Saturday, November 24, 2007

Technologically and financially you are giants, morally you are pygmies

Yahoo pays up for sending Chinese dissidents to jail for 10 years.

Google and other search engines also "cooperate" with the Chinese government by (for example) self censoring their search results.

They say they are following Chinese law, but what they are really doing is making the twisted (and often quite evil) views of the Chinese government look internationally acceptable.

This is tantamount to internationally credible people twisting their views so that their view would be available in Nazi Germany, Apartheid South Africa or New Order Indonesia for example.

Google says that Chinese citizens are better off with their service than without. I suspect China would actually be better of without another internationally credible organisation parroting the Chinese government - there are more than enough of those already.

Sunday, November 18, 2007

The Economist's Oath (II)

In the first part of this blog post I implied that economists make 99% of their money out of one simple idea.

This isn't as fantastical as it sounds - but economists rarely let the cat out of the bag without forcing you to buy their latest book or signing you up for an undergraduate degree in economics (and even then most undergrads don't "get" it - economists are a stingy bunch).


The one useful idea in economics is this:

"People can cooperate very successfully together, but sometimes they don't and need to be coordinated."

The "sometimes" is the contentious part. Libertarians/capitalists would tend to say that individuals cooperate well most of the time without out any outside interference and socialists would say that people mostly need to be coordinated by government.

Most economists naturally tend to fall on one or other side of the cooperation vs coordination divide without being extremists - economics is a science after all, not a dogma - so each case should be examined on its own merits regardless of one's natural inclinations.

One of the major success stories of cooperation over coordination is China since it began free market reforms in the late 1970s. The Chinese were highly coordinated beforehand, being told by a central authority where to work; how much to produce; what to buy etc. (needless to say, coordinating billions of people in such small detail can be quite tricky!). Under Deng Xiaoping they were allowed to cooperate more, each Chinese citizen was given more economic freedom.

China's free market reforms are probably the greatest single achievement of economic theory.

A looming cooperative disaster however is global warming. People don't cooperate well together when it comes to global warming because the price I pay for fuel for my car reflects the costs of production - ignoring the costs inflicted on the environment (e.g. the cost to the tourist industry in Manado because of the coral bleaching caused by global warming).

The usual coordination solution is quite simple: tax fuel so that the price reflects the estimated cost to the environment.

A slightly deeper cooperative solution may be to allow freedom of movement across all borders, i.e. remove government's "coordination" of movement.


Now that you have a grasp of cooperation vs. coordination, there's no need to waste your money on Freakonomics II or sign up for that economics undergrad course, you're probably better off studying something more intellectually stimulating like statistics.

Sunday, November 11, 2007

Sunday Evening with Milton Friedman

This interview (via Greg Mankiw) is well worth a listen.

Wasting Energy

I used to live in East Germany, quite close to the iron curtain.

What struck me most of all about the Berlin wall, the Stasi etc. was that on a very simplistic level, undemocratic countries waste so much time, people, energy and money on things which retrospectively are incredibly stupid.

For example Singaporean censorship, China with their spying programs on Chinese students abroad (I kid you not) and Malaysian tear gassing of peaceful protesters.