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?