Best Movie Line of the Day

It's from a movie about the life of Wing Chun kung fu master Ip Man, who was also one of the Bruce Lee's martial arts teachers.

Background of the line: Another kung fu master goes to master Ip's house and requests the latter to have a match with him. The line goes like this:

Challenger: So you don't want to have a match with me.

Ip Man: No. It's just that you come at a wrong time as my family and I are having dinner right now.

Ip continued: What about you? Have you eaten yet?

Challenger: No

Ip: Then why don't you join us?

Now that's real Martial Spirit right there!

Movie of the Year

This year's "Movie of the Year" goes to:

Ip Man

Here is the trailer

Idiots

立法會保安事務委員會討論策略發展委員會建議簡化專才輸入計劃的安排，多名議員質疑會加劇競爭，令本地大學畢業生在金融海嘯下搵工更難。

That is from today's Ming Pao, more here.

The fallacy inherent in the legislators' plea to stop importing talents from outside of HK is that they see the economy as a fixed-size pie. If some people get a large share of the pie, then others inevitably would get smaller slices. Zero-sum thinking.

That metaphor, market as a fixed-sized pie, is wrong.

A better metaphor for the market is that it is an exchange nexus. As more people participate in the market nexus, the extent of divison of labor could be further extended, the more productive the economy would become. A larger pie for everybody. And that, the enlargement and the extension of the market through increasing the number of market participants, is one of the fundamental drivers of the wealth of nations.

BTW, don't blame the legislators to be such idiots. YOU voted them in, remember? Disclosure: I DID NOT VOTE AND I WILL NOT FOR THE MANY ELECTIONS TO COME.

Are We All Keynesians Now?

Amid the unfolding global financial crisis, countries across the world are fast in deciding pump-priming is the way to go in engineering a recovery of their economies.


If my memory serves me right, about a decade ago, economists, especially those from the IMF and the US Treasury were asking all those troubled economies afflicted by the Asian financial crisis to keep their fiscal house in order before they could gain access to any emergency aid from the IMF or the US(?).

Now, the same economists, (I am assuming here that the economists at US Treasury or IMF who are advising the US government say were either the same ones or have recieved very similar training to those who doled out the advice to leaders of Asian economies ten years ago) are now advocating their governments to spend their way out of the problem.

What has caused this shift in mentality?

Hypocrisy anyone?

Hong Kong = Rent-seeking Paradise

"Social welfare expenditure [in Hong Kong] had increased by 80% from $20 billion in 1997-98 to $36 billion in 2007-08, representing the second largest share of government recurrent resource allocation"

And No, I do not make this up, it is from the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung. More here.

So please repeat after me: Good bye Capitalism, Welcome Welfare State.

My sense is that this is going to get worse as the global financial crisis unfolds. Stay tuned.

Bush on Capitalism

President Bush was talking a lot of sense in the following speech:

-- History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market.

-- Like any other system designed by man, capitalism is not perfect. It can be subject to excesses and abuse. But it is by far the most efficient and just way of structuring an economy.

-- Ultimately, the best evidence for free market capitalism is its performance compared to other economic systems.

-- The record is unmistakable: If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go. (Applause.) And it would be a terrible mistake to allow a few months of crisis to undermine 60 years of success.

In other words, our trust on free market is not based on faith or belief, it is based on development experiences throughout the course of history. And we trust the free market not because it is inherently perfect or good in an absolute sense, it is simply better than all the EXISTING alternatives. Unless humans are lucky enough to stumble on another system better free market, if we want to prosper, there is simply NO other way.

For the full speech, read here.

All the recent BS about free market fundamentalism is simply that, BS. No sophisticated free market supporter subscribes to that strawman anyway.

BTW, for those on the left who want to criticize Milton Friedman and other intellectual leaders of the free market, please, please at least read through their stuff before attacking them, not by imaging something they had said or believed and then criticized them on stuff that they did not write or say.

Read the damn books/papers or shut the (insert a four letter word here) up!

Learn Property Rights Economics from its Guru

Here is the opportunity. More importantly, it is FREE, for now anyway. The chapters are from professor Yoram Barzel's property rights economics text. The first edition came out 1989 and the second one came out in 1997, I read both and the text is an excellent introduction to the subject though professor Barzel's writing can be dry at times. My guess is the online chapters indicate that professor Barzel is preparing the third edition of the book.

Needless to say, I am a true fan of professor Barzel's work. Not only because he was a former colleague of professor Steven Cheung, also as a result of his extension and elaboration of the Washingtonian Approach to Transaction Cost Economics pioneered by Steve (where the measurement problem occupies the center stage of the paradigm). The other alternative of course is that advocated by UC Berkeley's emeritus professor O E Williamson where asset specificity, incomplete contracts, bounded rationality, and opportunism are its major focus.

(An aside: I once believed that the measurement approach to TCE was at least inspired by the characteristic approach of consumer theory pioneered by Kevin Lancaster. So I asked the professor sometime ago in 2005 if that was the case. Guess how the professor responded? The attributes embodied in the goods in Lancaster's are exogenously given, whereas the attributes were endogenously determined in the measurement approach. Brilliant.)


I quite enjoy his Theory of the State book a bit, unfortunately the book fails to grasp the attention of most economists. In Steve's three volume works Economic Explanation (in Chinese) the theory of the state has received little and limited coverage. I once pointed that out to the professor. The professor agreed and promised to write more on this when it is time to revise the works. Recently, the professor reminded me that he would start working on revising the three volume works very soon. So stay tuned.

Can Keynes Save Us All?

A short answer is no, and that's the conclusion of this interesting piece by Nobel Prize winner in economics (2006) Edmund Phelps in FT.

This bit is my favourite, at the very end of the piece:

Capitalism theory stresses diversity in sources of new commercial ideas, in the pool of entrepreneurs available for their development, in sources of finance – angel investors, venture capitalists and the rest – and in the array of end users.

It also stresses how important it is that owners of financial and business enterprises be accountable to no one (except their own consciences) – thus free to use their intuition – in contrast to the strict accountability rightly required of state employees. Thus a greatly increased presence of the central government in a country’s investment sector could constrict innovation and lower the quality of the innovations that are made. We would be left still in a slump.

At the end of his life Keynes wrote of “modernist stuff, gone wrong and turned sour and silly”. He told his friend Friedrich Hayek he intended to re-examine his theory in his next book. He would have moved on. The admiration we all have for Keynes’s fabulous contributions should not sway us from moving on.

Butch Cassidy and the Sundance Kid

Thanks to W H Yeung at Next Magazine for allowing me to post this latest column of his before it officially appears in tomorrow's addition of the magazine. Enjoy!

「致命的自負」 觸發金融海嘯

格林斯班退休近三年，再出席國會聆訊，為任內的金融政策問責。卸任後尚要問 責，情況堪稱罕見，然而誰又可以否認這不是個非常時期？無論中外報章，都大字 標題說他為過去疏忽監管金融衍生工具認錯。真的嗎？細閱他的演詞及他對議員質 詢的回應，說他「認錯」無疑是太沉重了。
自由經濟有瑕疵

中外報章說他「認錯」了，看來是本此番對答而言吧： 眾議院政制改革委員會主席華士文（Henry Waxman）問：「以今視昔，你是否囿於 意識形態（ideology），做出了不該做的事？」 答：「是的，我發現了一個瑕疵（flaw）。我不知道這個瑕疵有多嚴重或會否持 續。但我為此深受困擾（distressed）。」 華士文眾議員口中的「意識形態」不用說是指資本主義自由市場經濟引伸出來的放 任政策了。不管大家怎麼樣想，然而橫看側望，我都見不到格林斯班有哪個地方是 「認錯」了。資本主義自由市場經濟不是個玫瑰園，即使這個「意識形態」像有格 林斯班說的有瑕疵，只消證明放任政策勝過人類歷史上嘗試過的任何體制，那不便 夠了嗎？ 要驗證自由經濟這個優越性倒又沒有半點難度。就算在風雨飄搖的今天，若然有選 擇，你會願意回到三十年前中國尚未開放的日子嗎？就算不是走這樣的回頭路，今 天你會考慮移民到北韓、古巴或委內瑞拉等堅持社會主義優越性的國家去嗎？


格林斯班亦凡人而已 格林斯班在聯儲局待上了十八年，他對經濟運作的認識肯定比世界上99.99%的人為 多。然而不辯的事實是，他亦凡人而已。哪怕市場真的發生了一些他過去沒有察覺 到的事情，以致判斷出錯，那也沒有什麼好值得大驚小怪的吧？ 說到底，他已屆八十三歲的耄耋之年。即使認錯，那又有啥大不了，更何況他只是 說察覺到自由市場有一些令他困擾的瑕疵，他不是對這個體制信心崩潰啊！況且誰 說資本主義自由市場經濟是不許有瑕疵的？ 海耶克不早便告訴我們了嗎？市場錯綜複雜，根本上沒有人可以隨時隨地完全掌握 全局；過去沒有，現在也沒有，甚至將來也不大可能有。即使格林斯班坐鎮的聯儲 局有全世界最鼎盛的經濟研究隊伍，有最完備的經濟數據，再輔以最了不起的超級 電腦，他亦不見得便全知全能掌控一切吧！要不然他不便能列寧、毛主席、卡斯特 羅所不能，搞起計劃經濟來了嗎？

何方神聖猛火密襲 格林斯班出席國會聆訊的當天，《紐約時報》刊登了跟美國財長保爾森作的專訪， 講述從九月十二日雷曼倒閉到國會通過七千億元救市方案，那個多月間他的日日夜 夜。當中他有這一句發人深省的自白： 我恍惚是神槍手與智多星。到底是何方神聖向我連珠砲發猛火密襲？（I feel like Butch Cassidy and the Sundance Kid. Who are these guys who just keep coming?） 保爾森口中的情境，是羅拔烈福及保羅紐曼的名片《神槍手與智多星》（Butch Cassidy and the Sundance Kid）最後的一個鏡頭。

這兩個專門打劫銀行及解款車 的美國大盜逃到南美洲的波利維亞，給大軍重重圍困，彈盡糧缺更受了傷，試圖突 圍，哪有希望？正當他們冒槍林彈雨死命衝出屋外的一剎那，電影定鏡，只聞一 把聲音：「開火！」隨諸而來的是一陣彈雨槍聲。 保爾森何等樣人也？美國財政部什麼經濟數據沒有？其通訊、電腦硬件又怎不完備 、先進過人？那麼他又豈不對經濟情況有個第一時間的通盤掌握？再者，保爾森又 不只是財長而已；出仕之先，他是高盛這間華爾街第一大行的主席。身經百戰，什 麼大場面他沒有見過？他對實際金融運作的認識又怎不勝過9999%的人？然而以他 的條件、閱歷，他亦不得不從實招來，承認不知道金融市場發生了什麼事情。這般 複雜的體制有個格林斯班口中的瑕疵，正常呀！


資本主義撞正大板？ 《神槍手與智多星》裡有這最後的對白： 羅拔烈福：且慢，那不是我們的天敵Lefors嗎？ 保羅紐曼：Lefors？不是，你問來做什麼？ 羅拔烈福：嚇得我，我尚以為這一趟撞正大板了。（For a moment there I thought we were in trouble.） 我不知道當他想起《神槍手與智多星》時，保爾森有否記起電影落幕前這最後的一 句對白。這一趟資本主義自由市場是撞正大板了嗎？麻煩是有的，但經此一役，世 界便從此回到社會主義大鑊飯的洪荒年代嗎？當然不會。如今甚至鎖國超過半個世 紀的北韓不也開賭場、搞加工特區、讓南韓人前去「觀光」了嗎？（餓殍遍野，何 光之可觀有哉？）像戴卓爾夫人說的：TINA —— There is no alternative —— 捨自由經濟，人類別無選擇！

技術枝節阻住地球轉

依我看，金融海嘯最是棘手之處，是在超級電腦的催谷下，金融衍生工具發展得太 快，但完成買賣這些衍生產品所需的配套環節，譬如怎樣管理好買賣雙方萬一不能 完成交易的風險（銀行投保CDS，AIG賠不起那怎麼辦？）；票據交收機制如何才可 以追上交易步伐（以次按為基礎CDO給降低評級，了無成交，無從定值，那又怎麼 辦？）；按市值入賬（mark-to-market）的會計準則形同迫使金融機構自動破產， 以致整個金融體系僵硬冰封，這個準則在這非常時期應否堅持下去？……等等。 不過，凡此種種，都是技術層面的枝節，跟市場能、官僚不能，這個自由經濟的大 前提無涉。技術枝節又焉能動搖根基，令建基於私有財產的市場體制崩潰？這一兩 個星期來儘管衝擊不絕，技術問題已在逐一解決。譬如面值超過六十兆美元的CDS 票據市場終於發展出了個有效的交收系統，冰封的市場有望解凍。 銀行家朋友又告之，以次按為基礎的CDO債券無疑大跌價，面值一元的票據只賣得 兩角錢，但有成交。換言之，海嘯過後，整個金融系統是在一步步地恢復運作了。 只要市場繼續復元，那麼不管多大的問題也有望解決了。

致命的自負

格林斯班沒有和盤托出，說他看到資本主義自由經濟有個什麼的瑕疵。要是讓我在 堆填區觀天，問題的癥結，是海耶克說的「致命的自負」（The Fatal Conceit）—— 有了超級電腦，好些華爾街上的才俊便長了個僥倖之心，以為自己 真的懂得了投資必賺的竅門，義無反顧、搏到盡，在次按的基礎上滋長出五重、六 重以至更多的衍生產品。頭重腳輕，終致出事，也是常理之中了。問題是這些才俊 哪裡來這個必賺之心？ 先前BBC訪問了一個這樣的才俊，他是唸「理論物理學」（Theoretical Physics） 的，數學了得但對市場供求運作一無所知。他知道的是如何炮製模式，設計形形色 色的金融衍生工具。他說這些模式涉及複雜的方程式 —— 不是一條、兩條以至一 百條方程式，而是八十萬條！一個有八十萬條方程式的模式有多複雜，我想也不敢 想。

與天公比高 然而在華爾街上的金融機構來說，有科學家設計出了這般複雜的模式，而超級電腦 又運算出精準不過的數據，那麼天下萬物 —— 包括必賺的投資 —— 又怎不盡在 掌控之中？掌控一切，那又跟全知全能的上主何異？自負得像毛主席那樣「欲與天 公試比高」，那麼不費吹灰之力不便可以作必賺的投資了嗎？人人都以為懂得必賺 之術，釀出一場金融海嘯也是理所當然的吧。

如何收拾局面？這位華爾街科學家說今後搞金融的該先學點經濟學，認識市場供求 為何物。是的，吃了這麼大的苦頭，怎到你不學得謙卑點？甚至格林斯班、保爾森 不也承認世界複雜，大有他們不認識、不明白的地方。最是不好對付的是，好了瘡 疤忘了痛，雨過天晴、境況好轉，運算能力更強的超級電腦出台，人們便不難再興 「與天公試比高」的歪念了。怎麼辦？怎麼辦？

If you are a macroeconomist, do not read further than this

I have always thought that the issue of the relationship between financial markets and the "real economy" was really deep. I thought that it was a critical part of macroeconomic theory that was poorly developed. But the economics profession for the past thirty years instead focused on producing stochastic calculus porn to satisfy young men's urge for mathematical masturbation.

That is Arnold Kling speaking, more here.

Who's Who?

Two pictures with two guys, one of them is a famous actor and other one is the newly minted Nobel Laureate. Guess who's who?

Paul Krugman on the Subprime Mess

Look, I do not like Krugman and I think there are other economists who deserve more to get that your know what I am referring to prize.

Still, I have got to say that Krugman articulated quite well what triggered the whole subprime mess in this Youtube vid, enjoy!

Economic Downturn + Minimum Wage in HK = What a Deadly Combination

According to the Sunday edition of Ming Pao:

多個勞工團體今早遊行到政府總部，要求政府訂立最低工資及標準工時。

Another story in the same paper, it reported that:

勞工及福利局長張建宗表示，金融危機對勞工市場影響未完全浮現，香港不能倖免，預計年底失業率會上升，但未能確定會否差過SARS時的低位。

Alright, let me get this straight, folks here in HK want minimum wage to be introduced right around the time when the ripple effects of the unfolding financial crisis in the US begin to affect the local economy. Nice timing, indeed, eh? Guess if minimum wage were indeed introduced soon, my sense is that uemployment might surge up to say 7-8 percent or even low double digit number.

Just when HK needs all the flexiblity required for prices to adjust efficiently and effectively to the large negative economic shock originated from the financial crisis, some folks here actually believe that instilling inflexible prices is a good thing for Hong Kong people. Shame on them!

Is Recapitalizing the Banks By the Government the Answer to Restore Confidence in Financial Markets?

The answer is a yes for a growing number of economists according to this WSJ story:

The government's plan to buy equity in financial institutions, announced Friday by Treasury Secretary Henry Paulson, is an idea that many academic economists have championed from the start of the crisis.

Here is more.

However, just days ago also in the WSJ, Gary Becker does not believe taking equity stake in banks by government is a good idea:

One troubling provision is that the government can take an equity stake in banks it helps. Some economists have proposed a similar role for government equity in these banks. I believe it is unwise to give governments equity in private companies, even if the government does not have voting rights in company policies.

Many examples in recent history, such as the current Alitalia fiasco, show that political interests outweigh economic ones when governments have some ownership of private companies. This is likely to happen in this bailout if some banks that are helped decide to sharply cut employment in the districts of some congressmen, or to transfer many jobs overseas.

Read the whole thing here.

The Scariest Sentence I Have Read Today

"When the price of credit-default swaps on some company's bonds gets way too high, people look at that and it affects the stock price, it affects their ability to borrow, it starts to affect their credit rating, and their rating affects the credit-default swap price in turn. It becomes a spiral."

Here' s more.

Bernanke and the Financial Accelerator Model

After the recent two weeks of tumult in the American economy, consumers couldn't be blamed for wishing they had a crystal ball that could help them see into the uncertain future. Will there be a recession? How bad would it be? Should Congress and the White House launch a $700 billion Wall Street rescue mission?

The closest alternative to a crystal ball, in the real world, is a computer model of the economy. Back in the 1980s, one such model was created by none other than Ben Bernanke, who's now at the center of the crisis as the chairman of the Federal Reserve.

That is from a story in NPR covering the financial accelerator model invented by none other than Ben Bernanke and NYU professor Mark Gertler. More here.

Best Line On the Unfolding US Financial Crisis I Have Read Today

Virtually all of the franchise value of Goldman and Morgan is human capital. The folks at these firms are the most innovative product developers and skilled risk managers that the world has ever seen.

---That is from a new blog with rotating contributors from the Columbia Business School, interesting throughout, more here.

Head You Lose, Tails I Win

Do we want to live in a system where profits are private, but losses are socialised?

--- That is a question posed by U of Chicago professor Luigi Zingales on the appropriateness of the Benanke--Paulson rescue package, more here.

As Reagan Would Have It: Government is the Problem

Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves.

Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac.

The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.

--- That is from an excellent oped by professor Charles Calomiris at the Columbia Business School and his coauthor in WSJ, more here.

Amusing Pair of Sentences on the Unfolding Financial Crisis I Have Read Today

--- From Gary Becker

Despite my deep concerns about having so much greater government control over financial transactions, I have reluctantly concluded that substantial intervention was justified to avoid a major short-term collapse of the financial system that could push the world economy into a major depression.

--- From Richard Posner

In effect, the government's power to repair the crisis that Wall Street created has been delegated to Wall Street.

More here.

路人甲, Morris and Randy

九七年秋的一個晚上，獨個兒從華盛頓飛往三藩市面試，飛機上暗黃的燈光散落在我手中捧着的小書，淚水滴在橙黄色的書紙上分外動人。 書的名字叫 Tuesday with Morris.

********

面試成功，九八年回港工作。


********

十年後的一個懶洋洋下午，一口氣把 The Last Lecture 讀完，心情平靜。


*******

是過去十年的生活令我變得麻木、泠漠起來？


*******

To me, reading The Last Lecture reminds me of reading one of those pop self-help books written by Anthony Robbins.

Yes, it is tragic that Randy's life was being cut short by a terrible illness. But I also believe it is a fact that a lot of people, in fact I would venture to guess 90 percent of the people, could not achieve what Randy did achieve in his forty some years in existence. Therefore, some people like myself , may not relate to the feelings, messages and lessons relayed in Randy's book as much as when reading Tuesday with Morris. Guess it's because most of us are ordinary folks. Randy's achievement certainly inpires us, but I doubt many of us could attain his level of achievement even if we try our best to take down those brick walls blocking our way.

**********

Some walls are simply made of steel or concrete. Or may be what I wrote above only reflects my weakness, my lack of determination to achieve life goals. Whatever. Just live your life the way you think best for you.

Harold Demsetz's New Book

The book is due next month. Check out the table of contents here.

Best Line I Have Read Today

Spaghetti is undoubtedly a delicay. But better leave it to the restaurant.

No, it is not about food, it is actually about free trade agreements, read more here.

My Alma Mater Ranks Above U of Southern California

No, no I do not make this up, that is according to the latest ranking of the US News and World Report. See it for yourself here.

假如我是劉先生

Disclaimer: All the following did not happen

At a press conference:


Reporter: What are your feelings now that 1.3 billion are sad that you could not compete the other day?

Mr Liu: You see, I do this stuff because I like it, I enjoy it, not because 1.3 billion people want me to do it. Make this fact clear, will you?

Tomorrow, if I decide to be a marathon runner, that is what I will do, and I won't do what people want me or expect me to do, or even what my country wants me to do, have I made myself crystal clear?

Reporter: Will you compete again in four years?

Will you marry in four years, who knows? And who would plan that far anyway. Again I might decide to compete in the marathon event in 2012.

Reporter: What is your future plan then?

No, I do not have a plan, the government has a plan, the police has a plan, I DON'T.

Next question please...

干預炮製出梁展文案

Thanks to Yeung Wai-hong at the Next Magazine for letting me publish his editorial in the next issue of the magazine here first! Enjoy!

說梁展文一案的癥結是他的「酌情權」，殆無異議。要是沒有「酌情」沽售（或不 沽售）紅灣半島的權力，他又何來輸送利益給新世界發展之嫌？可是「酌情權」這 問題核心又來自哪裡？那無疑是伴隨政府干預市場而來的孿生兄弟了。

政府不插手干預市場則已，一插手則必然賦與主責官僚若干酌情空間，（政策是死 的， 人才是活的；無權酌情，何以推行政策？）從而衍生私相授受的機會。故此 根絕貪污之道不是增加監管規條而是減少干預，否則擴大廉署編制一百倍、一萬倍 仍將歸於徒然。像太史公說的，利字當頭，「刀鋸之誅」又豈嚇得倒「舞文弄法」 之輩？

眾所周知，涉案的紅灣半島是個干預樓市的居屋項目 —— 以低於市價給中下家庭 提供居屋。這更不是一般的居屋，而是有私人發展商參與的計劃（新世界是政府的 拍檔）；故此政府有責任在限期內為發展商提供買家，否則要賠償。

不巧，紅灣半島建成，為了救樓市，董建華先是判了八萬五突然死亡，進而停售居 屋。跟新世界訂定的合同又如何是好？按協議，要麼真金白銀賠償其損失；要麼便 按個公平價格出售紅灣半島給新世界；捨此之外，別無他途。當時梁展文為房屋及 規劃地政局的常任秘書長，率領地政總署、屋宇署及律政署的專家談判出賣物業； 事出突然，無先例可援，你說他的酌情空間又有多大？

事後孔明可能會說這是個不平等協議，然而不可不知者，引入私人發展商建造居 屋，其主旨乃在加快居屋供應以平抑樓價。居屋價格既然由官家訂定，利潤有限； 不加入多重保障，頭腦正常的發展商肯參與嗎？倘若買入紅灣半島新世界真的得享 「暴利」，關鍵是政策反覆，從壓抑樓價一百八十度轉為停售公屋救市，製造了上 下其手的酌情空間。

若然沒有政府干預樓市在先，若然干預沒有在壓抑樓價的洶湧群情下升級，引入私 人發展商參建居屋；若然政策一以貫之，沒有建華之亂炮製的反反覆覆，那麼高官們又何來混水摸魚的空間？
於此可見，要是梁展文確有濫用酌情權之嫌，問題的根源是干預政策不斷升級變 質，製造出愈來愈大私相授受的灰色地帶。不從減少（甚至廢除）干預市場入手對 付貪污，一味增加監管，疊床架屋，重重監管那又伊于胡底？

事實亦然。香港不是有個威名遠播、專門對付貪污的廉政公署嗎？爆發這般觸發公 眾關注的大案，廉政公署至今不吭一聲，難道我們的貪污??星沒有絲毫角色？再 者，防止貪污是廉署的主要職責之一。干預升級、政策反覆炮製出偌大的酌情貪污 空間，敢問廉署又可有治亂於源，從減少干預入手積極預防貪污？

尸位素餐，嚴格而言可能算不上是貪污，然而食公眾之祿而葬送公眾利益，那又與 貪污何異？

Best Conclusion I Have So Far Today

And doesn't the fact that Hong Kong's made it this far without antitrust give you a moment's pause about the domestic benefits of these laws?

More here.

Best Line I Have Read Today

But the success of other nations should not be taken per se an indication that America is in decline.

That is Gary Becker talking, more here.

Needless to say I am in agreement with Becker on this one. That's why I do not subscribe to any of the views about Hong Kong being marginalized as China continues to grow or Hong Kong will be overtaken by Shanghai or other major cities in China very soon bla, bla, bla........

Now this is progress

According to a story reported in China's Caijing magazine, a tax firm (let's call it firm A) in the coastal Zhejiang province has filed a complaint to the court that a local government has violated the newly implemented antitrust law.

According to the story, firm A complains that another tax firm (let's call it B) has been allowed to have an office at the local government building while similar demand from firm A is denied. Apparently firm B has close government ties with the local government. Hence, the complaint. It will be very interesting to see how the court rules in this case. Stay tuned for more reporting on the case.

Here is the story, sorry folks in simplified Chinese only.

Now even if the mainland's antitrust law does allow cases against the government (some other jurisdictions as well like Australia), one wonders why in HK government's consultation paper on competition law, the government is exempted from the law.

Books I Plan On Getting

1. The Price of Everything: A Parable of Possibility and Prosperity The author Russ Roberts was a former student of Milton Friedman and the author of earlier economic novels like the Invisible Heart and the Choice.

2. Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit. Author Ed Browning is an expert in public finance.

3. The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It. No, this is not simply another I told you so kind of book, it is by Bob Shiller, who wrote the Irrational Exuberance a couple of years back.

4. The Best Book on the Market: How to stop worrying and love the free economy by E Butler.

5. Fixing Global Finance by Martin Wolf, the FT columnist.

6. Morals and Markets: An Evolutionary Account of the Modern World by Dan Friedman.

My friend Ming talked about his disappointment of the annual book fair in Hong Kong here. In general I am in total agreement with him. But this year it is a bit different, I got Milton Friedman and Anna Schwartz's A Monetary History of the United States for HK$ 30. And the book is in EXCELLENT CONDITION.

The apparent missing of prestigious mainland publishers is what really upsets me at the bookfairs in recent years.

And also Ming, I do not know you are interested in learning more about economic history, otherwise I would recommend David Lande's Weath and Poverty of Nations, Eric Jones' European Miracle , Ken Pomeranz's the Great Divergence, Jared Diamond's Guns, Germs and Steel and Greg Clark's Farewell to Alms.

Oh My Go......

Three in every four Catholics agree on the need for a minimum wage law, according to a survey by the Hong Kong Catholic Commission For Labour Affairs...

So reported in today's edition of the HK Standard, more here.

If people are so eager to help out, here is a suggestion, how about setting the minimum wage at say HK$ 10,000 and and ask those staunch supporters of minimum wage to pay a special fee to top up the wages of workers who qualify for the minimum wage (the rate of the fee can say vary according to different income levels). My bet is the proportion of minimum wage supporters will drop dramatically if the fee were to be imposed.

Afterall spending other people's money (employer's) to do good is not quite the same as spending one's own eh?

Randy Pausch 1960 --2008

Professor Randy Pasuch passed away...here is more from ABC, and here from his colleague at UVA.

My condolences to his family.

Marty

David Warsh has written an extremely lucid review of Marty Feldstein as head of the NBER. More here.

Web 2.0 Is this It?

I have heard a lot about Web 2.0 of late and its business potential. I have no clue what it is though. But if the Web 2.0 business model can bring more stuff like this vid, hey, I am totally for it.

This short video is pretty amusing. I, for one, is sick and tired of all campagin stuff ahead of HK's September Legislative Council election. So please sit down, relax, and watch this vid, enjoy!




HT to Division of Labor for the pointer!

林行止、香港、會計師

「香港怪現象之最是會計師經常評論政經事務，此為世界所無的香港畸態。」

The above line appears in Mr Lam's column today. Right on. More here.

Me

Recently I was invited by L, my former colleague who is now working for Hong Kong Economic Journal, to contribute a piece to his paper commemorating the paper's 35 anniversary.

A few people have missed it when it was published last week and asked me to reprint here. I am not so sure because of my concern about copyright issues.

Now the problem is finally resolved because one can read it for free online, and the link is here.

Bogus Economics

A guy wrote in today's (23 July) Hong Kong Economic Journal making a case for the minimum wage:

第二、客觀來說，低技術勞務市場並不存在刻意的價格操控情況。但在現今互聯網的年代，僱主所擁有的似乎是完全的市場資訊，當某個僱主了解到其他僱主願意付出的工資價格後，他是沒有誘因去把工資無故提高的。

If a worker can produce 10 dollars worth of stuff, and the worker is currently paid nine dollars. (Let's put aside the question of why the worker gets paid less than his or her contribution for argument's sake). Comes another employer, turn on his computer, check out his competitor's offer to workers, and discovers an opportunity to make profit (by paying a bit more than nine dollars this empolyer in question can bid away that worker who can produce stuff worth ten bucks and the employer in question can pocket a bit less than a dollar difference as profits). My guess is , TEN OUT OF TEN EMPLOYERS would do what they can to lure that worker to work them and in the process bids up the wage of the worker to ten bucks, his or her productivity.

Other parts of his piece are equally silly and it is not worth my time to comment on it.

Probably only the writer of the piece would not do something when he sees that kind of profit opportunity, but then again he is not a boss, otherwise he would not have that kind of time to write such silly article anyway.

Coase on China

Below is the introduction Ronald Coase delivered at the beginning of the China conference which we have talked about here before. Thanks to Linda, Professor Steven Cheung's wife, for kindly providing me with a copy of the introduction and granting me permission to reproduce it here:

China’s Economic Transformation

Ronald Coase

July 14, 2008

I now have the very pleasant task of welcoming you to this Conference on China’s Economic Transformation. When Steven Cheung wrote in 1982 his pamphlet for the Institute of Economic Affairs in London on the question “Will China go capitalist?” a question that he answered in the affirmative, I was one of the few people who agreed with him.

But I thought in terms of 100 or 200 years, not 25 or 30 years. What happened in China was a complete surprise to me, its scale, its character and speed – which means that I did not understand what was going on. I therefore determined to hold a conference that would uncover the facts about this extraordinary series of events. We sought out those best able to inform us, academics, businessmen, government officials, about the facts about what happened. I think we succeeded. We have a series of fine papers that greatly enlighten us about what has happened in the years since 1978. As we intent to publish an edited version of these papers (and of the discussions) in a book, they will inform a much wider audience.

Of course, although we will learn a great deal about what happened, it is not to be expected, although some things will be made clear, that there will be complete agreement in the views expressed – nor is it desirable that there should be. A subject in which everyone says the same thing is a dead subject and one which will not progress.

Competition in the market for ideas is as valuable as in the market for goods. The truth is found as a result of the clash of ideas. And it will be so at this conference.
Our first paper by Steven Cheung will be delivered by him on DVD. It is long (about 2 hours) and I decided to divide it into two parts, each about an hour in length with an interval with refreshments in between.

Unfortunately, one of our important discussants, Professor Mundell, will not be able to attend on the first day but will give his views on Tuesday morning. I should explain here that while I speak as though I organized this conference, in fact all I did was to have the idea that such a conference would be a good thing. The actual organization of the conference was carried out by Ning Wang, assisted more recently by Lennon Choy and Marjorie Holme. I have been largely a spectator and admirer of their work. I should also say that, approaching 98 years of age later this year, I get extremely tired and almost certainly will not be able to attend all the sessions. But those who present papers at sessions I do not attend should realize that my absence is in no sense of judgment on the worth of their papers.

I now turn to Steven Cheung’s talk. I came to know Steven when he came to Chicago from UCLA in 1967 on a fellowship and was later in 1968 appointed an assistant professor. I don’t remember how we met. But when we did, we formed an immediate bond and we had the most enjoyable and productive talks together.

Unfortunately for Chicago, he decided to leave Chicago and go to the University of Washington where he had as colleagues Douglass North and Yoram Barzel. However, our relationship did not end and Steve wrote a series of splendid articles published in the Journal of Law and Economics of which I was editor. Then, in 1980, Steve received an offer from the University of Hong Kong. I urged him to accept. I thought it would be a fine place to observe what was happening in China. Just how valuable it would be I did not then realize. But you will learn from his talk what he has gained from his close observation of events in China over the years. I won’t hold up this really important talk any longer. So here we have Steven Cheung speaking on China’s Economic Transformation.

PS. Kempton, sorry for not posting this piece on the Free Lunch with Steven Cheung site, as I lost the email you sent teaching me how to post stuff on that. Would you mind helping me to upload this post over there as well. Thanks a lot!

話家常

相識二載的 D 那天對我說，小時窮，買不起汽水；到今天四十多歲負擔得起， 卻出於健康理由很少喝 。

******************************

I know D back in my college days. Those were good times to say the least. We both were and still are deeply influenced by Professor Steven N S Cheung's works.

Funny thing is, we were not aware of each other's existence until one day, out of the blue, we bumped into each other in the elevator on our way to attend Professor Cheung's lecture. And I have to remind you as well that we were not students of HKU. We missed our classes just so we could attend Professor Cheung's lectures.


*****************************

My co-blogger Wayne Winegarden is coming to town (HK) next week, I am really looking forward to seeing him. Last time I saw Wayne was back in 2001 when he was working for Philip Morris. I was Wayne's roommate for a couple of years and did our Ph.D. thesis under the supervision of the same professor. I will take a day off work to spend time with my best buddy and his family.

So you want to know more about the Subprime mess?

This first legi volume on the Subprime mess has essays written by a very strong lineup of economists including Charles W. Calomiris, Mike Bordo, Guido Tabellini, Carmen Reinhart...

Even better is the fact that it's FREE, download it here.

Best Indicator of China's Economic Growth. No, it's Not GDP

No, no, no, definitely not GDP figures as a lot of pundits like to charge them as not reliable and cooked.

What is a better, more reliable indicator then? One that the government would find it hard to tinker with.

I think I have found one, the number of obese men in China.

According to a study done by researcher up at U of North Carolina, "more than 25% of adults in the country are overweight or obese and that the number could double over the next 20 years.

The report, based on data collected from 20,000 patients in China over the past 15 years, says obesity has increased 1.2% a year among men in that time -- higher than the rate for adult men in the U.S., U.K. and Australia."

According to Professor Barry Popkin, the reason for such hefty growth in the number of obese people has nothing to do with increased consumption of fast food or other Western foods in China.

Rather, improving living standards mean that growing numbers of Chinese can now afford vegetable oil, beef and dairy-food sources that until recently had been too costly.

The study is reported in this WSJ story.

The Man Who Started It All

Coase, Chicago and China Conference

The conference organized by R. Coase on China is forthcoming in mid-July.

Stars who will attend include Coase, Bob Mundell, Doug North, Bob Fogel, Janet Landa and Gordon Tullock. You can access the conference's program here. Enjoy!

And yes, Professor Steven N S Cheung's paper would be the first paper to be presented at the conference, and discussants are Bob Fogel and Bob Mundell.

比爾蓋茲 (Bill Gates) 與‘創新’資本主義

早前比爾蓋茲的‘創新’資本主義 (Creative Capitalism) 演說引起媒體的廣泛報導。

多位著名經濟學者近日在一博客討論這‘創新’資本主義的可行性, 包括有 Gary Becker, Bill Easterly, Dick Posner, Greg Clark...等，大都對這嶄新理念有所保留。

Read more here. All posts deserve a close read, and yes, even if you do not fully agree with their authors' views.

Anti-Commons

A good friend of mine Ming is curious about the term anti-commons. The term actually was coined back in 1998 by Columbia Law School professor Michael Heller in a Harvard Law Review piece, some simple description of the concept could be found here.

Two years later, Jim Buchanan and his colleague wrote a piece in Journal of Law and Economics elaborating on the idea. The abstract for the piece is reproduced below:

An anticommons problem arises when there exist multiple rights to exclude. In a lengthy law review paper, Michael A. Heller has examined "The Tragedy of the Anticommons," especially in regard to disappointing experiences in efforts to shift from socialist to market institutions in Russia. In an early footnote, Heller suggests that a formal economic model of the anticommons has not been developed. This paper responds to Heller's challenge. We analyze the anticommons problem in which resources are inefficiently underutilized rather than overutilized as in the familiar commons setting. The two problems are shown to be symetrical in several respects. We present an algebraic and geometric illustration and extend the discussion to several applications. More importantly, we suggest that the construction is helpful in understanding the sources of major value wastage in modern regulatory bureaucracy.

Interesting Links

1. A new book by free trade guru Jagdish Bhagwati.

2. A new book on anti-commons.

3. Jim Buchanan on Rawls.

4. An interesting piece on Mises and Schumpeter.

5. A new economics novel by Cafe Hayek's Russ Roberts.

Government Policy Should Not Bias Towards Homeownership

No, the line above does not come from some free market economists, it is a line I've got from Paul Krugman's latest column in NYT.

I can't remember when is the last time I acutally agree with stuff written by Krugman, this is certainly one of those rare occasions. More here.

"Anybody who can claim that Milton was not one of the major thinkers of his time is crazy"

That is Columbia University Free Trade Guru talking.

Here is the source. And Professor Jagdish Bhagwati is criticizing those U of Chicago professors (you hear me right, U of Chicago professors) who oppose the establishment of an Institute in Milton Friedman's honor.

HT to Truth on the Market for the pointer.

支持凌尉雲再戰立會

I really think Miss Ling should run in the forthcoming Legislative Council election and on the platform of free market principles.

No minimum wage, no maximum working hours, no more favours to selective interest groups like scrapping taxes on diesel which meets the Euro V standard, slash taxes, oppose the buidling of the West Kowloon Cultural Hub (instead the money saved is given to each and every Hong Kong resident through the form of cultural activities coupon and let them decide what kind of art activities they would like to enjoy, guess it is too late now), reduce the wages of civil servants, slashing the number of civil servants, balanced budget amendment to the Basic Law, distributing the cumulative surplus now piled up at the HK Monetary Authority back to where it belongs, ordinary folks, people like you and me, in Hong Kong a la Macau style on a per head basis...

Stupidity Hurts, Stupidity in Economics Hurts Even More

Fuel Price Concern Transportation Joint Conference spokesman Stanley Chiang Chi-wai asked:

"If Hong Kong has a monetary authority to maintain currency stability, why can't it set up something similar to regulate the price of diesel and petrol?"

More here.

Yeah, Stanley, while you are at it, why don't we set up a body to regulate food prices (they are in the rise, aren't they?), rents (they too go up a lot as well?)...or what about we simply prohibit any price increase ? Wouldn't that be better?

What about your wage Mr Chiang, guess it has been rising huh? Should the government also set up a body to cap the wages in your sector as well? !

Free Trade Nation: China

The link is here.

Results Are In, Music Please

From the April issue of Southern Economic Journal:

According to this study, GMU Econ now ranks 41 OVERALL among programs in the U.S.

GMU is just behind #40 UNC-Chapel Hill, and above highly regarded programs such as Univ. of Washington (45), Texas A&M (49), Florida State (52), GW (54), U. Pittsburgh (59), Washington University (69), Emory (71), UC-Irvine (72) and VA Tech (75), and West Virginia (104).

More here. HT to Austrian Economists for the pointer.

GMU, of course, stands for George Mason University, my Alma Mater.

Gary Becker Meets Behavioral Economics

Yes, I suspect that psychology might have some potential use in economics (frankly, I have only read one book on behavioral economics, though I plan to also read Nudge and Sway).

But I am also puzzled by how behavioral economists would respond to Gary Becker's 1962 piece Irrational Behavior and Economic Theory, appeared in Journal of Political Economy, the purpose of which, in Becker's own words is to "show how the important theorems of modern economics result from a general principle which not only includes rational behavior and survivor arguments as special cases, but also much irrational behavior." (my emphasis).

Behavioral Economics = Freudian Pyschology ?

"Self-help books are among the hottest sales items in your favorite book store, right after Gothic novels and cookbooks. Many people are dissatisfied with their lives and don't quite know why. Self-help interpretations claim they offer helpful psychological insight, but do they? Freud gave us the quite valuable notions of id, ego, and superego, but also the quack notions of penis envy and oedipal complex. Later generations of self-help pop psychologists turned Freud into a cash cow of dangeriously overused but highly fashionable slogans, such as psychosomatic illness, inferiority complex, repressed memory, childhood trauma, and hysterical conversion syndrome.

Freudian psychology is just about dead in the self-help arena, but now we have a new contender for leader of the pop psychology: behavioral economics. (My emphasis) Ariely's is one of several new books that take the experimental results of the past quarter century and turn them into self-help. The main message is that we are irrational, but if we understand and correct for this, we can overcome our irrationality and improve our lives. "We are pawns in a game whose forces we largely fail to comprehend," says Ariely. "Although irrationality is commonplace," he continues, "it does not necessarily mean that we are helpless. Once we understand when and where we may make erroneous decisions, we can try to be vigilant." (p. 243)

Like Freudian psychology, behavioral economics gives us a few critically important insights, including hyperbolic discounting, excessive pattern-finding, loss aversion, status quo bias, and innate altruistic cooperation and punishment. However, just as Freud was mostly wrong (and therapeutically a high-maintenance disaster), so is behavioral economics, although I doubt that people will be paying $200 per hour to sit on a couch with a behavioral economics therapist."

That is H Gintis reviewing the book Predictably Irrational, more here (scroll down a bit and you will see it). Strangely enough , soon after writing this review, the same Gintis has a five-star review on the book Nudge by Thaler and Sunstein, also on behavioral economics.

Best Line on Government I Have Read Today

When demanding assistance from the state people forget that it is a demand upon the other citizens merely passed on through the government, but believe they are making a demand upon a sort of Fourth Dimension which is supposed to be able to supply the wants of all and sundry to their hearts' content without any individual person havnig to bear the burden.

Wilhelm Ropke cited in Jim Buchanan (2007) p. 136.

Man of the Street is Better Politician than Intellectual

As a general rule states are better governed by the man in the street than by intellectuals. These are the sort of people who want to appear wiser than the laws, who want to get their own way in every general discussion, because they feel that they cannot show off their intelligence in matters of greater importance, and who, as a result, very often bring ruin on their country. But the other kind -- the people who are not so confident in their own intelligence -- are prepared to admit that the laws are wiser than they are...

Thucydides cited in Jim Buchanan (2007) p. 132

天譴論 -- An Economic Exploration

天譴論最近在報刋鬧得火紅。

From my very limited understanding (for all those who know the theory better than I do, educate me please), the theory goes something like this:

Let A be God, B be the secular ruler, and C be the ruled.

The theory suggests, again my understanding might be incorrect here, that when B performs poorly, there will come a point where A will do something nasty, NOT to B, but to C instead as a signal of A's indignation towards B's acts. That is, the bad things happening to C serve as a red flag for B in the hope that B will cut back on his harmful acts targted at C.

But the question is, why B will do less of the bad acts when some of the costs of his bad actions are not borne by B himself or hershelf but shifted to C instead?

Hayekian Insights on Development

Bill Easterly at NYU and Arvind Subramanian at the Center for Global Development debated Hayek's relevance on economic growth and development here.

A Scholar's Act

Chicago's Emily Oster revises her thesis on the impact of hepatitis B on China's sex ratio. More here in this WSJ story.

共鳴

我相信每一顆生命都有其莊嚴的價值。

人，不是用來實現上帝旨意的工具，更遑論成為上帝譴責、懲罰另外一些人、一個政權的一堆籌碼。

That's Ivan Choi talking, replying to an earlier editorial in Apple Daily. More here in Ming Pao.

旗正下半 -- 楊懷康

感謝楊社長懷康讓讀者先睹其將在本週三刋出的專欄。

國務院為五一二四川大地震死難者下半旗三天，前所未有地把全世界的中國人凝聚 在一起。隨五星旗半下，希望的曙光在一片哀鴻中默默升起，照耀出開放、現代 、以人為本的新中國。倘若大災難能換來一個不再為天災人禍蹂躪的新中國，數以萬計的災民便沒有白白犧牲了。

○八既是改革開放三十年，亦是北京奧運年。這本來是標誌百年盛世、中國人站 起來的時刻。可是自年初以來一趟又一趟的天災（春運遇上雪雨）、人禍（山東火車超速出軌、西藏動亂），再加上世紀大地震，則又刻畫出中國人還有多遙遠的路 要走才到達那將安、將樂的小康社會。

中國人民無疑多災多難，當中又以人禍為甚。可幸吸取了文革十年浩劫的慘痛教訓，在三十年前執權者開始一步步為人民鬆綁，釋放出前所未有的生機，改變了河山面貌。經過百年苦難，中國人看到了明天、看到了希望。

然而開放鬆綁的道路是迂迴的。在十九年前的另一個春夏之交，天安門的坦克也將全世界的中國人在悲痛中凝聚了起來。血染的風采可沒有撲滅中國人的希望，拐過 一個小彎，執權者繼續開放向前行。經過廿年的持續發展，哪怕開放之路不是一遍坦途，十三億中國人的生活還是登上了個全新的台階。

是的，過去的三十年是邁向小康的三十年，也是執權者學習開放的三十年。痛定思痛，他們顯然學好了最寶貴的一課 —— 極權鎮壓是萬劫不復的不歸路，只有全面 開放、跟世界併軌，才是富強之路，才是中國的明天。

學好了這最寶貴的開放一課，大地震後，北京執權者沒有像緬甸的獨夫那樣閉關鎖國，置人民的死活於不顧。反之，他們放下由自卑感扭曲而成的面子，接受全世界的關懷與支援，更又敞開資訊新聞的大門，讓全世界感受分擔中國人的傷痛。泱泱大國，具體而微了。

這般坦蕩蕩的開放無疑是自信的體現了。開放三十年，中國確是創造出了無比的成 績，那是值得所有中國人 —— 及執權者 —— 引以為驕傲的。這個從開放中建立起來的自信，顯然更讓執權者再不懼怕面對人民的傷痛，讓他們敢於降下權力的象徵，為人民的災劫下半旗。

是的，是時候拿出自信來跟人民和解，為六四死難者、為文革浩劫、為歷盡苦難的 中國人民下半旗致哀了！是時候讓中國人民告別苦難、不再哭泣了！

Axel Leijonhufvud on New Keynesian Macroeconomics

Axel lamented:

New Keynesians adhere on the whole to the same DSGE modeling technology as RBC macroeconomists but differ in the extent to which they emphasise inflexibilities of prices or other contract terms as sources of short-term adjustment problems in the economy. Except for this stress on inflexibilities this brand of contemporary macroeconomic theory has basically nothing Keynesian about it. (my emphasis)...

The obvious objection to this kind of return to an earlier way of thinking about macroeconomic problems is that the major problems that have had to be confronted in the last twenty or so years have originated in the financial markets - and prices in those markets are anything
but inflexible.

This bit is even better:

But there is also a general theoretical problem that has been festering for decades with very little in the way of attempts to tackle it. Economists talk freely about inflexible or rigid prices all the time, despite the fact that we do not have a shred of theory that could provide criteria for judging whether a particular price is more or less flexible than appropriate to the proper functioning of the larger system. (my emphasis)

Read the whole thing here.

BTW, Axel was at UCLA and one of Professor Steven N S Cheung's colleague.

More Than A Name

他/她們是孩子的父親母親，別人的兒子女兒，外甥的舅父母，姪兒的叔父母...他/她也有自己的名字。

A Moment of Silence

A Moment of Silence, from NYT.

来生我们一起走

孩子快抓紧妈妈的手

去天堂的路太黑了, 妈妈怕你碰了头, 快抓紧妈妈的手

让妈妈陪你走, 妈妈怕天堂的路太黑, 我看不见你的手。

自从倒塌的墙把阳光夺走, 我再也看不见你柔情的眸。

孩子你走吧。 前面的路再也没有忧愁，没有读不完的课本和爸爸的拳头。

你要记住我和爸爸的模样，来生还要一起走。

妈妈, 别担忧，天堂的路有些挤, 有很多同学朋友。

我们说不哭, 哪一个人的妈妈都是我们的妈妈; 哪一个孩子都是妈妈的孩子。

没有我的日子你把爱给活的孩子吧。

妈妈, 你别哭, 泪光照亮不了我们的路, 让我们自己慢慢地走。　妈妈, 我会记住你和爸爸的模样, 记住我们的约定来生一起走。

Source: Nanfang Daily

希望在人間

Best Line I Have Read Today

[G]etting fired can turn out to be a promotion.

From a review of a book on Pixar here in WSJ.

Rocket Scientists on Bubble

The WSJ has an excellent story on three financial economists, all at Princeton and hired by then Department chair Ben Bernanke, who have their research focus on the causes of bubbles. And yes, Hayek is cited. Enjoy it here.

Yeung Wai Hong Weighs in on HK's Proposed Competition Law Part 2

HT once again to Yeung Wai-hong for sharing his thoughts on HK's proposed competition law before they appear in print. Enjoy.

競爭法：濫權的利器

在堆填區出入，十又有一年矣。年來經常性開支之一，是補車胎。警力無疑嚴重過 剩，鐵馬們對來往堆填區的垃圾車、泥頭車沿途灑垃圾污水，丟垃圾、泥頭石塊、 玻璃鐵釘則似乎採取完全放任政策；由是之故，一頭半個月我那四個轆不是給碎玻 璃便是鐵釘拮穿。那天去補胎，赫然有發現。

發現些什麼？補胎鋪掛起過了膠的補胎價目表，的士多少、貨車多少、私家車又是 多少，總共有十幾項之多。各位，這些價目不是個別補胎鋪自己開出的價錢，而是 一個什麼香港膠輪胎公會訂的「公價」，既不可以少收，多取亦不成。我不知道公 會如何處置違規的胎鋪，憑我豐富的補胎經驗告訴大家，無論在香港那個角落，胎 鋪都是按公價收費的，足見公會規限管制價格有法也。

協議定價觸目皆是 我不知道膠輪胎公會這個「公價」是怎樣定出來的，然而不同地點、規模的胎鋪 （大都一同經銷輪胎、電池、車牌等），成本皮費大有不同，卻又劃一收費，那又 何來競爭可言？一旦通過競爭法，這個公價便不難給環頭環尾的胎鋪帶來麻煩，令 他們成為打擊懲治對象了。
按公價收費的當又止於補胎費而已，中文報紙亦然。此外，以我所知，在建築、裝 修業，從紮鐵到泥水等工種亦莫不是以「公價」計酬的。這些行業將來的命運又如何？

油站泵價劃一是「自然迸發」的結果，而不是像補胎或報販那樣，有個公會發施號 令一致行動的。故此協議夾價削弱競爭的嫌疑理應較少，他們可還是逃不過給消委 會拿來作練靶的厄運。若然消委會諸君像鄙人那樣是補胎鋪常客，他們又會對付其 協議定價否？以小人之心度之，相信不會。說到底，對付環頭環尾的胎鋪又豈及打 擊國際石油公司那麼威猛？

證諸報販們新近要求加報價 —— 加兩元至每份八元 —— 遇上的滑鐵盧可見（不 消兩三天便揠旗息鼓撤回要求），協議定價跟是否面對競爭顯然是兩碼子事。成功 將報價劃一並不表示報販們便有「壟斷」市場、壓搾消費者謀取暴利的本事 —— 除了便利店削報價競爭，報販更為免費報紙及網上報紙蠶食客路。只消稍為睜開眼 睛看看現實世界，誓要實行競爭法的干預主義者則不難知道，協議定價實為正常不 過的市場運作，不是什麼十惡不赦的罪行。

到處皆為「強大市場力量」 若然協議定價不便等於「反競爭」或「削弱競爭」，那麼像競爭法及其衍生的衙門 —— 競爭事務委員會 —— 又還有什麼作為可言？這個大家可又不用替執權者擔 心。諮詢文件說這個新衙門將按市場的「實質效果」來檢定是否有壟斷的「濫用行 為」。這些「實質效果」是什麼？官家說一個供應商只消佔了四成以上的市場，便 將被視為「強大市場力量」；不管這個力量是透過協議定價還是巧取豪奪建立起來 的，有這般「實質效果」便足以構成展開調查的「濫用行為」了。

若然競爭法真的像諮詢文件所言以四成市場佔有率為調查與否的分水嶺，那麼一開 張新衙門便可能會忙得不可開交了：香港近兩萬部的士差不多無一不是豐田皇冠、 大家朝夕打交道的自動櫃員機則清一色是NCR產品、九成五以上的電腦都是由微軟 來提供運作平台的。還有，香港無疑有三間發鈔銀行，所有銀紙都來自大埔工業?? 那間印鈔公司。到處「強大市場力量」，新衙門又怎閒得下來？
條文含混打擊經濟 「實質效果」無疑顯示到處都是壟斷的「濫用行為」，在競爭法下，調查與否，制 動權將完全操在官家手裡。諮詢文件是這樣說的：
我們需要強調，企業規模的大小或純粹擁有強大市場力量本身不會成為企業受查的 原因。委員會須有理由相信企業的行為具有嚴重削弱競爭的目的或效果，才可展開 正式調查。這樣應可減低「過分規管」的危險。（諮詢文件第三章第十三段）

俗語有云，不怕官最怕管；執權的愈是叫你不必害怕「過分規管」，你理應愈是要 提防啊！而競爭法衙門那個既主觀又武斷的制動權又確又令人不由不心憂：怎麼樣 才可以叫他們「有理由相信」要調查？怎麼樣才可以教他們「有理由相信」毋須調 查？須知法治的可貴之處，是法律條文明確清晰，讓大家有法可依。這就像在時速 以五十公里為限的路面，哪怕到處鐵馬，只要沒有超速，你便不用擔心要吃官司 了。

競爭法可不是這麼一回事了。你的車速無疑剛好是五十公里，可是為官的「有理由 相信」你有超速的「目的」—— 直路在望，而你作態加油 —— 那便可以調查你 一下了。反之，你的車速儘管高達七十公里，可是為官的「有理由相信」你的目的 不是超速（榮智健便在庭上說過他車子的隔音、避震特佳，他感受不到超速了五、 六十公里），那麼你也不用擔心吃官司。

高懸頭頂的利刀 調查與否純憑為官的主觀判斷是不是「有理由相信」「有嚴重削弱競爭的目的或效 果」，這個含混不清的條文又豈不成為梁愛詩口中懸於每個人頭頂的一口利刀？時 刻提心吊膽會否被查，那又還做得成生意嗎？ 不過，這個任意執法（或不執法）的權力亦非競爭法最要命的地方；更可怕的，是 擁有這個權力的人既非司法體系的法官，亦非經選舉產生、要向選民負責的政治人 物，而將全由行政長官來委任 —— 故此他們只是向特首負責。了無制衡，那又何 來保障這個新衙門不至淪為排斥甚至逼害異己或政治酬庸的工具？說到底這是個標 榜親疏有別的政府啊！

更有甚者，這個獨立王國更將擁有豁免權力，可以酌情讓輪胎公會或報販協會等組 織明目張膽協議定價而不被制裁 —— 條件是證明這樣的協議「產生的經濟效益大 於對競爭造成的損害，或能達致其他重要社會或公共政策目標」（諮詢文件第七 章）

製造貪污機會 莫說什麼叫經濟效益或損害從來都不好界定，哪怕界定得來亦不易客觀地量度，作 出比較。至於什麼叫「社會或公共政策目標」，也就更加抽象了。如斯一來，豁免 與否，那個官字便端的要多少個口可以有多少個口了。準則含混，形同賦予執權者 上下其手的空間，那也就是貪污吃黑的機會了。

就算執權者像包公般秉正不阿，這個既主觀而又武斷的豁免權實無異於經濟學家、 政治學家及律師們的長期飯票。試想想，要證明協議夾價有理，那要聘用多少這種 那種專家作這個那個經濟、政治研究，然而再又找律師籌組其事，向衙門「據理力 爭」？橫看側望，這都將是一場對整體經濟毫無裨益的「零和遊戲」—— 專家、 律師們的收益是商界的開支成本，捨此之外，沒有別的人得到絲毫好處。這又是促 進經濟效益之道嗎？

專業人士、大律師將是競爭法的大贏家。以此為骨幹的公民黨要推行競爭法，不難 理解。可是以草根為取向的民建聯也幫腔支持其事，那可便教人莫名其妙了。他們 可以撈到什麼油水？莫非黨性比人強，凡是助長統治權勢的，他們都必然支持？

動容

四川災劫後，有人先想到如何發災難財，有人馬上施以援手，人力上的和物資上的。 人性的惡和善在同一刻展現。

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作為父親的我，看到失去孩子的父母所流露出的悲痛，感同身受，心如刀割。 May they rest in peace.

To the Point 一語中的

據稱因天氣惡劣，解放軍中的精銳部隊空降兵在四川的救援行動受阻延，温總對部隊說：

我就一句話，是人民在養你們，你們自己看着辦。

Yeung Wai Hong on Competition Law

Again thanks to the generosity of Yeung Wai-hong, we have the priviledge to publish his forthcoming commentary on competition law to appear in the next issue of the Next Magazine. Enjoy!

競爭法要內置「落日條款」

政府決意在本立法年度通過競爭法。主要政黨從保皇的民建聯，到將會從這個法例 引發的訴訟獲利的法律界人士為骨幹的公民黨皆表態支持；大勢所趨，立法殆成定 論。這般全面干預市場運作 —— 競爭法是跨行業的，並非像電訊條例那樣只針對 一個行業 —— 是否香港之福又作別論。 香港開埠一個多世紀都沒有競爭法，那既無礙經濟的持續繁榮發展，更無損一致公 認的「舉世最自由經濟體」的地位。西諺有云：「既無破損，何苦修補？」（If it ain't broke, why fix it?）

官家強調，差不多所有國家，從始作俑者的美國，還處於資本主義初級階段的中 國，到一直以香港為假想敵的新加坡都有競爭法，要躋身世界先進之列，香港又豈 可無此法？年前政府要開徵「商品及服務稅」（GST），道理之一，亦是這般「年 晚煎堆、人有我有」的謬論。立法與否，取決因素，又豈不是有沒有這個需要？立 法是否切合香港的現實？ 香港不需要競爭法的道理簡單不過：有這般法例的國家和地區，誰有香港般的驕人 經濟成就？誰又能年復一年給這個基金、那個組織評為「舉世最自由經濟體」？這 些國家倒轉頭來向我們學習，取消競爭法還來不及，我們怎麼竟自毀長城干預起市 場來？

不管官家如何好話說盡，保證競爭法條文會防止瑣碎、無謂的訴訟，不辯的事實是 在這法例下成立的「競爭事務委員會」將有權調查所謂「強大市場力量」（政府界 定為40%的市場佔有率）及別的「反競爭」行為，進而有審裁、懲罰這些行為的權 力，也就是增加干預了。要應付調查以至起訴，又豈能沒有法律界人士支援？ 什麼叫競爭？什麼叫「反競爭」或「削弱競爭」？都沒有個客觀的準則 —— 若然 像官家說的，40%市場佔有率為「強大市場力量」，39.9%又如何？在那裡設個界線 、調查與否、起不起訴又豈無武斷成分？既為武斷，委員會的決定也就不一定是公 平、公開、為人接受的了。委員會成員皆由特首委任，而又取向武斷，那又能不令 人擔心這個衙門早晚淪為政治迫害的工具？

由是之故，競爭法應該內置落日條款（sunset provison），以免不管有沒有需 要，這個衙門也膨脹擴張下去。譬如訂明一旦被揭發淪為政治工具，委員會便馬上 解散。此外，倘若時間證明香港市場充滿競爭，譬如持續三年沒有發現任何反競爭 或削弱競爭行為；又或者所謂的反競爭行為根本無傷大雅，譬如牽涉的活動少於經 濟產值（GDP）的1%，委員會亦應自動解散。 經驗證明香港不需要競爭法，若然官家誓死趕時髦，不打緊，就在法例中列出落日 條款 —— 一旦事實驗證沒有這個需要，就給這個衙門來個了斷，免得行政機關多 一個濫權干預的利器！

Books, More Books and I Have Started Reading Some of Them

1) I got this at a bookstore in Central, Hong Kong last weekend, although Amazon said it has not been published. I have just finished reading the first chapter and have begun the 2nd, so far so good and it actually cites Armen Alchian in the first chapter. The author is a physics professor at Caltech.

2) A Splendid Exchange: How Trade Shaped the World.

3) Harry G Johnson: A Life In Economics. And yes, he was the guy where legend has it that he could finish writing a paper during a plane ride over the Atlantic (he held position both at LSE and Chicago). Rumour has it that George Stigler once responded to the question why he did not get as many published papers as Johnson, the guy down the hall, and George's answer was: Yeah but mine are different.

4) The latest edition of Peter Kennedy, an excellent, indispensable reference on the concepts behind econometrics for dummy like me.

Books on Antitrust

A good friend of mine, Ming, asked me to recommend a couple of books on the topic of Antitrust. Here's my list:

For Antitrust Law in General

1) Dick Ponser, Antitrust Law, 2nd edition, U of Chicago Press.

2) Herbert Hovenkamp, The Antitrust Enterprise: Principle and Execution, Harvard U Press.

3) Bob Bork, The Antitrust Paradox, Free Press. A bit dated, but still the book to go to for standard reference.

4) Massimo Motto, Competition Policy: Theory and Practice, Cambridge U Press.

5) Keith Hylton, Antitrust Law: Economic Theory and Common Law Evolution, Cambridge U Press.

For Public Choice Perspective

6) Bill Shughart, Antitrust Policy and Interest Group Politics, Quorum Press.

7) Fred McChesney and Bill Shughart edited, The Causes and Consequences of Antitrust: The Public Choice Perspective, U of Chicago Press.

For Austrian Perspective

8) Dominick Armentano, Antitrust and Monopoly, Independent Institute.

For Textbook Treatment

9) Roger Sherman, Market Regulation, Addison Wesley.

10) Roger Blair etal. Antitrust Economics, Oxford U Press.

萬全之策

電台DJ在節目討論近日多宗私人資料外洩事件，認為目前仍未有對應這問題的萬全之策。

If you are an economist, you will know such 萬全之策 is simply not economical and therefore should not be adopted even if it were available. Interested readers could spell out the missing steps involved in deriving the conclusion in the statement above in the comments section.

Best Line I Have Read Today

I have long thought it troublesome that Alan Greenspan was a follower of Ayn Rand.

More here.

Debunking 林行止 Part Four, Yeung Wai Hong Version

Thanks to Yeung Wai Hong up at Next Magazine once again for his kind permission to post this forthcoming article to appear in next issue of the magazine. Enjoy.

天地不仁以萬物為芻狗

林行止先生後悔卅多年來「理直氣壯維護資本主義」，他那「後悔」二字縈繞腦 際，揮之不去。那天晚上開車返家途中，收音機播BBC夏莉‧喬拔（Harriett Gilbert）主持的《讀書會》（The Word）節目，忽然給一把聲音吸引，再又令我 想起林先生的「後悔」來。

索姆之役 眾所周知，《讀者會》這個節目跟好些介紹書本的節目大同而小異，有書評、書訊 、作者現身導讀等環節。教我迷的不是節目的內容，而是夏莉‧喬拔的那把圓渾 、沉實發自丹田的聲音。「查找」過了方知，夏莉是科班出身的戲劇演員，寫過不 少劇本、小說，絕非「普通」一個主持也（BBC的眾多主持可以說沒有一個是「普 通」的，不過那是題外話了）。

那個晚上的《讀書會》，她找來了英國作家福斯（Sebastian Faulks 1953-）說他 的暢銷名著《鳥之歌》（Birdsong）（九三年出版以來已賣了超過五百萬本，給翻 成不下十種語言）。吸引我的正是福斯那個晚上的解讀。

《鳥之歌》以一九一六年第一次世界大戰的「索姆之役」（Battle of the Somme）為主軸，穿插蕩氣迴腸的愛情故事 —— 夏莉‧喬拔讀出一個男讀者的來 函，說他結了婚好一段日子，可從未嘗過福斯筆下的愛情滋味，故此他決定離開妻 子去追求夢一般的愛情。

上天不會出手 福斯的愛情故事雖然動人（甚至激發離婚的衝動），但德法兩國差不多一個世紀前 的濠溝戰事才是小說的主題。有讀者問他，《鳥之歌》對戰事的描述細緻寫實，直 是教人嗅到腥風血雨 —— 四個月間一百五十萬名士兵陣亡 —— 然而書名跟戰爭 可風馬牛不相及，那不是無厘頭得很嗎？觸動我神經線的，正是福斯就此番質疑作 的回應。他是這樣說的：

小說確是寫實的，內容沒有絲毫無厘頭（ironic）之處；我無疑可以用《血與肉》 、《血濺泥濘》等字眼為書名；可是我到戰場踏地則發覺，就算在戰事最是慘烈的 時刻，士兵們不難會發覺戰場上依舊有狐狸、田鼠出沒，天空照樣有雀鳥飛翔。這 本小說要探索的是，戰事膠、犧牲了無數性命，為什麼就是沒有人想到要叫停， 結束戰事？終於給我明白了過來的是，不管戰爭如何殘酷，上天是不會出手制止 的。上天對人的愚昧，是了無止境地無動於衷的（There's no limit to nature's indifference to the idiocy of humankind.）。 （各位千萬不要以為鄙人有特異功能，可以一邊開車、一邊聽收音機，而又隻字不 漏過耳不忘。為了「忠於原著」，我上網重溫了福斯此番沉痛的解說。）

上天以萬物為芻狗 「上天對人的愚昧是了無止境地無動於衷」之說，值得花上偌大的氣力查找一番 嗎？值得的，因為我聽到他這麼說的時候，腦際頓然亮起燈泡：那不正是《老子》 說的：「天地不仁，以萬物為芻狗」（第五章、第一句）嗎？

「芻狗」是什麼？根據張默生先生的注釋，那是「用草成的狗，古人取作祭祀用 的；用完以後，隨便拆除，隨便拋棄，絕不愛惜牠。」對天地這個「用過即棄」的 取態，韋利（Arthur Waley 1889-1966）及劉殿爵皆翻作ruthless；林語堂則譯為 unkind；兩者跟福斯的indifference大有距離，讓我來挑，福斯的「無動於衷」可 能跟《老子》的「原意」更為吻合。

明顯不過的是，無論是ruthless、unkind或indifference，其制動權都在上天；這 三者之中，ruthless最是極端，大有為求達到目的，無所不用其極，凶殘無道在所 不惜之意。林語堂的unkind並非這般可怕：上天本來是可以仁慈一點的，不幸卻沒 有。福斯的說法跟林語堂相近，而又進一步淡化上天的角色 —— 上天對世間萬物 的榮衰非但說不上什麼仁慈或不仁慈，更根本便不聞不問，甚至毫不上心。

一切淡然以對 換言之福斯並沒有給上天的本質到底是性善或性惡下個主觀判斷，在他來說，上天 既非凶殘無道，亦非仁愛慈悲；而是一切淡然以對、無動於衷。既然無動於衷，那 麼上天對人世間不公平、不合理、有乖道義的事情又豈會出手干預？

我喜歡福斯這個indifference，他眼中的上天跟張默生對《老子》的解讀，跨越時 空（張著《老子章句新釋》在一九四三年出版），互相輝映。張先生對「天地不 仁」，是有這般說法：
萬物生生死死，各有他自己的本性，有朝生暮死的，有年歲久長的，只要順遂他的 本性就好，你不必替他擔心。譬如鴨子的腿是短的，鶴鳥的腿是長的，這是鴨鶴本 來的天性；你若是妄施仁恩，以為鴨子的腿太短，鶴的太長，不如截下鶴腿的一 段，去安到鴨子的腿上，那就雙方都苦了！

愛之適以害之 故此，本仁愛慈悲之心妄作干預，往往帶來海耶克所說「非原先設想的後果」， 弄巧反拙有之，愛之適以害之亦有之。可是古往今來，有所作為、「先天下之憂而 憂」、救世為懷的人就是不甘於順遂天地萬物的本性、放任自然，讓市場的無形之 手解決問題。用心良善，他們可又知道濟世的第一戒條是「萬勿造成傷害（Do No Harm?）」。

別的不說，「糧食危機」當前，政府不是禁止糧食出口，人為抬高糧價，把問題惡 化；便是管制糧食價格，以致供應萎縮；再不然便是像前聯合國秘書長安南那樣， 鼓吹非洲糧食自給自足。
安南是西非加納人，他手擎前聯合國秘書長這招牌推動非洲自給自足不難會贏得不 少支持，但這是解決問題的辦法嗎？這五、六十年來，像安南般自給自足的設想我 們還見得少嗎？未改革開放之先，中國大陸不便以「自力更生」為基本方針國策 嗎？時至今日，北韓、古巴以至委內瑞拉都不還在標榜類似的政策嗎？其實效如 何，恐怕亦不用多說了。由是之故，當我聽到安南說要搞自給自足，便不期然興起 福斯般的慨歎：上天對人的愚昧確實是了無止境地無動於衷的。

打不死的干預主義 柏林圍牆倒塌、東歐變天，我幻想過「強物情、就己意」的干預主義將從此打入天 牢，永不超生。然而隨海耶克、佛利民等巨擘相繼殞落、人們對計劃經濟造成的 苦痛，顯然已日漸淡忘，故此社會主義又在拉丁美洲般的地方重新抬頭了。當日我 冀盼干預主義從此畫上句號，像江澤民說的，這般一廂情願的想法又豈非too simple, sometimes naive？

古今中外，改造世界的野心從來都是打不死的。就以中國來說吧，那個有使命感的 讀書人不是以張載（1020-1077）的「為天地立心，為生民立命，為往聖繼絕學， 為萬世開太平」為寄志？要幹一番事業的人都有個這個理想，政府的干預之手又還 閒得下來嗎？

聊堪告慰的是，干預主義的禍害儘管像《鳥之歌》的法德戰事那樣沒完沒了，而上 天對人的愚昧，又看似了無止境地無動於衷，以致人不時誤入歧途；可幸上天又賦 予人無時無刻努力改善當前境況的本性，有這個本性引領前行，早晚還是會回到市 場的金光大道的。

Debunking 林行止 Part Three, the Tyler Cowen Version

In his recent column, Lam lamented the lack of response (? or is it the speed of response) of rice production to the surge in its price. That fact persuaded him to abandon his free market belief as he inferred from that fact that the market in rice failed miserably...

The fact of the matter is, hemmmm, it is not market failure, but state failure which accounted for the lack of (?) supply response to the price surge in rice.

My former teacher wrote in the New York Times:

RISING food prices mean hunger for millions and also political unrest, as has already been seen in Haiti, Egypt and Ivory Coast. Yes, more expensive energy and bad weather are partly at fault, but the real question is why adjustment hasn’t been easier. A big problem is that the world doesn’t have enough trade in foodstuffs.

The damage that trade restrictions cause is probably most evident in the case of rice. Although rice is the major foodstuff for about half of the world, it is highly protected and regulated. (My emphasis) Only about 5 to 7 percent of the world’s rice production is traded across borders; that’s unusually low for an agricultural commodity.

So when the price goes up — indeed, many varieties of rice have roughly doubled in price since 2007 — this highly segmented market means that the trade in rice doesn’t flow to the places of highest demand.

Poor rice yields are not the major problem. The United Nations Food and Agriculture Organization estimates that global rice production increased by 1 percent last year and says that it is expected to increase 1.8 percent this year. That’s not impressive, but it shouldn’t cause starvation.

Read the whole thing here.

Debunking 林行止 Part Two (by Yeung Wai Hong)

With kind permission from Mr Yeung Wai Hong, his forthcoming article in the next issue of Next Magazine is posted below, enjoy:

林行止先生新近的一篇文章令我既驚愕亦失落，相信好些《信報》及林先生的長期 忠實讀者都同樣感到震撼。教我久久不能釋懷的是林先生這句說話：
寫了三十多年政經評論，筆者對過去理直氣壯地維護資本主義制度頗生悔意，因為 看到了太多不公平手段和欺詐性活動，而一些本以為放諸四海皆准的理論則經不起 現實考驗（比如價高必然使產量增加促致價格回順）……。筆者真的希望中國不要 徹底走資，社會主義的確能夠維繫社會公平，中國若能定出一套「向錢看」與社會 公平間平衡發展的政策，中國的崛起才對提高人類福祉有積極意義！（《信報》二 ○○八年四月廿八日）


體現勇氣的肺腑之言 林先生這肺腑之言令我不期然反思：會否有一天我也有他今天的悔意？果如此，我 又會否像他那樣以社會主義為出路？到了那一天，我又會否有林先生打倒昨日之我 的勇氣？有這個勇氣，又能否像林先生那樣向讀者坦誠交代？

深受困擾，回首思索我是怎麼樣「理直氣壯地維護資本主義制度」起來的。話說讀 過經濟學的入門課，微觀、宏觀過後，再又硬啃過什麼經濟發展論、公共理財、經 濟思想史，可還是摸不透經濟學到底是什麼的一門學問，更遑論維護資本主義了 （我是「解放」後出生的，礙於基因結構，要理直氣壯地維護共產主義制度亦無從 啊）。

「極端自由市場信徒」有這個流行說法：「一切通常都是由蘭德開始的（It usually begins with Ayn Rand）」。我個人的經驗亦是如此。我有兩個蘭德迷的 同學，茶餘飯後，不管什麼話題，我每一開口便給他們異口同聲、不屑地駁斥： 「蘭德說過了。」

不勝其擾，拿了他們朝夕掛在唇邊的《巨人聳肩》（Atlas Shrugged）來看，一發 不可收拾 —— 我啃掉蘭德所有的小說，對資本主義制度造福人群從此深信不疑 —— 這個信念至今沒有動搖。不過蘭德也只是個開始而已，我要是對市場還是有 點認識的話，那是拜海耶克及張五常之賜。
蘭德的桃花源 早前我在此跟大家交代過了，《巨人聳肩》是個桃花源的故事，說的是一班實業家 、銀行家、經濟學家、作曲家、哲學家……不堪官僚的干預壓迫，拒絕讓偽善的官 僚寄生蟲吸血，齊齊「罷工」，終致令整個社會停頓下來。

這些為世界創造財富、藝術、理念的巨人建起了一個沒有官僚、沒有政府、沒有不 勞而獲、沒有抽稅均分財富的世外桃源。這個桃源裡是個赤裸裸資本主義社會的縮 影，一切活動都是你情我願的交易，所有行為皆以個人利益為本位；自私非但絕不 醜惡，反而是最崇高的情操（蘭德的一本文集以The Virtue of Selfishness為 名）。

蘭德狠批官僚假公平之名干預、吸血自肥，讓我�饇g了好一陣子。及後讀了海耶克 的《自由的憲章》才恍然大悟，蘭德的桃花源跟馬克思「各盡其能、各取所需」的 地上天堂一丘之貉而已；兩者的終極目標雖則南轅北轍 —— 在蘭德的理想國裡人 人自私自利而社會和諧富足，在社會主義的烏托邦則人人無私奉獻而一切天天向上 —— 可是其出發點則如一，那就是嚴復說的「強物情，就己意」；無論是蘭德或 馬克思都蔑視生活現實，追求他們的理想則必然不擇手段，踐踏扭曲人性，竊瀆人 的尊嚴。

科學實證不是喊口號 當我猶為蘭德迷倒之際，張五常給我當頭棒喝：「你口中的政府萬惡不赦，為什麼 自有人類歷史以來普天之下便有政府的存在？」這個問題醍壺灌頂，令我體認到要 了解現象、加以解釋才是提升認知的科學方法；否則喊喊口號，又豈有助於解決問 題？到頭來要改善眼前境況，人類便得要解決不斷湧現的問題，是不是？

從解釋現象入手，則更加鞏固我對資本主義制度的擁護。香港了無天然資源，大家 都是中國人，香港人的物質條件勝過大陸多矣 —— 而又活得更有尊嚴 —— 那當 然是得體制之利了。同樣，歐美的生活條件亦顯非一切要排隊配給的東歐計劃經濟 所能望其項背。在這些鐵一般的事實面前，毋須多費唇舌，拿出平常心來，便不難 認定只有市場才能真正造福人群。然而市場到底又是什麼？為什麼科學地調撥資源 、計劃經濟，其效果竟又及不上看似完全無人駕駛的市場？

市場是個發現探索的過程 海耶克給市場冠以不少稱號，超級電腦一也；發現、探索的過程二也。總的說來， 他告訴我市場不是像書本上說的，是個按邊際功能支配資源的過程。在他來說，以 市場運作為計數是既矮化亦醜化了市場 —— 若然可以這樣機械化地支配資源，任 何懂得計數的工程師都可以把資源發揮得淋漓盡致，讓所有國家都安樂富足，那又 豈還有貧富懸殊的問題？事實上當蘇聯和中國還站在市場經濟的對立面時，也都是 由工程師治國的。不幸「理性」的計劃經濟非但沒有為人民謀幸福，反而導致飢孚 遍野、生靈塗炭。

若然不是個理性、機械地支配資源的過程，那麼市場又是什麼？在海耶克來說，市 場不是個地方，亦不是個會社組織，而是個讓人們交換資訊的過程。這跟生產、消 費等民生經濟活動有何相干？海耶克言人所未言之處，是指出一切經濟活動都是以 資訊為基礎的：每個人對自身處境的掌握都至為獨特，沒有兩個人知道的東西是完 全一樣的；而一旦境況起了變化，每個人的反應亦往往有別於人；而市場也者，便 是個交換獨特資訊的過程。

資訊的鴻溝 海耶克這個資訊論看似平平無奇，然而用心善良、救世為懷的人則又往往體味不透 箇中真諦，而要政府干預這、干預那以致引發這種、那種「非原先設想的後果」 （unintended consequences）—— 設立最低工資對付貧富懸殊，導致失業漲升， 衍生福利開支、形成依賴福利過日的沉淪一族；給印尼海嘯災民提供先進漁船，捕 獵過度，以致魚穫下跌。好心做壞事，因為主觀意願跟具體事實之間，有一道干預 主義者跨越不來的資訊鴻溝，內裡暗藏無窮無盡單憑個別人的識見設想不來的「意 外」—— 每個人掌握獨特的資訊，這些資訊不為人知，當然是在為政者的設想之 外了。

海耶克從這個資訊鴻溝再作引伸 —— 所有「強物情、就己意」的干預，都必然引 發出其不意、「非原先設想的後果」，故此執權者也就有必要力求克制不作干預 —— 這又不止於利來利往的買賣活動而已。 海耶克認為社會體制、倫理關係是長期演變的結果，都累積了前人無窮的智慧。要 是對眼底看似不公平、不合理的現象沒有個透徹的認識便妄作干預，其後果往往不 堪想像 —— 美國給未婚媽媽提供救援，用心是保護小孩子，結果則導致離婚率激 增、破碎家庭的子女欠缺母愛，濫藥嚴重、教育水平下降。若然如此，任何干預固 然要慎始，不可輕舉莽動；更萬萬不可輕言革命：當下雖有盛世中華之稱，共產革 命毀滅說不出的累積智慧；這般浩劫又豈是三十年開放改革便平反得過來的？

捨市場經濟別無選擇

故此，我無藥可救地擁護資本主義體制，並不單純是因為市場經濟打造了有目共睹 的物質繁榮。海耶克說過了，市場經濟必定要以個人（而不是社會、國家）為本， 唯其如此，資源效益才能全面發揮和提升。政府一旦插手干預市場，首當其衝的， 必定是以個人為本的價值觀，故此也就必然打擊人權、自由。沒有以武力為後盾的 稅吏，便不可能以累進稅制、均分財富。稅吏、官僚手握大權，濫權腐敗的日子又 還會遠嗎？故此不管用心如何良善，一切干預都勢必威脅人權自由，都必定侵犯人 的尊嚴。

我不以為建基於私有產權、自由市場的資本主義是個至善至美的體制。我們生活在 現實世界，而不是在桃花源裡，恐怕是沒有個令人類認同的完美的制度的了。到了 我這把年紀，我認同的是戴卓爾夫人說的TINA：捨市場經濟之外，別無選擇 —— There is no alternative。這不是喊口號，而是張五常的科學實證得出的結 果。

圖字：回首前程，我「理直氣壯地維護資本主義制度」，是拜蘭德、海耶克及張五 常這三張皇牌之賜。

Debunking 林行止 Part One

Lam's claim: 社會主義的確能夠維繫社會公平

Does he mean equal chances of being politically oppressed, equal chances of being starved to death (remember the great leap forward)...? What kind of equality he is talking about here?

No kidding, I am not an expert of Chinese politics, but read this short introduction to communism if you want to know the horrors of implementing socialist "heaven on earth".

Take China's rural socialist experiment as an example. The use of so called production team as a unit of production with pay unrelated to effort (instead, team members are assigned workpoints according to some arbitrary "equitable" criteria) turns out to be a big policy disaster and results in sharp fall in arigultural output.

Who suffers in the end, THE MASSES, not the POLITICAL ELITES on top. Now is that FAIR?

What about corruption, time wasted spending in line to get daily necessities(and mind you only ordinary folks, that means people like YOU AND ME, again not the POLITICAL ELITES are the ones who have to line up for stuff)....Is that fair Mr Lam?

Beginning of the End

寫了三十多年政經評論，筆者對過去理直氣壯地維護資本主義制度頗生悔意，因為看到了太多不公平手段和欺詐性活動 ，而一些本以為放諸四海而皆准的理論則經不起現實考驗（比如價高必然使產量增加促致價格回順）……。筆者真的希望中國不要徹底走資，社會主義的確能夠維繫社會公平，中國若能定出一套在「向錢看」與社會公平間平衡發展的政策，中國的崛起才對提高人類福祉有積極意義！

This is from Hong Kong Economic Journal's famous columnist 林行止 .

Read the whole thing here. More comments later.

Social Justice? Are you kidding me, Mr Lam? There IS NOT an identity called society which makes economic decisions, and I thought we are over that idea DECADES AGO!

Armen Alchian and Hong Kong Judges' Economic Training

Any Alchian student or fan knows that Armen also had a heavy influence in the training of judges and lawyers through the George Mason Law and Economics Center Program started by Henry Manne. In an important antitrust policy speech, former FTC Chairman Timothy Muris articulates a sentiment I’ve heard repeatedly from those who went through the program or watched Armen teach:

Armen Alchian was unexcelled in teaching economics to lawyers. He often presented economics socratically - a technique familiar to lawyers. For years Armen was one of the most popular instructors in Henry Manne’s programs for teaching economics to lawyers. In short courses, he taught literally hundreds of federal judges and law professors.

That's from Josh Wright, a student of both Ben Klein and Armen and now at George Mason University Law School himself on Armen's 94th birthday. Read more here.

Now that HK is contemplating to have a competition law, I am really curious about the ability of HK judges ability in deciding cases involving some serious econometrics, price theory, game theory and what not. That makes me worried.

May be HK should considering hiring someone like Armen, Demsetz or Josh to offer some economics crashcourses for the local judges?

Futility of Granting More Power to the Fed

Although plenty of questions are being asked about Secretary Paulson's plan granting sweeping new powers to the Federal Reserve, a crucial one is in danger of being overlooked. That question is: What use has the Fed made of past extensions of its powers? Is it reasonable, given the Fed's record, to expect it to use new powers responsibly?

The answer ought to give plan supporters second thoughts. It is that, whenever the Fed acquired new powers in the past, it abused them, often with dire consequences for the U.S. economy.

More here from George Selgin at UGA.

男人四十

心情近日有点灰。 為人也為事。

楊社長懷康說，這是中年危機 (mid-life crisis)。

身邊年過四十的朋友或家人，事業的發展都不怎麽樣。 They simply get stuck. And I am not even talking about people with minimal education. 他/她們都是留學英美的碩士/博士，讀的也非什麽雜牌大學, 而是在 U of Chicago, HKUST, Purdue University, Indiana University at Bloomington, and University of Minnesota. 情况就如大樂在<<四代香港人>>說的那樣。

How did that happen? 如何釋懷？

As far as I know, most of them simply devote their attention elsewhere instead of their career, like their children and other hobbies or interests. 但我知道他/她們仍不甘心。

就此胸懷 fustration and unfulfiled dream 過一生？

難怪在洋人的喪礼或墓碑上，都總有這樣的一句： Rest in Peace。

這是因為太多人含憾而終？！

Best Line I Have Read Today

In general, I think that the economy's fate hinges on its ability to adapt to changes in relative prices. If there are few large shocks, then full employment will not be disturbed. With large shocks, then people need to respond to incentives to exit some occupations and industries in order to enter others.

Here's more from Arnold Kling.

My hunch is that with large shocks to the economy, people start to panic as uncertainty looms. Instead of figuring out ways to respond to massive shifts in relative prices (that's what large shocks mean to me anyway), people's brain is hardwired (a legacy of our tribal past as Hayek has argued in Fatal Conceit) to immediately seek help from some saviour, God may be, government definitely (as a surrogate God?). And that's what makes Keynesian economics so appealing I think.

Money Does Buy Happiness

Read more here. HT to Greg Mankiw for the pointer.

Recent Books on Spontaneous Order

A reader asked me to recommend a couple of recent books on spontaneous order. To me, the term spontaneous order is a way to conceptualize the interaction of people in the market place according to some ground rules. If you accept that definition, all books explaining how market works are also books on the topic of spontaneous order.

Some of my recommendations are (they are all written for non-specialists):

1) Origin of Wealth

2) The Mind of the Market

3) Basic Economics

4) Economics Facts and Fallacies

5) Freedomomics

6) The Wisdom of Crowds

Randy

“We cannot change the cards we are dealt, just how we play the hand.”—Randy Pausch

For those of you who don't know Randy, you have to, watch this (HT to Kempton for the link).

After you have done doing that, get his book and read it, the book is entitled The Last Lecture.

做好人

楊社長懷康傳來鄭板橋家書一封，其中一句很有意思：

夫讀書中舉中進士作官，此是小事，第一要明理做個好人。

The above line in English: Now to be a scholar and be a college graduate or a doctor is a small thing; the important thing is to be reasonable and be a good man (林語堂譯)

Come to think of it, how many parents in HK would rather have their kids become successful at school and at work than simply be a good man ?

My Sincere Thanks to WWW

While searching the net for some info, I stumble across a bio page of my former roommate/class mate back at graduate school. My old friend Mike Giberson, a fellow Masonomist. My previous impression was that Mike was a guy with few words.

Now not only is he in the consulting business, he is a contributor to two blogs on economics as well. Check him out for yourself here. BTW, he did his thesis under Nobel Lauerate Vernon Smith.

Economic Growth From a Smithian Lens

Dartmouth's Meir Kohn explains in this paper why, in order to enhance our understanding of economic change, we need to have a Smithian approach to economic growth instead of the standard Ricardian one.

Byron, The Global Economy Needs You

"Macroeconomics has taken a turn towards theory in the last 10-15 years. Most young macroeconomists are more comfortable with proving theorems than with getting their hands on any data or speculating on current events."

Read the whole thing here.

Byron, where are you just when the global economy needs you most?

Transformers, They Are Cool

Lately, my five-year old son and I have started collecting figures of different robots which have appeared in the movie Transformers. First, we learn about who are the good guys (Autobots) and the bad guys (Decepticons), then we learn about the different heros within the good guys camp and follow that up with learning the different characters in the bad guys camp...and finally we are after those hard to get figures like Target and Wal-mart exclusives.

Check out the picture above, isn't it cool? That's Stealth Bumblebee in robot mode, see more for yourself here. It is due out soon, stay tuned.

Clueless About the Unfolding Financial Market Mess? No Worries You are Not Alone

In an excellent NYT story here, former Fed Vice-chairman and currently professor of economics at Princeton Alan Blinder said;

Mr. Blinder, the former Fed vice chairman, holds a doctorate in economics from M.I.T. but says he has only a “modest understanding” of complex derivatives. “I know the basic understanding of how they work,” he said, “but if you presented me with one and asked me to put a market value on it, I’d be guessing.”

My responses:

1. If even sophisticated traders don't know what they are buying and selling, monitoring costs go up the roof and the monitors of these traders could do nothing even if they are well incentivized to do their job. The whole internal risk management function of the firm falls apart.

2. You see pages and pages of stock market recommendations or comments in the papers' financial section, are writers of those pieces smarter than Blinder and the traders and know exactly what's going on? If they are clueless, why readers would want to read junk stories then? Is it related to human nature, a relic of our tribal past, where one always look for wisdom from a wise-man in times of panic (even if the wiseman also has no clue on what's going on)?