Archive for February, 2011

…is paved with good intentions. That’s how¬†Saint Bernard of Clairvaux put it about a thousand years ago. Unfortunately, people forgot about it and literally thousands of well-intended policies were passed with disastrous consequences, mostly for third parties.

One particular case was coined in the 1960s, labeled affirmative action. Wikipedia describes it as “policies that take factors including race, color, religion, sex, or national origin into consideration in order to benefit an underrepresented group, usually as a means to counter the effects of a history of discrimination”. Sounds great, somehow social and just.

But what did affirmative action really do to the people affected? Did it really benefit black people? Thomas Sowell describes the effect from his point of view:

As we see the actual effect of affirmative action was to delegitimize blacks’ achievements. Nobody intended to do this. But it is therefore important to always check for the actual consequences of policies and not to judge a wine by the bottle’s label. I can only recommend reading Dr. Sowell’s books. He is truly one of the view exceptional intellectuals of our time.

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Please take the opportunity and vote. Thanks!

*you can now also rate each single post!

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In combination with the gorgeous weather the recently fallen snow actually makes sense. Welcome to Switzerland at its very best!

Snowy trees on the way to campus

Winter Wonderland St.Gallen

…would be awesome to have this kind of scenery every day when walking to school ūüôā

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here we snow again

End of February and for lack of anything better to do Saint Peter sent some winter to Switzerland. Dislike.

View of St.Gallen from my house

Some snowbound stairs at the Rosenberg

Street in front of my house

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elitist thinking

Starting with a  simple question: Is there any reason to subsidize theaters?

For Uncommon Knowledge Prof. Sowell discusses the role of intellectuals in society, their lack of knowledge as well as their attempt to disguise this lack by self-pleasing arrogance:

William F. Buckley, Jr. on his attitude towards intellectuals:

I’d rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University.

Sowell on why intellectuals regard themselves as superior:

They have every incentive to believe they are brighter than other people, and know more than other people because they have been told that all their lives.

Take this into account and reconsider the above-mentioned question. Surely, it is the small minority of self-proclaimed intellectuals who want other people to believe the answer is ‘yes’. But is there any reason, any factual right to take money from other people (i.e. taxpayers) by using force in order to subsidize what a small minority regards as amusing? The fallacy in this case has been described beautifully by Bill Maher in I’m Swiss:

We must stop making opinion into law.

If I happen to like chocolate ice cream, or soccer, or opera, do I have any right to oblige you to pay for my enjoyment? Simply, the answer is no. People ought to choose independently what they want to pay for. If you prefer cinema to theater, go ahead. If you choose America’s Idol over Shakespeare, go ahead. It is your decision, you have pay the bill. And you have no justification whatsoever to pass the bill to someone else.

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It just takes a couple of minutes to get bored or even annoyed by most televised talk shows today. Thanks to youtube and Uncommon Knowledge you no longer have to waste your time watching stupid discussions with Anne Will:

In this 26-minutes video, Dr. Friedman (in contrast to Dr. a.D. Guttenberg he truly deserved his title) explains what libertarianism is all about. This covers among other topics…

  • …why helmet laws should be eliminated,
  • …why airline pilots ought to work without licenses,
  • …why the Food and Drug Administration should be abolished
  • …and which government departments are justified.

It’s always a mystery to me why people think that some experts in a Washington office who don’t know you, don’t know me, don’t know our children, know better than you and I do what we want to have on our packages and what we want our children to know.

If you agree with what he says and especially if you don’t, get yourself a copy of “Free to Choose“. It is probably the greatest books ever written about economics and society.

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sankt gallen at night

Just an impression of what St.Gallen looked like when I finally left the library…

City of St.Gallen at night

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Wonderful WSJ article taking a statement by George Osborne, Chancellor of the Exchequer of the United Kingdom, as a starting point for analyzing what went wrong in Anglo-Saxon economic politics:

WSJ – George Osborne’s Crony Capitalism

“They have promised to pay smaller bonuses to their staff, to pay more taxes, and to lend more to regional businesses.”

Jamie Whyte beautifully describes the fallacies of this statement and how Osborne’s policy is related to both 1930s fascism and the recent financial crisis.

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William Voegeli,¬†author of Never Enough: America’s Limitless Welfare State, discusses whether there is a possibility at all to reduce the extent of welfare state.

For decades libertarian economists have failed to clarify the long-term consequences of ever enlarging government interventions. Instead short-sighted politics based on current events (hurricane Katrina, 9/11, Lehman) were signed into law over and over again. Voegeli raises the important question what can be done about this and how libertarians have to change their efforts in oder to succeed. Alas, his answer (workfare) is rather poor compared to truly libertarian ideas (EITC among others).

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With reference to the current debate in Germany about passing a law stating a minimum proportion of women in leadership positions, let’s hear an economic analysis:

The major fallacy with a policy proposal like that is a classic misunderstanding of statistics. Only after taking into account all observable differences between men and women, we can say something about discrimination. If people of the same age, qualification, work experience, productivity, etc. are paid differently, the difference is just the upper threshold of potential discrimination. There is certainly a whole bunch of factors that we cannot observe so discrimination would be only a small fraction of the correctly measured wage differential. Nonetheless, this differential is already close to zero after correcting for age, qualification and work experience.

In addition, there is absolutely no reason to assume 17.6 per cent to be too low or too high a proportion*. Whether or not women capture a larger or smaller share of leadership positions ought to be a decision made by thousands and millions of individuals. There is no single person or political party having a better understanding of what to do than the collective of these individuals. And besides, do not ignore that those companies who discriminate against women pay a price for doing so! They will lose their most talented women to competitors who do not discriminate. In a free market no company can afford discrimination and no one will do. It has frequently been state-run institutions being the only ones who could afford discrimination because they did not face competition in the market place.

And finally, one fun statistic to show the problem of dealing inexpertly with figures: In more than 90 per cent of fatal accidents at work it is a man -not a woman- biting the dust! What policy can you derive from that shocking proportion?

Update: How policies favoring certain groups (e.g. affirmative action) actually affect these groups has be described here.

*proportion of female employees in leadership positions in DAX companies

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