Jerry White and John
Sherriff post regularly on the Facebook page Lucky and Good. We hope
you might join in the conversation there.
But for some readers, it is easier to get a weekly summary of the posts.
If you sign up on the left side with your email address you will get a periodic
update of our material. Here are our
posts from last week.
^^^
"Socialism, like the
ancient ideas from which it springs, confuses the distinction between
government and society. As a result of this, every time we object to a thing
being done by government, the socialists conclude that we object to its being
done at all.
We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."
~Frederic Bastiat
I would, today, exchange his word Socialism to Statist.
Jerry
We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."
~Frederic Bastiat
I would, today, exchange his word Socialism to Statist.
Jerry
^^^
John Dewey (1859 to 1952)
- a major voice of progressive education and liberalism....on Progressive
Education....
"And anyway the teachers—or should I say, nurses?—will be far too busy reassuring the dunces and patting them on the back to waste any time on real teaching. We shall no longer have to plan and toil to spread imperturbable conceit and incurable ignorance among men. The little vermin themselves will do it for us. Of course this would not follow unless all education became state education. But it will. That is part of the same movement. Penal taxes, designed for that purpose, are liquidating the Middle Class, the class who were prepared to save and spend and make sacrifices in order to have their children privately educated. The removal of this class, besides linking up with the abolition of education, is, fortunately, an inevitable effect of the spirit that says I’m as good as you...If ever there was a bunch of tall stalks that needed their tops knocked off, it was surely they."
Jerry
"And anyway the teachers—or should I say, nurses?—will be far too busy reassuring the dunces and patting them on the back to waste any time on real teaching. We shall no longer have to plan and toil to spread imperturbable conceit and incurable ignorance among men. The little vermin themselves will do it for us. Of course this would not follow unless all education became state education. But it will. That is part of the same movement. Penal taxes, designed for that purpose, are liquidating the Middle Class, the class who were prepared to save and spend and make sacrifices in order to have their children privately educated. The removal of this class, besides linking up with the abolition of education, is, fortunately, an inevitable effect of the spirit that says I’m as good as you...If ever there was a bunch of tall stalks that needed their tops knocked off, it was surely they."
Jerry
^^^
And I said “Isn’t this
unethical?”
And he said “It is perfectly legal,”
Jerry
And he said “It is perfectly legal,”
Jerry
^^^
Ah yes, the Law of
Unintended Consequences.
"Gov't interventions create unintended consequences that lead to calls for further intervention, and so on into a destructive spiral of more and more gov't control". - Mises
Jerry
"Gov't interventions create unintended consequences that lead to calls for further intervention, and so on into a destructive spiral of more and more gov't control". - Mises
Jerry
^^^
“History is always
written by the winners. When two cultures clash, the loser is obliterated, and
the winner writes the history books-books which glorify their own cause and
disparage the conquered foe. As Napoleon once said, 'What is history, but a
fable agreed upon?”
― Dan Brown, The Da Vinci Code
So given this, always be a bit skeptical about the history written by the winners. Don't ignore their story - you just might learn something. But also realize that they may have been extraordinarily lucky.
John
― Dan Brown, The Da Vinci Code
So given this, always be a bit skeptical about the history written by the winners. Don't ignore their story - you just might learn something. But also realize that they may have been extraordinarily lucky.
John
^^^
A good thought from
Donald J. Boudreaux (Professor of Economics and Martha and Nelson Getchell
Chair for the Study of Free Market Capitalism at the Mercatus Center George
Mason University.)
"Yep. In fact, poverty - real, absolute deprivation of the sort that was the common lot of nearly every human being until just a few centuries ago - has been utterly eliminated in every society that is market oriented. The war on poverty in these societies has been fought and won - decisively. And the vanquishing 'force' is market-based capitalism."
"Relative poverty, of course, still exists - and, by its very nature, will exist always in any society that doesn't completely reduce its citizens to subsistence levels of wealth."
Jerry
"Yep. In fact, poverty - real, absolute deprivation of the sort that was the common lot of nearly every human being until just a few centuries ago - has been utterly eliminated in every society that is market oriented. The war on poverty in these societies has been fought and won - decisively. And the vanquishing 'force' is market-based capitalism."
"Relative poverty, of course, still exists - and, by its very nature, will exist always in any society that doesn't completely reduce its citizens to subsistence levels of wealth."
Jerry
^^^
Some good thoughts from
David Kelley's book 'A Life of One's Own' (thanks to Cafe Hayek)...
Is money, in the form of taxes, forcible taken by the government and provided to the needy a form of charity? It takes 'X' hours of my time to pay my taxes each week. Lets say about 7 hours a week (on average) to pay my taxes. If this is true then why not compel every citizen to work for some period of time as a 'volunteer' somewhere (hospital, poverty center, etc.) Is there a difference? In the private sector don't people volunteer both their money and time to help the needy? "If government programs are simply a collective way to organize charitable activities, why not compel both sorts of contributions?" But of course you say that this is not 'right'. The government can't make an individual sacrifice his time for others, that would be involuntary servitude....oops....
Jerry
Is money, in the form of taxes, forcible taken by the government and provided to the needy a form of charity? It takes 'X' hours of my time to pay my taxes each week. Lets say about 7 hours a week (on average) to pay my taxes. If this is true then why not compel every citizen to work for some period of time as a 'volunteer' somewhere (hospital, poverty center, etc.) Is there a difference? In the private sector don't people volunteer both their money and time to help the needy? "If government programs are simply a collective way to organize charitable activities, why not compel both sorts of contributions?" But of course you say that this is not 'right'. The government can't make an individual sacrifice his time for others, that would be involuntary servitude....oops....
Jerry
^^^
When the shiitake hits
the fan, citizens tend to lose economic freedoms. We saw that earlier in Cyprus
where the government started by confiscating bank deposits and limiting the
amount of funds that anyone could take out of the country.
I was fascinated to see how the Argentine government has limited the international internet purchases because this was obviously a way that their citizens could export their rapidly deteriorating currency for real world goods. Refer to Mish’s post.
I was fascinated to see how the Argentine government has limited the international internet purchases because this was obviously a way that their citizens could export their rapidly deteriorating currency for real world goods. Refer to Mish’s post.
Mark - I would be interested to hear what the impacts on inflation and other changes are in Turkey?
John
Here was Mark’s response:
The Turkish lira has
crashed, but don't know whether the hot money being pulled out (though assume
it is). It is tough to separate self-inflicted damage of Erdogan's megalomania
starting this past summer from macro-trends.
But it does not look good for a country whose successes have been in my mind exaggerated and whose weaknesses - low-skills/education and growth based on reaping the low-hanging fruit of local trade - remain a fundamental restraint to sustainable growth. But blame is directed at an international conspiracy - really, no lie - to keep Turkey weak. Individual freedoms, already not anything to brag about, being attacked as a result. Freedom House just lowered its rating of Turkey in that regard. I'm worried, as have a stake in this place.
But it does not look good for a country whose successes have been in my mind exaggerated and whose weaknesses - low-skills/education and growth based on reaping the low-hanging fruit of local trade - remain a fundamental restraint to sustainable growth. But blame is directed at an international conspiracy - really, no lie - to keep Turkey weak. Individual freedoms, already not anything to brag about, being attacked as a result. Freedom House just lowered its rating of Turkey in that regard. I'm worried, as have a stake in this place.
^^^
The EOP (Equality of
Opportunity Project) study (equality-of-opportunity.org) discusses upward
mobility and comes to the conclusion that it has not been declining. The study
shows that income inequality isn’t the factor most correlated with mobility.
Family structure is. The EOP study on mobility across areas states that “The
fraction of children living in single-parent households is the strongest correlate of upward
income mobility (not moving up)” among all the variables the research team
explored. Social capital is also key since “high upward mobility areas tend to
have higher fractions of religious individuals and greater participation in
local civic organizations.” Good schools and less sprawl — thus less
segregation are also important factors.
Jerry
Jerry
^^^
Great
commercial....teach
our kids how Krony Kapitalism works in the real world....
Jerry
Jerry
John’s
response – Jerry, please remember that it is Crony Socialism not Crony
Capitalism.
^^^
Just saw that a number of businesses are
supporting the call for a higher minimum wage. Two of these are Costco and Ben
& Jerry's who now pay (last I heard) $11.50 and $15.97 an hour which is
well above the minimum wage mandated by the Federal Government. I guess that we
should give them the benefit of the doubt and say that they are doing this for
the 'good' of the minimum wage workers in the nation so that they may have a 'living' wage (at least those
that keep their jobs or get a MW job). Or could it be that they might be
thinking that their competitors who 'only' pay minimum wage would be hurt by
the proposed higher MW. Their competitors costs (for labor) are forces up,
making them less able to compete for customers and possible some competitors
will leave the market or scale back their operation? Na, I am just being a
cynic......
Just wondering why these 'for higher minimum wage' companies are so concerned about what their competitors are paying for labor.
Just wondering why these 'for higher minimum wage' companies are so concerned about what their competitors are paying for labor.
Jerry
^^^
If your attorney asks you to do something dishonest
or unethical run for the hills. If they lie to others they will lie to you. If
you discover that they have made a "small" lie to you, this is likely
the tip of the iceberg. See the blog post.
John
^^^
One of the expressions that I try to banish
from my speech and always causes me to question another speaker is: "Let
me be honest with you." What? Does that mean that everything else that
they have said without this caveat is dishonest? I always suggest a much better
expression "Let me be candid with you." You rarely owe candor but you
always should be honest (even when you don't brag about your honesty).
John
^^^
Champs listen to Yogi Berra’s advice: “When you
come to the fork in the road, take it.” I advocate an even more assertive
mantra: “Find a fork in the road and take it!” Forks in the road are like water
in the desert – they are source of life for entrepreneurs.
John
^^^
I’d like a piece
of this action if Buffet ever needed to lay off some of the action.
Unfortunately I can’t afford the whole thing (or even a piece that makes it
worth Buffet’s time to talk to me).
There are about 9 quintillion (this is 9 million trillion) different possible combinations. Jeff Bergen a DePaul University mathematics professor estimates the chances of someone that knows something about basketball having a one in 128 billion chance of winning.
The winner can receive 40 annual installments of $25 each or a one-time payment of $500 million – so the real cost of the payoff is $500 million not the advertised $one billion.
If there are one million entries then the rough odds of Buffet’s expected payout would be (1,000,000 * $500,000,000) / 128,000,000,000 = about $390,000. So Buffet charges one million and his expected profit is $610,000.
It’s a nice gig if you can get it and can afford the possible $500 million downside.
There are about 9 quintillion (this is 9 million trillion) different possible combinations. Jeff Bergen a DePaul University mathematics professor estimates the chances of someone that knows something about basketball having a one in 128 billion chance of winning.
The winner can receive 40 annual installments of $25 each or a one-time payment of $500 million – so the real cost of the payoff is $500 million not the advertised $one billion.
If there are one million entries then the rough odds of Buffet’s expected payout would be (1,000,000 * $500,000,000) / 128,000,000,000 = about $390,000. So Buffet charges one million and his expected profit is $610,000.
It’s a nice gig if you can get it and can afford the possible $500 million downside.
John
^^^
During the past few years we have been bombarded with stories
about how the European nations have wonderful healthcare insurance and that we,
as a nation, must follow in their footsteps for the sake of 'fairness'. Now I
have been reading articles about changes occurring in various European nations
that do not match these stories. From J.D. Tuccille today (January 22, 2014)
comes some data on health insurance in Sweden. Some quotes, from various Swedish sources,
provident by Tuccille follow:
“The number of private health care insurance policies has increased in recent years. In 2011 about 440,000 people had private health care insurance. Most of these people have their policy paid by their employer.”
"One in ten Swedes now has private health insurance."
"It's quicker to get a colleague back to work if you have an operation in two weeks' time rather than having to wait for a year,..It's terrible that I, as a young person, don't feel I can trust the health care system to take care of me."
"...visitors [to Sweden] are sometimes surprised to learn about year-long waiting times for cancer patients."
and one last quote:
"Income tax in Sweden is now lower than in France, Belgium and Denmark and public spending as a share of GDP has declined from a record 71.0 percent in 1993 to 53.3 percent last year."
Jerry
“The number of private health care insurance policies has increased in recent years. In 2011 about 440,000 people had private health care insurance. Most of these people have their policy paid by their employer.”
"One in ten Swedes now has private health insurance."
"It's quicker to get a colleague back to work if you have an operation in two weeks' time rather than having to wait for a year,..It's terrible that I, as a young person, don't feel I can trust the health care system to take care of me."
"...visitors [to Sweden] are sometimes surprised to learn about year-long waiting times for cancer patients."
and one last quote:
"Income tax in Sweden is now lower than in France, Belgium and Denmark and public spending as a share of GDP has declined from a record 71.0 percent in 1993 to 53.3 percent last year."
Jerry
^^^
There is an inherent conflict between finding diversity
(mathematical not social) and having an advantage on each of one’s bets. The
one company that I should know the most about is the one I have worked for
during the last two decades (this still happens on occasion.) It is the one in
which I have the best chance of an information advantage relative to the
company's future prospects (in varying degrees depending on if I work at the reception desk, sales forecasting, or
investor relations). But even if I believe wholeheartedly (and with a detailed
understanding) in the company and its future, if the competition or a black
swan puts us out of business, then I will likely lose my job, my health
insurance, and whatever I have invested in its stock.
On the other hand if I invest in 10 large cap stocks around the world, I have much more (although still limited) diversity in my portfolio. But there is no way I can have the same kind of information advantage that I might have on the company I have worked for during the last 20 years.
1. Advantage is based on a combination of better Information, relationships, market structure, level of competition, political scrutiny, and regulation.
2. Diversity is based on little or no correlation in the outcomes from my different bets.
It is great (and rare) when you can get a portfolio of bets in which you have both an advantage and diversity - and that is the rub.
On the other hand if I invest in 10 large cap stocks around the world, I have much more (although still limited) diversity in my portfolio. But there is no way I can have the same kind of information advantage that I might have on the company I have worked for during the last 20 years.
1. Advantage is based on a combination of better Information, relationships, market structure, level of competition, political scrutiny, and regulation.
2. Diversity is based on little or no correlation in the outcomes from my different bets.
It is great (and rare) when you can get a portfolio of bets in which you have both an advantage and diversity - and that is the rub.
John
^^^
I have been an advocate and I have been a
hyper-advocate. I was 100 times more valuable in the latter role.
I have written plenty of book reviews.
I have had close to 70 book reviews for my book (Lucky and Good) between the US and UK sites (mostly from friends).
But when I got energized over a recent book Blogging Enron by Cara Ellison – I went ballistic.
I was 100 times more valuable in getting the message out about this book than in my previous reviews.
First, I spent much more time writing the review. Then I posted it on Amazon. Then I posted on the Amazon UK site (you have to log in separated to do this). Then I posted it on my personal FB page with 500+ contacts. Then I posted it on the Lucky and Good FB page with 1100+ followers. Then I sent out a twitter message to my 500+ followers. Then I posted it on my blogger site.
But here was the hard part. I decided to send it to all of my Linkedin contacts. I have about 2800+ contacts and it turns out that Gmail limits me to 50 contacts per email and 1000 emails per day. So it took a minimum of 3 days and 56 emails to send my reviews out to my Linkedin contacts.
I’m not bragging here. I am simply stating that getting me excited to this extent on this outstanding book was more valuable by a factor of 100 rather than meeting the minimum threshold of having me simply write a review.
I don’t exactly know how you get folks this excited (I was already emotionally vested in the subject). I did not plan to get this energized. I simply read the book and came unglued.
By the way, this post is yet another reminder to buy this book if you haven’t so far. The ebook is only $2.99 and the paperback is $7.45. I hope that you will read this book and step back and think.
John
I have written plenty of book reviews.
I have had close to 70 book reviews for my book (Lucky and Good) between the US and UK sites (mostly from friends).
But when I got energized over a recent book Blogging Enron by Cara Ellison – I went ballistic.
I was 100 times more valuable in getting the message out about this book than in my previous reviews.
First, I spent much more time writing the review. Then I posted it on Amazon. Then I posted on the Amazon UK site (you have to log in separated to do this). Then I posted it on my personal FB page with 500+ contacts. Then I posted it on the Lucky and Good FB page with 1100+ followers. Then I sent out a twitter message to my 500+ followers. Then I posted it on my blogger site.
But here was the hard part. I decided to send it to all of my Linkedin contacts. I have about 2800+ contacts and it turns out that Gmail limits me to 50 contacts per email and 1000 emails per day. So it took a minimum of 3 days and 56 emails to send my reviews out to my Linkedin contacts.
I’m not bragging here. I am simply stating that getting me excited to this extent on this outstanding book was more valuable by a factor of 100 rather than meeting the minimum threshold of having me simply write a review.
I don’t exactly know how you get folks this excited (I was already emotionally vested in the subject). I did not plan to get this energized. I simply read the book and came unglued.
By the way, this post is yet another reminder to buy this book if you haven’t so far. The ebook is only $2.99 and the paperback is $7.45. I hope that you will read this book and step back and think.
John
^^^
Part of a thought experiment over at EconLog: Suppose
everyone had identical lifetime wage income and inherited no money. Also assume
all investments were risk-free. Incomes would still vary greatly due to
different preferences regarding current vs. future consumption (i.e. different
saving preferences.)
Should we really be looking at the present value of wage income, or the present value of consumption? Do capital income hugely distorts the numbers of the top one percent?
Does the fact that we measure realized capital gains rather than unrealized capital gains make income look more unequal than it is?
Jerry
Should we really be looking at the present value of wage income, or the present value of consumption? Do capital income hugely distorts the numbers of the top one percent?
Does the fact that we measure realized capital gains rather than unrealized capital gains make income look more unequal than it is?
Jerry
^^^
I must say that my old econ 101 professor, Ed Brooks (I miss
him and his wisdom very much), was right again. About what Jerry, you ask?
Well, about incentives and how everyone, rich and poor, conservative and
liberal, Republican and Democrat all are driven by incentives. And what, you
again ask, brought this on at 3am on a Tuesday morning. Just my reading and
cruising the internet looking for little known factoids.
Did you know that all 9 movies nominated for Best Picture (Oscar) were filmed in jurisdictions with movie production incentives? American Hustle (Mass.), Captain Phillips (VA.), Dallas Buyers Club (LA.), Gravity (UK), Her (CA.), Nebraska (NA.), Philomena (UK), 12 Years a Slave (LA.), and Wolf of Wall Street (NY).
The all got grants, or credit on expenditures, or funds from the local economic development offices, or tax credits, or some combination of these 'incentives'.
Strange how economics theory works and has worked for as long as records have been kept......
Jerry
Did you know that all 9 movies nominated for Best Picture (Oscar) were filmed in jurisdictions with movie production incentives? American Hustle (Mass.), Captain Phillips (VA.), Dallas Buyers Club (LA.), Gravity (UK), Her (CA.), Nebraska (NA.), Philomena (UK), 12 Years a Slave (LA.), and Wolf of Wall Street (NY).
The all got grants, or credit on expenditures, or funds from the local economic development offices, or tax credits, or some combination of these 'incentives'.
Strange how economics theory works and has worked for as long as records have been kept......
Jerry
^^^
From Erika Johnsen at Hot Air:
“Why is it, whenever the federal government — in all of their august and well-meaning wisdom — creates a program that either hands out money and/or attempts to manipulate the free market by injecting it with artificial incentives, it always seems to be so rife with waste, fraud, and, abuse? From agriculture and energy subsidies to food stamps to Medicare and Medicaid, the feds lose hundreds of billions of taxpayer dollars every year via the nefarious deeds of people who scam the system. It couldn’t be that Big Government is both a vehicle for costly, bureaucratic inefficiency as well as an enabler of opportunities for said waste, fraud, and abuse, could it?”
Jerry
“Why is it, whenever the federal government — in all of their august and well-meaning wisdom — creates a program that either hands out money and/or attempts to manipulate the free market by injecting it with artificial incentives, it always seems to be so rife with waste, fraud, and, abuse? From agriculture and energy subsidies to food stamps to Medicare and Medicaid, the feds lose hundreds of billions of taxpayer dollars every year via the nefarious deeds of people who scam the system. It couldn’t be that Big Government is both a vehicle for costly, bureaucratic inefficiency as well as an enabler of opportunities for said waste, fraud, and abuse, could it?”
Jerry
^^^
This is the 'limousine liberal' at his best. I may be a millionaire
(and Krugman is) but I got my wealth by working hard for it but those other
millionaires did not, they just stole it from the poor. Sorry, that last
sentence was my interpretation of what Paul K. said. We should not be surprised
at this op-ed because Paul K. has been saying this for a long time, such as his
statement back in 2010 -
"You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes." (we know that Krugman has no influence now does he and so he is just like the rest of us, 'the common man').
Krugman reminds me of Ellsworth M. Toohey (a rich limousine liberal in The Fountainhead) in that he hates men who show that outstanding achievements encourage the growth of everyone around them. That the desire for individual achievement is selfish and that all men are equal and can be forced to be equal by the power of the mob (read government).
Jerry
"You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes." (we know that Krugman has no influence now does he and so he is just like the rest of us, 'the common man').
Krugman reminds me of Ellsworth M. Toohey (a rich limousine liberal in The Fountainhead) in that he hates men who show that outstanding achievements encourage the growth of everyone around them. That the desire for individual achievement is selfish and that all men are equal and can be forced to be equal by the power of the mob (read government).
Jerry
^^^
"Having lots of cash only delays the onset of the sales
learning process." - Greg Gianforte & Marcus Gibson in Bootstrapping
Your Business copyright 2005
John
Leo Thompson replied: “ I
believe the best scenario for a start-up is to be held very tight on cash in
the early days until smart decision making becomes a habit. Once the team is
disciplined, they will make much better decisions when the cash arrives. During
the dot-com book days, I saw lots of high-tech start-ups destroy themselves by
crazy spending.”
^^^
The story in this book Making
Great Decisions in Business and Life permeates my book as well (Lucky
and Good): "I (Charles L. Hoooper) once asked my father-in-law why he
never invested in stocks. His reply: 'The stock market is like gambling.' I had
to agree with him: the stock market is like gambling. In his mind, gambling was
much to risky and so he stayed away completely. But many other things are like
gambling, too. In fact, much of what we do in life involves tremendous risk.
You study the situation, put down your bet, usually do just fine, sometimes hit
the jackpot, and sometimes get totally hammered."
John
^^^
In their book Making
Great Decisions in Business and Life, David R. Henderson and Charles L.
Hooper describe how in the old Soviet Union the government usually rewarded
managers for things that had all kinds of unintended and unwanted consequences.
"Managers of factories that produced nails optimized production by producing either fewer larger and heavier nails or more smaller nails. The fact that factories were judged by rough physical quotas rather than by their ability to satisfy customers-their customers were the state-had predictably bad results. If, to take a real case, a nail factory's output was measured by number, factories produced large numbers of small pin-like nails. If output was measured by weight, the nail factories shifted to fewer, very heavy nails."
What was never considered was the overall relationship of the value of the product as perceived by real customers, to the cost of the production. And this is where a free-market excels. Via millions of consumer and business decisions, managers get constant and ever changing feedback on the cost and the value of producing a small pin-like nail versus a large and heavy nail. Much of this information is communicated via constantly changing prices.
"Managers of factories that produced nails optimized production by producing either fewer larger and heavier nails or more smaller nails. The fact that factories were judged by rough physical quotas rather than by their ability to satisfy customers-their customers were the state-had predictably bad results. If, to take a real case, a nail factory's output was measured by number, factories produced large numbers of small pin-like nails. If output was measured by weight, the nail factories shifted to fewer, very heavy nails."
What was never considered was the overall relationship of the value of the product as perceived by real customers, to the cost of the production. And this is where a free-market excels. Via millions of consumer and business decisions, managers get constant and ever changing feedback on the cost and the value of producing a small pin-like nail versus a large and heavy nail. Much of this information is communicated via constantly changing prices.
John
^^^
At the Cafe Hayek this morning a quote from Gordon Tullock’s
1971 book, The Logic of the Law:
"The probability that I will become ill is actuarially computable. However, the amount of medical attention I have after becoming ill is not in any way limited. I am sure that if I so desired, I could have a $10,000 expenditure out of the treatment of a common cold. One of the best-known treatments for a cold is to spend some time on the Jamaican beaches. My decision as to how much to spend on treatments if I am ill is affected very sharply by how much it will cost me to spend that amount. If any and all treatments are free for me, then I may be expected to spend a good deal more than if I faced a real cost."
"As a consequence of this rather obvious fact, all schemes of medical insurance contain some kind of limitation on the freedom of the patient…. In places such as England where large-scale public health is provided, treatment is administratively rationed and there are long lines of people waiting for treatment."
And I might add that this will never happen here in the United States under any form of medical insurance (private or government) because we folks in the United States are not the same as people in other countries. We are just so much more rational and we understand that there must be limits on 'free' stuff.
BTW, that last paragraph was sarcasm on my part.....
Jerry
"The probability that I will become ill is actuarially computable. However, the amount of medical attention I have after becoming ill is not in any way limited. I am sure that if I so desired, I could have a $10,000 expenditure out of the treatment of a common cold. One of the best-known treatments for a cold is to spend some time on the Jamaican beaches. My decision as to how much to spend on treatments if I am ill is affected very sharply by how much it will cost me to spend that amount. If any and all treatments are free for me, then I may be expected to spend a good deal more than if I faced a real cost."
"As a consequence of this rather obvious fact, all schemes of medical insurance contain some kind of limitation on the freedom of the patient…. In places such as England where large-scale public health is provided, treatment is administratively rationed and there are long lines of people waiting for treatment."
And I might add that this will never happen here in the United States under any form of medical insurance (private or government) because we folks in the United States are not the same as people in other countries. We are just so much more rational and we understand that there must be limits on 'free' stuff.
BTW, that last paragraph was sarcasm on my part.....
Jerry
^^^
