Thoughts on economics and liberty

Tag: Eco-imperialism

Greenies have systematically destroyed the quality of life in the West in an insane attempt to impose their delusions on everyone

Greenies have become the most intrusive sub-species of man, intent on imposing their distorted worldview on everyone.

These freaks are systematically destroying amenity and quality of life in the West and putting to severe risk human health. That they are destroying all vestige of liberty in the process is a separate issue.

These “experts” have destroyed water systems across the west already. Toilet flushes store so little water they’ve stopped cleaning. Showers provide so little water you don’t get the sense you’ve bathed. Showers at public swimming pools switch off automatically in a few seconds, so you can’t even clean yourself. And now toasters that won’t toast. These people have gone berserk.

The “common people” have been bamboozled. These laws are made with a 2-3 year window. The people don’t know about it and all of a sudden the stuff has changed in the market.

One fine day when I went to get incandescent bulbs, there were no more bulbs in the market. And yet, it is these bulbs that are best suited to the human eye. Today I have to use a bright halogen lamp in my room to compensate for low light from LED. And on the other side are those bright LED lights in cars which send a piercing beam into the eye at night. It is intolerable that well-functioning incandescent bulbs were forced off the market by these loonies. Now you can’t get proper light at home and you get a fierce beam of bright light into your eyes at night.

The agenda and approach of the greenies is not market driven at all – and it has NOTHING to do with the environment. It is always based on bogus cost-benefit analyses, with the benefits grossly exaggerated and the costs not even properly identified.

These “experts” don’t trust the market at all, although people will naturally pay for greater energy or water efficiency – so long as there is no loss of function. The market solution would be acceptable, but these experts are “rushing” things and in that process destroying basic amenity and quality of life in the West.

Toilets across the West have started stinking. Water is choked and one can’t even wash one’s hands. A total disaster imposed on society by crazy lunatic greenies.

The West has turned into a stinking Third World, and I’m sure people’s health will soon be adversely affected as they can’t even wash their hands with high-restriction taps.

I’m quite sick of constant meddling by “smart-alecks” into the daily lives of the people in every possible way – that too on entirely spurious grounds.

The world needs to fight back against these bureaucracies which have entangled politicians in their grip. There seems to be no one left to block paternalistic interventions by governments.

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Organic farming: a rip-off #2

A few weeks ago I wrote this piece, entitled, “Organic Farming: a rip-off“. Here’s further confirmation that the money we pay for organic foods is not worthwhile.

Intensive farming is found to be better than organic methods for protecting the environment

Farming systems such as organic that seek to share land between crops and wildlife inflict greater damage on biodiversity than conventional approaches that maximise crop yields, a major study has revealed.


Growing organic vegetables may be better for the environment, but eating them may not necessarily be more healthful. (Discovery News,22 November 2010)


“[A] new study … found no difference in antioxidant levels between organically and conventionally grown onions, carrots, and potatoes.

“[T]he experiment was part of a bigger project that was so systematic and rigorously controlled that the findings likely apply to other crops, too, said lead author Pia Knuthsen, a senior research scientist at the Danish National Food Institute’s department of food chemistry, based at the University of Copenhagen.

Giving preference to organic products because they contain more bioactive components is doubtful and not supported by scientific evidence,” Knuthsen said.


The following scientific conclusions would generally (not always!) hold:

1. Organic farming is generally not cheaper than modern farming, being less productive. It cannot therefore (in general) be a solution to mankind’s food production problems.

2. Organic foods are generally not healthier than food grown by modern farming.

3. If fresh produce is washed thoroughly, one is not likely to imbibe more than microscopic level of pesticide. At such microscopic levels, virtually no harm is caused. The best way to minimise pesticide use is to shift to pest-resistant GM crops that have been tested and proven to be safe.

By all means pay more for organic food – if you can afford it. That money goes to farmers and I don’t envy farmers getting rich at the expense of the rich who have money to throw on unnecessary things . But it is self-evident that organic can’t help prevent widespread hunger among the poor. I’d rather teach the poor to wash their food before eating, and have them live, than have them starve to death because of thoughtless imposition of expensive organic food on everyone by eco-imperialists.

We should focus on ensuring that no one goes to bed hungry in India. That can’t be done by organic farming. It is a luxury good that has no policy implications for India – except that no subsidy should ever be applied towards organic food.


Little evidence of health benefits from organic foods, study finds


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A preview of one of the world’s greatest books: Julian Simon’s The Ultimate Resource

Here’s a preview of The Ultimate Resource (2) in Julian Simon’s own words. The entire book is available for public education here. This is an electronic version containing Simon's notes that went to the publisher. The finally published version (Princeton University Press, 1996) is a collectible item, worth having in EVERY library! Today we are truly fortunate to have some of the greatest books freely available online., The fact that this (relatively) recently published book is freely available is something to be grateful for.

Simon's book is one of the world’s great classics on political and economic thought, without having read which we are sure to remain in the pre-historic days (figuratively speaking), and believe in false arguments that underpin the claims of eco-imperialists and socialists. So please take the time to read this entire book if you haven’t done so yet. It is very large (around 700 printed pages) but every word is worth reading. More than anyone else Simon's work has destroyed the influence of Malthus in economics, and has converted the 'dismal science' into a positive science about human aspiration, innovation, and potential.

Preview of the book

Here follow some of the main conclusions of the book. At the time of the first edition they seemed far-fetched to most readers, and they still shock many. But events since then have without exception confirmed the forecasts implicit in the trends and analyses made here.
Food. Contrary to popular impression, food production per capita has been increasing for the half century since World War II, the only decades for which we have acceptable data. We also know that famine has progressively diminished for at least the past century. Average height has increased in developed countries in recent centuries, a sign of people eating better. And there is compelling reason to believe that human nutrition will continue to improve into the indefinite future, even with continued population growth.
Land. Agricultural land is not a fixed resource. Rather, the amount of agricultural land has been increasing substantially, and it is likely to continue to increase where needed. Paradoxically, in the countries that are best supplied with food, such as the U.S., the quantity of land under cultivation has been decreasing because it is more economical to raise larger yields on less land than to increase the total amount of farmland. For this reason, among others, the amount of land used for forests, recreation, and wildlife has been increasing rapidly in the U.S. – hard to believe, but substantiated beyond a doubt.
Natural resources. Hold your hat – our supplies of natural resources are not finite in any economic sense. Nor does past experience give reason to expect natural resources to become more scarce. Rather, if history is any guide, natural resources will progressively become less costly, hence less scarce, and will constitute a smaller proportion of our expenses in future years. Population growth is likely to have a long-run beneficial impact on the natural-resource situation.
Energy. Grab your hat again – the long-run future of our energy supply is at least as bright as that of other natural resources, though government intervention can temporarily boost prices from time to time. Finiteness is no problem here either. And the long-run impact of additional people is likely to speed the development of cheap energy supplies that are almost inexhaustible.
Pollution. This set of issues is as complicated as you wish to make it. But even many ecologists, as well as the bulk of economists, agree that population growth is not the villain in the creation and reduction of pollution. And the key trend is that life expectancy, which is the best overall index of the pollution level, has improved markedly as the world's population has grown. This reflects the enormous decline during the past couple of centuries in the most important pollutions, diseases borne by air and water.
The standard of living. In the short run, additional children imply additional costs, though the costs to persons other than the children's parents are relatively small. In the longer run, however, per capita income is likely to be higher with a growing population than with a stationary one, both in more-developed and less-developed countries. Whether you wish to pay the present costs for the future benefits depends on how you weigh the future relative to the present; this is a value judgment.
Human fertility. The contention that poor and uneducated people breed without constraint is demonstrably wrong, even for the poorest and most "primitive" societies. Well-off people who believe that the poor do not weigh the consequences of having more children are simply arrogant, or ignorant, or both.
Future population growth. Population forecasts are published with confidence and fanfare. Yet the record of even the official forecasts made by U.S. government agencies and by the UN is little (if any) better than that of the most naive predictions. For example, experts in the 1930s foresaw the U.S. population as declining, perhaps to as little as 100 million people well before the turn of the century. In 1989, the U.S. Census Bureau forecast that U.S. population would peak at 302 million in 2038 and then decline. Just three years later, the Census Bureau forecast 383 million in 2050 with no peaking in sight. The science of demographic forecasting clearly has not yet reached perfection. Present trends suggest that even though total population for the world is increasing, the density of population on most of the world's surface will decrease. This is already happening in the developed countries. Though the total populations of developed countries increased from 1950 to 1990, the rate of urbanization was sufficiently great that population density on most of their land areas (say, 97 percent of the land area of the U.S.) has been decreasing. As the poor countries become richer, they will surely experience the same trends, leaving most of the world's surface progressively less populated, astonishing as this may seem.
Immigration. The migration of people from poor to rich countries is as close to an everybody-wins government policy as can be. Countries in North America and Western Europe advance just about all their national goals thereby – higher productivity, a higher standard of living, and an easing of the heavy social burdens caused by growing proportions of aged dependents. And of course the immigrants benefit. Even the sending countries benefit on balance from the remittances that immigrants send back, and from improved ties between the countries. Amazingly, immigration does not even increase native unemployment measurably, even among low- income groups. This topic, discussed briefly in the first edition, now constitutes a separate book. Pathological effects of population density. Many worry that mental health is worse in more densely populated areas. This idea was reinforced by research on animal populations. But this putative drawback of population growth has been falsified by psychological studies of humans. Similar "common sense" convinces many people – including the powers-that-be in the CIA – that population growth increases the likelihood of wars. The data show otherwise.
World population policy. The first edition documented that tens of millions of U.S. taxpayers' dollars are being used to tell the governments and people of other countries that they ought to reduce their fertility. The long-time head of the Population Branch of the U.S. State Department Agency for International Development (AID) – for many years the single most important U.S. population official – publicly said that the U.S. should act to reduce fertility worldwide for the U.S.'s own economic self-interest. And a secret policy assessment by the National Security Council in 1974 – finally declassified in 1989, but with many pages still blacked out – specifies population-control activities for U.S. governmental agents to carry out in various countries, especially Africa; this includes twisting the arms of foreign governments in a variety of ways to ensure "cooperation". But economic data and analyses do not justify this policy. Furthermore, might not such acts be an unwarranted (and resented) interference in the internal affairs of other countries?
Domestic population activities. Other millions of public dollars go to private organizations in the population lobby whose directors believe that, for environmental and related reasons, fewer Americans should be born. With these funds they propagandize the rest of us to believe – and act – in ways consistent with the views of such organizations as the Population Crisis Committee, the Population Reference Bureau, the Worldwatch Institute, and the Association for Voluntary Sterilization. Still other tens of millions of U.S. tax dollars target the fertility of the poor in the U.S. The explicit justification for this policy (given by the head of Planned Parenthood's Alan Guttmacher Institute) is that it will keep additional poor people off the welfare rolls. Even were this to be proven – which it has not been, so far as I know – is this policy in the spirit or tradition of America? Furthermore, there is statistical proof that the public birth-control clinics, which were first opened in large numbers in the poorer southern states, were positioned to reduce fertility among blacks.
Involuntary sterilization. Tax monies are used to involuntarily sterilize poor people (often black) without medical justification. As a result of the eugenics movement, which has been intertwined with the population-control movement for decades, there were (when last I checked) laws in thirty states providing for the involuntary sterilization of the mentally defective. These laws have led to many perfectly-normal poor women being sterilized without their knowledge, after being told that their operations were other sorts of minor surgery.
In the chapters to come, you will find evidence documenting these and many other surprising statements about resources, population, environment, and their interconnections. You will also find a foundation of economic theory that makes sense of the surprising facts. And you will find an offer to back with my own hard cash my forecasts about the things we can bet about – not only natural resources, health, and cleanliness of the environment, but also all other measures of human welfare. If you believe that scarcities or more pollution are in the offing, you can take advantage of my offer and make some money at my expense. (My winnings go to finance research on these and other topics.)
You may wonder why the tone of this book is so overwhelmingly positive whereas that of most popular writings is so negative. The most important explanation, I think, is the nature of the comparisons that are made. The comparisons in this book mostly compare now with earlier times. The comparisons others make often show one group versus another, or contrast how we are versus how we think we should be or would like to be – situations that guarantee a steady flow of depressing bad news.
As you reflect upon the arguments of the doomsters with which this book takes issue, you may notice a peculiar contradiction: On the one hand, the doomsters say that there are too many of us; on the other hand, they warn that we are in danger of most of us being wiped out. Usually, a larger number of members of a
species is greater protection against being wiped out. Hence there is an apparent contradiction.
The doomsters reply that because there are more of us, we are eroding the basis of existence, and rendering more likely a "crash" due to population "overshoot"; that is, they say that our present or greater numbers are not sustainable. But the signs of incipient catastrophe are absent. Length of life and health are increasing, supplies of food and other natural resources are becoming ever more abundant, and pollutants in our environment are lessening. In reply, the doomsters point to vaguer signs of environmental disruption. I confess that I see none of the signs that they point to except those that have nothing to do with the "carrying capacity" of the earth – I do see profound changes in society and civilization, most of which can be interpreted as either good or bad, and which are entirely within our own control. But you the reader will decide for yourself whether those claims of the doomsters are convincing to you in light of the issues that we can discuss objectively, and that are taken up in the book.
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Does small business need special government protection? NO, of course not!

One of my civil service colleagues in India recently commented on my Facebook page on the "need" for government protection of the small business sector. Since such views are typical in the policy circles of India, let me discuss this matter briefly and suggest that Indian policy-makers revert to first principles.

Friends's comment on Discovery of Freedom:

"I went through the manuscript cursorily. I have just one comment. Capitalism has the built in tendency of the bigger fish swallowing the smaller ones. The small fish too do have their right of existence. But they can't survive when they have to compete on an equal footing with hugely big players, who can manipulate the markets, and even resort to strangle smaller players by artificially reducing their prices temporarily to grab the market in the longer run.

"Clearly there is a case for protecting the small ..I think it was the British economist, Shoemacher, who did some research in the area of comparative efficiency of a system of multiplicity of small and medium enterprises (SME's) vis-a-vis monopolistic MNC,s for the oveall well being of a society. And he concludes – Small is Beautiful. He has also written a book by the same title and I am sure you must have come across it.

"Clearly there is a case for protecting – in some way – the smaller AND the efficient players in the economy. This is not socialism. It is only giving the smaller ones the supporting environment for survival -so that they too may express their full potential, that they too may blossom…"

My brief response:

I'll respond to this in more detail in DOF (when my health improves and I can revert to the manuscript), but my key arguments would go something like this:

1) A government has no coherent, logical, or consistent method of assessing whom to protect in a marketplace. Even if such a method existed it has no capacity to practically distinguish the criteria. Even if a government had the capacity to distinguish the selection criteria, it can never have a capacity to implement a coherent protection of the "smaller AND efficient" players, for it requires local knowledge of details that, as I show in BFN (and as Hayek showed), NO ONE can possibly hope to accurately measure and assess. The idea of such protection is not feasible, apart from being unethical – as I show in (2) below. 

2) A government has no business to "protect" any segment of the population EXCEPT from injustice and crime. Any expense on such protection (beyond that of the social insurance program) is unethical, amounting to redistribution of wealth, namely, stealing from the rich and giving to the poor. That is socialism and that is anti-freedom, and basically criminal. Let governments implement their core functions of justice and security. If they do that well enough, India will do WONDERFULLY well. Why meddle in things that governments should NEVER be involved with?

3) By definition there is NEVER any NEED to protect "efficient" business. If a business needs protection it is NOT efficient. In BFN I have even opposed  the "well-established" idea of anti-trust laws which leads to the same trap outlined in (1) above, creating unethical outcomes. If a business is efficient and provides value, the consumer will protect it – through his repeat custom. Let, therefore, the market democracy protect the efficient and let the government stay away from ANY kind of business.

4) The reality is that small businesses FLOURISH in the West compared with socialist India. Indeed, in socialist India, the government squeezes out small business through the license raj, blocking its growth and preventing its entry in many sectors. But the data below (outdated – being taken from my 1993 term paper in Curtin University, but still relevant) demonstrate that in the more free societies, the small sector is booming

Relative share of small (versus big) enterprises in employment across some countries
(data relates to the early 1980s)
Country     Small firms as a                 Small firms as
               per cent of enterprises         per cent of total
                                                          employment in the
                                                           private sector
Australia         98                                  52
UK                 95                                  36
USA               99                                  48
Japan             99                                  81

(Source: Johns, L.; Dunlop, W.C. and Sheehan, W.J. (1989) Small Business in Australia; Problems and Prospects.3rd edn. Allen and Unwin, Sydney: 6)

Note that Western small businesses are, generally speaking, (a) NOT protected, and (b) do NOT require protection, either – being efficient and quality conscious. 

The mechanics of competition mean that small businesses can't compete on cost – on which the big players do best (economies of scale). Instead, the small businesses in the West compete on quality (which includes, in many cases, locational advantage and flexibility in service provision). As a result they manage to produce half the output of the Western nations, employing roughly half the workers in the West.

5) Finally, I did write an extensive paper on Schumacher's Small in Beautiful in 1983-84 in the Lal Bahadur Shastri National Academy. In that paper I compared his views favourably (!!) with Ayn Rand's Capitalism: The Unknown Ideal. But I did so under the influence of socialist academics who then taught young IAS recruits. No one in LBSNAA had the slightest clue about freedom in 1982-84. I don't believe much has changed.

Anyway, today I am able to rip apart Schumacher's ridiculous arguments. After understanding Julian Simon, in particular, I do not need to consider the views of eminently confused thinkers like Schumacher. Fortunately, now the world KNOWS what works and why. And definitely capitalism works.

And definitely a government should stay out of business and "industry policy".

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