Apathy kills Wednesday, Mar 31 2010 

WikiLeaks has just released a rather disturbing document. The leaked document comes from the CIA, and it details how the manipulation of public opinion should be used to bolster support for our war in Afghanistan. The CIA is apparently concerned with the possibility of a “Dutch-style debate” in other NATO countries, “notably France and Germany.” The Dutch, of course, made news last month after their government collapsed amid debates as to whether the country should keep its troops in Afghanistan or not. The Dutch will pull their troops out by August.

Naturally, the U.S. government is very concerned about this. If a “Dutch-style debate” spreads to other countries, the mission in Afghanistan could be jeopardized. They know this because they know their war in Afghanistan is overwhelmingly opposed by the public. (You can read my post on why I think the Afghanistan War is fundamentally wrong here.) The CIA acknowledges, “Berlin and Paris currently maintain the third and fourth highest ISAF troop levels, despite the opposition of 80 percent of German and French respondents to increased ISAF deployments, according to INR polling in fall 2009.”

I believe this has something to do with one of the conclusions I came to in a post about the way democracy in the United States functions: the public is supposed to be marginalized and its opinion ignored. I don’t pretend this is limited to the United States. The CIA readily admits “French and German leaders” have been able to “disregard popular opposition and steadily increase their troop contributions to the International Security Assistance Force (ISAF).” The CIA notes that Germany and France “have counted on public apathy about Afghanistan to increase their contributions to the mission.” But if a “Dutch-style debate” spreads to these countries, they may not be able to rely on apathy any longer to continue their involvement in Afghanistan. Apathy could quickly “turn into active and politically potent hostility,” and worsening conditions “could become a tipping point in converting passive opposition into active calls for immediate withdrawal.” This is bad news because the CIA fears “politicians elsewhere might cite a precedent for ‘listening to the voters.'” We can’t have politicians listening to voters…

Thus, the report recommends the United States government be involved in a campaign to alter the public’s opinion, or what has been referred to as “the manufacture of consent.” In normal parlance we might refer to this as propaganda. The report mentions, “Western European publics might be better prepared to tolerate a spring and summer of greater military and civilian casualties if they perceive clear connections between outcomes in Afghanistan and their own priorities.” Therefore, there is a need for “A consistent and iterative strategic communication program” that would give “tailored messages” to the public, in order to get them “to support a good and necessary cause despite casualties.” The report suggests the U.S. government “could leverage French (and other European) guilt.” If we monger fear, particularly about “the Taliban rolling back hard-won progress” and “a refugee crisis,” we could “provoke French indignation.”

One of the key resources we have in doing this is President Obama. It’s fairly hard for anyone to ignore how muted the subject of war has become, particularly in left and Democratic circles, after the election of President Obama. Him being a Democrat has helped the hawks in calming the anti-war movement, which has a strong core of Democrats and leftists (though there are also many right-libertarians as well). The CIA recognizes this fact. The CIA is quick to boast about the “confidence of the French and German publics in President Obama’s ability to handle foreign affairs in general and Afghanistan in particular.” They suggest there is a “significant sensitivity to disappointing a president seen as broadly in sync with European concerns.” Therefore, President Obama is a wonderful asset for the U.S. government to sell the war.

If our government being involved in the manipulation of opinion in other countries doesn’t unsettle you in the slightest, perhaps it would be even harder to not be disturbed by how it is actively going after Web sites like WikiLeaks that expose secrets of corrupt governments and corporations. WikiLeaks.org has been described as a “controversial but essential example of what the web does best,” that “takes power away from the powerful and hands it to citizens.” This is precisely what has the U.S. government concerned. Writes The New York Times, “To the list of the enemies threatening the security of the United States, the Pentagon has added WikiLeaks.org, a tiny online source of information and documents that governments and corporations around the world would prefer to keep secret.” This is following WikiLeak’s release of a document prepared by the U.S. Army Counterintelligence Center that discusses how it sees WikiLeaks as being a threat to the national government.

I think little else need be said.

People respond to incentives Tuesday, Mar 23 2010 

Some readers might remember I wrote about obesity and wealth a couple of months ago. One of the conclusions I came to was that there is an inverse relationship between a state’s GDP and the rate of obesity in that state. In other words, richer states have fewer obese people (relative to their total population) than poorer states do. Some people may disagree with regards to how significant or even causal the relationship is, but I believe there is a general and visible trend that can be explained in part. One reason that I surmised is that poor people have fewer choices, namely because they have less money. One thing that this implies is that poor people will be forced to buy cheaper foods. The cheaper foods, however, tend to be the unhealthier foods. Of course, it’s not impossible to buy cheap and nutritious foods. However, if we look at just a few statistics regarding food and prices, we can begin to see the perversity of the current situation. For example, in my previous post, I cited the fact that the real price of vegetables and fruits have increased 40% between 1985 and 2000, while the price for soft drinks have declined 23%.

This is partly the consequence of government interference in the market. Most of this interference comes in the form of subsidies. Government subsidizes some foods to a great amount, such as corn, and subsidizes other foods to a very little amount or not at all, such as vegetables and fruits. This has an effect. One effect is that certain foods such as corn are overproduced and prices decrease. This is why soft drinks, which use a great deal of subsidized corn syrup and sugar, can remain cheap while more nutritious foods and drinks become more expensive. That’s just one example, but it holds across the board.

Effectively, this means government is subsidizing the consumption of unhealthy foods. Poor people that lack choices are thus more likely to be unhealthy due to their eating habits. The reason I’m bringing this topic up again is because of something Professor Nathan Hampton of the economics department at SCSU said. I had Dr. Hampton over last summer, but not this semester. However, my roommate currently has him for principles of macroeconomics and he forwarded Dr. Hampton this chart about government subsidies to certain foods vis-à-vis nutrition guidelines that are recommended by the government. The chart is supposed to explain why salads cost more than Big Macs. According to the chart, it’s because dairy and meat are heavily subsidized while vegetables and fruits are hardly subsidized at all. Thus, unhealthy foods like Big Macs are cheaper than healthier foods like salads.

Dr. Hampton’s response, however, was that this chart is misleading. He essentially called it a lie and told my roommate to sharpen his critical thinking skills. The reason, Dr. Hampton says, is because meat is not subsidized the U.S. government. While dairy is highly subsidized by the government, it is misleading (“pathetic” even) to group “meat and dairy” together to make it appear as if Big Macs are being subsidized by the government. Thus, the argument that Big Macs are cheap due to subsidies is “only for the simple minded and the weak.”

Perhaps Dr. Hampton’s response wouldn’t seem so berating if there were any merit to his claims, but there is none. The fact of the matter is that meat is being subsidized by the government. Though there may not be any direct subsidies, as Dr. Hampton claims, it is being subsidized indirectly. Exercising some of those critical thinking skills Dr. Hampton implored, it’s not very difficult to see that what’s being subsidized to a rather large extent is feed crops. What are feed crops like corn doing? They’re feeding livestock—the same livestock that eventually ends up in your Big Mac. The Institute for Agricultural and Trade Policy concludes in a rather interesting study, “corporately owned, vertically integrated, industrial animal factories have reaped major gains at the expense of U.S. farmers and taxpayers.” The reason? Subsidies. If you subsidize that which is necessary for the production of meat, you also (indirectly) subsidize the production of that meat. So, yes, when you subsidize feed crops like corn, you also subsidize the production of meats, which are used in Big Macs. It doesn’t take a great deal of critical thinking to see this fact.

Dr. Hampton says the first principle of economics is that everything has an opportunity cost. Maybe so, but it’s also true that people respond to incentives (according to Greg Mankiw‘s fourth principle of economics). When government subsidizes feed crops, it’s an incentive to overproduce meat and to lower the price of Big Macs. People respond to those incentives.

Innovations Tuesday, Mar 16 2010 

There’s been some talk about innovations recently. “Innovation” is defined as “The act of introducing something new” by the The American Heritage Dictionary. Not only are innovations new things, but they are also useful things. Innovation is one of the greatest sources of wealth creation and increased productivity. Thus, the importance of innovation is critical to the study of economics. In fact, there is an entire doctrine of economics, called innovation economics, that explores the relationship between innovation and economic growth. The pioneer of this doctrine was Joseph Schumpeter, author of Capitalism, Socialism and Democracy. According to innovative economics, the primary source of growth is not the accumulation of capital, but rather innovation, particularly innovation that increases productive efficiency. Thus, the incentivizing of innovation is what’s critical for an economy. In this sense, Schumpeter thought capitalism was the best mode of production because it incentivized innovation the most. Today, several prominent economists have used the theories of innovation economics to explain the growth of economies.

What is absolutely clear is that innovations are beneficial. How beneficial they are compared to other sources of growth could be debated, but it’s generally widely agreed upon that innovations provide a benefit to society. For example, King Banaian, the chairman and a professor of the economics department at SCSU, says entrepreneurship, which is a major source of innovation, is a positive externality and “may do more to relieve poverty than social organizations.” It’s a positive externality because “the value of this is not captured as much by entrepreneurs themselves as by society at large.” For example, with the invention of Windows, society was benefited far more than Bill Gates was benefited. (In other words, the price one pays for innovations does not reflect the true benefit it brings.) Basically everyone agrees innovation is great for society.

However, there are also problems with the current system of innovation, or the environment in which innovation occurs. One issue that I’ve highlighted on this blog before is that of copyrights and patents. Patents and copyrights are tools used to incentivize innovation and entrepreneurship. However, as I mention in the post, patents and copyrights create what are basically government-granted monopolies. As very elementary principles of microeconomics show, monopolies are economically inefficient. This can have significant impacts in the real world. For example, “economic inefficiency” might be translated into “hundreds of thousands of Africans dieing.” That’s precisely the consequence of patents in the medical industry, which keep prices high and poor people out of the market for life-saving drugs. Thus, I think it’s important to keep in mind the real world implications when we use technical and theoretical jargon like “market inefficiency”; it has real effects.

Essentially, the argument I made in that previous post is that government interference in the market creates an inefficiency (one that has dire effects) and that government-granted monopolies are not the solution for incentivizing innovation, particularly in the medical industry. I raised this point in Dr. Banaian’s post, and I got derided for it. I was told I was “only looking at one side of the issue.” After all, there’s a benefit that patents and copyrights bring, in that they do incentivize innovation, which we’ve all agreed is a positive thing. I’ve acknowledge that. If patents and such do lead to the creation of innovation and entrepreneurship, then that is a positive thing. We might even agree that the positives of this “intellectual property” outweigh the negatives of them. But that still doesn’t mean that patents and copyrights are the best option to choose. That’s an important point to keep in mind.

What I believe is “only looking at one side of the issue” is ignoring the more harmful consequences of this type of government interference. If some of the consequences of patents truly are harmful, even if there is a net benefit, we should ask ourselves if there is a way to mitigate the harmful aspects of our incentives for innovations without mitigating the positive aspects of our incentives. If there is, then we ought to choose that option.

Even though I do believe government-granted monopolies (i.e. the result of patents and copyrights) are quite harmful, that doesn’t mean government should necessarily get out of the way. I still agree innovation and entrepreneurship should be incentivized and rewarded. After all, if we accept the arguments coming from innovation economics, innovation is the key to economic growth. So how do we incentivize innovation without the harmful effects of patents and copyrights? There are different ways, but one idea that is proposed by Joseph Stiglitz, a Nobel laureate at Columbia University, is what he calls “prizes, not patents.” One of the problems with the current system (what I call the “profit motive“) is that it does not incentivize the allocation of scarce resources into areas that are not profitable for private, profit-maximizing firms—even when there’s a tremendous social benefit in doing so. (In other words, public goods are underproduced in free markets.) One example is in the production of life-saving drugs for illnesses and diseases that afflict much of the Third World. A majority of the populations that are afflicted by these life-threatening conditions are poor, so there’s not a lot of profit to be found in selling them drugs. A prize system, which is discussed in more detail in Stiglitz’s book Making Globalization Work, would help mitigate this problem by offering a reward or financial incentive to those who produce important innovations, like life-saving drugs. Not only would it incentivize innovation, it would direct resources into areas that would otherwise would not be profitable but are still a great benefit to society. Explains Stiglitz, “Since governments already pay the cost of much drug research directly or indirectly, through prescription benefits, they could finance the prize fund, which would award the biggest prizes for developers of treatments or preventions for costly diseases affecting hundreds of millions of people.”

There are other ways governments can be (and, in fact, are) critical in the introduction of innovation, which is through development that comes straight out of the state sector. CNN has an interesting article about the three most important “innovations that changed America.” The reader is asked to pick the most important of three, which are “1. The building of the interstate highway system, 2. The blanketing of the United States with coast-to-coast television, 3. The introduction and spread of the Internet.” Voting is now over, but 58% of readers chose the Internet, 29% picked television, and 14% picked the interstate system (numbers were rounded). I would agree, the introduction and spread of the Internet was the most important innovation that changed not only America but also the world. But where did the Internet come from? It came out of the state sector. The Internet was developed by the public, and it was later transferred to the private sector so that private firms could make a profit off it (that’s why we pay for Internet today). What about the interstate system, which is “often said to be the biggest public works project in the history of the world,” according the CNN article? It’s basically the same thing. This great innovation in logistics was created by the state, as I was quick to point out in a previous post on transportation subsidies. In television, it may be less clear, but the government still played an important role, particularly in broadcast television and the introduction of communication satellites. What this suggests is that, while (private) entrepreneurship is an important source of innovation, so too is the public sector.

In fact, a great deal innovation comes from the state sector. The Internet and the interstate system are two very important examples, but there are many others. In particular, high technology either comes from or is critically supported by the state sector. Science and innovation are symbiotic, and a lot of science is funded by the public. MIT, for example, is a source of great innovation; while a private university, MIT receives are great deal public subsidies, particularly through grants under the guise of military contracts. Public universities are also responsible for a great deal of innovation in both technology and ideas. This is what we should expect. If entrepreneurship and innovation is a positive externality, as Dr. Banaian contends it is, then we should expect that it would be underproduced in a free market. This image from Wikipedia shows this concept graphically. If private markets underproduce important innovations, then it suggests the state could play (as it currently does) an important role in either producing or incentivizing these innovations, e.g. through Pigouvian subsidies.

Are most economists against government intervention? Monday, Mar 15 2010 

Do most economists think government being involved in markets is a bad thing? The answer to that probably depends on the market. If markets are efficient, there’s probably no need for government to get involved. If markets are inefficient, there’s probably a good reason for government to interfere to attempt to increase efficiency and so there could be an economic argument in favor of government intervention. So the question now is whether markets are efficient or not.

The reason I bring up the topic is because of something professor Komai of the economics department brought up in my managerial economics class today. (Dr. Komai is definitely one of the best professors I have had at this university.) She said only a small amount of economists are totally against government intervention, but they seem like a majority (because they make a lot of noise). The reason, she says, is that most economists do agree that government probably should not be involved in perfectly competitive markets, because perfectly competitive markets are efficient. At the same time, however, perfectly competitive markets exist virtually nowhere. Thus, when markets are not perfectly competitive, there is market inefficiency and perhaps a good reason for government to get involved to try to increase the efficiency of the market.

Most markets are oligopolies and a small amount are monopolies (which are even more inefficient). Therefore, there are compelling economic reasons for government to get involved to try to increase competition or otherwise reduce inefficient behavior. This is one argument in favor of government involvement in markets—there are others as well—but this one is particularly convincing.

One example, which was brought up in class, is the Clayton Antitrust Act of 1914. It is one of the many antitrust laws passed throughout American history and is specifically aimed at preventing the rise of corporate power. The late nineteenth century and early twentieth century were interesting times. This was the time of when the Republican Party was still a fairly young party (it was formed in the middle of the nineteenth century). At some level, Republicans of this era represented the true ideals of Republicanism. William H. Taft and Theodore Roosevelt, for example, were completely against big corporations. The history of these presidents, particularly their domestic economic policy, is quite fascinating, and there is great literature and documentaries on this topic. These early Republicans are what were called “trust busters.” They saw government power as one counterweight to corporate power, which they found subversive. So they busted trusts, so to speak, and they increased regulations. Roosevelt’s Square Deal endorsed these principles and was totally supportive of progressivism. Those were the ideals of early Republicanism. And I believe many of these ideals have been lost in today’s Republican Party.

Update (3/31/2010): I just want to clarify that I do not mean to misconstrue the position of Dr. Komai. She has made it clear to me in class that she prefers to stay in the center or the middle of issues. It’s not my intention to brandish her as a leftist of some sort who is automatically in favor of government intervention in markets. That’s not my position either.

The point that I think ought to be taken here is that market fundamentalism is misguided. We often here that governments are inefficient and that we should “just let the markets work.” It might certainly be true that governments are inefficient, but less heard is the fact that markets can also be inefficient. I personally do not think this message is conveyed a lot—certainly not as much as the message of government inefficiency is. So my point isn’t to say governments are great, that we should have intervention everywhere, and so on and so forth; instead, I am pointing out that markets are not as great as they are lauded by some on the right, particularly market fundamentalists and Austrian economists. It’s simply my feeling that when people are taught about markets, especially in courses that introduce the principles of economics, they usually are not hearing the complete side of both stories. What’s being projected, I think, is skewed a bit. That’s the part I take issue with. We can, of course, always quibble about the right balance of things—but that’s not quite my objective here.

Lipstick on a pig fools no one Thursday, Mar 11 2010 

Pelosi came into the position as the Speaker of the House in 2006 along with major victories for other Democrats who now control a majority in the House, and she promised, “Democrats intend to lead the most honest, most open and most ethical Congress in history.” Today we’re hearing that House Democrats ended the GOP bid for an ethics probe into allegations that Democrats covered up sexual harassment claims. I am under no illusion that the GOP’s bid had nothing to do with gathering more votes in the next election, but one still has to wonder whether even stopping an ethics probe into allegations against your party is adhering to being the “most ethical Congress in history.” Normally I think I would make a larger fuss out of this, but I think the facts speak clearly enough for themselves.

Israeli speaker to come to SCSU Thursday, Mar 11 2010 

There have been plenty of good events going on around campus lately. The latest is going to be an Israeli speaker who was in the Israeli Air Force but who later refused to participate in aerial attacks on Palestine. He is now a nonviolence and human rights activist. Here is an e-mail regarding the event that I got from Amber Michel, creator of the newly-formed SCSU Students for a Free Palestine student group on campus:

On March 26, Yonatan Shapira, former Israeli Air Force Captain,
Refusenik and human rights activist, will speak at SCSU to share his
experience in the Israeli military and how he came to work for
nonviolence and Palestinian human rights.

This is a tremendous honor and opportunity for our campus and
surrounding communities.

Don’t miss this chance to hear a first-hand account from someone who
was inside the Occupying force.

I’ll send along a flier soon with more information, but for now:

Yonatan Shapira
March 26, 2010
4:00 – 6:00 pm
Atwood Theater, Atwood Student Center
St. Cloud State University
St. Cloud, MN

FORWARD FAR AND WIDE!!

In Solidarity,
Amber – Students for a Free Palestine

Comment on subsidies Tuesday, Mar 9 2010 

One thing some people, particularly those on the right, love to complain about is rail transportation. They hate trains, light rails, and so on. The reason is because it’s usually quite highly subsidized by government. For example, Dr. Banaian, quoting the Freedom Foundation of Minnesota, says the Northstar line between St. Cloud and Minneapolis is costing us taxpayers $42 million annually to operate. That’s “when you take into account the amortized $317 million capital costs.” (To correct the FFM, the real number would be $38.5 million, because fares cover 21% of the 16.8 operating costs.) The reason is because fares cannot cover all of the cost, so taxpayers must subsidizes the difference. Therefore, rail should be abandoned. Since it’s not possible without government assistance, we should reject rail transport and complain when it’s subsidized.

That might be true enough, but no one bothers to take the next logic step, which would be to condemn other federally or locally subsidized modes of transport. In particular, they seem to ignore the fact that traveling by road is the most highly subsidized mode of transportation. For decades, auto manufacturers have been getting bailouts from the government, because they simply can’t survive in a free market. The biggest form of subsidization, however, comes from the construction of roadways. Road travel is only possible because of the production of these roads. Yet, everyone loves to complain about trains, not roads.

By the way, that’s all very purposeful. If we go back to what is perhaps the largest engineering and logistics project in human history—the interstate highway system, undertaken by one of the Republicans’ favorite heroes, President Eisenhower—it was a very deliberate government-financed displacement of the rail system. Rail used to be the dominant mode of transportation in the U.S. at one time, but that was put to end by automobile interests, which were attended to by the government. So, if we want to look at the history of it even closer, you’ll see a history of conspiracy–by General Motors, Firestone Tire, Standard Oil, Phillips Petroleum, Mack Trucks, and the Federal Engineering Corporation–which was meant to subvert the rail system for the conspirators’ interests (namely road transportation). It was literally a conspiracy, and they were were convicted. Government took over, and now that’s why suburbanization and road transportation have completely transformed the American landscape. All very purposeful and completely reliant upon the government. That’s one reason why if you compare the United States to Europe, transportation is completely different, and the reason why European transport is so much more efficient. That’s if you want to be honest about it.

When you actually bother to look at the numbers, rail is much more efficient than road travel. One reason is the fact that rail can carry so many more people than roads. For example, a typical freeway expansion costs about $20 million per mile for both directions. Several light rails have been built for less, but the typical cost is about $35 million per mile. At the same time, however, a light rail line can carry up to 20,000 people per hour, compared to a freeway lane’s 2,400 people per hour. So rails can carry a considerable amount more people than roads can. Thus, the cost per person carried can be significantly less for rail than it is road. The Transportation Research Board of the National Academies has done a considerable amount of research in this area. In our cause, the Northstar line was created with less than $8 million per mile, much less than half the cost of upgrading existing highways.

There are other benefits as well. Besides the enormous cost inefficiency of roads themselves, vehicles to drive on roads cost a considerable amount of money in addition to the costs required to maintain and operate them. These costs become even more exacerbated for people with disabilities who need to buy modified vehicles. Disabled people pay the same price (or even reduced prices) as people who are not disabled to ride the light rail. It’s no surprise that transportation costs are the second highest cost a household incurs after housing costs. The same study shows that households that use public transportation save a significant amount money than those that do not. Rail is also safer than road transportation. Light rails are quieter, less disturbing, experience network efficiency effects, increase local property values (highways have the opposite effect), and increase mobility for people unable to drive (e.g. youngsters, the disabled, or people too poor to afford driving). Critically, rail transport eliminates or reduces many externalities associated with driving, chief among them being pollution. Light rail has the potential to be many times more energy efficient than driving, which reduces pollution, including the emissions of greenhouse gases that associated with global warming (which has been described as the “greatest market failure ever“). Rail transport can also reduce congestion, which is another common externality associated with driving.

In all, it seems as if those who complain about rails really ought to be focusing their attention on road transport. Not only is it more highly subsidized by the government, it is also much less efficient in almost every respect.

Some updates Saturday, Mar 6 2010 

I was only able to attend one of the speeches at the Academic Event of the Winter Institute, but I was glad it was Barry Nalebuff’s speech. Dr. Nalebluff is a professor of management at Yale University and is considered “an expert in business strategy and game theory” (Wikipedia). His speech was fascinating and I think Dr. Nalebluff is an excellent speaker. The title of his speech was also the subject of his book with Adam Brandenburger, “Co-opetition.” Co-opetition is a portmanteau of “cooperation” and “competition,” and it essentially means cooperative competition. The problem, says Dr. Nalebluff, is that we lack even the vocabulary to talk about the business strategy he advocates. What he advocates is that firms, even if they are competitors, work together in such a fashion that they can “expand the pie,” which he argues is better for both the consumer and the firms. He is careful to note that he does not advocate collusion or anti-competitive behavior. Co-opetition does not refer to how firms cooperate with each other to “divide the pie”; it is simply meant to increase the size of the industry as a whole and lower prices. He gives several examples of its application, but I won’t bother going into details here. The message I think that should be taken is that the old business models of “destroying your competition” and being envious results in less efficient outcomes than when firms also cooperate with each other in such a way that helps reduce prices and increase demand.

Another note I would like to make is regarding the Chile fundraising party that was held last Thursday. The Spanish Club along with several Chilean students hosted a dance for Chile in Atwood’s ballroom. The cost was $3 to get in and they also sold $1 raffle tickets for some prizes (e.g. music by Spanish professor Michael Hasbrouck). I was glad to volunteer my time; the earthquake that hit Chile was among the largest ever in history and killed hundreds of people and caused billions of dollars in damage that the Chilean government says will take years to recuperate from. The Chileans on campus, and there are not many, are quite distraught over the whole event, and rightfully so. I have to say though, people have been overwhelming generous in Chile’s time of need. In just 3 days, the organizers of this event collected nearly $1,800 in donations (most of which came from the dance). It hasn’t yet been decided where the money is going, but the organizers want to go toward helping out a small community that was struck by the earthquake. Again, I would like to say thanks to all the organizers who put on this event in such a short order and all those who have donated money for helping Chile.

Finally, I just finished writing an essay on globalization’s effect on child labor for my international economics class with Dr. Lo. I chose the topic after making a post last month about ending child labor. Though length quotas for the paper put a limit on how in-depth I could explore the subject (which is enormously vast), I did do some more research and I may make a new post regarding some of the findings I came across, which are indeed fascinating.

Winter Institute Tuesday, Mar 2 2010 

Again for those in the St. Cloud area, the economics department of SCSU is holding their 48th annual Winter Institute summit regarding “business and economic leadership.” It is being held on Thursday, March 4th. The first half of the event, dubbed the Academic Event, is being held in the Kimberly Ristche Auditorium in Stewart Hall for free from 8:30 A.M until 12:45 P.M. There will be lunch at noon in Atwood for $12.50, but this requires registration and I believe it is full at this time. A list of topics and speakers for the Academic Event cant be seen here. Following the Academic Event will be the Business Event, which is being held at the Best Western Kelly Inn from 2:30 P.M. until 7:30 P.M. This also requires registration and a fee. I’m not sure if this event is also full at this time. A list of topics and speakers for the Business Event can be seen here.

The event is being described as “a valuable glimpse into a vastly changed economy. Attend the SCSU morning & luncheon events for a deep discussion on economic theory, or come to the Kelly Inn afternoon & evening events for business insights and bold predictions.” There appears to be a good lineup of economics speakers for the Academic Event, including Barry Nalebuff of Yale University, Costas Azariadis of Washington University, James Bullard who is the president of the Federal Reserve Bank at St. Louis. The Business Event will include these same speakers, as well as some regional businessmen and King Banaian, who is the chairman and a professor of the economics department. The closing speaker will be Yoram Bauman who is also from the University of Washington.

Dr. Bauman is particularly interesting to me, given that he will be speaking on climate change and because I’ve done a great deal of research on the topic as well (see here for previous posts on the subject). I won’t be attending that event, but I did read a few posts on his blog regarding climate change, and they’re all quite interesting. I’m glad Dr. Bauman recognizes that climate change is a real problem and that it has significant economic implications. I was reading, for example, this post about “libertarians on global warming,” where he accuses libertarians of the “Three No’s” (a humorous reference to the dubious “Three No’s” associated with the Khartoum Resolution): “No recognition that climate change is a theoretical possibility … No peace with the IPCC … No negotiation about climate change science, i.e., no serious scientific engagement.” It is true that rightist libertarians (e.g. Cato Institute) do tend to deny climate change science for whatever partisan reasons they have (they surely have no scientific basis), but I don’t think this necessarily has anything to do with libertarianism per se. True libertarians ought to be concerned—not dismissive—about climate change, as it represents a serious violation of the rights of not only current human beings but also of future human beings, as I explain in this post. As I point out, the issue is essentially an issue of externalities, which has an easy (market-based) solution. Dr. Bauman seems to agree when he writes, “the way market-based instruments reduce pollution is by making pollution expensive.” However, I unfortunately won’t be attending that event, so I won’t be able to write about it.

This summit presents a great opportunity for those in the St. Cloud area to be engaged in the economic issues of our time and is being presented by great economic thinkers. It’s not an opportunity you’ll want to miss. I will try to attend some of the speeches and may post a response some time later.

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