WWMD: What Would Malthus Do?

An article in this week's Economist discusses recent history and current trends in world population.

If you'll recall the "Logistic Equation" from precalculus or calculus, you know that certain things, such as population growth and predator-prey relationships, can be shown with a nifty formula, involving an ugly thing called the natural number "e." When graphed, this renders an s-shaped curve, or what looks like a sideways graph of tangent.

Basically, it means that populations tend to grow slowly at first, then reach a critical number that sends the species population soaring through reproduction, until environmental effects (shortage of food, disease, predators, or crowding) force members of the population out, or dead. The curve levels out and maintains what would appear to be a long-term stable number, ceteris paribus.

Numbers are still growing; but recently—it is impossible to know exactly when—an inflection point seems to have been reached. The rate of population increase began to slow. In more and more countries, women started having fewer children than the number required to keep populations stable. Four out of nine people already live in countries in which the fertility rate has dipped below the replacement rate. Last year the United Nations said it thought the world's average fertility would fall below replacement by 2025. Demographers expect the global population to peak at around 10 billion (it is now 6.5 billion) by mid-century.

I would wager this recent inflection point has something to do with the signals we are receiving from our environment. Increased income, wealth, and abundance of materials has given rise to a shift in attitudes among young professionals, whom would rather use disposable income to enjoy themselves than save for a child's college, especially when costs are rising as rapidly as their are in the knowledge economy.

Think of twentysomethings as a single workforce, the best educated there is. In Japan (see article), that workforce will shrink by a fifth in the next decade—a considerable loss of knowledge and skills... In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

Well, hardly a poor use of resources if its a choice willingly made. But it begs the question: how much does the "labor" or "human capital" part of the production function really affect the makeup of an economy?

States should not be in the business of pushing people to have babies. If women decide to spend their 20s clubbing rather than child-rearing, and their cash on handbags rather than nappies, that's up to them.

Really? That's interesting, because an article from Medical News Today discusses some of the incentives Estonia is using to entice its young females to have multiple children. From that article:

Estonia provides employed women who have children with their monthly salary, up to $1,560 monthly, over a 15-month period and unemployed women with $200 monthly.

Whatever the measures, governments tend to protect their investments in capital and infrastructure and have been known to wage war, from time to time, over resources. So why not protect human capital as well?

more people + better education = economic growth

Oil Ref-Irony: A Minor Observation

Global warming threatens to thaw the world's arctic climate, which is exactly where the Bush administration talked about drilling a few years ago in Alaska.

The irony is rich: if we drill in Alaska, we threaten wildlife there; if we don't global warming will eventually kill them off (if global warming is even a significant trend).

Even more ironic is a recent note I heard about oil taxes floating a few indigenous tribes in the arctic, who would have been forced to assimilate a long time ago if not for oil revenues, but whose way of life (e.g. hunting seals, polar bears) is threatened by the "global warming trend." There has to be a cliché to describe this predicament...

North Korea Statism as Organized Crime

Today's article from the Informed Reader Blog over at the Wall Street Journal discusses N. Korea's statism. The first paragraph is quite good and spurred my thoughts.

The North Korean government’s stake in criminal enterprises is large enough that it will prolong the rogue state’s clash with the West, whether or not Pyongyang halts its nuclear-weapons program. Through interviews with defectors and policy makers, Time’s Bill Powell and Adam Zagorin describe the mechanics of how government dealings in Pyongyang translate into counterfeit money in New Jersey and heroin in Russia.

I'd love to hear a libertarian's thoughts on the first sentence in particular. It's a shame most libertarians live in advanced western culture, where their philosophical ideas, no matter how odd or unproven, are allowed to flourish.

State Criminal Activity
The idea of the State engaging in criminal enterprises is quite alarming to me. My libertarian friends might say that the State is already an organized crime unit by their own definition. In any case, its clear N. Korea's interests are not in promoting the welfare of its citizens through its "comparative advantage in violence."

Counterfeiting

Illegal activities bring $1 billion a year to Pyongyang, a State Department official tells Time. That compares with $1.7 billion in legitimate exports in 2005, based on estimates by the Central Intelligence Agency.

In addition to constituting more than half of N. Korea's trade income, counterfeiting has been cited as a means of modern warfare. Debase the quality of a country's products, commodities, or currencies, and you've got people worried. Call it "economic terrorism." We've even engaged in it ourselves.

Our libertarian friends would be more apt to quit their Rothbard-inspired gold buggery and focus on the dangers presented by counterfeiting paper currency by other governments, not our own. Don't get me started on commodity-based currency, but foreign counterfeiting could pose a serious threat to the strong currencies of the world.

'Passive Citizenship' and the Role of Judicial Review

During a lecture last January, a thought occurred to me: perhaps judicial review is a major contributor to passive citizenship.

By establishing Judicial Review, the US Supreme Court effectively took the job of monitoring legislation from irritated citizens and gave it to learned lawyers. In and of itself, this may be a more efficient way of reviewing legislation, striking bad law, and keeping legislators in line.

However, "passive citizenship" is a common problem in America, which I personally categorize as a general disinterest in politics, issues "beneath" learned citizens, and debates. The latter may cause a drop in participation if one fears confrontation, offending someone, or failing to make a point (or simply making an ass of one's self).

In a country where the government takes over this role, what incentives do citizens have in participating in the political process if their vector of preferences includes risk-averse behaviors noted above.

Then does a multiparty system actually encourage debate? More views expressed publicly by politicians or celebrities may make more people feel comfortable with expressing their own views, writing their congressman, or by participating in a local peaceful protest. Power to the people.

Rational Gay Union Policy

I'm not attempting to steal JurisNaturalist's thunder, but our recent discussion of the rationality of gay union is even more important to post because we're both fairly conservative Christian men.

JN sent me an e-mail this morning about a possible paper topic. A general outline of our discussion (he might contest it was one-sided pontificating) is below.

Assumptions:

1. Heterosexual unions (hereafter referred to as "marriages") are good for society. They promote procreation, family values, sexual and mental health, and general happiness.
2. Heterosexual couples choose to enter into marriage for these reasons, and according to individual sets of tastes and preferences (often, individuals are said to display a "vector" of preferences, tradition being one common example).
3. Marriage is a private contract and subject to analogs of common contract law. Divorces, alimony, custody and more have analogs in breech of contract, reparations, and property ownership, respectively (forgive the coldness).
4. Individuals enter into contracts only when it is beneficial to both parties.
5. It has not been widely shown by credible sources that homosexual unions (hereafter referred to as "gay unions") are not afforded the same quality of life improvements set forth in step 1.
   
6. It follows that all couples, regardless of sexuality, benefit from union (steps 1 and 4 with 5).
7. As long as individuals benefit, society's welfare increases.
8. It is in the best interest of governments to sanction unions for all couples.

Caveats:

1. Some members of society may receive disutility from the existence of gay unions. One might imagine an extreme conservative Christian to be extremely irked by his state's passage of such a law. In this case, social welfare decreases.
2. Some members of the gay community receive disutility from the ban or non-recognition of gay unions. One might imagine an extreme leftist progressive becoming irate over a state ban of gay marriage. In this case, social welfare also decreases.

We are left with no decision. Either banning or allowing gay union will decrease social welfare. We much measure the total welfare effect of each and compare three worlds:

1. Where gay union is allowed
2. Where gay union is banned
3. Where those receiving disutility from the permission of gay union do not exist

In the first two worlds, both containing the individual that receive disutility from permission, social welfare is not optimal. When that common factor is removed, in world 3, social welfare is optimized based on the above assumptions (thought process).

We see, then, that the market for gay union has a positive externality in that it increases total social welfare, but costs of offending idealogues are included in any individual policy decision. Following general theory of market failures and government intervention from any basic resource economics course, one sees that gay unions are underprovided. This is much in the same way that education is thought to be underprovided in Externalities in a Nutshell; however, in that article, higher than normal costs are borne by buyers but in gay unions, these costs are borne by other individuals.

It occurs to me that, by my last statement, this means the market for gay unions contains a negative externality, not a positive one. This means that the market over-provides the number of unions. However, I believe this discrepancy lies in whom one place initial rights (see Property Law or Google for some more information on "initial allocation". If anyone can find a hole in my logic, please leave a comment. If a negative externality is actually the case, the following analysis is perfectly incorrect.

The common solution, then, is that government intervene to create an environment conducive to more gay unions, either silencing or removal of the offended, or in some other way encouraging couples to enter this contract. If this means subsidizing the union, then I see potential laws being similar to current marriage laws, including tax breaks for the union, for raising children, etc.

It seems more likely, however, that the first step be allowing the unions to take place at all.

Paper Idea: The Benefits of a U.S. Multiparty System

Any well-connected reader might have noticed third-party candidate news during the last election, and I'm sure it will come up again. With movies like Man of the Year becoming more popular, the ideas of third parties and general political change are enjoyed by most of the public.

Train of thought:

1. Third parties create political dialog through special interest proposals
2. Third parties reduce polarization through increased choice (it's tough to be "in the middle" of three diverse groups)
3. Legislative debate and dialog produce ideas
4. More ideas are better than less ideas (due to increased choice)
5. Third parties encourage public debate (in homes and/or media)
6. Public opinion influences elected official behavior (perhaps principal-agent connection)
7. Ideas will be "purchased" in the market through policy
8. Only quality policy will pass the rigorous debate phase
9. Quality policy increases voter happiness, participation

Hypotheses:

1. Quality of policy after established third party participation increases.
2. Quality policy increases voter participation.

Maybe:

1. Quality policy has spillover effects: decreasing bureaucracy or its costs, increasing satisfaction, decreasing domestic unrest or terrorism, increased unemployment, efficient taxing, &c.
   

Why Gun Control via the Insurance Vehicle Isn't So Easy

This morning, I submitted my thoughts below to the author of this article. Please read over his proposal that increased personal liability insurance coverage could serve as a better gun "control."

I enjoyed a good idea as much as the next person. this article on insuring firearm owners strikes me as a method of controlling both the number of citizens owning guns and the number of "accidents," or at the least "accidents" without compensation that occur each year.

I wonder though, how such a policy would prevent violent crime in the nations most notorious crime areas (New York, Atlanta, and Chicago). I feel that any kind of gun control policy will always fall short of reducing violent crime outside the deterrent effect that widespread proliferation insures. If you don't know who has a gun on the subway, you are less likely to pull yours out in the commission of a violent crime. Unfortunately, forcing insurance coverage seems more likely to increase the cost of owning (and operating) a weapon and decrease the numbers of gun owners in particularly high-risk areas. This all but eliminates the deterrent effect.

For my thoughts on gun control, a game theory analysis that affects my reasoning for widespread proliferation, and opinion of forced insurance coverage, see these posts:

Game Theory and VT Shootings
Healthcare is Messier Than You Think

Comments are welcome and encouraged.

Income Tax

This time of year my mind always wanders to the income tax. I just want to collect a few short thoughts, and comments are welcome.

A flat tax disproportionately burdens the poor. Yes, the percentages are the same, but who can more afford the flat 10 or 15 percent? The person making six figures, not the one below the poverty line. The distinguishing factor here is how we define subsistence.

That's why our income tax is called a progressive tax.

And it's a pain to file. But without withholding, the people put most at risk of defaulting on their tax bill, otherwise productive members of society if by meager means, would be thrown into debtor's prison. Or jail, I guess we don't have debtors prison anymore. Without withholdings, the poorest members of society would not receive an injection of "unexpected income" and people of modest means would be hit with an "unexpected debt" that may be hard to pay.

Don't mess with something if it ain't broke.

Cheating: Jobs and Relationships

Without going into too much detail, please take the following scenario:

1. Policemen need to be honest.
2. The nature of their work exposes them to bribes: opportunities to "cheat."
3. Their decision to cheat relies partly on the probability of getting caught, the amount of the bribe, and some sense of satisfaction (with themselves, their ethics, their job, etc.).
4. Many less will cheat with a higher salary, but bribes may just become bigger to compensate.
5. So, they may be kept from cheating by keeping a significant portion of their compensation out of their pockets until their entire career can be "certified" clean; that is, give a good pension to the deserving, good cop.

Now, it may not seem natural at first, but taking the scenario of a spouse, or commited one into account:

1. Spouses need to be honest. Love one another. Be trustworthy. All that jazz.
2. The nature of being a social animal exposes them to plenty of opportunities to "cheat." Define that however you wish.
3. Their decision to cheat relies partly on the probability of getting caught, the reward for cheating (the attractiveness of the individual, their attentiveness, their gifts, etc.), and some sense of satisfaction (with themselves, their ethics, their relationship, etc.).
4. Many less will cheat with a better looking mate, a higher combined income, better emotional security... but barring it all they may just cheat with an even further attractive mate. In the end, its all about morals. Why else would super-celebs cheat?
   
5. So, then, what keeps one from cheating? A significant portion of compensation must be kept until after a clean record can be proven. Since gifts, income, and even beauty don't make much sense here, I am left an appearantly logical conclusion: give good couples a great reward. God will give us good "pensions" for displaying His love and commitment in our human endeavours on Earth.