Self-management in business

It almost sounds like spontaneous organization with echoes of communal cooperation. Here is a huge business venture where the employees run the show:

Junk Food Jury 2

I hope you have been paying attention to your junk food intake during the holiday season. Why do I care? I don’t really.

But just because I think it is a personal choice and responsibility what you eat, that does not mean everyone else does.

The Ontario Medical Association (OMA), infinitely wise, and powerful, has pronounced on junk food. Apparently, it's the cause of the obesity epidemic sweeping our society and OMA knows how to combat the problem. OMA president Dr. Doug Weir: “We are raising a generation of children that will suffer from devastating and wholly preventable diseases, overwhelm the health system, and die prematurely…. The time for gentle admonitions has come and gone. We need to fight…with…. tax incentives and graphic warnings.”

Privately run and voluntary advocacy groups should be able to push an agenda, but OMA is a special case. They bargain with government when physician’s contracts expire. Effectively they are a union monopoly, with the ear of government. They represent the "political, clinical and economic interests" of the Ontario's medical profession. When they advocate legislation to increase taxes, or restrict marketing, you can be certain such legislation is inevitable. Of course their monopoly plus the government monopoly on healthcare, gives them the credibility to say they can mitigate healthcare costs by behavioural engineering.

OMA uses the unfortunate precedent and apparent success of the anti-tobacco campaign to bolster their case. However, tobacco is not an essential requirement of life, food is. The reasons for the steady decline in Canadian smoking rates over the years may be in part due to government action, but I suspect it has more to do with education and societal pressures. There is little reason to ask someone standing beside you to refrain from drinking cola; smoking is different.

Strangely, there is no real scientific evidence that points to junk food as being the cause of shorter lifespans in people or the primary cause of obesity. Diet is so variable, volume of food may be more important. Should we legislate the size of cutlery? Scientifically, there are too many questions to answer before we impose any judgment on food, even if it were appropriate. Agreement on what is junk food will end up being extremely arbitrary.

Last February three Alberta physicians suggested that junk food be reclassified as "pathogenic," disease-causing, like viruses. I wrote about that story here. Their argument is that junk food contains so many excesses related to various chronic conditions, junk food must be the causative agent. Yet that has never been established because very few people (if any) eat junk food exclusively.

So why is OMA so concerned about your diet that they want to warn you using government legislation? Because we let them, its become fashionable for the political elite to rail against junk food. Lots of stories in the States from the West coast, and the East.

I don't really have a problem with an educational assault on junk food without any government involvement. Good advice on diet is to be expected from physicians, why don't they leave it at that?   

The main argument against the OMA proposal is the libertarian one. Should government use its monopoly on the use of force to control our diets? Certainly not!

A climate science debate? We'll see.....

It's been almost six months since I've mentioned global warming. That recent IPCC conference in Doha was barely worth mentioning, not much of consequence happened. I guess just going to a part of the world that depends on the fossil fuel business, with an anti-fossil fuel message is worth noting. So there, noted.

In case you are wondering, I am not denying global warming (climate change or whatever). I believe the planet has been warming, certainly since the last ice age. It's still warming. Are humans the cause? Maybe to some extent, but not to the extent that we need to take any drastic global action, now or ever.

Over the past 22 years IPCC has put out an "assessment"  of the "climate crisis." The fifth one, AR5, was just prematurely released here. Each report since 1990 made predictions based on the climate models IPCC runs. 

The graphic, which comes from this site, shows predictions from the first assessment (FAR) to the last AR4, including an actual measured record (black arrow), at least according the this website.

Terrence Corcoran in the National Post, says AR5 has a “game-changing admission” about the effect of the Sun's magnetic field on climate. He also points out that a debate has broken out among the priesthood of climate science: "we have a science debate, rather than a dumped consensus. It’s not pretty, but it is an improvement over the secretive science that has dominated the IPCC since its inception."

Its good to see debate, that is the essence of science after all, that's how it corrects itself so the truth does emerge....eventually.

The rest of us can get on and discuss the real manmade problems of sovereign debt and currency. There is your real crisis and looming catastrophe. 

Lots of REASON to be optimistic....

...at the end of 2012.

How to increase the cost of post secondary education

Perhaps you have seen the recent television ads from the Ontario government explaining that school isn't like the movies. The ads show dramatized scenes of a student making an extraordinary football catch, another completing an arcane math equation on a blackboard, and both being offered fully paid university scholarships.
Alas, those were movies, in real life students and their parents need to pay for education, so the Ontario government has a solution. It will give qualified students 30% off on their tuition.

You might think that qualifying for this discount would be difficult, not at all, easy as pie. This eligibility wizard lets you know if you qualify, you should try it. You might be surprised to read that in order to qualify gross parental income must be less than $160,000. Thats right $160K, not exactly poverty, not by a long shot. So, if your parents only make a paltry $150K per annum, you're in.
A brief check of average per capita income in Ontario, and you find that most families pull in considerably less than $100K, let alone $160K.
Now lets look at tuition, average undergrad tuition in Ontario is the highest in Canada at just under $7200. A 30% discount brings it down to about $5000.
Sure, even that is a strain on any family, but children take about 18 years before they are ready for university, and planning and saving is something I would expect everyone to do, but thats me, and that is the responsible thing to do.

The point is, making the cost of education lower for many people, actually makes it more expensive for everyone.

When something of value becomes cheaper, more of that something is consumed. Demand for that something becomes greater. Greater demand generally results in higher prices. That is what will happen and is happening to the cost of education in many jurisdictions.

This is another example of how a well-meaning government action is not fully thought through, but in fact leads to unintended consequences as this video points out:

Think like a libertarian in 30 days or less!

Now there is an outrageous claim and a tall order. Some may be mumbling "why would I want to?" 

If you have some free time over the holiday period in the next few weeks, let me suggest a productive way to improve yourself while obtaining a very strong grasp of libertarian principles and a basic understanding of Austrian economics. You may not agree with it all, or any of it, but you will have a better understanding of the libertarian idea.

The reading list that I have linked here was created by Robert Wenzel, who as you can see has a very popular blog. Note that some of the comments below that list suggest other articles that Wenzel missed.

Why we wait for healthcare in Canada....

"We have a (healthcare) system in which the patient is not at the forefront of the system.....We have a system where ..... patients are a cost to the institution....The hospitals in Canada are unique in the OECD in being funded almost exclusively with global budgets....which means that a hospital is given a billion dollars a year....and no matter whether they treat 100 or 1000 or 20,000 patients, every patient that comes into their institution is a cost. This is a perverted system of funding a hospital...."  Dr. Brian Day

See the story of the boy that was paralyzed after surgery delays:

What is the price of the "free healthcare" we receive in Canada? Read this.
Is current healthcare policy sustainable in Canada? Read this.  

Right-to-work OR race-to-the-bottom?

Hard to believe "right-to-work" has arrived in Michigan.
The Detroit area, called Motor City, was once the centre of the universe for automobile manufacturing. Michigan was a fantastic wealth-producer as well as being heavily unionized and really one of the centres for the labour movement in America. Things have changed, that's what competition does.

The manufacturing sector has been shrinking in Michigan since year 2000, and has only weakly recovered in recent years, much of that due to artificial government "stimulus."

But competition has also pushed Michigan to act. Earlier this year neighbouring Indiana became a right-to-work state, so, lose jobs to Indiana or stop the bleeding, that was the choice for Michigan.

Of course Michigan borders Ontario, so are we next? We can hope, but not likely, not yet.

The principle behind right-to-work clearly lines up with the libertarian non-aggression principle. Workers should be able to join and contribute fees to a union or not. Employers should have the right to choose their employees based on whatever criteria they please. Workers should be able to freely associate and form collective bargaining units (unions) and approach employers with terms. Employers should be free to bargain with the union or other workers who are NOT members of the union. Unions and union members do not own the jobs they have, the jobs are the property of the employer/owner of the business. Right-to-work for workers means freedom to choose to belong to a union or not, within a free market.

Of course none of that squares with the way unions operate in reality. Generally the "brothers and sisters" do not appreciate independent thinkers in the workforce and are more likely to bludgeon (and I mean literally) reluctant joiners into joining. This practice of union coercion is referred to as "hard fought gains" by the mainstream media. One of my least favourite reporters from CBC, Neil Macdonald, wrote his fair-minded assessment of the situation here. I'm not sure which of the thirteen "!" CBC unions Macdonald belongs to, but even he couldn't ignore reality in that missive:

"Now, it is unarguably true the unions brought a lot of their misfortune upon themselves. The larger ones have often been corrupt and sometimes entangled with organized crime." Oh really?

Evidence that union jobs don't belong to the union members came recently in the dispute with Hostess Brands. Two unions were involved, the International Brotherhood of Teamsters and Bakery, Confectionary, Tobacco Workers and Grain Millers (BCTGM) Union (part of the AFL-CIO). The story is complicated, Hostess has been struggling for some time now, 8 of the last 11 years were in bankruptcy, and blame is shared all around. But to give you an idea as to how unions help business this is from a story in the Wall Street Journal:

"Under the latest turnaround plan, the sticking point was Hostess's distribution operations, source of the Hostess horror stories filling the media. Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer's shelf. Wonder Bread and Twinkies couldn't ride on the same truck."

Rules are rules, and sometimes they get in the way. Hostess is being liquidated and the jobs are gone for 18,500 people, but the union wins a Pyrrhic victory, whoop-dee-do.

Jon Stewart called right-to-work a race to the bottom and went on to say: "It's one of those things that are actually named for the opposite of the thing they do, like strip bars call themselves gentlemen's clubs."  I think he got that wrong. What unions want is the right-to-coerce, what should be, is the free market.

Anti-vax backlash

Two rules to contemplate for the new year:

1. Never fool with mother nature, she will win.
2. Frequently conspiracy theories have no merit, you should be skeptical always, especially when there is good evidence that contradicts the theory.

Good advice, I think. Sadly the photo left tells a different story. The photo suggests that someone associated with the liberty movement is against vaccination, all vaccination I guess. This is troubling. Certainly the person in that picture has a right to voice an opinion, right or wrong. But blanket generalizations like that do not put libertarians in a good light. The man holding the sign is doing a disservice to the cause of liberty and perpetuating a myth. And both are dangerous. "Say no to vaccine" flies in the face of over 200 years of evidence, it's a stupid, stupid statement. I'm not about to defend the practice of vaccination here, if you are interested in finding out some information from someone other than Alex Jones, then go here.

Its easy to dismiss the tremendous evidence that very few people in the Western world get sick or die from the numerous diseases that don't seem to be making people sick or killing them anymore. The diseases are no longer a problem, most people are immune to them because of vaccinations. But the diseases are still out there, people are still infected, the causative microbes still get passed around. Very few people show symptoms because their immune systems are able to fight the microbes off due to previous vaccination That's how we know the vaccines work. What happens if people refuse vaccinations, like my liberty minded friend above?

In recent years vaccinations have become associated with childhood autism, there is no evidence to support this. Young children get numerous vaccines through their early years. Autism is behavioural disorder that doesn't manifest itself until children are 12 months to 4 years old. Parents look for a cause and point to vaccination because autism and vaccinations are correlated. But correlation is not causation, and I repeat there is not supporting evidence. On the contrary, there is much written against. But worried parents have taken the precautionary principle to heart, and refused certain vaccinations. The results are predictable as you can see here, here, and especially here.

Be skeptical, but be smart.      

The future? "Better in some ways, worse in others."

"The story that was widely accepted in the 1960's.....strong central government and central planning.....is much less believable now, than it was then." David Friedman 

Good news: "the use of force is going down"

"Libertarianism is based on a single ideal, the non-aggression principle, so libertarian rhetoric tends to be remarkably consistent." Mary Ruwart

A new understanding of why money and democracy don’t mix well.

Of the many events that happened in November 2012, one of them was the first Toronto Austrian Scholars Conference. The conference was held by the Mises Institute of Canada, whose mission is to educate the public to the importance of placing human choice at the centre of economic theory.

One of the featured speakers at this conference was Assistant Vice-Provost of the University of Guelph-Humber and Program Head of Business, Dr. George Bragues. My daughter interviewed Dr. Bragues, and here is what she wrote. This originally appeared here.

If democracy needed only to be viewed through a moral lens, Dr. George Bragues, would have many good things to say. “Equality is the moral pivot of the whole democratic regime. And in many ways, a very noble aspect of it,” he says.

But enter a financial lens, and the picture becomes clouded with contradictions.

Money in a democracy is an affair of the State; the State prints the money, and oversees its supply. But in a democracy, the State is also voted in by the many. This naturally brings political incentives into the picture – and more than that, the necessity to please the many in order to win their votes.

“Given the moral climate democracies tend to foster, and given the incentives that politicians face to get votes – politicians tend to be inclined toward deficit spending,” says Dr. Bragues. He explains: “Democratic politics becomes a bit of a bidding war, where politicians tend to outbid one another in an ‘I can offer you that’ manner in order to win a majority. But never is there talk about how it will be paid for. In a democracy, the cost of public goods always appears cheaper than they really are to the voter,” he says.

Once politicians are faced with deficits, Dr. Bragues explains the three options from which they have to choose: “One – you can cut spending, which is not very popular. Two – you can increase taxes, which is difficult from a political standpoint. Three – you can just print more money.”

Dr. Bragues says it is this third option that is often the chosen route, given the innate realities of a democracy. But to take this one step further, Dr. Bragues adds that printing more money leads to its devaluation. Soft money, as it is otherwise known.

Here comes the part where Dr. Bragues prefaces his thoughts with “I hope I don’t sound pessimistic.”

“Soft money raises serious moral questions.”

He argues that certain virtues become undermined with soft money, ultimately and inevitably leading to a moral decline. “What ends up happening is one part of society uses another part. The people who profit more from a soft money regime gain at the expense of those who get hurt by it.”

“So – are you really treating everybody equally? Or is the political regime just helping one part of society to gain at the expense of another?”

Here is Prof. Bragues in his own words at the conference:

Middle East Morass

Troubling, is what I would call some of the commentary from libertarians on Facebook and other social media with regard to the Palestinian - Israeli conflict recently.

Steve Horwitz, a professor of economics and an advocate of the Austrian School, wrote a blog post on the conflict that sums up my thoughts very well, in an argument that might satisfy many libertarians. Have a look at his blog post, it's worth your time.

The issue of course is extremely complex, made worse by missteps on both sides and by the 24 hour news cycle that needs to be fed. On top of that there are issues of political correctness when one or the other side is criticized.

A great many younger libertarians and modern day liberals have approached this conflict with the same view promulgated by politicians, commentators, and reinforced by the modern liberal mainstream media who believe they are being objective in their position which sounds something like this: 

Poor tiny Gaza is being blockaded by the tyrannical Israeli's, whose apartheid policies have caused the Palestinian people untold hardship. It's an unfair fight, the Israeli's with their modern military might against the Palestinian's homemade rockets and plucky attitude of resistance. 

That represents the superficial argument if you, like many, are unaware of the history of this conflict or you have been fed the revisionist story widely available on the CBC et al. 

The purpose of my blog is to advance the cause of liberty and secularism. It is difficult to ignore that this conflict seems to be a clash of religions. Lets put aside the conflict for the moment, one has to consider which side in this conflict has the greatest possibility of advancing the cause of liberty in the future. So lets look at that.

Over the past two years a number Arab states in the region have undergone what is called the Arab Spring. This has been touted as a freedom movement by the liberal media, a move towards democracy and away from dictatorial rule. In several of the countries dictators have been overthrown or killed and replaced by new government. Lets look at Egypt, one of the more "peaceful" revolutions. The dictator Mubarak was overthrown, the new President, Mr. Morsi, after 100 days in power has adopted temporary sweeping new powers, effectively making him a dictator now backed by the Muslim Brotherhood. A Mubarak military dictatorship has been replaced by a Morsi theocratic dictatorship. 

Is that a move forward or backward? I'm not sure. 

Its happened in other places and in Syria, it is still happening. The dictator is slaughtering his own people, cutting them off from the rest of the world (Internet was turned off for two days) with no peace in sight yet. The Arab Spring has morphed into the Islamist Winter. I'm going to take a guess and say that it is unlikely that any of these revolutions will result in classical liberal democracies with the type of liberties common in other countries like Canada.

On the other hand Prof. Horwitz has this to say: "Let me be blunt: there is one and only one state in the region that rests on broadly classical liberal values and that is Israel. It has the rule of law, an independent judiciary, a more or less market economy that protects private property, not to mention a higher degree of ethnic/religious inclusiveness in its political institutions. It is far from perfect, but it is the most classical liberal game in town."

Their have been several wars since the state of Israel was founded 65 years ago, Israel has been victorious in all of them. Do you seriously believe that if Israel had lost one of those wars the country would still exist? I don't. Yet each of Israel's neighbours still exist, they have even (foolishly IMHO) had land returned by the Israeli's in an attempt to have peace, but those wars have morphed into an ongoing war of attrition. I'm predicting this war is going to get much, much bigger, in many different ways. I hope not, but history is not on the side of peace. 

The video below is a bit of history, and if you haven't seen it you should.

A farewell from Ron Paul

Here is likely the final address to Congress of Texas Rep. Ron Paul. His final chance to tell them what he really thinks, and he pulls no punches as usual.

Market Power - I, Pencil

There is nothing simple about the science of economics. Worse yet it's very difficult to predict using ordinary mathematical principles commonly used in science.

For example in chemistry it's fairly straightforward to predict the products and their quantity in a particular chemical reaction or even a set of reactions if the starting materials and conditions of the chemical reaction are known beforehand. Using stoichiometry, "the rules of chemical reactions," its simple enough that high school students can do the calculations and make the predictions.

Economics, is very different. There is something called econometrics, the application of math and statistics to economics. It's very useful in showing economic trends and events in the past, but predicting the future, not so much.

In the 19th century, Thomas Carlyle called economics the "dismal science" in response to the grim predictions in the writings of Malthus in the previous century. Malthus was wrong, he could not predict the scientific and agricultural advances that changed the lives and economics of Western civilization, the apocalypse did not happen as Malthus envisioned.

Malthusians in the guise of environmentalists are still around today, predicting doom and gloom. It makes for great news stories because of the hyperbole involved, the books written, movies made, and the creation of an army of charlatan scientists predicting doom and gloom. Malthus would have been proud.

In economics, more often than not, the past does not predict the future because human actions are far too complex. But because humans are incentivized to act for their own well being, what seems chaotic and spontaneous often has wonderful orderly results, and what seems destructive, ends up being very creative.

The following video is a perfect example of a seemingly chaotic and spontaneous interplay, creating order.           

If you didn't understand that, here it is explained.