Wednesday, March 28, 2007

Libertarians of the World Unite

Here's an interesting idea - get a whole bunch of committed libertarians and put them in one place to create a sort of libertarian homeland. That's what the Free State Project is about. Basically, they are looking for about 20000 people who will commit to move to New Hampshire where they will uphold libertarian principles. New Hampshire was chosen because it has no state income tax or state sales tax and with a motto "Live Free or Die", it's bound to be libertarian leaning. While I question whether it will make a difference, I do see it as an important step in libertarian activism.
Large governments don't work. Give a man power and he will abuse it. There are no ifs about it. My hat goes off to the Free State Project.

Saturday, March 24, 2007

As good as it gets...

Indur Goklany has written an excellent essay about the state of the world, which can be found here. No surprise really - we are healthier, wealthier and dare I say it, happier. Of course too much of a good thing can be a bad thing witness all those angst ridden teenagers at anti-globalization marches.
On the topic of globalization, few years ago, an excellent book by Martin Wolf called Why Globalization Works, looked at trade as the panacea for the world's poor. Indeed the percentage of people living on less than $1/day has more than halved in the last 20 years, global literacy levels have increased from 52% to 82%, and infant mortality rates have decreased almost everywhere. All this at a time of unprecedented increases in trade and freer movements of people and goods. It's almost painfully obvious that increasing trade is better for everyone. We wouldn't give the time of day to someone who would suggest increasing tariff barriers between the State of New York and the Commonwealth of Pennsylvania to protect jobs in New York and yet these are exactly the same sorts of arguments we are making on an international level.
Of course some people argue that a wealthy country trading with a poor country is not the same thing as two wealthy countries trading. Complete tosh. We haven't seen a drop in living standards in the US as a result of increased globalization. True average family incomes have not really increased but on the other hand, people's net wealth has, which is more important. More importantly, globalization has led to a stabilization in prices. Never have Americans looked so good dressed in low cost clothing from China.
The other thing that people forget is that the US economy has transformed itself in the last 40 years from manufacturing to services. Services now make up nearly 80% of the US economy. The US is the recognized leader in the services industry.
Indeed that "Great sucking noise" failed to materialize. Instead the US has gained massive benefits from free trade with Mexico. That Mexico hasn't benefited to the same degree is largely due to the inherent inefficiencies in the Mexican Economy.
The developing world has also benefited from globalization - witness India and China. Two economic basket cases 40 years ago are now poised to become the biggest economies this century.
Things are getting better with time. Increased globalization has led to greater innovation, more productivity, and increased trade. Increased competition keeps prices down while at the same time encouraging increased diversity of products and services. Consumers benefit from this and we are all, at the end, consumers.

Friday, March 23, 2007

Global warming Redux

Came across this interesting article about global warming. Another reason why we should not rush head-long into any solution that might fix global warming. In the end, we need to weigh the costs of doing something against the costs of doing nothing except mitigating the effects of global warming when or if (a very big if) they happen.

There are some, however that would take a more extreme approach such as building huge sunshades to lower the amount of energy reaching the earth or purposefully polluting our planet with aerosols to block sunlight. Now they do say "as a last resort". This, of course makes it all sound really dire. Reality is that even the worst predictions don't even come close to warranting these sorts of "remedies" but it all makes it sound very exciting.

Monday, March 19, 2007

Questioning climate change

My current beef is climate change. Before I begin, let's organize some of the arguments:

1) Climate change is happening and we must act.
2) Climate change might be happening but the risk of catastrophe is so great that we should spend now to counteract its effects.
3) Climate change is or might be happening but we can only mitigate it's effects.
4) Climate change might be happening and we should apply appropriate cost/benefit analysis methods.
5) Climate change is not happening or the evidence is quite shaky.

Most greens would put themselves in the category (1).
The Stern Report would be in category (2)
Robert J. Samuelson fits into category (3).
The Copenhagen Consensus would be in category (4)
And writers such as Nigel Calder would be in category (5).

Where I fit is between 4 and 5. I agree very much with the Copenhagen consensus that we need to consider how best to spend our money. ie. if I give you $1, where would you get the best return on this money. The Copenhagen consensus report found out that the top 4 best returns would be from investing in eliminating diseases such as HIV/AIDS, eliminating malnutrition, eliminating subsidies and tariffs (which is a major reason why the world's poor can't climb out from the trap of poverty), and preventing malaria which has a terrible social and economic impact on African countries. Somewhere at the bottom of the list was climate change.

Of course, we must adjust our thinking as new facts come in. The problem is that with all the hysteria surrounding Global Warming and Al Gore doing his global warming dance around the world, it's hard to seperate fact from theory and politicians are climbing over each other to figure out new ways to tax us (too bad they couldn't use the same level of creativity to tackle some other issues like completing the Doha round, which would give poor countries access to Western markets). The Stern Report was the first serious attempt to put a price tag on global warming but an excellent rebuttal came from Bjorn Lomborg in the WSJ, where he dismantles some of the assumptions (such as a very low discount rate) and puts into question whether we should be basing policy on this document. Problem is that it's already too late. The Stern Report is considered Fact.

So what's the point of this rant? No point really. Just wanted to air my frustrations with this whole global warming thing. A few years ago activists got all flustered by globalization. Now the new bogeyman is global warming (and of course the old enemies remain - corporate America and evil multinationals). Sigh...