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Wednesday, May 13, 2015

Takin' Care of Business

Would you tell an accountant how to do their job if you had no accounting experience and limited knowledge of accounting? Would you second guess how a guitarist played a riff if you don't play the guitar, even if you know a little bit about music? Would you criticize a quarterback on how they played a game, especially if you've never played football?

Of course, we all do things like that, especially the last one which birthed the phrase "Monday Morning Quarterback." So the real question is whether the accountant or the guitarist or the quarterback would take you even vaguely seriously. The answer is: very likely NO. Partly because after the fact second guessing is very much different than making decisions in real-time under great uncertainty. But mostly because without the experience of setting up charts of accounts, fingering guitar riffs, or calling plays, realistically, your input isn't terribly useful. On the other hand, advice from another accountant, guitarist, or quarterback is much more likely to be of value since they've had similar experience and a great deal of knowledge.

Now I'd like to switch from accounting, guitar playing, and football and consider business. Of all of the things I've ever done, from recording rock music to robotics, starting and running a business is by far the hardest. Resources have to be constantly orchestrated and many of those resources need to be kept "happy" in order that they do the best job possible. Market trends have to be guessed, regulators complied with or dodged, suppliers (who have the same issues) have to be convinced to supply at an acceptable time and price, customers need to be found and product delivered, funding needs to be found, and on, and on, and on.

All of these ons and ons and ons have to be balanced in a web of hard to fathom tradeoffs. For example, perhaps there's yet another of the many cash crunches we've faced. Do I lay off a couple of employees now, hurting them, and if so which employees, or do I hold on and keep them because there's a reasonable possibility that one of two contracts will begin generating revenue in time, but if the revenue doesn't start in a timely fashion I won't be able to pay anybody next month and the whole company will unravel in an unpredictable way and possibly everybody will be out of a job? Every day, I have a hundred questions with that level of complexity.

So when non-business folk do the Monday Morning Quarterback thing regarding some business catastrophe, I mostly just laugh. Recently, I made the following comment along those lines:
"I rarely take criticism to entrepreneurs seriously except from other entrepreneurs because I'm convinced that those who haven't started and run businesses have no idea how hard it is since I certainly didn't before I did it."
That's not my friendliest comment ever and I apologize for the dismissive tone. I made that comment during a discussion about the 2013 Savar building collapse in which 1,129 people died and thousands more were injured. There were some comments that I found not credible and/or not relevant that went something like: "it pays for itself to implement basic safety standards."

Maybe. But the question is who has the incentive to take this safety action. Let's start in the middle of story. Let's say I'm one of the factory owners/managers. I don't own the building and I'm simply leasing space. The building is evacuated because there are large cracks in the building. But the next day:
It is also reported that Kabir Hossain Sardar, the upazila nirbahi officer visited the site, met with Sohel Rana, and declared the building safe. Sohel Rana said to the media that the building was safe and workers should return to work the next day. One manager of the factories in the Rana Plaza reported that Sohel Rana told them that the building was safe.
Assume I'm the manager mentioned. I see these huge cracks and I might well be skeptical that the building is safe even though I'm told that it is. I can make one of two choices:
  1. Not have my employees go in the factory and work. In this case, I'm nearly certainly bankrupt, which I'll bet is pretty damn unpleasant in Bangladesh. Not only is my family ruined and perhaps destined to be homeless on the streets, but my dozens or hundreds of employees aren't going to get paid which will seriously damage them as well. If the building doesn't collapse, I've badly hurt a lot of people, including my family, for no good reason in hindsight. If the building does collapse, I'm still ruined, but at least I've saved some people.
  2. Have my employees go in the factory and work. Hopefully, the building won't collapse, or if it does, perhaps there will be enough warning to get out.
The trade off is certain damage to a lot of people versus possibly catastrophic damage to a lot of people. In my experience, that would be an impossibly difficult choice to make in real-time. Now that we know the building collapsed, it's easier to make the choice as a Monday Morning Quarterback.

One thing that I've found is that many non-business owners think that all entrepreneurs and business owners are rich and have essentially infinite resources at their command. Nothing could be further from the truth:
...small business owners ... are receiving an average salary of $68,000 annually, down from $72,000 a year ago. In addition, nearly 15 percent of small business owners need to work a second job while running their business in order to make ends meet.
I'm in that 15 percent. Not all entrepreneurs are Bill Gates or Steve Jobs and even they were probably short on cash in the beginning. If I had to fix the building I'm in, I'd throw in the towel and walk away. There's no possible way I could afford to fix it.

Working backwards, where could've decisions been made to prevent the catastrophe. Clearly Kabir Hossain Sardar could've declined to declare the building safe. My bet is that some sort of corrupt deal between Sardar and Rana was made. However, let's assume not for a moment. Even without bribes Sardar would've been under immense pressure to say the building was "safe." Not only from Rana (possibly a mob thug), but also from the factory owners/managers and even the employees.  No factory equals no work equals no pay equals serious problem.

Working back from there, I could've not started the factory. But my opinion is that discouraging business in Bangladesh is wildly counterproductive. No businesses, no jobs, no work, no pay, no food.

Working back from there, Rana could've not built the building and/or not allowed the modifications to the building and/or made the building safer. My guess is that Rana simply wouldn't have bothered to build the building if he had to incur the extra cost of making it safer. In other words, the ROI wouldn't have penciled out. It's easy to Monday Morning Quarterback it and say that since the building collapsed, he would've been better off making it a safer building. Yes, but he might've been even better off not building it in the first place and investing elsewhere if it was going to be more expensive. Then, no building, no factories, no jobs, no work, no pay, no food.

Another choice is that the government could've done a better job enforcing building codes. Then Rana wouldn't have built the building. Then, no building, no factories, no jobs, no work, no pay, no food.

Another choice is that the government could've taxed the people more and built the buildings themselves using appropriate building codes. With $1,100 per year GDP, higher taxes pretty much means someone's not eating. And if you think the government is somehow going to tax people like Rana instead of the poor, think about how corrupt Bangladesh is.

Nobody had the incentive to prevent the catastrophe. Note that even the government wasn't going to bother doing anything about the collapse until Americans complained.

I want to end with a snippet about George McGovern.

Senator George McGovern was the Democrat's presidential nominee in 1972 and was possibly the most left wing candidate ever to run for president as part of a major party. As a Senator, he was involved in a great deal of legislation that directly affected business.

Later, he became a businessman (my guess is he thought it would be really easy) and reminisced about the experience:
In 1988, I invested most of the earnings from this lecture circuit acquiring the leasehold on Connecticut’s Stratford Inn. Hotels, inns and restaurants have always held a special fascination for me. The Stratford Inn promised the realization of a longtime dream to own a combination hotel, restaurant and public conference facility — complete with an experienced manager and staff.  
In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn’s 43-year leasehold. I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender. [emphasis added]
Everybody thinks business is easy, but most who try it, find it's not.

And now, one of my favorite songs:

a

143 comments:

Clovis e Adri said...

It's come to this: 'We entrepreneurs are so special and important, we are above the Law'.


If we are going through a honest exercise of trying someone's else shoes, I'll wait for your version on the father who lost a daughter or son for that owner's decision (alas, we have 1129 to choose from here). I guess that, as I am at least a father, I may be allowed an opinion on that one.

Bret said...

Which law?

Clovis e Adri said...

It looks like, every one of them, including gravity.

Bret said...

They did indeed violate the laws of gravity. Or at least they tried (probably without knowing it).

Can you be a little more specific on other laws, if any, that were violated? And who specifically violated them?

Clovis e Adri said...

Bret,

One relevant part about Laws is here:

----
I can make one of two choices:
Not have my employees go in the factory and work. In this case, I'm nearly certainly bankrupt [... or] Have my employees go in the factory and work. The trade off is certain damage to a lot of people versus possibly catastrophic damage to a lot of people. In my experience, that would be an impossibly difficult choice to make in real-time.
----
Imagine that scenario in America.

You wouldn't have those choices, for the gross negligence involved in the second one would be criminal. So you'll only consider that one if you feel yourself above the law. (I want to add that your "Have my employees go in the factory" line could be more accurate as "Threat my employees to have them going to the factory", as happened then.)

Of course, that's exactly what pretty much every one in Bangladesh's Elite is: above the law. So they will freely consider they have the options above to choose from.

As it turns out, even in Bangladesh you can end up caught by the Law after you kill more than one thousand, at least if you are not that high in their power hierarchy. So in this case a few of them are on trial.

I can't really see why the choices above are anything close to "impossible difficult to make in real-time", but maybe that's because I am not a business owner.

After all, were I such business owner in that time and place, instead of a "Monday Morning Quarterback", I don't think the big cracks in the wall, the banks and other businesses closing all around, would be that much of a warning, would they? Life is tough and we have deadlines! So let us all work really hard, folks...

Except, none of the onwers and managers were in the building when it collapsed, were they? To paraphrase AOG, of such sacrifices those brave entrepreneurs are made.

Bret said...

Clovis wrote: "...for the gross negligence involved in the second one would be criminal."

Are you sure? Peter? If think if a relevant government official such as Sardar "declared the building safe" to the owner who then told me that it was safe and all of that was true, I might still be sued (but in America pretty much anybody can sue anyone for anything) but I don't think I'd have criminal liability.

Clovis wrote: "...even in Bangladesh you can end up caught by the Law after you kill more than one thousand..."

It looks to me that's only because foreigners (such as Americans) complained. Bangladesh is clearly a pretty brutal place. But that's kinda the whole point - until wealth is created, life is brutal.

Clovis wrote: "Except, none of the onwers and managers were in the building when it collapsed, were they?"

I don't know, weren't they? I don't see any evidence one way or the other. Often administrative offices are in a different part of the building and sometimes even in a different building, so maybe, but what I don't see is evidence that they ordered the workers in and then didn't themselves go in because they were afraid of collapse. Perhaps some media account does state something like that, but I haven't seen it, and even if I did, I'd probably be skeptical without pretty strong proof that it was so (seeing as this is a sensationalized story).

Clovis wrote: 'I can't really see why the choices above are anything close to "impossible difficult to make in real-time" ...'

We may be interpreting the story a bit differently. My interpretation is that the building was iffy, but by no means certain or necessarily even particularly likely that it was going to collapse without warning. Given my interpretation, then it is indeed Monday Morning Managing to decide that it was obvious not to enter the building.

You seem to be interpreting the story to be that collapse was imminent and certain in which case of course there would be no hard decision to make.

Clovis e Adri said...

Bret,

---
Are you sure?
---
Not sure, but confident. Not only because some of them are in jail/trial. The non-authorized extension of the building and its non-authorized industrial use are, by themselves, sufficient to configure so IMHO.

My experience following similar cases in Brazil also follow that direction, to the extent that is of any help given differences in Law codes.

---
Perhaps some media account does state something like that, but I haven't seen it, and even if I did, I'd probably be skeptical without pretty strong proof that it was so
---
Which makes all this discussion pointless, since none of us will be able to independently confirm any of this.

---
We may be interpreting the story a bit differently. My interpretation is that the building was iffy [...]
---
It looks to me that "Sardar "declared the building safe" to the owner" in a very informal way. Now, if you are a business owner in that situation - watching the cracks and everyone else avoiding the building - and you still believe the iffy word of a corrupt bureaucrat and a corrupt building owner with not even a formal letter and assessment, and having heard differently from a technician who supposedly knew better... well, there again, it doesn't look like so hard a decision at all.

Take notice that to interpret deceiving information *is part of doing business successfully* in places like Bangladesh (maybe the main part of it).

---
But that's kinda the whole point - until wealth is created, life is brutal.
---
That's another hypothesis we do not share.

Your excessive attention to capital and GDP misses many aspects that are important in making a society wealthy and sucessfull in the long run.

The few gains made by those sweatshops may well be outweighted by the losses induced by the brutality.

Excluding slaves, the US was a much better society than Bangladesh, even when it was poorer back in those times than Bangladesh is now. The same is true for many other countries now wealthy.

I keep amazed on how the same people here who fiercely defend the importance of freedom to growth and long term wealthy, can so promptly contradict themselves the moment they look somewhere else.

Annoying Old Guy said...

Clovis;

The few gains made by those sweatshops may well be outweighted by the losses induced by the brutality.

That seems a particularly dubious assertion. If, as you seem to claim, cultural factors are at work, why presume they apply only to factory owners and not to everyone else? That is, why presume the rest of Bangladesh is less brutal? In which case there's not much loss because it's not much different.

Bret said...

Clovis wrote: "...everyone else avoiding the building..."

Given that several thousand people entered the building, it looks to me like only a small fraction of those who utilized the building stayed away.

Clovis wrote: "...it doesn't look like so hard a decision at all."

Apparently it was hard decision for several thousand people. Or are you thinking that with guaranteed imminent collapse and death staring them in the face, they still chose to enter the building and work; in other words, that it was better to die than to have a month's wages withheld?

Clovis wrote: "The few gains made by those sweatshops may well be outweighted by the losses induced by the brutality."

Because Bangladesh was a kinder, gentler place prior to sweatshops?

Clovis wrote: "...the US was a much better society than Bangladesh..."

I agree.

Clovis wrote: "...the same people here who fiercely defend the importance of freedom to growth and long term wealthy, can so promptly contradict themselves the moment they look somewhere else."

Say what? I'm totally not following that statement.

Clovis e Adri said...

AOG,

---
That is, why presume the rest of Bangladesh is less brutal?
---
Maybe because in the other sectors of economy people die much less?


Bret,

---
Say what? I'm totally not following that statement.
---
Oversimplifying: does wealth leads to virtue (and freedom) or the other way around?

Bret said...

Clovis asks: "Oversimplifying: does wealth leads to virtue (and freedom) or the other way around?"

I agree with the oversimplifying part. :-)

"Virtue" and "freedom" are such large, yet fuzzy, concepts, encompassing an awful lot making the feedbacks tough to discern.

My observations are that wealth itself has a less positive effect on virtue and freedom (however defined) than growth. For example, the (dead) economist Mancur Olson wrote about how wealth eventually tends to lead to sclerotic bureaucracies and government and decline in "The Rise and Decline of Nations," and his writings (including in that book), with the work of others, formed the basis for an entire branch of economics called Public Choice Theory.

However, prior to the "decline" part of "rise and decline," I think that economic growth does tend to lead to some sorts of virtue and some sorts of freedoms that in turn feedback and lead to more growth. But I would agree with you that jump starting that virtuous feedback loop is more likely to happen in cultures that have certain values. In other words, certain freedoms and virtues are more likely to lead to economic growth than economic growth is likely to lead to freedom and virtue.

Another concept I find fascinating along these lines is D. McCloskey's "Bourgeoise Dignity" which is that the explosion in innovation and wealth in the west starting in the 18th century was due to one very small shift - the bourgeois going from being detested to dignified. This concept is well defended in the book but I never recommend the book because the author continuously uses 10 words where 1 is more than adequate which drives me absolutely crazy.

Anyway, I find the concept plausible enough that I think the demonization of Bangladeshi entrepreneurs is overall a mistake. Again, I understand that your narrative of the owners/managers sending their workers to their nearly certain deaths and the workers meekly being willing to go to their deaths justifies that demonization. I'm just not interpreting it the way you are and, as a result, I think that demonization is counterproductive.

Annoying Old Guy said...

Maybe because in the other sectors of economy people die much less?

Do they? Do you have any data on that? I would think just the regular flooding would make the factory jobs safer statistically.

Clovis e Adri said...

AOG,

I was not aware that "flooding" was a sector of economy.


Bret,

---
Again, I understand that your narrative of the owners/managers sending their workers to their nearly certain deaths and the workers meekly being willing to go to their deaths justifies that demonization. I'm just not interpreting it the way you are and, as a result, I think that demonization is counterproductive.
---
IOW, you don't want people to call the devil by its name?

The 18th century dignification of the bourgeoise came from the examples they had set.

We better hope the bourgeoise to be copied and dignified in Bangladeshi is a better one than the one you want to protect.

Annoying Old Guy said...

Clovis;

I didn't know building collapsing was a sector of the economy either.

Harry Eagar said...

Boo-freakin'-hoo. Nobody forces you to be an entrepreneur. If you cannot provide non-fatal accommodations and make a profit (and I admit that in the rightwing's preferred 'fireproof hotel' environment, you probably cannot stay out.

This is not really a difficult decision. Going back in history to the early mills,which often collapsed, then the entrepreneur really did have a difficult choice:

wrought iron beams and cast iron columns or vice versa? But eventually, after several collapses, the right information was elucidated.

But in the Bangladeshi case, you must ask the right question, and I fully agree with rightwing economists that it is the balance between risk/reward. And if you are accepting all the rewards, then morally only you can take risks. Asking people to accept risks without additional reward is tyranny.

This isn't that hard. You do not have to have run a business to figure it out. It is a moral question, and you don't necessarily learn morality by being in business.

Harry Eagar said...

'I would think just the regular flooding would make the factory jobs safer statistically.'

Not being of the Batiat school of murder your neighbor for selfish reasos, the gummint 'plundered' the fisc to build islands of refuge so that people no longer drown by the millions in Bay of Bengal cyclones. This happened long before Wal-Mart opened its arms to deathtrap operators.

It is a fair guess that Wal-Mart would not have opened there if the gummint had not plundered private wealth sufficiently to enable secure supply chains.

If the idea of this post is to make me believe that business owner are capable of making tough decisions but that, say, gummint planners are not, it isn't working so far.

Harry Eagar said...

You think businessmen are understood too little. I think they are understood very well.

http://restatingtheobviousmaui.blogspot.com/2015/05/dont-think-in-oklahoma-it-disturbs-ceos.html

Annoying Old Guy said...

"If you cannot provide non-fatal accommodations"

No such thing. There is always risk. This false dichotomy is at the root of much of the bad analysis of tranzi thought.

Hey Skipper said...

[OP:] Another choice is that the government could've done a better job enforcing building codes. Then Rana wouldn't have built the building. Then, no building, no factories, no jobs, no work, no pay, no food.

You assume a huge fact that not only isn't in evidence, it isn't even particularly likely. Say, for the moment, that the government did impartially enforce building codes. Then Rana's choice is to either build to code, or do something else that doesn't involve buildings. With the latter choice, no building, no job, no work, no pay, no food for him.

That's why your consequent not only doesn't follow, it can't, in general, follow. Otherwise, you must be asserting that if the government had impartially enforced building codes from the git go, everyone would be standing around in the open, staring at each other.

Which points out the proper role for government in the economy. To act as an impartial third party. With respect to building codes, the government doesn't care who the tenants are, what processes the builder uses, how much the owner pays for it, etc. The govt's role is to ensure that all structures, and modifications, at least meet uniformly applied standards. That eliminates the scourge of libertarianism — free riding.

Of course, underneath this simple assertion lies complication: what should the code be? Obviously, Bangladesh can't afford to impose the elaborate — and effective — building codes the US has. Doing so would impose huge opportunity costs. But imposing structural requirements to support live and dead weights, fire detection and escape, proper ventilation, etc is pretty basic stuff. Put another way, how much more expensive would building to code have to be before building wouldn't happen in the first place?

But underlying that complication is the fundamental requirement. Government impartially enforcing building codes in the first place.

It didn't. Nobody forces you to be a building inspector. If you cannot provide impartial enforcement of building codes, you probably need to be doing something else.

I think there are probably a lot of parallels here with the Korean ferry disaster.

[Harry:] If the idea of this post is to make me believe that business owner are capable of making tough decisions but that, say, gummint planners are not, it isn't working so far.

Harry, why is it that you never indict government for its manifest failures?

(And I could have sworn the point of this post is that government has no idea what the decisions are in the first place.)



P.S. Between shifting continents and being subjected to internet service noteworthy by its almost complete absence, I've been unavoidably out of the fight. I'm hoping that clears up in another couple weeks.

erp said...

Missing you Skip.

Harry Eagar said...

'There is always risk'

Not really. I have been employed for 52 years and so far none of my co-workers has been killed on the job.

But you are right -- under the 'fireproof hotel' model of business, there is much greater risk and, for the lucky, greater profits. For the unlucky bankruptcy and for their workers, maybe death, but hey, it's all about risk/reward.

Nobody said the risks and rewards apply to the same person, did they?

Which is among the many reasons I doubt the skill of American managers. When they win, it's just luck.

Hey Skipper said...

[AOG:] There is always risk

[Harry:] Not really. I have been employed for 52 years and so far none of my co-workers has been killed on the job.


Harry, you have proved beyond a smidgeon of doubt one thing for sure: you do not understand risk. And, in the space of the same sentence, also failed to apprehend the unbridgeable gap between anecdote and data.

(And, to be fair, in the space of two sentences, I have perfectly repeated myself.)

I have been employed for 37 years. So far, 16 of my coworkers — and that is a very tight definition of co-worker, by the way — have been killed on the job.

And from that, I can conclude … ?

Which is among the many reasons I doubt the skill of American managers. When they win, it's just luck.

As a journalist, I doubt you have very much experience of managers. Or at least none that shows.

My experience is very extensive. Yes, luck plays its part. But attributing winning to just that is a sure sign of someone who badly needs to come out of their own echo chamber.

Nobody said the risks and rewards apply to the same person, did they?

It's a shame when that isn't the case. But I suspect Rana is feeling some risk right about now. As have those involved with the Korean ferry disaster.

Unfortunately, as is your blinkered wont, you completely neglect to mention that in government, risk and rewards almost never fall on the same person.

How many people got fired after the VA fiasco? The IRS practically destroyed a guy's business recently, then tried to cover it up. How many fired? In jail? How many "educators" get fired for the travesty we call a school system? And so on, and so forth. Ad infinitum.

Harry Eagar said...

Guy accused me of cherry-picking. No, that would be Skipper.

Even in Skipper's trade, which is inherently more chancy than most, it has been possible to reduce the risk of death on the job from very high to rather low.

As a tot, I used to follow the exploits pf America's test pilots. I know their names, and their ends, which were almost always bloody. Capt. Iven Kincheloe, for example, ejected sideways about 100 feet off the runway.

But how often do test pilots buy the farm nowadays? It happens. Happens to Airbus just last week. But even test piloting can be made safe.

If that can be done, then semastresses should have a claim to risk-free workplaces.

I'll note, in all this, that although Guy disliked my definition of capitalism, Bret's posts and all the supporting comments prove my point nicely. What is superior? Capital.

Harry Eagar said...

And what to my wonderin' eyes did appear but a voice from the innovative camp:

http://www.bloomberg.com/news/articles/2015-05-17/gates-richest-man-says-40-000-goes-further-these-days

Annoying Old Guy said...

how often do test pilots buy the farm nowadays? It happens. Happens to Airbus just last week. But even test piloting can be made safe

Safe, while deaths on the job still happen. Yeah, that makes sense...

Harry Eagar said...

Rarely.

There is no excuse -- unless you are a capitalist -- for anyone to die while seamstressing nowadays.

You talk a lot about innovation but,like networking, you don't recognize it when you see it.

Barry Meislin said...

"...could've done a better job enforcing building codes...."

But seriously, now: why enforce building codes when everything (as in, everything) is the will of God?

Hey Skipper said...

Harry, you generalized your particular experience to contradict AOG'S assertion that "there's always risk".

I know I'm repeating myself, but you proved you do not understand the concept of risk. And then you compound the crime by loudly proclaiming you don't understand the term "cherry picking", either.

Starting with the latter. I specifically implied that there is no more reason to induce from my specific experience a general rule than their is for yours: none.

Yes, the risk has gone way down. But it is not zero, as FDX 80 proved. Your assertion that no seamstress should die on the job is equal parts bold and bollocks.

You assert a negative, while leaving yourself a hostage of fortune. Seamstresses never die of heart attacks, or blown aneurysms?

Or, going a bit further afield, how much are you willing to spend to prevent the death of a seamstress in Pakistan instead of the death of a Pakistani farmer? How much are you willing to spend to prevent work place deaths in general instead of providing clean water?

I know that as a self avowed member of the reality based community, you believe there is such a thing as "free", but for the rest of us poor deluded slobs, opportunity cost is tantamount to a force of nature.

Clovis e Adri said...

Barry,

Give me a hand here with your comment. Are you mocking them for being a Muslim country?

Clovis e Adri said...

Skipper,

---
You assume a huge fact that not only isn't in evidence, it isn't even particularly likely. Say, for the moment, that the government did impartially enforce building codes. Then Rana's choice is to either build to code, or do something else that doesn't involve buildings. With the latter choice, no building, no job, no work, no pay, no food for him.
---
Good point. I was going to give Bret a free pass on that one, but since you mentioned it...

Had the govt enforced building codes, what would most probably happen is that Rana would build a *smaller* building. A safer one too. And business would still happen there.

There is more I think Bret does not get about economy and society in the developing world. Part of the reason I do not give the owners the complete benefit of doubt, as Bret does, is that I believe to detect guile where he likely won't. It is the same reason "gringos" often look so naive to local populations when first travelling through LA countries, for example.

Annoying Old Guy said...

I believe to detect guile where he likely won't

I believe exactly the same thing about you, that you don't detect it in government officials. I think people are people and you can't make them better by sprinkling magic pixie, I mean "government authority" dust on them. A culture where business men regularly cheat and abuse their workers is a culture where government officials will do exactly the same, except with guns.

Clovis e Adri said...

AOG,

I so much take it for granted in govt officials that I didn't see the need to mention it. How did you conclude the contrary?

Annoying Old Guy said...

Because your recommended policies have that as an implicit presumption.

Harry Eagar said...

'How much are you willing to spend to prevent work place deaths in general instead of providing clean water?'

Why instead of? You make a valid point in theory but not in practice; and doubly not in respect of capitalism.

It is possible that the money 'plunderd' to build isles of refuge would have saved even more live if it had been directed at clean water, or vaccinations or education of girls. Some thing are hard to know.

But for sure, if private investment had been left, in its wisdom about allocating capital, not one of those things would have happened.

Trying to look like an owl and saying 'there is no such thing as no risk' is the kind of thinking that 1) proves you don't know how to balance interests, and 2) demonstrates why privatization is usually a bad idea.

We can note, for the record, that you work for a company that understands networks and balancing of interests so poorly that it wanted to shut down universal postal delivery in thename of private profit.

Clovis e Adri said...

I am curious, AOG, what are my recommended policies?

AFAIK, I have advocated here for business owners to be accountable under the law even in the poorest places. Is that what you mean by a presumption favoring corrupt bureaucrats?

Annoying Old Guy said...

Clovis;

I was speaking much more generally, about your entire set of comments here. E.g., government run health care.

In this particular case, all I can for your policy is you don't like how business is done in Bangladesh (e.g. "Take notice that to interpret deceiving information *is part of doing business successfully* in places like Bangladesh (maybe the main part of it).") and therefore want less of it.

Clovis e Adri said...

AOG,

I want less deceit, not less business.

All this cutting corners, the guile directed to take advantage of others at their expense, it is the ultimate free riding problem: if everyone tries to ride free, the train barely moves for no one is left to make it so. I live in a country still plagued by that, while you don't, so who is being really the Monday morning quarterback here?

Annoying Old Guy said...

This is where I, as an engineer, seem to differ from you. I don't ask "what do you want?", I ask "what will be the effect of your actions?". My reading of the historical record of such things is that protests about cheating businessmen will lead to less business, not less cheating. I would ask you, presuming that assessment is accurate, whether such results matter in choosing your actions?

Clovis e Adri said...

AOG,

---
I would ask you, presuming that assessment is accurate, whether such results matter in choosing your actions?
---
We don't share your presumption, making your question invalid.

If you want to enlarge your reading of the "historical record of such things", I suppose you can try to understand how 19th century Sweden overcame what was a reasonably high level of corruption. Maybe you can start here.

Hint: to publicly expose the ones cheating, is part of the medicine. Your tax declaration is public there, to take one simple example.

Clovis e Adri said...

BTW, a relevant excerpt of my previous link also touching the question I've made to Bret before:

"As shown by for instance Hilton Root’s (1996) studies of the successful anti-corruption policies launched in Hong Kong and Singapore, the quality of political and legal institutions is not culturally determined. As is well-known, these societies have experienced remarkable economic growth, and Root convincingly shows that the prerequisite for that growth was the successful fight against corruption that began in the 1970s."

Harry Eagar said...

'protests about cheating businessmen will lead to less business, not less cheating.'

Really? The creation of the SEC led to less business in seecurities?

I gotta admit, the volume of cheating is up, but that's the innovation we are so enamored of. But I do think that practices on Wall Street are less corrupt than they were when it was a free market.

Or the ICC. Do you think railroads are an example of more cheating/less business sinc regulation?

I am baffled. I cannot begin to guess what business you think contracted after rgulation.

Annoying Old Guy said...

Clovis;

We don't share your presumption, making your question invalid

No. It's hard to imagine having to explain the concept of gedanken experiment to a physicist.

Mr. Eagar;

The creation of the SEC led to less business in seecurities

No.

you think contracted after rgulation

You're making stuff up again. You're also committing the category error I have mentioned before, viewing "regulation" as homogeneous.

If you want an actual example, look at recent efforts in minimum wage regulation.

Harry Eagar said...

Back atcha. I didn't realize minimum-wage legislation was anti-cheating. I agree not all regulations are the same. That's why I cited examples of anti-cheating regulations.

Glad to see a slight puff of reality break through regarding the volume of securities trade. It's a rare and therefore noteworthy event here.

Annoying Old Guy said...

Mr. Eagar;

Here is what you wrote - "I cannot begin to guess what business you think contracted after rgulation" which is the question I answered.

Clovis e Adri said...

AOG,

---
No. It's hard to imagine having to explain the concept of gedanken experiment to a physicist.
---

What can I make of that? We usually refrain from starting a gendanken experiment with a hypothesis easily seen as wrong.

You do not realize it, but out of ignorance for the real conditions and practices in the under-developed world, you are effectively arguing for the contrary of your usual tenets: freedom and free markets.

Bret said...

Hey Skipper wrote: "...no food for him [Rana]."

You're assuming that he couldn't find work doing anything else. In my opinion, that's an incorrect assumption. Those with entrepreneurial capability can choose to just get a job working for someone else, in which case they are a job consumer, or they can start and/or run businesses, in which case they are job producers.

Rana would have work and eat in either case.

Hey Skipper wrote: "The govt's role is to ensure that all structures, and modifications, at least meet uniformly applied standards."

That's be nice. To bad they utterly failed in that case.

Hey Skipper wrote: "Nobody forces you to be a building inspector."

No, but it's extremely lucrative. You get huge bribes, don't have to work too hard, and only an occasional building falls down.

Bret said...

Clovis wrote: "I suppose you can try to understand how 19th century Sweden overcame what was a reasonably high level of corruption."

An interesting read. The first question that came to mind was why the "big bang" changes from corruption to non-corruption occured: "Nevertheless, as with neighbouring Denmark, these reforms started after the countries had experienced crushing military defeats (and ruined state finances as a consequence) that threatened the very existence of both states. Faced with such a severe threat to the very existence of the Swedish (and Danish) state, it seems as if the elites in both countries realized the importance of genuine institutional change (cf. Frisk-Jensen, 2008). As is known from research about group behaviour, a severe external threat usually increases internal cooperation (Hardin, 1985)."

The sort of crushing military defeat suffered by Sweden is probably not in the cards for Bangladesh, nor the US, nor Brazil.

These things don't just happen, unfortunately.

Bret said...

Clovis wrote: "...successful anti-corruption policies launched in Hong Kong and Singapore..."

Interesting that you picked two of the lower tax regimes in the developed world. I completely agree that anti-corruption policies are more likely to be successful where less "looting" is possible due to smaller government expenditures.

Bret said...

Harry wrote: "Really? The creation of the SEC led to less business in seecurities?"

Yes. Next question.

Clovis e Adri said...

Bret,

I guess you are the first American I've ever seen to lament the US not to take a crushing military defeat. Given that nowadays such defeat for a nuclear power like the US can only mean complete devastation of the country and most of its life forms, that's quite a love for mankind you show up :-)

---
Interesting that you picked two of the lower tax regimes in the developed world.
---
Only if you pick and choose my points, for I started with Sweden, quite the heavy state poster child. That same article actually made the point:

"Sweden as well as the other Nordic countries seem to present a puzzle
in this discussion. On the one hand they are characterized by most of the
features that according to standard economic theory should make them
corrupt beyond repair (Alesina and Angeletos, 2005). For example, they
have very large public sectors, interventionist governments, and large bureaucracies
with lots of discretionary power over many various types of
regulations. Yet, the most commonly used comparative measures of national
levels of corruption show precisely the opposite to be the case,
namely that the Scandinavian countries have the lowest levels of corruption
(Hopkin and Rodrıguez-Pose, 2007; Uslaner, 2008)."

I was hoping for AOG to take notice, for he accused me of being the one favoring corruption due to any generic comment I may have made in favor of "government run health care".

The simple truth is that you'll find lower and higher taxes countries doing quite well among the developed world - you may argue, as you've done here before, that the lower taxes still may be more productive, but that's a small point compared to the main problem (to account for why the underdeveloped ones lag so much behind). So the endemic plague of the under-developed ones must be elsewhere.

That article gets much right when taking the game theory approach, IMHO. It is one thing your analysis, when trying solely the Bangladeshi entrepreneur shoes, end up missing.

Annoying Old Guy said...

Clovis;

AOG to take notice, for he accused me of being the one favoring corruption due to any generic comment I may have made in favor of "government run health care".

No. Quote, please.

Sweden is an interesting case if you look at its history. It got rich via free market economics, then built a welfare state, and is now seriously pondering dismantling that welfare state because it's unsustainable. Basically the arc the free market types predict for that sort of thing.

Clovis e Adri said...

AOG,

---
Sweden is an interesting case if you look at its history. It got rich via free market economics [...]
---
I wonder, what part of "they have very large public sectors, interventionist governments, and large bureaucracies with lots of discretionary power over many various types of regulations" better fits with your "It got rich via a free market" description?

Sweden's history is sure interesting, evem more if you actually look at it instead of making things up out of thin air.

Harry Eagar said...

That's not how Sweden got rich and in any event, the free-market types first have to explain how it got to be the poorest country in Europe.

Annoying Old Guy said...

Clovis;

You really can't resist accusing other people of what you've been caught doing.

As for Sweden and its large welfare state, your view is that cannot have changed during its history? That if Sweden is in such a condition now, it must always have been in that state? Otherwise one might think of the possibility that Sweden got rich first and then built a welfare state on top of that. That is, "It got rich via free market economics, then built a welfare state [emphasis added]".

Mr. Eagar;

I think that is how Sweden got rich based on my reading of multiple analyses of its history. You feel free to presume your interpretation of history is a priori correct, I am simply doing the same. Why not?

Harry Eagar said...

Well, no, my interpretation is simply regurgitated from a long-ago study in Journal of Economic History, which made a number of my favorite points:

1. Sweden invested in its human capital (school in every village)

2. Innovation is not important to economic development; you can always copy

3. Countries that avoid war do better economically (not always true but a ggod rule to follow anyway

Sweden is the state to contemplate when it comes to takeoff, because worst-to-first is the extreme case. There is no reason to think free-market theories were essential

Clovis e Adri said...

AOG,

---
As for Sweden and its large welfare state, your view is that cannot have changed during its history?
---
It is my view that they were always a very bureaucratic country, being the difference that it went from being a corrupt bureaucracy to a mostly clean one.

I presented a paper that clearly reinforces that, with many references therein. While you, as usual, presented only snarky replies.

Hey Skipper said...

[Clovis:] Had the govt enforced building codes, what would most probably happen is that Rana would build a *smaller* building. A safer one too. And business would still happen there.

Left unanswered is what the building codes contain. Let's say that Pakistan's commercial building code contains one provision: The structure will be of type X, and the live load limit is Y. The result wouldn't necessarily be a smaller building, but rather more buildings: this disaster wouldn't have happened if the load was distributed among more buildings or if the building had been stronger. Either way, the result of a building code is going to be more money per square foot, which translates into more money per pound.

Your assertion that business would still happen there is true, but qualified. There are business activities that are operating at the margin — any increase in cost, for instance, and that business ceases activity. If the Pakistani government was to impose Western building codes tomorrow, the buildings would be far safer, but there wouldn't be any business at all.

Which is where Harry goes off the rails: Why instead of? You make a valid point in theory but not in practice; and doubly not in respect of capitalism. There is an opportunity cost to spending money on safer buildings, and it applies to reality, not any particular economic system. (BTW, if you want to see really crappy buildings, go to a socialist country. Obviously, Harry has never been to one.)

Building codes are creatures of experience, economics, and culture. They are an excellent example of a problem best solved collectively. In a free market economy that produces enough wealth to afford the luxury, and with a low corruption culture.

As I noted above, that isn't always enough. South Korea is rich, and not particularly corrupt. Yet it suffered a ferry disaster brought on by a combination of incompetence, stupidity, and free riding.

(Interesting link to the paper on corruption — thanks. I have only browsed it, but I couldn't help but notice this: However, contrary to what is often believed, during the eighteenth and early nineteenth century the Scandinavian states were by today’s standards thoroughly corrupt. (This changed dramatically during the
latter part of the nineteenth century.)


By todays standards, the US was incredibly corrupt, too. It isn't anymore.

Hey Skipper said...

[Harry:] We can note, for the record, that you work for a company that understands networks and balancing of interests so poorly that it wanted to shut down universal postal delivery in the name of private profit.

Wow, you sure wrapped up a lot of unacknowledged assumptions in there. FedEx understands networks very well; as for "balancing of interests", that isn't FedEx's job, which is to make as much money as it can in the package delivery. It can't make a profit,which means it won't exist, if it doesn't have enough satisfied customers. Unlike the USPS, which can continue to exist no matter how much money it sets on fire.

The interest you didn't balance, because as a Progressive, the only ones that matter are the ones echoing in your
head, is whether the US would be better off with FedEx/UPS delivering mail to profitable areas, and a smaller USPS devoted solely to delivering mail to the hinterlands.

Until you have answered that question — and I'd be astonished if you have even considered it, then your statement is just typical prog fluffery.

I am baffled. I cannot begin to guess what business you think contracted after regulation.

You have never heard of the EPA?

Hey Skipper said...

[Bret:] You're assuming that he couldn't find work doing anything else. No, I'm asserting it's not an either-or. Pakistan could have more rigorous, and better enforced, building codes. At some point along the scale from shambolic to Germanic, the cost would become too great to bear. I doubt Rana would have gone bust had the government fairly enforced structural codes. But it didn't. The knock-on effects to business behavior should be obvious.

Hey Skipper said...

Clovis:

I neglected to mention something that bothered me about that link. (To be fair, though, this happens a lot.)

Frequently using countries as a unit of comparison is a mistake. In this case, the US has several features that Sweden does not that aren't related to corruption or economic performance, but affect both. Norway doesn't have a large immigrant population, substantial illegal immigration, or the knock-on effects of slavery.

Consequently, rather than comparing the entire US against Sweden, it would make far more sense to compare Swedish-Americans against Sweden.

That is hard to do. However, a close approximation is easy. Minnesotans are largely Swedish descendants. The median income in Minnesota is more than twice Sweden's ($61k per year, vice $28k). And Minnesota isn't exactly a hot bed of corruption, either.

Bret said...

Hey Skipper,

You got a link(s) for that income thing? To me, it looks like you are comparing Swedish disposable family income versus US total income.

erp said...

Skipper, it's always been my contention that the best, the brightest and the most self-reliant from all over the world emigrated here with the Swedes being no exception, so it's not surprising that once they got here, they far surpassed the folks back in the old country as did every other immigrant group.

Bret said...

erp,

I always thought it was the craziest and most desperate (or most persecuted) that historically came here. :-)

erp said...

Beggars in Sweden and I read an article last night about Swedish beggars in Spain.

Sorry I'm using the I-pad and it's too much trouble trying to figure out how to find the link from here.

Harry over to you.

erp said...

Swedish beggars in Spain. Can't wait to find how the welfare state went wrong.

;-}

erp said...

... You can look at that way, but those who stayed were the weak and timid, those who picked up with nothing in their pockets were the strong and the ambitious, brave ... Perhaps desperate too.

Bret said...

erp,

The beggars in Sweden are mostly foreigners.

The Swedish beggars in Spain are small in number and are alcoholics and druggies looking for a better climate.

erp said...

Bret, I know, I read the articles, but isn't that a system failure? Our homeless are also in the main substance abusers and people with mental problems many of whom were tossed on the streets during the period of deinstitutionalization, but that doesn't stop lefties from using the issue as hook for more federal welfare programs.

Swedish youth doing the begging in Spain aren't familiar with working for a living if they're anything like their counterparts in Denmark.

My best friend is a Dane who married an American 50 years ago. Her two nephews, now well into their 40's and 50's have never worked yet they own homes, travel, attended universities abroad, etc. all on the dole.

The Protestant work ethic is apparently dead.

Bret said...

erp wrote: "...that doesn't stop lefties from using the issue as hook for more federal welfare programs."

Yeah, but they're full of crap. I'm surprised you'd stoop to their level. Two Lefts don't make a Right (or whatever the saying is :-).

erp wrote: "...have never worked..."

Yeah, but a couple of Danes here and a few dozen Swedish beggars there don't form a statistically confident indictment of the Scandanavian protestant work ethic.

Having been in Europe transacting business (I was in Belgium last week, for example) a couple of dozen times over the last couple of decades, I'd say the work ethic is mellowed but not dead. The vast majority of Europeans do still expect to be and work towards being productive and contributing members of society, though perhaps at a significantly more relaxed pace than a few decades ago.

Clovis e Adri said...

Skipper,

---
I neglected to mention something that bothered me about that link. [...] Frequently using countries as a unit of comparison is a mistake. [...] Consequently, rather than comparing the entire US against Sweden,
---
I guess you may have missed its main point: it is not about comparing countries as units, but as groups. The problem it wants to understand is why the underdeveloped countries keep being so.

Sweden and the US, from the point of view of a Bangladeshi, are entirely the same thing: they are so high up above in the GDP per capita, to the point the differences are a matter of detail.


---
By todays standards, the US was incredibly corrupt, too. It isn't anymore.
---
I am lost at this one, Skipper.

Compare that paper description of 19th century Sweden with Tocqueville's America. Looks quite different, including the part about corruption. The US back then was a laissez-faire economy with a small bureaucracy (which also would contribute to less corruption, right AOG?), Sweden quite the opposite. What am I missing here?

erp said...

Bret, Belgium has a lot of German influence which may account for the lingering Protestant work ethic and my friends nephews are more the rule than exceptions.

Of course lefties are full of it, but that doesn't prevent them from confiscating gazillions of our money to fund their "assistance" programs.

There's been so much in the news about robots, I hope you are thinking of a post so we can get the real skinny from the horse's mouth.

Bret said...

erp,

I've also been to Sweden and it's not all that much different than Belgium as far as work intensity goes.

I'll think about doing a robot post.

Clovis e Adri said...

Erp,

Your link on Swedish beggars made me remember one nice story.

One day, back when I lived in Sao Paulo as a grad student, I was walking back home and an American, using a nice expensive suit and all, stopped me with a sad story. He was robbed just a few minutes ago and was devastated. He needed to catch a flight and had not a penny for the cab anymore. He would call the police and ask his bank for help any other day, but right now he had to be in that plane, for his daughter was almost dying in the hospital back in the USA.

He was desperate, tears in his eyes, and he was just so thankful that I could at least understand English.

I was mad at my country for making that poor foreigner to be in that position. It was 4 p.m. and I knew that, if he didn't get a cab right know, he would never get to the airport in time after the rush hour kicked in. And that airport (Guarulhos) was really far away from the neighborhood we were (Avenida Paulista), so the cab fee would be quite high.

He was lucky I had cash, I gave him everything I had in my wallet. As I was a grad student, that amounted to something like 1/4 of my monthly income.

I knew I would eat badly the rest of the month for it, but I was glad enough to help a soul that day.

Until the next week a colleague at my Physics Institute tells me, happily, he has just helped a poor American with the very same sad story.

Tell me, Erp, isn't that American beggar a system failure of your economy? :-)

erp said...

No. How could a hustler in a foreign country be a failure of our system.

You did the right thing anyway. Even if hundred times it's a scam, the one time someone was in real need and got helped, it would all be worth it.

Sweden is always held out as the pinnacle of socialism in action, so the need for people to beg in the streets is a failure of their system.

A well dressed hustler with an American accent is only well dressed thief.

I have a funny story in Spain. We were sitting in an outdoor cafe sorting out Spanish money because we were leaving the next day and didn't want to have Spanish money on us. This was a while back when the dollar was very high -- we stayed at a 5 star hotel for $13.00/night.

A bunch of kids were quite interested in what we were doing, so we called them over and said they could have it all - perhaps 20-30 dollars, but they had to divide it evenly. It was such a pleasure to watch them very carefully figure it out. It was quite a fortune for these kids and I'm sure for the rest of their lives they told stories of the crazy Americanos.

It is truly much more fun to give than to receive.

erp said...
This comment has been removed by the author.
Harry Eagar said...

OK, Skipper, it was synecdoche for a point I have made more than once before. Neither you nor FedEx nor Guy understand the value of networks.

I used to use the Black Ball Line as an example, a rarish example of a really important innovation that came from private, free market sources; but I have recently learned that the Black Ball innovation was anticipated by a socialist, Taxis, of the Habsburg imperial post.

See 'The Invention of News' by Pettegree. A fine example of how socialist investment allowed private business to flourish.

Hey Skipper said...

[Bret:] You got a link(s) for that income thing? To me, it looks like you are comparing Swedish disposable family income versus US total income. [I compared Swedish income against Minnesota income].

Median household income: Minnesota, Sweden.

Median equivalized disposable household income (PPP). US, $26,672; Sweden, $19,736.


[Clovis:] I guess you may have missed its main point: it is not about comparing countries as units, but as groups. The problem it wants to understand is why the underdeveloped countries keep being so.

You are right, my comment wasn't so much about the studies main point. After all, even if I'm right about studies such as this (average life spans by country is another one) making specious comparisons, that doesn't touch the paper's conclusions.

[Hey Skipper:] By todays standards, the US was incredibly corrupt, too. It isn't anymore.

[Clovis:] I am lost at this one, Skipper.


I don't know if the level of corruption in the US was comparable to Sweden's. Nonetheless, it was far greater in the 19th century than it is now. That change as come without the motivation of an existential crisis. Which doesn't mean that such crises don't provoke needed change, but it does suggest they aren't necessary.

[Harry:] OK, Skipper, it was synecdoche for a point I have made more than once before. Neither you nor FedEx nor Guy understand the value of networks.

I'm willing to bet you have never made that point before, and you certainly haven't here. From what I have written, and you haven't quoted, I said nothing about the "value" of networks. And I rather suspect you have the typical progressive hubris to conclude that your particular notion of that "value" is the actual value, and that your notion of how to purchase that value is the best way to do so.

Which is why you say these things without a smidgeon of justification. And that is before observing that your understanding of networks is so superficial that your marxist assertions miss the blindingly obvious.

I used to use the Black Ball Line as an example, a rarish example of a really important innovation that came from private, free market sources …

Putting a camera in a phone. Fiber-optics. Anti-skid brakes. Ball point pen. Printing press. PGP encryption. Biscuit joiner.

I could go on. But I won't, because I suspect that your meanings for "important" and "innovation" and "private" and "free market" must be completely unhinged from reality for you to have typed that sentence.

See 'The Invention of News' by Pettegree. A fine example of how socialist investment allowed private business to flourish.

Trotting out a book title doth not an argument make.

The New York Times review is not laudatory, and provides no hint, not even a smidgeon of a hint, that the book shows "how socialist investment allowed private business to flourish."

Bret said...

Hey Skipper,

The "Median equivalized disposable household income (PPP)" is a better measure and notice it doesn't vary by as much as your original numbers.

Even it isn't directly comparable since it "excludes most non-cash income" such as government provided health insurance, day-care, etc.

Anyway, I buy the point that those of Swedish descent may to do slightly better than average wherever they've ended up living. On the other hand, I think the advantage of Minnesoteans over Swedes is pretty difficult to discern and extremely dependent on the exact definition of household income used.

Clovis e Adri said...

Skipper,

---
I don't know if the level of corruption in the US was comparable to Sweden's. Nonetheless, it was far greater in the 19th century than it is now.
---
Would you please illuminate me on how you concluded so? Why do you think the US was more corrupt?

Seriously, I'd be very tempted to conclude the contrary by the image I have of the US past.

erp said...

If it's any consolation Clovis, I could ask the same question. I know Harry means the robber barons, the cruelty of slavery, the cruelty towards the indians, the cruelty towards the innocent trade unionists ..., but I'm not sure to what Bret and Skipper are referring.

Bret said...

erp wrote: "I'm not sure to what Bret and Skipper are referring."

I'm not sure what I wrote about past corruption, but I probably just miswrote it. I don't have any strong opinion on past corruption in the United States.

Hey Skipper said...

[Clovis:] Would you please illuminate me on how you concluded so? Why do you think the US was more corrupt?

Tammany Hall. Teapot Dome. Prohibition. Unions. Opposition to Unions. Jim Crow. Treatment of indigenous Americans. Etc.

Like Bret, I don't have a strong opinion about US corruption from the 19th through the mid-20th centuries. So while I might well be wrong, my impression is that the US was much more corrupt then than it is now. Which is probably also the same as saying it wasn't above average at the time. Yet despite no existential crises, the US is, in my experience, corruption free. (Which isn't the same as saying free of incompetence or stupidity.)

[Bret:] The "Median equivalized disposable household income (PPP)" is a better measure and notice it doesn't vary by as much as your original numbers.

True, but. Remember, my point was that comparing Sweden to the aggregate US requires folding in many things that have nothing to do with the comparison. I couldn't quickly find a PPP comparison between the Minnesota and Sweden. Median income was a doddle, though. Comparing similar to similar with respect to median income, MN is leagues ahead of Sweden.

Just as I suspect that if one was to compare Sweden's level of corruption with MN's, they'd be close as dammit to identical.

The US is a country. Sweden is a country. But in the aggregate, they have almost nothing in common. So why persist in inappropriate aggregation?

(BTW, I'm only a couple hours from Brussels. You didn't call, you didn't write. Sheesh.)

Bret said...

Hey Skipper wrote: "I'm only a couple hours from Brussels. You didn't call, you didn't write."

You're in Frankfurt? That's only a couple of hours away? Bummer! It didn't occur to me that it was so close. It would've been fun to see you. Next time (I'll give it 50/50 that I'm back within a year).

Hey Skipper said...

You're in Frankfurt?

Close-ish. Düsseldorf is less than a third the distance to Brussels.

Do what you can to make it a 110/50 chance. Beers & brats on me.

Bret said...

Hey Skipper,

Oh wow, we really were close since my meeting was in Overpelt, Belgium which is 15 miles due south of Eindhoven (Netherlands), so Overpelt is maybe 50 miles from Düsseldorf?

Harry Eagar said...

No existential crisis? Right around the time you suspect the corruption quotient went down? (Waiting music) No economic catastrophe, no mass migrations of desperate displaced people? No despair? No sea change in the balance of power between the dominant political parties? No doubt as to the ability of democracies to compete successfully against the dictatorships?

No, cannot think of a thing.

Harry Eagar said...

Biscuit joiner? You really don't get it, do you?

I am talking about innovations that make profound, extensive, society-changing economic moves possible, like mass production by means of interchangeable parts (socialist) or creation of regular, dependable communications networks (socialist) or the 3-crop rotation (not socialist). Ballpoint pens?

I plan to recall your encomium to the Times someday, I bet. RtO's notice of Petteegree (forthcoming) will be more enthusiastic, better-informed.

Harry Eagar said...

David Carr doesn't know much history, and it shows. He wanted the book to be a history of newspapers and instead he got exactly what the title promised, a history of news, which is not the same thing.

That's the problem with assigning reviews to beat writers; unless the subject is their beat, they are not usually well-placed to do a good job. Carr's review was poor.

Hey Skipper said...

[Bret:] so Overpelt is maybe 50 miles from Düsseldorf?

Close -- 70 miles.

[Harry:] Biscuit joiner? You really don't get it, do you?

I am talking about innovations that make profound, extensive, society-changing economic moves possible, like mass production by means of interchangeable parts (socialist) or creation of regular, dependable communications networks (socialist) or the 3-crop rotation (not socialist). Ballpoint pens?


I do get it. I get that your definition would be tendentious, and that you can't recognize the sea of innovations within which you swim, and without which your life would be very different.

So, yes, the biscuit joiner, and ballpoint pens, and the pencil. Add to that list cardboard, cam-lock fasteners and flat pack furniture. Oh, cloud computing. The ratcheting wrench. Sealed bearings. Hours spent listing free-market innovations would scarcely touch the subject.

Socialist innovations? Are there any?

Interchangeable parts socialist? Scarcely, if at all. The innovations that made communications networks possible in the first place weren't socialist.

Above, you cited the Black Ball line as a really important innovation? Why it, and not cloud computing? Why the Black Ball line, and not FedEx?

Also, you couldn't begin to guess what business contracted after regulation. FedEx is the flip side of that coin — it was a business that wasn't possible in the face of existing regulations. Eliminating those socialist encrustations led to a huge expansion in business. In today's NYT, there is a story about the EPA getting ready to impose stringent emissions rules on the aircraft industry.

This proves — although I'll bet you won't be able to figure out why — that the EPA is staffed with drooling morons whose only product, besides drool, is frequently business destroying rules.


2. Innovation is not important to economic development; you can always copy.

Really? Tell that to Nokia.

There are many more examples.

David Carr doesn't know much history, and it shows.

How about doing us all a favor, and make an argument, instead of See 'The Invention of News' by Pettegree. A fine example of how socialist investment allowed private business to flourish.

Tell us, and some specifics would be nice, what socialist investment was involved in the invention of news. I read several reviews, and not one of them hinted at it.

erp said...

Harry, isn't socialist investment a contradiction in terms. Socialists don't have capital now that slave labor is a no-no. That's only capital they ever had to invest. They had plenty of money stolen from those who had it, but that was for their "retirement" funds, not for the cogs.

erp said...

Skipper, if you are compiling a list of inventions which have made life immeasurably better, please add my favorite above all: The Automatic Garage Door Opener. I think I'd rather wash clothes in the river than get out of the car to open to the garage door -- not having a garage or car is unthinkable. ;-}

Clovis e Adri said...

Skipper,

---
Which is probably also the same as saying it wasn't above average at the time. Yet despite no existential crises, the US is, in my experience, corruption free.
---
Sorry but I don't think you proved your point. Those two links look rather trivial compared to, let us say, Watergate.

You also shouldn't conflate things like slavery or the treatment to indigineous Americans with corruption. They were seen as not part of the society then, so their treatment does not constitute corruption within that society.

My (possibly naive) view of US history tells me the protestant ethic upon which the country was first founded gave it a lot of resitance to epidemic corruption.

As you may see from my Swedish link above, a good way to portray corruption is like a standard disease for which there is a vaccine. You inoculate enough people and that society acquires a herd immunity, upon which the few cases that will happen (and there will always be, that's human nature) won't propagate to endemic scale.

If anything, I have the impression you are less immune nowadays than before. The more I read about contract deals for Iraq/Afghan war, or the Clinton Foundation, among dozens of other examples, the more it looks so.

Harry Eagar said...

I guess you didn't read very far into Wikipedia:

"Numerous inventors began to try to implement the principle Blanc had described. The development of the machine tools and manufacturing practices required would be a great expense to the U.S. Ordnance Department, and for some years while trying to achieve interchangeabililty, the firearms produced cost more to manufacture. By 1853 there was evidence that interchangeable parts, then perfected by the Federal Armories, led to a savings. The Ordnance Department freely shared the techniques used with outside suppliers.[1]"

People whose knowledge of economic history runs deeper than a third of a Wiki entry also know that the first successful mass manufacture of identical products (though not using interchangeable parts) was also socialist, at the Royal Dockyards around 1798 with the machine production of reeve-blocks.

About FedEx: It is a company I will not use, because its service is 10 times as expensive as USPS and not nearly as convenient: It does not deliver to my house.

All FedEx was cream off the profitable parts of the socialist postal network, adding no value whatever, and thus making the full service of the post office on the money-losing routes even more expensive. As I said, you guys understand nothing about the value of networks.

erp said...

Clovis, Watergate is not a good example unless you mean the corruption of the media/Democratic party. Nixon's sin was that while he was a socialist, he wasn't a Communist and didn't kowtow to Moscow (note the alliteration).

The burglary was blown into an atomic bomb from a tiny pop gun of John Dean trying to erase his then girlfriend and later wife's name off the "escort" lists. Nixon was caught in a lie and forced to resign. Note the difference when Clinton lied under oath, he was not hounded into resigning and in fact wasn't even convicted after being impeached.

Similar thing is Hastert who will be nailed to the wall for doing the same thing lefties have done with impunity. In fact, not only impunity, but Clinton pardoned Mel Reynolds, an Illinois congressman who was convicted of a similar crime.

The list of corruption on the left is even longer than Skipper's list of great inventions and conveniences of the last couple of hundred years. Far less so from conservatives because we are the remnants of classic liberalism and the protestant work ethic.

You're right about slavery and indians. I threw it in because Harry is obsessed with it.

Harry Eagar said...

'Harry is obsessed with it'

True, I believe in human rights. I could never be a rightwinger for that reason. Rightwingers believe in property rights only, and while this might not be the case for every conservative, the nearer you approach the Austrian School, the closer you get to 100%.

Annoying Old Guy said...

Property rights proceed human rights and the latter are dependent on the former. Human rights without property rights is like voting in a one party state - technically you have that right but it is de facto null and void.

erp said...

Harry, you still haven't favored us with your definition of a right winger. My definition is fascist and since fascists are socialists, your argument is circular.

Leave off the labels since you're not making sense.

Corruption in US cities started when the community organizers/rabble rousers came on the scene at about the same time as the Bolshies. Prior to that it was penny-ante local stuff. Tammany and union thugs and their counterparts in other cities got the ball rolling and it's been rolling along for a hundred years and counting.

I trust you're happy at the inroads you and your buds have made.

Mazel tov.

erp said...
This comment has been removed by the author.
Hey Skipper said...

[Harry:] I used to use the Black Ball Line as an example, a rarish example of a really important innovation that came from private, free market sources …



Sweden is the state to contemplate when it comes to takeoff, because worst-to-first is the extreme case. There is no reason to think free-market theories were essential



I guess you didn't read very far into Wikipedia:


All your statements on this subject conspire against you.

Yes, I did read all the way through the Wikipedia article. And what was quite certain throughout all of it was that all the innovations in mass manufacturing came from free market sources — the inventors and innovators were working to enrich themselves, after all — that a customer in any given instance was the government is absolutely beside the point.

What is the point, the one that confronts you at every turn, yet you refuse to see, is that the existence of a free market was absolutely essential to the innovations that government, on occasion purchased.

In order for your argument, and I'm being charitable here, to hold any water at all, you must demonstrate that interchangeable parts and mass manufacturing would not have existed if had government simply steered clear of the whole concept.

If you can't demonstrate that, and I'm quite certain you can't because that Wikipedia article I read all the way through says otherwise:

The first mass production using interchangeable parts in America was, according to Diana Muir in Reflections in Bullough's Pond, "The world's first complex machine mass-produced from interchangeable parts", which was Eli Terry's pillar-and-scroll clock, which came off the production line in 1814 at Plymouth, Connecticut. Terry's clocks were made of wooden parts. Making a machine with moving parts mass-produced from metal would be much more difficult.

In fact, beyond reeve blocks and the unsuccessful attempt to mass produce rifles, there isn't a single mention of government in the whole article.

Therefore, the conclusion staring you in the face is that free markets are absolutely essential to almost all innovation, and that Sweden is no exception to the rule. All Swedish innovations came about due to individuals and companies hoping to enrich themselves. All innovation that came about elsewhere and was used in Sweden came about from companies and individuals in other free markets hoping to enrich themselves.

I will happily grant that certain things like land line telephone, roads and railroads, clean water, sanitation, are simply not possible absent collective action.

But I'll bet you can't find a single innovation in any of those areas that didn't come from individuals in free markets working for their own enrichment.

Hey Skipper said...

[Harry:] About FedEx: It is a company I will not use, because its service is 10 times as expensive as USPS and not nearly as convenient: It does not deliver to my house.

The heck you don't.

Which shows this: All FedEx was cream off the profitable parts of the socialist postal network, adding no value whatever, and thus making the full service of the post office on the money-losing routes even more expensive. As I said, you guys understand nothing about the value of networks to be utter nonsense.

Exactly which part of the socialist postal network did FedEx cream off? Was it overnight point to point service?

Oh, wait, can't have been that, because the USPS couldn't manage it.


Hey Skipper said...

[Clovis:] Sorry but I don't think you proved your point. Those two links look rather trivial compared to, let us say, Watergate.

For some reason, I forgot to mention Prohibition -- socialist intervention in personal freedom that led to epic corruption until, in the absence of any existential threat, it was ditched.

I'm not sure that Watergate is a good example against my admittedly impressionistic thesis -- in order for those events to become notorious, they had to be a singular example in stark contrast to an otherwise largely uncorrupt system.

Clovis e Adri said...

Erp,

If I am to believe most sources, it looks like Wikipedia has it right with:

" Those activities included such "dirty tricks" as bugging the offices of political opponents and people of whom Nixon or his officials were suspicious. Nixon and his close aides ordered harassment of activist groups and political figures, using the Federal Bureau of Investigation (FBI), the Central Intelligence Agency (CIA), and the Internal Revenue Service (IRS). The scandal led to the discovery of multiple abuses of power by the Nixon administration, articles of impeachment,[2] and the resignation of Richard Nixon, the President of the United States. The scandal also resulted in the indictment of 69 people, with trials or pleas resulting in 48 being found guilty and incarcerated, many of whom were Nixon's top administration officials."

That looks like a lot more serious than a cover up of an escort list.



Skipper,

How alcohol-Prohibition corruption, back then, compares to corruption related to other drugs' Prohibition of nowadays?

Bret said...

Harry wrote: "All FedEx was cream off the profitable parts of the socialist postal network..."

Apparently, you don't understand the value of time? USPS refused to set up overnight networks.

USPS doesn't look like very good evidence for the socialist model. It can only compete because it, by federal law, has a granted monopoly on standard mail delivery. Oh wait, it can't compete, it still needs a $18 billion a year taxpayer subsidy. That's $200 for every household in the United States every year. That's a lot of junkmail! Yay!

Harry Eagar said...

Skipper, where did you read that the Harper's Ferry Arsenal failed to successfully produce rifles? It did. It cost the taxpayers a great deal of money. Something no private venture could have withstood.

If you really get into it, private manufacturers didn't move very quickly into mass production with interchangeable parts even after the socialists proved it could be done. As long as labor was sweated, they were content to file each final fitting by hand. That's what Singer did, as an examination of some thousands of its sewing machines proved.

And, of course, you misread what I said. Gummint purchases were important to Sweden, which was a latecomer. The breakthroughs in mass production were made in government factories. (With roots going all the way back to the Arsenal in Venice in the 15th c.)

Bret, I earned all that subsidy back, and then some, in January when I wanted to ship a chlld's rocker made by my wife's grandfather to my daughter so his great grandchildren could use it. FedEx quote: $336. Post office actual: $34. That's part of the value of networks.

Erp, Tammany goes back to the 18th c., and its most corrupt days (Tweed) were in the 1860-70s. You really should get an American history book and read it. The history of your country is truly interesting, and every time you post you demonstrate you don't know anything about it.

erp said...

Clovis, Yes, the all powerful “if.”

Harry, please get someone to read and interpret for you. I said Tammany got the ball rolling, I didn't say it started at the same time as the Bolshies.

Harry Eagar said...

You are simply ignorant. It's sad since you care but not enough to work at it.

Hey Skipper said...

[Harry:] Skipper, where did you read that the Harper's Ferry Arsenal failed to successfully produce rifles? It did. It cost the taxpayers a great deal of money. Something no private venture could have withstood.

Here. "Something no private venture could have withstood" is typical of your assertions. Questionable, since you haven't cited the amount of the contract, and irrelevant, because a private venture might very well have considered the task not worth doing.

The reason Whitney, and others failed, was the lack milling machines. The development of those tools, upon which interchangeable parts rely, was almost exclusively the consequence of private innovators.

If you really get into it, private manufacturers didn't move very quickly into mass production with interchangeable parts even after the socialists proved it could be done.

But not done well enough to be worth doing, until technology caught up with the concept. No doubt some breakthroughs occurred in government factories. But it is an extraordinary claim, for which you provide no proof, that breakthroughs would not have occurred otherwise. And you completely neglect that virtually all progress in mass production and interchangeable parts have been in the free market, by people who weren't working for the government.

If socialism was essential to interchangeable parts and mass production, then the obvious conclusion is that socialist countries would be the most innovative.

History says otherwise.


Bret, I earned all that subsidy back, and then some, in January when I wanted to ship a chlld's rocker made by my wife's grandfather to my daughter so his great grandchildren could use it. FedEx quote: $336. Post office actual: $34.

You need to recheck your sums.

The subsidy is $200 from you and $200 from your daughter.

And now you have to recheck your multiplication.

That is one chair, once. The subsidy is every year.

So, no, you haven't earned that subsidy back. Not even close. Math is hard for progressives.

[Clovis:] How alcohol-Prohibition corruption, back then, compares to corruption related to other drugs' Prohibition of nowadays?

Daniel Okrant recently wrote "Last Call", an excellent book about Prohibition. Clearly, we are repeating history.

(Disclosure: I have never used illicit drugs.) I think our drug laws are a grotesque imposition on personal freedom, have militarised our police forces, damaged respect for the law, populated our prisons, and damaged civil society throughout the Western Hemisphere.

It is difficult to see how treating drugs as a health matter rather than criminal would have caused anywhere near the amount of damage as prohibition has.

Once marijuana is legalised, we will look back on that particular instance of prohibition with appalled astonishment.

Hey Skipper said...

I could never be a rightwinger for that reason. Rightwingers believe in property rights only, and while this might not be the case for every conservative, the nearer you approach the Austrian School, the closer you get to 100%.

Cite, please?

Bret said...

Hey Skipper wrote: "Once marijuana is legalised, we will look back on that particular instance of prohibition with appalled astonishment."

I wonder. (Disclosure: Errr, uh, I might not be able to make the same disclosure as Hey Skipper above).

From what I can tell about marijuana and the psychedelics is that they induce a Leftist worldview: everything's cool and groovy, peace and love and a brotherhood of mankind, private property is evil, tax the rich, feed the poor, productivity is uncool, etc. I don't have enough observational or other experience to be particularly confident of that, but let's say I'm right for a moment (I know, I know, a pretty huge concession :-). Also assume for now that legalization of marijuana would increase its usage (also not certain, but likely to some extent).

If so, it would likely push the country to the Left. The question then is: would that be bad, and if so, what would it be worth in terms of a war on drugs to prevent that?

Being a pro-liberty kinda guy, I would still incrementally legalize drugs, starting with marijuana, but not necessarily for the practical reasons you mentioned, because practically, I'm not sure that the country would be better off in the long run.

Clovis e Adri said...

Bret,

LOL.

I wonder if you see the irony behind a Libertarian questioning his Libertarianism because it could lead to... less Libertarianism. It is a never ending paradox.


Skipper,


I am pretty sure the Chinese look back to their old Opium trade times with the same appalled astonishment. I guess though their astonishment isn't the same one you have in mind with regard to Prohibiton.

If our war on drugs so much "damaged civil society throughout the Western Hemisphere", how that compares to how a free policy on drugs damaged civil society throughout the Eastern Hemisphere?

Bret said...

Clovis wrote: "...questioning his Libertarianism..."

Questioning is a bad thing because why? In case you haven't noticed, I question everything I can.

I'm not so enthralled with Libertarianism that if I thought it would really screw things up I wouldn't support non-libertarian policies.

Harry Eagar said...

I don't see anything about the Harper's Ferry Arsenal, Skipper. You have the wrong place and the wrong time and the wrong program. You need to actually study the history. Wiki won't get you there. Hounshell will:

http://www.mauinews.com/page/blogs.detail/display/959.html

Harry Eagar said...

The guy who owns the pawnshop I work in has a blue card and he's very rightwing, so perhaps entrepreneurialism trumps pot?

Clovis e Adri said...

Harry,

Not to mention all those financial market traders, hooked up on cocaine and ecstasy, usually all very rightwing or Libertarians too.

Harry Eagar said...

Yeah. Way back in the '60s, the friend I have mentioned who first introduced me to a non-racist conservative was also commenting on redneck pot growing.

Money talks. One of my college classmates teamed up with his grandmother to raise weed in the hills of North Carolina. They justified it as 'saving the family farm.'

Hey Skipper said...

[Harry:] I don't see anything about the Harper's Ferry Arsenal, Skipper. You have the wrong place and the wrong time and the wrong program.

You said mass production by means of interchangeable parts was a socialist innovation. It wasn't. Mass production using interchangeable parts was successful in building clocks long before the Harper's Ferry Arsenal. Eli Whitney's attempts, which were roughly contemporary with the first mass produced clocks, failed.

What you left us with here is another one of your baseless assertions. Stating mass production is a socialist innovation doesn't make it so merely because the characters spewed from your keyboard. You are making the extraordinary claim that without socialist measures, mass production would never have come about, which in turn is based on an astonishingly simplistic view of mass production as a single, unitary, innovation.

It isn't. Successful mass production is the consequence of innovations beyond numbering, almost none of them due to socialism. No doubt it is possible to name a few that came about sooner than they otherwise would have done due to government spending, but the vast majority did not.

It gets worse: you don't know how to use the "innovation" properly. Mass production isn't an innovation, it is a process that is the sum of innovations beyond counting. You claim for socialism that which doesn't make sense, and make socialism the instigator for a multitude of ideas to which it contributed nothing. Indeed, in your counting, socialism's great contribution is the procuring of armaments.

Of course, I am sure you can use your superior knowledge of history to demonstrate otherwise. For instance, because socialism is such fertile soil for innovation, it is no wonder why British Leyland is the incredibly productive, globe straddling giant it is today. And that it is merely one among many such socialist companies. Also, no doubt, if you were to use "innovation" correctly, you would be able to inundate us with a list of socialist innovations. Actual innovations, that is. Not calling a concept that had been around for a long time socialist because a war needed a lot of guns, but rather the thousands of things that are required to make that concept a reality.

And you can explain to us why those socialist innovations, Title IX and the ethanol mandate are the ne plus ultra of human ingenuity.

(Oh, and one more thing about innovations. How the heck did you manage to miss the airplane and radio?)

So let's review:

You don't get networks. You can't be bothered to explain value, even in the face of $18B of subsidies as far as the eye can see. Because of your fathomless understanding of networks, you refuse to use FedEx, even though you do. You claim to have been a business journalist, yet cannot fathom opportunity cost. Innovations aren't what you say they are, so it isn't coming as a particular surprise that you think they aren't necessary. Sony will find that a great relief.

All in one thread. Wow.

Hey Skipper said...

[Clovis:] If our war on drugs so much "damaged civil society throughout the Western Hemisphere", how that compares to how a free policy on drugs damaged civil society throughout the Eastern Hemisphere?

Unfortunately, I have no idea how much damage opium did to Chinese society. It isn't as if Chinese society was so wonderful. And no matter how much damage opium my have done, it didn't amount to a flea on the back of what communism managed.

I'm making a utilitarian argument (which probably deserves its own post), which is based upon an assumption: a certain percentage of people have addictive personalities, and that percentage is independent of what is on offer. Further, some substances don't (IMHO) come close to causing the damage their prohibition does. Marijuana is foremost among them. Almost everyone has tried the stuff (I'm about the only person I know who hasn't), yet we aren't plagued with reefer maddened zombies.

So it seems likely that marijuana's effect on society, except for driving up the cost of Doritos, is negligible, and almost certainly far less than alcohol, of which I am quite fond, thank you very much. If I'm not willing to entertain a ban on a substance I like, and which causes me no problems, then I wouldn't have much of a leg to stand on if I opposed lifting prohibition on marijuana.

Perhaps, maybe even probably, drugs such as heroin and meth cause so much damage that there is no such thing as casual use, and the least worst option is continued prohibition.

Don't know about that, but to me legalizing marijuana is a slam dunk.

Hey Skipper said...

Harry:

Rightwingers believe in property rights only, and while this might not be the case for every conservative, the nearer you approach the Austrian School, the closer you get to 100%.

You going to back that up with anything, or can we just assume you are making it up?

Harry Eagar said...

Shoot, that wasn't so hard:

https://mises.org/library/property-rights-and-theory-contracts

I don't think innovation means what you think it means. Da Vinci imagined a diving suit (I saw a mockup at the Venetian in Las Vegas, of all places) but that doesn't mean he gets credit for actually DOING IT.

Howard said...

ROTHBARD?

There are more card carrying Communists than Rothbardians in America.

Howard said...

So let's review:

You don't get networks. You can't be bothered to explain value, even in the face of $18B of subsidies as far as the eye can see. Because of your fathomless understanding of networks, you refuse to use FedEx, even though you do. You claim to have been a business journalist, yet cannot fathom opportunity cost. Innovations aren't what you say they are, so it isn't coming as a particular surprise that you think they aren't necessary. Sony will find that a great relief.

All in one thread. Wow.


But...but...THE NARRATIVE, THE NARRATIVE!

Clovis e Adri said...

Skipper,

---
Don't know about that, but to me legalizing marijuana is a slam dunk.
---
Add me to the small club of people you know who haven't tried it.

Not for lack of opportunity: I did study in a highschool where a majority of the students had access to it. Where I also could witness that classic ditto about marijuana: it sure isn't too much of a drug, except it is a big door for the real ones.

Want to legalize it? Fine enough for me, then you will lose the excuse of using it as the standard-bearer for that Libertarian drugs-are-personal-business motto, and will need to start talking openly about legalizing the real stuff out there too.

I would like to see that happening in your lifetime, so we could test your theory on what is worse: Communism X Zombies. I do have a bet here to take with you.

Annoying Old Guy said...

Mr. Eagar;

Your cite does not apply to "Rightwingers believe in property rights only". It is a discussion of contract law, basing them on property rights. More over, the discussion explicitly states that a prohibition against slavery follows from this property rights basis. Is your view that if someone did only believe in property rights but from them derived all the other human rights you believe in, that would still be wrong?

Hey Skipper said...

[Harry:] Shoot, that wasn't so hard:

I read most of that rather lengthy piece. I can't tell whether it is merely irrelevant to your claim, or nearly completely undermines it.

Perhaps I missed something. How about pulling some quotes supporting rightwingers believe in property rights only.

I don't think innovation means what you think it means.

It sure as heck doesn't mean what you think it does. The ballpoint pen, ratcheting wrench, URL, etc. are innovations.

Mass production is a process. Sure, a process can be innovative, but mass production is an idea that had been around for a long time, waiting for sufficient innovations to make it possible.

And because some governments wanted to buy lots of guns doesn't make the idea socialist, nor the innovations that eventually made mass production possible socialist.

Unless, of course, you can provide evidence otherwise.

Clovis e Adri said...

Skipper,

---
How the heck did you manage to miss the airplane and radio?
---
Just a historical note: the radio example actually does not help your argument. It owns a lot more to govt funded academy than to smart entrepreneurs.

The commercial use of knowledge surely owns a lot to private investors and businessmen. The building of the knowledge that even made possible the most revolutionary inventions, though, has been largely due to non-profit govt/academic endeavours.

I know this is not the argument Harry is actually doing, but is the one he should.

Harry Eagar said...

Clovis, sure I agree. No Langley, no Wright brothers.

But my point is more radical. Some innovations, like mass production by interchangeable parts or space satellites, are so complex and expensive that only socialized development succeeds.

Skipper's argument is otiose. Sure, many people had the idea of serial production but -- for some reason -- they couldn't pull it off privately. So that's my proof. It didn't happen because it didn't happen. Because it couldn't happen.

Bret said...

Harry wrote: "So that's my proof. It didn't happen because it didn't happen. Because it couldn't happen."

The first part is tautology. The second part doesn't follow. Not much proven.

Harry Eagar said...

I can rephrase: many private investors tried to make it happen and failed; social investing succeeded where they failed.

BTW, I think it is cute that you believe FedEx introduced overnight delivery when the post office wouldn't. FedEx doesn't deliver overnight to my house. It doesn't deliver to my house at all. If someone sends me something by FedEx (as my stockbroker sometimes does), it's a 30-mile trip to get it; unless it isn't there, when it becomes a 60-mile trip.

Bret said...

Harry,

It is true that governments can invest more than private groups. It is true that things like the Manhattan Project and the Apollo Project had to be done, at least in their eras, by large governments. It also true, that with ten times the budget beyond what makes commercial sense projects can succeed where they would otherwise fail. That doesn't make it a good idea to do them. That doesn't mean that private groups wouldn't succeed at a later time, and possibly, at far less cost. Socialism can "succeed" at various projects, yet at the same time impoverish their citizens. For example, the USSR also succeeded in building nuclear weapons, yet their citizens paid quite a price for the USSR's various successes.

My observations are that Hey Skipper's comment was right on: "Successful mass production is the consequence of innovations beyond numbering ... No doubt it is possible to name a few that came about sooner than they otherwise would have done due to government spending, but the vast majority did not." And that your belief that mass production was "invented," basically in one fell swoop, by socialism, is very, very far off the mark.

erp said...

Harry, why don't you get pkgs in a timely manner?

Clovis e Adri said...

Harry,

You should use DHL. Have you tried?

Hey Skipper said...

[Harry:] I can rephrase: many private investors tried to make it happen and failed; social investing succeeded where they failed.

Your rephrasing is no help. Eli Whitney failed. Forty some years later, the opposite was the case. However, "social investing" was prominent in both cases. Something — actually many somethings — happened in the interim that made possible in 1850 what wasn't in 1815.

The emptiness of your rephrasing is telling. In 1850, what, exactly was required to make mass production possible that only "social investing" could provide? Or, put another way, what tools and techniques did the Harper Ferry arsenal rely upon that came from outside "social investing"? The Harper's Ferry arsenal succeeded where Eli Whitney failed due largely due to the intervening years, which you have conveniently elided.

[Clovis:] Just a historical note: the radio example actually does not help your argument. It owns a lot more to govt funded academy than to smart entrepreneurs.

I stand corrected.

To be clear, in certain realms, without the "social investing" that Harry keeps harping on about, wrongly every time, things we take for granted wouldn't exist. GPS, for instance. As well as every communications platform that needs to be in geostationary orbit.

[Harry:] No Langley, no Wright brothers.

Another evidence free assertion.

BTW, I think it is cute that you believe FedEx introduced overnight delivery when the post office wouldn't. FedEx doesn't deliver overnight to my house.

So? FedEx did, in fact, introduce overnight delivery. And it was able to do so because no one else had thought it possible. Fred Smith got a middling-C from the Harvard Business school on his thesis that became the plan for FedEx. That, by the way, is innovation, properly considered.

Of course, there is a a question that needs answering: how best to serve outlying communities. Does it make sense to stop FedEx delivering overnight to the vast majority of the US if it won't go to the rest?

Perhaps you think so. Then by all means, make the case.

However, there is a further question that begs asking. How much do the rest of us owe you to get the mail to your front door? After all, you don't have to live so far out; you are doing that to satisfy yourself. Why should the rest of us pay for that choice?

Hey Skipper said...

[Clovis:] Harry,

You should use DHL.


DHL tried to make a go of it here in the US. Couldn't compete, pulled out in 2009 or so, if memory serves.

Harry Eagar said...

Asked and answered, in 1892. How much would it cost society if everyone lived in crowded cities? Ever hear of RFD? Probably not.

It isn't easy to keep up with all the assertions, they come so thick; but I am puzzled by your repeated reference to the ratcheting wrench, a modest advance, Every mechanic's chest still has flat wrenches, and I use mine.

But there is more to the story. We all know what happened to the next person who innovated on the ratchet wrench, don't we? Don't we?

You are, of course, correct that machines improved between 1815 and 1850. And who improved them? The gummint.

erp I don't get packages timely because FedEx loses money on me and -- following its business model of 'least service at highest price' -- uses every trick to make sure I don't place any orders. It's the 'fireproof hotel' model of business and it works until it doesn't.

Anyhow, Skipper conforms my view that FedEx either doesn't understand the value of a network or doesn't care. Cherry-picking a social good is not the kind of innovation we want. Even Skipper wouldn't want it it were his insides.

I am surprised Harvard disparaged the plan, because the dean at about that time wrote a book extolling the same plan applied to repair of inguinal hernias. You could (I suppose still can) take your hernia to a clinic in Canada and get it fixed in a fraction of the time and cost at your local hospital -- if your surgery is the simplest kind.

Otherwise, they won't take you just as FedEX won't take me. Trouble is, there's a social cost there. To have good surgical outcomes and keep overall costs down, you need to do the job frequently. If you cream off the profitable ones to some greedy Canadian doctors, then when you need a surgery they won't take, you are forced, willynilly, to take a service that has been degraded by the profit motive. And tere goes your health, maybe.

Clovis, I don't use any of those services. The post office gives excellent service, at a fraction of the cost. It doesn't promise overnight delivery but that's usually what I get anyhow. I give the mail lady oranges (best in the world) and she knows me and my schedule. She goes out of the way to keep me happy, the opposite of the private companies.





erp said...

... Harry I would have thought a plain working man like yourself wouldn't need to order much.

As a student of history like yourself must know, it might have taken Rural Free Delivery months to delver a single letter -- never mind a new wrench.

BTW --bribing a federal employee to get special treatment is a serious crime.

Hey Skipper said...

[Harry:] I am puzzled by your repeated reference to the ratcheting wrench, a modest advance, Every mechanic's chest still has flat wrenches, and I use mine.

I referred to the ratcheting wrench because it is a perfect example of an innovation. And "modest advance" could only be written by someone who does not routinely work with wrenches.

You are, of course, correct that machines improved between 1815 and 1850. And who improved them? The gummint.

Bollocks. Independent inventors were responsible for the vast majority, if not all, of the improvements.

erp I don't get packages timely because FedEx loses money on me and -- following its business model of 'least service at highest price'

You once again, odd, considering you are a business journalist, but perhaps not so odd, considering you are a marxist, demonstrated you don't grasp the fundamentals of economics. Of course FedEx provides the least possible service at the highest possible price. Emphasis added, because what Harry left out is indispensable.

So why doesn't FedEx charge infinity for nothing?

Anyhow, Skipper conforms my view that FedEx either doesn't understand the value of a network or doesn't care.

FedEx knows the value of express delivery, and has the requirement of making a profit. You have not demonstrated the value of the postal service, but you have demonstrated the progressive's inability to understand there is no such thing as free: The post office gives excellent service, at a fraction of the cost. It doesn't. Why don't you bother yourself with a little bit of math and come up with a ballpark figure of how much the USPS would have to charge in order to eliminate the illusion of "free".

Speaking of FedEx, I have to start planning my flight from Paris to Manchester. Apparently, we have a full airplane.

How could that be?

Harry Eagar said...

You repeatedly demonstrate here tat you understand nothing abut te value of a network, better tan I coud. Attaboy.

A flight from Paris to Manchester is nt necessarily part of a network.

Dunno where you get the idea that the post office is free, but I read the papers, so I know FedEx did vale it enough to spend a lot of effort trying to destroy it. And what about Peter Roberts?

Hey Skipper said...

[Harry:] You repeatedly demonstrate here that you understand nothing about the value of a network, better than I coud.

You keep saying that. Unfortunately, the word "demonstrate" doesn't mean what you think it does. Unless, of course, you can quote something, anything, that I said regarding the value of any network, never mind the USPS.

A flight from Paris to Manchester isn't necessarily part of a network.

At a purely literal level, that statement is true. A particular flight could, indeed, not be part of a network. A training flight, for instance, isn't part of a network.

However, escaping from the realm of the purely literal by adding the obvious context -- I work for FedEx, 33,000 pounds of freight didn't just materialize out of the ether, than that flight from Paris to Manchester was obviously, as in blatantly, flagrantly, glaringly obvious, apparent, manifest, plain to see, that your comment must be intentionally obtuse.

Dunno where you get the idea that the post office is free ...

Dunno where you got the idea that I have that idea. Once again I shall repeat myself: rather then telling me what I ideas I have, quote what I say my ideas are. (Oddly, innumeracy, and evidentiary ineptitude seems to characterize progressives.)

For example, compare and contrast [Harry:] Dunno where you get the idea that the post office is free ... with [Hey Skipper:] You have not demonstrated the value of the postal service, but you have demonstrated the progressive's inability to understand there is no such thing as free: The post office gives excellent service, at a fraction of the cost. It doesn't.

I'm betting on more crickets abuse.

And what about Peter Roberts?

I don't know, Harry, what about Peter Roberts. Just as we still don't know about Rightwingers believe in property rights only, and while this might not be the case for every conservative, the nearer you approach the Austrian School, the closer you get to 100%..


Oh, and going back to somethings you said earlier:

Some innovations, like mass production by interchangeable parts ... are so complex and expensive that only socialized development succeeds [sic].

That is complete nonsense. Unless, of course, you can point out even one element of MPBIP that was so complex and expense that socialized development was necessary.

Well?

[Clovis:]
Harry,

You should use DHL. Have you tried?


I have just tried DHL. Ordered a couple things from Amazon.de. Delivery was supposed to be on Monday the 8th. We were at the apartment all day.

Nothing. Nada. Zilch. Nil. Zippo. Squanto.

It is now Saturday. Still Nothing, Nada, etc.

Went to the DHL site, armed with tracking number. Progress through the 8th, where it was received at the distribution center.

Since then: Nothing. Nada. Zilch. Nil. Zippo. Squanto.

So I went to their online chat to inquire. Or, I would have done, if there was such a thing. Sent them an email instead, which won't get answered until Monday.

Oh, BTW, the exact same thing happened with our other shipment, too.

In contrast, FedEx provides far more detailed shipment info every step along the way, and flags when things don't happen that should have happened. And if you need to talk to someone right now about something, they are right there.

Color me not impressed, and less perplexed about why DHL pulled out of the US.

Harry Eagar said...

DHL has not entirely pulled out of the United States. It has an office (a franchise, apparently) in my county. I haven't used it since I am so pleased with my convenient, cheap postal service.

Well, if you are going to praise the effectiveness of private innovation, you need to explain the fate of Peter Roberts and those like him. Not pretty.

Hey Skipper said...

... since I am so pleased with my convenient, cheap postal service.

Which is $200/year more expensive than you thought until a few days ago. But that's OK, progressives like spending other people's money on themselves.

Well, if you are going to praise the effectiveness of private innovation ...

Sounds like we agree, then, that mass production wasn't due to socialism.

Of course, with regard to the effectiveness of private innovation, I don't need to explain how Sears tried to rip off Roberts, nor how Ford or GM tried to ripoff the guy who invented the intermittent windshield wiper. They are two different concepts entirely.

However, it is worth noting that those corporate ripoff attempts were just like socialism writ small: if the benefits of inventiveness are taken, why bother?

Which goes a very long way to explaining why socialism and innovation almost never appear in the same sentence. Except, of course, when written by a marxist such as yourself.

BTW, what about:

Rightwingers believe in property rights only, and while this might not be the case for every conservative, the nearer you approach the Austrian School, the closer you get to 100%.

And what was it I said about the value of networks?

Clovis e Adri said...

Skipper,

I'd say it doesn't look like DHL pulled out of the USA at all.

I didn't expect my mentioning of the competition would lead you to ask for a comparison, but if you really want a second opinion...

I have tried the major ones many times already (FedEx, UPS, DHL, TNT), and I must tell you, I hardly trust anyone but DHL nowadays.

I may well agree they are not the faster, and probably not the most hightech ones when you want to check your delivery through internet. I also have the impression they are less competent within Germany than outside it, as it looks like you are experiencing now. I had experiences similar to yours when buying at Amazon.de back when I lived aprox. 15 miles from where you live now.

But for international orders, every other carrier has shown themselves pretty incompetent at one very, very important thing to me: dealing with customs clearance.

You usually shouldn't pay taxes, here in Brazil, when you order something at less than $50 from abroad. Also, if your order books, you should never, ever pay taxes, no matter the order value. [It may appear the height of prolixity for an American, but the fact is: our Constitution, no less, explicitly forbids taxes on books at every level].

To exemplify, just the other day I've ordered $59 in Physics books from Dover store. In past they used DHL and I have never had problems before. Now most unfortunately they are using TNT (I didn't know), so I was a bit surprised when TNT mailed me, a few days later, charging me more than $80 in taxes to deliver those books.

I have somewhat similar experiences with UPS and FedEx too.

Maybe, as DHL comes from a bureaucractic country such as Germany, they understand a little bit more about how to deal with bureaucractic things like a proper customs clearance. You Americans look too busy to learn that, and I am too tired of footing the ensuing bill.

Howard said...

Sure would be nice to have some of those property rights.

"It was at that fateful moment that the court decided to suddenly redefine the takings clause, changing the idea of “public use” to mean “public benefit” which opened the door to all sorts of government scheming."

erp said...

That government schemes for economic development have only benefitted the developers, usually cronies of the politicians, seems to have been lost on communities who allow their citizens' property to be confiscated.