The most important sentences I’ve read in a month

Of course, if there were no legal remedies against fraud, people would be more careful–but they would be too careful; they would incur high costs of self-protection. It is cheaper to punish fraud, just as it is cheaper to punish burglary than to tell people to fortify their houses.

Judge Posner

Where is the line drawn between individual and community action to secure private property? Why is protection for burglary a public good, but protection against flood, not? Of course, protection from murder is a public good, as it should be and of course, “protection” from not being wealthy isn’t a public good. But why is insurance for large sums of money a public good, but protection from starvation not?

The line is feeling awfully arbitrarily drawn to me, atm.

Yet Another Sentence of Enduring Value

For, in the abstract, we may envision an Olympian perfection of perfect beings in Washington doing the business of their employers, the people, but any of us who has ever been at a zoning meeting with our property at stake is aware of the urge to cut through all the pernicious bullshit and go straight to firearms.

David Mamet

Sentences of Enduring Value

First, on general principles it’s not clear what one learns from very short-term movements in relative wages… Second, more specifically, the period since 1995 includes a major boom-bust cycle in high-technology industries. The technology bubble of the late 1990s probably elevated the education premium, while the subsequent bust caused that premium to deflate. As a result, inferences from the movement in inequality during the first few years after the tech bust should be taken with a grain of salt.

Paul Krugman 2008 working paper (pdf)

Learn some economics, be entertained… (part III)

YouNotSneaky’s at it again. Why might prices be more stable under monopolies (and why might we care)?

Here’s my favorite line:

Probably less explicitly but more importantly, when prices keep changing on you it means you’ve gotta recalculate your optimal allocations of expenditure again. You gotta set up a new Lagrangian, take the damn first order conditions and figure out if making out the adjustments in your optimal consumption basket – given your income – are worth it. What? You don’t think that way? You don’t set up constrained Lagrangians every time there’s a change in prices and compute your Kuhn-Tucker conditions?

Liberal Nicene Creed

Paternalism is the use of coercion to force people to do or refrain from something against their will for their own good. Liberals of all stripes generally reject paternalism for reasons most lucidly laid out in J.S. Mill’s masterpiece On Liberty. First, we assume the individual is the best judge of her own good. Second, whether or not the individual is the best judge of her own good, we rightly doubt that another individual (or assembly thereof) has the legitimate moral authority to substitute their judgment for the individual’s by force — especially in light of widespread disagreement about the nature of a good life. Third, truth is hard to come by, and none of us can be fully certain we’ve pinned it down. Allowing people to act on diverse opinions about morality (or rationality) broadens the search for truth about good lives by setting up a decentralized system of social laboratories where experiments in living succeed or fail in plain view. So, unless an action harms somebody else, people should be at liberty to satisfy their preferences, whether saintly or sinful, coolly rational or impulsively emotional.

Wilkinson

Sentences of Enduring Value

Just in case you missed it, let me repeat: when it comes to the kind of intra-nation inequality that we should really care about (if we are going to worry about intra-nation inequality at all), we “do not know.” As in “know” and “not” put together. “Not” is the word of negation, by the way. And the last I looked, not = not, as it usually does on most Wednesdays. Would you like to hear more on what is implied by the conjunction of “not” and “know”?

MR