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01/05/2005

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» The economics of tsunami risk in a nutshell from The Acorn
Answers from the dismal science The Becker-Posner blog has excellent posts on the economics of catastrophic risk. Here is an excerpt.Nevertheless, it seems apparent that the total cost figure of the recent tsunami will come in at an amount great eno... [Read More]

» Tsunami Delusions and Aftermath from Duophony
The 12/26 tsunami is not the story of a freak act of God. Its a statistical blip, which is exacerbating a man-made travesty of justice in more than one country. The uncritical outpouring of donations by admirably-intended, but naive, and perhaps oblivi... [Read More]

» Tsunami Prevention from De Rerum Natura
Richard Posner has some interesting thoughts about the lack of preventive measures in place before the recent tsunamis in the Indian Ocean.... I link to this because I was wondering recently what would happen if a tsunami had hit a more developed cou... [Read More]

» A Cold-Blooded But Interesting Look at Risk from As the Top of the World Turns
It seems a bit cold-blooded, but illustrates a rational, as opposed to purely emotional, means to allocate resources to risk-prevention and risk-mitigation. One of the building-blocks of the analysis is how much a life is worth (in the U.S., so they ... [Read More]

» The Tsunami as Blank Slate: Round 2 from Metaphor Country
The New Republic Online (subscription required) is up with two articles that help make the case that the East Asian tsunami is, among other things, an enormous blank slate onto which you can project the ideology of your choice. Peter [Read More]

» [翻译]贝克尔和波斯纳的网络日志导言 from 素为法学BLOG
作者:Posner,原文在这里, 基于Creative Commons License发布英汉对照的翻译见 [贝克尔-波斯纳-BLOG]中文翻译项目(希望大家踊跃地参与到这个WIKI协作项目中来),本翻译文基于发布,翻译人素为.声明:翻译... [Read More]

» CATASTROPHE AND RESPONSE from Pejmanesque
The issue of the week at the Becker-Posner blog is catastrophes and humankind's response to them. This is of particular interest given Judge Posner's recent book and the subject matter it discusses. It is only natural, therefore, that Posner begins... [Read More]

» Good Investment For Whom? from No Treason
It seems to me that I'm the one in the best position to manage my own risks; why should I want to manage the risks of others? Richard Posner smuggles in a collectivist premise when he writes: The fact that a catastrophe is very unlikely to occur is... [Read More]

» 'CIO role will be more from auto baratos
Resource your "continuing operations" (ie keeping the servers up and networking running) either to an independent internal structure, or to [Read More]

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Brian

"Scarcity is a marketing tool. It is a construct of the capitalists."

Wow, you have a nano-assembler? Mind making a copy for me?

"The day that we begin to run a cost-benefit analysis on human lives is the day that we lose our humanity."

In that case, we ceased to be human the day life insurance was invented, and probably well before that. You and I make a cost-benefit analysis of human lives every time we get in a car.

David

Corey - scarcity is an unfortunate fact of life. Neither individuals nor governments are infinitely rich, and they cannot afford everything. Both public and private actors must make decisions about how to manage their resources, and that's where economics comes in.

BUT, we must remember that economics is a tool, not a cure-all ideology. A cost-benefit analysis does not tell us what we are willing to pay, politically or privately, for any particular benefit. That has to come from another source, and in politics, perhaps it derives from our notions of "right," "humanity," "fairness," and "efficiency" (among other things). We can debate what an ideal society should look like. Economics merely allows us to understand the trade-offs.

David Pittelli

Corey: "So I should assume that you agree with 1% of the population controlling 40% of the wealth?

Better that 1% of the population should control 40% of the wealth than that the government should redistribute this wealth, given that:

1) Such a redistribution relies on coercion/force.

2) Total wealth and growth are negatively impacted by such schemes. It's not a coincidence that only Alabama and Mississippi are as poor as Western Europe (and explicitly socialist countries are much poorer still).

Rob

ok, so there has been a lot of silliness from both ends of the spectrum here. Just wanted to point out that

(1) "redistribution" relies on no more force than is required to enforce private property rights (maintaining police units, etc.)

(2) There are good arguments for thinking that Western Europe is richer than some U.S. states besides Alabama and Mississippi. In as much as we can think of an area as large and diverse as Western Europe as being monolithically rich or poor, it does pretty well. There are also studies that people care more about relative wealth than the overall wealth of their countries; that is, contentment in one's finances is tied more to the former than the latter.

and to be fair

(3) Scarcity of resources is not a capitalist invention, though capitalist markets do result in resources being scarcer for some than for others. If ifs and buts were candies and nuts, we'd all have a wonderful christmas.

now on with writing other crazy things

Corey

Ok, I'll change my statement to: "scarcity is sometimes a construct of the capitalists." Examples being whatever toy you can't find at Christmas, anything with the words "limited edition" in front of it, and things you can't afford that we agree everyone should be able to afford.

And I take no issue with the existance of economics. I take issue with the program of the "Law and Economics" movement which seeks to make cost-benefit the primary mode of jurisprudential analysis because of some idea that doing so is more rational than say... case by case application of democratic jury decisions.
I take issue with appointed judges presuming to decide issues of social policy based on a formula that only works when we "assume that the probability of X is .5"

"redistribution relies on coercion/force."

Yeah, well, SO DOES WEALTH ACCUMULATION! You just don't see it because most of the coercion happens in places like Indonesia.

I want to take Warren Buffet's money, what stops me? Well the government will arrest me on his behalf and lock me away. If you are so against force, why allow the government to use it to protect the status quo wealth distribution. Is it because the current distribution is fair? If it isn't fair, then isn't my case stronger. If the government is going to use force and police power then they should do so on behalf of those who have need, not the other way around right?

Either Warren deserves to have 20 billion, or he has accumulated more than his share. Either he is 10,000 times more productive and smart than anyone posting here, or else wealth is not distributed according to merit. If we can agree that his wealth is undeserved, then we have to ask what forces operate to allow him to hoard cash while Indonesians starve and die, while American children go hungry! We could all go to Omaha and take his money, there are enough of us to pull it off. Why does no one try? Those are some pretty strong laws at work. People will choose to let their kids be underfed and go to substandard schools rather than hit the streets and shake their pitchforks at the rich. Reading history, I am continually impressed by the effectiveness of all this.

Corey

"2) Total wealth and growth are negatively impacted by such schemes."

I'm sorry, but that is WRONG.

During the 60s, when the highest tax rate was 70%, the GDP growth rate was higher than the last decade. Not suprisingly, during the 60s, income inequality was as narrow as at any point during the century.

In 1967, with the highest tax rate at 70%, the American GDP grew just over 10%, In 2004, with the Bush top tax rate of 31%, the GDP grew just under 4%. Neato. But many economists don't think growth is correlated to the tax rate at all.

Here is a web site with some fun facts:
http://www.huppi.com/kangaroo/L-taxgrowth.htm

Note the western european countries with twice our tax rate that are growing faster. hmmm...

Fred

I am strongly in favor of 1% controlling 40% of the wealth (or whatever silly figures you come up with) if it's because 1% are creating greater productivity. A world where initiative is rewarded is a world where the average person does better too. Let me put it as starkly as possible, so Corey can understand. If you oppose a world where 1% controls 40% of the wealth, then you favor a world of massive poverty where starvation and disease are the rule and the average person has almost no chance of doing well no matter how much the effort.

Michael

What about the implications of all the private donations of people to relief organisations and whether their use is directly aimed at the destroyed regions or not?!
I'd very much a appreciate a comment on that from both!

Rob

"If you oppose a world where 1% controls 40% of the wealth, then you favor a world of massive poverty where starvation and disease are the rule and the average person has almost no chance of doing well no matter how much the effort."

False dichotomy: presenting two unrelated options as the sole possible outcomes in any given scenerio. See above. Also:

"If you oppose a world in which I am the richest, most-sexed man alive, you favor a world in which the entire human population is decimated by a painful skin disorder"

And:

"If you oppose a world in which you give me your wallet, you favor a world in which I beat you about the head."

Make your own:

"If you oppose a world in which [A], you favor a world in which [any letter you would like]."

Granted, none of this has to do with Posner or Tsunami relief, or anything intelligent, but it is good to know.

Now, please, write more crazy things.

Rob

I desire more crazy talk. For this exercise, I will assume the role of the crazy liberal:

There wouldn't be any tsunamis if not for capitalism. Capitalist scientists invented tsunamis in their secret laboratories so as to sell the masses cheaply produced parkas at astronomical prices. You should all feel very ashamed.

And capitalists aren't only to blame for tsunamis. They are also at fault for the extinction of the money tree, the golden-egg producing duck, and the woodchuck made of chocolate, with the creamy banana center. Without such awful meddling, we would live in a land of good&plentys; we would all have flat tummies with ripped abdominal muscles, and we would cavort in the meadow giving and taking from the good earth.

I await the crazy conservative response. I will start you off: "unless you agree that the poor should die hungry in the streets ... (I can't do all of your work for you). Engage.

(apologies to our esteemed Posner, who no doubt desires an intelligent discourse, but crazy talk is what he has engendered and there is no turning back)

Corey

"apologies to our esteemed Posner, who no doubt desires an intelligent discourse"

Perhaps if you didn't "esteem" him so much, HIS op-eds would look like crazy talk to you also.

I didn't think I sounded crazy except in juxtaposition with the Econ For Neo-Cons, but if you think so, then you think so.

What's your position on wealth distribution and economic policy? Is it MODERATE? I hear moderate is the new black. All the cool dudes and chicks be wearin it. I've been thinking of going on a makeover show, so I can learn be a funny disaffected moderate too. Who can tell what we should do, its all been said before, let's have a chai, oh, that belt is hot!

John Hall

A long time ago, I was told that you could not use risk benefit analysis to factor in the possibility of remote catastrophe.

As a practical matter, INFINITY * EPSILON where EPSILON is > 0 but not distinguishable from it is ambiguous.

Palooka

"Either Warren deserves to have 20 billion, or he has accumulated more than his share."

99% of his wealth is in his company, Berkshire Hathaway. He doesn't have it locked in a vault so he can count it every night. He doesn't have 13 homes (like a recent presidential candidate). He doesn't evade paying income taxes through every tax loophole available (like a recent presidential candidate's wife).

Moreover, he is a Democrat and he plans on giving the vast majority of his wealth to charity upon his death.

The real question is why you'd object to someone like Warren Buffet, Corey. I think it has something to do with your inherent dislike of inequality per se. You'd prefer all of us live in squalor than for us to live here in these United States with--gasp--inequality.

Does the thought of a billion dollar corporation keep you awake at night? Because that is all Warren Buffet's wealth is. Does the thought of wealth accruing at double digit rates annualy for the eventual dispersement to charity really disturb you? If it does, I'd really like to know why.

Maybe you should think a little less about who "has more than his fair share" and a little more about how this world actually operates.

I try not to respond to your every trollish comment, Corey (though I have, again, lapsed in that goal). Whether income redistribution is a "good" thing or not is an interesting topic, but it seems you deliberately avoid the specific issue, prefering to rail against The Great Capitalist Machine instead.

So, if you would, why is it not necessary to place a dollar value on human life? How else can a bureaucracy find a reasonable amount of expenditure on a given health or environmental issue? Pull a number out of a hat? After sitting on that for awhile, maybe you'll begin to understand how empty your rhetoric is.

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