Saturday, March 22, 2008

Trade and inequality: The role of economists

Trade and inequality: The role of economists

Dean Baker faults economists for exaggerating benefits of trade, and dishonestly ignoring or downplaying the distributional consequences: who wins and who loses. At the post-autistic economics network.

Placed in the Criticisms of Neoliberalism, Capitalism, and Free Markets index.

Sunday, March 09, 2008

Nozick's Wilt Chamberlain example

Tyler Cowen has written about Nozick's Wilt Chamberlain example over at Marginal Revolution. It's interesting that in 100+ replies, nobody seems to realize the fallacious assumption Nozick makes.

Nozick assumes that claims on Chamberlain's income come from "a third party who had no claim of justice on any holding of the others before the transfer". (ASU p.162) But in the real world, third parties DO have just claims before transfers: they are very common. For example, if Chamberlain had been paying alimony to a wife (he never married), or had faced civil judgements for child support. If the owners of the basketball court or the other players insisted that Wilt be a paid member of the player's union if he wants to perform on that court or with those players. Wilt will not get rich by himself: he needs the cooperation of other people and they will require something for that cooperation.

A social contract such as citizenship is just such a pre-existing claim of justice: Chamberlain was a citizen obligated to obey laws, including laws on taxation. Libertarians frequently whine that citizenship is not voluntary, but that's not true: you can renounce citizenship and/or assume citizenship in other nations. Most US citizens have ancestors who did just that.

All of Nozick's major arguments rely on fallacious assumptions or illusions of logic. For example, the idea that liberty upsets patterns EXCEPT NOZICK'S IDEA OF HISTORICAL JUSTICE. Nozick simply distracts from the fact that property restricts the liberty of others, and that it is only by continuous interference with liberty by very strong coercion that the pattern of property is maintained. Without that continuous coercion, people would assert their liberty to use whatever they wanted.

Nozick's "Whatever arises from a just situation by just steps is in itself just" can fail because of many implied requirements. Perfection of the original situation and the steps is required. Just initial situations are required (an impracticality.) And a demonstration of perfect justice-maintainance of the steps is required: a step may be just without maintaining justice. (This is a big problem: he's making an argument that only looks like mathematical induction without showing the critical step.) For example, if it is just to take a seat on a bus when there is no elderly person present, and it is just for an elderly person to enter the bus after that, but it is not just to remain in the seat after the elderly person has entered. But worse, in real life we can't ever have perfect justice of steps or starting situations. So the question is whether the steps move us closer or further from justice, and where an equilibrium will be reached (if one exists.) The Nozick statement has an implied binary logic model which real life doesn't match. Nozick doesn't begin to address a quantitative model of justice whereby we can state that any one situation is more just than another. Instead, he relies on the kind of "gut feelings" Steven Colbert ridicules so well with his persona.

The rest of Tyler's post is silly: he makes assumptions such as "no one should be forced to part with more than a certain percentage of his or her income". What next, Tyler, going to set the price of gold? Just as Tyler would think the price of gold should be set by a public, social decision-making process (a market), so the taxation rate should be set by another public, social decision-making process (a government.)

But I suspect the silliness is purposeful: to focus attention to the question of what rate is just, and thus slide in the propagandistic framing and assumptions without real discussion. Propaganda works by repetition, and Tyler is making his contribution to the right wing echo chamber. That, and entertaining his claque.

Sunday, March 02, 2008

Shermer's The Mind of The Market

Shermer's The Mind of The Market

Libertarian Tim Sandefur finds both Shermer's libertarianism and skepticism disappointing and unconvincing.

Added to the Reviews Of Books Related To Libertarianism index.