People want higher incomes

I was reading an interesting article by Roger Kerr. Now there were a lot of good points here which I plan to discuss at some point, however I’m not going to right now. One thing that did catch my eye was a poll he used as evidence that our incomes are too low. According to this poll 96% of New Zealander’s want higher incomes.

Now this poll is stupid, deep down 100% of people want higher incomes. All the poll is tell me is that 96% of people are honest about wanting more money, while 4% of people want to make themselves feel good by pretending to not value material things. It reminds me of when I was a student working at the Warehouse and hippies would come in complaining about capitalism and social inequality while happily buying goods that would have ‘exploited’ foreign labour.

Who needs government anyway?

We talk about government intervention all the time, but there are those who believe that governments themselves are unnecessary in modern economies. Peter Leeson says

Anarchy, like all political-economic organizations, is riddled with problems. It is not clear that these problems are any
more numerous or severe than those that plague governments, however. …Where the state does not provide law, order, or the
institutions required to produce these things, private institutions emerge to perform these roles instead.

It may be that many small, everyday transactions, such as those cited by Leeson, would still happen smoothly without government involvement. However, as Rodrik points
, these sort of things don’t scale well. They tend to rely on repeated transactions between individual agents to maintain co-operation. Once people have to interact on a one-shot basis, as happens in most large economies, this co-operation breaks down without enforcement. If you don’t expect to transact again then there is no incentive to invest in a reputation as an honest trader.

There is also the problem of maintaining a functioning financial system in a large economy. This is very difficult to do without some
regulation, as the online life simulation Second Life is finding out.

The Economist writes well

On the economist blog they decide to talk about carbon emissions. Everything they said was simple 1st year economics, I completely agree with them. But they say it so well, and in so few words.

Now they might make the odd mistake (such as inverting the exchange rate and saying we are 72% over-valued against the US$ when it was actually about 9%), but they write so well. I know its not much of a compliment from someone as illiterate as myself, so I was wondering what everyone else thinks.

Someone mentioned us

How awfully nice of no right turn to mention us. I was surprised to see our traffic jump 10 fold, and there is the reason.

As a result we have already had one new intelligent comment from Nigel Kearney, lets see if we can get some more 😉