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Gennady Stolyarov II Presents at the “Meet the Candidates” Night of the Indian Hills General Improvement District

Gennady Stolyarov II Presents at the “Meet the Candidates” Night of the Indian Hills General Improvement District

Gennady Stolyarov II


The video recording of Gennady Stolyarov II’s presentation at the “Meet the Candidates” Night (October 17, 2018) at the Indian Hills General Improvement District has been posted here.

Mr. Stolyarov’s candidacy has previously been unanimously endorsed by a vote of the U.S. Transhumanist Party’s members.

There is some technical flaw with the audio around 8:52 – the time that Mr. Stolyarov discusses protecting homeowners’ property rights and opposing the establishment of a homeowners’ association. You will hear several parts of these remarks simultaneously – but you will likely still be able to discern Mr. Stolyarov’s position. About a minute afterward, the proper linear audio stream resumes.

After completing his presentation, Mr. Stolyarov issued the following written statement:

I am pleased with the outcome of “Meet the Candidates” Night at the Indian Hills General Improvement District this evening. The seats were nearly all filled, and approximately 25 residents appeared in person. All candidates’ responses were recorded and will be posted on YouTube in the coming days. I will provide links as soon as I become aware of them.

I was able to use the allotted time to present my intended messages regarding my qualifications and my priorities of maintaining essential infrastructure, promoting growth, supporting technological and factually, rationally grounded solutions, and being attentive to all residents and representing the District as a whole in a nonpartisan manner. The statements and questions were thoughtful and generated a civil, meaningful discussion about events in the District. This is what political activity should be about – not factionalism, tribalism, or blind partisanship.

Many residents and the other candidates appeared to be sympathetic to my approach and positions – and my hope is that this will enable them to recognize me as a good consensus candidate who can draw support from all constituencies in the District. I stated at the event that I would be honored to work with any of the other candidates if they are elected to the Board alongside me.

Whether my objective of not being last in the vote count can be met remains to be seen; this election will probably surprise everyone. However, this event most definitely helped – and I hope the videos will help as well.

Early voting in Douglas County begins this Saturday, October 20, from 10 a.m. to 2 p.m. at the Courthouse in Minden. I have been conducting research on the ballot questions and candidates in the contested races for several hours per day; now I am close to finalizing my own preferences.

Please inform any of your acquaintances who reside in the Indian Hills GID about me and my candidacy!

Become a member of the U.S. Transhumanist Party for free, no matter where you reside. Fill out our free Membership Application Form here. It takes less than a minute!

Why California Cities Are Becoming Unlivable – Article by Andrew Berryhill

Why California Cities Are Becoming Unlivable – Article by Andrew Berryhill

Andrew Berryhill
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California has the highest poverty rate in the U.S. and is rated dead last in quality of life.

In July, the mayor of San Francisco frankly stated that poverty in the city is so bad, that “there is more feces on the sidewalks than I’ve ever seen.” And it’s not just her – the local NBC investigative unit found a “dangerous mix of drug needles, garbage, and feces throughout downtown San Francisco.”

While such conditions are thankfully not widespread, California still has the highest rate of poverty of any state when factoring in living costs and is rated dead last for quality of life. It’s no wonder that from 2007 to 2016, California lost a million residents on net to domestic migration.

This plight may appear counterintuitive since California’s economy is booming. If the state were an independent country, its economy would rank as the 5th largest in the world. However, a high GDP does not necessarily entail socioeconomic wellbeing.

So, what’s the main problem ailing California and creating such a high cost of living?

Housing Costs

How bad are housing costs? The median price of a home in California is over $600,000 (compared with $300,000 nationally) and a recent study found that:

“Across California, more than 4 in 10 households had unaffordable housing costs, exceeding 30 percent of household income, in 2015. More than 1 in 5 households statewide faced severe housing cost burdens, spending more than half of their income toward housing expenses.”

Housing costs are so high that in San Francisco and San Mateo counties the government considers a household of four making $105,350 as “low income”.

And it’s not just low and middle-income families that are suffering – even many “elite” technology workers can barely make ends meet. Lucrative six-figure salaries don’t go far when you live in the most expensive housing markets in America while also paying some of the highest taxes.

You can save money by living in the suburbs, but multi-hour commutes in soul-crushing traffic may await. Is such an arrangement worth it? Many have said “no” and moved to other states. While their new jobs elsewhere might pay less, other benefits more than make up for it.

But why is the housing situation in California so terrible?

It’s easy to simply say “supply and demand” – so many people have moved to cities that housing construction can’t keep up, causing real estate prices and rents to skyrocket.

However, this invites an important question: why can’t residential developers build fast enough?

Regulations

Regulations play an especially large role in the San Francisco Bay Area, which shockingly includes 15 of the 30 cities with the highest rents in the country. One article explains these struggles well:

For new housing developments in San Francisco, there’s a preliminary review, which takes six months.

Then there are also chances for your neighbors to appeal your permit on either an entitlement or environmental basis. The city also requires extensive public notice of proposed projects even if they already meet neighborhood plans, which have taken several years of deliberation to produce. Neighbors can appeal your project for something as insignificant as the shade of paint. . .

If those fail, neighborhood groups can also file a CEQA or environmental lawsuit under California state law, challenging the environment impact of the project. . .

Then if that fails, opponents can put a development directly on a citywide ballot with enough signatures. . . That’s what happened with the controversial 8 Washington luxury condo project last November even though it had already gone through eight years of deliberation.

These barriers add unpredictable costs and years of delays for every developer, which are ultimately passed onto buyers and renters. It also means that developers have problems attracting capital financing in weaker economic years because of the political uncertainty around getting a project passed.”

Why aren’t politicians working to fix this? Self-preservation. Here’s the unfortunate reality:

“The reason the San Francisco city government won’t fix things that seem obvious . . . is because it fears a backlash from the hundreds of neighborhood associations that blanket the city and can reliably turn people out to the polls.”

Community Sentiment

This cultural opposition to development is not a modern phenomenon:

“San Francisco’s orientation towards growth control has 50 years of history behind it and more than 80 percent of the city’s housing stock is either owner-occupied or rent controlled. The city’s height limits, its rent control and its formidable permitting process are all products of tenant, environmental and preservationist movements that have arisen and fallen over decades.”

Development proposals have been shot down for reasons ranging from burrowing owl protection to complaints that the size of new residential buildings will block sunshine and thereby “devalue human life”.

The power of this “Not In My Back Yard” (NIMBY) movement has been considerable, but counter-movements are growing. When one homeowner recently complained in a Berkeley city council meeting that a proposed residential building would block sunshine for her zucchini garden, one young woman angrily responded: “You’re talking about zucchinis? Really? Because I’m struggling to pay rent.” Young workers facing unaffordable rents are increasingly fed up with petty opposition to more affordable housing.

However, Californian cities still seem more preoccupied with banning strawscocktail swordsscootersdelivery robots, and workplace cafeterias.Even when politicians try to help, they frequently ignore the root causes of the issue. For example, California Representative Kamala Harris recently proposed a bill called the “Rent Relief Act” that would provide a tax credit for people spending over 30 percent of their income on rent.

Harris’ proposal only addresses symptoms of an underlying disease and would almost certainly be counterproductive. It doesn’t encourage more housing construction, which is the only real solution.

Until sweeping housing reform to enable residential development is passed at the state and local levels, Californians will keep fleeing to Texas, Nevada, and Arizona. I don’t blame them.

Andrew Berryhill is an Alcuin Fellow at Intellectual Takeout and a rising senior at Hillsdale College majoring in economics. Andrew has interned on Capitol Hill and was a research fellow for Hillsdale’s economics department. In his spare time, he enjoys practicing the violin and playing golf.

This post (“Why California Cities Are Becoming Unlivable“) was originally published on Intellectual Takeout by Andrew Berryhill.

The World’s Poorest People Are Getting Richer Faster Than Anyone Else – Article by Alexander Hammond

The World’s Poorest People Are Getting Richer Faster Than Anyone Else – Article by Alexander Hammond

The New Renaissance Hat
Alexander Hammond
October 29, 2017
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Last Tuesday marked the 25th anniversary of the United Nations’ International Day for the Eradication of Poverty. The date intentionally coincides with the 30th anniversary of the Call to Action, which saw the French anti-poverty campaigner Father Joseph Wresinski ask the international community, in front of 100,000 Parisians, to “strive to eradicate extreme poverty”.

To mark the occasion, Antonio Guterres, the United Nations Secretary-General, was featured in a short video assessing the current state of world poverty. Despite noting such issues as unemployment, inequality, and conflict continuing in some regions, Guterres correctly observed that since 1990 the world has made “remarkable progress in eradicating poverty.”

While it is valuable to acknowledge that problems remain, it is important to reflect on just how far we’ve come.

Alleviating Poverty Fast

The speed of poverty alleviation in the last 25 years has been historically unprecedented. Not only is the proportion of people in poverty at a record low, but, in spite of adding 2 billion to the planet’s population, the overall number of people living in extreme poverty has fallen, too.

As Johan Norberg writes in his book Progress, “If you had to choose a society to live in but did not know what your social or economic position would be, you would probably choose the society with the lowest proportion (not the lowest numbers) of poor, because this is the best judgement of the life of an average citizen.” Well, in 1820, 94 percent of the world’s population lived in extreme poverty (less than $1.90 per day adjusted for purchasing power). In 1990 this figure was 34.8 percent, and in 2015, just 9.6 percent.

In the last quarter century, more than 1.25 billion people escaped extreme poverty – that equates to over 138,000 people (i.e., 38,000 more than the Parisian crowd that greeted Father Wresinski in 1987) being lifted out of poverty every day. If it takes you five minutes to read this article, another 480 people will have escaped the shackles of extreme of poverty by the time you finish. Progress is awesome. In 1820, only 60 million people didn’t live in extreme poverty. In 2015, 6.6 billion did not.

Now let’s consider those people who are still trapped in extreme poverty. The Oxford University scholar Max Roser’s website, Our World in Data, used World Bank databases to estimate that in 2013, there were 746 million people living in extreme poverty. Of these people, slightly more than 380 million resided in Africa, with Nigeria being home to largest number (86 million). Meanwhile, 327 million of those in extreme poverty lived in Asia, with India having the largest proportion by far (218 million). China had 25 million. The remaining 35 million lived in South America (19 million), North America (13 million), Oceania (2.5 million) and Europe (0.7 million.)

Put differently, of those who live in extreme poverty, over 40 percent resided in just two nations: India and Nigeria.

The Poorest of the Poor

Since its economic liberalization reforms in 1991, India’s average income has increased by 7.5 percent per year. That means that average income has more than tripled over the last quarter century. As wealth increased, the poverty rate in India declined by almost 24 percent. But most significantly, for the Dalits – the poorest and lowest caste in Indian society – the poverty rate during this period declined even faster, by 31 percent. That means that in the nation that has by far the largest number of people in extreme poverty, it is the people at the very bottom of the social strata who are getting richer faster.

A similar trend can be seen in Nigeria. Since the new millennium, gross domestic income per capita has increased by over 800 percent, from $270 to over $2,450. There is much work to be done, but this level of progress shows that even in the poorest countries, the speed of economic growth is encouraging.

In order to help the poorest, consider the impact free-market capitalism has had in the last 200 years in alleviating extreme poverty. The Industrial Revolution turned the once-impoverished western countries into abundant societies. The new age of globalization, which started around 1980, saw the developing world enter the global economy and resulted in the largest escape from poverty ever recorded. That is something that the late Father Wresinski would have been eager to celebrate.

Alexander C. R. Hammond is the Research Assistant for HumanProgress.org, a project of the Cato Institute’s Center for Global Liberty and Prosperity. He writes about economic freedom, globalization, and human well-being.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

Laissez-Faire in Tokyo Land Use – Article by Alex Tabarrok

Laissez-Faire in Tokyo Land Use – Article by Alex Tabarrok

The New Renaissance HatAlex Tabarrok
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Tokyo, Japan’s capital city, has a growing population of over 13 million people but house prices have hardly increased in twenty years. Why? Tokyo has a laissez-faire approach to land use that allows lots of building subject to only a few general regulations set nationally. Robin Harding at the FT has a very important piece on the Tokyo system:

Here is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the 83,657 housing permits issued in the state of California (population 38.7m), or the 137,010 houses started in the entire country of England (population 54.3m).

Tokyo’s steady construction is linked to a still more startling fact. In contrast to the enormous house price booms that have distorted western cities — setting young against old, redistributing wealth to the already wealthy, and denying others the chance to move to where the good jobs are — the cost of property in Japan’s capital has hardly budged.

This is not the result of a falling population. Japan has experienced the same “return to the city” wave as other nations.House_Prices_2

How is this possible? First Japan has a history of strong property rights in land:

Subject to the zoning rules, the rights of landowners are strong. In fact, Japan’s constitution declares that “the right to own or to hold property is inviolable”. A private developer cannot make you sell land; a local government cannot stop you using it. If you want to build a mock-Gothic castle faced in pink seashells, that is your business.

But this alone cannot explain everything because there was a huge property price-boom in Japan circa 1986 to 1991. In fact, it was in dealing with the collapse of that boom that Japan cleaned up its system, reducing regulation and speeding the permit approval process.

…in the 1990s, the government relaxed development rules, culminating in the Urban Renaissance Law of 2002, which made it easier to rezone land. Office sites were repurposed for new housing. “To help the economy recover from the bubble, the country eased regulation on urban development,” says Ichikawa. “If it hadn’t been for the bubble, Tokyo would be in the same situation as London or San Francisco.”

Hallways and public areas were excluded from the calculated size of apartment buildings, letting them grow much higher within existing zoning, while a proposal now under debate would allow owners to rebuild bigger if they knock down blocks built to old earthquake standards.

Rising housing prices are not an inevitable consequence of growth and fixed land supply–high and rising housing prices are the result of policy choices to restrict land development.

The policy choices were made–they can be unmade.

tokyo-japanThis post first appeared at Marginal Revolution.

Alex Tabarrok is a professor of economics at George Mason University. He blogs at Marginal Revolution with Tyler Cowen.

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

The New Renaissance HatSteven Horwitz
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One of the perennial complaints about the US economy is that we don’t “make stuff” anymore. You hear this from candidates from both major parties, but especially from Donald Trump and Bernie Sanders. The argument seems to be that our manufacturing sector has collapsed and that all US workers do is to provide services, rather than manufacturing tangible goods.

It turns out that this perception is wrong, as the US manufacturing sector continues to grow and in 2014 manufacturing output was higher than at any point in US history. But even if the perception were correct, it does not matter. The measure of an economy’s health isn’t the quantity of physical stuff it produces, but rather the value that it produces. And value comes in a variety of forms.

Manufacturing is Up

The path to economic growth is not to freeze into place the US economy of the 1950s. Let’s deal with the myth of manufacturing decline first. The one piece of evidence in favor of that perception is that there are fewer manufacturing jobs today than in the past. Total manufacturing employment peaked at around 19 million jobs in the late 1970s. Today, there are about 12.5 million manufacturing jobs in the US.

However, manufacturing output has never been higher. The real value of US manufacturing output in 2014 was over $2 trillion. The real story of the US manufacturing sector is that we have become so much more efficient, that we can produce more and more manufactured goods with less and less labor. These efficiency gains are largely the result of computer technology and automation, especially in the last fifteen years.

The labor that we no longer need in order to produce an ever-increasing amount of stuff is now available to produce a whole variety of other things we value, from phone apps to entertainment to the expanded number and variety of grocery stores and restaurants, to the data analyses that makes all of this growth possible.

Just as the workers in those factories we are so nostalgic for were labor freed from growing food thanks to the growth in agricultural productivity, so are today’s web designers, chefs at the newest hipster café, and digital editors in Hollywood the labor that has been freed from producing “stuff” thanks to greater technological productivity.

Or, put differently: those agricultural, industrial, and computer revolutions collectively have enabled us to have more food, more stuff, and more entertainment, apps, services, and cage-free chicken salads served with kale. The list of human wants is endless, and the less labor we use to satisfy some of them, the more we have to start working on other ones.

But notice something: all of the things that we produce have something in common. Whether it’s food or footwear, or automobiles or apps, or manicures or massages, the point of production is to rearrange capital and labor in ways that better satisfy wants. In the language of economics, the point of production (and exchange) is to increase utility.

When we produce more cars that people wish to buy, it increases utility. When we open a new Asian fusion street food taco stand, it increases utility. When Uber more effectively uses the existing stock of cars, it increases utility. When we exchange dollars for manicures, it increases utility.

Adam Smith helped us to understand that the wealth of nations is not measured by how much gold a country possesses. Modern economics helps us understand that such wealth is not measured by how much physical stuff we manufacture. Increases in wealth happen because we arrange the physical world in ways that people value more.

Neither producing cars nor providing manicures changes the number of atoms in the universe. Both activities just rearrange existing matter in ways that people value more. That is what economic growth is about.

Misplaced Nostalgia

We’re richer because we have allowed markets to produce with fewer workers. When we are fooled into believing that “growth” is synonymous with “stuff,” we are likely to make two serious errors. First, we ignore the fact that the production of services is value-creating and therefore adds to wealth.

Second, we can easily believe that we need to “protect” manufacturing jobs. We don’t. And if we try to do so, we will not only stifle economic growth and thereby impoverish the citizenry, we will be engaging in precisely the sort of special-interest politics that those who buy the myth of manufacturing often rightly complain about in other sectors.

The path to economic growth is not to freeze into place the US economy of the 1950s. We are far richer today than we were back then, and that’s due to the remaining dynamism of an economy that can still shed jobs it no longer needs and create new ones to meet the ever-changing wants of the consumer.

The US still makes plenty of stuff, but we’re richer precisely because we have allowed markets to do so with fewer workers, freeing those people to provide us a whole cornucopia of new things to improve our lives in endless ways. We can only hope that the forces of misplaced nostalgia do not win out over the forces of progress.

Steven_Horwitz

Steven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions.

He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

Inflation’s Not the Only Way Easy Money Destroys Wealth – Article by Frank Shostak

Inflation’s Not the Only Way Easy Money Destroys Wealth – Article by Frank Shostak

The New Renaissance Hat
Frank Shostak
October 14, 2014
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The US Federal Reserve can keep stimulating the US economy because inflation is posing little threat, Federal Reserve Bank of Minneapolis President Kocherlakota said. “I am expecting an inflation rate to run below two percent for the next four years, through 2018,” he said. “That means there is more room for monetary policy to be helpful in terms of … boosting demand without running up against generating too much inflation.”

The yearly rate of growth of the official consumer price index (CPI) stood at 1.7 percent in August against two percent in July. According to our estimate, the yearly rate of growth of the CPI could close at 1.4 percent by December. By December next year we forecast the yearly rate of growth of 0.6 percent.

Does Demand Create More Supply?

It seems that the Minneapolis Fed President holds that by boosting the demand for goods and services — by means of additional monetary pumping — it is possible to strengthen economic growth. He believes that by means of strengthening the demand for goods and services the production of goods and services will follow suit. But why should that be so?

If by means of monetary pumping one could strengthen the economic growth then it would imply that — by means of monetary pumping — it is possible to create real wealth and generate an everlasting economic prosperity.

This would also mean that world wide poverty should have been erased a long time ago. After all, most countries today have central banks that possess the skills to create money in large amounts. Yet world poverty remains intact.

Despite massive monetary pumping since 2008, and the policy interest rate of around zero, Fed policymakers seem to be unhappy with the so-called economic recovery. Note that the Fed’s balance sheet, which stood at $0.86 trillion in January 2007 jumped to $4.4 trillion by September this year.

Production Comes Before Demand

We suggest that there is no such thing as an independent category called demand. Before an individual can exercise demand for goods and services, he/she must produce some other useful goods and services. Once these goods and services are produced, individuals can exercise their demand for the goods they desire. This is achieved by exchanging things that were produced for money, which in turn can be exchanged for goods that are desired. Note that money serves here as the medium of exchange — it produces absolutely nothing. It permits the exchange of something for something. Any policy that results in monetary pumping leads to an exchange of nothing for something. This amounts to a weakening of the pool of real wealth — and hence to reduced prospects for the expansion of this pool.

What is required to boost the economic growth — the production of real wealth — is to remove all the factors that undermine the wealth generation process. One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. (Once the loopholes for the money creation out of “thin air” are closed off the diversion of wealth from wealth generators towards non-productive bubble activities is arrested. This leaves more real funding in the hands of wealth generators — permitting them to strengthen the process of wealth generation (i.e., permitting them to grow the economy).

Artificially Boosted Demand Destroys Wealth

Now, the artificial boosting of the demand by means of monetary pumping leads to the depletion of the pool of real wealth. It amounts to adding more individuals that take from the pool of real wealth without adding anything in return — an economic impoverishment.

The longer the reckless loose policy of the Fed stays in force the harder it gets for wealth generators to generate real wealth and prevent the pool of real wealth from shrinking.

Finally, the fact that the yearly rate of growth of the CPI is declining doesn’t mean that the Fed’s monetary pumping is going to be harmless. Regardless of price inflation monetary pumping results in an exchange of nothing for something and thus, impoverishment.

Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. See Frank Shostak’s article archives.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Progress: Creation and Maintenance (2010) – Article by G. Stolyarov II

Progress: Creation and Maintenance (2010) – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
Originally Published March 8, 2010
as Part of Issue CCXXXVIII of The Rational Argumentator
Republished July 22, 2014
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Note from the Author: This essay was originally published as part of Issue CCXXXVIII of The Rational Argumentator on March 8, 2010, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 22, 2014
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The audio version of this essay is read by Wendy Stolyarov. You can also download this audio essay as an MP3 file here. 

One frequently encounters the identification of human creativity and inventiveness as driving forces for progress in technology and society. In part, this identification is correct: it is through the human creative faculty – the ability to bring forth new combinations of matter and new ideas – that improvements to the human condition arise. But while creation is a necessary component to progress, it is not a sufficient component.

Consider that the human creative faculty has existed since the emergence of our species; even cave dwellers exhibited it, to the extent that they could take even a little leisure time in their highly dangerous, subsistence-based lives. Cave paintings and tools from several tens of thousands of years ago show clearly that our remote ancestors had the ability, and the desire, to reshape the world in an attempt to improve their condition. And yet, for the vast majority of human history – up until the 18th-century Enlightenment and the subsequent Industrial Revolution – real progress has been so slow and minuscule as to be virtually imperceptible within an ordinary person’s lifetime. This was the case despite the fact that every generation had its share of great thinkers, artists, and even mechanical tinkerers.

The other necessary component of progress is maintenance of what has already been created. While creation is an ever-present ability within human beings, there are also destructive forces that counteract and diminish its fruits. Nature itself is the source of many such forces: disease, decay, and death are omnipresent unless counteracted by arduous and continual human effort. Just as billions of lives have been lost in complete oblivion to the ravages of “natural causes” – from catastrophic disasters to senescence – so have innumerable works of art, architecture, literature, and technology been lost to these perils. Consider that even the extant works of great known philosophers such as Aristotle or composers such as Georg Philipp Telemann are a fraction of what these great men of the past are known to have created, but which was buried by the sands of time. Imagine, also, what the pitifully short lifespans throughout most human history did to diminish the output of creative geniuses, who, in better times, might have continued to innovate for decades more.

Maintenance is the ability to preserve and transmit existing knowledge, techniques, and objects. It can be performed through sheer effort of will – but only to a point. A European monk or an Arabic scholar in the Middle Ages could spend a lifetime meticulously copying by hand a single book from centuries before his time, only to have it vandalized by one of his successors some generations hence. Even the work of Archimedes was subjected to such savage mistreatment.

Since the Industrial Revolution, and especially since the Information Revolution, the techniques for the preservation of physical goods and knowledge have become tremendously more reliable than was possible in premodern societies. The ability to make multiple copies of an object and potentially inexhaustible copies of an idea – and to maintain detailed visual, textual, and auditory records of particular times, places, and activities, with little effort by historical standards, has preserved many of the accomplishments of prior and current thinkers for the creative faculties of humans to expand upon.

It is doubtful that we, in our time, are inherently more creative than our ancestors. But we do have a much more diverse and advanced subject matter to which to apply our creativity. Where we are free to do so, we may arrange these building blocks of innovation in much the same way that our ancestors arranged sticks and stones – except that the consequences of our actions are much more powerful, life-enhancing, and durable. Our infrastructure and our methods for maintaining and transmitting knowledge separate us from our ancestors to the extent that, to them, we would be as gods.

And yet, none of the wonders that enable progress in our time are ever guaranteed to continue, though not due to inanimate nature and lower life forms alone; those have always been in a steady retreat wherever human reason and productivity were unleashed at anywhere near their fullest extent. But the folly, ignorance, sloth, and envy of other men can all too easily slow the growth of progress-nourishing infrastructure to a crawl, or even reverse it and usher in a new Dark Ages. Coercive policies, economic misconduct and capital consumption, massive wars, widespread prohibitions on peaceful and productive activities, superstitions and irrational taboos, pervasive and disproportionate fears – as embodied in the environmentalists’ progress-killing “precautionary principle” – and a desire for “security” over liberty, for “tradition” over growth, and for stasis over innovation, are all forces that counteract and threaten the maintenance of our civilization. In most times and places, only a handful of people have been immune to deleterious anti-progressive beliefs and their consequences, but there is no reason why we cannot all rise above such anti-life thinking. We all have the creative faculty in us, and we can all think.

The importance of maintenance to human progress can be carried into the life of the individual with profound consequences that can produce massive personal growth and productivity via a change of habits. A mere creation of reproducible records of one’s past achievements – and their publication on the Internet, where possible – can create a formidable store of knowledge to which the creator and others can refer and which they can build upon. The concepts of open-source software and distributed computing, for instance, are built on this elementary principle, but it can be applied to so many more areas of life. The creative faculty is with us every day, and every day it produces original ideas and methods for improving our lives. But, without adequate maintenance – including the establishment of a concrete form for these innovations – these gifts from within our minds will fade away into insignificance, much like the ruins of antiquity. Developing an improved infrastructure for the products of one’s own mind may be the first step toward revitalizing the infrastructure of civilization itself.

Click here to read more articles in Issue CCXXXVIII of The Rational Argumentator.

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TANSTAAFL and Saving: Not the Whole Story – Article by Sanford Ikeda

TANSTAAFL and Saving: Not the Whole Story – Article by Sanford Ikeda

The New Renaissance Hat
Sanford Ikeda
October 3, 2012
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How often have you heard someone say, “There ain’t no such thing as a free lunch,” or, “Saving is the path to economic development”?  Many treat these statements as the alpha and omega of economic common sense.

The problem is they are myths.

Or, at least, popular half-truths.  And they aren’t your garden-variety myths because people who favor the free market tend to say them all the time.  I’ve said them myself, because they do contain more than a grain of truth.

“There ain’t no such thing as a free lunch” (or TANSTAAFL) means that, with a limited budget, choosing one thing means sacrificing something else.  Scarcity entails tradeoffs.  It also implies that efficiency means using any resource so that no other use will give a higher reward for the risk involved.

That saving is necessary for rising labor productivity and prosperity also contains an economic truth.  No less an authority than the great Austrian economist Ludwig von Mises has stated this many times.  In an article published in The Freeman in 1981, for example, he said:

The fact that the standard of living of the average American worker is incomparably more satisfactory than that of the average [Indian] worker, that in the United States hours of work are shorter and children sent to school and not to the factories, is not an achievement of the government and the laws of the country. It is the outcome of the fact that the capital invested per head of the employees is much greater than in India and that consequently the marginal productivity of labor is much higher.

The Catalyst

But the statement is true in much the same way that saying breathable air is necessary for economic development is true.  Saving and rising capital accumulation per head do accompany significant economic development, and if we expect it to continue, people need to keep doing those activities.  But they are not the source–the catalyst, if you will–of the prosperity most of the world has seen in the past 200 years.

What am I talking about?  Deirdre McCloskey tells us in her 2010 book, Bourgeois Dignity: Why Economics Can’t Explain the World:

Two centuries ago the world’s economy stood at the present level of Bangladesh. . . .  In 1800 the average human consumed and expected her children and grandchildren and great-grandchildren to go on consuming a mere $3 a day, give or take a dollar or two [in today’s dollars]. . . .

By contrast, if you live nowadays in a thoroughly bourgeois country such as Japan or France you probably spend about $100 a day.  One hundred dollars as against three: such is the magnitude of modern economic growth.

(Hans Rosling illustrates this brilliantly in this viral video.)

That is unprecedented, historic, even miraculous growth, especially when you consider that $3 (or less) a day per person has been the norm for most of human history.  What is the sine qua non of explosive economic development and accelerating material prosperity?  What was missing for millennia that prevented the unbelievable takeoff that began about 200 years ago?

A More Complete Story

Economics teaches us the importance of TANSTAAFL and capital investment.  Again, the trouble is they are not the whole truth.

As I’ve written before, however, there is such a thing as a free lunch, and I don’t want to repeat that argument in its entirety.  The basic idea is that what Israel M. Kirzner calls “the driving force of the market” is entrepreneurship.  Entrepreneurship goes beyond working within a budget–it’s the discovery of novel opportunities that increase the wealth and raises the budgets of everyone in society, much as the late Steve Jobs or Thomas Edison or Madam C.J. Walker (probably the first African-American millionaire) did.  Yes, those innovators needed saving and capital investment by someone–most innovators were debtors at first–but note: Those savings could have been and were invested in less productive investments before these guys came along.

As McCloskey, as well as Rosenberg and Birdzell, have argued, it isn’t saving, capital investment per se, and certainly not colonialism, income inequality, capitalist exploitation, or even hard work that is responsible for the tremendous rise in economic development, especially since 1800.

It is innovation.

And, McCloskey adds, it is crucially the ideas and words that we use to think and talk about the people who innovate–the chance takers, the rebels, the individualists, the game changers–and that reflect a respect for and acceptance of the very concept of progress.  Innovation blasts the doors off budget constraints and swamps current rates of savings.

Doom to the Old Ways

Innovation can also spell doom to the old ways of doing things and, in the short run at least, create hardship for the people wedded to them.  Not everyone unambiguously gains from innovation at first, but in time we all do, though not at the same rate.

So for McCloskey, “The leading ideas were two: that the liberty to hope was a good idea and that a faithful economic life should give dignity and even honor to ordinary people. . . .”

There’s a lot in this assertion that I’ll need to think through.  But I do accept the idea that innovation, however it arises, trumps efficiency and it trumps mere savings.  Innovation discovers free lunches; it dramatically reduces scarcity.

Indeed, innovation is perhaps what enables the market economy to stay ahead of, for the time being at least, the interventionist shackles that increasingly hamper it.  You want to regulate landline telephones?  I’ll invent the mobile phone!  You make mail delivery a legal monopoly?  I’ll invent email!  You want to impose fixed-rail transport on our cities?  I’ll invent the driverless car!

These aren’t myths. They’re reality.

Sanford Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.