[unrev-II] Economics and the Garden of Eden

From: John \ (johnwerneken@netzero.net)
Date: Wed Jun 07 2000 - 23:16:08 PDT

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    I hope my tendency to over-do or be to wordy does not become insufferable,
    and I'll try to keep this shorter.

    As to who owns the air, perhaps it doesn't matter who owns it. As long as it
    is not nobody, or the entire public (same thing) or the government or some
    other legally-entrenched-and-supported-by-force monopolist. Land is as vital
    as air and in much of the country mostly private. It may be a little
    different; my bad practices may lose me all my topsoil and flood everyone
    downstream, but perhaps you could move upstream of me more easily that you
    could avoid an equivalent threat from airborne pollution. In either case
    there is an argument that something must be done.

    I agree, there needs to be ways to address this issue (one man's perceived
    benefit coming more or less directly at someone else's expense, with the
    someone else having no choice, no reasonable means of avoidance, and perhaps
    no recourse). The Asarco Lead Smelter at Tacoma, Washington was one of the
    world's largest and most unhealthful sources of air pollution for about a
    century and the bottom of Tacoma's bay (Commencement Bay? I forget) remains
    heavily contaminated. This is obviously a different type of thing from the
    costs resulting from my sporadic decisions to resume smoking tobacco
    cigarettes - at least the scale of the affect is enough larger to make it
    truly different.

    With land, we have some examples of good and bad private action as well as
    public policies that tend to make things better or worse. Some of the most
    astonishingly shortsighted decisions are such as the forest sales you
    mentioned, which in the past (and including the present Alaskan Tsongas
    Forest Sale, one of the largest) cost the public more in subsidies than the
    economic gains to the private loggers were worth. Subsidy gone mad. I
    believe present forest sales tend to recover costs and subsidize non-logging
    forest uses to some degree, which is an improvement.

    My point is that some of the worst stuff happens exactly because the
    government intervenes, not because it does not.

    Another interesting case is land use in my area, Portland, Oregon. Yes the
    local governments are all acting just like other businesses and the value of
    their regulated developable land is their greatest asset, as far as
    generating growth in their own revenue is concerned. So they have conspired
    with some of the largest land owners to inflate the price of their land by
    essentially making it unlawful to develop land outside the cities'
    collective boundaries. This also greatly reduces the cities' costs of
    providing public services, by concentrating new development where the
    existing infrastructure is.

    A lot of people find this all quite marvelous. Collateral benefits are
    retention of farm uses quite close to the city, which the farming interests
    like, and retention of other undeveloped spaces as well, which suits middle
    class and wealthier citizens for recreation.

    Notice where the money comes from to pay for all this: a governmental
    monopoly raising the prices of land and housing far above what they
    otherwise would be. Our housing affordability index (incomes compared to
    cost) is as bad as anywhere in the nation. Another consequence is that the
    preferred options of simple home owners and small businesses - which is to
    live in suburbia, be able to drive, and be able to locate businesses in
    relatively inexpensive but accessible locations - is totally foreclosed.
    Finally, all of this has helped greatly in shifting the tax burden to
    renters, simple homeowners, and small businesses.

    We have an ongoing political war in this state, fought every year, which is
    precisely about land use, transportation, and tax burdens, and which sounds
    exactly like a Marxist class war - because that is exactly what it really

    There is NO community consensus on any of these topics, not any more. One
    day's majority does it's level best to gore the interests of that day's
    minority; after each election, whichever side lost, plots to strike back.

    This is all happening simply because we have allowed or entrusted our
    governments with powers they should not have, to make land development
    decisions by political fiat.

    I find it ironic that the pattern of development favored by the land use
    control advocates was actually put in place entirely by private enterprise.
    Private companies built the electric power grids, the roads, the street car
    lines, and developed all the core area neighborhoods, as well as the
    community centers of the surrounding suburbs. These enterprises worked with
    the transportation technology of their day, and they were held accountable
    by competition in the market place.

    There is nothing to hold the present transitory majorities accountable for
    the damage they do. In consequence, our public system of grade schools, high
    schools, and public colleges is gradually disintegrating, as the social
    consensus to fund normal government services has been entirely destroyed.


    Briefly, on the external costs, our harbor is polluted seriously, and the
    present owners of the waterfront property are on the hook for the costs of
    the cleanup. They may not themselves be the polluters, but they are today's
    beneficial owners of the assets of those polluters.


    Briefly, on who decides, it's good that many decisions are made with money.
    First, when I have money (or when Paul Allen does - he's a big wheel in this
    area), the money can not actually force other people to do things. Tempt,
    but not force. Second, all the money does not belong to the same gang. They
    compete. Also, though richer people do own an awful lot of the assets, not
    so rich people collectively own an equivalent share. Further, ordinary
    people earn and spend most of the income. So if the rich want to get richer,
    they are held accountable, because no one of them holds all the cards, and
    because people in general contribute importantly to their prosperity, by
    their spending decisions.

    Finally, there is the whole dishonesty thing about democratic decisions that
    involve robbing the Peters to pay the Paulines. As long as the Paulines are
    more numerous, they may continue to rob the Peters, until the Peters are no
    longer worth robbing. There is no feedback. There is no pressure for a
    win-win solution. If the Paulines choose an especially inefficient means of
    robbing the Peters, there is no may that a less wasteful method can come to
    the fore - no competition - and there is no check from the Paulines running
    out of money with which to back their bad choices.


    On rights, I think "life, liberty, and the pursuit of property (which is
    what they meant by happiness)" pretty much says it all. The rest of it is
    outcomes. There are not rights to outcomes. Outcomes are a result of wealth,
    and decisions about the use of wealth. Given enough wealth, it is reasonable
    to agree to some tax to insure that everyone eats. We have this. Given more
    wealth, maybe we can guarantee that everyone lives in doors, and still have
    acceptably low taxes (as regards encouraging the creation of more societal
    wealth). We don't have this, but I can see us getting there. The wealth to
    give everyone the very best in life-saving, life-improving, and
    life-extension medicine does not as yet exist.

    The only way we'll ever get either the quantity or the quality we want, is
    to let money largely determine who gets the quality. Then both quality and
    quantity will continue to rise (and liberals can come along every generation
    and raise the safety nets).


    On your deeper point, why in hell, would I want a system that is "fair"? As
    of today, "fairness" would raise my personal living standard. But it would
    foreclose any decent future increases in any body's living standards. Simply
    not worth it!

    Some sort of connection between individual action and individual reward,
    meted out by individual (economic and hence honest) decisions and not by
    collective (political and hence dishonest) decisions is necessary to both
    individual pursuit of happiness and to over-all wealth creation.

    Further, the money-based distribution allows one's descendants to greatly
    improve their RELATIVE living standards - people are not stuck in the same
    social position (as they are in EVERY political-based decision system that
    has ever been tried).


    WE do not need to decide anything! Each person individually should decide
    their piece of it! Those who tell the Indians that they can not develop as
    the Americans have are possibly racists of the worst kind. Sauce for the
    goose and all that.


    I don't want to hear about slavery. I don't want to hear it from my roommate
    either (who is a black political activist, by the way). It is a long time
    ago. ALL the early social structures (of any large scale anyway) had tiny
    powerful elites and mass peasantries held in serfdom, which differs from
    slavery mostly in the fact that a serf is sold with the land, not as an
    individual (which might tend to conserve nuclear families, so it is a
    difference worth noting, but not for economic reasons). And military
    exploitation was very familiar to most native American cultures - the Zuni
    in their desert and the Kwatiutl in their Vancouver Island fisheries being
    the only counter-examples that come readily to mind.

    The thing the Europeans brought that mattered was world-wide trade and a
    sociopolitical system that allowed and rewarded economic progress. Put
    together, these two factors concentrated incredible wealth in previously
    quite average Europe, made an industrial evolution possible, and now is
    extending those economic benefits world-wide.

    The large scale murderers are almost entirely twentieth century
    totalitarians - an order of magnitude worse, in a span of a couple of
    decades, than all the centuries of the African slave trade.

    Power - the strong warlord with his band of assassins or the modern State
    with its band of uniformed assassins - is the true enemy of mankind. Our
    luck or genius is to have a relatively limited form of State power,
    sufficient to prevent individual war lords (though with difficulty - as the
    Davidians) but unable to act that way itself for any sustained period.

    I am proud of the accomplishments of my American forbears, including their
    conversion of this land from the idealized barbarity present in 1492. Some
    of their methods were deplorable by our standards, but not by the standards
    of the time. Standards are a luxury, they evolve as people gain in wealth
    and freedom.

    I have more of a problem with some current activities than I do with any of
    the settlement of North America. Our government bombing Belgrade civilians
    to stop Milosevic for example. Isn't he an indicted war criminal, for the
    crime of directing the mass murder of enemy civilians by military forces in
    order to obtain political ends? Where is the difference? Should not Clinton
    be put on trial in the Hague with him? Apparently, he murders to gain
    Albanian peoples' lands for Serbians, and we murder to gain Serbian lands
    for Albanians...

    Another problem I have is with the Seattle coalition. Trade unionists,
    environmentalists, and liberal church activists vs. the World Trade
    Organization. The forces of globalization are the forces of the future, of
    choice, of wealth and freedom. Opposing them are vested interests who want
    to defend their monopoly economic power where they still have it
    (unionists), wealthy people who want to make nature parks out of poor
    people's livelihoods (environmentalists), and one army in the cultural Jihad
    (the liberals) seeking to embarrass its cultural competition (pro-business

    Nothing wrong with the defense of one's interests, but the hypocrisy stinks.
    At least the Nike contract with the Indonesian shoe factory helps transfer
    the means of wealth production to a poor land while enriching its owners -
    the putative beneficiaries of these protesters have nothing but poverty to
    look forward to if the protesters were by some chance to succeed.

    Finally, Thank God for Bill Gates. This conversation would not be happening
    without him. Thanks to him, PCs are common and the Internet connects masses
    of middle class people, who can afford the means for this kind of
    communication. His ruthless pursuit of the dominance of standards was only
    made possible by his ruthless pursuit of a mass market, through ease of use,
    interoperation, and lower prices.

    Reminds me of the Railroad War at the very beginning of the railroad
    industry (1830s and 1840s). Rich experimenters basically created the
    technology and toyed with locomotive prototypes. Dropout George Stephenson
    built the first practical locomotive, built it on the gauge of the
    horse-drawn cart lanes of his coal field home region, and spread his
    invention mightily. The better minds of the day were aghast. The greatest
    engineer of the age, Isambard Kingdom Brunel, developed a proper gauge,
    significantly wider and more stabile at high speed (sounds like Sun, doesn't
    it?). He even built a competing nearly national railroad, the Great Western

    Although the Great Western gauge was thought to be technically superior, the
    mass market built on the Stephenson gauge, and now virtually all railroads
    use it. Network effects, don't you know.

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