Merit and the marketplace, free choice etc

Horwitz has an article on the “myth of merit”-

In his various chapters and essays on the “mirage” of the concept “social justice,” F. A. Hayek makes a claim that is very often overlooked by those who support the market. He argues that markets generally do not reward “merit.” That is, the people who become wealthy in the marketplace do not do so, for the most part, because they are somehow “better” people than those who are not as wealthy. The wealthy are not necessarily more intelligent, more moral, or even harder-working than the rest of us. However meritorious we think those attributes are, they are not what the market rewards. The market rewards the creation of value in the form of providing goods and services that other people want. Period, end of sentence.

Paraphrasing one of my comments, the free market is not a meritocracy.

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O&M has a post on “cognitive dissonance.”-

[Chen] basically demolished 45 years of experimental results in social psychology that claim to have discovered cognitive dissonance in choices. According to this literature, it is among the best-documented results in psychology that people change their preferences after making a choice so as to rationalize the choice and make themselves feel better about their decision. Chen argues — persuasively — that essentially all these results are statistical artifacts. At a much more sophisticated level, social psychologists have fallen victim to the igon value effect.

Bhagwati on protectionism

An interesting interview with Jagdish Bhagwati where he talks about protectionism and free trade. He mentions global warming too-

I think it depends on the way you do it. First, you’ve got to decide whether there is a problem of an externality. I have doubts about these scientists who claim to have a consensus on global warming because, you know, Freeman Dyson, a great scientific figure, says these guys are really low-level scientists and I’m told by many that they, in fact, are. And if they reach a consensus, I don’t care. I mean, that’s the consensus of incompetents.

But so long as only the scientists were talking about global warming, nobody paid the slightest attention. Remember, not a single senator voted for the Kyoto resolution back in the ’90s. Even Al Gore and Clinton had to walk away from Kyoto. But then the polar bears were threatened, the glaciers began to melt, and then that great French film about the penguins which touched all our hearts came out. So these were three whammies. Even if you live in Peoria you will understand, wrongly maybe, that global warming is a problem. I tell all my students: If they think of something like that for free trade, please let me know.

Two Ts and an M

Parochialism is not a new phenomenon in politics. Neither is hypocrisy. Therefore, when Raj Thackeray is criticized for his “sons of the soil” position on employment, and nothing is said when such discrimination is practiced at the national level, one shouldn’t be surprised. I am referring to this statement by Tharoor-

“As far as our basic policy is concerned, we would certainly be hesitant to offer employment to a foreigner for a job which could be done by an Indian in India.”

He sounds as if its he who’s doing the hiring, and even paying the wages out of his own pocket. If he has a problem with the Chinese (and Chidambaram with migrants from Bangladesh), a diplomatic problem, a “national security” problem, he should be open about it and not talk in terms of who has the first right to a job. Unfortunately though, such small-mindedness is hardly limited to India. Even the bastion of free market capitalism (I am joking), the United States of America, suffers from this mentality—the protectionist one.

Don Boudreaux made a nice point in an open letter regarding the same, to someone who asked what he would do if someone “stole” his job-

My answer to it is this: I’ll find a way to feed my family. I’ll get another job (or jobs). I’ll cut back on less-essential expenses. If I must, I’ll rely on my family and close friends as I hope they would rely on me if they were in dire straits.

But I will not, under any circumstances, use my economic misfortune as an excuse to violate the freedoms of others.

A protectionist is a person who believes that being born in a particular family/ community/ nation gives him an automatic first claim on the property and services of his fellows, and that if they bypass him, he has the right to beat them up, physically and financially, through the use of goons, or the government. He is, in fact, no better than a thug.

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Wired has an article on the man behind Minerva (via K). The US mission of spreading democracy worldwide has been a great success when it comes to South Korea-

Today anonymous dissenters are unlikely to be punished in democratic countries. But the law in South Korea makes it easy for the government to unmask troublesome writers. Every account on Daum and other major sites is associated with a national ID number. In Minerva’s case, Daum promptly handed over his IP address, which led the police directly to Park’s door.

[...]

For 103 days, the South Korean government held Park in a 50-square-foot cell at a Seoul detention center. Interrogators asked about his family, whether he had a girlfriend, whether he was a spy. He tried to keep calm, meeting with his volunteer legal team and studying the writings of the early-20th-century Italian Marxist Antonio Gramsci. “I felt so isolated,” he says. “They accused me of selling out my country. No! I’m not a spy. I wanted to help through my criticism. I had thought that South Korea was a democratic country. I felt as though my nation betrayed me.”

[...]

It is very difficult to find anyone in the South Korean government willing to talk about Minerva. The prosecutors say they can’t discuss the case until the appeal is over. Two spokespeople for the Korea Communication Standards Commission explain that they weren’t directly involved with the case, though they do have as many as 50 employees watching Daum and other sites at any given time. “We have to protect our children and our public,” one of them explains. “That’s the government’s job, to maintain a nice, clean Internet.” A spokesperson for the Ministry of Strategy and Finance says Park was beneath their notice. “If his theories were made by a publicly recognized institute, we might have some comment. And it is not appropriate for the government to comment on forecasts published by citizens on the Internet.” Months before, the head of the same ministry had argued that Minerva’s influence over exchange rates had cost billions. Now, however, the government had nothing to fear. Once again, as it had been during his whole previous life, Park could be treated like any other nobody.

Stay on the right side of people who are in a position to cause grave harm, especially those in government, and you will be okay. Otherwise you will be persecuted. That’s the lesson one learns from all this. If this is the situation in one democracy, this is what happens (via Reason) in, again, the freest country on the planet-

In a case that raises questions about online journalism and privacy rights, the U.S. Department of Justice sent a formal request to an independent news site ordering it to provide details of all reader visits on a certain day.

The grand jury subpoena also required the Philadelphia-based Indymedia.us Web site “not to disclose the existence of this request” unless authorized by the Justice Department, a gag order that presents an unusual quandary for any news organization.

[...]

Morrison replied in a one-sentence letter saying the subpoena had been withdrawn. Around the same time, according to the EFF, the group had a series of discussions with assistant U.S. attorneys in Morrison’s office who threatened Clair with possible prosecution for obstruction of justice if she disclosed the existence of the already-withdrawn subpoena — claiming it “may endanger someone’s health” and would have a “human cost.”

[...]

Bankston has written a longer description of the exchange of letters with the Justice Department, which he hopes will raise awareness of how others should respond to similar legal demands for Web logs, customer records, and compulsory silence. “Our fear is that this kind of bogus gag order is much more common than one would hope, considering they’re legally baseless,” Bankston says. “We’re telling this story in hopes that more providers will press back and go public when the government demands their silence.”

For private money

Sauvik has an article in Mint on private money, plus his daily antidote where he demolishes the ET editorial on the “barbaric metal.” The editors at ET are puzzled about gold’s “intrinsic value.” What applies to beauty and the beholder also applies to all economic goods. All values are subjective in nature-

Gold was some $30 an ounce when Nixon de-linked the dollar from gold, in the early 70s, thereby putting the entire world on a purely fiat money system. Gold has shot over $1000 an ounce now. This is why ordinary common people “respect” gold. These editors worship State-issued papers with Gandhi’s photu on them.

They doubt whether gold possesses “intrinsic value.” Actually, nothing has “intrinsic value,” not even gold. All “value” lies in the minds of valuers. Value is “subjective.” The common people who are buying gold “respect” the value of gold. What, indeed, is respect? The first article of mine ET ever published was titled “Respect Must Be Earned.”

The power to issue fiat money must be taken away from government. But, at the same time, so must the power to tax. In a state where the government has the power to tax, private property can never be safe. Even this position is dodgy though, because Rothbard turned Mises’ impossibility of economic calculation in the Soviet Union argument against the provision of “public goods” by the state. I’ll leave that for another day. This dialogue, however, fits-

Auda: Now! I will tell you what they pay me, and you will tell me if this is a servant’s wages. They pay me, month by month, one hundred golden guineas.
Lawrence: One hundred and fifty, Auda.
Auda: Who told you that?
Lawrence: I have long ears.
Auda: And a long tongue between them.
Lawrence: A hundred; a hundred and fifty; what matters? It’s a trifle…a trifle which they take from a great box they have…
Ali: In Aqaba.
Auda: In Aqaba!
Lawrence: Where else?
Auda: You trouble me like women.
Lawrence: Friends, we have been foolish. Auda will not come to Aqaba.
Auda: No.
Lawrence: For money.
Auda: No.
Lawrence: For Feisal?
Auda: No.
Lawrence: Nor to drive away the Turks. He will come because it is his pleasure.

[...]

Auda: Paper! Paper! There is no gold in Aqaba. No gold! No great box!
Lawrence: Did Auda come to Aqaba for gold?
Auda: For my pleasure as you said, but gold is honorable, and Aurens promised gold. Aurens lied.

“Aurens” promised, and lied. Just like the state.

What sells

Abhishek and K.M. have already commented on this idiotic NYT “book review.” But Jeff Tucker at the Mises blog says it best-

Whatever your opinion of her work, it is a great thing to encounter a figure who believed very seriously in the notion that what you believe about the world really matters. In fact, she arguably took this notion too far, believing that ideas are the foundational source of all ownership – even to the point of owning the ideas themselves. The book that draws attention to this is Goddess of the Market by Jennifer Burns. This book caused my own admiration of what she accomplished to go way up. To me, this book is a model of what a serious biography of a serious person should be like.

In contrast, there is Ayn Rand and the World She Made, by Anne Heller of Esquire and Redbook, a book that focuses on Rand’s sex life and loves and any other prurient details she can dig up at the expense of the ideological core of Rand and her life. The author apparently can’t conceive of the possibility that Rand’s life was really all about ideology and ideas and why they matter. So guess which book gets the headlines in the New York Times while Burns’s serious work is relegated to a parenthetical statement? To ask the question is to answer it.