Update (8/30/14): I’ve written a shorter version of this guide for teachers to hand out to their classes. If you’d like a PDF, shoot me an email: jenniferraff (at) utexas (dot) edu.
Last week’s post (The truth about vaccinations: Your physician knows more than the University of Google) sparked a very lively discussion, with comments from several people trying to persuade me (and the other readers) that their paper disproved everything that I’d been saying. While I encourage you to go read the comments and contribute your own, here I want to focus on the much larger issue that this debate raised: what constitutes scientific authority?
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Suppose you go to a doctor. You are in pain and you tell him that you feel like you are going to die. He takes your temperature, and sees that it is a perfectly normal 98.6F. He tells you to go home, you must be fine. He does not seem to be aware of any problem that can cause pain but not a fever (e.g. a broken vertebra, cancer, or bleeding). He is a quack.
It’s a good thing that real doctors have many diagnostics and indicators. They are not limited to just body temperature.
Let’s turn our attention to the monetary system. The quacks focus their attention on prices. The rate of change of prices—which they improperly define as inflation—is the monetary equivalent of body temperature in medicine. In some cases, it’s an important part of making a diagnosis.
And it is far from the only indicator.
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The battle over minimum wage is raging. Emotions are running hot. Some cities are setting the bar very high. For example, Seattle is mandating a $15/hour wage.
Economically, the issue is very simple. Minimum wage laws do not raise anyone’s wage. This is because it’s not sustainable to overpay.
Suppose you run a small tailor shop. Customers are willing to pay $20 to repair a pair of slacks. Why are they willing to pay that, and no more? It’s not just their budget, but also the relative value of fixing their old trousers compared to buying new. A higher wage for your employees will have no effect on customer willingness to pay.
You have rent, utilities, insurance, wear and tear on your sewing machines, etc. that add up to $10. Therefore your maximum gross profit is $10. You cannot pay someone $11, much less $15, to do this work. If the law…
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A story has been echoing around the financial news for a few weeks. One article about it, It’s official: America is now No. 2 by Brett Arends at MarketWatch, came to my attention. Arends asserts that the Chinese economy is now larger than the economy in the US. Here’s what he said.
“We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world.”
With GDP data from the IMF, we can easily see that the US economy is bigger than China’s. The IMF estimates 2014 GDP at $10.4T for China and $17.4T for the USA. So how does Arends claim the contrary? He uses different data that IMF adjusts. By this methodology, the Chinese economy is “really” $17.6T.
Although Chinese GDP is lower when measured in yuan and converted to dollars…
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Only last week, I published an article about the madness of Fed regulation. I presented several key assumptions behind all regulation, and exposed them to be false.
- Regulators Are Smart and They Care
- Compliance Makes Things Safe
- Unregulated Businesses Will Harm Us
- Regulation Turns Crooks Into Producers
- The Financial Crisis Occurred Due to Private Crimes
- The Fed Can Create Stability
- Central Planning Works
And now the Nobel committee has chosen to honor Jean Tirole with the prestigious prize. He earned this award and recognition for his work on the best way to regulate large, powerful firms in industries including banking.
He helped show, “what sort of regulations do we want to put in place so large and mighty firms will act in society’s interest,” Tore Ellingsen, the chairman of the prize committee, said after the award announcement.
How many of the fallacies I debunked are implicit in this? I count at least 5…
With visions of the military marching through the streets of the U. S., we read stories about how America is becoming a police-state; about how the police have become “militarized”.
What does this mean, though?
Are they” militarized” because they are using equipment that was originally created for the military and subsequently purchased by the police?
If so, why is this necessarily a bad thing?
In the past, police were armed with night sticks (or “billy clubs”) but as criminals became more organized and better armed, the police also increased their own arms and self defense equipment. Criminals today have access to firearms well beyond the “midnight specials” of the past and, in order to protect us, and themselves, the police must also increase their firepower and protective equipment, accordingly.
“But, ” you may say,” they are using this equipment against us and enforcing bad laws!”
I will address this valid point briefly in a moment.
What I wish to focus on in this article is the validity of “militarization” as a concept.
As human beings, we think in terms of concepts and, because we do, there are times when an “anti-concept” is able to creep into our language.
“An anti-concept is an unnecessary and rationally unusable term designed to replace and obliterate some legitimate concept. The use of anti-concepts gives the listeners a sense of approximate understanding. But in the realm of cognition, nothing is as bad as the approximate .. . .
One of today’s fashionable anti-concepts is “polarization.” Its meaning is not very clear, except that it is something bad—undesirable, socially destructive, evil—something that would split the country into irreconcilable camps and conflicts. It is used mainly in political issues and serves as a kind of “argument from intimidation”: it replaces a discussion of the merits (the truth or falsehood) of a given idea by the menacing accusation that such an idea would “polarize” the country—which is supposed to make one’s opponents retreat, protesting that they didn’t mean it.”
“Credibility and Polarization,” The Ayn Rand Letter
I view the term “militarization” as one such anti-concept because :
1) “its meaning is not very clear”
– When does the level of weaponry become” militarized”, and why is this level necessarily bad?
2) It is “something that would split the country into irreconcilable camps and conflicts”
– The populace vs the police.
3) It “serves as a kind of” argument from intimidation “.
– If one does not agree that they are” militarized “, one is naive because” everyone knows they are! ”
4)” It replaces a discussion of the merits… by the menacing accusation that ”
– if you disagree, you are enabling the police to use their weapons against the populace for their own ends which will lead to a police-state.
For these reasons, I believe that, as a valid concept,” militarization” falls short.
Returning to the point of the police using the weaponry against us, I will grant you that there are bad police officers, just as there are the bad in any profession. I, in no way, agree with any illegal and/or immoral use of force by the police, such as the anti-drug laws, anti-gambling laws, anti-prostitution laws, (or virtually any laws that fall under “vice”) that they enforce, but I believe that these two issues (the police and their equipment vs the government and the immoral laws they impose) should be kept separate and clearly defined.
Instead of “f¿¢|< the police", we should focus on "f¿¢|< bad laws".