Browsing Tag: IHS

    Income Inequality and the Effects of Globalization – Learn Liberty
    Articles, Blog

    Income Inequality and the Effects of Globalization – Learn Liberty

    August 22, 2019

    Speaker 1: Lately there’s been a lot of discussion
    of the topic of income inequality. People are pretty upset about the widening gap between
    the top and the bottom of the economic heap in the United States.
    But inequality is a global issue, too, and globally, something fascinating has occurred.
    Over the last 20 years, income inequality worldwide actually has been falling. Recent
    economic growth in India, China, and other developing countries has driven a historic
    period of wealth creation. Billions of people who otherwise would live in poverty are now
    far better off. The globalization that many say contributes to inequality in the US has
    had the opposite effect on a global scale, bringing unprecedented levels of prosperity.
    As we grapple with income inequality in the US, we should be careful not to destroy the
    engines of prosperity that have improved the lives of billions. Globalization, free trade,
    and other foundations of the global economy have been and can continue to be the greatest
    equalizers the planet ever has seen. Learn more about income inequality with Learn Liberty


    Thought Experiment: The Spider in the Urinal – Learn Liberty

    August 18, 2019

    Warning, the following program is
    a philosophical thought experiment. Do not attempt at home. A few months ago, in the men’s
    room in the philosophy department, a large spider appeared in the urinal. I saw him in the same spot for
    a week straight. I noticed that whenever
    the urinal was in use, he would try to scramble out of
    the way as fast as humanly possible. Often, he would get caught,
    tumbled and drenched by the flushing torrent of Princeton’s city water and
    the urine of aspiring philosophers. The worst part was, that there was no
    way for the spider to get out, and no way to tell if he even wanted to. None of the other students or professors
    did anything to alter the situation. As the months wore on,
    I arrived with much uncertainty and hesitation at the decision
    to liberate him. He just sat there, not moving a muscle. The next day,
    I found him in the same place. His legs shriveled in that way
    characteristics of dead spiders. His corpse stayed there for
    a week until they finally swept the floor. No! For weeks after, I had recurring
    nightmares, giant spiders, teeth, webs, me, your humble narrator, charged with
    manslaughter in the high spider court. Your honor, my client was acting
    with the best of intentions when he rescued Mister Spider
    from the urinal. Mister Spider was forcibly
    removed from his home. Objection! Sustained. Please proceed. Your client without fully considering
    the potential consequences of his actions proceeded to interfere in and
    ultimately, end Mister Spider’s life. We find the defendant guilty! This thought experiment forces us to
    question the morality of intervention. Good intentions do not
    always yield good results. You gotta let these people think for
    themselves. If you were in my position,
    would you move the spider or let him be? What do you think? I’m not that bad of a guy. Am I? Am I? Am I?

    2016 Presidential Election: Student Debt – Learn Liberty
    Articles, Blog

    2016 Presidential Election: Student Debt – Learn Liberty

    August 15, 2019

    One of the major issues facing
    recent grads this election year, is->>Student debt.>>A lot of students
    are just choking with it.>>Increase to college tuition.>>Debt free tuition.>>Less government subsidy.>>College is too expensive.>>Americans currently hold 1.3
    trillion dollars in student debt. Even more than they hold
    on credit card debt. Former students are delaying major
    life decisions like marriage and buying a home,
    because of their student debt payments. Part-time and summer jobs can no longer covere
    the cost of college as they once did. And prospective students are scared of
    the debt burden that accompanies today’s college education. As the presidential candidates
    hit the campaign trail, everyone wants to know where
    they stand on this issue. Some candidates argue for an expansion
    of programs that forgive part or all of people student debt. Help you pay down your student debt
    >>And make public colleges free or heavily subsidized.>>We’re going to have to have colleges
    and universities tuition-free.>>Others argue that reforms are needed
    to the traditional college education model itself. No debt and
    free college sounds appealing right? Well so does getting a free car or
    free house. But nothing is free and
    forgiving debt doesn’t make it disappear. It simply transfers the cost from
    the students to the taxpayers. In fact, this policy will
    make the problem even worse. By further weakening the incentives and the competition that put downward
    pressure on college costs. Programs that forgive debt would also
    encourage students to take out even more loans. Because, hey, if you don’t have
    to pay it back, why not load up? Debt forgiveness programs are projected
    to cost hundreds of billions of dollars. A better approach is one that actually
    addresses the underlying problems. Now causing the high cost of college and
    skyrocketing student debt. It unleashes the power of the market. Which keeps costs low for other goods and
    services that we use on a daily basis. It’s basically Econ 101. Which, by the way,
    is a class you should take. This approach means more competition
    to the traditional four year high cost college model. This could include two year trade schools,
    online college and community colleges. It also means reducing government
    subsidies that drive up the cost of college. And are often used on luxury amenities or
    on new administrative positions. For example, the University of Akron
    boasts a 56 foot climbing wall. The University of South Florida
    has its own disc golf course and Temple University has
    an indoor driving range. And even bigger problem is
    the expansion of university bureaucrats who offer no educational value. More educational options and less government interference
    would drive down overall costs. And thereby reduce the debt that
    students carry into adulthood. Which approach to reducing college
    cost do you think is better? Transferring the cost of
    college to all taxpayers or introducing more competition
    to higher education.

    What If There Were No Prices? The Railroad Thought Experiment
    Articles, Blog

    What If There Were No Prices? The Railroad Thought Experiment

    August 11, 2019

    To appreciate why market prices are essential to human well-being, consider what a fix we
    would be in without them. Suppose you were the commissar of
    railroads in the old Soviet Union. Markets and prices have been banished. You and your comrades. Passionate communists all. Now, directly plan how to
    use available resources. You want a railroad from city A to city B,
    but between the cities is a mountain range. Suppose somehow you know that
    the railroad once built. Will serve the nation equally well. Whether it goes through the mountains or
    around. If you build through the mountains,
    you’ll use much less steel for the tracks. Because that route is shorter. But you’ll use a great deal of
    engineering to design the trestles and tunnels needed to cross the rough terrain. That matters because engineering is also
    needed to design irrigation systems, mines, harbor installations and
    other structures. And you don’t want to tie up
    engineering on your railroad if it would be more valuable designing
    those other structures instead. You can save engineering for
    other projects. If you build around
    the mountains on level ground. But that way you’ll use much more steel
    rail to go the longer distance and steel is also needed for other purposes. For vehicles, girders, ships, pots and
    pans and thousands of other things. Which route should you choose for
    the good of the nation? To answer, you would need to
    determine which bundle of resources is less urgently needed for
    other purposes. The large amount of engineering and
    small amount of steel for the route through the mountains,
    where the small amount of engineering and large amount of steel for
    the roundabout route. But how could you find out the urgency
    of need for engineering and steel in other uses? Just one way engineering is used
    is to build irrigation systems. To assess the importance of a particular
    irrigation system, you would need to know what the farmers know about how irrigation
    would increase the yield of their fields. And to know the value of that increased
    yield, you’d need to know what grocers know about their customers eagerness for
    that produce. That in turn depends on what customers
    know about the better meals they could fix with that produce. How would you find all this out? Just one way to use steel
    is to build new trucks. To assess the importance of a particular
    new truck, you would need to know what the trucker knows about the capacity
    of his current truck, and how much more quickly he could make the deliveries his
    customers want with a new bigger truck. To know the importance of those
    deliveries, you would need to know what his customers know about the value
    of getting goods delivered. That in turn depends on what still others
    know about the uses of those goods at their destinations. To reason about where
    to route the railroad, you need this kind of information for all
    possible uses of engineering and steel. That’s a massive amount of knowledge, held
    by millions of people throughout society. How might you get it? You might try surveys, but think how
    many people you would need to survey. All those who prepare meals with produce,
    and all those who take delivery by truck for
    starters. The numbers would be staggering. And often people don’t even know what they
    prefer until they face an actual choice. So they might not be able to answer
    survey questions accurately. Even if they could,
    by the time the surveys were returned and processed, much of the information
    would be out of date. And even if you could get complete and
    timely information about what everyone knows, that’s relevant
    to every use of steel in engineering, you would still need to deduce from
    it where to build the railroad. How would you begin to make
    sense of that mountain of data? In the words of Ludwig von Mises,
    you would be groping in the dark. You would face what is known as
    the knowledge problem of central planning. The reason why comprehensive
    socialism inevitably fails. Central planners cannot get the knowledge
    they need in order to plan effectively. You, commissar, simply cannot know on what
    projects scarce resources should be used for the good of the nation. But now change the thought experiment. Imagine that somewhere in the market
    economy part of the world, you are the chief operating
    officer of a railroad company. You work not for the good of the nation,
    but to generate profits for your firm. You want to run a railroad
    line from city C to city D. Again, there’s a mountain
    range between them. Now, how do you decide on the route? You choose what’s cheapest. You would calculate the total
    cost of each route for each one, multiplying the amount of engineering
    required by the price of engineering, and adding that to the amount of steel
    required times the price of steel. Then, you would choose whichever
    cost your company less. You might give no thought at all to the
    good of the nation or society as a whole. But, and here’s the marvel,
    by choosing the route that is cheapest for your company you would thereby choose
    the route that’s best for society. You would use the bundle of resources
    that’s least urgently needed for other purposes. Why? Because those market prices you calculate
    with reflects the urgency of need for engineering and
    steel in all their alternative uses. For example, suppose customers wanting
    to taste your meals, would buy better, more expensive produce, if it were
    on the shelf of their local grocery. In effect,
    they’re offering grocers more for produce. So the grocers will offer farmers more for
    produce. So the farmers who feels would be
    sufficiently improved by irrigation will offer more for irrigation systems. And those who build irrigation systems
    will offer engineers more to design them. Now that designing irrigation
    systems pays engineers better, people who want to hire engineers for
    other projects, such as railroads, will have to offer them at least as
    much to make it worth their while. The higher price tells everyone who
    uses engineering that it’s become, for some reason, more valuable so
    maybe they should use less. In this way, the market prices of
    resources represent the particular knowledge and preferences of
    millions of people who directly or indirectly use those resources. And the prices communicate
    that knowledge and those preferences to everyone interested. Only with market prices to communicate
    this vast amount of human knowledge to us. Can we calculate the least costly
    ways of producing the things we want, coordinator activities with the activities
    of others, use resources where society values the most, and thereby satisfy
    as many human wants as possible?