dirty work

I first heard of Steven Johnson’s 2006 book The Ghost Map from a George Will piece called “Survival of the Sudsiest.” The book’s full title is The Ghost Map: The Story of London’s Most Terrifying Epidemic — and How It Changed Science, Cities, and the Modern World. Will describes it as "a great scientific detective story about how a horrific cholera outbreak was traced to a particular neighborhood pump for drinking water.”

In the "The Books of Summer" (Liberty, July 2007), Bruce Ramsey also recommends it:

It tells the tale of the deadly outbreak of cholera in London in 1854, and how two men, a doctor and a preacher, proved how it was spread.… In parallel to the detective story is a revolting description of London in the early industrial age. The industrial revolution made London the earth’s largest city with the earth’s largest waste problem. Libertarians will note that market mechanisms did arise to handle this, though they were, in the author’s estimation, not so good. They will note that the first solution imposed by government made matters worse — but that the second one was better. The book also shows how the provision of sewers and a clean water supply ended cholera epidemics by the last quarter of the 19th century.

I’m finally getting around to reading The Ghost Map, and while it is compelling and enjoyable from the first page, it is also an excellent example of why it helps to have some economic literacy to be able to read popular history critically.

Both Johnson’s masterly prose and his questionable economics are evident from the first. Read more of this post

when private property isn’t

On the Adam Smith Institute’s blog, George Kirby writes about the need for Britain to adopt a Scandinavian law:

Currently, in Britain I am largely restricted in my freedom of movement, despite thousands of miles of footpaths, bridleways and other rights of access. Furthermore, in England and Wales, I cannot camp in the ‘wild’ — instead I must pay to use a campsite.

What is restricting Kirby’s freedom? Apparently, it’s his lack of access to other people’s property.

"Implementing Allemannsrett in Britain," he suggests, "would change this."

Read more of this post

history minus economics

Wikipedia today features an article on the "Turban Head eagle" gold coin. You cannot coherently address the history of gold coins without also addressing price theory and the history of monetary intervention, and yet no such explanations are even hinted at in the article.

The short feature states, “increases in the price of gold made it profitable for the coins to be melted for their precious metal content, and in 1804, President Thomas Jefferson ended coinage of eagles.”

This implies that rising gold prices are enough to explain the melting down of any gold object, and yet I’m confident that people weren’t melting down their jewelry and other gold items, only gold coins. Why is that? Read more of this post

relative poverty

I caught this on Wikipedia’s front page yesterday:

23 January 2013

Did you know

· … that while poverty in South Korea, particularly absolute poverty, has significantly declined since mid-20th century, relative poverty has recently risen?

Why would anyone worry about "relative poverty"? The very concept strikes me as offensive. Absolute poverty is a big deal. Relative poverty is a made-up problem.

What is relative poverty? It’s the statistical "income gap" between the richest and the poorest within an economy. Note that "absolute poverty" describes how much you do or do not have. "Relative poverty" describes how much someone else has.

I think it’s safe to say that (absolute) poverty has been the most pressing issue for humankind for as long as we’ve been around. Some people have always been better at producing than others, but for the first few millennia of agriculture, it was almost impossible to produce enough to escape the hardships of nature and the threat of starvation.

The old way to escape poverty was to be strong enough and nasty enough to coerce the producers. Oppenheimer (and Nock, and Chodorov, and Rothbard) called this the "political means." Until recent centuries, the "economic means" could keep you from starving, but direct production (i.e., farming or artisanship) wasn’t going to make anyone rich, not without an indecent admixture of the political means (e.g., extracting a portion of other people’s product by whatever excuse was handy, or using slaves to do the producing for you on "your" land).

Beginning slowly a few centuries ago, and then much more quickly after the advent of the Industrial Revolution, the economic means became much more effective than they had been under lower levels of technology and more centralized forms of government.

Over time, in the West, fewer people starved to death. Fewer people feared starvation. The rural poor became the urban poor because they were better off in the cities than they were in the country. This process continues. As The Triumph of the City (which Doug French reviews here) makes clear, urban poverty can be a sign of the promise and success of a city: as poverty-reduction machines, market-rich cities attract more and more of the rural poor into the ranks of the urban poor. Over lifetimes and generations, the urban poor become the urban (and then often suburban) middle class. This is all to the good, and it’s driven by "capital," both in its financial sense (investment funds) and its older sense, "the means of production."

The market has, in a couple of centuries, undone much of the absolute poverty of the previous millennia. Those who want to see a reduction of absolute poverty and human suffering should hope to see the market spread throughout the world — that is to say, less of the political means and more of the economic means, now matched with 21st-century technology and a free flow of capital.

Chasing after the chimera of equality, trusting in the political means to, in essence, force the world to behave according to overly specific (but still arbitrary and culturally imposed) standards of "economic justice" may or may not result in a reduction in relative poverty. It’s guaranteed to increase absolute poverty.

Between my last post and this one, it’s going to seem like I’m picking on Wikipedia. I really don’t mean to. I love Wikipedia. I think I can say without exaggeration that it and Project Gutenberg fundamentally changed the quality of my life. But I can love Project Gutenberg, for example, while not loving every author or every book in the public domain. Likewise, Wikipedia is my main source of information on a daily basis. But an open project like Wikipedia can’t help but reflect some of the attitudes, values, and emotional reflexes with which I will want to take issue.

So whoever is in charge of the front page of Wikipedia decided to alert us to issue of relative poverty in South Korea.

I’m guessing that North Korea has much lower rates of relative poverty. Let’s have a look at what the lack of relative poverty looks like:

Postscript: Several years ago, I listened online to a talk by Walter Block in which he was discussing statistical work he had done for the Fraser Institute: a comparison of different degrees of economic freedom in different countries. One correlation that surprised me was Block’s claim that the more economically free countries also had the lowest income gaps, while countries whose governments were more involved in the economy produced larger income gaps. His explanation was that in a free market, an entrepreneur can only become rich by improving the lives of others. Successful entrepreneurship grows overall wealth; it does not transfer it.

I’m still not sure I buy it, but if he’s right, I’d say that relative poverty is not a problem in itself; rather it may be a sign that a market is being hampered by crony capitalists who are trying to use state intervention to earn what economists call "rent" — which I find a misleading term and prefer to call "political profit," as distinguished from honest and productive entrepreneurial profit in a free (or less hampered) market.

So, does anyone know if the South Korean government has recently become more aggressive in its regulation of the economy?

Update

Well, not really an update. It’s just that Jeffrey Tucker just tweeted an image that I thought went well with this post: