Lion of the Blogosphere

A positional goods question

with 83 comments

Once upon a time on an online lawyers forum, I suggested that associates could save money by driving an inexpensive car like a Honda Civic (which was a small inexpensive car back then).

Some of the responses were in the nature that a Honda Civic would be a career killer, because what if you had to drive a partner or an important client to the airport in your Honda Civic?

I am not sure I believe that anyone cares what car you drive as long as it doesn’t look like a jalopy. On the other hand the attitude in the forum does demonstrate the emotion that I believe drives luxury purchases, which is not the conscious pursuit of status so much as the feeling that people have prove to the world that they are not losers. What do you think?

Written by Lion of the Blogosphere

April 19, 2015 at 8:02 pm

Posted in Wealth

The subjective theory of value (libertarianism part 4)

with 44 comments

Libertarians believe in the subjective theory of value. “The subjective theory of value is a theory of value which advances the idea that the value of a good is not determined by any inherent property of the good, nor by the amount of labor required to produce the good, but instead value is determined by the importance an acting individual places on a good for the achievement of their desired ends.” In other words, the value of something is subjective, and measured by what someone is willing to pay for it, and not what you think the value should be.

Now certain commenters have insisted that my statement that libertarians believe that what a person makes is exactly equal to the value they create is not what libertarians believe, but it’s simply a tautology of the subjective theory of value. If the “free market” was willing to pay billions of dollars for Bill Gates’ labor, that means the value of his labor was billions of dollars. The subjective theory of value is at the core of Austrian economics which is synonymous with libertarian economics.

Since libertarians believe that value is subjective, this can’t be disproved empirically, it but it’s easily disproved by using common sense. So put on your common-sense thinking caps, people.

In order to explain real-world economics, I’ve created the theory of value transference. Under my theory, value transference is the difference between a thing’s true value (which is indeed hard to objectively measure precisely) and what someone paid for it. (Although it’s a theory that’s still being refined, so I reserve the right to change it.)

In my economic universe, everyone wants to make money, but most people don’t care if they make money by creating value or by transferring value created by other people to themselves. Some people do think that what they do for a living should be socially useful, but they are in the minority. In the modern economy, most people don’t even choose whether they want to make money by creating value or by transferring value. They take whatever job is available to them and their employer directs their labor either towards value creation or value transference. And regardless of whether the employee creates or transfers value, some of that value will be transferred up the corporate ladder to higher level executives and then a residual amount to shareholders.

* * *

It should be further elaborated that libertarians/Austrians believe that there is one exception to the theory of subjective value, and that’s when the government butts into the free market, which allows people to make money by lobbying the government for favorable laws. Libertarians call this “rent-seeking behavior.” If government would only de-regulate everything and allow a completely laissez-faire economy, then all “rent-seeking” would go away and there would be libertarian bliss.

Written by Lion of the Blogosphere

April 19, 2015 at 3:10 pm

Comment about libertarianism

with 56 comments

Lowe writes:

How is libertarians generally disliking gov’t bureaucrats evidence that they hail corporate bosses as heroes?

Destructure is right, that you are addresses a caricature of libertarianism.

A simple Google search shows you that “government bureaucrats” is a routinely used phrase at Reason.com.

Libertarian John Stossel writes at Reason.com “Free enterprise does everything better. Why? Because if private companies don’t do things efficiently, they lose money and die.” Stossel, of course, is totally wrong. Once free enterprise has monopoly power, it can operate extremely inefficiently and still make money.

Anyway, from reading Reason.com, it’s clear that libertarians hate hate hate “government bureacrats” and love “free enterprise” which includes corporations and their bosses, who earn so much money because libertarians believe they are the best and brightest and thus deserving of those huge salaries because they create value and “take risk.”

I don’t have to caricature libertarians because they do such a great job of caricaturing themselves.

Written by Lion of the Blogosphere

April 17, 2015 at 1:24 pm

Posted in Libertarianism

People are people (libertarianism part 3)

with 50 comments

Libertarians believe that people who work for big corporations are super-value-creators and heroes, but people who work for the government are value-destroying “bureaucrats.”

Well the truth is that they are the same people. They come from the same colleges and have the same social circles and the same world view. My favorite example of this is Al Gore who was Vice President of the United States, and left that job to sit on the board of directors at Apple (where he made $30 million, although most of Al Gore’s wealth comes from managing an investment fund, which is the same way that Warren Buffet got rich). But even at lower levels, people move from private industry to government to private industry all the time.

And the reality of big corporations is that their bureaucracy is just as stifling as government bureaucracy. From personal experience, I can say that a government agency I used to work for, as a consultant, was more entrepreneurial than a big corporation I later worked for. And big corporations have HR departments that push diversity and other politically correct stuff just as relentlessly as government. Big corporations make money because they have monopoly power and not because they have super-efficient management.

* * *

If you need further evidence that big corporations are controlled by the same liberals who control government, how about today’s news that 43 CEOs from some of the world’s biggest corporations endorse action on climate change?

If Republicans were smart, they would punish these CEOs by passing a law which says that CEOs can’t make more than ten times the salary of the corporation’s lowest-paid employee. That would be funny, wouldn’t it?

Written by Lion of the Blogosphere

April 17, 2015 at 9:27 am

New essay on libertarianism, part 2, incentives

with 35 comments

What happens if the government creates a program to give money to unmarried women with children who need the money?

Libertarians are more likely than liberals to get the correct answer, which is that there will be more unmarried women with children collecting money from the government. Libertarians will smugly assert that liberals don’t understand that people respond to incentives.

But in fact, libertarians are wrong about liberals. Liberals do believe in incentives. They believe that the incentive of a potentially self-actualizing career is so much incredibly higher than the incentive of collecting modest sums of money from the government that no one would ever voluntarily choose the latter, and therefore the welfare program has no effect on the behavior of poor people. Didn’t all of the poor women read The Feminine Mystique? Libertarians have simply stumbled upon the correct answer because they have a much lower opinion of poor people than liberals, because libertarians judge people by how much money they are able to earn in the so-called “free market.”

Unfortunately, the same blind spot the liberals have for the poor, libertarians have for the rich. What happens when the structure of the economy is such that value transference work like investment banking pays huge amounts of money, while value creation work in science and engineering pays only middle-class wages? The answer is that the most intelligent and capable are incentivized to work in the sectors where they make more money but don’t benefit society because they aren’t creating value, they are just transferring the value created by the scientists and engineers to themselves.

Libertarian Republican Senator Rand Paul, in January, proposed a foreign profits tax holiday to allow companies like Apple (run by liberals such as Tim Cook and Al Gore) to repatriate their foreign profits without having to pay the normal 35% corporate income tax. What sort of incentive does this create that companies are given a reward for cheating on the spirit of the income tax system in the first place? The same sort of bad incentive that amnesty for illegal immigrants would create, except that in the first case the bad incentive is directed towards rich people, and in the latter case the bad incentive is directed towards poor people. (It’s interesting that Democrat Barbara Boxer is supporting Rand Paul. I guess she wants to pay back the rich people who donated to her campaigns.)

The liberal Huffington Post columnist Dave Johnson (no to be confused with the manager of the 1986 Mets) demonstrates that he understands incentives very well:

If you reward bad behavior you create an incentive for the bad behavior to continue. This is certainly the case with taxes on profits made outside the country. Rewarding multinational companies for keeping profits outside of the country has cost us jobs and tax revenue.

The conclusion is that liberals and libertarians alike both understand incentives when the incentive is created by a law they disprove of.

* * *

COMMENT SPOTLIGHT

“Chairman” writes:

I don’t view welfare disincentivizing people to work as a bad thing. If everyone on welfare now suddenly had an intense incentive to find a crappy job, then crappy jobs would be even worse, pay worse, have even less than the little opportunity for mobility they afford now, and be harder to find so crappy employers would have the power to make applicants jump through even more ridiculous hoops to get these shitty jobs than they already have. Welfare disincentivizing work is a policy that increases the power of employees vs. the power of employers, however little, which is in my mind almost always a good thing.

Written by Lion of the Blogosphere

April 16, 2015 at 9:39 am

New essay on libertarianism, part 1

with 60 comments

Inspired by this George Monbiot blog post which was given to me by commenter “Julian,” here’s yet another essay from me about libertarianism.

Libertarians believe that, in the absence of government regulation, the amount of money one earns is exactly equal to the amount of value one created. Libertarians get all riled up, for some reason, when I state it this way, but I should know because I used to be a libertarian and I used to believe that. And if they argue that the word “exactly” isn’t quite correct, they do believe that it’s correct enough such that there’s no need for any sort of government regulation.

Once I wrote in a blog post that for the most part, people just want to become rich, and they don’t care if they become rich in a way that doesn’t create any value. This caused an outraged libertarian commenter to explain that there’s no way to become rich without creating value.

But this is just a belief system. Like believing in Jesus, or Mohammed, or Buddha. There’s no scientific evidence that the libertarian belief is true. Common sense in fact, ought to tell you that the libertarian belief is false. There are obvious cases of people who are rich who didn’t create any value, such as those who became rich through marriage or being born to rich parents. Yes, libertarians have some sort of philosophical explanation for why those exception don’t matter, but as a philosophy it’s inherently impossible to prove that it’s the scientifically correct philosophy. People can become rich from insider trading, which libertarians don’t believe should be illegal (because it’s an unnecessary government regulation and the market can “self-regulate” better than government bureaucrats ever could!). I personally don’t see how insider trading creates value.

Going back to common sense, I think that common sense ought to tell us that only superman and not a regular human being could personally create billions of dollars of value. So how do people become billionaires? People become billionaires by obtaining a monopoly, and monopolies are the natural state of commerce in the modern technological economy, so one doesn’t have to be superman in order luck into owning a monopoly. Of course, everyone wants to own a monopoly and become rich, or at least a large percentage of people want to become rich, so the competition to obtain one of these monopolies can be pretty intense, so the difficulty of obtaining a monopoly that makes massive amounts of money is confused by libertarians with actual value creation. I suppose this is especially confusing when the monopoly in question makes something that seems valuable like iPhones, but libertarians should really know better when it comes to financial monopolies which just move money around.

I will have to finish this in a subsequent post or posts.

Written by Lion of the Blogosphere

April 15, 2015 at 11:04 am

Posted in Libertarianism

Republican summary

with 62 comments

Jeb Bush

Considered the front-runner, but I think that people are tired of Bushes and he is an easy target to be picked off.

Scott Walker

Considered the most likely to beat Jeb, and I agree with that.

Marco Rubio

This guy is really out of his league, and no one considers him as an alternative to Jeb beause he’s also a moderate pro-immigration Republican from Florida. If you want that, why not just vote for Bush who has already raised massive amounts of money and is favored by pro-immigration business interests.

Rand Paul

Less nutty than his father, but still too nutty to be elected. Too many weird positions. No one understands that he’s a paleo-conservative, people think he’s “libertarian.” Has zero chance.

Mike Huckabee

Way underrated by everyone, he has the best chance to beat Jeb if Walker fails. He won in Iowa before. His job with Fox News means he has had a LOT of practice in front of the camera and will excel in debates. Walker could make some mistake and Huckabee could catch up. Don’t write him off. However, his supoprt for the gimmicky “Fair Tax” is a negative.

Ted Cruz

Maybe he’s the smartest guy in this group, but his persona is mean and beta and lacking in the all-important gravitas.

Ben Carson

His only qualification for the job is that he’s black.

Chris Christie

Killed off by “Bridgegate”

Rick Perry

Was out of his league last time around, still out of his league.

Bobby Jindal

Absolutely no gravitas. Zero.

Rick Santorum

Was out of his league last time around, still out of his league.

Written by Lion of the Blogosphere

April 14, 2015 at 4:42 pm

Posted in Politics

Scott Walker vs. Marco Rubio on evolution

with 106 comments

Scott Walker knew not to say anything (which vaguely annoys liberals a whole lot but in a way they can’t put a finger on).

Marco Rubio gave a stupid answer.

This demonstrates the superiority of the Walker over Rubio. Rubio is just not smart enough to succeed in a presidential campaign.

Written by Lion of the Blogosphere

April 13, 2015 at 12:32 pm

Posted in Politics

No one dares to oppose gay marriage

with 66 comments

There was a New York Times article this weekend about how there are no lawyers from any big law firms who are willing to argue in the Supreme Court against gay marriage. This is because the idea of being opposed is so abhorrent, almost like being racist, no respectable lawyer wants to touch it.

And remember that lawyers often represent the world’s worst scum but still remain respectable. There is normally a belief in the legal community that everyone is entitled to legal representation (especially if they are willing to pay for it) and it doesn’t reflect poorly on the lawyer if the client is scum, because the lawyer is engaging in a public benefit to ensure that every person has a fair hearing in court. That’s what professor Michael Berch taught me in my legal ethics class.

Once again, this demonstrates the amazing power of the gay-controlled mainstream media that they could so fundamentally alter society’s views in only thirty years. Thirty years ago, the notion of two men marrying each other seemed ludicrous to everyone, even atheist liberals.

Written by Lion of the Blogosphere

April 13, 2015 at 10:27 am

Posted in News

Today in the news

with 15 comments

Thumbs up to Pope Francis for calling Turkey’s slaughter of Christian Armenians a “genocide.” Because he’s a cool socialist pope respected more by the atheist mainstream media than all other popes before him, his words may actually sway opinion.

I am amused by the anti-Hillary “street art” in Brooklyn.

Why is Marco Rubio running for president? He has no chance of winning. Doesn’t he know that? Also, he’s just not that smart, he’s going to embarrass himself the way that Rick Perry did the last go-around.

ISIS is now calling for attacks against America. We should have given all ISIS sympathizers a free one-way ticket to Syria. But we had to keep them in the United States, and now they will become an Islamic fifth column.

Written by Lion of the Blogosphere

April 13, 2015 at 9:44 am

Posted in News

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