Who Will Build The Hover Ports?

The ultimate and predictable argument presented by people wed to state dominance is the question of “public services” like roads and other infrastructure: Who would build and maintain roads if not for the public spirited denizens of government agencies? The answer, of course, is that people would build roads just as they do today.

During the industrial revolution, advances in productivity yielded increases to supply of a host of consumer products. Much of this productivity centered around factories and mills where technological advances and assembly lines improved efficiency. While the builders of these industries grew wealthy, so did the vast majority of people who now had access to less expensive clothing, durable goods and food. To get to these factories, roads were required. To ensure that people could travel from their homes to these factories, roads were required. To provide places where the products of these factories could be sold, roads were required.

The need for means of travel sparked the building of roads. Of course, roads existed long before the industrial revolution, but the need to transport ever larger quantities of goods over longer distances triggered other advances in road building and transportation. None of this required government oversight, foresight, or edict. In other words, necessity built the roads.

From this point the argument will typically devolve into concern for the less fortunate: Who would build roads for the poor? The answer is the same: anyone who has a need to access, or provide access to, labor and distribution of goods. The poor have to eat and cloth themselves just like everyone else. To the capitalist, they are a market to serve not a victim to subsidize. The same roads transporting goods across the country are made accessible to all. While access to these roads would likely include a fee to cover upkeep, that would be no different from the fees currently extracted through the numerous tax schemes claimed by bureaucrats and politicians as a means to keep up the roads. The difference is that competition for transit possibilities would make roads cheaper and better maintained. Of course, had government not hidden the cost of roads through taxation, socializing the cost and making road travel appear less expensive than it is, other means of transportation might have been developed by now to reduce the cost and improve efficiency. Then the question might be: Who will build the hover ports?

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When Goods Don’t Cross Borders

The Protectionist in Chief has decided that “trade war” is a sound approach to foreign policy. From Canada to Russia and China, among others, the Big Cheese-Doodle has signed on to several efforts to “protect” the interests of American business by limiting and taxing businesses and industries located in nations deemed trading adversaries. As Otto T. Mallery stated in Economic Union and Durable Peace, a quote oft attributed to Frédéric Bastiat, “When goods don’t cross borders, armies will.” As a result, describing Mr. Trump’s initiatives as “war” is far more apropos than his highness might prefer.

When the coercive force of government is employed, markets are kept from being free. In the case of tariffs, nations with competitive advantage are targeted with import premiums or restrictions. The effect of such “protectionism” is to negatively impact the livelihood of those people living in the nations or regions targeted. As a result, the people impacted become belligerent and bellicose, escalating tensions and increasing the risk of conflict. Before long, this sentiment results in military action.

While protectionism increases the likelihood of tensions and conflict, it also negatively impacts the very people supposedly benefited. When a good like imported steel is targeted, for example, the price of this good increases for everyone in the importing nation. The argument is that this makes domestic steel producers more competitive. However, domestic producers are only made more competitive in domestic markets at the expense of consumers in that market. As a result, U.S. consumers pay a higher price for such goods than the rest of the world enjoys. Additionally, the tariffs themselves are paid to the U.S. government, benefiting those who dictate the increased prices.

In the end, tariffs benefit states. While the price is borne by the people within the state enforcing tariffs, targeted nations seek remedies through other means like military confrontation. If military conflict results, individual people subject to the control of the states involved again pay the price. In the end, protectionism hurts individuals and benefits states regardless of where it is tried.

Myths of Economics: Value

There are a few beliefs about value which are false yet commonly held: value is objective and value is quantifiable. While neither of these is true, both are believed in general and presented as fact by those who should, and possibly do, know better.

When we speak of value, we often confuse this term with cost or price. We speak of the “cost of living” or the “price per ounce” as though either or both of these things denote value. In fact, value is something which can only represent a verifiable thing to a single individual at a particular point in time. For example, a warm coat has certain value to a person in Alaska which is not likely shared by a similar person in Hawaii. Similarly, that same warm coat to the person in Alaska has certain value on a cold day which is absent on a mild day. While the price of the coat is almost certainly too high to the Hawaiian on any day, the price assigned by those interested in selling it is either too high or too low to our Alaskan based on the temperature at the time we ask. As a result, the value of an item is both subjective and constantly in flux.

Similarly, the value of an item cannot be quantified. When our Alaskan talks of the value of their warm coat, they refer to this item in relation to other items available. When offered the option of a warm room or the warm coat, our Alaskan will choose based largely on their tasks and goals: work to be done outside will increase the value of the coat while leisure or work to be performed inside will decrease the value of the coat. In the case of work to be done outside, several other attributes like external temperature, coat comfort, coat serviceability, and coat effectiveness will come to play in the coat’s value at the time our Alaskan reaches into their coat closet.

In all cases of value, it should be understood that the ranking of our warm coat can only be done ordinally; our warm coat is only considered in order of value above or below alternatives. For example, to complete tasks outside in Alaska, the warm coat is compared against other protective clothing available at the time. Each available alternative is ranked in order of perceived benefit to achieve the goal based on the temperature at the time. Our Alaskan might value a lighter coat ahead of our warm coat because the task is sufficiently brief, the temperature is sufficiently low, or flexibility is sufficiently greater than the warm coat. In the end, the alternative chosen cannot be measured quantitatively against the alternatives because no common measure is possible; there are too many factors or methods of measurement to isolate a value common  to all the potential alternatives.

In the final analysis, it is impossible to for an actor to understand or communicate all of the reasons for a given valuation. Choices involve myriad alternatives with incomparable attributes pertinent only in subjective evaluation. Value is ever changing based on available alternatives and a continuously changing landscape of attributes and alternatives.