This morning I was awoken by my alarm clock powered by electricity generated by the public power monopoly regulated by the US department of energy. I then took a shower in the clean water provided by the municipal water utility. After that, I turned on the TV to one of the FCC regulated channels to see what the national weather service of the national oceanographic and atmospheric administration determined the weather was going to be like using satellites designed, built, and launched by the national aeronautics and space administration. I watched this while eating my breakfast of US department of agriculture inspected food and taking the drugs which have been determined as safe by the food and drug administration.
At the appropriate time as regulated by the US congress and kept accurate by the national institute of standards and technology and the US naval observatory, I get into my national highway traffic safety administration approved automobile and set out to work on the roads build by the local, state, and federal departments of transportation, possibly stopping to purchase additional fuel of a quality level determined by the environmental protection agency, using legal tender issed by the federal reserve bank. On the way out the door I deposit any mail I have to be sent out via the US postal service and drop the kids off at the public school.
After spending another day not being maimed or killed at work thanks to the workplace regulations imposed by the department of labor and the occupational safety and health administration, enjoying another two meals which again do not kill me because of the USDA, I drive my NHTSA car back home on the DOT roads, to my house which has not burned down in my absence because of the state and local building codes and fire marshal’s inspection, and which has not been plundered of all its valuables thanks to the local police department.
I then log on to the internet which was developed by the defense advanced research projects administration and post on freerepublic.com and fox news forums about how SOCIALISM in medicine is BAD because the government can’t do anything right.

This brief post made me think of Russ Roberts’ general intention behind Invisible Heart – empathetic classical liberalism. Roberts’ sort of describes the brilliance and majesty of iPencil stories, the power of choice and the wonderment of spontaneous orders. Isn’t it all so obviously good? Dan Klein’s friend Joy would certainly agree.
When we compare Roberts’ project to this post (or something like it) – mainly an artistic device that communicates an opposing perspective – it holds another implication that the conclusions of social science are merely matters of interpretation. In that sense social science is no science at all.
At this point the debate almost inevitably appears empirical. From which source is the majority of social order stemming from – voluntary exchange or governmental design and prodding? Can we measure this, if yes then how do we know that we’re doing it right?
Robert’s approach wins here, his ongoing collection and restating the beauty of iPencil stories gives his readers a vision as to the infinite complexity and size of the economy.

And my response:
I don’t think secession type movements can sustain on ideology alone. So I’ll ignore it momentarily.
My first impression is that Tiebout competition would drive “good” results. Regardless of whether the heads of such movements, “get the rules right,” increasing the supply of governance should drive down price. Leaders would want a greater tax base through economic prosperity. Rational expectations plus economic freedom index shazaam! global prosperity.
That’s probably a best case scenario. More likely:
Whether the growth / transition periods of these islands was fast or slow would determine their sustainability. It might help to think of young states, post war contexts, post soviet contexts, post natural disaster contexts… geez! wonder why this sparked your interest Pete?
My guess is these experiments would be stuck in a sort of horse race between being captured by existing interests on the one hand and failing to develop on the other. Much like the market place, certain policy baskets can systematically crowd out particular sectors – inexpensive private schools, small scale charity, why not sizes and or types of governments? Maybe existing states are benefiting from economies of scale so these newbies wont be able to provide competitive public goods packages?
My guess is that the market is dynamic in service offerings enough and debilitating in taxation and regulation enough currently that some industry more probably some slough of industries would find some significant gains from moving to a stateless society. Server hosting has been one to date, so were many financial serves essentially – Cayman islands bank accounts and the like.
If small scale experiments had long periods of developing then mechanisms to increase the scale and quicken the pace of development could be ensured through constitutional foresight. But in such a case owners of current capital would have to share the role as Kirznerian entrepreneurs. One could only expect innovation in government when the owners of existing dominant capital stocks also discovered the opportunities for improvement. But only in so far as those benefits of innovation outpace their current benefits gained through the status quo.
Since larger scale sea-steads or sea steads that could develop more quickly would presumably have a better chance of survival than perhaps large scale corporations would fund such projects, such a dominant vested interest in the original stages would likely try to insulate its corporate interests. If firm zero that was attracted to seasteadia was Microsoft and they fronted a bunch of money to build infrastructure etc. I doubt they would be honky dorey if Apple was the next invite.
In this sense the world the world would look a lot like it does now, but hopefully wealthier.

Criminal justice “system” v. criminal justice “service”
The Supreme Court doesn’t care about criminal justice
Calculation problems in the war on drugs
Abolish life without parole sentences!

Is Michael vick being over punished?

Crime rates in major cities have dropped. Is deterrence working?

Anyone who has done an interview for television media knows that even though they roll tape and take up your time for up to a half hour, the vast majority of material winds up on the cutting room floor. While I think the points I make in this interview are true, the lead in of the piece is a bit dubious given my conversation with the reporter. The video implies that the success of New Orleans is due in large part because of the large amount of federal funding that came into the area after Katrina. I guess that means we should all be hopeful about stimulus in the wake of crises…
Just to be clear I explicitly told the reporters during my interview that I thought federal and large scale government involvement post-Katrina had done more harm than good. The successful rebuilding and know resilient endurance through the financial crises that New Orleans has experienced is a testament to the power of markets and capitalism.

Caplan’s got an interesting post summarizing Portfolio – a book I haven’t read. Bryan’s most interesting comment about the book:

Yes, the world’s poor are striving to better their lot. But what they really need isn’t small-scale entrepreneurship and micro-credit. It’s employment in the formal sector, and access to international credit markets. What they need, in short, is globalization. Either they need to come to us, or our institutions need to go to them.

In my experience this attention to funneling the bottom classes into the formal sector is explicitly mentioned as a primary goal of microfinance programs, but this leaves a few very important clarifying questions:
1. The typical Austro-Virginian political economy critique: do micro-finance programs have the knowledge or the incentives to accomplish this goal?
2. Do we (economists skeptical of microfinance) or they (microfinance proponents) have a good accounting of the fundamental causes for why these lower class populations are stuck in the illegitimate – dare one say “black market” – sector?
3. Is there a full accounting of all or at least most of the obstacles that may arise with the application of new micro-finance policies?
I share Caplan’s general point mostly because I think the answers to number one aren’t good because most of the support for microfinance programs are coming from the public or quasi public sectors. I think the answer to number two is a mild yes for we but a resounding no for they. And the response to three is dependent on the answers for one and two.

A great post on modernity:

The total volume is so massive we couldn’t consume that top 10% if we tried with all our might… Friedman’s problem is that he ignores the countervailing effects of population and wealth. Lots of creative people serving a big market of rich consumers is a recipe for progress – and that is precisely what see we all around us.

On this note I highly recommend: Rip: A Remix Manifesto.

Art Carden at Division of Labor has a great post today on the widespread acceptance of inevitable environmental catastrophe.

a public school teacher in our congregation had been encouraged by the School Board to highlight the “fact” that overpopulation is our #1 environmental problem as part of the Earth Day curriculum. That this is demonstrably false doesn’t seem to trouble anyone. In the face of compelling evidence, people cling nonetheless to environmentalist mythology.

Behavioral economists are always so worried that we under-estimate the likelihood of catastrophe’s because of cognitive biases and inabilities to deal with very big and very small numbers. But the political sphere seems to have force fitted this issue so that the bias runs the other way.

A while back I posted this question about the political implications of people who believe in an “end of days scenario.”
Today I found this interesting post at Offsetting Behavior.

CHRISTOPHER CROWE, International Monetary Fund (IMF)
Abstract: The recent housing bust has reignited interest in psychological theories of speculative excess (Shiller, 2007). I investigate this issue by identifying a segment of the U.S. population–evangelical protestants–that may be less prone to speculative motives, and uncover a significant negative relationship between their population share and house price volatility. Evangelicals’ focus on Biblical prophecy could account for this difference, since it may enable them to interpret otherwise negative events as containing positive news, dampening the response of house prices to shocks. I provide evidence for this channel using a popular internet measure of “prophetic activity” and a 9/11 event study. I also analyze survey data covering religious beliefs and asset holding, and find that ‘end times’ beliefs are associated with a one-third decline in net worth, consistent with these beliefs providing a form of psychic insurance (Scheve and Stasavage, 2006a and 2006b) that reduces asset demand.

Just a small quote, but the video is up this time.

Pete Boettke recently posted a photo of Virgil Storr’s office wall – a beautiful arrangement of photographs depicting Virgil’s intellectual heritage. I had a similar desire for my own office, but I lack sufficient pictures for the more recent scholars. Instead I settled for the pack of Austrian scholars for sale at mises.org and some custom frames.



Jen Mansfield made these frames especially for me. She is a very talented New Orleans artist and a close personal friend. I highly recommend these frames to anyone interested in re-creating their own intellectual family tree.