Tag: police

The Economists Answer for Bad Drivers

I originally posted this as just audio, but then I had someone transcribe it for me on Freelancer.com.  I paid him $10 and he did it from Montenegro in 20 minutes.  Fun!

One of the many things I love about economics is that it helps you understand and make sense of things that otherwise seem irrational and mysterious.

It helps you come up with actual workable solutions, rather than of a bunch feel-good nonsense.

To give a concrete example, there are a lot of bad drivers out there and lots of accidents. It’s really scary, right?

So what’s the normal non-economist response to this? “Let’s produce and buy cars with more safety features, front airbags, side airbags, better brakes, glass that shatters in way that won’t hurt you.”

All these safety features seem like the thing to do, because with all these accidents and dangerous drivers you want to protect people, right?

Ah, but this is where the economic way of thinking sheds some light.  The economist says, “You fools!”

We don’t want to make cars safer, that’s just going to lower the cost of bad driving, let’s mount a spear on the steering wheel of every car at two inches from the driver’s chest. Now let’s see who’s driving recklessly! You don’t want to lower the cost of reckless driving, you want to raise it!

My comedian friend Jeremy McClellan has this great bit about whether you’d want your kids to take driver’s ed from cops, who basically drive as recklessly as they want to because they can turn on their sirens and get away with it, or from drug dealers?

The cost of a drug dealer getting in any kind of traffic accident is very high. If they get pulled over they could go to jail for carrying all these drugs around. You want to learn to drive from drug dealers. They’re going to be the safest on the road.  It’s all about the incentives.

This is the kind of crazy, seemingly barbaric but wonderful insight that economic thinking can bring.

Why in my neighborhood are all these soccer moms such reckless drivers? One of the reasons is because they have such wonderful breaks and safety features on their brand new SUVs.

They know they can scream up behind me at 65mph and slam on their breaks with two inches to spare and their car will come to a gentle halt.  Their latte won’t even spill. Meanwhile I’m terrified.  It’s endangering my heart rate if nothing else.

Then there’s me, driving my 2002 Saturn with a 195,000 miles on it. I’m like a train conductor. I start breaking about two and a half miles before the stop light to just ease into it because I know if I slam on the breaks with just 50 feet to spare my foot will literally go through the floor of my car and I’ll have to use my foot on the pavement as a break. That’s a really high cost. I don’t want to lose my foot.

I’m the most cautious driver you will ever see in my Saturn. I check my blind spot religiously, partly because my car is so low it could fit under other cars, but partly because I have no side mirror.  I lost that in an unfortunate parking incident.

This is just one little illustration of economic thinking and how it can help you develop counterintuitive insights and come up with counterintuitive solutions to common, everyday problems.

Below is the original audio, a note I left myself on Voxer.

If You Don’t Like Profit, Advocate Free Markets

I don’t find anything at all distasteful about profit.  Profit seeking behavior is as natural and inescapable in humans as breathing, and deserves no moral censure.  When placed in an open and voluntary institutional setting profit is an indicator of value created for others.  Still, a great many people find profit disturbing and wish to curb it.  If that is you, you have no practical choice but the full-fledged support of free-markets.

Competition exerts a relentless downward pressure on profit.  Open markets invite competition and power positions in the market are never secure.  It is for this reason that those in the temporary position of high profit-earners are most likely to be the ones lobbying for new rules and regulations.  They don’t want to compete, they want to monopolize.

The only true monopoly is government monopoly.  All other applications of the term are illusory and not to be feared.  Peter Thiel has famously advocated for monopoly, but he uses the word to represent a business that creates a product so unique it is all but impossible to be replicated by competitors for a long period of time.  That is not the same as the textbook description of monopoly with all of its attendant dangers.  The only true and dangerous form is government monopoly.  It eliminates not only present competition, but potential competition.

Unlike competition, monopoly exerts no downward pressure on profit.  Indeed, its sole purpose is to suppress competition so that profit can balloon, without any corresponding increase in value creation.  In this sense, the critique that, “There is too much profit in X industry”, or, “The profit motive corrupts Y good or service”, is correct.  In a truly monopolized industry, the profit motive is terrible.  Again, not because of the motive itself, which is ever-present in all humans, but because of the institutional setting which prevents all of the incentives to curb and corral profit motive towards value creation and away from plunder.

In monopolized industries the profit motive is very destructive.  Do not be fooled by tax designations or accounting terminology.  Governments and “non-profits” are also profit driven.  It is here where profit is the most dangerous and often deadly.  The justice and law enforcement industry is all-but entirely monopolized by the state.  Because it faces no real competition there is no downward pressure on profits.  It is therefore one of the most profit-driven enterprise imaginable, only it needn’t create value to profit.

An ever growing number of laws and regulations ensure that more and more people are guilty of crimes.  This is a highly profitable state of affairs for the justice system.  Law enforcement routinely harass and abuse and give out tickets for violations of no practical importance.  They find or plant illegal substances for the sole purpose of seizing assets of the accused.  Prosecutors, medical examiners, judges and law enforcement regularly lie, exaggerate, and falsely convict.  The profit motive is what drives them.  They have a monopoly on the administration of justice, so they invent whatever means they can of increasing the profitability of the enterprise.  The greater the number of crimes, the greater the receipts.  Indeed, the origin of government monopolized police and courts attest to the revenue-enhancing motive at their core.

We cannot wish away the profit motive, or hope to elect or appoint people who magically do not possess it. (How would they win an election or appointment without it?)  We can, however, realize the danger of granting monopoly status to any profit-seeking enterprise, including governments.  If it is profit that is driving the corruption and abuse among police, courts, and other sectors, the surest way to suppress the ability to generate more profit is to open it up to competition.

Drugs and Church

A post I wrote about two years ago for the Western Standard:

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My wife and I were visiting a new place for Sunday morning service this week and I couldn’t help but be disturbed yet again at the tendency of Christians to mistake political for spiritual accomplishments.

The pastor told a story about a small church that is located in a “rough” neighborhood. Some parishioners were on the corner outside the church praying for the area when they ran into some drug dealers (I’m not sure how the churchgoers knew them to be drug dealers). The dealers told the prayers, “This is our corner” and the interceding churchmen replied, “No, this corner belongs to Jesus”. The pastor said one of the drug dealers was visibly moved and walked away saying, “this isn’t right what we’re doing. I’m going home”. The rest of the drug dealers stood their ground, so the church members retreated back into the church. So far, an interesting story.

Then, the pastor told us, the police showed up and arrested the remaining drug dealers on the street corner. Everyone listening to the story started clapping and shouting “amen”. The pastor used the story to illustrate the effectiveness of prayer, and the transforming power of the church located in the rough neighborhood.

This was all rather unsettling to me and my wife and as we discussed on our way home. Combined with the abysmal performance of the Detroit Lions, it put a bit of a damper on my day.

The part of the story where one drug dealer felt some kind of conviction and went home was interesting. The faith and words of the Christians on the corner apparently got him thinking deeply about his life. But what about those arrested by police? What victory is there for the church in that? There was no mention of any violent acts by these men. There wasn’t even mention of a violation of property rights (it was never clear if the corner was part of church property). There was only an assumption that these men were somehow “bad” and therefore their arrest was somehow “good” for the neighborhood, and ostensibly the Kingdom of God.

But how did this event advance the Kingdom of God? Is not the point of the Kingdom to transform lives? Is not the point to demonstrate the power of Christ to forgive and to move individuals to break free from the bondage of sin and embrace His forgiveness and live freely and righteously? What did this confrontation and arrest do for these men to help them see their need for freedom in Christ, if indeed they were in need?

Moreover, what grounds is there to cheer “amen” at the arrest of these men? It betrays a notion that runs deep in the church; that political action is analogous to spiritual action.

This same conflation was demonstrated some years ago when members of my church collected petition signatures sufficient to force a strip club to move from downtown to a location outside of town. This was touted as a victory. But in spiritual terms, who won? Did any of the petition signers go down and offer hope and freedom to the men in bondage to sexual addiction? Did they offer comfort and companionship to any of the strippers who were, purportedly, desperate for money and approval? Was a single soul set free? Did the patrons of the establishment have a new respect for Christians after seeing them forcibly remove the business from town? If anything, it set the stage for a more hostile relationship between strippers and patrons of the strip club and Christians. Banning sinful behavior by force of law is no signal to sinners that they can come to the church for freedom and aid.

Christ did not behave this way. Even when given the chance to use the laws of the day to punish a prostitute, He instead offered her grace and left her to make the choice on her own. He did not petition to hide sinful behavior from His sight, but spent much of His time hanging out with the least reputable sinners of society. He offered them hope and escape from damaging behavior, not prison.

When Christians look to laws of man to accomplish goals of the Kingdom they distort and corrupt both. All earthly governments are based on force. The Kingdom of God is based on love, freely given and freely received or rejected. Even the despotic, egotistical, and violent Napoleon saw this clear distinction in his last days exiled on the Island of St. Helena:

“Alexander, Caesar, Charlemagne, and I myself have founded great empires; but upon what did these creations of our genius depend? Upon force. Jesus alone founded His empire upon love…”

Why does the church so often fail to see what Napoleon understood? His Kingdom is truly, “not of this world”, and we shouldn’t reduce it to the activities and tools of earthly kingdoms – force, fraud, pomp, and patriotism.