economist Richard Easterlin), which states that rich countries do not have happier people than poor people, has become a central dogma in the field of happiness economics. Indeed, as you recently reported, even the Korea Development Institute, remarking on South Korea’s low quality-of-life rankings, writes: “Korea’s per capita income has risen significantly over the past 20 years. Nonetheless, Koreans’ satisfaction level of their quality of life is stagnant. We are seeing the ‘Easterlin Paradox’ here.”

Problem is, the Easterlin Paradox, based as it was on small sample sizes, appears to be wrong. Two recent research papers, both published in 2008, analyzed the data and the unequivocal conclusion of both is that the Easterlin Paradox does not exist. Distilling the essence of these studies in his book The Rational Optimist, Matt Ridley writes: “Rich people are happier than poor people; rich countries have happier people than poor countries; and people get happier as they get richer.”

Given the importance of economic prosperity in human happiness, then, the South Korean government should think twice before it crafts economic policies around platitudes such as “harmony.” Far better to permit citizens a greater range of choice in the way they live their lives, whether in the products they buy, the people with whom they associate, or where they pass their time. Quite simply, the government cannot create happiness; it can only get out of the way and allow individuals to create it for themselves.

Aaron McKenzie
Seoul

The papers to which I refer here are:

• "Development, Freedom and Rising Happiness: A Global Perspective (1981-2007)," by Inglehart, et. al.
• "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," by Stevenson and Wolfers.
  

Update: The JoongAng Daily published this letter on 29 August, 2011.

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On Seoul's 'Free Lunch' Program

On 24 August, Seoul will hold a referendum to determine whether all students should receive free lunches at school. I had initially planned to write on the budget issues pertaining to this matter (and I kinda, sorta did here), but then it struck me that there are greater moral issues as stake. And so...


Suppose I knew a poor child who needed lunch at school but didn’t have the money to pay for it. So I walk up to one of you readers and threaten, “give me enough money for a year’s worth of that kid's lunches or I’m going to harm you!” Having relieved you of your money, I then purchase that child’s lunches for an entire year. Would you see me as a caring individual or just a common thief, regardless of what I did with your money?

Before you answer, though…

Let’s suppose that, before I relieved you of your money, I got a majority ‘yea’ vote among me and ten other people that I should do so. Would that help you decide whether I was committing an act of compassion or an act of theft? Suppose 100 people, or 100 million, agreed that I should take your money for the benefit of someone else. Would that change anything? Put another way: does a consensus or even legality determine whether a particular moral act is right or wrong?

Before you say it, I know what you’re thinking: “Well, if the government doesn’t take people’s money and provide that kid’s lunch, how in god’s name would he ever have anything to eat?”

How about this: if you think this child’s lunch situation is a problem, reach into your pocket to fund his meals, or convince your friends to pool some money and feed more than one child. But as Walter Williams once wrote, “reaching into your own pocket to help another is compassionate and praiseworthy. Reaching into somebody else's pocket is theft and there's no two ways about it.”



Full disclosure: this piece itself is little more than theft. I lifted the format from Walter Williams, but I hope he'd approve of its use in such circumstances.

And, coincidentally enough, it appears that Detroit is going through a similar debate over 'free lunches.' (H/T: The Pretense of Knowledge)

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One Lesson of Fly-Fishing

Lawrence Reed, president of the Foundation for Economic Education, once had the following to say about his passion for fishing:

I especially love fly fishing because it's totally absorbing and the very activity itself makes me think of liberty. I figure when I hook 'em, I'm giving the fish a taste of what socialism is all about. Then when I throw 'em back, hopefully they've learned something about steering clear of that seductive free lunch.

I was reminded of Reed's quote today upon reading the saga of Oh Kil-nam in The Korea Times. Nam, a left-leaning economist, defected to North Korea in 1986 with his wife and two daughters after he was promised medical treatment for his wife's tuberculosis by North Korean agents in Germany.

Once in North Korea, however the family was stashed in the mountains for brainwashing sessions and Oh was later dispatched to Germany with orders to lure other South Koreans to North Korea. Oh eventually re-defected, this time turning himself over to European authorities on one of his recruiting trips in the late 1980s. His wife and daughters, however, remain in North Korea, possibly in the infamous Yodok concentration camp. Sadly, this situation is all too common among defectors, many of whom had to leave their families behind in North Korea when they escaped.

I wonder if Oh would still describe himself as "left-leaning" today, having gotten a taste of true and complete central planning. Whatever his political-economic sentiments, I'm sure he wishes he could have gone fly-fishing with Reed before he crossed paths with the NorKs.

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Kling/Schultz on The New Commanding Heights

When economists and political analysts talk about the "commanding heights" of an economy, they are typically discussing such sectors as mines, railroads, power generation, heavy manufacturing, etc. - that is, the industries which, in years gone by, were the engines of employment, production, and consumption in an advanced economy.

In an important article in this summer's issue of National Affairs, however, Arnold Kling and Nick Schultz argue that these industries, which ceased to be sources of growth sometime in the 1970s, no longer constitute the commanding heights of the world's advanced economies. Over the past generation, the areas of health care, education, and government work have become the growth sectors in the rich world, at least insofar as employment and consumption are concerned. Trouble is, these areas have not produced corresponding growth in productivity.

The reason? According to the authors, while advocates of the free market have largely won the debate over the traditional commanding heights (which are now largely deregulated and allowed to operate on market principles), they are losing the battle over the new commanding heights. In the United States, for instance, 90% of children are educated in K-12 public schools, while 50% of every dollar spent on health care in the U.S. comes from the government. The result: "Government’s influence artificially increases the demand for health care and education (by significantly subsidizing both), and it makes both sectors even less efficient than they would be otherwise (by heavily regulating them and shielding them from market forces)."

History is clear on where this leads: in countries where the state had the heaviest control over the commanding heights of the economy, growth and prosperity were stifled and eventually retarded. Why should we expect anything different in the case of the new commanding heights?

I read the Kling/Schultz piece with great interest given the transitions currently taking place in the South Korean economy. The health insurance system here is already dominated by the government, as is the education system. As the Korean population ages and shrinks, the demands on the health care system will increase. Yet, if Kling and Schultz are correct (and I believe they are), the heavy government involvement will stifle innovation and add to the economic challenges of an aging society. And although Korean parents are remarkably adept at compensating for the shortcomings of the local education sector, government meddling does the country no favors and will continue to hurt South Korea as the country tries to move into the upper tier of rich nations.

Moreover, as has been oft-discussed (including here), the South Korean economy is overly dependent on exports, a relic of its post-war development strategy. As such, analysts continually tout the need for a more vibrant domestic service sector in South Korea. Given the aforementioned demographic trends, however, some of the largest growth industries are likely to be those services which cater to the so-called "silver generation," that is, retirees. How will extensive government involvement in health care and pensions play into this economic transition?



Note: You can also listen to Arnold Kling discussing the National Affairs piece on this Manhattan Institute podcast. And/or, you can read more of Kling's ever-insightful work at his blog.

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Friedman v. Klein

Milton Friedman vs. Naomi Klein: what a fun debate it would have been to see. Alas, Friedman died in 2006. Klein, meanwhile, continues to rake in the bullion with her best-selling paranoianomics.

So enjoy the video below, which is the closest we'll ever get to a Friedman-Klein match, and then have a look at Tyler Cowen's excellent review of Klein's latest tirade, The Shock Doctrine (2007).

HT: Ideas Matter

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Reading Chang Ha-Joon (Ch. 2)

Note: for my musings on chapter one, see here.

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”

Thomas Sowell

In chapter two of 23 Things They Don’t Tell You About Capitalism, Chang Ha-Joon argues against the idea that corporations should, above all things, seek to maximize profits for their shareholders. Chang’s essential beef with this line of thought: because shareholders can, presumably, quickly dump their shares when times turn bad, they have less interest in the long-term success of a company.

“Shareholders,” argues Chang, “may be the owners of corporations but, as the most mobile of the ‘stakeholders’, they often care the least about the long-term future of the company.”

I always become suspicious when anyone uses the word ‘stakeholder,’ as the definition is usually so broad as to potentially include any person who had their feelings hurt because, say, Old Navy didn’t offer purple cargo shorts this summer. In Chang’s world, the whims and wishes of these stakeholders takes precedence over the institution of private property (“shareholders may be the owners of corporations but…”), which, as I discussed in my notes on chapter one, is the bedrock of a functioning economy.

More to the point, however, Chang ignores the fact that all sales must have both a seller and a buyer. Thus, the ability of a shareholder to sell his shares in company typically implies that someone else is optimistic about the future of that firm. Otherwise, why would that person buy the shares?

As an important aside, I should confess that my knowledge of laws regarding shareholder rights is scant, so I’ll not delve too deeply into specifics in this post. And I’ll warn you that I haven’t the first clue about how Coca-Cola, Samsung, Siemens, or any other corporation ought to be run. But guess what? Neither does Chang, who has even less experience in the private sector than I have. Take it from Thomas Sowell (above quote), then, and don’t listen to either of us.

According to Chang, the ideal form of economic system seems to be one in which corporations, governments, and labor unions join hands and bring some much-needed stability to corporate management. As evidence of the success of such cozy arrangements, Chang offers the history of state-owned banks in South Korea and the government involvement in firms like Renault and Volkswagen. Of course, Chang never offers to discuss the ways in which those state-owned Korean banks (and their conglomerate partners) contributed to the 1997-98 financial crisis, nor the numerous instances of government involvement in the car industry that didn't turn out so well (Trabant, anyone? How 'bout Chrysler?).

As to the notion of labor unions having a greater voice in company operations – what’s stopping them? I stand by what I wrote early last year:

… labor unions are remarkably self-assured in their belief that they know better than the company's management how the firm should be run. And maybe they do. Maybe the workers are underpaid. Maybe the union leadership does know best where a factory should be located. Maybe the union has a particularly keen insight as to which cars consumers want to buy. It's possible.



And so, a suggestion for these large unions:



Take those large sums of money you've raised from union dues and start a company of your own. Given your vast managerial knowledge, I have no doubt it will be a first-rate success. You can pay your workers a higher salary and, since you're offering such "socially just" benefits, you'll no doubt be able to lure the best workers away from those other, less-humane car companies, thus enabling you to build a top-flight product. You can get out from under the Fat Cats, build a better car, and, if you're lucky, some sanctimonious hipster musician might even write a romantic folk song about you. Go ahead, make it happen. If nothing else, such a venture will keep you busy for a while and give you less time to destroy other people's property.

And, Mr. Unionman, please hire Chang Ha-Joon as your company's CEO. He seems to know one helluva lot about how to to run a company.

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Free Vs. Forced Association

Writing this past week in The Freeman, Sheldon Richman poses a fascinating - and important - question: "Would the free-market movement be perceived differently if its dominant theme was social cooperation rather than (rugged) individualism, self-reliance, independence, and other synonyms we’re so fond of?"

Unfortunately, as Richman points out, even those who embrace the free market too often resort to a vocabulary that boils down to, for lack of a better phrase, "leave me the hell alone." Not surprisingly, this sets them up for easy caricature by those who fear that if the state doesn't solve certain problems, no one will. After all, says this cartoon version, free marketeers and their ilk are interested only in their own self-interest.

Yet, as Penn Jillette eloquently explains the following video (which, yes, I have linked before), there is no lack of compassion among libertarians. That is, the disagreement between libertarians and those of a more statist mindset is seldom on what the problems are, but rather how people are rallied to tackle them.




Richman makes a similar point when he writes:

When President Clinton declared (disingenuously) in his 1996 state of the union address, “The era of big government is over,” he followed up that sentence with this: “But we can’t go back to the era of fending for yourself.” But human beings have always been social/political animals. There was no era when men and women fended for themselves individually. The choice was between free and forced association.

For more on this point, I direct you to this earlier piece I wrote on much the same theme. First, though, high-tail it over to The Freeman and read Richman's column.

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Reading Chang Ha-Joon (Ch. 1)

Note: Over at CFE, Casey Lartigue has put together a “Chang Ha-Joon Resource Center” dedicated to discussing and, when necessary (which is often), countering the writings of Korea’s most famous heterodox economist. There you can find links to reviews of Chang’s work by the likes of William Easterly, Douglas Irwin, and Mark Pennington. I’ve lately been trying to hack my way through Chang’s latest rant, 23 Things They Don’t Tell You About Capitalism, and will try to post a short summary of my thoughts regarding each chapter. Easterly, Irwin, et al, have all offered excellent analyses of Chang's work, but in case you just can't get enough, here's mine.



Notes on “Thing One: There is No Such thing as a Free Market”

First on the list of things that Chang doesn't tell you about capitalism: what the word actually means. In essence, Chang Ha-Joon has a view of the market as imperfect to the point of being sinister. Always ready to indict the failures of capitalism, however, he never bothers – at least not in 23 Things They Don’t Tell You About Capitalism - to actually define the term. Better, apparently, to simply lash out at malign penumbras.

So here’s my definition of capitalism: a social system of private property in which each person is free to pursue his own interests, associations, etc. provided he does not resort to fraud, theft, coercion, or the threat thereof. This underlying framework makes possible ‘creative destruction,” which Joseph Schumpeter both coined as a term and which he called the “essential fact about capitalism.” And it is to creative destruction that we ultimately owe our standard of living and, because of the improvements it has engendered in medicine and the environment, our lives.

As mentioned, this dynamic process of wealth creation can only occur if humans are free to make mutually beneficial arrangements among themselves, and thus even the most hardened advocate of limited government nevertheless typically sees a role for the state in protecting property rights and in enforcing the rule of law and contracts. In other words, deterring you from punching me and running off with my popsicle.

Chang, however, seems to believe that any attempt by the state to curb this coercion automatically boots an economy immediately out of “free market” territory. Thus, at numerous points does he invoke the ban on the slave trade as evidence that the world has gradually been moving toward less “marketization.” Never one for subtlety, Chang neglects to mention that slavery – and, in America, the Jim Crow era that followed - was a prime example of government failure, that is, of failing to prevent and punish the sort of coercion that prevents consensual market transactions from occurring. Alas, this early attempt to attribute one of the most brutal, anti-capitalist acts in human history to those who believe in economic liberty is only a taste of things to come.

As the title would suggest, Chang spends his opening chapter elaborating on his notion that “if the same market can be perceived to have varying degrees of freedom by different people, there is really no objective way to define how free that market is. In other words, the free market is an illusion.” This is akin to saying that since beauty is in the eye of beholder, no woman is beautiful. As someone who lives near North Korea and even nearer Ewha Womans University, however, I can assure you that both freedom (if you escape to South Korea) and beauty most assuredly do exist. Yes, the South Korean economy is hampered by certain bad policies, and sure, that fetching young Ewha student could benefit from some lunges. But does that make South Korea a prison colony (a la North Korea) or the young lady an eyesore? By Chang's logic, apparently so.

Chang might be pleased to know that I agree with him on at least one count: many of the regulations and restrictions imposed upon markets - typically for political rather than economic reasons - are indeed anti-capitalist and inhibit the ability of the market to better satisfy with limited resources our unlimited desires. Where Chang cheers such controls, however, I merely see them as infringing on the right of individuals to live their life free of government diktats.

For my thoughts on Chapter Two, see here.

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Brilliant, Indeed

I have even less than Penn Jillette to add to this, except to agree that it is genius.

Actually, hold on. I do have a couple thoughts.

I know very little about marketing, but this seems to be a growing trend: the user of a service is the product. Take Google, for instance, which we all think of as an internet search firm. What Google really sells, however, is you - or, rather, information about what you're doing via their websites - to various businesses who buy ads on Google. So Berth Milton gives you a hotel room, you have sex on camera, and he then sells the viewing rights to that video. Sounds a bit Googlish to me.

But parenthetically: perhaps this is nothing new. After all, network television has essentially given away their content for years in the hopes that you, the viewer, would patronize their advertising partners.

For years, much of the content on the internet - good, bad, or otherwise - has been created by users who receive no financial remuneration for their efforts. At least now, a few brave, horny souls will at least get a night's accommodation out of the bargain.

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4Chan's Christopher Poole on TED

In posting this TED video of 4Chan founder Christopher Poole, I must confess to knowing very little about his project aside from the name. This ignorance, however, is more reflective of me than of 4Chan. As Poole notes in the video, his site receives 7 million visitors a month and 700,000 posts in one day, so clearly, he knows more than I do about how to build a successful online presence. And his talk is worth a few minutes of your time, touching as it does on 4Chans's "meme factory" capabilities and the phenomenon of "rickrolling."

Moreover, even if you know nothing - or care little - about sites like 4Chan, Poole's talk is an intriguing example of Hayekian emergent orders. Poole set up the site and established a set of rules, but as he points out, the rules are largely ignored and the users - via their incessant, interconnected activity - have made the site what it is today. And not everyone likes what it is. As 4Chan has no user IDs and no site memory, participation is anonymous - a situation which often encourages jackassery. But, as you'll hear in the video, the site has also been a force for good at various times. It is, in short, a pocket of humanity.

Poole's main, stated concern is that as online activity moves more toward social networking, anonymity will become a thing of the past. Consider Facebook, where your presence is hyper-identified by tagging, likes, comments, etc. Yet, while Facebook and the associated disclosure of so much private information certainly has its drawbacks, it is at least a voluntary community. No one forces anyone else to join Facebook. I'm more concerned, as I wrote last week, about governments compelling internet users and companies to divulge private information, as the South Korean government does at virtually every online turn.

At least with Facebook, I have the choice about how much I share. The government is rarely so flexible.

Update: South Korea's Ministry of Home Affairs (which, despite what you might think, cannot do anything about your husband's philandering ways) says it will push to repeal the country's online real-name verification system. A step in the right direction, if you ask me.


See also:

• This beautiful visual representation of emergent orders, by Cristobal Vila.

• Cato's Julian Sanchez, ever-knowledgeable on such matters, discusses online privacy and, specifically, where the real risks lie.
  

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Underground Highways in Seoul?

The Reason Foundation’s Adrian Moore was recently on John Stossel’s Fox Business show, where he discussed private road systems around the world. Of particular interest, Moore notes that large cities around the world are beginning to build underground road systems with an eye toward alleviating street-level traffic. Chongqing, China (at 28 million people, no rustic hamlet), for example, has connected its underground parking areas with a subterranean road, while Paris has a double-decker highway that adds to the city’s traffic capacity and greatly speeds commute times. And in 2007, Kuala Lumpur completed its SMART Tunnel, which functions both as a traffic artery and as a flood control system. Each of these systems is funded, at least in part, by user fees, which gives the operator an incentive to keep traffic moving (as more cars equal more revenue).

Seoul has been toying with the idea of an underground expressway for some years now, but as you might imagine, these sorts of roads come with a unique set of challenges. They’re obviously more expensive to build than surface roads and, once built, pose a different sort of operational challenges. How, for instance, can traffic be kept moving in the event of an accident, and how will emergency vehicles clear the obstacle? Of course, an extra center lane could be built for emergency use only, but adding the width of one more lane to a tunnel project can push the project costs into unrealistic regions.

Perhaps more importantly - and despite the fact that these roads are privately financed - the operators are subject to certain dictates of the local government, which has an incentive to keep tolls low for political reasons. Not surprisingly, given the laws of supply and demand, low prices lead to high demand and thus excessive traffic in these underground roads, thereby producing the very congestion they were built to alleviate. These roads, then, only serve their intended purpose if market prices are allowed to prevail. So no underground roads for Seoul…yet.

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Notes from CFE Event on Welfare Populism

I had the great good fortune yesterday to attend my first Center for Free Enterprise event here in Seoul, a discussion on the continuing Greek crisis and its roots in 'Welfare Populism.' Featured speaker Aristides Hatzis, an economist at the University of Athens, opened his talk by referencing two related topics that are dear to my heart: government spending and the boondoggle that is the Olympic games.

The people at CFE invited me to speak on the Greek crisis which has been, unfortunately, one of the leading stories in every newspaper and every TV and radio station worldwide for the past 18 months. The last time something like that happened to Greece was 2004, when Athens hosted the Olympics. As you might remember, the Olympics were very successful. But don't ask how we paid for them...

This, in fact, cuts to the heart of Greece's troubles, as well as to the core of most government spending. It looks splendid so long as no one bothers to ask where the money came from. In Greece's case, the funds came from borrowing, which was made easier when Greece joined the European Community in 1981 and which became almost criminally simple when Greece adopted the Euro in 2002. Today, Greece finds itself with public debt at 150% of GDP, deficits at 15% of GDP, and unemployment in the neighborhood of 15%. Complicating efforts to tackle these problems is the fact that a huge proportion (about 25%) of the working population is employed by the state itself, and as Takis Michas noted in this Cato video last year, these featherbedded folks take to the streets every time anyone gets a notion to bring their compensation packages back into this stratosphere.

As a remedy for his country's ailments, Hatzis prescribed a heavy dose of reforms: tax, regulatory, welfare, and most important, institutional. Unfortunately, he didn't sound too terribly optimistic that crisis would shake out the entrenched interest groups who have succeeded in running the Greek economy into the ditch.

As this event was held in Seoul, local participants naturally wanted to know how South Korea can avoid repeating the mistakes of Greece. Fortunately, South Korea's problems seem trivial when compared to those of our Mediterranean cousins, but a local brand of the welfare populism that got Greece into hot water seems to be gaining momentum here in ye olde Daehan Minguk. On 24 August, for instance, Seoul citizens will vote in a referendum on a proposal to offer "free lunches" to local students, and just this week a member of the ruling (and supposedly conservative) Grand National Party proposed offering full childcare services to all parents, courtesy of the government's wallet, of course. Politics in South Korea, quite simply, isn't much different than politics elsewhere: promise goodies to one group of people at someone else's expense. But what happens when you run out of other people's money?

Even as South Korean politicians pledge more spending on such social programs, the country faces looming financial/economic problems which will complicate the government's ability to actually pay for them. Let's just bullet-point a few of these:

• As the population continues to age, younger workers will be forced to pay more simply to care for the elder generation of retirees. Inevitably, the demand for increased welfare spending will collide with demographic reality.
  
• The prospect of Korean reunification has President Lee Myung-bak talking about a unification tax to pay for the biggest family reunion in human history (and one which promises to be even more difficult, if that's possible, than my own family's reunions).
  
• As I've written before, the South Korean government is on the hook for the debt of numerous state-owned companies, debt which is growing at an worrisome clip.
  
• As if the above weren't yoke enough, South Korea will once again have the dubious distinction of hosting the Olympic games, this time in the winter of 2018. Regular readers will know why these sorts of events are nothing more than fool's gold.
• And all of this will somehow have to be financed on the back of slowing economic growth.
  

All in all, then, 'twas a morning of rosy optimism.

Actually, it was a fun time. We had knowledgeable speakers, fascinating topics, and, best of all, the event was an opportunity for those interested in such matters to get acquainted and chew over the issues. Thanks to Chung-ho Kim, Casey Lartigue, and to the rest of the folks at CFE for putting the event together.

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Seoul Station Booting Homeless Folks

How many homeless people would you be willing to take into your home and to house indefinitely?

I ask because, as the Wall Street Journal's Korea Real Time blog reports, the approximately 250 homeless folks living in or around Seoul Station (the city's main rail terminal) have been ordered to pack up and clear out by 22 August. According to the Korea Railroad Corporation (KORAIL), allegations of bad behavior by said vagrants have been on the rise, with passersby complaining of being harassed, spit on, and just generally pestered. So KORAIL has decided to give them the boot.

Before I continue, please allow me make the obligatory admission that, yes, poverty is terrible and we'd all love to just snap our fingers and make homelessness disappear. Stipulated? Good.

Not surprisingly, certain local civic groups have their undies in a bundle over KORAIL's decision:

Civic groups say it’s not as simple as just ushering in all the homeless people into shelters. Choi Joon, a volunteer activist, says that the homeless will struggle to adapt to the hard-and-fast rules in shelters such as quitting drinking, observing curfews and pledging to find work. “Homeless people feel like it as a concentration camp or a labor camp,” he said.

Sounds a lot like my house, actually.

But back to my original question, this time posed to anyone upset by KORAIL's efforts: How many of these homeless folks would you be willing to take into your own house? If you answered 'none,' then by what rights do you wish to force KORAIL to board them in their 'house?' Until you're willing to invest your own resources in solving a problem, don't get too riled up about how someone else chooses to tackle it.

Yes, KORAIL is a state-owned company, but that doesn't mean that we all have the right to set up camp in the middle of their buildings, just as we're not allowed to move into lobby of City Hall or the chambers of the National Assembly. Moreover, most of Seoul Station's space is occupied by private commercial tenants - Lotte Mart, Burger King, Bennigans, etc. - whose business can't be helped by the behavior of the local homeless population.

Don't misunderstand me here. No one is saying that we shouldn't have sympathy for the hard luck cases of our world. Rather, I'm arguing that it's immoral to sit back and simply order others to do the good deed, which is exactly what the director of Seoul's Catholic Urban Poor Pastoral Committee is doing when he claims that "it is inhuman for Korail to expel these people without any plan to help them."

Since when is KORAIL responsible for the life of every person who shows up on their plaza, drunk and harassing customers?

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A Tuesday Buffet of Goodness (9 August, 2011)

• I've said it before, but I love the way Jack Vale and his Uncle John (see video above, or here) illustrate the difference between 'law' and 'legislation.' Has the government ever passed legislation making it illegal to take things from other peoples' shopping carts? No. Then why do folks get so upset when Uncle John does it?
  
• Here's Mark Perry on "Why the Gender Pay Gap Won't Go Away. Ever."
• Energy independence is a pipe dream, according to Jeff Jacoby.
• What books would you recommend to a progressive? My only (possible) addition to this list: Matt Ridley's The Rational Optimist, if only because modern liberalism is predicated on a terribly pessimistic outlook on the world and because Ridley is just the man to give them a basket full o' optimism.
  
• Seth, at Our Dinner Table, has a dandy idea for Matt Damon's next film project.
• Why South Korea is eyeing nuclear weapons - if not their own, then America's. I say let 'em build their own and let the U.S. go home.
• Oh, sure, now you tell us: 100 Reasons Not to Go to Grad School (h/t: Kevin Kim)
• Finally, a pair of Asia Times pieces on North Korea that will get you thinking: Andre Lankov on who owns what, post-reunification; and Andray Abrahamian on taxing South Koreans to pay for that reunification.

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Who Needs Coherence When You Have a Whole Newspaper?

To a correspondent, Thomas Jefferson (or Pascal, or Kareem Abdul-Jabbar, or someone else) once wrote, "Please pardon the long letter; I didn't have time to write a short one." Well, here's a letter to The Korea Times, one which I won't be submitting for publication because I don't have the time to get it down to 300 words or less. Hell, I'm even reluctant to post it here - not so much because of its length but because you might be tempted to read the original piece to which I'm responding. If so, I apologize in advance.

In an editorial more befitting a dorm room rant than a respected news outlet (“Crisis After Crisis,” 7 August, 2011), you howl that a plethora of recent economic calamities were caused by an “Anglo-American neo-liberalist model.” At the feet of such dogma you lay the current troubles of the Eurozone and the United States as well as the challenges faced by South Korea. Unfortunately, your piece is so vague and incoherent as to make a focused response all but impossible. Nevertheless, a few points bear mentioning.

The Eurozone, you allege, is in crisis because “many of its members failed to maintain balance between growth and welfare, and others who have managed to do so won’t make too much sacrifice.” In reality, however, countries such as Greece find themselves in a pinch because they failed to balance one thing: their budgets. Indeed, for decades, Greece has provided the perfect example of the sort of “welfare” state you seem to demand, that is, one which puts people – namely favored interest groups such as labor unions - above markets. The result in Greece: a bloated public sector, a mass of unfunded entitlement programs, rampant corruption and, hence, the current financial woes. Greece’s day of reckoning has finally come and one can hardly blame prudent Germans for not wanting to subsidize Greece’s fiscal incontinence.

On the United States, you write that “the invisible hand behind healthy profit-seeking has given way to unethical greed of giant market players amid governments’ dereliction of regulatory duty.” Ironically, though, your calls for more stringent regulation could well backfire. A concentration of political power - and regulation is an extension of political power - tends to give more influence to those who can afford to lobby political powerbrokers. That is, if legislators and regulators have extensive power to pick winners and influence outcomes, private firms will naturally seek to protect their own interests in the writing of legislation and in the crafting of regulations. By contrast, if the state has less power to pick winners and bail out losers, such lobbying efforts become less fruitful. Ignoring such realities, you call repeatedly for more, not less, state involvement in the economy.

Finally, you write that the “liberalization of [South Korea’s] capital markets has made the nation the most vulnerable to global crises even among the Asian countries.” Yet, according to the Fraser Institute, the capital markets of Hong Kong, Taiwan, and Singapore were all more open than those of South Korea in 2008. If liberalization alone is the problem, then, why were these nations not more vulnerable than South Korea? In addition, you never make clear why supposed sins in past financial regulation mean that the South Korean government now ought to create more “welfare-related jobs” or how, exactly, you propose to turn “welfare spending into another growth engine.” Indeed, you never even bother to define what you mean by such terms.

In the future, I hope that your editorial staff will devote less time and space to such emotional diatribes and more to actual analysis of the news.

Sincerely,
Aaron McKenzie
Seoul

H/T to (or a pox upon, I'm not sure which) Casey Lartigue for forwarding the original KT editorial to me.

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Two More Notes on Population

With perfect timing (in light of my letter to Adam Carolla from yesterday), the Joong Ang Daily published this piece today. A snippet:

Korea’s population is aging at the fastest rate in the world. Last year, Korea’s birth rate was 1.22, the lowest among OECD nations. By 2018, Korea is expected to be an “aged society” with 14 percent of the nation being elderly.

The 18 years in which Korea is expected to take in shifting from an aging society to an aged society contrasts starkly with the time it took France (115 years), the United States (73 years) and Japan (24 years) to do so.

This rapid aging can cause three problems in the labor market: labor shortages; productivity shrinkage; and job competition between generations.

I didn't cite his essay in my letter to Señor Carolla, but Bryan Caplan's piece in Cato Unbound from earlier this year deserves your time. A sample:

After two centuries of rising population and rising prosperity, attempts to blame low living standards on overpopulation have worn thin. The most popular anti-population arguments now come from environmentalists. But their case is surprisingly weak. We’re not “running out” of food, fuel, or minerals. Despite occasional price spikes, real commodity prices have fallen about 1% per year for over a century. Air and water quality in the First World have been improving for decades despite rising population. Genuine problems remain, but limiting population to counter environmental problems is using a sword to kill a mosquito. Pollution taxes and congestion prices are far cheaper and more humane remedies.

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Kurt Loder Ricochets

If you grew up in 1980s or 1990s America, Kurt Loder is likely a symbol of your youth, a cultural icon. He was the editor of Rolling Stone in the 1980s (the grand era of Tom Wolfe, P.J. O'Rourke and Hunter S. Thompson), the host of MTV News (where he informed me of Kurt Cobain's death), and even a contributor to the Tina Turner biopic What's Love Got to Do With It?. And these days, to his great credit, he's a contributor to Reason Magazine. The man, in short, done been everywhere.

Except for Ricochet. Until now, that is.

That's right, Loder is the featured guest on the latest installment of the Ricochet podcast, where he joins James Lileks, Peter Robinson, and Rob Long to discuss his tenure at Rolling Stone, MTV's impact on culture, why 3D movies and the film adaptation of Ayn Rand's Atlas Shrugged suck, and why Captain America doesn't.

Loder is simply an interesting listen on all matters from culture to politics, so subscribe to the Ricochet podcast and lend him your ear.

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An Open Letter to Adam Carolla

Dear Mr. Carolla,

On your podcast, you occasionally touch on the topic of population, and more specifically on your belief that there are too damn many people in the world. And indeed, the world’s population is expected to surpass the seven billion mark later this year, up from six billion just 12 years ago. If I may, however, I’d like to offer you a few opportunities for optimism on this matter.

Opportunity #1: Has there ever been a time in history – when world population was always lower than it is now – in which humans enjoyed a higher standard of living than they do today? Over the past two hundred years, as world population ticked rapidly upward, human life nevertheless (or even, if Adam Smith was correct, as a result) improved in every measurable area: health, wealth, longevity, opportunity, etc. Is there any reason to believe that this trend won’t continue?

Opportunity #2: As this graph shows, there appears to be no relationship between population density and living standards. Sure, Delhi – with its sprawling slums – has a population density of 11,000 people per km², but Tokyo, one of the wealthiest cities in the world, manages to pack more than 14,000 folks into one km². Moreover, according to this map, if the entire population of the world lived in one city with the population density of New York City, the entire group could reside in the state of Texas, while leaving the rest of the world's land area free for agriculture, vacations, or the racetrack of your dreams. The world, then, is far from crowded.

Opportunity #3: Humans are a resource, not a liability. Just look at South Korea, Japan, and China, where low birth rates have put the countries in quite a demographic pickle - that is, there will soon be a dearth of workers relative to every retiree, thus placing a heavy financial burden on every young worker. Additionally, as Julian Simon argued, human beings are the "ultimate resource." After all, nothing - not wood, not crude oil, and certainly not human feces - is a resource without the human ingenuity and effort required to figure out how to put it to good use.

Opportunity #4: And if, even after all this, you still reject my attempt to blow sunshine up your backside, you can at least find solace in the fact that the rate of population growth has leveled off (and even slowed a tad) in the past 15 years. As you might imagine, this is not necessarily good news in my opinion, but it should cheer those who take a more Malthusian view of the world.

Finally, I’d like to thank you for your contributions to the world of comedy and podcasts…and for bringing two of your own children into the world.

Mahalo,
Aaron McKenzie

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North Korea: Reasons for Optimism? (Hint: No)

Is there any better to relax on an August evening than to dip into an article on North Korea, especially one that reinforces your fear and depression about the issue? If there is, I sure haven't found it. Quite simply, nothing chills me out like pondering the apocalypse that looms over Northeast Asia. So stir yourself a highball, kick those feet up, and - if you're in South Korea - consider what could be coming over the border at any minute.

For your reading pleasure, I send you to this excellent article by Robert Kaplan and Abraham Denmark, published this past spring in World Affairs (h/t: Gypsy Scholar). If you've been watching North Korea for any length of time, you likely won't learn much new from this piece, but it does pack a convoy's worth of knowledge into a short space and is a great review of why, as the authors put it, "most Americans look at North Korea as the 'land of lousy options.'"

Among other causes for concern, Kaplan and Denmark point to three historical trends that will likely frustrate those hoping for a carefully orchestrated reunion of the two Koreas:

1. "The more repressive and artificially maintained the regime is, the more sudden and precipitous the collapse." (Think Poland/Hungary vs. Romania/Albania)
2. "Another lesson from past regime collapses is that the worse the level of oppression, often the more profound the nightmare upon liberation." (See: Iraq)
3. "In the second half of the twentieth century, states divided in two by political and military conflict—Vietnam, Germany, Yemen—all experienced sudden and tumultuous collapses and reunifications, leaving the equities of key stakeholders ignored or unaddressed. " (For instance, the authors worry that the North Korean military could split into post-collapse factions - e.g. pro-China, pro-South Korea, pro-DPRK, etc. - thus spawning a civil war)

And if or when the North Korean regime does collapse, and assuming South Korea sends troops in to take control and keep the peace, the situation may only become thornier:

South Korea...would also seek to stabilize the North in the event of a collapse. Achieving the goal of a reunified Korea under Seoul’s control, according to Bruce Bennett of RAND, would entail the defeat of North Korean forces, their eventual and successful integration into civilian society, control over WMD facilities, the stabilization of the North under non-Communist leadership, and the provision of humanitarian aid, particularly in the northern two-thirds of the country. In short, South Korea would have to accomplish all the objectives that the US failed to achieve in Iraq, and more; and some of these objectives might conflict with those of China.

I've written repeatedly on my belief that the collapse of the North Korean regime (and I do believe it will collapse, rather than slowly wither and die) will occur suddenly: one day everything will be quiet, and the next day we'll be wondering what to do with 25 million hungry North Korean refugees. And I've also written that reunification shouldn't even be the goal anymore.

This Kaplan and Denmark article does nothing to change my thinking on either front.

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Keynes vs. Hayek: the Battle Continues

Sorry no new economic rap videos today.

What I have for you instead is an excellent debate over the ideas of John Maynard Keynes and F.A. Hayek - a debate which is especially relevant in economic times such as these. Hosted by the London School of Economics, it features Robert Skidelsky (Keynes' biographer), Duncan Weldon, Jamie Whyte and George Selgin (who wrote up his behind-the-scenes account of the debate on his Free Banking blog).

You can listen to the debate on the BBC Radio 4 website, or download it as on the BBC's Analysis podcast.

I doubt this discussion will change the minds of those already partial to the views of either Keynes or Hayek. Both sides tend to view the other as a religion, having either blind faith in the benevolence and omniscience of bureaucrats (as Hayekians view Keynesians) or as being heartless, do-nothing ideologues (the Keynesian view of Hayekians). Russ Roberts and John Papola captured this tension well in their most recent Keynes-Hayek rap battle, "Fight of the Century" (hey, I didn't say I wouldn't quote from a rap video):

KEYNES

so what would you do to help those unemployed?

this is the question you seem to avoid

when we’re in a mess, would you just have us wait?

Doing nothing until markets equilibrate?


HAYEK

I don’t want to do nothing, there’s plenty to do

The question I ponder is who plans for whom?

Do I plan for myself or leave it to you?

I want plans by the many, not by the few.

Regular readers of this site will know where my sympathies lie in this debate, but I'm always keen to hear the opposing side's best argument, which this event delivers. Even better, this discussion is remarkably lacking in technical jargon, making it a great first exposure to these ideas for the curious newcomer. So go take a listen for yourself.

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Do As I Do, Not as I Do

Recently, computer hackers managed to penetrate the security system of Cyworld, South Korea's most popular social networking site (which is run by SK Communications). In doing so, these hackers gained access to 35 million accounts, a staggering number in a country of only 50 million people. As this piece in today's edition of The Korea Times reports, "the compromised information includes names, passwords, phone numbers, e-mail addresses, and most alarmingly, resident registration numbers, the country’s equivalent to social security numbers."

Why, you ask, would a social networking site have your social security number on file? After all, Facebook and Twitter never ask for such information when you register. In South Korea, however, local laws mandate that citizens identify themselves in virtually all online activity, including shopping, banking, blogging, and yes, social networking. SK Communications, therefore, is legally obligated to collect its customers resident ID numbers as a condition of Cyworld membership.

Not that this is all bad for private companies: knowledge of customers' ID numbers gives them access to a treasure trove of personal information that comes in handy for personalized marketing campaigns. Thus, we seldom hear these companies complaining about the burden of collecting such data. Possession of this data, however, makes them deliciously tempting prey for hackers.

Also in today's issue of The Korea Times we have this story, which reports that Apple has been fined 3 million KRW (about $3,000) by the Korea Communications Commission for collecting location data on iPhone users (readers may recall that I wrote about similar charges against Google last year).

So let me see if I understand this. The Korean government forces companies to collect private information about their users, information which then becomes a target for hackers. The same government, however, then turns around and punishes companies for collecting private information on the company's customers.

Oh well, I guess I gave up on the consistency of bureaucrats a long time ago.

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Straw Man Assembly, by Chang Ha-Joon

A few years ago on my birthday, my wife gave me a copy of Bad Samaritans, by Cambridge University economist Ha-Joon Chang. As a Korean who made good on the global academic stage, Chang gets even more attention here in the ROK than he does elsewhere, and certainly more than he deserves. In fact, I only barely managed to finish the book, so saturated was it with pisspoor logic and lousy writing - but I did manage to plow through it, simply because my wife had given it to me and I felt maritally obliged to reach the last damn page.

Briefly, for those who've blessedly not stumbled across his work, Chang is an ardent critic of what he calls "neo-liberal" economics (note: whenever someone uses the term "neo-liberal," you know you're about to get an earful), arguing instead for a much bigger role for governments in the economy. Yet, Chang's beliefs are not the problem. Rather, it's the way he lobbies for them that so irks people like me.

I feel somewhat vindicated in my low opinion of Chang's work when fellows like Mark Pennington, of the University of London, lay into him for his lazy scholarship. In a recent series of much-needed pieces (part I is here, part II is here), Pennington takes Chang to task for, among other sins, failing to demonstrate even a rudimentary knowledge of his supposed intellectual opponents' work, such as that of Coase, Buchanan, Hayek, Irwin, and Broadberry, much less to cite them in his most recent book, 23 Things They Don't Tell You About Capitalism. Instead, Chang merely sets up the argument with which he prefers to contend, and then proceeds to conveniently knock it down.

Pennington goes on to note that (as Douglas Irwin has pointed out) Chang also has a troubling tendency to commit that most elementary of errors: confusing correlation and causation. Chang is fond of arguing that, in their earlier stages of development, the now-rich countries of the world (e.g. Britain and the USA) erected numerous trade barriers and other protectionist policies. Chang takes this as proof that these countries became rich because of these policies. Never one to trouble himself with empirical evidence, Chang simply ignores compelling research that the world's wealthy nations rose to the ranks of the richest in spite of their many mistakes in trade policy. To familiarize his readers with such scholarship would have been inconvenient for Chang's thesis, so he apparently just chose to ignore it (I charitably assume that he's bothered to read it himself).

In writing this post, I fear that I've given Chang's writing more time and attention than it deserves, and I certainly wouldn't recommend that you buy his books. Flip through them in a bookstore, perhaps, if you're curious or masochistic - but don't expect to come away from the experience having learned much of anything.

(H/T to Casey Lartigue for pointing me to the Pennington pieces)

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A Tuesday Buffet of Goodness (2 August, 2011)

• For some reason, no one understands what Jack's talking about (video above, or here).
  
• "What May Happen in the Next 100 Years," c. 1900.
  
• The Wall Street Journal has this excellent interview with British prison psychiatrist Theodore Dalrymple, who holds forth on what we can and cannot know about a killer like Anders Behring Breivik. The article is interesting throughout but includes such tidbits as this:

The human impulse to explain the inexplicably horrific is revealing... It says something about us that we feel compelled to explain evil in a way that we don't feel about people's good actions. The discrepancy arises, he says, "because [Jean-Jacques] Rousseau has triumphed," by which he means that "we believe ourselves to be good, and that evil, or bad, is the deviation from what is natural."

For most of human history, the prevailing view was different. Our intrinsic nature was something to be overcome, restrained and civilized. But Rousseau's view, famously, was that society corrupted man's pristine nature. This is not only wrong, Dr. Dalrymple argues, but it has had profound and baleful effects on society and our attitude toward crime and punishment. For one thing, it has alienated us from responsibility for our own actions. For another, it has reduced our willingness to hold others responsible for theirs.

• Here's Professor Mark Perry with three simple things you need to know about trade deficits.
• How much would you pay for a 1985 Toyota 4-Runner with only 38,000 miles? It's in gorgeous condition, but $24,000 seems a tad rich. And anyway, what's the point of owning a fine 4x4 like that for 26 years if you're not going to put it to good use? Hell, the truck still has its original tires.
  
• This being the anniversary week of Milton Friedman's birth, I thought it appropriate to repost this 1977 article of his from Newsweek (h/t Cafe Hayek). A taste:

...scrutinize word for word the Declaration of Independence, the Constitution, and the Bill of Rights, and you will not find the word "fair." The First Amendment does not protect the "fair" exercise of religion, but the "free" exercise thereof; it does not restrain Congress from abridging the "fairness" of speech or of the press, but the "freedom" of speech or of the press.

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