Thursday, June 26, 2008

Man's Limitless Need for Wealth

This is my friend Roger Slothower.

Roger, one of the most full-of-life people I know, died very unexpectedly of a heart attack on May 19, 2008. For me, Roger’s sudden death makes it all the more real and personal why we can never have enough wealth.

Current “cultural wisdom” contains an outcry for cutting back: less production, less consumption, less wealth. We repeatedly hear how our standard of living is destroying the earth and the future. Our wealth is the evidence used to convict us of the crime of wasting precious, scarce resources, of polluting the atmosphere with climate-changing CO2, of causing the poverty present in rest of the world. We are too greedy! We have more than we need!

By what standard?

The above conclusions are all based on the assumption that the earth and its resources are the limiting factor, that the greatest scarcity we face is the finiteness of pristine natural resources present on our Spaceship Earth. And thus, the cry to conserve resources and ration our use of energy. Recycle, Reuse, Refuse and Reduce.

Yet, the shortages we face in usable natural resources are minimal when measured against the scarcest resource of all: human life. With the exception of the miniscule amount of matter changed into energy in a nuclear explosion, we never use up anything! We only change how it is arranged, its present form and function. Trees are turned into houses and paper. Sand is turned into fiber optics and computer chips. Water and soil are turned into food. And so forth. The matter changes form, but none of it disappears. What disappears is people.

People are the truly finite resource. We are what come and go on this earth. Each of us has a very limited time here, and when it is over, it is over. Forever. By the standard of human life, we do not have enough wealth, enough material goods used in service of our lives. We do not produce or consume enough. When human life is seen as the highest value, the need to conserve physical matter pales by comparison.

Is it possible to have too much of one’s life? Too much health? Too much well-being? In order to continue expanding our human potential, improving the quality of our lives, we must exploit the material resources on earth. We must take the nature-given and alter it to better serve our lives. Even the preservation of wilderness is a value stemming from the beauty and respite it offers us in lives that flourish because of the prior exsistence of wealth beyond the requirements of mere survival.

By the standard of human life, it is human time, human labor that must be conserved. The way this is achieved is to increase the productivity of labor. That means increasing our investment in capital goods: the machines, the tools, the knowledge and technology, the systems of organization which allow us to accomplish more in less time. That means preserving and expanding human freedom so as to unleash the creative potential needed to solve the problems of producing ever more wealth.

When my grandparents were children, people died and were crippled for lack of antibiotics. In my mother and father’s time, children lost their parents from the lack of open-heart surgery and cardiac catheritization. In my time, we lost Roger from the lack of an economical way to diagnose unsuspected vulnerability to heart attacks, and my brother-in-law Glenn from the lack of effective treatment for cancer. My mother to Parkinson's. My friend to depression. So many others....

The solution is more wealth. Wealth applied to the advancement of human life.

For some people, that means increased access to clean water, adequate nutrition and shelter. For others, it means pushing the envelope of medical technology and a million other things we could dream up. All of this requires human labor, ingenuity, creativity. We have all the resources in the world. What we need is more time.

Roger may not have agreed with this perspective. In fact, chances are, he wouldn’t have, though I don’t think he’d mind this tribute. I just wish I could talk with him and find out.


Saturday, June 21, 2008

Basking in Benevolence

What a delight it is to sit on my deck, soak up the California summer sunshine, watch the ocean shift from early-morning steel-grey to a glistening, late-afternoon silver-sapphire, engrossed in the reading of Capitalism: A Treatise on Economics by George Reisman, Professor Emeritus of Economics.

Sun and economics. I revel in them both.

I am just finishing up Part I (a mere 100+ pages of this 1000 page magnum opus) – and already at multiple points, I’ve had to pause, draw in a luxurious deep breath of sea-side fresh air, and immerse myself in the glorious benevolence which emanates from his discussion of capitalism. Oh, he is understandably testy about and disgusted by the misanthropic premises of environmentalism, but the overall tone of his writing is one of reverence and awe for the complex, yet finely-tuned and superbly functioning mechanisms of the free market. He repeatedly highlights the incalculable benefits capitalism has bestowed on the lives of human beings: longer life-spans, better health, a cleaner, safer environment, greater well-being, an alternative to war.

Peaceful, mutually-beneficial, voluntary trade. That is the essence of capitalism. The application of individual rights (life, liberty and property) consistently applied to trade results in transactions where each party is enriched, each life enhanced. In the struggle to overcome poverty, in a life which would otherwise be “solitary, poor, nasty, brutish and short,” capitalism provides the means to make allies of us all. I can’t wait to read more about the “benevolence of economic competition and economic inequality” –phrases he offers as appetizers to the deeper explanations yet to come.

Down the road, I hope I have time to summarize in this blog some my favorites from the myriad of points he makes, but for now, I just want to share the sensation of the splendid sun shining down on me – and the glorious, life-affirming warmth shining out at me in ideas and sentiments from Dr. Reisman’s book.

Economics. Who would have thought?

Wednesday, June 18, 2008

Priceless Green Angst

“Paper or plastic?”

This simple question, asked with a friendly, innocent smile by the grocery store courtesy clerk (a.k.a. check-out bagger) is enough to cause shopping paralysis in a conscientious “green” consumer.

Paper biodegrades, but logging leads to the cutting of old-growth forests. Plastic ends up in landfills, but it manufacture uses less CO2-producing energy. There’s always reusable canvas bags, but how do you calculate the value of your time remembering to bring them as well as cost of purchasing them? Is this really an important enough issue to spend hours on the internet researching all the alternatives?

Multiply this quandary across a myriad of consumer choices (cardboard cartons or glass milk bottles, disposable diapers or water-intensive cleaning of cloth ones, mercury-containing compact fluorescent bulbs versus energy-sucking incandescents, biofuels and food shortages versus expensive hybrids versus less convenient mass transit) and what you end up with is green overload and angst.

How can anyone ever have the time to bike to work if they have to spend all that time researching and evaluating the costs and benefits of these everyday purchases? How is anyone supposed to figure out what is the best and most efficient use of Earth’s scarce resources?

We are all caught in the throws of economic chaos. A misplaced desire to “save the earth” has ended up destroying our best means of rational, economic (and ecologic) calculation: the free market price system.

The free market acts like a vast computer coordinating the trillions of decisions made by all participating individuals as to what resources are desired and in what quantities. Prices are the signals which integrate and harmonize the plans and decisions of each individual with the plans and decisions of everyone else*.

Free market prices reflect the sum total of demands relative to supply for every resource (along with every existing alternative use of every resource.) The profit motive assures us that the most efficient users of those reources are the most highly rewarded, and that inefficient users are penalized. For the system to function optimally, profit seekers must be free to compete and consumers must be free to choose.

Every government intervention into the free market system acts as a price distorter. Actions such as taxes, tariffs, regulations and license requirements add artificial costs, making something seem more scarce than it really is. Subsidies, price controls, tax and regulatory breaks make a resource seem more abundant than it really is. These attempts to “fix” the free market actually work to disrupt the very mechanism needed for rational economic calculation. Even with all the research you can muster trying to sort through costs, benefits, pros and cons, the current system of distorted prices will never give you more than guess work. Garbage in, garbage out. If the data you are working with to make calculations does not reflect true scarcity or abundance, there is no rational way to decide. The end result: chaos, angst.

Unhamper the market by eliminating artificial manipulations via government intervention (which really means coercion requested by some special interest group) and decisions become straight forward: profits and free competition direct resources to their most efficient uses and users. Prices reflect true supply (or if you prefer scarcity) relative to actual demand. In this way, free market prices give us the information we need to make intelligent decisions regarding the best use of resources. When you go shopping, you can then make your personal private choices by balancing your own priorities with your own scarce resources. And, every other free individual gets to do the same.

The free market helps us preserve not only our resources, but our freedom as well.

*Thank you to George Reisman for this formulation, and others, in multiple works including Capitalism (see link under Politics and Economics in sidebar.)

(Published in TIA Daily June 19, 2008)

Sunday, June 1, 2008

Freedom Fighters

This is an experiment. I am trying to learn how to embed videos on this blog.

The first is a brief (about five minutes) video. Here's a descritption from Cato:

Venezuela's student movement emerged in May of 2007 in response to a government-ordered shutdown of the nation's oldest private television station, RCTV. In the face of ongoing death threats and continual intimidation due to his prominent and vocal leadership, 23-year-old law student Yon Goicoechea, recipient of the 2008 Milton Friedman Prize for Advancing Liberty, plays a pivotal role in organizing and voicing opposition to the erosion of human and civil rights in his country. In his commitment to a modern Venezuela, Goicoechea emphasizes tolerance and the human right to seek prosperity.