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Prices, Property, Profit and Loss

Willingness to pay is understood in terms of what other goods or services a person might buy instead, the economic term is opportunity cost. But this is also never observed, though it is very real. Wage labor can also be understood in terms of opportunity cost. Why does a person take a job at a particular wage? Because it is her best option. She must compete with everyone else for her job. She is a seller of her labor. If she does not like the available options, she is free to create a job, to produce a good or provide a service that other people can demonstrate their willingness to pay for by paying her for it. Where is the power dynamic in that? And land ownership of course has historical injustices tied to it. But those injustices are mitigated by the market. A person who has inherited land faces the opportunity cost of using it themselves or renting it out to someone else. The decision is the same as that for the laborer. If the owner can make the best use of the land him...
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Look at Benefits, Not Just Profits, To Understand Justice

In every voluntary exchange both the buyer and the seller benefit.  The price paid is never above what someone is willing to pay, it is always less than what a person is willing to pay. The difference is benefit to the buyer, not measured in monetary terms, but in terms of personal satisfaction. Personal satisfaction is not measurable. It is subjectively derived.  Similarly, the seller never sells for the minimum willingness to sell, for zero profits, but always for some amount greater than the minimum willingness to sell, those are profits. These are measurable because sellers have explicit costs, as compared to buyers' subjectivity.  So, we can easily see and measure the profits of sellers, but we cannot see the benefits to buyers.  However, in most markets, where there is active competition among sellers (including labor markets) the buyer captures far more benefit than the seller does profit.  So, my take (hot or not) is that the profits captured ...
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Our Subversive Task

The matter comes down to practicality. Most people want a way to engage that leads to observable change in the social structures around them. They want to be a part of saving the world. But some social structures are irredeemable. That is, some social structures are founded upon violence that always results in a zero- or negative-sum game. Mark Van Steenwyk, if I understand you right, believes that the state as currently constituted is one of these structures. Do you believe that the state can be restructured, redeemed, and then reformed as a vehicle for redemption? The revolution-jubilee perspective suggests that you do. However, capitalism as an economic structure, starting with the principle of private property, is often lumped in with the state as requiring complete change. That is where I part ways. I understand property as an emergent phenomenon not necessarily flowing out of violent control. Consequently, I place market exchange in the category of redemptive. Not just capa...
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Is Capitalism Structurally Amoral?

Would I say that Capitalism is structurally amoral? I do not know. It depends on what is meant by Capitalism. I treat voluntary exchange relations as good from the point of view of the individuals in the exchange. For them the trade was good. For them an obstacle to that exchange would be bad. This treatment is amoral in that it does not interrogate as to the nature of the good or service exchanged. I buy an apple for less than my full willingness to pay, I am happy. The grocer sells for more than her reservation price, she is pleased. A random stranger propositions me with some money to perform personal favors for them. So long as we are both made better off in our own estimation the transaction is treated by good as each of us, and the economist does not impose a normative judgment on those actions. A price floor on apples that requires all apples to be sold for $2.50 a lb, including the falsely named Red Delicious, could result in fewer consummated voluntary exchanges. Some seller...
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What I Mean by Will Hunting Smart

I have adopted the phrase "Will Hunting Smart." You should too. http://www.youtube.com/watch?v=ymsHLkB8u3s
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Moving

Bad news, I've moved. You can now read me here. Or type in http://jurisnaturalist.failuretorefrain.com/ I hope you'll add me to your list server there. Jeff and I have started a radio show called "Failure to Refrain," as in President George Bush has failed to refrain from comparing Iraq to Vietnam. Anyway, I continue to do battle at God's Politics as jurisnaturalist. We're still on immigration... And school has started again. This semester I'm reading... a lot... no, really, a LOT. So, come on over and read what's new.
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Assymetric Voting

Megan has a post explaining why NYC will always get Republican mayors. The gist is that the Democrats, having such a majority in NYC, will always nominate a candidate too liberal to win the general election. Instead a liberal Republican will get the job. This would be interesting to test. If it is true, then Democracy is an effective check on extremist groups, but not against moderate statists. Maybe this book will have something to say about it.
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Add this to my list

Patronization Kills
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'Nuff Said

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go duke! Hat tip, Struttin' Wolf
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Obfuscation is the Mother of Invention

As a member of the next generation of economists, I was glad to receive a short education in econometrics earlier today, which previous generations will certainly be familiar with, to the point of it being a cliche. Now the problem reveals itself to be related directly to the quantity of upper extreme appendages normally attached to upright biped inspectors of dismal occurances. Gavel bang to Mankiw .
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Sanctuary

This article at Christianity Today gives some of the history of the principle of sanctuary, and perhaps hints at a legitimate role for the church against statism. But it falls short of understanding fundamental subtleties on law. "As a product of a time when justice was rough and crude," law professor Wayne Logan summarized in a 2003 Harvard Civil Rights-Civil Liberties Law Review article, "sanctuary served the vital purpose of staving off immediate blood revenge." If the church could be convinced that the sanctuary seeker's life was not in danger, it would turn him over. "The church, in short, played a foremost role as intercessor," Logan writes. Fugitives in medieval English sanctuaries, about 1,000 a year, were able to negotiate financial compensation or a punishment like scourging or exile. So the church plays the role of the judiciary by providing a recourse to violence. Justice would be served through a trial process instead of through violenc...
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Opportunity Cost and Immigration

I have little or no pity for the roofers, drywallers, textile workers, etc., who have lost their jobs to immigrants. Why should they be protected from competition? According to what principle? Let's say two individuals make widgets. Joe and Larry. Who should you buy a widget from? Let's assume they are of equal quality. Then you buy from whomever sells for less, let's say Joe. Why? Because it shows that Joe's next best alternative is worse than Larry's next best alternative. He has a lower opportunity cost. If Larry can make widgets at a cost of $4 or whatsits at a cost of $5, these are his two options. If Joe can make widgets for $4 or whatsits at a cost of $6, these are his two options. Who should do what? Let's say we want ten of each. If Larry makes whatsits and Joe makes widgets our economy uses $90. If they switch roles the economy uses $100. Everyone is better off if they allocate their energies according to what their next best alternative would be. This...
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