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wilte's review
4.0
Clear arguments from a libertarian. On some issues I had a nagging feeling that something did not add up, but it was hard to put my finger on it. Consequences follow very logically from his premisses.
I do think Whyte has to much faith in rationality of people (or if they are irrational, they should suffer the consequences themselves). I would argue from a bit more leniency on the (consequences of) the gap between intentions and behavior.
Whole collection is a free download at http://www.adamsmith.org/research/boo...
Some quotes that struck me:
"...statistical definition: you live in poverty if your household’s income is less than 60 per cent of the national median. (...) Using this definition, a recent Unicef report claimed that there is more child poverty in Luxembourg than in the Czech Republic. Why would anyone use such a preposterous definition of poverty? Unicef gives a simple answer: if it did not, then there would be no poverty in rich countries such as Britain. This is my conclusion exactly. (...) What Labour and Unicef call poverty is really just income inequality."
"...corporate philanthropy is theft. (...) Shareholders tolerate a certain amount of what looks like corporate philanthropy because some customers like to see it, and so become more inclined to buy the company’s products. Used in this way, philanthropy is simply part of a firm’s marketing. And it must be justified in the same way as any other marketing effort: Does it increase revenues by more than it costs? (...) We at Acme Shovels are very glad to give Save the World $100,000 because we believe it will boost our sales.” Such honesty would undermine the gift’s intended effect. Acme Shovels’ reputation and revenues will benefit from the gift only if it appears that they did not intend to benefit from it."
"the first conviction is the most expensive for a criminal. This is when he incurs the one-off, irrecoverable costs of becoming a known criminal, such as diminished career and social prospects."
"The cause of bankers’ imprudent culture is government guarantees to depositors (and their reliable bailing out of banks’ wholesale creditors). Depositors do not care now about the prudence of bankers because they do not benefit from it. Because the government promises to cover the losses of depositors should their bank lose their money, they no longer care if the bank is a prudent lender or is otherwise trustworthy. And if depositors do not care, banks have no reason to care either. They gain nothing from prudence. (...) That is why state guarantees that create perverse incentives are often thought to be successful in their early years. The careful habits built up during the risky past persist for a while. At first, the guarantees seem to provide security at no material cost."
"Politicians being lobbied by would-be recipients of taxpayers’ funds are well known to make better investment decisions than people risking their own money." (to state the obvious: Whyte is being ironic in this column)
"Whom do you trust more to make good investments: someone risking his own money in search of profits or someone risking other people’s money in search of votes?"
"here will always be charlatans who exploit ignorance and superstition. The Government need not outlaw them. Human folly should be permitted when it is only the fools themselves who suffer from it. But where folly is likely to harm others, higher intellectual standards should be required.(...) Yet, no matter how much private nonsense should be tolerated, state-sponsored nonsense is never acceptable. For the State’s actions always involve compulsion, if not in what we receive, at least in what we pay for. And no one should be compelled to pay for nonsense. Taxing us to fund homoeopathy is outrageous. It is no better than forcing us to pay for a space programme based on Aristotelian physics or a meteorological service based on numerology."
I do think Whyte has to much faith in rationality of people (or if they are irrational, they should suffer the consequences themselves). I would argue from a bit more leniency on the (consequences of) the gap between intentions and behavior.
Whole collection is a free download at http://www.adamsmith.org/research/boo...
Some quotes that struck me:
"...statistical definition: you live in poverty if your household’s income is less than 60 per cent of the national median. (...) Using this definition, a recent Unicef report claimed that there is more child poverty in Luxembourg than in the Czech Republic. Why would anyone use such a preposterous definition of poverty? Unicef gives a simple answer: if it did not, then there would be no poverty in rich countries such as Britain. This is my conclusion exactly. (...) What Labour and Unicef call poverty is really just income inequality."
"...corporate philanthropy is theft. (...) Shareholders tolerate a certain amount of what looks like corporate philanthropy because some customers like to see it, and so become more inclined to buy the company’s products. Used in this way, philanthropy is simply part of a firm’s marketing. And it must be justified in the same way as any other marketing effort: Does it increase revenues by more than it costs? (...) We at Acme Shovels are very glad to give Save the World $100,000 because we believe it will boost our sales.” Such honesty would undermine the gift’s intended effect. Acme Shovels’ reputation and revenues will benefit from the gift only if it appears that they did not intend to benefit from it."
"the first conviction is the most expensive for a criminal. This is when he incurs the one-off, irrecoverable costs of becoming a known criminal, such as diminished career and social prospects."
"The cause of bankers’ imprudent culture is government guarantees to depositors (and their reliable bailing out of banks’ wholesale creditors). Depositors do not care now about the prudence of bankers because they do not benefit from it. Because the government promises to cover the losses of depositors should their bank lose their money, they no longer care if the bank is a prudent lender or is otherwise trustworthy. And if depositors do not care, banks have no reason to care either. They gain nothing from prudence. (...) That is why state guarantees that create perverse incentives are often thought to be successful in their early years. The careful habits built up during the risky past persist for a while. At first, the guarantees seem to provide security at no material cost."
"Politicians being lobbied by would-be recipients of taxpayers’ funds are well known to make better investment decisions than people risking their own money." (to state the obvious: Whyte is being ironic in this column)
"Whom do you trust more to make good investments: someone risking his own money in search of profits or someone risking other people’s money in search of votes?"
"here will always be charlatans who exploit ignorance and superstition. The Government need not outlaw them. Human folly should be permitted when it is only the fools themselves who suffer from it. But where folly is likely to harm others, higher intellectual standards should be required.(...) Yet, no matter how much private nonsense should be tolerated, state-sponsored nonsense is never acceptable. For the State’s actions always involve compulsion, if not in what we receive, at least in what we pay for. And no one should be compelled to pay for nonsense. Taxing us to fund homoeopathy is outrageous. It is no better than forcing us to pay for a space programme based on Aristotelian physics or a meteorological service based on numerology."
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