What did Prop 15 have to do with capital gains tax?
Essential Economics for Politicians
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What did Prop 15 have to do with capital gains tax?
Coo Coo
Bruddah IZ
DA
Who said it did? Read-spola.
Bruddah IZ
DA
The possibility of investment also renders relevant the increased satisfactions that the rich person’s investment today makes possible for other people to experience in the future. If Bezos’s investment is successful in the market, this investment creates more goods and services for many consumers. The additional satisfactions that these consumers enjoy from these goods and services would not exist without Bezos’s investment. Therefore, when comparing the amount of satisfaction that a poor person would experience today from spending a dollar taxed away from a rich person, the comparison must be not only to the consumption satisfaction that the rich person would eventually experience from using this dollar, but also to the consumption satisfaction that many other consumers would eventually experience from the rich person’s successful investment of this dollar.
Because rich(er) people generally invest a larger portion of their incomes than do poor(er) people, as a practical matter the ‘economic’ (or utilitarian) case for progressive income taxation and for income redistribution – a case built on comparing the “marginal utility” of income or wealth enjoyed by poor(er) people to that enjoyed by rich(er) people is not as straightforward as many professors, pundits, and politicians suppose. As is so often true in economics, being attuned to more than what is immediately obvious yields insights very different from those that arise from looking only at what is immediately obvious.-- by DON BOUDREAUX
Because rich(er) people generally invest a larger portion of their incomes than do poor(er) people, as a practical matter the ‘economic’ (or utilitarian) case for progressive income taxation and for income redistribution – a case built on comparing the “marginal utility” of income or wealth enjoyed by poor(er) people to that enjoyed by rich(er) people is not as straightforward as many professors, pundits, and politicians suppose. As is so often true in economics, being attuned to more than what is immediately obvious yields insights very different from those that arise from looking only at what is immediately obvious.-- by DON BOUDREAUX
Bruddah IZ
DA
Lockdown Harms and the Silence of Economists
The lockdowns of Spring of 2020 were likely responsible for much more of the decline in economic activity than the consensus among economists admits.
That lockdown would, in principle, impose overwhelming costs on the population at large is not surprising. The scope of human activity touched by lockdown is overwhelming. Lockdowns closed schools and playgrounds, shuttered businesses, and barred international travel. Lockdowns told children they could not visit their friends, put masks on toddlers, and dismissed university students from campus. They forced elderly people to die alone and prevented families from gathering to honour their elders’ passing. Lockdowns cancelled screening and even treatment for cancer patients and made sure that diabetics skipped their check-ups and regular exercise. For the world’s poor, lockdown ended the ability of many to feed their families.
Economists, who study and write about these phenomena for a living, had a special responsibility to raise the alarm. And though some did speak, most either stayed silent or actively promoted lockdown. Economists had one job—notice costs. On COVID, the profession failed.
There are personal reasons for this docility that are easy to understand. First, when public health officials first imposed lockdowns, the intellectual zeitgeist was actively hostile to any suggestion that there might be costs to pay. The lazy formulation that lockdowns pitted lives versus dollars took hold of the public mind. This provided lockdown proponents with an easy way to dismiss economists whose inclination was to point out costs. Given the catastrophic toll in human life that epidemiological modellers projected, any mention whatsoever about pecuniary harm from lockdown was morally crass. The moral zeal with which lockdown proponents pushed this idea undoubtedly played an important role in side-lining economists. No one wants to be cast as a heartless Scrooge, and economists have a particular aversion to the part. The charge was unfair given the costs in lives that the lockdowns have imposed, but no matter.
The lockdowns of Spring of 2020 were likely responsible for much more of the decline in economic activity than the consensus among economists admits.
That lockdown would, in principle, impose overwhelming costs on the population at large is not surprising. The scope of human activity touched by lockdown is overwhelming. Lockdowns closed schools and playgrounds, shuttered businesses, and barred international travel. Lockdowns told children they could not visit their friends, put masks on toddlers, and dismissed university students from campus. They forced elderly people to die alone and prevented families from gathering to honour their elders’ passing. Lockdowns cancelled screening and even treatment for cancer patients and made sure that diabetics skipped their check-ups and regular exercise. For the world’s poor, lockdown ended the ability of many to feed their families.
Economists, who study and write about these phenomena for a living, had a special responsibility to raise the alarm. And though some did speak, most either stayed silent or actively promoted lockdown. Economists had one job—notice costs. On COVID, the profession failed.
There are personal reasons for this docility that are easy to understand. First, when public health officials first imposed lockdowns, the intellectual zeitgeist was actively hostile to any suggestion that there might be costs to pay. The lazy formulation that lockdowns pitted lives versus dollars took hold of the public mind. This provided lockdown proponents with an easy way to dismiss economists whose inclination was to point out costs. Given the catastrophic toll in human life that epidemiological modellers projected, any mention whatsoever about pecuniary harm from lockdown was morally crass. The moral zeal with which lockdown proponents pushed this idea undoubtedly played an important role in side-lining economists. No one wants to be cast as a heartless Scrooge, and economists have a particular aversion to the part. The charge was unfair given the costs in lives that the lockdowns have imposed, but no matter.
Bruddah IZ
DA
Our supposition of economists’ sense of duty to the world’s poorest was well justified. For decades economists have fiercely defended the global economic system on the grounds that it has helped lift more than a billion people out of extreme poverty and increase life expectancy everywhere. The global economy has some significant flaws—vast inequality and climate change are often noted. But the worldwide network of trade has an essential role in facilitating economic development that brings sustained improvements to the lives of the world’s poorest, economists have argued.
The expected rush to quantify the global collateral damage from rich countries’ lockdowns never materialized. With few exceptions, economists most decidedly did not lean into quantifying lockdown harms either in developing countries or rich countries.
You're not alone case clowns.
The expected rush to quantify the global collateral damage from rich countries’ lockdowns never materialized. With few exceptions, economists most decidedly did not lean into quantifying lockdown harms either in developing countries or rich countries.
You're not alone case clowns.
Bruddah IZ
DA
Precautionary Principle and Lockdown Love
Already in March 2020, economists considered lockdowns to be worthwhile. Their reasoning was a glorified version of the precautionary principle. Several research teams quantified how large the economic damage would have to be for lockdowns to be beneficial on net. Using epidemiologists’ guesses of how many lives lockdowns might save, these analyses calculated the dollar value of the life years saved by lockdowns.
In the early days of the epidemic, there was fundamental scientific uncertainty about the nature of the virus and the risk it posed. Faced with this uncertainty, many economists (joining other scientists less well trained in thinking about decision-making under uncertainty) adopted a peculiar form of the precautionary principle. The implicit counterfactual exercise in these analyses took at face value the output from compartment models with dubious assumptions about critical parameters, such as the infection fatality rate from the model and compliance with lockdown policy. Unsurprisingly, these early analyses concluded that lockdowns would be worthwhile, even if they were to cause extensive economic disruptions.
Applied to the COVID crisis, the precautionary principle says that when you have scientific uncertainty, it may make sense to assume the worst-case about the biological or physical phenomenon you want to prevent. This is what the early economic analyses of lockdowns did by taking at face value the early estimates produced by epidemiological models (such as the Imperial College Model) of alarming COVID deaths in the absence of lockdowns.
The idea was that since we do not know with certainty, for instance, about the infection fatality rate, immunity after infection, and the correlates of disease severity, it is prudent to assume the worst. Therefore, we must act as if two or three out of a hundred infected people will die; there is no immunity after infection; and everyone, no matter what age, is equally at risk of hospitalization and death after infection.
Every one of these extreme suppositions turned out wrong, but of course, we could not have known that with certainty at the time, although there was already some evidence to the contrary. Scientific uncertainties are notoriously hard to resolve in advance of the time-consuming scientific work to resolve them, so maybe it was prudent to assume the worst. Unfortunately, fixating on the worst-case scenario then spurred long-lasting unfounded fears among the public and economists.
This all sounds very reasonable, but there was a curious asymmetry in the application of the precautionary principle in these analyses. With the benefit of hindsight, it should be clear that this application of the precautionary principle to the uncertainties of March 2020 was shockingly incomplete. In particular, it was not reasonable to assume the best case about the harms from the interventions you want to impose while at the same time accepting the worst case about the disease.
There are harms from the lockdown policies that any responsible economist should have considered before deciding that lockdowns were a good idea even then. A consistent application of the precautionary principle would have considered the possibility of such collateral lockdown harms, assuming the worst as the principle dictates.
In the panic of March 2020, economists assumed the best about these collateral harms. They adopted the implicit position that the lockdowns would be costless and that there was no other choice but to enforce lockdowns, at first for two weeks and then for as long as it might take to eliminate community disease spread. Under these assumptions motivated perhaps by a curiously asymmetric application of the precautionary principle, economists stayed silent while governments adopted lockdown policies wholesale.
Already in March 2020, economists considered lockdowns to be worthwhile. Their reasoning was a glorified version of the precautionary principle. Several research teams quantified how large the economic damage would have to be for lockdowns to be beneficial on net. Using epidemiologists’ guesses of how many lives lockdowns might save, these analyses calculated the dollar value of the life years saved by lockdowns.
In the early days of the epidemic, there was fundamental scientific uncertainty about the nature of the virus and the risk it posed. Faced with this uncertainty, many economists (joining other scientists less well trained in thinking about decision-making under uncertainty) adopted a peculiar form of the precautionary principle. The implicit counterfactual exercise in these analyses took at face value the output from compartment models with dubious assumptions about critical parameters, such as the infection fatality rate from the model and compliance with lockdown policy. Unsurprisingly, these early analyses concluded that lockdowns would be worthwhile, even if they were to cause extensive economic disruptions.
Applied to the COVID crisis, the precautionary principle says that when you have scientific uncertainty, it may make sense to assume the worst-case about the biological or physical phenomenon you want to prevent. This is what the early economic analyses of lockdowns did by taking at face value the early estimates produced by epidemiological models (such as the Imperial College Model) of alarming COVID deaths in the absence of lockdowns.
The idea was that since we do not know with certainty, for instance, about the infection fatality rate, immunity after infection, and the correlates of disease severity, it is prudent to assume the worst. Therefore, we must act as if two or three out of a hundred infected people will die; there is no immunity after infection; and everyone, no matter what age, is equally at risk of hospitalization and death after infection.
Every one of these extreme suppositions turned out wrong, but of course, we could not have known that with certainty at the time, although there was already some evidence to the contrary. Scientific uncertainties are notoriously hard to resolve in advance of the time-consuming scientific work to resolve them, so maybe it was prudent to assume the worst. Unfortunately, fixating on the worst-case scenario then spurred long-lasting unfounded fears among the public and economists.
This all sounds very reasonable, but there was a curious asymmetry in the application of the precautionary principle in these analyses. With the benefit of hindsight, it should be clear that this application of the precautionary principle to the uncertainties of March 2020 was shockingly incomplete. In particular, it was not reasonable to assume the best case about the harms from the interventions you want to impose while at the same time accepting the worst case about the disease.
There are harms from the lockdown policies that any responsible economist should have considered before deciding that lockdowns were a good idea even then. A consistent application of the precautionary principle would have considered the possibility of such collateral lockdown harms, assuming the worst as the principle dictates.
In the panic of March 2020, economists assumed the best about these collateral harms. They adopted the implicit position that the lockdowns would be costless and that there was no other choice but to enforce lockdowns, at first for two weeks and then for as long as it might take to eliminate community disease spread. Under these assumptions motivated perhaps by a curiously asymmetric application of the precautionary principle, economists stayed silent while governments adopted lockdown policies wholesale.
Bruddah IZ
DA
The one you paid for? Lol! Always fun watching the smartest guy in the room tell us how smart he is without telling us how smart he is. Your technocratic bent is showing.
Bruddah IZ
DA
Was it the "case clown" that set the hook?
Essential Economics for Politicians
Practically speaking, you'll find the purer form of free market in China, Brasil, India and a few other emerging economies.Practically huh? Be more specific as to why the aforementioned countries practices a "purer" form of free markets. No doubt it is refreshing reading.
www.socalsoccer.com
Bruddah IZ
DA
In addition to the asymmetric treatment of scientific uncertainty about COVID epidemiology and lockdown harms, economists erred in two additional ways in applying the precautionary principle. First, when evidence arose contrary to the worst case, economists insisted on continuing to believe the worst case. One example of this rigidity is the negative reaction by many (including many economists) to studies that showed the infection fatality rate from COVID to be much lower than initially feared. Motivating much of this reaction was the thought that this new evidence might lead the public and policymakers to not believe the worst about the disease’s deadliness and thereby not comply with lockdown orders.[1] A second example is economists’ support (with some exceptions) in 2020 for continued school closures in the U.S. in the face of ample evidence from Europe that showed that schools could be opened safely.
Second, while the precautionary principle is useful for aiding decision-making (particularly, it can help avoid decision paralysis in the face of uncertainty), we must still consider alternate policies. Unfortunately, in the Spring of 2020, economists—in their rush to defend lockdowns—largely closed their eyes to any alternatives to lockdowns, such as age-targeted focused protection policies. These mistakes further solidified the economics profession’s ill-advised support for lockdowns.
Second, while the precautionary principle is useful for aiding decision-making (particularly, it can help avoid decision paralysis in the face of uncertainty), we must still consider alternate policies. Unfortunately, in the Spring of 2020, economists—in their rush to defend lockdowns—largely closed their eyes to any alternatives to lockdowns, such as age-targeted focused protection policies. These mistakes further solidified the economics profession’s ill-advised support for lockdowns.
Bruddah IZ
DA
Rational Panic?
A second strand of analysis by economists in Spring 2020 was perhaps even more influential in turning economists in favour of lockdowns. Economists observed that most of the decline in movement and economic activity occurred before governments imposed any formal lockdown orders. The conclusion? The decline in economic activity in Spring 2020 was driven not by lockdowns but by voluntary changes in behaviour. Fear of the virus induced people to engage in social distancing and other precautionary measures to protect themselves, economists reasoned.
Having concluded that lockdowns do not significantly impede economic activity, economists have seen little need to quantify any domestic or global collateral damage from lockdowns.
To governments, this consensus among economists provided considerable relief and arrived just in time. At around the same time in the Spring of 2020, it became evident that the depth of the economic contraction was much larger than first anticipated. It was essential to politicians to blame this economic damage on the virus itself rather than the lockdowns since they were responsible for the latter but not the former. And economists obliged.
https://collateralglobal.org/article/lockdown-harms-and-the-silence-of-economists/
A second strand of analysis by economists in Spring 2020 was perhaps even more influential in turning economists in favour of lockdowns. Economists observed that most of the decline in movement and economic activity occurred before governments imposed any formal lockdown orders. The conclusion? The decline in economic activity in Spring 2020 was driven not by lockdowns but by voluntary changes in behaviour. Fear of the virus induced people to engage in social distancing and other precautionary measures to protect themselves, economists reasoned.
Having concluded that lockdowns do not significantly impede economic activity, economists have seen little need to quantify any domestic or global collateral damage from lockdowns.
To governments, this consensus among economists provided considerable relief and arrived just in time. At around the same time in the Spring of 2020, it became evident that the depth of the economic contraction was much larger than first anticipated. It was essential to politicians to blame this economic damage on the virus itself rather than the lockdowns since they were responsible for the latter but not the former. And economists obliged.
https://collateralglobal.org/article/lockdown-harms-and-the-silence-of-economists/
Bruddah IZ
DA
Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020 Austan Goolsbee & Chad Syverson
The collapse of economic activity in 2020 from COVID-19 has been immense. An important question is how much of that resulted from government restrictions on activity versus people voluntarily choosing to stay home to avoid infection. This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data). While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry. States repealing their shutdown orders saw identically modest recoveries--symmetric going down and coming back. The shutdown orders did, however, have significantly reallocate consumer activity away from “nonessential” to “essential” businesses and from restaurants and bars toward groceries and other food sellers.
The collapse of economic activity in 2020 from COVID-19 has been immense. An important question is how much of that resulted from government restrictions on activity versus people voluntarily choosing to stay home to avoid infection. This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data). While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry. States repealing their shutdown orders saw identically modest recoveries--symmetric going down and coming back. The shutdown orders did, however, have significantly reallocate consumer activity away from “nonessential” to “essential” businesses and from restaurants and bars toward groceries and other food sellers.
Bruddah IZ
DA
Having concluded that lockdowns do not significantly impede economic activity, economists have seen little need to quantify any domestic or global collateral damage from lockdowns.
To governments, this consensus among economists provided considerable relief and arrived just in time. At around the same time in the Spring of 2020, it became evident that the depth of the economic contraction was much larger than first anticipated. It was essential to politicians to blame this economic damage on the virus itself rather than the lockdowns since they were responsible for the latter but not the former. And economists obliged.
To governments, this consensus among economists provided considerable relief and arrived just in time. At around the same time in the Spring of 2020, it became evident that the depth of the economic contraction was much larger than first anticipated. It was essential to politicians to blame this economic damage on the virus itself rather than the lockdowns since they were responsible for the latter but not the former. And economists obliged.
Bruddah IZ
DA
From "larger" link in the post above
Bruddah IZ
DA
But was this conclusion about the lack of marginal lockdown harms justified? Economists were no doubt correct that movement and business activity would have changed even without any lockdowns. Vulnerable older people were wise to take some precautionary measures, the elderly in particular. The staggeringly steep age gradient in mortality risk from infection with novel coronavirus was already known by March 2020.
Nevertheless, the argument that people would have voluntarily locked down anyway even in the absence of a formal lockdown is spurious. First, suppose we take the argument that people rationally and voluntarily restricted their behavior in response to the threat of COVID as correct. One implication would be that formal lockdowns are unnecessary since people will voluntarily curtail activities without lockdown. If true, then why have a formal lockdown at all? A formal lockdown imposes the same restrictions on everyone, whether or not they are able to bear the harm. By contrast, public health advice to restrict activities voluntarily for a time would permit those—especially the poor and working-class—to avoid the worst lockdown-related harms. That some (though not all) people did curtail their behavior in response to the disease threat is thus not a sufficient argument to support a formal lockdown.
Nevertheless, the argument that people would have voluntarily locked down anyway even in the absence of a formal lockdown is spurious. First, suppose we take the argument that people rationally and voluntarily restricted their behavior in response to the threat of COVID as correct. One implication would be that formal lockdowns are unnecessary since people will voluntarily curtail activities without lockdown. If true, then why have a formal lockdown at all? A formal lockdown imposes the same restrictions on everyone, whether or not they are able to bear the harm. By contrast, public health advice to restrict activities voluntarily for a time would permit those—especially the poor and working-class—to avoid the worst lockdown-related harms. That some (though not all) people did curtail their behavior in response to the disease threat is thus not a sufficient argument to support a formal lockdown.
Bruddah IZ
DA
… is from pages 492-493 of the 2011 revised and enlarged edition of Thomas Sowell’s 2009 book Intellectuals and Society (footnote deleted; link added):
The vast disparity in knowledge and understanding between intellectuals and the population at large assumed by the intelligentsia is crucial to the vision of the anointed, whether in discussions of law, economics, race, war or innumerable other issues. But, if the knowledge that is consequential includes a range of mundane information too vast to be known to any given individual – whether among the intellectuals or the masses – then top-down decision-making processes like economic central planning, directed by an intellectual elite, are less promising than market competition, where millions of individual decisions and mutual accommodations bring into play a vastly larger range of consequential knowledge, even if this knowledge is available to each individual in unimpressively small fragments of the total knowledge in society. As Robert L. Bartley of the Wall Street Journal expressed this point of view: “In general, ‘the market’ is smarter than the smartest of its individual participants.”
The vast disparity in knowledge and understanding between intellectuals and the population at large assumed by the intelligentsia is crucial to the vision of the anointed, whether in discussions of law, economics, race, war or innumerable other issues. But, if the knowledge that is consequential includes a range of mundane information too vast to be known to any given individual – whether among the intellectuals or the masses – then top-down decision-making processes like economic central planning, directed by an intellectual elite, are less promising than market competition, where millions of individual decisions and mutual accommodations bring into play a vastly larger range of consequential knowledge, even if this knowledge is available to each individual in unimpressively small fragments of the total knowledge in society. As Robert L. Bartley of the Wall Street Journal expressed this point of view: “In general, ‘the market’ is smarter than the smartest of its individual participants.”
Bruddah IZ
DA
This is what the COVIDOCRACY misses.
is from pages 464 of F.A. Hayek’s profound and important 1964 article “Kinds of Order in Society” (available without charge on-line here) as it appears in Liberty Fund’s 1981 single-volume collection of New Individualist Review:
The kind of knowledge to which Hayek here refers is what in 1945 he called “knowledge of the particular circumstances of time and place.” It is not scientific knowledge of the sort that scholars learn in school, teach to students, and sometimes – when they advance it – earns for them Nobel Prizes. It is not knowledge of statistical data, regardless of how thoroughly the statistics or econometrics are done. (Statistics, by its nature, aggregates measurements of individual, specific instances into larger lumps of data.) It is not even wisdom acquired through experience. Instead, it is knowledge (Hayek later said “information”), almost always new and surprising, of very precise, often fleeting details found in local circumstances – the discovery that a particular iron-ore mine contains more ore than previously thought; knowledge that a machine in a catfish-processing plant in Breaux Bridge, LA, has just broken down and can best be repaired by paying Gerry Dugas to do the job; a hunch that changing ever so slightly the way some fracking machines are used will increase the daily rate of extraction by about two percent; finding out that skilled labor in some town costs more than expected and experimenting on the spot with ways to minimize the impact on production costs; knowing what specific menu items, and prepared just so, are likely to work best at a Silvio’s Italian Kitchen in Westchester County, NY; discovering that the wall of a grain silo is weakening and how best to strengthen it; noticing at a Petco in Pueblo, CO, that buyers there have an unexpectedly high demand for a particular kind of cat-litter box.
Knowledge of scientific propositions – and, even more, experience – often prime the human mind to be better able to recognize particular facts such as these and to understand their potential significance. But scientific knowledge and experience alone are not the sources of the kind of knowledge that Hayek here has in mind.
It is not too much to say that the most under-appreciated fact about modernity is the market’s astonishing success at routinely, every moment of every day, prompting individuals in their unique circumstances to notice and act on local, detailed knowledge in ways that change prices and, in turn, cause millions of strangers each to change his or her actions as if each of these strangers were consciously informed of some detailed piece of knowledge from far away and then persuaded to react to this knowledge as if his or her goal were to serve humanity as best as possible.
No serious person argues that the results of the market process are perfect in comparison to what the human mind can imagine. But no truly informed person denies that the results are truly marvelous. The irony is that the market works so well and so consistently that we take its successes for granted and notice only its relatively rare ‘failures.’
is from pages 464 of F.A. Hayek’s profound and important 1964 article “Kinds of Order in Society” (available without charge on-line here) as it appears in Liberty Fund’s 1981 single-volume collection of New Individualist Review:
[
DBx: Undeniably true.
The kind of knowledge to which Hayek here refers is what in 1945 he called “knowledge of the particular circumstances of time and place.” It is not scientific knowledge of the sort that scholars learn in school, teach to students, and sometimes – when they advance it – earns for them Nobel Prizes. It is not knowledge of statistical data, regardless of how thoroughly the statistics or econometrics are done. (Statistics, by its nature, aggregates measurements of individual, specific instances into larger lumps of data.) It is not even wisdom acquired through experience. Instead, it is knowledge (Hayek later said “information”), almost always new and surprising, of very precise, often fleeting details found in local circumstances – the discovery that a particular iron-ore mine contains more ore than previously thought; knowledge that a machine in a catfish-processing plant in Breaux Bridge, LA, has just broken down and can best be repaired by paying Gerry Dugas to do the job; a hunch that changing ever so slightly the way some fracking machines are used will increase the daily rate of extraction by about two percent; finding out that skilled labor in some town costs more than expected and experimenting on the spot with ways to minimize the impact on production costs; knowing what specific menu items, and prepared just so, are likely to work best at a Silvio’s Italian Kitchen in Westchester County, NY; discovering that the wall of a grain silo is weakening and how best to strengthen it; noticing at a Petco in Pueblo, CO, that buyers there have an unexpectedly high demand for a particular kind of cat-litter box.
Knowledge of scientific propositions – and, even more, experience – often prime the human mind to be better able to recognize particular facts such as these and to understand their potential significance. But scientific knowledge and experience alone are not the sources of the kind of knowledge that Hayek here has in mind.
It is not too much to say that the most under-appreciated fact about modernity is the market’s astonishing success at routinely, every moment of every day, prompting individuals in their unique circumstances to notice and act on local, detailed knowledge in ways that change prices and, in turn, cause millions of strangers each to change his or her actions as if each of these strangers were consciously informed of some detailed piece of knowledge from far away and then persuaded to react to this knowledge as if his or her goal were to serve humanity as best as possible.
No serious person argues that the results of the market process are perfect in comparison to what the human mind can imagine. But no truly informed person denies that the results are truly marvelous. The irony is that the market works so well and so consistently that we take its successes for granted and notice only its relatively rare ‘failures.’
Happy Labor Day to all of you. This is Crush's Labor Day predictions for the future. Entertainment purposes only and please do your own research & predictions and add some personal dreams to it and share as well. One can only dream in these tough times and that's what I do all day
I have visions of so much fun for all of us some day. The fact is, all of our ancestors ((working class)) worked their asses off to build this world and only a few got super duper rich off our great & great & great Grandpa's and Grandma's sufferings and sacrifices. If you add all the industrialized wars to make extra dollars off our kids lives, it makes one think deeply today. Plus all the abortions they want. Wait until you find out what these monsters do with fetus. It's truly insane to rationalize what these monsters are up to right now as we all rest on this Labor Day. It's time us workers taste some freedom and fun, just like all the Elitist have been enjoying since forever. America was started for this very reason. I can say without a doubt that their is plenty of food, land and resources for all of us to live freely. I mean super free. Like wake up tomorrow and if you dont want to get on the Hamster Wheel of life, then you dont have to. If you dont want to go to school tomorrow, you dont have to. Crazy to think about real freedom, right? If they ((the good guys)) take all the $$$ away from the cheaters & snakes, then we all can get $100,000 each to kick start the new life and then $2500 a month each for life. Inflation will come down. So if one wants to sit in his room all day playing video games, go ahead. That's freedom or addiction, but choice has to be made. We made these stupid video games and we have a generation of addicted and obese kids that just sit in their room all day and night playing video games. If one 18 year old really wants to travel around the world, then they can. It's called freedom. Others like me and my wife, we want to innovate with our ideas. I have so many ideas to help humanity. I want to build the first ever, "Open 24/7" Holistic Healing Urgent Care. No pills or thrills. No office, just Mother Nature and all she has to help us be healthy with our amazing bodies that were created to win. This has been going on for thousands of years until big farma took over and used Petroleum to treat our pain. If you want booster jabs forever, you can do that too. We will have two worlds to choose from very soon. The new world order or freedom. If you want big brother ((and your wife)) spanking your ass every morning to get on that damn wheel and telling you want you can and can;t do ((Espola and Dad types)) then you can have that as well. I'm going to build my own wheel with my wife. Peace to all!!!