University of Southern California USC
Peter Gordon
A blog exploring the intersection of economic thinking and urban planning/real estate development and related big-think themes.

Saturday, February 14, 2004 



Democracies do not make war on each other and the number of democracies is increasing. So, we are headed for world peace. Well, slowly. Primitives understand that they are on the wrong side of history and are ruthless in their response. September 11 proved that they now have the means as well as the will to do great harm. This is now a war as auspicious as the ones against Nazis and Communists because precious values of freedom and liberty are at stake.

In a very harsh world, there are high costs to pay -- in lives, in treasure and in some loss of liberty and tranquility at home. High costs for high stakes is the way of the world. The fact that Americans, unlike many Europeans, are willing to make the sacrifices is profound.

The mission is never "unilateral"; there are many strong supporters -- notably those who had a front-row seat at the performance of the former East Bloc. Many others, notably Turks and Saudis, also having been recently hit, are rethinking their pre-war stance.

The "international community" by the East River UN headquarters is hardly that. It is, rather, a bloated bureaucracy with an outlandish and misplaced sense of self-importance. More unintended self-parody than heft, witness the pathetic UN performance in Bosnia and the tragic and steady non-performance in Africa's civil wars. Paul Johnson has urged that the UN relocate to an African capital. Less NYC high-life and more exposure to some harsh realities.

Historian Robert Higgs has documented how wars exact costs in terms of an expanded size and scope of centralized power. The bright side is that whereas growth spurts in the size of government during war are never fully surrendered in peace time (the "ratchet" growth effects that Higgs identifies), losses of liberty are more likely to be recovered. Ever since the Civil War, civil liberties have been many times trampled, whether by Lincoln, Wilson, FDR or rabid red-baiters in post-WWII government. Yet, in another chapter of American Exceptionalism, after all the losses, the long run progress of due process in the U.S. had continued apace. There is, therefore, reason to expect that the excesses of the Patriot Act will be tempered.

The best is always the enemy of the good. Nevertheless, eternal vigilance abroad and at home must and probably will remain standard practice. Our strength is that we are likely not to be on a slippery slope.

Friday, February 13, 2004 



Charles Murray's Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, 800BC-1950 (Harper Collins, 2003) is an audacious project. The critics that I have read focused on methodological issues (which the author addresses in many of his appendices) and the predictable political ones (which he also addresses). Human accomplishment as surveyed by Murray is, of course, breathtaking. The giants identified in 21 areas (arts and sciences, east and west) and their works are astonishing. As the author suggests: "how can people do that?" There are giants among us.

One has to ask: are these giants of the arts and sciences also the moral giants? Probably not. It is reminiscent of questions over whether culture matters, or whether high culture matters. Twentieth-century Europe offers an answer; the hotbed of Western culture spawned horror and terror on an unprecedented scale. This is the continent that gave us Hitler, Stalin, Mussolini, Franco, Milosovics and many of their ilk -- plus millions of willing and enthusiastic followers. Clearly culture must be enjoyed for its own sake.

Adam Smith clarified the benefits of the market system as well as the "esteem system" (Dan Klein's appellation). The latter refers to the importance of trust in producing valuable market as well as non-market interactions. Both breed prosperity and liberty and more -- and are likely to keep spreading. These,then, are some of the sources of human goodness that we can identify. High culture, on the other hand, appears not to be a bulwark against evil. It is simply there to be savored.

Thursday, February 12, 2004 



A Republican Congress and President offer us an expanding welfare state financed by large deficits. Ideology is trumped by electoral politics. Public Choice economics offers the explanation that affluence is the problem. As the opportunity cost of serious political participation increases, more people choose "rational ignorance". (Yes, voter participation increases with income and education but all strata participate less now than in the past.) Most people either do not vote or they participate via a paper-thin level of interest. This is why appearances, hairdos, images and (pricey) twenty-second TV spots matter so much. The consequence of low levels of participation is that interest groups win. The shorthand way to say it is that rich societies choose to afford bad government.

There is, seemingly, no way out. The argument suggests that reform via spending and taxation caps or super-majority voting requirements is unlikely.

Yet, the courts could be helpful. Political gerrymandering is now a science. Data, hardware and software are better than ever. Within the last ten years, the proportion of incumbents re-elected in the U.S. House of Representatives has risen from 92% to 98%. It cannot go much higher. This means that in almost all Congressional (and who knows how many other) districts, large numbers of voters and would-be voters are disenfranchised. In most cases, they sense it or know it.

If we get lucky, the judges and justices may spot a Constitutional problem here. This one would not require a journey of discovery.

Wednesday, February 11, 2004 



Forbes (Feb 16) has an update on heart disease research. It appears that there is good reason to think that leukrotines are a problem and that leukrotine inhibitors are a promising treatment. "Both Merck and Pfizer are now racing to test whether their leukrotine-blocking drugs might work for cardiovascular disease." We hope. In this political season, the demagogues are also racing -- to be the first to threaten "big pharma" for "putting profits before people." The simple answer is that this is impossible; they make profits only if they succeed in saving (extending) people's lives.

It is just like the joke about the deconstructionist who puts aside his objections that science and engineering are simply cultural (and oppressive) artifacts when he is cruising to a conference at 30,000 feet to deliver the bad news about the hegemonists in their white coats.

The demagogues will surely have their lives and the lives of their loved ones extended and/or made less miserable by the nasties who are putting people before profits. Neither group can consider the irony. It is, after all, their intellectual capital that's at stake. What would they do for a living?

Yet, beating up the messenger (deconstructionists or demagogues, even MTV) overlooks the hard fact that they only succeed because they are delivering to an audience. There are large audiences for quirky messages. Mass higher education (a U.S. invention) seems not to have made a difference.

Tuesday, February 10, 2004 



One of my most jarring reading experiences was Peter Landesman's "Sex Slaves on Main Street" in the NY Times Magazine (Jan. 25). His depiction of the international sex slave trade reinforces all of the doubts about humanity that we try not to think about. Young (very young) girls are kidnapped and/or given up by families and condemned to a life of horror. Letters from readers (Feb. 8) echoed their disgust and dismay. Many added that in this case, they felt powerless to "do something." Yet, there are, seemingly, groups that are doing something. Have a look at www.roomtoread.org or www.thailife.de/wecare/depdc/depdc_help.html or www.licadho.org/donation/donation.php or www.streetfriends.org.
Often, a few dollars are enough to buy a young girl a uniform so that she can attend school, get off the streets, and have a chance. Lack of a uniform keeps many out of school. There are many good causes in the world. This one has to be near the top.

Monday, February 09, 2004 



The Southern California Association of Governments has been trying to manage regional development for almost 40 years. Since 1998, they have been issuing a "regional report card", documenting performance in seven categories: income, education, employment, safety, air quality, housing and traffic. The grades awarded are usually miserable. It is often a version of "it's too crowded; no one wants to come here anymore." But, many (mainly from abroad) do want to come here and they do. A sub-text of the SCAG report is that governments are not doing enough. There are plenty of ironies. An underreported theme is that perhaps governments at all levels are doing too much and/or all the wrong things. Too much regulation; too little reliance on markets and incentive-based policies. The latter alternative hypotheses are not considered. Give them more time?

Sunday, February 08, 2004 



Exporting democracy or making the world safe for democracy were themes that infused U.S. foreign policy through much (not all) of the 20th century. The War on Terror has shifted the focus to exporting Civil Society. The broadening of the vocabulary is welcome but foreboding. What is CS? What do people do when left with a minimum of top-down rules? I count these: 1) they specialize, trade and create wealth (and growth); 2) they form voluntary associations that channel the impulses of their other-regarding selves; 3) they form social capital; 4) they form communities (spatial and not); 5) they participate in the evolution of practical institutions, bottom-up; 6)they provide and manage infrastructure. The Voluntary City offers examples, past and present.

Most of economics focuses on #1 but says little about the others five. Yet, people participate in all these activities -- in the context of an ever expanding political ambit, among others. Of course, the capacity of top-down decision making is in serious doubt -- moreso now than in recent memory. What, therefore, will be the direction of the (largely) spontaneous evolution of CS? To what extent does prosperity expand the demand for economic freedoms while expanding freedoms expand prosperity? In other words, how potent is the virtuous cycle? The latter can be boiled down to two (hard to specify) equations, that we could actually start to test as the international data improve. It's a good time to be alive and curious.

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