A Modest Marginal Proposal

A recent report that concludes that the carbon footprint of food overwhelmingly consists of carbon emitted during the food's production rather than its transport (i.e. 83% from production, 4% of total footprint is preventable by "eating local"). Based on the report's conclusions Tyler Cowen (of Marginal Revolution) suggests:

In other words, when it comes to food the greenest things you can do, if that is your standard, is to eat less meat and have fewer kids.

But this suggestion just made me think of a modest proposal whereby we could solve both problems in one swift swoop...

Government Proposes Petrol Cartel Enforcement Legislation

I'm still astounded by the Australian Government's proposed Fuel-Watch scheme. Working at its best, Fuel-Watch might provide an extremely marginal decrease in petrol prices but it seems far more likely to me that Fuel-Watch will have the exact opposite effect!

The most difficult part about enforcing a cartel agreement with your competitors is monitoring their behaviour and making sure that they stick to the cartel's agreed-upon price. In Fuel-Watch, the government is providing just such a mechanism, the perfect way for petrol stations to enforce any cartel-like agreements. All that the petrol stations need to do now is agree on a monopoly-level price and rake in the profits while the government works hard to enforce their cartel agreement!

Does anyone have a clue in the Rudd government? (Don't take that as an endorsement of the Liberal Party, the opposition is no better, if not considerably worse...) *sigh*

Privatize Australia Post! Privatize it NOW!

Open the postal sector up to free competition! Other countries have done it and they didn't collapse into anarchy! Even Sweden, one of the countries that from my brother's account seems to be most likely to collapse into a communist dictatorship, has done it! Australia Post needs to be privatized and the postal sector opened up to competition.

Australia Post's:

• Diabolical customer service
• Absolutely ridiculous opening hours (have you ever tried to pick up a packet delivered to your house when you work full-time?)
• General ignorance about the services they actually offer (try sending something use Print Post Direct International, and you'll see what I mean)
• Need I go on?
  

all argue for change. For instance in Sweden where postal delivery has been opened up to competition, you can pick up packet deliveries from the local 7-11 24 hours a day, 7 days a week!

And don't get me started with remarks like: "What about the people living in rural areas?". I've had quite enough of funding the lifestyle decisions of people who choose to live in rural areas. They can find out just how much their decision is costing the rest of us!

Privatize Australia Post! Privatize it NOW!

Maternity leave tax on women without plans for children a "Human Right"

What about: "Sex discrimination commissioner advocates lower wages and poorer conditions for women of child-bearing age"? Or perhaps "sex discrimination commissioner wants to make it harder for women of child-bearing age to find work"? That's what I read when I saw this article. The Sex Discrimination Commissioner, Elizabeth Broderick, wants maternity leave recognised as a "Human-Right" and for mothers to initially get 14 weeks of paid maternity leave. She eventually wants the maternity leave increased to 48 weeks.

This paid maternity leave can be funded in two ways, by forcing employers to provide paid maternity leave or through taxation. In the first case, employer financed maternity leave; anyone who understands any economics whatsoever will realise that obligating employers to provide these benefits is a sure way to increase discriminatory hiring and firing practices.

In the second case, getting tax-payers to fund other people's life-style choices is, in my opinion, morally questionable. Even in this latter case, the employer is presumably obligated to keep the job open for the new mother on her return after almost a year of leave. This will still create an, albeit lesser but no less real, incentive for employers to discriminate against women of child-bearing age.

Why not let people plan their own lives and make their own decisions? A free market economy already offers employers far more incentives than the government ever could not to discriminate against different groups in the community. Efforts by the government that have the stated goal of reducing discrimination usually have the perverse consequence that they actually increase levels of discrimination (or at the very best shift that same level of discrimination into other practices).

Rudd demonstrates Hayek-ian knowledge problem

In searching for some material on Hayek I turned up this speech by Kevin Rudd on the Hayek's philosophy. One of the core claims of the speech is that Hayek argues that (and this is a claim upon which most of Rudd's argument rests):

"Hayek argues that human beings’ altruism is a hangover from their primitive tribal experience, reinforced by religion, and must be purged if we are to optimise our individual liberty through rational self-centred participation in the market."

Anyone passingly familiar with Hayek's work could tell you that this assertion was a patent mis-representation of Hayek's thought. Rudd is either willfully ignorant or willfully misrepresented of Hayek's thought. Rudd's entire argument collapses like a house of cards if we were to consider, for instance, this quotes from Hayek's book, "The Fatal Conceit":

"…we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed rules of the…small band or troop, or…our families…to the (extended order of cooperation through markets), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were to always apply the (competitive) rules of the extended order to our more intimate groupings, we would crush them."
(Hayek, 1988, p 18)

Hayek argues that extended orders of cooperation are impossible to maintain if the rules of small scale interactions (like those within the family) are applied to the macro scale. Not, as Rudd represents Hayek's thought as being, that applying the rules of these small scale interactions is always a mistakes.

It is one of Hayek's most famous quotes so it is difficult to maintain that someone who had actually done any research on Hayek and his thought could possibly be ignorant of it. It is incumbent on Rudd to either maintain intellectual honesty and either not give a speech about a topic about which he quite obviously has no understanding or alternatively be honest about Hayek's philosophy and engage it for what it is rather than the straw-man version Rudd presents.

UPDATE: I just noticed The Economist's Free Exchange blog has a post making almost exactly the same point except that it was written some time ago. Nice to know that I'm in good company.

Bogu bags $80m deal!?!

I guess it just shows how preoccupied with kendo I am at the moment but I saw this article in the sport section and thought, "wow, that's a lot to pay for a bogu bag". Of course, the headline was actually "Bogut bags $80m deal" and about basketball...

Rudd's Breathtaking Ignorance

Not Kevin but Kevin's cousin, Van Thanh Rudd. According to this article Van Thanh recently had his submission to an exhibition rejected for being too provocative. Commenting on his artwork and its meaning Van Thanh reportedly said:

"commenting on the fact that I believe the global economy is a direct hurdle to a lot of the good peace processes to deal with human rights abuses", including in Tibet. He said he did not discount China's obvious atrocities. "But the overwhelming historical thing is going back to American colonialism in Asia and globally."

I really hope this thinking isn't reflective of Kevin's thoughts. I hope Kevin believes something more like this (but I doubt it):

"The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another."
Milton Friedman

The "global economy" is a force for good lifting people out of conflict and poverty, not miring them in it!

Unions look after unions

I think this post from Megan McArdle stresses an important point that is often forgotten in discussions about unions and unionization, unions are, first and foremost, out to look after the health of the union rather than the workers. Just like the politicians whose main aim is to implement good policy rather than get re-elected probably won't get re-elected, the unions that don't focus first and foremost on sustaining their own existence will probably cease to exist.

Energy Efficiency - Market Response

There's an interesting article in this week's Economist about energy efficiency. Most of the most egregious causes of poor energy efficiency are government subsidies and regulations.

The article also talks about how many businesses and consumers seem not to bother to adopt energy saving devices unless there is a very high return on their use. They cite the transaction costs of researching, purchasing and installing these energy saving devices as one of the main causes of this failure . This of course presents a profit opportunity. Companies have sprung up that take care of financing and talling energy saving devices. These companies split the energy savings with their clients.

If only the various Australian water boards learnt that lesson and raised the price of water instead of instituting the ridiculous water restrictions that they use to limit demand.

My bank employs Marvin

It seems my bank has decided to employ Marvin to write captchas for them: