Left wing parties better for economic growth

Economic growth measured in GDP? You should see my surprised face (Shoutout to JJ on that one).

As discussed, GDP is problematic. How is capital measured? Do they take an inventory of currently utilized national capital goods?

…Exactly…

What law is that? Why 20 and not 25?

Knowledge certainly can be gained by observation, but it depends on what kind of knowledge. Observation in the constant equilibriating disequilibrium that is the market yields no explanation on causality. What good is economics if it cannot explain causality?

Economics is an a priori science, since no economic ‘experiment’ can prove or disprove things, but only lend credence to them. Economic knowledge is made possible with mentally constructed market experiments with ceterus paribus conditions. Example: Ceterus Paribus increased supply decreases price.

Who said inflation? Is that the only missing variable? Is it the only determinant of prices? What about supply and demand? What’s the IV?

What’s the point of the increments?

I didn’t deny that state infrastructure spending could have be a net positive.

I linked the North America report, not the world report. Anyway, the point is that you can find data sets to fit any theory. I would assume that high growth rates correlate to some extent with higher state spending just because you can take a larger percentage from richer people without killing them, which Hans Hoppe explains in a seminar.

All methods trace back to observation. The question is, what realm of things were observed? AE is based on more general observations than normal statistical studies. I’m going to make a thread about this later.

ed: Caley, I’ll be back to you on that.

The capital stock is not included in GDP, besides the capital produced in any given year included as investment. GDP is calculated as… you know the formula, with data obtained from tax returns and business surveys. As far as I know, net GDP, or GDP minus depreciation, is not used particularly often by empirics.

20 is convenient because smaller samples tend to produce statistically insignificant results. 20 or 25 is not that important. The point is to have a reasonable sample size.

The law of large numbers states that as samples are randomly drawn from a population, sample characteristics will increasingly reflect population characteristics. If you just ask three people their opinion on politics, your results probably won’t be as accurate as those from a random sample of a hundred people. So a sufficient sample size is important.

There can be problems with this approach if price floors or ceilings exist. It is possible that public infrastructure really destroys the economy but it’s effects are hidden through government regulated milk prices. Otherwise, supply and demand equilibriate and GDP measures aggregate demand- which may be a DV and/or a control IV. The independent variable is the variable input into the model to evaluate the hypothesis, like government policies.

To display the effects of each control variable on the result and check for robustness. If a result fluctuates wildly with application of control variables, this could indicate problems in data quality or model design, unless the relationship really is that complicated (and can be investigated with additional theoretical and microeconomic work).

To Caley:

I read the report summary and didn’t see any specific claims regarding a correlation between EF and growth across US and Canadian states.

Just for kicks, I correlated US state EF with 2009 growth rates from usgovernmentspending.com and got a negative correlation. Not that it means much.

Even I’m not going to argue that the payroll tax kills people.

I can either let that sit or take it as a profound epistemological question. I’ll let it sit. Forgive me, but what does AE stand for? American Enterprise Institute?

Interesting thread that you linked to. I saw the empirical model by Sieben. Getting a high R squared on GDP is easy, though. You can get an even higher R squared by excluding his assumptions.

They do everything but that. I know Alberta is 1st-2nd highest in both and also in currrent GDP per capita.

I don’t know how that relates to what I said.

I didn’t think it was profound. AE = Austrian Economics.

I was talking about those who don’t vote to “fund” these programs.

You asked for a proof for the existence of negative consequences from government action. Do you now concede that negative consequences are tautologically inherent to every government action, by definition?

Let me repeat myself: why should I go back to talking about the argument, when you don’t seem to be playing fair?

The moral of this story is: you can’t make an omelette without first breaking a few eggs.

Some in this country have gotten into the routine practice of rationalizing away the fact that someone gets screwed no matter. I’m not entirely sure why but I see it all the time in political debates. The left particularly likes to focus on stealing from the rich. Maybe they think they’re playing Robin Hood I dunno.

However, just because someone doesn’t want to fund something originally doesn’t mean they won’t come to appreciate it over time. I know I was very opposed to the financial bailouts at first but I’ve come to appreciate them. I’ve even come to appreciate the auto bailouts.

We live in a system where a good many people (myself included) accept that they’re going to be forced to pay taxes one way or another so they might as well try to get that money used in a way that satisfies them.

It’s entirely possible that everything would be better if no such system existed but I don’t bet on that happening anytime soon. I’m not much for idealism, I try to make do with what I’ve got.

Mustang, I’m glad you shared those papers. A lot of it is over my head because of the math but I still enjoyed reading the essay parts.

I’m not exactly a fan of national healthcare but I’m certainly with you on the infrastructure projects. The problem is that while we may be able to agree that building infrastructure is a good idea, we run into the real world problem of having to pick which projects to fund and which projects not to fund. All the arguments about productivity aside, there’s no escaping the fact that we’re essentially picking winners and losers and we might be funding some projects that really don’t deserve funding. But I guess that’s just the risk we have to be willing to take.

I don’t like the word “tautology”. Praxeology sounds much better. But yes, I agree and I can understand how you are opposed to the idea of public goods in priniciple. Individuals who disagree are free to move to countries that don’t levy income taxes or provision public goods.

You’re welcome. Once one gets into the details of it, deciding which projects to fund is a civil engineering matter. The federal government doesn’t decide that; when making disbursements, it generally hands a block grant to the states, which often give the money to local governments, which have a better idea of local conditions.

If you would like a less boring and technical (although a little sensationalist) look at infrastructure issues, you could look into infrastructurereportcard.org. It’s not just a matter of creating new infrastructure at this point. The public infrastructure stock has been depreciating since approximately 1970, and additional investment is needed just to maintain already existing roads, bridges, sewage systems and waterways. Additionally, there isn’t always a government financial loss on these investments. The revenue generated from infrastructural economic growth is a fairly important revenue sources for local governments, even if the public sector puts up the initial capital.

Given a net return on public infrastructure capital of at least 30%, 5% annual depreciation, and an average tax rate of 30% of income, projects will self-finance on average. Since historically, tax revenue increases have been followed by subsequent tax cuts, some of the higher returning infrastructure projects may even result in cuts to marginal tax rates in the long run. That means higher absolute tax revenue, but lower taxes as a share of income. Something to think about.

That is one of the less savory aspects of the left. At the present time, however, they have laid off on that. Despite all the noise, the two parties are pretty much together on taxes. The Republicans got their extension of the Bush tax cuts and agreed to some of the middle class tax reductions. The differences between the two parties are mostly on spending, not on taxes anymore (other than the House trying to sink the payroll tax cut).

@ Bloom

Don’t be so quick to draw a moral from this.

Pardon, but this is one of the more insanely thuggish things to say. Firstly, all states tax. Secondly, the burden isn’t on the taxee to flee but on the taxer to stop. That’s like saying “Well hey, if hate being raped so much why don’t you stop dressing like a whore?” Now imagine that my whore-clothes are superglued onto my body permanently.

Anyways could you please summarize the parable of the broken window again? I feel like your first answer was sarcastic. Also, Z’s answer to your question was in a moralistic sense but the parable not a moral illustration but an economic one. So in the economic sense, I disagree with your definition.

Human rights are one thing, but the right to not pay for basic public services is another. There are countries out there that don’t subsidize in public infrastructure to any significant degree.However, they aren’t very pleasant places to stay.

There are opportunity costs associated with every action.

In fact, if there aren’t opportunity costs, then there’s no point in discussing economics.

What are “public” goods? What would you say is their most important aspect which distinguishes them from “non-public” goods?

Quite a method you got yourself there for eliminating negative consequences of government action. Just make the ones carrying the “opportunity cost” disappear. And what do you do with the ones refusing to leave, and stubbornly insist on negatively affecting your flowery “aggregate utility” model? Gas them?

If a statistical study showed a consistent increase in utility (satisfaction) from 3 to 7 (on a scale from 1 to 10) for groups of three rapists during rape (for a total aggregate societal utility gain of 3x4=12), on average, while a consistent decrease in utility from 9 to 1 for every rape victim, would you go around promoting gang rape as a “public good”? If not, why not? (12 > 8, after all).

Jargon, my argument is not moral but purely economic. Re-read “Human Action”.

Public goods are types of goods subject to market failure. The average return on public infrastructure is much higher than private capital returns, but private capital investment doesn’t occur in this area due to the failure to capture externalities discussed before.

No, just let them vote libertarian. People don’t want Austrian Economics because it doesn’t work. Sure, in 18th century America people got by with private religious education, but they were scraping goat crap on a farm. Sure, there are some developing countries with private infrastructure and education systems, but same story.

No, because there’s such a thing as human rights that comes before personal freedom and private property.

Does public infrastructure have anything to do with rape? If anything, building roads helps law enforcement do its job.

@ Z

I only meant that you were reinforcing Mustang’s incorrect/sarcastic summary of the broken window. It is true that it is possible that the expropriation of one’s wealth towards infrastructure spending might be the spending of their choosing, but since infrastructure is monopolized it’s impossible to tell. Mises was right in that spending people’s money on ends they do not choose reduces utility, but one can’t tell that that expropriatin towards infrastructure wasn’t of their choosing because of the monopolization. All the more reason to privatize infrastructure.

@ Mustang - It’s baffling to me that you recognize the validity of opportunity cost yet still point to studies saying “Look! Infrastructure is good!” No one here wants to undo or destroy infrastructure. Personally my reasoning against infrastructure spending is that you (in 99 cases out of 100) overpay for labor, the satisfaction derived from such projects is incalculable in contrast to private projects, and it justifies the notion that the state should monopolize infrastructure.

The first and last are true. The second one, calculation, is a little misleading. Public and private infrastructure have the same measureable benefit- increased disposable income.

What is market failure? And your externalities do not prove or even suggest anything significant. See James J. Hill’s Great Northern Railroad, the only railroad not to go bankrupt.

Votes don’t mean anything. I can vote for Satan but I won’t get the Satan outcome, capiche? Hey, the Jews could have voted Hitler out. It was their choice. I guess they really just wanted to be exterminated.

Oh really? This is a pretty silly idea. Economics doesn’t ‘work’ anything. If you mean free markets don’t work, then (1) they have not existed so cannot be claimed to be a failure, (2) those periods most resembling free markets were the most wealth-creative periods in history. Why is Hong Kong such a beast? Why is America such a beast? See: Gilded Age and Germany’s Economic Miracle.

They don’t like AE because it doesn’t spoonfeed them pies in the sky from their lovely lords. That and AE, understood by all, would basically end monopoly, which is unacceptable to monopolists. See: http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html

“Hey look at the Soviet standard of living in 1937! It’s 10x greater than that of England in 1754! I guess this means that communism is the best form of economic organization, hurrah!”

Oh you mean positive rights? As in, entitlements? Whose existence can only be funded by coercive expropriation of labor i.e. slavery? Didn’t know you were a supporter of slavery.

Because rape is a crime, as is theft. Infrastructure is not a crime and no one said so.

EDIT: Measurement =/= Calculation. Public projects efficacy cannot be measured because consumers do not ‘vote’ for it’s usage. When the pickled egg guy starts making shitty pickled eggs, less people buy from him. When the roads are shit, who are you going to stop buying from? No one. You already paid for it and it’s there. Not driving on roads wouldn’t be anymore of an input either, because none of the inputs are processed, as they are in a business.

What is market failure? (Not playing dumb – I honestly don’t know the meaning of the phrase.) Is everything which is subject to market failure a public good, by definition, or are there non-public goods which are also subject to market failure?

What do you think is the most important characteristic of public (government) capital “investments” that makes them so much more immune to (market) failure – or so much better at “capturing externalities” – relative to non-public capital investments? What are externalities, and why would capuring them be desirable (valued), and to (by) whom?

Does, in your estimation, the current democratic model “work”? Please check out Beyond Democracy ($0.99 on Kindle, and a quick read – well worth the couple of hours).

Strawman. Harvard is private, and non-religious. So is Khan Academy. Have you read a letter from the 18th century? What did you think about its structure, eloquence, and clarity? There are people scrapping goat crap today that could afford to purchase you and your mother as their slaves.

What are human rights are where are they?

The “public” part makes it equivalent to rape. At least someone must have made an involuntary “contribution” (like the “contribution” made by the raped one during gang rape) – otherwise it would not be “public”, but simply private (i.e. voluntary).

A market failure occurs when the government sells of all its infrastructure and the economy falls apart. Good for James Hill, but countries without public subsidized roads and waterways aren’t the best economic success stories.

Because, among other things, those countries established public education and infrastructure around the time of their economic takeoff.

You can show examples of the public sector not working, but you can’t find any examples of a first world country with no public infrastructure or education.

Slavery is coerced labor, after all. However, the government taking green pieces of paper from you is not quite the same thing.

That’s where voting comes in.

It’s not really much of a term if stretched beyond common sense. A market failure is a market event which allocates resources in a way that fails to maximize whatever utility function you are trying to maximize. Not all market failures indicate a need for public goods. Government failure occurs when the government fails in the same way.

In practice, absolutely everything is subjec to varying degrees of government or market failure. Don’t take these terms as absolutes.

Page 5 > Ctrl+F > “Adam Smith”

Better than any non-electoral system known today. I’ll consider your book, but please, cliffs?

The problem with anarcho-capitalism, besides the idea of abandoning checks and balances and democratic representation, is that it does not guarantee human rights to everyone.

As defined by the UN charter:

If you want to debate the UN, please PM me or start another thread. Otherwise, I’m getting interested in this discussion.

I would say that most democratic countries at least attempt to uphold human rights.

The decline of European classical education has been a tragedy. For-profit college education has undermined the supremacy of Cambridge and King’s College.

If tax funding for rape crisis centers, courts, and police stations to deter crime is equivalent to rape in your eyes, then you and I have a very different ethics.

Interview with one of the co-authors (both Dutch, btw). The book is Cliffs Notes (100 pages or so) of itself. Its arguments couldn’t possibly be made any more cogent, clear, and powerful. Read it. You will thank me for pestering you about it, I think.

That stuff definitely happens with 3rd worlders saddled by the IMF/WB, but are hardly market processes. When Bechtel gets something fo free, why do they give a shit to run a stable long-term business model?

Again correlation =/=causation in regards to your second point. One example is all it takes to disprove an assertion

Don’t make me laugh. Infrastructure? Hong Kong? It’s frickin tiny. Also compulsory education didn’t happen in the US until the 20th century. I think we both know that the key to America’s and Hong Kong’s economic clout isn’t public education, which couldn’t teach highschool students a world map.

You missed the point, which is anyone can point to specific time periods, like early 19th century america and say that people were dirt poor farmers but this only reflects a lack of societal capital accumulation, not the efficacy of any economic paradigm. Once again, correlation =/= causation. In America’s case the all-saving holy highway project happened after America had become an economic powerhouse.

Try stop giving them that paper. Then you see what happens to bad slaves.

Can you explain to me how you think that voting for projects is in any way comparable to paying for services? Firstly, no one who lives far from the project will vote for it. So it probably won’t get passed. Secondly, entrepeneurs choose projects and their locations on the basis of profit and thus effective resource allocation, whereas politicians choose projects for their effects on re-election chances (See: Tennessee Valley Authority). Thirdly, voting is slow. Fourthly, will this voting be compulsory? Fifthly, those who are most affected by said project and least affected get the same amount of say in the matter.

Don’t you realize that monetary transaction is voting? People vote on what services they value most by subscribing to them. You don’t need a political process to vote on things. The difference is no one gets stolen from.