Friday, October 16, 2009

KA-POW! #3 - Harper

This week's “Kick-Ass Post O’th’ Week” (KA-POW) goes to F.A. 'Baldy' Harper for “The Omelet Has No Rights" :

The omelet, or collectivist, concept holds that the social omelet is the sole concern and objective of humanity. "When you are making an omelet, you must break the eggs." By this view, human rights are vested completely in the collective of persons, not in individuals. Since the will of the collective is deemed to be the same thing as justice, it follows that rights reside in the omelet and not in the individual eggs. So it becomes humane and socially justifiable to break the eggs for the omelet because that is what eggs are for. ...

The other view of human rights, the libertarian view, may be called that of the individual egg. It holds that human rights reside entirely in individual persons as such. This reasoning is based on the biological and spiritual nature of man. It looks upon every collective of persons, whether the Elks Club or the nation, as nothing more than a temporary arrangement of persons for purposes of some convenience; and if all persons are removed from the collective, there remains only an empty organizational shell devoid of any problem of human rights. Since the functional unit of all life and all action is the individual person, it is here that any sound concept of human rights must be anchored. ... "You can't hatch chicks from an omelet."

The individual person is the only unit that acts, even in an army under strictest orders doing the goose step. No single sensation of a person can be transferred to another person. His every thought is individually constructed, and can be transmitted to another only with difficulty and inaccuracies.

...

A simple truth is that one cannot serve two masters because it is impossible to obey two conflicting orders. As applied to the problem of human rights, this means that one cannot serve both his conscience and some political mechanism at the same time, in the sense of ruler.

Whenever one is in the sorry plight of having conflicting orders from two sources, he must choose his master and suffer the consequences. It is always enticing to subordinate the conscience because the retributions it imposes are less clear and vivid than the gallows flaunted in his face by his fellow men in the role of master. God in His design gave man, as a necessary part of the right of freedom, the chance to do evil as well as good. Had He denied to man the chance to do evil, it would have been necessary also to deny him the right to freedom itself — the problem of human rights.

Honorable mention goes to Art Carden for "Tire Trade Tirade" :

A simple example illustrates the essential logic of comparative advantage. Suppose Amy can produce either one hundred oranges or ten tires in a day while Chen can produce either ten oranges or two tires in a day. At first glance, it doesn't look like they have anything to gain from one another: Amy is much more productive than Chen.

When we compare their opportunity costs, however, a different story emerges. The opportunity cost is what you have to give up to get something else. To produce one hundred oranges, Amy gives up the opportunity to produce ten tires. Her opportunity cost of an orange is one tenth of a tire, and her opportunity cost of a tire is ten oranges. Chen's opportunity cost of an orange is one fifth of a tire, and her opportunity cost of a tire is five oranges.

In terms of tires, it is cheaper for Amy to produce oranges because she only gives up one tenth of a tire to produce an orange while Chen has to give up one fifth of a tire. In terms of oranges, it is cheaper for Chen to produce tires because he only gives up five oranges to produce a tire while Amy gives up ten oranges to produce a tire.

They can both have more oranges and more tires if they specialize and trade. Suppose Chen offers Amy one tire in exchange for seven oranges. Chen would be better off because he would get seven oranges in exchange for one tire, whereas he would only get five oranges in exchange for one tire if he produced them himself.

So if Chen is better off, Amy has to be worse off, right? Wrong. This is an attractive deal for Amy too, because she can get a tire for only seven oranges, which is fewer than the ten oranges she would have to give up if she produced tires herself. At any "orange price" of tires between five and ten, Amy and Chen are both better off.

Economists have shown that the same logic applies to trade between countries as well. Simply replace "Amy" with "the United States of America" and "Chen" with "China," and you can easily see that both countries are better off if they can specialize and trade.

This law of comparative advantage is one of the most important and most poorly understood ideas in economics. It is also an anvil that has worn out many hammers. In spite of repeated objections from noneconomists and even a few theoretical counterexamples from economists, the law of comparative advantage remains robust.


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