“Renewable resources” are supposed to be superior to “non-renewable” resources because, well, they’re renewable!!!  Those who advocate renewable resources are responsible, care about the earth and care about leaving something to future generations.  Those who just use resources without regard to renewability, therefore, must not care- they want to party like it’s 1999, damn the consequences, the waste, and the future generations.    If this is a gross over-simplification, let me know.

I’m fed up with the notion that “renewable” = superior.  I’m fed up with the notion of “renewable.”  Resources are resources, and their value or usefulness exists in the minds of people who use the resources to fulfill their goals.  If there is less of a resource than people could make use of, it is an economic good and people will economize its use based on its cost.  Hence the only relevant indicator of superiority of a resource is it’s cost, not whether it’s “renewable.” 

Let’s take a quick example: the corn interests and (some?) greens push ethanol, because it’s renewable!!  Renewable means: we can always make more, as opposed to oil, which, they predict, will all be gone someday.  However, for the time being, we can make more oil as well, and it’s cheaper to make a gallon of gasoline or diesel than a gallon of corn alcohol, and you get more energy from it to boot!  So enough about the corn-hucksters’ claims of superiority.  The main issue for me and, I contend, most people, is cost, not some empty claim of “renewability” which amounts to moral posturing.  When the oil runs out, actually long before the oil runs out, it’s price will rise, and ethanol will become more and more attractive.  At some point perhaps ethanol will become economical, but at that point I won’t need the corn-hucksters’ notion of moral superiorty, of “caring about the earth” or what have you, to compel me to use their product.  I’ve already got a far more superior concern- cost- which, it turns out, is a far better motivator for getting the most out of resources, whether “renewable” or not. 

Economists ought to say, “Don’t tell me it’s renewable.  Tell me it’s cost-effective.”

I suppose it’s a sign of extreme wealthiness when people can afford to economize resources based on moral claims and not solely on money costs, but it bugs me immensly when these greens/renewable advocates tell me that I should care about whether a resource is renewable.  I don’t.

Just goes to support my belief that criminals make their decision using a much shorter time horizon.

http://news.yahoo.com/s/nm/20070206/od_nm/japan_police_theft_dc_1

I am not a good libertarian largely because this offends me more than the war on drugs. While I deeply oppose drug prohibition, it does not provoke the same visceral reaction as light-bulb prohibition. The small meddling is vastly more insulting than the large meddling. I am tempted to believe that it is a moral failing.

What is the role of government.  As I said earlier, I say to provide services/goods for the country that the country will not provide when left alone.  (Which includes safety brought about by helmets for example).  I know Eli disagrees, and Stew.  What do people think?  This is another way to see how libertarian you are I think.

That little libertarian questionnaire made me think again about the oh so interesting question of safety regulation.  The first inclination of a good small government economist is to say “thats ridiculous of course they should have no regulations on safety”.  This is an area though where I think we may need some regulation (though it could be state, local, or even company regulation if the company is brave enough). 

We’ll use the safety helmet requirement for example.  If there is no requirement then there will likely be a machismo factor, or a coordination failure.  “I don’t need a helmet” in other words it maximizes individual utility to not be the only one wearing a helmet, though they’d like to.  There is a factor of worrying about being made fun of for wearing it.  “hey helmet boy, afraid a wrench is going to fall on your head”, the risk of this is high enough to outweigh the benefit of wearing the helmet.  Every worker you can think of having this internal struggle, thus we have an equilibrium where few to none wear helmets.  Regulation can serve to correct the coordination problem with very little inaction costs.  Few refuse to wear it cause they won’t be made fun of for wearing it, and their utility is better for they have no fear of being mocked and they get the utility of better expected safety.  An improvement I’d say.  “They could just self regulate right, agree all together to wear helmets” no that is the reason it is a coordination failure problem. chances are no one has the incentive to initiate the self-regulation.  Imagine the taunting “little poor jimmy wants us all to wear a helmet, throw your wrench at him”.  Poor Jimmy.  I think the role of govt is to do for society what society would like to be done, but can’t do on its own.  This is one of the few times I’m for regulation.  There are actually papers written on this exact subject.  If any is HIGHLY interested (your utility of knowing the paper is greater than the hassle for me to dig through my old labor papers) Ill look it up for you. 

I think my Bayesian updating isn’t working right due to the cold weather.  I experience day after day of sub freezing weather and then the next day get up and see sun and think, its going to be warmer today.  Every additional cold day is making me think the next is more likely going to be warm.  I need an adjustment.

I was reading an un-named paper by an un-named person for an un-named class and for every two sentences there was a paragraph long end-note. I had to alt-tab between two documents so that I could easily read a sentence and then flip to the explanatory notes.

Sometimes I wish that by invoking the name of McCloskey I could cause other Economists to burst into flames.

EDIT: Spelling

Economists often say they stick to ‘positive statements’, and that ‘normative statements’ are something different. However they seem to disregard common sense here. People ( as well as economists ) have value judgements that are almost implicitly derived from positive statements.

By constantly stressing that they are being objective it seems like economists have something to hide. Maybe they ARE actually trying to influence the conclusions of other people. Maybe they are actually people in real life (!!) with opportunity costs associated with picking their research areas, and they spend years at schools like George Mason focussing on those subjects that have the biggest influence on people’s normative judgements.

By picking your objective battles you already make an implicit normative statement. Why hide this behind the shield of ‘objectivity’ ? It will only anger people.

Given our recent discussions on Global Warming, I would like to add a random thought.  It appears to me that one of the most powerful implications of the second law of demand is that change is irrelevant if it happens slowly.  This is a simplification, but the second law of demand stipulates that our elasticity’s are flatter in the long run than in the short run.  Specifically the farther we are from any specific moment of change, the easier it is to find substitutes.

If the danger of Global Warming is that over the next hundred years, the temperature will rise a few degrees, then I am unmoved.  This will be a slow process and given this long period of time, it will be much easier for people to adapt to the change.

Unless Global Warming is apocalyptic, massive sudden change, there is little to be worried about.  The hard sell is the only sell as it is the only way to justify current Green policy.

Last night my professor claimed that there was no amount of money that he would accept in exchange for losing his arm.  I think he may have even said his value for his arm was “infinite”. 

If this is what he meant, I have trouble believing this to be true.  If so, it would suggest that he would pay me any amount of money if I threatened to cut his arm off.  The expected value of losing infinite value is certainly worse than all of the money in his bank account.  Or, for example, it would imply that he never leaves the house because of the small, but very real, risk of losing a limb in some freak accident.  It wouldn’t be worth it.