Going backwards

Freedom is not license. By adhering to a set of abstract rules we can secure limited domains of freedom for everyone. When a society that once followed these practices abandons such, bad things can happen:

What made Hugo Chavez possible? How does a country let a man whose credentials are those of a coup leader who tried to topple a legitimate government become the unbridled ruler of the nation? What kind of people applaud a president who would replace the republican institutions with a system -- socialism -- that was so discredited in the 20th century?

Latin America's history shows that populist strongmen keep appearing with astonishing frequency. Understanding why Chavez came to power almost a decade ago and is now poised through a constitutional amendment to become president-for-life is a necessary step in trying to halt the emergence of future populist strongmen.

In the first half of the 20th century, Venezuela had a relatively free economy even though its political system was undemocratic. Far from giving rise to a typical state-run economy dependent on its natural resources, the discovery of oil in 1918 gave impetus to a free-market system that led to impressive results. Manufacturing and services, in addition to oil, expanded at rates greater than the economy as a whole.

But then something went wrong. It started under the dictatorial government of the 1950s and gathered pace when democracy came to Venezuela in 1958. Venezuelans went from being mostly self-relying entrepreneurs to depending on a government that began to grow -- and grow. Professor Faria thinks that economic success led to a desire for political participation -- i.e., democratic government, which in turn generated all sorts of pressures on a new political elite bent on pandering to the people's instincts for dependency rather than hard work.

I would add another explanation to the one given by Faria for the move toward big government after the establishment of democracy in Venezuela -- the political culture of the Latin American elites. They were profoundly influenced by the nationalist ideas in vogue at the time -- that development was only possible by breaking away from the international centers of power and the creation of domestic markets through government protection. The policies associated with these ideas -- import substitution, nationalizations, currency manipulation, price controls -- were deeply ingrained in the political mind of Latin America.

Economic freedom is foundational to other freedoms. Jefferson would probably argue that the right to self defence is as well. When government acts in a predatory manner or gives protections to the few at the expense of the many, it fails to contribute to progress.

Improving education

The rising cost of health insurance and health care and the quality of public education are pointed to as causes of anxiety by many people. They are two significant areas of society with heavy government involvement. It makes you wonder...or at least it should. More money is the cry heard from certain interest groups:

If any state has taken to heart the claim that more money is the key to improving public education for low-income students, it's Connecticut. The Nutmeg State, which ranks first in per capita income ($47,800), also leads the way in average teacher salary ($58,700) and is third in per-pupil spending ($11,000). Yet according to the latest National Assessment of Educational Progress released this week, Connecticut has the nation's largest achievement gap between poor and non-poor students.

The NAEP measured reading and math skills in grades four and eight. And while scores nationwide showed modest progress this year, Connecticut is moving in the opposite direction. Not only are low-income students falling further behind in Connecticut than anywhere else, but the state's overall ranking is also down. Since 2005, Connecticut has lost ground to other states in three of the four NAEP categories. In fourth-grade math, it's fallen to 16th from 9th. In eighth-grade math, it's fallen to 29th from 20th.

As usual, the supposed beneficiaries of Connecticut's education lucre are faring worst. Poor and minority students typically attend schools in urban districts that spend thousands of dollars more than the per-pupil state average. Yet the state ranking for Hispanic students declined in all four categories; for blacks, it fell in all but one category. Eighth-graders in Connecticut who qualify for free or reduced price lunches had the second-lowest math scores for poor students in the U.S.

Public charter schools in Connecticut regularly outperform traditional public schools, and do so on significantly smaller budgets. Hartford's lone charter school, Jumoke Academy, receives $8,000 per student from the state, while surrounding public schools receive $13,600 per kid. On the most recent state assessment test, 60% of Jumoke's students scored proficient in math, 70% scored proficient in reading and 95% scored proficient in writing. The corresponding results for the surrounding public schools were 22%, 30% and 27%.

Over at Marginal Revolution, Alex Tabarrock points to something else that can actually help but that much of the educational establishment simply resists.

What we need to save inner-city schools, and poor schools everywhere, is a method that works when the teachers aren't heroes. Even better if the method works when teachers are ordinary people, poorly paid and ill-motivated - i.e. the system we have today.

Ayres argues that large experimental studies have shown that the teaching method which works best is Direct Instruction (here and here are two non-academic discussions which summarizes much of the same academic evidence discussed in Ayres). In Direct Instruction the teacher follows a script, a carefully designed and evaluated script. As Ayres notes this is key:

DI is scalable. Its success isn't contingent on the personality of some uber-teacher....You don't need to be a genius to be an effective DI teacher. DI can be implemented in dozens upon dozens of classrooms with just ordinary teachers. You just need to be able to follow the script.

Contrary to what you might think, the data also show that DI does not impede creativity or self-esteem. The education establishment, however, hates DI because it is a threat to the power and prestige of teaching, they prefer the model of teacher as hero. As Ayres says "The education establishment is wedded to its pet theories regardless of what the evidence says." As a result they have fought it tooth and nail so that "Direct Instruction, the oldest and most validated program, has captured only a little more than 1 percent of the grade-school market."

This from the second link above about DI:

What if the federal government spent $1 billion over nearly three decades to study thoroughly the question of which teaching method best instills knowledge, cognitive skills and positive self-concept in students?

What if that study were able to conclude exactly which method best does all three?

Wouldn't the American people like to know about it?

"The education profession has never been particularly interested in results, especially if they run counter to the prejudices of the profession," says Mr. Carnine, who was involved with Project Follow Through when his university served as one of its sponsors.

Direct instruction, one of the basic skills approaches, showed the greatest positive impact on all three types of development (see graphs).

"What they did was change the question because they didn't like the answer. Their argument was that we should ignore the question of what leads to better academic learning. So they essentially gave people permission to ignore the whole point of the project.

I have actual experience teaching children with DI. My mom who is a special education teacher in the NYC school system has had phenomenal results teaching learning disabled children with DI when she has been allowed to use this method. Broward County schools have used this method in a limited number of schools in the most underprivileged areas with positive results that shocked board members. Widespread adoption of DI in schools where students are most in need of improvement could have a dramatic effect, but it is not happening. Give these parents vouchers and choice and see if anything changes.

revisiting spontaneous order

A decent set of rules (legal system) and their enforcement are important to a well ordered and functioning society. The additional benefit of avoiding statism is that self-ordering or spontaneous order can take place giving rise to new powers for wealth creation and other forms of betterment. It is easy to be unaware or overlook the power of this type of process. This from an old post worth rereading:

The principle of spontaneity, of liberty, is not an all-or-nothing proposition. But the principles of local knowledge, coincidence of interest, and spontaneous adaptation have much more power than is generally recognized. People have a hard time understanding how spontaneous order works, or even that it exists.

Oblivious

The Massachusetts Institute of Technology is famous for having numerous brilliant but totally oblivious professors and students over the years. One of my favorite stories that I was told when I was at MIT was about Norbert Wiener, a famous and brilliant Math Professor:

MIT corridors have, or at least used to have, wainscoting, that is, a strip of wood with a molded groove in it running along a wall about three and a half feet off the ground. The nominal purpose of this is to prevent chair backs from scratching the paint on walls and to provide a boundary between the darker shade which the lower part of walls are usually painted and the lighter shade above. It was Wiener's custom to stick his finger in this groove, close his eyes, lower his head in thought and walk down a corridor, guided by the wainscoting. Professors were told to close their classroom doors or Wiener would be apt to follow the corridor wainscoting to the door jamb of the classroom and pick up the trail of the wainscoting on the inside of the classroom, following it around the room until it led him back to the corridor.

This story may well just be an urban legend, but in that case I'm inclined to use the phrase "fake, but accurate" in a positive sense since such total lack of awareness of how one's behavior might be viewed or affect others was and is rampant at MIT and the story is so utterly plausible, even if not actually true.

So it is of no surprise that a young female MIT student follows in a long tradition of obliviousness in her recent visit to the Boston airport to pick up her boyfriend:

An MIT student with what police feared was a fake bomb attached to her chest was arrested at gunpoint Friday at Logan International Airport and later claimed it was artwork, officials said.

Star Simpson, 19, had a computer circuit board and wiring in plain view over a black hooded sweat shirt she was wearing, said State Police Maj. Scott Pare, the commanding officer at the airport.

The circuit board had flashing LEDs and a battery. But keep in mind that MIT students and faculty also have a long history of wearing batteries:

One notable hack attempt targeting the 1948 Harvard-Yale football game involved the use of primer cord. One night shortly before the game MIT students snuck into the Harvard stadium and buried primer cord just under the field. The plan was to burn the letters MIT into the middle of the field during the game. However, their work was uncovered by groundskeepers and disabled. During the game the hackers were apprehended while wearing heavy coats on a fair-weather day. The coats were lined with batteries, obviously intended to be used to detonate the primer cord. An MIT dean came to their defense, opening his own battery-lined coat and claiming that "all Tech men carry batteries".

Apparently all Tech women carry batteries too. The thing that was suspicious to me was not the circuit board or batteries, but rather the playdough:

She was holding a lump of what looked like putty in her hands.

The response was swift and deadly serious:

The trooper, joined by others with submachine guns, confronted her in front of the terminal.

"She was immediately told to stop, to raise her hands and not to make any movement, so we could observe all her movements to see if she was trying to trip any type of device," Pare said. "Had she not followed the protocol, we might have used deadly force."

He added, "She's lucky to be in a cell as opposed to the morgue."

Shooting her would've probably been overkill (so to speak). Probably everybody is lucky she didn't end up in the morgue. A headline that read something like "Police kill young MIT student because she was carrying a circuit board" really wouldn't've done much for the reputation of the police and would've only hampered real law enforcement needs in the future.

The student is being charged with criminally negligent joking:

Simpson was charged with possessing a hoax device and was arraigned today East Boston Municipal Court. She was held on $750 cash bail and ordered to return to court Oct. 29.

With all the laptops, cell phones, and circuit boards for my robots that I've carried into airports, it's a miracle I've never been charge with possessing a hoax device. I've probably even had play dough with me for some of my trips with the kids. Perhaps I've had circuit boards, LEDs, batteries and play dough all at the same time! Clearly shocking:

"I'm shocked and appalled that somebody would wear this type of device to an airport," Pare said.

I can understand the "appalled" part, but "shocked"? He had never met an MIT student before during all the years he lived in Boston? Personally, I agree with her defense attorney:

"I would characterize it as almost being paranoid at this point," Schreiber said of authorities' response.

Unfortunately for her, the key word is "almost". It wasn't quite paranoid, and as a result, I wouldn't be at all surprised if this poor oblivious MIT student is convicted.

A workable balance

The discussion in the comments to the revisiting statism post touched upon the idea of a mixed economy. I expressed my preference for a mixed economy that was largely free. In light of the matter it seems like this article by Mark Skousen could provide some food for thought.

Too much government and the economy chokes. Too little, and it cannot function. Is there a Golden Mean?

Each year the Fraser Institute publishes their Economic Freedom of the World Index (see www.fraserinstitute.org), which measures five major areas of government activity in more than 100 countries: size of government, legal structure, sound money, trade, and regulation.
The most surprising thing about the study, according to its author James Gwartney, a professor of economics at Florida State University, is the importance of legal structure as the key to maximum performance for an economy. “It turns out,” he told me in a recent interview, “that the legal system — the rule of law, security of property rights, an independent judiciary, and an impartial court system — is the most important function of government, and the central element of both economic freedom and a civil society, and is far more statistically significant than the other variables.”

Gwartney pointed to a number of countries that lack a decent legal system, and as a result suffer from corruption, insecure property rights, poorly enforced contracts, and inconsistent regulatory environments, particularly in Latin America, Africa, and the Middle East. “The enormous benefits of the market network — gains from trade, specialization, expansion of the market, and mass production techniques — cannot be achieved without a sound legal system.”

Milton Friedman identifies the legitimate roles of the state: “The scope of government must be limited. Its major function must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets. Beyond this major function, government may enable us at times to accomplish jointly what we would find it more difficult or expensive to accomplish severally.” Adam Smith suggests that this “system of natural liberty” will lead to a free and prosperous society. As Smith declares, “Little else is required to carry a state to the highest degree of opulence from the lowest level of barbarism, but peace, easy taxes, and a tolerable administration of justice.”

My thesis is that as a society moves from zero government to point P, economic well-being increases to peak performance. Then, as it adopts a larger and less necessary government, its growth diminishes, and can even turn negative if government becomes too burdensome and controlling.

Hayek makes the following point in The Fatal Conceit:

The more one learns about economic history, the more misleading then seems the belief that the achievement of a highly organized state constituted the culmination of the early development of civilisation. The role played by governments is greatly exaggerated in historical accounts because we necessarily know so much more about what organised government did than about what the spontaneous coordination of individual efforts accomplished.

Governments have more often hindered than initiated the development of long-distance trade.

Rather, it would seem as if, over and over again, powerful governments so badly damaged spontaneous improvement that the process of cultural evolution was brought to an early demise. The history of China provides many instances of government attempts to enforce so perfect an order that innovation became impossible. What led the greatly advanced civilisation of China to fall behind Europe was its governments' clamping down so tightly as to leave no room for new developments, while Europe probably owes its extraordinary expansion in the Middle Ages to its political anarchy.

(back to Skousen)

Several economists have attempted to determine the ideal level of government spending as a percentage of GDP. In the 1940s, Australian economist Colin Clark said that the maximum size of government should not exceed 25% of GDP. Anything higher would hurt economic growth. Professor Gerald W. Scully, of the University of Texas at Dallas suggests that the tax rate ought not to exceed 23%. World Bank economists Vito Tanzi and Ludger Schuknecht analyzed 17 countries during the period 1870 to 1990 and concluded that public spending in newly industrialized countries should not exceed 20% and in industrialized countries not more than 30%.

Is optimal government (point P) the same for every country? This would make an interesting study, but I suspect that differences in culture and socio-economic circumstances suggest that some nations require more government than others. As Benjamin Franklin states, “A virtuous and laborious [industrious] people may be cheaply governed.”9 And a lazy, dishonest people must be expensively governed.

Almost every country in the world today is to the right of Point P, and could grow faster and enjoy a higher quality of life by reducing the size and scope of government. Countries from China to Ireland to Chile have demonstrated how dramatically the economy can improve by cutting back the state. I’m sure even Hong Kong, #1 in the Fraser Institute’s study in terms of performance and freedom, could benefit from some improvements by scaling back some types of government services. According to the latest surveys of economic freedom by the Fraser Institute and Heritage Foundation, countries on average are becoming more free, and not surprisingly, the world’s economic growth rate is rising. After noting that government represents 40–50% of GDP in most developed nations, Tanzi and Schuknecht conclude, “we have argued that most of the important social and economic gains can be achieved with a drastically lower level of public spending than what prevails today.”

In short, most countries could use less government, but a few countries could use more of the right kind of authority. There is an optimal size and structure of government, and when it is reached, the result is, in the words of Adam Smith, “universal opulence which extends itself to the lowest ranks of the people.”

While I think that it is important to be skeptical about our ability to know something like optimal size and role of government with any precision, it may be possible to learn more through such observation and trial and error experimentation in incremental policy steps. In comparison to centrally planning and directing any meaningful portion of our complex economy and society, learning more in this area of the public- private mix should be doable.

Other Economic Obsessions

Howard and I have written numerous posts on Deficit Obsession Disorder, where the sufferer is convinced that federal government deficits are inherently a very bad thing and refuses to consider the very straightforward math that shows that small to medium deficits like we've had over the last few years are not harmful at all.

Lately, I've been seeing some Inflation Obsession Disorder where the sufferer is convinced that it's better to suffer a recession or other economic crisis rather than taking an action which might possibly lead to some future inflation in order to prevent that recession or economic crisis. For example, here are a couple of paragraphs by Nobel Laureate Robert Lucas regarding the recent rate cut by the Fed:

So I am skeptical about the argument that the subprime mortgage problem will contaminate the whole mortgage market, that housing construction will come to a halt, and that the economy will slip into a recession. Every step in this chain is questionable and none has been quantified. If we have learned anything from the past 20 years it is that there is a lot of stability built into the real economy.

To me, inflation targeting at its best is an application of Milton Friedman's maxim that "inflation is always and everywhere a monetary phenomenon," and its corollary that monetary policy should concentrate on the one thing it can do well -- control inflation. It can be hard to keep this in mind in financially chaotic times, but I think it is worth a try.

In this last paragraph he seems to be saying that the Fed should control inflation no matter what, even if it were to mean economic catastrophe. I personally don't think the Fed needed to cut rates and the economy, including the mortgage markets, would have been okay anyway. But the risk to the economy from not taking action was significant and as a result I have no problem with the Fed's action, even though it probably does mean a bit of a higher inflation rate in a year or two.

To focus on inflation to the exclusion of everything else is its own sort of obsession and can be equally damaging as Deficit Obsession Disorder.

Revisiting statism

One of the primary reasons for recent and future planned posts on economic history is an attempt to more accurately calibrate views of the past. Although true believers in socialism are now a small minority in most places (I hope), many mixed economy advocates are prone to a slide towards statism. A search of this blog by that term yields this collection of posts. Many people have the tendency to blame too many ills of society on a free market economic system while underappreciating the benefits of free market and limited government. Consequently, there is a willingness to allow for more government involvement when marginally less involvement might lead to better outcomes.

"...statism, which my dictionary defines as the concentration of economic controls and planning in the hands of a highly centralized government, and which I further define as the belief that the state is the mechanism best suited for solving most if not all of society's ills, be they health related, natural disasters, poverty, job training, or injured feelings. Statism is the great political disease of the twentieth century, with Communist, socialist, and many democratic nations infected to a greater or lesser degree. When the political history of our century is written, its greatest story will be how a hundred variants of statism failed." Jim Rogers from Investment Biker

This increasing statism can have detrimental effects, both subtle and not so subtle.

As we have pointed out, the modern welfare state indeed coerces in a variety of ways to attain its unattainable ends.

But well-meaning patriarchalism also enervates people by robbing them of the entrepreneurial spirit implicit in freedom. What harm long-term dependence on the welfare state can inflict became apparent after the collapse of the Soviet Union, when a substantial part of the population, suddenly deprived of comprehensive state support and unaccustomed to fending for itself, came to yearn for the restoration of the despotic yoke.

The trouble is that because schools fail to teach history, especially legal and constitutional history, the vast majority of today’s citizens have no inkling to what they owe their liberty and prosperity, namely a long successful struggle for rights of which the right to property is the most fundamental. They are therefore unaware what debilitating effect the restrictions on property rights will, over the long run, have on their lives.

The aristocrat Tocqueville, observing the democratic United States and his native bourgeois France a century and a half ago, had a premonition that the modern world faced dangers to liberty previously unknown. “I have no fear that they will meet with tyrants in their rulers,” he wrote of future generations, “but rather with guardians.” Such “guardians” will deprive their peoples of liberty by gratifying their desires and then exploit their dependence on such generosity. He foresaw a kind of democratic despotism in which “an innumerable multitude of men, all equal and alike” incessantly strive to pursue “the petty and paltry pleasures with which they glut their lives.” The benign paternalistic government – the modern welfare state – hovers over them.

For their happiness such a government willingly labors, but it chooses to be the sole and only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

The “principle of equality has prepared men for these things” and “oftentimes to look on them as benefits.”

After having thus taken each member of the community in its powerful grasp, and fashioned him at will, the supreme power then extends its arms over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent and guided; men are seldom forced to act, but they are constantly restrained from acting: such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

Property and Freedom by Richard Pipes pp291-2; drawing upon Democracy in America.

Another Bet?

Apparently flush with confidence from his successful bet last year with Duck regarding the price of oil, Oroborous is interested in seeing if he can extend his winnings. Oroborous has made a number of dire predictions for the economy and the markets. For example, in a comment to his post "Morons" he wrote:

"However, buying stocks [on the rally on August 29, 2007] because they're "bargains", with the Dow a mere 6% down from the nominal all-time high, with the economy's warning lights all in the red and flashing, and with the "recession klaxon" sounding, is either speculation of the most egregious kind or simply moronic."

A second example is his comment from "Mountains, Molehills and the Government":

"Rather, the problem is just getting started, and the worst is yet to come."

My response was that the only significant problem facing the economy and/or financial markets was the potentially precipating panic due to the rising subprime mortgage rate of defaults and that the potential for panic seemed to be dissipating. Oroborous replied as follows:

"Would you like to make a small wager on that ?"

I wondered what exactly we might bet on and Oroborous replied:

"You'd have to come up with a description of what you'd be willing to wager won't happen.

"We could use GDP stats, employment figures, foreclosure stats, declines in home prices...

"Whatever you like."

Whatever I like? Excellent! I bet the stock market doesn't go down 100% in the next month!

Actually, being the fair guy that I am, let me propose something more sporting. What I think the fundamental claim that Oroborous is making is that something unusually bad is in store for the markets and the economy. For example, people who are investing right now (or at least on August 29th) are moronic for not seeing a train wreck coming.

I'm claiming that nothing out of the ordinary is likely to occur and that there's no readily available knowledge that makes the current moment a particularly bad (or good) time to invest.

So what's ordinary? One thing that ordinarily occurs is that the Dow Jones Industrial Average chops around an upward trendline of about 6% per year. The standard deviation of the movement about that trendline for any given period can be approximately predicted from lognormal standard deviations of the daily returns. If the lognormal standard deviation of the daily returns is S, the lognormal standard deviation for a period of N trading days is S * (N ^0.5). The lognormal standard deviation of the daily returns for the DJIA from August 1st to September 14th is 1.27%. The quarterly, 1/2 yearly, and yearly derived standard deviations to the downside would be approximately 10%, 13%, and 19% respectively.

To have statistical confidence (to the 95% confidence level) that something out of the ordinary has occurred, we would need to see a drop of at least 1.96 standard deviations below the expected trend line. Since my prediction is simply that we don't observe anything out of the ordinary (with statistical confidence), I thus predict (and am willing to bet) that the DJIA doesn't drop more than 17% in the next 90 days, 22% in the next 180 days, or 29% in the next year. (Note that all these calculations are done in the lognormal domain which is why the don't "add" up).

Since the DJIA is more or less as good a measure as any regarding the future health of all aspects of the economy, if Oroborous isn't willing to take one of the above bets, then we have to assume that he and I are in concurrence that nothing unusual and measurable with statistical confidence is likely to occur to the downside during the above periods due to the subprime markets, the housing market, or anything else.

Reality Mirrors Paradox

I've often noted on this blog how often satire ends up predicting reality. It happens pretty often. But this is the first time that I've seen reality mirror a paradox.

The "liars paradox" is a famous logic paradox has the following form:

"This statement is false."

It's a paradox, because whatever truth value you assign to the statement implies the opposite truth value. If you assume the statement is true, that implies that it's false, but that implies it's true, and so forth.

Now, thanks to some recent research, we have a very similar statement:

"Research results shows that the results of all research is false."

Well, not quite. We need to substitute "most" in for "all" in the above statement, but still, it's hard to believe a researcher would write something like that and expect anyone to take him or her seriously.

But let's give this research the benefit of the doubt and assume that it's true (that most other research results are suspect). That might well explain the results of the rather inane research identified by both Hey Skipper and erp that supposedly supports the hypothesis that liberals' brains are more "spiffy" (that's Hey Skipper's word for it) than conservatives' brains. I'd certainly call it suspect.

Free market capitalism: evil or amazing?

I guess it depends upon your perspective. If one is devoted to the view that life, the world, the system victimizes most people, that will certainly color your view of other things. When we read history books describing the horrible things that are attributed to capitalism, we will not only believe such stories, but are likely sure that they are utterly true. If, however, our minds are open to other possibilities, it might occur to us that man's inhumanity to man was in full flower long before anything like capitalism was in existence. Perhaps not all but many of these evils have a different root cause and perhaps there are some very different insights about capitalism to be had:

With the intensification of exchange, and improving techniques of communication and transportation, an increase of numbers and density of occupation makes division of labour advantageous, leads to radical diversification, differentiation and specialisation, makes it possible to develop new factors of production, and heightens productivity. Different skills, natural or acquired, become distinct scarce factors, often manifoldly complementary; this makes it worthwhile to workers to acquire new skills which will then fetch different market prices. Voluntary specialisation is guided by differences in expected rewards. Thus labour may yield increasing rather than decreasing returns. Even the bare fact of living peacefully in constant contact with larger numbers makes it possible to utilise available resources more fully.

When, in such a way, labour ceases to be a homogeneous factor of production, Malthus’s conclusions cease to apply. Rather, an increase of population may now, because of further differentiation, makes still further increases of population possible, and for indefinite periods population increase may be both self-accelerating and a pre-requisite for any advance in both material and spiritual civilisation.

It is, then, not simply more men, but more different men, which brings an increase in productivity. Men have become powerful because they have become so different: new possibilities of specialisation – depending not so much on any increase in individual intelligence but on growing differentiation of individuals – provide the basis for a more successful use of the earth’s resources. This in turn requires an extension of the network of indirect reciprocal services which the signalling mechanism of the market secures. As the market reveals ever new opportunities of specialisation, the two-factor model, with its Malthusian conclusions, becomes increasingly inapplicable.

But it would be more accurate to conclude from this that the process of growth benefits the larger number of the poor more than the smaller number of the rich. Capitalism created the possibility of employment. It created the conditions wherein people who have not been endowed by their parents with the tools and land needed to maintain themselves and their offspring would be so equipped by others, to their mutual benefit. For the process enabled people to live poorly, and to have children, who otherwise, without the opportunity for productive work, could hardly even have grown to maturity and multiplied: it brought into being and kept millions alive who otherwise would not have lived at all and who, if they had lived for a time, could not have afforded to procreate. In this way the poor benefited more from the process. Karl Marx was thus right to claim that ‘capitalism’ created the proletariat: it gave and gives them life.

Thus the whole idea that the rich wrested away from the poor what, without such acts of violence would, or at least might, belong to them, is absurd.

The size of the stock of capital of a people, together with its accumulated traditions and practices for extracting and communicating information, determine whether that people can maintain large numbers.

Thus without the rich – without those who accumulated capital – those poor who could exist at all would be very much poorer indeed, scratching a livelihood from marginal lands on which every drought would kill most of the children they would be trying to raise. The creation of capital altered such conditions more than anything else. As the capitalist became able to employ other people for his own purposes, his ability to feed them served both him and them. This ability increased further as some individuals were able to employ others not just directly to satisfy their own needs but to trade goods and services with countless others. Thus property, contract, trade, and the use of capital did not simply benefit a minority.

Envy and ignorance lead people to regard possessing more than one needs for current consumption as a matter for censure rather than merit. Yet the idea that capital must be accumulated ‘at the expense of others’ is a throwback to economic view that, however obvious they may seem to some, are actually groundless, and make an accurate understanding of economic development impossible.

source

An alternative explanation worth thinking thinking about!

Stirling Solar Power

Photovoltaic solar cells have been improving in terms of energy output per dollar at the rate of about 5% per year. That may not sound like much but they've been improving at approximately that rate (with significant fluctuation) since the first one was built in 1883. If the average yearly improvement continues at the current rate (which I think is a very good bet), then by mid century, the use of photovoltaic solar cells will be significantly cheaper than fossils fuels as a method to generate electricity.

I've been so focused on using photovoltaic cells to generate electricity that I missed a very important development right here in my own backyard using an alternative method to convert solar energy to electricity:

Two Southern California utility companies are planning to develop a pair of sun-powered power plants that they claim will dwarf existing solar facilities and could rival fossil-fuel-driven power plants.

Southern California Edison and San Diego Gas & Electric are working with Stirling Energy Systems, a Phoenix startup that has paired a large and efficient solar dish with a 200-year-old Stirling engine design.

Poor Bob Stirling. Even though the engine he invented nearly two hundred years ago is by far the most efficient type of heat based engine and is way more efficient than the Internal Combustion Engine (that's what's in cars), and can be powered from any heat source (or cold sink), it has never really found very many useful applications. That's because while it's very efficient transforming heat into mechanical energy, it's much larger than alternatives such as the Internal Combustion Engine for a given amount of power and therefore generally more expensive to build. As long as fuels suitable for other engines remain inexpensive, the capital costs required for Stirling engines overwhelm the fuel savings.

So Bob would be thrilled to know that his design, at long last, has the potential to be widely used to transform heat from the sun into mechanical energy which will then be used to generate electricity:

Stirling Energy Systems is planning to build two separate solar farms, one with the capacity to generate 500 megawatts of electricity in the Mojave Desert near Victorville, California, for SoCal Edison, and a 300-megawatt plant in the Imperial Valley, near Calexico, California, for SDG&E. The utilities have signed 20-year deals to buy all the juice the farms can turn out, and have options to expand the plants if they are successful.

Stirling Engines are the best alternative for this application since Internal Combustion Engines can't be powered by an external heat source (the sun in this case) and other engines like the steam engine are too inefficient (and therefore cost too much) for this application:

Osborn said the Stirling dishes are 30 percent efficient -- 30 percent of the sun's energy is converted into electricity -- which is two to three times as efficient as conventional photovoltaic cells.

The efficiency is not necessarily the most important factor, however. It's the cost of electricity after all costs, including capital costs, are taken into account. I suspect this is the biggest contributor to where photovoltaic cells currently fall short of the Stirling dishes.

However, assuming that efficiency is the most important factor and assuming that the 5% per year average improvement of photovoltaic cells continues, it'll take about 30 years for photovoltaic cells to catch up with Stirling dishes. Of course, improvements in the manufacture of Stirling dishes may also occur which would make this approach competitive for even longer.

Given the expected prices of fossil fuels over the next decade or so (from oil futures prices), the Stirling dish design is competitive now and will probably continue to be over at least that period unless another technology is developed that is even more inexpensive.

On the downside, the 2005 article quoted above says that the first megawatt of generating capacity was supposed to be online in the spring of 2007. It's not, so the project has already fallen behind. However, as a founder of a startup that's behind the initial projected schedule on some of its projects, it's not necessarily the end of the world.

Hopefully, it will be successful, since we have a lot of desert here in Southern California and a huge need for electricity.

No Room for Judgement

There are many dangerous and evil people loose in our society. Mark Steyn identifies one such pair:

Do you know Cory Mashburn and Ryan Cornelison?

If you do, don't approach them. Call 911 and order up a SWAT team. They're believed to be in the vicinity of McMinnville, Ore., where they're a clear and present danger to the community. Mashburn and Cornelison were recently charged with five counts of felony sexual abuse, and District Attorney Bradley Berry has pledged to have them registered for life as sex offenders.

Oh, by the way, the defendants are in the seventh grade.

Seventh grade? Wow! They must've done something really heinous:

They were arrested in February after being observed in the vestibule [at school], swatting girls on the butt.

Mr. Steyn happened to ignore some of the other charges which included being accused of "poking or cupping girls’ breasts", but still, the authorities' responses seem a bit much to me:

So, upon being caught butt-swatting, Mashburn and Cornelison were called to the principal's office, where they were questioned for several hours by vice principal Steve Tillery and McMinnville Police officer Marshall Roache. At the end of the afternoon, two boys who'd never been in any kind of trouble before were read their Miranda rights and led off in handcuffs to spend five days in juvenile jail. [...]

After a court appearance in shackles and prison garb, the defendants were charged with multiple counts of felony sexual abuse, banned from school and forbidden any contact with their friends.

Funny that they were read their Miranda rights after being questioned for several hours.

It doesn't quite end there. It turns out that some of the victims felt pressured to answer in a way that hurt the defendants:

At the initial hearing, a couple of female students spontaneously testified that they'd felt very much pressured to conform during their interviews with the vice principal and the police officer. "Well, when the principal asked me stuff, I kind of felt pressured to answer stuff that I was uncomfortable, and that it hurt, but it really didn't," said one girl.

In addition, the district attorney's office withheld evidence from the defense:

A motion says that until its existence was disclosed last week, the district attorney’s office failed to give the defense a February police report in which a female Patton Middle School student disputes an officer’s account of the behavior of two boys.

Rather important evidence too:

In his initial police report Feb. 22, Roache said the girl told him that Mashburn and Cornelison writhed up against her in a sexually suggestive form of dance. Roache described the moves as “party-boy dancing” from the movie “Jackass.”

But in the Feb. 28 report, taken by a different McMinnville police officer, the girl said there was never any touching involved and that she did not believe Mashburn or Cornelison should be charged with a crime.

I'm starting to get concerned that we are losing our way as a society. Mark Steyn believes we are losing our sense of proportion:

A world that requires handcuffs and judges and district attorneys for what took place that Friday in February is not just a failed education system but an entire society that's losing any sense of proportion. Without which, civilized life becomes impossible. So we legalize more and more aspects of life and demand that district attorneys prosecute ever more aggressively what were once routine areas of social interaction.

I think it's more fundamental than that. None of the authorities were able to exercise any judgement. I don't know if they were simply incapable of exercising judgement, afraid to exercising judgement, or prohibited by statutes or authorities above them from exercising judgement, but in my opinion, from the admittedly limited information on the Internet, the use of critical reasoning skills and judgement was notably absent.

Granted, it is just my opinion. A quick google based search tells me that around 85% of people agree with Steyn and me (that the reaction was over-the-top). The rest either didn't have an opinion one way or another, or felt that sending two 13 year-olds to trial, convicting them of multiple felonies, sending them to jail for up to ten years and having them registered as sex offenders for life was a perfectly reasonable response given the crime (allegedly) committed.

But humor me for a moment and assume that my opinion and judgement is near the mark on this one. For sure the boys' behaviors were wrong. For sure they should have been sent to the principal's office and been punished with detentions, suspensions, and other disciplinary tools available to school authorities. If it was repeated behavior, then perhaps getting legal authorities involved would be appropriate. Everything else was needless and most likely damaging to the community. Pressuring testimony against the boys; handcuffs; five days in juvenile detention; being charged with multiple counts of felony sexual assault; overzealous prosecutors; withholding evidence; a judge that didn't immediate throw the whole case out. This doesn't even count all the money and court resources wasted.

My guess is that the principal was afraid of lawsuits and was happy to wash his hands of the whole affair. The police were just doing their jobs without thinking and ended up interrogating the students in a way that might've been appropriate for adults but was intimidating to young girls who felt pressured as a result. Either the DA transposed the age of the defendants and thought they were 31 instead of 13 or was just blindly handling the case like he would any other without considering the defendants age. The one person I would think might be likely to exercise some judgement would be, well, the judge! However, maybe even the judge's hands were tied given that the DA wanted to pursue the case. Maybe the DA's hands were tied given that the mother of one of the girls wanted to pursue the case.

I don't know, but whatever the explanation, there was a rampant systematic failure in being able to exercise judgement.

If too many people in society are unable to exercise reasonable judgement whether because of lack of critical reasoning skills, prohibition by statute on using that judgement, or fear of reprisals for using judgement, then eventually every possible interaction between people will need to be codified into law and civilization will sink and suffocate in the quicksand of legal detail and court proceedings, weighed down by the costs, both to our wallets and souls, of supporting such a legal regime.

If you think I'm exagerating, think again about the concept of dragging two thirteen year-olds through the court system for six months because a teacher's aide saw them touch a girls clothed bottom.

Government power and legal complexity are almost never rolled back. The best we can hope for is that it doesn't get any worse.

By the way, the case was ultimately dismissed (just a couple of weeks ago):

a judge dismissed charges against the two, ending a six-month case that drew national attention. [...]

The News-Register newspaper of McMinnville reported that a "civil compromise" reached by prosecutors and the defense called for both boys to apologize, to pay each of the four girls $250 and to complete a "boundaries education" program.

Perhaps they should've worked toward a civil compromise before making it a criminal matter? "Civil" is the root of "Civilization". Best to keep it there whenever possible.

Judging conditions

In light of the revisiting economic history post and the ensuing comments about standards and judgements, this post by Mark Perry at his Carpe Diem blog is quite apropos:

“Workers are paid poorly, only 15-25 cents per hour, and are expected to work 60 hours per week, often in unsafe and dangerous conditions. Sweat shops can be found in every major city across the country. There are no worker fringe benefits, no paid holidays, etc., and unions are nonexistent. Child labor is common, especially providing long hours of grueling manual labor on farms, and farms are so dependent on child labor that schools are not even in session during the peak growing and harvest months of the year. There are no environmental, safety or labor standards to speak of, and dirty black clouds of smoke are a common sight. City streets and sidewalks are often covered with rotting animal waste. People burn garbage everywhere without restriction, and the foul smells and thick smoke from burning garbage are a daily nuisance.”

Sounds like China today? Actually the description above is of the United States in 1900, when it could accurately be described as a “developing economy” by today’s standards.

Now, you should probably read the whole post to follow everything he is saying. He does us the great favor of summing up the key takeaway at the end:

Bottom Line: Advanced labor, health, safety, and environmental standards are luxuries that only advanced economies can afford. The U.S. couldn't afford these luxuries in 1900 and China can't afford some of them today. But just like the U.S. eventually created enough wealth to afford a clean environment, end child labor, regulate safety, and improve working conditions, so will China. Just give it time.

Then this comment makes another key point:

They seriously believe America is wealthy with comfortable working conditions because of labor laws, minimum wage laws, and other regulations.

As economies develop and workers get more productive, they will prefer to take some of their compensation in non monetary form: cleaner safer working conditions, limited work hours, a cleaner natural environment, etc. Employers will usually go along with this both for competitive reasons and because as workers get more productive it is worth doing things that enhance the health and happiness of employees. First comes enough of an increase in productivity, then comes the improvement in conditions. That's what it means for a society to become wealthier.

How workers become more productive and raise their standard of living further and further above a subsistence level is the subject of a future post. That's how workers compete with low wage workers : be much more productive or find a new area of comparative advantage.

ps Say I was in the car business and adopted this innovative way of organizing the work in my factory so my workers became much more productive. I could make more cars at a lower unit labor cost allowing me to undersell the competition and pay my workers more. The really fun part is that I could tell everyone how wonderful I was for paying such a generous wage. Really all I would be doing was following good business practices. Ford had a better idea.

Revisiting economic history

In moving beyond the economics and history typically taught in school, I've come to realize how badly we've been propagandized. There is a lot of misleading nonsense they is accepted because we don't know any better.

Capitalism and the Historians provides to first set of examples:

Everyone knows that what everyone knows is usually wrong. Here's one example: everyone knows that unfettered capitalism is evil.

This book describes how this originally got started. F. A. Hayek and other writers knowledgeable of the period explain how the lies told about capitalism in England and America in the 1800's made capitalism sound like the villain it never was. Instead, capitalism was actually a good member of the village - a good villain - one that provided better jobs and food to poor folk that otherwise would have died, as many did in fact die of starvation before capitalism showed up. ... These were respected historians, but ones who had a socialist axe to grind, and who hoped, not without justification, that the majority of folks reading their fictional drivel wouldn't bother to check out the facts of the matter. This book checks out the facts of the matter and sets the facts straight for those who would prefer living in a rational society in freedom rather than living in an irrational one in indentured servitude to coercive bureaucrats.

In these essays concerning the treatment of capitalism by historians, the authors of these papers analyze the history of the 19th Century in England and America to uncover some salient facts:

• When wages went down, it was during a period of deflation - more people were working and their money could buy more sustenance than before.
• Ramshackled, jury-built housing was built by homeless individuals, not the factories. Factories built decent, sturdy houses for their workers.
• The standard of living of families dropped when state laws prohibited children from working in the factories. They went from many wage earners to one.
• More deformed children worked in factories than on the farms because the work was lighter and out of the weather. [Note: deformities were due mainly to swaddling and other types of bandaging of infants that prevented them from learning smooth normal operation of their limbs and storing such learning as automatic doyles before their memory transition age of five years old. See Doyletics: Click Here]
• Windowless housing units were due to the state tax on windows, causing many apartment buildings to actually board up such windows as were already present.
• A large Irish immigration overloaded towns with workers eager to "work for pennies" to replace the children recently outlawed from the factories. [Note: obviously there were no minimum wages back then.]

One suspects that these capitalist-slamming historians were not writing about objective facts, but were merely re-hashing the interpretations of the biased social commentators of the time. These historians merely wrote what gentlemen of London society were saying at the time, "that the people, from starvation, oppression, and over-work, had almost lost the form of humanity." A gentleman made this remark to a Mrs. Cooke Taylor who had just returned from actually inspecting the conditions in Lancashire that the gentleman had referred to. She asked where he had seen such misery, and he replied that he had never seen it, but had been told that it existed. Mrs. Cooke Taylor's personal comments about the conditions in Lancashire were:

[page 21] "Now that I have seen the factory people at their work, in their cottages and in their schools, I am totally at a loss to account for the outcry that has been made against them. They are better clothed, better fed, and better conducted than many other classes of working people."

L. M. Hacker, writing an essay about America, points out that Josephson's The Robber Barons was based on "anecdotes, half-true tales, and uncritically handled court records". On such a tenuous basis the following three attitudes became part of "what everyone knows". It doesn't take much imagination to see that these attitudes are projections onto capitalism of the state's own coercive folly, which continues to the present day, up until now.

[page 80](1) that great fortunes in America were built up by fraud;

(2) that the country's natural resources were looted in the process; and

(3) that the social consequences of private ownership and wealth were unhappy - in creating classes, in subordinating agriculture, in building slums, etc.

Bertrand de Jouvenel makes the point that coercion has the opposite of the intended effect when applied to unwanted human behavior. When one knows the worthlessness of what they desire, their behavior tends to damp away, but when coercive laws are passed, the outlawed behavior begins to grow, as the behavior seems more desirable. The first method creates societal stability, the second, societal instability. One look at our experience with Prohibition is enough to convince anyone of the wisdom of Jouvenel's statements.

[page 95] These phenomena warn us that a result contrary to the intention may be obtained when social devices [i.e., coercion] are used to raise the moral level of human behavior. It is, moreover, well known that any attempt to change man's actions by means other than a change in his spirit is usually futile and anyhow not a moral improvement.

Jouvenel on page 100 makes a cogent point that the vast improvement of worker's conditions that is widely attributed to union pressure and "good" laws would have likely occurred anyway. He says that all the political action has "merely shaken from the tree the fruit it had borne." Unions, in other words, do not produce fruit and laws do not produce fruit, the entire tree produces fruit, from the ends of the roots to the tips of the branches, but to listen to "what everyone knows," one could be led "to the belief that fruit is produced by shaking the tree."

The closing paragraph of the book by W. H. Hutt provides an apt summary of the contents of the essays of this fine book that should be on every capitalist and freedom-lover's bookshelf:

[page 183 to 184] The two main conclusions suggested by this discussion are, first, that there has been a general tendency to exaggerate the "evils" which characterized the factory system before the abandonment of laissez faire and, second, that factory legislation was not essential to the ultimate disappearance of those "evils." Conditions which modern standards would condemn were then common to the community as a whole, and legislation not only brought with it other disadvantages, not readily apparent in the complex changes of the time, but also served to obscure and hamper more natural and desirable remedies.

Ignore the real evidence, adopt a social agenda deal in half truths at best and you too can contribute to a grand cause. A good narrative is enough for the propagandist.


The Myth of the Robber Barons is another corrective work:

Many students are taught that 19th century "robber barons" exploited their customers on the way to making America an economic colossus. Dr. Folsom makes the crucial distinction between business leaders of this period-economic entrepreneurs whose efforts broke monopolies, created wealth, and helped millions out of poverty, and political entrepreneurs who sought political influence and government subsidies to build their business empires. Now in its third printing, Myth of the Robber Barons explodes the misperception that the great competitors of the 19th century made their gains unjustly, while it exposes the damage done by those who depended primarily on state favors.

Coyote Blog goes more in depth:

While it is said that "history is written by the victors", I would observe that despite the fact that socialism and communism have been given a pretty good drubbing over the last 20 years, these statists still seem to be writing history. How else to explain the fact that men who made fortunes through free, voluntary exchange of products can be called "robber barons"; while politicians who expropriate billions by force without permission from the most productive in society are called "progressive". To be sure, capitalists of the 19th century sometimes played by rules very different from ours today, but in most cases those were the rules of the day and most of what they did was entirely legal. Also to be sure, there were a number of men who were fat ticks on society, making money through fraud and manipulation rather than real wealth creation (Daniel Drew comes to mind). However, most of the great industrialists of the 19th century made money by providing customers with a better, cheaper product.

He then gives these two examples:

When Vanderbilt first entered the steamship business, most routes were given as exclusive charters to protected monopoly companies, most run by men with friends in the state government. Vanderbilt took on the constitutionality of these government enforced monopolies and, with the help of Daniel Webster, won their case in the Supreme Court. Within a decade, the horrible experiment with government monopoly charters was mostly over, much to the benefit of everyone. While private monopolies have always proved themselves to be unstable and last only as long as the company provides top value to customers, publicly enforced monopolies can survive for years, despite any amount of corruption and incompetence. Vanderbilt, by helping to kill these publicly enforced monopolies, did more than perhaps any other man in US history to help defeat entrenched monopolies, yet today most would call him a monopolist.

Vanderbilt was successful both domestically and in beating Collins who had a government subsidy in the Trans-Atlantic shipping business.

My other featured industrialist here on hug-a-robber-baron day here at Coyote Blog is John D. Rockefeller. At one point of time, Rockefeller controlled 90% of the refining capacity in the country via his Standard Oil trust. He was and is often excoriated for his accumulation of wealth and market share in the oil business, but critics are hard-pressed to point to specifics of where his consumers were hurt. Here are the facts, via Reason

Standard Oil began in 1870, when kerosene cost 30 cents a gallon. By 1897, Rockefeller's scientists and managers had driven the price to under 6 cents per gallon, and many of his less-efficient competitors were out of business--including companies whose inferior grades of kerosene were prone to explosion and whose dangerous wares had depressed the demand for the product. Standard Oil did the same for petroleum: In a single decade, from 1880 to 1890, Rockefeller's consolidations helped drive petroleum prices down 61 percent while increasing output 393 percent.

By the way, Greenpeace should have a picture of John D. Rockefeller on the wall of every office. Rockefeller, by driving down the cost of Kerosene as an illuminant, did more than any other person in the history to save the whales. By making Kerosene cheap, people were willing to give up whale oil, dealing a mortal blow to the whaling industry (perhaps just in time for the Sperm Whale).

So Rockefeller grew because he had the lowest cost position in the industry, and was able to offer the lowest prices, and the country was hurt, how? Sure, he drove competitors out of business at times through harsh tactics, but most of these folks were big boys who knew the rules and engaged in most of the same practices. In fact, Rockefeller seldom ran competitors entirely out of business but rather put pressured on them until they sold out, usually on very fair terms.

As Burt Folsom himself puts it:

Only when Rockefeller sold cheap kerosene to tens of millions of Americans did he become the nation's first billionaire. "We must ever remember," Rockefeller told his partner, "we are refining oil for the poor man and he must have it cheap and good." Ironically, the price of Rockefeller's kerosene dropped to eight cents a gallon in 1885 from 26 cents in 1870 -- all the while he was viciously pilloried as a monopolist by the press, Congress and his competitors.

He elaborates earlier in the same piece:

In the world of wealth, the big news this summer is that Carlos Slim, 67, of Mexico may have surpassed Bill Gates as the world's richest person. Inevitably, writers compare Mr. Slim, who built his wealth on a telecommunications monopoly, to America's so-called "robber barons" -- including men such as John D. Rockefeller, James J. Hill and Henry Ford.

This is bad history. America's most famous rugged entrepreneurs, especially men such as Rockefeller and Ford, the wealthiest men of their eras, reached mass markets by producing quality products -- kerosene and cars -- at low prices. More recently, Sam Walton did the same thing in retailing. Mr. Slim, by contrast, is better characterized as a "political entrepreneur," who relied more on manipulating Mexico's bureaucracy than on satisfying consumers in a competitive arena.

Ford, Walton and Mr. Gates also had to sell widely to masses of Americans at competitive rates before they rose to the top. Putting a car in every garage, not just the garages of the rich, was Ford's working motto. In serving the most customers, he reaped the largest reward. So did Bill Gates with computers. When America did deviate from free markets -- for example, by granting government subsidies to the Union Pacific and Central Pacific Railroads -- the economy suffered instabilities. But it recovered from the experience and learned a lesson. James J. Hill built the Great Northern Railroad with no federal subsidy -- and outperformed all other transcontinentals.

Many of the great fortunes were made by serving the great masses of the common man with better goods and services at more affordable prices. That's my idea of social justice!

A more accurate history, step by step.

also:

This is audio of Professor Folsom or a briefer version audio

Update: via Dissecting Leftism

Victorian capitalism unfairly maligned

The plight of child labourers in Victorian Britain is not usually considered to have been a happy one. Writers such as Charles Dickens painted a grim picture of the hardships suffered by young people in the mills, factories and workhouses of the Industrial Revolution. But an official report into the treatment of working children in the 1840s, made available online yesterday for the first time, suggests the situation was not so bad after all.

The frank accounts emerged in interviews with dozens of youngsters conducted for the Children's Employment Commission. The commission was set up by Lord Ashley in 1840 to support his campaign for reducing the working hours of women and children.

Surprisingly, a number of the children interviewed did not complain about their lot -- even though they were questioned away from their workplace and the scrutinising eyes of their employers.

Sub-commissioner Frederick Roper noted in his 1841 investigation of pre-independence Dublin's pin-making establishments: "Notwithstanding their evident poverty ... there is in their countenances an appearance of good health and much cheerfulness."

A report on workers at a factory in Belfast found a 14-year-old boy who earned four shillings a week "would rather be doing something better ... but does not dislike his current employment". The report concluded: "I find all in this factory able to read, and nearly all to write. They are orderly, appear to be well-behaved, and to be very contented."

Source

AGW Model Sanity Check

I'm particularly annoyed that the climate models being used to support global warming estimates aren't being made available for general consumption. There's many good "Sanity Check" questions that I'd like answered. Here’s a good question posed by Kurt Cogswell, Head of the Department of Mathematics and Statistics at South Dakota State University:

[Have] any of the models Gore tells us about ever predicted that the world will cool dramatically at some point? That has been the pattern for more than a million years whenever the earth has gotten anywhere near as hot as it is now. The magnitude of the new CO2 source, human activity, is not of sufficient size to override this repeatedly observed cooling phenomenon. If that is never predicted by these models then they are incomplete in a serious way and there usefulness as long-term predictors has to be questioned. That’s not a political issue, that’s a data-driven mathematical modeling issue.

Cogswell's views are further elaborated in a speech by Freeman Dyson:

The first of my heresies says that all the fluff about global warming is grossly exaggerated. Here I am opposing the holy brotherhood of twilight model experts and the crowd of diluted citizens that believe the numbers predicted by their models. Of course they say I have no degree in meteorology and I am therefore not qualified to speak.

But I have studied their climate models and know what they can do. The models solve the equations of fluid dynamics and do a very good job of describing the fluid motions of the atmosphere and the oceans. They do a very poor job of describing the clouds, the dust, the chemistry and the biology of fields, farms and forests. They do not begin to describe the real world that we live in.

The real world is muddy and messy and full of things that we do not yet understand. It is much easier for a scientist to sit in an air-conditioned building and run computer models than to put on winter clothes and measure what is really happening outside in the swamps and the clouds. That's why the climate model experts end up believing their own models.

There's no doubt that parts of the world are getting warmer, but the warming is not global. The warming happens in places and times where it is cold, in the arctic more than the tropics, in the winter more than the summer, at night more than the daytime.

I'm not saying the warming doesn't cause problems, obviously it does. Obviously we should be trying to understand it. I'm saying that the problems are being grossly exaggerated. They take away money and attention from other problems that are much more urgent and important. Poverty, infectious diseases, public education and public health. Not to mention the preservation of living creatures on land and in the oceans.

The first of my heresies says that all the fluff about global warming is grossly exaggerated. Here I am opposing the holy brotherhood of twilight model experts and the crowd of diluted citizens that believe the numbers predicted by their models. Of course they say I have no degree in meteorology and I am therefore not qualified to speak.

But I have studied their climate models and know what they can do. The models solve the equations of fluid dynamics and do a very good job of describing the fluid motions of the atmosphere and the oceans. They do a very poor job of describing the clouds, the dust, the chemistry and the biology of fields, farms and forests. They do not begin to describe the real world that we live in.

The real world is muddy and messy and full of things that we do not yet understand. It is much easier for a scientist to sit in an air-conditioned building and run computer models than to put on winter clothes and measure what is really happening outside in the swamps and the clouds. That's why the climate model experts end up believing their own models.

There's no doubt that parts of the world are getting warmer, but the warming is not global. The warming happens in places and times where it is cold, in the arctic more than the tropics, in the winter more than the summer, at night more than the daytime.

I'm not saying the warming doesn't cause problems, obviously it does. Obviously we should be trying to understand it. I'm saying that the problems are being grossly exaggerated. They take away money and attention from other problems that are much more urgent and important. Poverty, infectious diseases, public education and public health. Not to mention the preservation of living creatures on land and in the oceans.

That the models are not sufficiently detailed is an important limitation. Personally, my main issue with the whole modeling thing is that the models are probably still very buggy. Both of these problems can be reduced by releasing the models to the public. If the models are not released, they should be ignored.