India! I dare you to be rich

Category: Economics

Hayek Society’s Hayek medal lectures by Geoffrey Brennan (2014) and Israel Kirzner (2015)

I wasn't aware of the Hayek Society (Friedrich A. von Hayek-Gesellschaft e.V.) but it has given a Hayek Medal (Hayek-Medaillen) since 1999 to a number of highly distinguished economists, including Gary Becker (2003) and Vernon Smith (2008).

I'm unable to provide more information (most is in German) but here are two lectures that I've identified.

2014: lecture by Geoffrey Brennan

[Not many people know Prof. Brennan. Here's a CV] He worked closely with Buchanan.

2015: lecture by Israel Kirzner

 

 

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Why I am not replacing my energy guzzling freezer with an energy efficient one

I've had a 200 litre upright freezer for 12 years that consumes (at current costs) around $173  of electricity per year.

Question: should I upgrade to a more energy efficient one?

The answer is no. The attached spreadsheet (click here) explains why. 

The sunk cost concept is crucial to such a calculation.

I have calculated that (at current price) the freezer has cost me around $2800 to date. However, that is totally immaterial to a decision to continue with it or replace it.

The real problem is that energy efficient feezers are still around 2-3 times costlier than less energy efficient ones. 

The sunk cost concept is crucial to such a calculation.

Plus discounting future costs appropriately (I've used 4 per cent discount)

Replacing my freezer never becomes viable in my lifetime – at current capital cost of replacement.

It has already worked for 12 years. I expect it will die sometime in the next 20 years, when I should buy a more efficient one. 

Over the years, I expect t be able to generate energy at home, thereby lowering my energy costs significantly.

DECISION: DO NOT CHANGE. 

Of course, if I want to increase freezer capacity from 200 to 300 litres or more, I should consider a new freezer. But so long as the job is being done adequately by a 200 litre freezer (in addition to the fridge – which I do intend replacing soon) I should not be attracted by the promise of greater energy efficiency.

EXTERNALITIES

Some externalities may arise from this decision, that I do not factor into my private calculation. But that's not my business to consider. Should someone subsidise me by around $1000, I MAY consider replacing my freezer. But then the society MUST gain at least $1000 (plus administrative costs) in real benefits for that subsidy to be even remotely a viable policy.

EFFECT OF THE AUSTRALIAN PENSION SCHEME

Let me add that the Australian pension scheme is a MAJOR determinant of my decision to replace the freezer. The more I save (by not buying a new freezer today, say), the more the cash I have at the end of age 67, and that has a direct and significant affect on the pension that I'd be eligible for.

It would be in my interest to – towards age 67 – to sink a LOT of capital into the most expensive and energy efficient gadgets, so I can get the following double benefit:

a) extra pension

b) much lower energy costs.

To that extent, the pension scheme acts as a direct subsidy for energy efficiency. 

Since I should therefore replace the freezer by age 67, it may be in my interest to replace it even earlier (provided the various trade offs involved work out – e.g. life of freezer, etc.).

ADDENDUM

Some reading material (I've not reviewed the material and do not endorse it: just some alternative views).

1) Life Cycle Optimization of Household Refrigerator-Freezer Replacement

2) SHOULD I BUY A NEW ENERGY EFFICIENT FRIDGE-FREEZER?

3) How Do You Know if Your Refrigerator Needs Replacing? Five Key Signs

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Economic Principles in Ancient India by N. Kazanas, Omilos Meleton (1992) #1

Chanced upon this article

==EXTRACT==

Conclusion

In the course of this discussion we have seen that the principles formulated by the classical economists (Adam Smith, Ricardo, Mill, down to Alfred Marshall) for a Free Economy are found in spermatic form in the Sacred Laws of the Indoaryans. Society was not then structured as it is today and, obviously, neither finance nor capital in the form of large complex machinery, buildings and/or means of transport and communication were available then. However, we do find – and very clearly – concern with justice and harmony with natural processes that make up civilization.

Although human rights as such are not formulated in any text of the Aryans, yet on the basis of the regulations in the Lawbooks and the philosophical systems, we can construct a simple table of certain natural human rights based on natural needs. In some philosophical systems formulated perhaps later than the Vedic period, the real nature of man – overlaid by many artificial elements – is said to be SAT-CIT-ANANDA. SAT is being, true, unchanging, imperishable; CIT is intelligence, consciousness, knowledge; ANANDA is bliss, happiness, beatitude.110 The needs and rights arise from this triad.

Observation and reason show that a man, in order to remain alive in this world, and to develop and manifest his full potential, must satisfy certain basic natural needs: undamaged natural bodily condition; space in which the body will exist and move; food with which to maintain life and so grow; expression of inner impulses through gesture and speech; movement in space; assembly, or company of other men (family, co-operators etc); individual possessions, or property; reputation or honour; peace and quiet, for study, prayer, meditation and whatever else.111

When people speak of human rights, they in fact refer to these basic needs and their satisfaction. The laws of the Aryas imposed duties (dharma) whereby people would respect these basic needs or rights in every other human being. The Aryan thinking can help us formulate 9 primary rights: three related to being and life, three to intelligence and free action and three to happiness. (To these could be related Jefferson’s formulation, in the American Declaration of Independence, of the rights to Life, Liberty and Happiness).112

BEING                   INTELLIGENCE               HAPPINESS

(Life)                     (Freedom, Action)             (Fullness)

1. Person             4. Expression                     7. Property

2. Land                  5. Locomotion                   8. Honour

3. Food                 6. Assembly                        9. Peace

1. Person is the embodiment itself with all its limbs (personality, mind, soul etc). Clearly without this there is no existence in this world: hence the importance of the Habeas Corpus (in Britain) and all prohibitions of assault, injury and murder.

2. Land provides the space, air and light, which are freely available and the man enjoys effortlessly and constantly. Here is the scene for man’s play and work, rest and movement, and the source of nourishment.

3. Food is mainly water and fruits of the earth (apart from air and impressions). Food at first comes to a man from others: from mother, when he is an embryo in the womb; from parents, when a child. Later man must seek it himself and for this he needs to move and act intelligently.

4. Expression is the movement of intelligence outwardly manifesting through facial expressions, speech and movement of hands and feet. From this arise mimicry, poetry, song, dance etc. With these a man may give enjoyment (food for the mind) and receive gross food in exchange.

5. Locomotion: without this man cannot, unless supported by others, obtain food. Furthermore he must move (act, work or labour) to produce all other things he needs – clothes, shelter, tools etc. In this he usually benefits with the cooperation of other men. Only some need to be food-producers. The others can produce other useful things and exchange them for food.

6. Assembly satisfies man’s need for companion-ship and family. In addition it facilitates a man in his work, amusement, act of worship etc. No man can live entirely by himself all his life. But once man lives in society he needs some things exclusively for his own use and consumption.

7. Property is what belongs exclusively to any one person (or group). A man has his inherent properties, i.e. his talents and weaknesses; also, the external possessions that are the products of his labour, or things exchanged thereby, or gifts, or bequests. (Land is No 2 and cannot belong here – except by defective or distorted thinking.)

8. Honour protects and promotes a man’s work. With a besmirched reputation, the teacher, lawyer, doctor, merchant and baker, cannot continue their occupation in the community as before.

9. Peace, finally, outer as well as inner, is needed for a man, if he is to enjoy the fruits of his work, study, worship or endeavour to attain supreme liberation (mokswa) of Spirit through Self-knowledge – which was the fourth and ultimate aim.

People today speak of "freedom of thought" or "of press" as a right. Rights are also considered to be the "freedom to work" or not work (i.e. strike, or "industrial action")113, free education etc etc. Clearly freedom of thought or press or conscience – all are included in No 4. Once there is a law that "No one shall be obstructed from expressing himself, provided he does no offend others" or simply "Be truthful", then people will, by extension, enjoy those liberties also. The modern "right to work" (or fair wages etc) arises automatically once all 9 rights are in operation – only then! If people understand and respect indeed these 9 rights in others, then all will enjoy political and economic liberty in a just society.

There is obviously, some gradation in these rights. Nos 4 and the rest are, in a way, though not absolutely, an unfoldment of the need for food, (No 3). Nos 7,8,9 come as a natural consequence (again not absolutely) of the "assembly", i.e. many men living communally and needing to distinguish food, clothes etc. A man can be gagged and bound but provided he gets fed, he will survive, however miserably.

If he is deprived of food, he will not survive long. If deprived of land, again he cannot survive in air and water. If deprived of person, that is his embodiment, he dies instantly. A man‘s life, action and fulfilment will be curtailed to the degree that the first three are restricted.

In any society, if people are to enjoy these rights, they must observe the duty to respect these rights where other people are concerned. Our freedom stops where that of others begins and we enjoy freedom only when, and to the extent that, others do not infringe our rights. Naturally we do the same. Ultimately it all amounts to avoid doing to others what we don’t want others to do to us. (This is a rule found in most religions, or ancient philosophies, from Confucianism to Christianity; in the Christian tradition it is known as the “golden rule” and is found formulated in Mathew’s gospel 7:12 and Luke’s gospel 6: 31.)

Through ignorance, insecurity and greed, some people seek to have advantages over others so as to obtain riches by not working or not working enough. They succeed in imposing a system of laws and institutions that forbid large numbers of men from satisfying these fundamental needs freely as Nature intends; for in any ancient small community it is obvious that all healthy people are capable of satisfying these needs quite freely and naturally. In ancient Sparta the helots, and in feudal times the serfs, were tied down to landowners’ estates having no freedom of expression, locomotion and the rest. In conditions of slavery the masters owned the person and could abuse, beat, maim or even kill him with impunity.

Today, all over the world, we ignore the second need – free access to land. Enormous numbers of people live and work in places owned by others and, to do so, have to pay a part of their income to the owners, thus being reduced to a subtle state of slavery. The vast majority of people everywhere, including those who suffer most from this deprivation, take this state to be natural: all economic activity proceeds under this delusion and oppressive restriction. It is not necessary.

In ancient times philosophers and law-givers provided their people both with common lands and individual holdings. Recognizing the truth that all land really belongs to and is given by the Supreme power, the Hebrews allowed every family its holdings:114 "The land shall not be sold for ever: for the land is mine (saith the Lord); for ye (are) strangers and sojourners with Me." Plato, again, following Lycurgus of Sparta and Solon of Athens, provided all the citizens in his new State with sufficient land to live and work.115 And in ancient India, Naarada said: "A householder’s house and his field are considered as the two fundamentals of his existence. Therefore let not the king upset either of them."116

Of course, with increase of population the idyllic conditions of the ancient simple communities changed considerably. As communities became larger growing into towns and cities, people would have to move much farther to obtain fresh lands. As a consequence there now emerged much more productive sites at the centre of the communities (or towns), and these gave a much bigger advantage to their possessors. Who should hold these? By what new arrangement those on the less productive sites would not be at a disadvantage?

John Locke stated the problem succinctly in the 17th century. "As much land as a man tills… and can use the product of, so much is his property. He by his labour does, as it were, enclose it from the common… Nor was this… any prejudice to any other man, since there was still enough and as good left, and more than the yet unprovided could use".117 Locke offers no solution, because, perhaps, the problem was not so pressing: he had in mind the new colonies in America where land was plentiful.

A reasonable solution came in mid-nineteenth century in the USA from the self-taught economist Henry George. Plainly, it is the community Ð its very existence and development in numbers, sciences etc Ð that creates the difference between more and less advantageous (i.e. marginal) sites. This advantage, therefore, this difference, this "surplus" or "economic rent", should be rendered back to the community which generates it. Since the value of a site reflects its desirability and this indicates people’s expectation to enjoy the advantage (or surplus produce) of the site, a tax could be levied on that value, thereby collecting (at least part of) the advantage for the entire community; the tax should be paid whether the site is in use or not Ð so that sites would not be held idle for speculative profits or other reason. This tax could substitute eventually all others. Under this system nobody in the community, by virtue of holding land, would reap an advantage over other members.118

Although George’s measure has been half heartedly applied in some countries with good results, although many eminent economists (like M. Friedman) at times refer to it as "sound"119 and others recommend120 its implementation both in industrialized and less-developed countries, yet it does not enjoy much popularity. People, strangely, prefer the complex current taxation on income, capital etc, which acts as a brake on initiative and industry and, ultimately, perpetuates the unjust, inefficient and oppressive condition whereby people have no free or easy access to land while others make large profits in land-speculation.

Thousands of years before Henry George and the French Physiocrats who held a similar view and John Locke, the Aryan sages stated the same problem and the same solution. "The earth …is common to all beings enjoying the fruit of their own labour; it belongs…to all alike"; therefore, "there should be left some for everyone": so the philosophical system Pu~rva Mima~m~sa~ 121 of Jaimini.

How is this to be realized?

Very similar to the Land-value taxation is Gautama’s rule that the king "shall live on the surplus", which means levying a tax on the difference of the more productive sites over and above the less productive (i.e. marginal). Apastamba also is quite clear: "If any person holding land does not exert himself and hence bears no produce, he shall, if rich, be made to pay what ought to have been produced".122 Land, in other words, should not be held out of production – particularly the land of central sites which are the most wanted and thus command the largest rent or surplus value.

But Apastamba goes a little further than modern social and economic reformers. He indicates that justice will prevail only when people observe their duties towards all others and turn to the realization of their true nature, to the knowledge of their own inner Self Atman who is the same in all people and no different from the Self of the Universe, Spirit Absolute Brahman, (see chs 22-33 of his Dharmasu~tras). This implies the resuscitation of the four a~s~rama system in some form suitable to modern conditions and particularly the turn to moks~a. This is, of course, the basic teaching of the philosophical system Veda~nta but also an important element in the ancient Greek tradition, particularly the school of Plato and his teacher Socrates, the doctrine that was expressed in the Delphic maxim ‘know thyself’ (gno~thi s’heauton). Veda~nta stresses the identity of the inividual Self with the universal Self and provides guideliness for this realization in life. Many Gnostic christians of the first four centuries of the Common Era held similar views, probably derived from the Vedic Tradition. Without this effort for realization, which includes the practice of truth and non-injury to others and the other basic duties (all summed up in not doing to others what we don’t want others to do to us), even the finest economic formulations would, according to these ancient teachings, degenerate and fail eventually and lasting happiness would elude man.

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Full statement of Ajit Pai, the dissenting commissioner (Federal Communication Commission)

In January 2015, FCC Chairman Tom Wheeler redefined broadband from 4 Mbit/s to 25 Mbit/s or greater. This was challenged by Ajit Pai, as changing the basic definition, with a view to declaring the internet uncompetitive. Such, indeed, are the ploys of people like Tom Wheeler, who relish the idea of increasing their regulatory reach.

On 26 February 2015, Ajit Pai (whom I've covered earlier, here), laid out an oral (6 page long) note of dissent. I reproduce it in fully below. I'll colour annotate in detail later.

===

ORAL DISSENTING STATEMENT OF
COMMISSIONER AJIT PAI

Re:       Protecting and Promoting the Open Internet, GN Docket No. 14-28.

Americans love the free and open Internet.  We relish our freedom to speak, to post, to rally, to learn, to listen, to watch, and to connect online.  The Internet has become a powerful force for freedom, both at home and abroad.  So it is sad this morning to witness the FCC’s unprecedented attempt to replace that freedom with government control.

It shouldn’t be this way.  For twenty years, there’s been a bipartisan consensus in favor of a free and open Internet.  A Republican Congress and a Democratic President enshrined in the Telecommunications Act of 1996 the principle that the Internet should be a “vibrant and competitive free market . . . unfettered by Federal or State regulation.”  And dating back to the Clinton Administration, every FCC Chairman—Republican and Democrat—has let the Internet grow free from utility-style regulationThe results speak for themselves.

But today, the FCC abandons those policies.  It reclassifies broadband Internet access service as a Title II telecommunications service.  It seizes unilateral authority to regulate Internet conduct, to direct where Internet service providers (ISPs) make their investments, and to determine what service plans will be available to the American public.  This is not only a radical departure from the bipartisan, market-oriented policies that have served us so well for the last two decades.  It is also an about-face from the proposals the FCC made just last May.

So why is the FCC turning its back on Internet freedom?  Is it because we now have evidence that the Internet is broken?  No.  We are flip-flopping for one reason and one reason alone.  President Obama told us to do so.

On November 10, President Obama asked the FCC to implement his plan for regulating the Internet, one that favors government regulation over marketplace competition.  As has been widely reported in the press, the FCC has been scrambling ever since to figure out a way to do just that.

The courts will ultimately decide this Order’s fate.  Litigants are already lawyering up to seek judicial review of these new rules.  Given the Order’s many glaring legal flaws, they will have plenty of fodder.

But if this Order manages to survive judicial review, these will be the consequences: higher broadband prices, slower speeds, less broadband deployment, less innovation, and fewer options for American consumers.  To paraphrase Ronald Reagan, President Obama’s plan to regulate the Internet isn’t the solution to a problem.  His plan is the problem.

In short, because this Order imposes intrusive government regulations that won’t work to solve a problem that doesn’t exist using legal authority the FCC doesn’t have, I dissent.

I.

The Commission’s decision to adopt President Obama’s plan marks a monumental shift toward government control of the Internet.  It gives the FCC the power to micromanage virtually every aspect of how the Internet works.  It’s an overreach that will let a Washington bureaucracy, and not the American people, decide the future of the online world.

One facet of that control is rate regulation.  For the first time, the FCC will regulate the rates that ISPs may charge and will set a price of zero for certain commercial agreements.  And the Order goes out of its way to reject calls to forbear from section 201’s authorization of rate regulation and expressly invites parties to file such complaints with the Commission.  A government agency deciding whether a rate is lawful is the very definition of rate regulation.

Although the Order plainly regulates rates, the plan takes pains to claim that it is not imposing further “ex ante rate regulation.”  Of course, that concedes that the new regulatory regime will involve ex post rate regulation.  But even the agency’s suggestion that it today “cannot . . . envision” ex ante rate regulations “in this context” says nothing of what a future Commission—perhaps this very Commission—could envision.

Just as pernicious is the FCC’s new “Internet conduct” standard, a standard that gives the FCC a roving mandate to review business models and upend pricing plans that benefit consumers.  Usage-based pricing plans and sponsored data plans are the current targets.  So if a company doesn’t want to offer an expensive, unlimited data plan, it could find itself in the FCC’s cross hairs.

Our standard should be simple:  If you like your current service plan, you should be able to keep your current service plan.  The FCC shouldn’t take it away from you.  Banning diverse service plans would just hurt consumers, especially the middle-class and low-income Americans who are the biggest beneficiaries of these plans.

In all, the FCC will have almost unfettered discretion to decide what business practices clear the bureaucratic bar, so these won’t be the last plans targeted by the agency.  As the Electronic Frontier Foundation wrote just this week:  This open-ended rule will be “anything but clear” and “suggests that the FCC believes it has broad authority to pursue any number of practices.”  And “a multi-factor test gives the FCC an awful lot of discretion, potentially giving an unfair advantage to parties with insider influence.”

Then there is the temporary forbearance.  Although the Order crows that its forbearance from some Title II rules yields a “‘light-touch’ regulatory framework,” in reality it isn’t light at all, coming as it does with the caveats that the public has come to expect from Washington, DC.  In discussing additional rate regulation, tariffs, last-mile unbundling, burdensome administrative filing requirements, accounting standards, and entry and exit regulation, the plan repeatedly states that it is only forbearing “at this time.”  For other rules, the FCC will refrain “for now.”

To be sure, with respect to some rules, the agency says that it “cannot envision” going further.  But as the history of this proceeding makes clear, assurances like these don’t tend to last very long.  In other words, expect forbearance to fade and the regulations to ratchet up as time goes on.

A.

Consumers will be worse off under President Obama’s plan to regulate the Internet.  Consumers should expect their bills to go up, and they should expect that broadband will be slower going forward.  This isn’t what anyone was promised, to say the least.

1.  New broadband taxes.—One avenue for higher bills is the new taxes and fees that will be applied to broadband.  Here’s the background.  If you look at your phone bill, you’ll see a “Universal Service Fee,” or something like it.  These fees—what most Americans would call taxes—are paid by Americans on their telephone service.  They funnel about $9 billion each year through the FCC.  Consumers haven’t had to pay these taxes on their broadband bills because broadband has never before been a Title II service.

But now it is.  And so the Order explicitly opens the door to billions of dollars in new taxes.  Indeed, it repeatedly states that it is only deferring a decision on new broadband taxes—not prohibiting them.

This is fig-leaf forbearance.  Indeed, the FCC has already referred the question of assessing federal and state taxes on broadband to the Federal-State Joint Board on Universal Service and “has requested a recommended decision by April 7, 2015,” right before Tax Day.  It’s no surprise that many view this referral as a question of how, not whether to tax broadband, and states have already begun discussions on how they will spend the extra money.

And the agency’s preference is clear.  The Order argues that taxing broadband “potentially could spread the base of contributions” and could add “to the stability of the universal service fund.”  For those not familiar with this Beltway argot, let me translate:  “Taxing broadband would make it easier to spend more of your money with minimal public oversight.”

We’ve seen this game played before.  During reform of the E-Rate program in July 2014, the FCC secretly told lobbyists that it would raise USF taxes after the election to pay for the promises it was making.  Sure enough, in December 2014, the agency did just that—increasing E-Rate spending (and with it telephone taxes) by $1.5 billion per year.

Public reports indicate that the federal government is eager to tap this new revenue stream soon to spend more of consumers’ hard-earned dollars.  So when it comes to broadband, read my lips:  More new taxes are coming.  It’s just a matter of when.

2.  Slower broadband.—These Internet regulations will work another serious harm on consumers.  Their broadband speeds will be slower.

The record is replete with evidence that Title II regulations will slow investment and innovation in broadband networks.  Remember:  Broadband networks don’t have to be built.  Capital doesn’t have to be invested here.  Risks don’t have to be taken.  The more difficult the FCC makes the business case for deployment, the less likely it is that broadband providers big and small will connect Americans with digital opportunities.

The Old World offers a cautionary tale here.  Compare the broadband market in the United States to that in Europe, where broadband is generally regulated as a public utility.  Today, 82% of Americans have access to 25 Mbps broadband speeds.  In Europe, that figure is only 54%.  Moreover, in the United States, average mobile broadband speeds are 30% faster than they are in Western Europe.

It’s no wonder that many Europeans are perplexed by what is taking place at the FCC.  Just this week, the Secretary General of the European People’s Party, the largest party in the European Parliament, observed that the FCC, “at the behest” of President Obama, was about to impose the type of “[r]egulation which . . . has led Europe to fall behind the US in levels of investment.”

Making it all worse is the fact that the FCC now welcomes litigation—from individual claims about the justness and reasonableness of ISP pricing to sprawling class actions for violations of the new Internet conduct rule—as an appropriate means of regulating the Internet economy.  Judging from what we’ve seen in the patent world, this will be a boon for trial lawyers.

And these are just the intended results of reclassification!

There are unintended consequences as well.  The fees that broadband providers—from small-town cable operators to new entrants like Google—must now pay to deploy broadband using things like utility poles will go up by an estimated $150–200 million per year.  And reclassification will expose many small companies to higher state and local taxes.  Here in Washington, for instance, companies will face an instant 11% increase in taxes on their gross receipts.  That big bite will leave a welt on consumers’ wallets.

All of these new fees and costs add up.  One estimate puts the total at $11 billion a year.  And every dollar spent on fees and new costs like lawyers and accountants has to come from somewhere: either the pockets of the American consumer or projects to deploy faster broadband.  And so these higher costs will lead to slower speeds and higher prices—in short, less value—for the American consumer.

B.

So do American consumers want slower speeds at higher prices?  I don’t think so.

That’s certainly not what I heard when I hosted the Texas Forum on Internet Regulation in College Station, the FCC’s only field hearing on net neutrality where audience members were allowed to speak.  There, Internet innovators, students, everyday people told me they wanted something else from the FCC—something that I thought had a familiar ring to it.  These consumers wanted competition, competition, competition.

And yet, literally nothing in this Order will promote competition among ISPs.  To the contrary, reclassifying broadband will drive competitors out of business.  Monopoly rules designed for the monopoly era will inevitably move us in the direction of a monopoly.  President Obama’s plan to regulate the Internet is nothing more than a Kingsbury Commitment for the digital age.  If you liked the Ma Bell monopoly in the 20th century, you’ll love Pa Broadband in the 21st.

This isn’t just my view.  The President’s own Small Business Administration—apparently acting independently—admonished the FCC that its proposed rules would unduly burden small businesses.  Following the President’s lead, the FCC ignores this admonition by applying heavy-handed Title II regulations to each and every small broadband provider as if it were an industrial giant.

Unsurprisingly, small Internet service providers are worried.  I heard this for myself at the Texas Forum on Internet Regulation.  One of the panelists, Joe Portman, runs Alamo Broadband, a wireless ISP, or WISP, that serves 700 people across 500 square miles south of San Antonio.

What does Joe think of Title II?  He thinks it’s “pretty much a terrible idea.”  His staff “is pretty busy just dealing with the loads we already carry.  More staff to cover regulations means less funds to run the network and provide the very service our customers depend on.”

Other WISPs feel the same way.  Just last week, 142 WISPs joined the chorus.  These WISPs have deployed wireless broadband to customers who often have no alternatives.  They often run on a shoestring budget with just a few people to run the business, install equipment, and handle service calls.  They have no incentive and no ability to take on commercial giants like Netflix.  And they say the FCC’s new “regulatory intrusion into our businesses . . . would likely force us to raise prices, delay deployment expansion, or both.”

Or consider the views of 24 of the country’s smallest ISPs, each with fewer than 1,000 residential broadband customers.  They wrote us that Title II “will badly strain our limited resources” because they “have no in-house attorneys and no budget line items for outside counsel.”

Or how about the 43 municipal broadband providers that flatly told the FCC that Title II “will trigger consequences beyond the Commission’s control and risk serious harm to our ability to fund and deploy broadband without bringing any concrete benefit for consumers or edge providers that the market is not already proving today without the aid of any additional regulation.”

There’s a special irony given that right before this vote, the FCC voted to preempt state laws regarding city-owned broadband projects.  This is an initiative President Obama announced just last month in Cedar Falls, Iowa, and the FCC is dutifully implementing it.  But Cedar Falls Utilities, the very municipal broadband provider the President promoted, tells us that Title II is a tremendous mistake.

So what does the Order tell Americans whose ISP isn’t a Comcast, an AT&T, a Google, or a Sprint?  What does it tell those whose service will be more expensive as a direct result of reclassification?  What does it tell those who may lose their Internet service if their small operator goes out of business?  What does it tell those who worked for years to serve their community and build a business, one that’s finally in the black?  There’s no explanation.  There’s not even an acknowledgement.  There’s just the smug assurance that it won’t be that bad.

C.

So the FCC is abandoning a 20-year-old, bipartisan framework for keeping the Internet free and open in favor of Great Depression-era legislation designed to regulate Ma Bell.  But at least we’re getting something in return, right?  Wrong.  The Internet is not broken.  There is no problem for the government to solve.

That the Internet works—that Internet freedom works—should be obvious to anyone with an Apple iPhone or Microsoft Surface, a Samsung Smart TV or a Roku, a Nest Thermostat or a Fitbit.  We live in a time where you can buy a movie from iTunes, watch a music video on YouTube, listen to a personalized playlist on Pandora, watch your favorite Philip K. Dick novel come to life on Amazon Streaming Video, help someone make potato salad on KickStarter, check out the latest comic at XKCD, see what Seinfeld’s been up to on Crackle, navigate bad traffic with Waze, and do literally hundreds of other things all with an online connection.  At the start of the millennium, we didn’t have any of this Internet innovation.

And no, the federal government didn’t build that.  Somebody else made that happen.

For all intents and purposes, the Internet didn’t exist until the private sector took it over in the 1990s, and it’s been the commercial Internet that has led to the innovation, the creativity, the engineering genius that we see today.

Nevertheless, the Order ominously claims that “[t]hreats to Internet openness remain today.”  It argues that broadband providers “hold all the tools necessary to deceive consumers, degrade content or disfavor the content that they don’t like,” and it asserts that the FCC continues “to hear concerns about other broadband provider practices involving blocking or degrading third-party applications.”

The evidence of these continuing threats?  There is none; it’s all anecdote, hypothesis, and hysteria.  A small ISP in North Carolina allegedly blocked VoIP calls a decade ago.  Comcast capped BitTorrent traffic to ease upload congestion eight years ago.  Apple introduced Facetime over Wi-Fi first, cellular networks later.  Examples this picayune and stale aren’t enough to tell a coherent story about net neutrality.  The bogeyman never had it so easy.

So what is there to fear?  A sober reader might borrow from the father of Title II:  “The only thing we have to fear is fear itself.”  But the FCC instead intones the nine scariest words for any friend of Internet freedom:  “I’m from the government, and I’m here to help.”

To put it another way, Title II is not just a solution in search of a problem—it’s a government solution that creates a real-world problem.  This is not what the Internet needs, and it’s not what the American people want.

D.

So—that’s substance.  A few words on process.  When the Commission launched this rulemaking, I said that we needed to “give the American people a full and fair opportunity to participate in this process.”  Unfortunately, we have fallen woefully short of that standard.

Most importantly, the plan in front of us today was not forged in this building through a transparent notice-and-comment rulemaking process.  Instead, The Wall Street Journal reports that it was developed through “an unusual, secretive effort inside the White House.”  Indeed, White House officials, according to the Journal, functioned as a “parallel version of the FCC.”  Their work led to the President’s announcement in November of his plan for Internet regulation, a plan which “blindsided” the FCC and “swept aside . . . months of work by [Chairman] Wheeler toward a compromise.”

Of course, a few insiders were clued in about what was transpiring.  Here’s what a leader for the government-funded group Fight for the Future had to say:  “We’ve been hearing for weeks from our allies in DC that the only thing that could stop FCC Chairman Tom Wheeler from moving ahead with his sham proposal to gut net neutrality was if we could get the President to step in.  So we did everything in our power to make that happen.  We took the gloves off and played hard, and now we get to celebrate a sweet victory.”

What the press has called the “parallel FCC” at the White House opened its doors to a plethora of special-interest activists: Daily Kos, Demand Progress, Fight for the Future, Free Press, and Public Knowledge, just to name a few.  Indeed, even before activists were blocking Chairman Wheeler’s driveway late last year, some of them had met with executive branch officials.  But what about the rest of the American people?  They certainly couldn’t get White House meetings.  They were shut out of the process.  They were being played for fools.

And the situation didn’t improve once the White House announced President Obama’s plan and “ask[ed]” the FCC to “implement” it.  The document in front of us today differs dramatically from the proposal that the FCC put out for comment last May.  It differs so dramatically that even zealous net neutrality advocates frantically rushed in recent days to make last-minute filings registering their concerns that the FCC might be going too far.  Yet the American people to this day have not been allowed to see President Obama’s plan.  It has remained hidden.

Especially given the unique importance of the Internet, Commissioner O’Rielly and I asked for the plan to be released to the public.  Senate Commerce Committee Chairman John Thune and House of Representatives Energy and Commerce Chairman Fred Upton did the same.  And according to a survey last week by a respected Democratic polling firm, 79% of the American people favored making the document public.  But still the FCC has insisted on keeping it behind closed doors.  We have to pass President Obama’s 317-page plan so that the American people can find out what is in it.

This isn’t how the FCC should operate.  We should be an independent agency making decisions in a transparent manner based on the law and the facts in the record.  We shouldn’t be a rubber stamp for political decisions made by the White House.

And we should have released this plan to the public, solicited their feedback, incorporated that input into the plan, and then proceeded to a vote.  There was no need for us to resolve this matter today.  There is no immediate crisis in the Internet marketplace that demands immediate action.

The backers of the President’s plan know this.  But they also know that the details of this plan cannot stand up to the light of day.  They know that the more the American people learn about it, the less they will like it.  That is why this plan was developed behind closed doors at the White House.  And that is why the plan has remained hidden from public view.

II.

These are not my only concerns.  Even a cursory look at the plan reveals glaring legal flaws that are sure to mire the agency in the muck of litigation for a long, long time.  But rather than address them today, I will reserve them for my written statement.

* * *

At the beginning of this proceeding, I quoted Google’s former CEO, Eric Schmidt, who once said:  “The Internet is the first thing that humanity has built that humanity doesn’t understand.”  This proceeding makes abundantly clear that the FCC still doesn’t get it.

But the American people clearly do.  The threat to Internet freedom has awakened a sleeping giant.  And I am optimistic that we will look back on today’s vote as an aberration, a temporary deviation from the bipartisan path that has served us so well.  I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future Commission.  But I do believe that its days are numbered.

For all of these reasons, I dissent.

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Is there enough meat for everyone? YES. And don’t fuss about “environmental” impacts and such bogus red herrings.

This question re: sustainability of meat has been raised by a couple of people on Facebook.

I tersely replied: "anyone who talks sustainability doesn't understand either science or economics. Please start by reading Simon's The Ulitimate Resource. They key is calibration through the price system. And allocation of property rights."

I suspect the person didn't understand. Let me clarify in a couple of minutes:

1) ECONOMICS

The price system regulates all production. Only the wealthy can buy a sufficient meat (which, of course, gives their children a serious brain and health advantage over others). So the first thing to note is that meat won't grow just by itself. It has to be DEMANDED, thorough real purchasing power. Very few countries have such purchasing power. Till countries like India choose to remain poor (by rejecting capitalism), they will not be able to afford meat. That will curb meat production.

Now assume that countries like India actually become rich. They will then start consuming more meat. That's where the price system sets into place automatic incentives for innovation.

As the price of meat rises (with increased demand), innovators will (as they always have) start making use of economically viable models to supply meat. Chicken meat comes to mind as the first port of call. It is easy to grow, and supply can be scaled up 1000s of times without any problem. Chicken production doesn't take much space, nor much of any non-renewable resource. 

As the demand for beef rises, say, in India, we'll find innovative farmers who shift their breeds to more meat-producing ones. There is also no shortage of options to grow meat efficiently. Even many Australian farmers have stopped letting their cattle out in the open, in preference to feeding them in stalls. That is both economical and increases meat output. And since space is hardly an issue in such a case (just like a large chicken farm), there is virtually no limit to the amount of beef that can be produced. Vast quantities of fish can be produced in fish farms. (The price of barramundi has fallen by half over the past 15 years I've been in Australia – even as other prices have risen – because of this massive increase in productivity of fish; and the price of chicken that I buy has remained virtually unchanged over the past 15 years, as chicken production becomes increasingly more efficient). And don't forget the humble insects.

So, as prices rise, a commensurate quantity of meat can be produced.

2) ENVIRONMENT

There was a time when stupid greenies, easily prone to jumping to conclusions, went about saying that producing meat consumes vast quantities of water. Well, they clearly don't know how to add, nor to subtract; leave aside that water is a PURELY RENEWABLE resource. The total quantity of water on Earth remains almost entirely the same. 

Even these "vast consumption of water" theories have been rebutted. Even greenies like Bill Gates (Gates doesn't demonstrate an understanding of either basic economics or basic science), have admitted that "it takes just 44 liters—not thousands—to produce a kilo of beef" [Source]. Plus remember, WATER IS ENTIRELY RENEWABLE. The only real resource in meat production is therefore human ingenuity and some energy (which – as I've often explained – is fundamentally available in infinite quantities, if we are able to crack fusion technology).

Now, note that I mentioned  property rights.

That's part of the way of fixing any negative externalities on the environment. Allocate property rights, and markets will fix most externalities. If needed, add a regulatory regime.

3) DEMOGRAPHICS

99.99 per cent of the people don't understand demographics. They fail to understand how the demand for children operates. In summary, as people become more prosperous, the demand for children falls. India has around 3 times more people today BECAUSE of socialism, than it would have had with capitalism. As people become rich, they are better educated, they have fewer children and tend to consume meat in moderation. The richer you are in the West, you will tend to have healthier eating and exercise habits.

Solution: IMPLEMENT CAPITALISM.

Never worry about sufficient meat and such bogus claims.

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Alex Epstein is spreading Julian Simon’s message of rational thinking: The moral case for fossil fuels (and nuclear energy)

I have absolutely no doubt that without CO2/CO emmiting fuels (largely fossil fuels such as coal and oil) we would have lived short and brutish lives today – like mankind did in the past. There would be no internet, no blogs, no international or space travel.

It was the discovery of the steam engine (which used coal) and – later – oil based engines, that revolutionised how we produce things, creating the unprecedented ability to produce and supply vast quantities of food and other goods very cheaply to hundreds of millions (now billions) of people.

Anyone who has cared to read the very best book on such subjects – The Ultimate Resource by Julian Simon – knows all about this, and much more.

But Simon's book is huge and tailored mainly to an academic audience. It was pleasing to find time to listen to Alex Epstein's recent interview with Glenn Beck.

I would recommend the entire interview, from the beginning to the end. There are many useful points made during this interview that are hardly ever considered by the vast majority of the easily deceived, gullible and unthinking socialist-greenie driven "educated classes" (not you, the reader of this blog, but the vast majority of others).

You will learn a lot from this book if you have ever been attracted to socialism or greenism (environmentalism). If you haven't read Simon's work, then read Alex Epstein.

Chapter 1 of the book.

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