Random Thoughts On The Passing Scene - Part 7
Economics
Collected over many years, attribution for the title goes to amazing Thomas Sowell based on his once regular column of the same title. Read all of those first and perhaps a second time before mine. I have to note that Art Carden beat me to this.
[Disclaimer that these might be partially or wholly, but completely unintentionally, stolen.]
Economic trade can do more to break down the artificial human barriers that we construct between each other than war and diplomacy could ever hope to accomplish.
Scarcity does not imply value. Scarcity implies poverty.
A good economist has an interest in philosophy and mathematics, but neither one overly so.
Zoning laws are created to combat the fear that too many people have that somewhere, sometime something might change.
A mystifying truth of economics is that the only way to have success is if you continue to have the opportunity to fail. It is a profit and loss system where the two are both necessary.
Incentives > intentions
Economics: the "science" where floors are above and ceilings below.
If economic feasibility studies were as valuable as they're supposed to be, business failure rates would be very low to nonexistent.
Most of the difference between interventionist and noninterventionist economists (liberal and conservative are not the right words here) boils down to how strongly one believes in negative and positive externalities. Interventionists of all stripes either explicitly or implicitly are clinging to a strong view of externality (an inability of the market to properly capture and incentivize costs and benefits) that defies credulity.
You may not believe in the market, but the market believes in you. The market relentlessly seeks to reward those who add value and punish those who subtract value. This truth does not cease to be in effect once you leave the workplace.
People want investing to be like reading the dictionary, predictable and obvious, with the benefit being like reading a generation-defining novel—momentous and unexpectedly rewarding. Somehow they are perplexed, if not enraged, when by pursing these objectives they get some combination of expensive mediocrity and painful surprises.
Patents and copyright should be used exclusively, carefully, and proportionately to protect only those with large differentials between the cost of origination and the cost of replication and only to the extent that it induces the next innovation or creation.
Work is something that is on net socially useful (the activity in total creates more resources than it uses with all costs and benefits included). A hobby, while personally useful, is socially destructive (it uses more resources than it creates leaving aside the personal benefit the hobbyist enjoys). If one's personal fulfillment truly covers the total cost of ALL resources used in pursuing the hobby including the hobbyist's time, then the hobby escapes the socially destructive verdict. Understanding this difference and honestly applying it to one's life will be both socially and personally profitable as it will free you from falsely justifying your pursuits or ignoring the real motives at play.
Winkler’s Law of Sand in the Gears: In every intra-company relationship between two parties along the critical path of production the parties will compete for the status of the under-privileged, under-respected, disenfranchised younger brother who is always getting taken advantage of.
When available, competition is always a superior regulatory force than is government coercion. Choose government regulation only when and to the extent you cannot employ competition.Â
Compounding > shortcuts: It is far better to put one’s efforts into capturing the power of steady, consistent growth than it is to reach for paths of rapid accent. The shortcuts rarely work, and often when they fail, they fail spectacularly.