One currency for the world?

[mike777]

Of course there becomes the whole debate over quality of life vs productivity or standard of living.

 

For decades many argue in Europe they have a better quality of life even if their standard of living has not kept pace with other places. As long as you are willing to move you can choose.

 

I note that in a recent wsj article roughly 50% of the rich chinese said they may move out of the country.

[mike777]

You know what? To me this is smoke and mirrors.

 

If you want to get into a discussion of what things should be grown where then you are getting into a very dicey area indeed. I don't know much about economic but I DO know quite a bit about growing food.

 

You might be interested in the Melbourne Peace Prize acceptance speech by Dr Vandana Shiva as to where your sort of thinking ended up getting farmers in India who were convinced that they would be better off listening to that sort of stuff. At least the farmers who didn't join the group of 6000 or so who comitted suicide when they couldn't sustain the farms doing what they had been convinced to do instead of what they had been doing.

 

You might read One Straw revolution by Fukuoka who watched as people abandoned their traditional crops in favor of what they were promised would be more profitable for them, and their subsequent struggles.

 

You might want to consider the Dust Bowl of the 30s which largely was a result of people farming the way business people (banks)told them to so they could make lots of money. The banks ended up with lots of farms out of that one.

 

And as far as that goes, you are wrong as far as needing fertilizers and pesticides etc; learn something about permaculture. I will point you in one direction..check out Joel Salatin of Polyface Farms. He will not send anything further than 400 miles from farm to consumer and he is very successful no matter what terms you choose to use to define success. Or watch some of the videos on You Tube about Sepp Holtzer of Austria.

 

You could look up some of the projects being done by Geoff Lawton with desert being brought back to fertility without chemicals. Or Growing Power in the US founded and run by Will Allen. He claims something like a million pounds of food grown on 3 acres. Without chemical fertilizers or pesticides.

 

Of course, before the companies such as Monsanto managed to get patents on seed, farmers used to save a portion of their harvest to use as seed the following year; this has become illegal in many instances. Farmers have lost their farms for having such plants show up on their land even though the plants are proven to escape from planted fields and show up where they haven't been planted. So seed can be a cost. Pesticides and fetilizers are most certainly required by such seeds, although both beooming less effective. Pesticides are now starting to give rise to superbugs in the same way that overuse of antibiotics has. You can check the growing concern about the corn borer in the States.

 

The other thing not mentioned is time. Some people claim that people in the first world countries are now working much harder and longer hours than was generally the case 80 or 100 years ago. that is..if they are working at all I suppose.

 

Fukuoka grew barley, rice and citrus trees and he had no machinery, no chemicals. He and the stores which carried his product could have got a premium for his produce but he refused to allow that, going so far as to boycott one store which did. He also had the resources and free time to think, to teach, to write, to travel.

 

/quote]

 

 

India is a perfect example of how they changed the way they grow food. They increased productivity in food production by giving up the old ways. India is real life proof of comparative advantages between nations.

 

You seem to think it is proof of smoke and mirrors?

[phil_20686]

Of course there becomes the whole debate over quality of life vs productivity or standard of living.

 

For decades many argue in Europe they have a better quality of life even if their standard of living has not kept pace with other places. As long as you are willing to move you can choose.

 

I note that in a recent wsj article roughly 50% of the rich chinese said they may move out of the country.

 

I have always assumed that this was largely a case of "inherited wealth", even if our income is less than, say, america, we have a large amount of inherited capital in terms of the high quality of our infrastructure, government institutions, trade agreements, housing stock, hospitals etc etc. America's train network is close to third world levels....

 

Moreover, its notoriously high to do apples to apples comparisons for GDP per capita. How do you value an institution like the National Health Service? It clearly adds relative value, since it has much better outcomes per unit cost than the insurance based service in america, on the other hands it is supported by higher taxes which tend to drive down per capita wealth. This is just one particularly difficult example.

[mike777]

As far as your nat health care, my main worry is the lack of incentives for innovation. It appears from afar, that this is a big issue but you may have studied this issue from a better viewpoint. Does Britian tend to import most of its healthcare innovation?

[phil_20686]

As far as your nat health care, my main worry is the lack of incentives for innovation. It appears from afar, that this is a big issue but you may have studied this issue from a better viewpoint. Does Britian tend to import most of its healthcare innovation?

 

I don't really understand this point. Its not that we pay less for a given treatment, we simply do fewer treatments. For example, whenever an insured american approaches a doctor with a complaint there is every financial incentive for the doctor to over treat, and give out many unnecessary tests. In the UK there is not such an incentive.

 

Since we are still paying the drug companies, they still have incentives to innovate. In fact one might say we have better incentives since they can be assured their treatments will undergo a rigourous cost benefit analysis, in america since doctors are basically private entitites it is harder for the FDA to collect large scale results. I dont really see that not paying for expensive treatments of doubtful benefit will mis-align incentives. Surely american incentives encourage pharmaceutics to concentrate on expensive end of life treatments even if they have marginal gains?

[mike777]

I don't really understand this point. Its not that we pay less for a given treatment, we simply do fewer treatments. For example, whenever an insured american approaches a doctor with a complaint there is every financial incentive for the doctor to over treat, and give out many unnecessary tests. In the UK there is not such an incentive.

 

Since we are still paying the drug companies, they still have incentives to innovate. In fact one might say we have better incentives since they can be assured their treatments will undergo a rigourous cost benefit analysis, in america since doctors are basically private entitites it is harder for the FDA to collect large scale results. I dont really see that not paying for expensive treatments of doubtful benefit will mis-align incentives. Surely american incentives encourage pharmaceutics to concentrate on expensive end of life treatments even if they have marginal gains?

 

 

My point is I dont see alot of innovation in healthcare coming out of UK compared to the USA.

 

I worry about the quality of healthcare in Britain over the next 20 years..not today.

 

---

 

 

btw as for railroads as far as I can tell the USA has been much more productive compared to Europe or UK.

 

As far as passenger trains we replaced them with buses, cars and planes,

 

 

In the 1950s, the U.S. and Europe moved roughly the same percentage of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8% of freight traveled by rail.[3] In 1997, while U.S. trains moved 2,165 billion ton-kilometers of freight, the 15-nation European Union moved only 238 billion ton-kilometers of freight.[4]

 

http://en.wikipedia.org/wiki/Rail_transport_in_the_United_States

[RMB1]

Speaking of checks, a few days ago I bought a new TV. $1100 (currently about 0.6 oz of gold). At the checkout, I said "I think I'll write a check". Clerk said "okay". I wrote the check. Clerk called a supervisor. She asked for my driver's license. In shuffling through the crap in my wallet, I first found my old expired license, then the current one, which I gave her. She went to her station, and played around with the computer for about five minutes. Came back and asked for my old license! Went away with it and played around for another five minutes or more. Called over somebody else and talked for more minutes. Then she came back and told me "we have a limit of $400 for check purchases". "So why didn't somebody tell me that fifteen minutes ago?" No answer. "What's your limit on credit card purchases?" "As far as I know, we don't have one". So I took back my check, tore it up, stuck the pieces in my pocket, and handed over my credit (actually debit — on the same checking account I'd written the check against) card, and finally got out of there with the TV. Left a bad taste in my mouth. ...

Most retail outlets in Britain no longer accept cheques.

[onoway]

MIKE'S comment!

 

 

India is a perfect example of how they changed the way they grow food. They increased productivity in food production by giving up the old ways. India is real life proof of comparative advantages between nations.

 

You seem to think it is proof of smoke and mirrors?

Absolutely yes it IS smoke and mirrors. Admittedly Dr. Shiva's speech is long. This is a shorter version of what is going on with food production in India. As well, there are now several areas which have declared themselves to be GMO free zones and which are using non chemical and non industrial methods to retain water and improve soil fertility.

http://www.npr.org/templates/story/story.php?storyId=102893816

[phil_20686]

My point is I dont see alot of innovation in healthcare coming out of UK compared to the USA.

 

I worry about the quality of healthcare in Britain over the next 20 years..not today.

 

---

 

 

btw as for railroads as far as I can tell the USA has been much more productive compared to Europe or UK.

 

As far as passenger trains we replaced them with buses, cars and planes,

 

 

In the 1950s, the U.S. and Europe moved roughly the same percentage of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8% of freight traveled by rail.[3] In 1997, while U.S. trains moved 2,165 billion ton-kilometers of freight, the 15-nation European Union moved only 238 billion ton-kilometers of freight.[4]

 

http://en.wikipedia....e_United_States

 

I think you are making an error in application here. Britain buys its medicine from american pharmaceuticals mostly, i.e. we are partly paying for the next generations of innovations. If you are talking about research into surgical procedures, that stuff is mainly carried out by government research grants at universities, and britian and america spend about the same fraction of GDP on government research so i guess its similar. Obviously, america is a bigger market, and should pay for medical research in proportion to its population size. Many pharmacueticals face "patent cliffs" in the future, but its not clear what will happen then. Low hanging fruit is mostly gone, but the number pr customers is going up and up, so I think it will be fine. Think of the money india and china will be spending on medicine in ten or fifteen years as percapita income approaches western levels for at least some fraction of the population.

 

When it comes to trains, remember that europe has a lot more coast line. We move a lot more freight by ship than is feasible in america, but agree that we should do more with our railways. The UK is particularly bad. Germany is much better I think.

[mike777]

I think you are making an error in application here. Britain buys its medicine from american pharmaceuticals mostly, i.e. we are partly paying for the next generations of innovations. If you are talking about research into surgical procedures, that stuff is mainly carried out by government research grants at universities, and britian and america spend about the same fraction of GDP on government research so i guess its similar. Obviously, america is a bigger market, and should pay for medical research in proportion to its population size. Many pharmacueticals face "patent cliffs" in the future, but its not clear what will happen then. Low hanging fruit is mostly gone, but the number pr customers is going up and up, so I think it will be fine. Think of the money india and china will be spending on medicine in ten or fifteen years as percapita income approaches western levels for at least some fraction of the population.

 

When it comes to trains, remember that europe has a lot more coast line. We move a lot more freight by ship than is feasible in america, but agree that we should do more with our railways. The UK is particularly bad. Germany is much better I think.

 

 

1) Ok so the UK will have to import innovation in healthcare for the most part or you will fall far behind. This is a huge negative for nat health care service. As a side note I always wonder just how this service works in the UK. I mean who pays for what and controls what at your local hospitals and doctor offices, etc? For example who owns the building and takes care of the upkeep? Who pays the staff and who is their boss? Who pays for the taxes, utilities, water, sewer etc? Who pays for the lab techs at the local doctor office and medical equipment at the local office? Who decides on raises and what equipment what office will have ...etc etc etc?

 

2) It sounds like USA railroads are far from third world quality.

[phil_20686]

1) Ok so the UK will have to import innovation in healthcare for the most part or you will fall far behind. This is a huge negative for nat health care service. As a side note I always wonder just how this service works in the UK. I mean who pays for what and controls what at your local hospitals and doctor offices, etc? For example who owns the building and takes care of the upkeep? Who pays the staff and who is their boss? Who pays for the taxes, utilities, water, sewer etc? Who pays for the lab techs at the local doctor office and medical equipment at the local office? Who decides on raises and what equipment what office will have ...etc etc etc?

 

2) It sounds like USA railroads are far from third world quality.

 

(1) I really don't understand you here. Why is importing innovation in medicine any different from importing innovation in technology, which I do every time I buy an apple computer? All else being equal innovation should be proportional to population. The only reason the UK would be responsible for less innovation is because we treat less, so less money for drugs companies. OTOH, it does align incentives better. As I understand it the UK has one truly global pharma: GSK. Medicine is not defense technology, there really seems to be no reason at all why I would wish to favour home grown companies over foreign ones when it comes to buying drugs?

 

(2) I was really thinking of passenger rail. A modern railway system should be competitive with flying for journeys of 2 hours or less by plane. The good bits of continental Europe manage that, Japan manages that easily. America doesnt even seem to have passenger rail, except for a little in the north east which is considered slow and unreliable. To put it in perspectives, the total number of passenger kilometres travelled per year in the US is less than swizterland, a country around 1% your size. Per head of population your rail usage is the lowest of any industrialised country. Your freight does seem to be quite good though, from a global standpoint.

[blackshoe]

Phil, as I've said before, I"m no economist. I had two semesters of econ as an undergraduate (Samuelson's text), learned enough to pass the tests, didn't really understand most of it, and in those days didn't much care. Now I'm trying to understand things, and I started with the Austrians because it seems to me they got dumped (instead of being legitimately disproved) and because, as a libertarian, I want to understand the basis of other libertarians' (and Libertarians') economic arguments.

 

You say that "history has repeatedly shown that a gold standard does not work". My problem with that is that back when we had a gold standard of sorts (even back in the days when kings were minting gold coins) "government" was still screwing with it in ways that the Austrians (and some others, I'm sure) deprecate, to say the least. IOW, I'm not so sure the "gold standard" was the problem. You mentioned fractional reserve banking. One of the things that Rothbard wanted to change in his "return to the gold standard" writings was to drop fractional reserve banking altogether — if a bank issues currency, it needs to have enough gold reserves to back all that currency. This may or may not (I haven't got that far yet in my studies) have or create other problems, but Rothbard's arguments on the subject certainly seem reasonable to me, at least at the moment.

 

Anyway, it seems to me its a very difficult subject, and I'm not convinced at this point that anyone has the right answers.

[hrothgar]

 

 

You say that "history has repeatedly shown that a gold standard does not work". My problem with that is that back when we had a gold standard of sorts (even back in the days when kings were minting gold coins) "government" was still screwing with it in ways that the Austrians (and some others, I'm sure) deprecate, to say the least. IOW, I'm not so sure the "gold standard" was the problem. You mentioned fractional reserve banking. One of the things that Rothbard wanted to change in his "return to the gold standard" writings was to drop fractional reserve banking altogether — if a bank issues currency, it needs to have enough gold reserves to back all that currency.

 

 

This sounds suspiciously like the government interfering in the economy.

I thought this was anathema to Libertarians...

[hrothgar]

This sounds suspiciously like the government interfering in the economy.

I thought this was anathema to Libertarians...

 

Still waiting for a followup from Blackshoes...

 

Why should the regulatory state step in and prevent banks from engaging in fractional reserve lending?

 

Surely you, as an independent investor, have the ability to discern between banks that engage in fractional reserve lending and those who don't. Moreover, you can certainly choose not to invest your hard earned dollars in banks that engage in this type of risky behavior.

 

In what way does this type of government interference in the free market further liberty?

 

Or, alternatively, perhaps there isn't anything wrong with government intervention so long as you're intervening in the "right" sort of way.

 

• 
   
  
• Intervening to deal with externalities like pollution = bad
  
• Intervening in favor of crank Austrian theories about business cycles = good
  

[jdeegan]

Phil, as I've said before, I"m no economist. I had two semesters of econ as an undergraduate (Samuelson's text), learned enough to pass the tests, didn't really understand most of it, and in those days didn't much care. Now I'm trying to understand things, and I started with the Austrians because it seems to me they got dumped (instead of being legitimately disproved) and because, as a libertarian, I want to understand the basis of other libertarians' (and Libertarians') economic arguments.

:P Austrian School economists can be wonderful, but poor Murray Rothbard is to economics as Gee is to bridge. Don't learn bridge from Gee. Don't learn economics from Murray Rothbard.

[blackshoe]

Don't know Gee, and Rothbard's dead. I do think his The Case Against the Fed was a little over the top, at least without more evidence than I saw in it. So far, his Man, Economy, and State doesn't seem very far from what I understand of von Mises' Human Action, which I'm also reading.

[jdeegan]

Don't know Gee, and Rothbard's dead. I do think his The Case Against the Fed was a little over the top, at least without more evidence than I saw in it. So far, his Man, Economy, and State doesn't seem very far from what I understand of von Mises' Human Action, which I'm also reading.

:P von Mises, Schumpeter and Milton Friedman are excellent. Rothbard was traumatized because his parents were communists (for them it was only that they were anti-Tsar and anti-pogrom). Raised in this environment, he evidently picked up on The Road to Serfdom as an intellectual way out. It seems to have worked for him, but it made him a terrible economist. Personally, I'm sympathetic to libertarianism, but you gotta have law and order.

[blackshoe]

Seems to me what you "gotta have" is respect for your fellow citizens and respect for their rights. "Law and order" for its own sake is a dangerous road.

[phil_20686]

Just seems to me that libertarians live in a Utopian fantasy. One of my favorite political insights is that, `If people behave perfectly, all forms of government are equal', and its collorary `the purpose of government is deal with the fact that people act badly`.

 

Any system based on people behaving well is doomed to failure in the real world, because there are always some people who won't, and then there are more people, who will refuse to participate because other people are taking advantage of the system. If you start by assuming that in the absence of corrective measures people will spontaneously behave well then:

 

(1) Divorce legislation starts to look pretty unnecessary.

(2) Might as well dismantle the criminal justice system since there won't be any criminals.

(3) National defence looks pointless since war seems impossible if everyone behaves perfectly.

 

 

etc etc. In fact, pretty much no regulation is necessary if people will spontaneously behave well and resolve their disputes in an honorable fashion. And then no government would be needed either.

 

In short, if you beleive that "spontaneous volunteer organisations of free individuals" will be, on the whole, beneficent and generous then I have a bridge I can sell you. In fact, I have a bridge and a pony.

[hrothgar]

In short, if you beleive that "spontaneous volunteer organisations of free individuals" will be, on the whole, beneficent and generous then I have a bridge I can sell you. In fact, I have a bridge and a pony.

 

Anyone else remember the old Saturday Night sketch where "Steve Forbes" was explaining that with the glorious new flat tax everyone would get their own pony?

[phil_20686]

Anyone else remember the old Saturday Night sketch where "Steve Forbes" was explaining that with the glorious new flat tax everyone would get their own pony?

 

No, I was thinking of this:http://examinedlife.typepad.com/johnbelle/2004/03/if_wishes_were_.html.

[PassedOut]

No, I was thinking of this:http://examinedlife.typepad.com/johnbelle/2004/03/if_wishes_were_.html.

Good piece. :)

[hrothgar]

No, I was thinking of this:http://examinedlife.typepad.com/johnbelle/2004/03/if_wishes_were_.html.

 

Good reference. Well worth reading...

FWIW, I believe that the popularity of the entire Libertarian / Pony meme can be traced back to said SNL sketch

 

It was brilliant. Sadly, I can't find it on YouTube

[Gerben42]

(1) I really don't understand you here. Why is importing innovation in medicine any different from importing innovation in technology, which I do every time I buy an apple computer? All else being equal innovation should be proportional to population. The only reason the UK would be responsible for less innovation is because we treat less, so less money for drugs companies. OTOH, it does align incentives better. As I understand it the UK has one truly global pharma: GSK. Medicine is not defense technology, there really seems to be no reason at all why I would wish to favour home grown companies over foreign ones when it comes to buying drugs?

 

(2) I was really thinking of passenger rail. A modern railway system should be competitive with flying for journeys of 2 hours or less by plane. The good bits of continental Europe manage that, Japan manages that easily. America doesnt even seem to have passenger rail, except for a little in the north east which is considered slow and unreliable. To put it in perspectives, the total number of passenger kilometres travelled per year in the US is less than swizterland, a country around 1% your size. Per head of population your rail usage is the lowest of any industrialised country. Your freight does seem to be quite good though, from a global standpoint.

 

I had the opportunity to take US rail from LA to Santa Barbara. It took a long time but it was a nice ride. Anyway, I guess California would benefit from a railway from LA to SF that takes, say, two and a half hours, rather than taking more than that time to Santa Barbara instead. Given the strict security measures for flying, you won't be faster by plane.

[S2000magic]

I had the opportunity to take US rail from LA to Santa Barbara. It took a long time but it was a nice ride. Anyway, I guess California would benefit from a railway from LA to SF that takes, say, two and a half hours, rather than taking more than that time to Santa Barbara instead. Given the strict security measures for flying, you won't be faster by plane.

I would like to think that a high-speed train between LA and SF would be a good infrastructure investment, but, having lived in CA for my entire life (well, except for 1½ years in NW New Jersey that I'm still trying to forget), I can say with some certainty that they won't get the ridership to justify it. Rightly or wrongly (wrongly, in my opinion), Californians don't seem particularly interested in mass transit apart from airplanes.