Tuesday, August 30, 2011

Capitalism and Socialism


“There are two ways for an individual to gain wealth: create it, or take it from someone else who has created it.  Capitalism is a way of organizing economic activity where individuals are free to create wealth, but not to take wealth by means of force or coercion.” ( From The WKU Center for the Study of Capitalism link)


“generally involves the argument that economic production has an essential social as distinct from individual element, and this requires public investment and justifies a public share in and distribution of rewards.” from The Blackwell Encyclopedia of Political Thought (Oxford, 1987)   in Dictionary of Theories, Jenifer Bothamley Visible Ink Press,2002)

Two Patterns of Socialism: Communism and Fascism

“The Russian pattern of socialism is purely bureaucratic. All economic enterprises are departments of the government, like the administration of the army or the postal system. Every plant, shop, or farm stands in the same relation to the superior central organization as does a post office to the office of the postmaster general.”

 “The German pattern differs from the Russian one in that it (seemingly and nominally) maintains private ownership of the means of production and keeps the appearance of ordinary prices, wages, and markets. There are, however, no longer entrepreneurs but only shop managers (Betriebsfiihrer). These shop managers do the buying and selling, pay the workers, contract debts, and pay interest and amortization.

There is no labor market; wages and salaries are fixed by the government. The government tells the shop managers what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. The government decrees to whom and under what terms the capitalists must entrust their funds and where and at what wages laborers must work. Market exchange is only a sham. All the prices, wages, and interest rates are fixed by the central authority. They are prices, wages, and interest rates in appearance only; in reality they are merely determinations of quantity relations in the government's orders. The government, not the consumers, directs production. “

This is socialism in the outward guise of capitalism. Some labels of capitalistic market economy are retained but they mean something entirely different from what they mean in a genuine market economy.”

(from OMNIPOTENT GOVERNMENT The Rise of the Total State and Total War. Ludwig von Mises, Yale University Press 1944 p56 link )

Three Myths About Capitalism

Saturday, August 27, 2011

Business Card

Saturday, August 20, 2011

Rent Seeking and Biotechnology

"Yet today we have only a handful of genetically modified crops, primarily soybeans, corn, canola and cotton. All are commodity crops mainly used for feed or fiber and all were developed by big biotech companies. Only big companies can muster the money necessary to navigate the regulatory thicket woven by the government's three oversight agencies: the E.P.A., the Department of Agriculture and the Food and Drug Administration."

Wednesday, August 17, 2011

Basic Concepts: Defining The Mean and Variance

"E[X] is the center of gravity (or centroid) of the unit mass that is determined by the density function of X. So the mean of X is a measure of where the values of the random variable X are" centered…. The variance of X will be a measure of the spread or dispersion of the density of X
" ---Mood, Alexander McFar1ane, INTRODUCTION TO THE THEORY OF STATISTICS  1963.

“The variance of a distribution provides a measure of the spread or dispersion of the distribution about its mean. A small value of the variance indicates that the probability distribution is tightly concentrated around the mean (μ ); and a large value of the variance typically indicates that the probability distribution has a wide spread about the mean (μ )….the variance of X is the second central moment of X” – DeGroot & Schervish. Probability and Statistics 2002.

Monday, August 15, 2011

AgBiotech combating climate change « The Berkeley Blog


Some teasers:

"GMOs in the US and in other countries, reduce significantly the use of rather toxic pesticide chemicals and there is evidence that they actually save significant amount of lives in India and China. "

"It is easy to show that if restrictions on the adoption of GMOs would have been removed and adoption rates of GM varieties in Europe would have been similar to the observed patterns of adoption, then much of the recent increase in commodity food prices would have been diminished. Introduction of GM varieties to wheat and rice would have further reduced commodity prices whereby helping the poor and would have released resources for other uses."

"The land use saving effect of GM varieties is estimated to have the equivalent effect of taking between 800,000-9 million passenger cars off of the road....The use of herbicide-tolerant varieties enable large scale adoption of low-tillage practices that sequester carbon and greenhouse gas sequestering effect is estimated to be equal to that of taking 6.4 million cars off the road."

"The heavy regulation of GMOs are unsound not only because of the loss of benefits from existing varieties, but because of the loss of potential benefits from newer applications of GMOs"

Sunday, August 14, 2011

Greg Mankiw's Blog: What nation has the most progressive tax system?

Based on these numbers, the U.S. has the most progressive tax system in the world by far.

The top 10% of earners earn about 33.5% of all income on the U.S. but pay 45.1% of taxes. They in essence pay 35% more in taxes than what they earn as a share of income.

There is also an interesting discussion on how these numbers are used and interpreted.


Monday, August 8, 2011

ScienceDirect - Ecological Economics : Impact of Bt cotton on pesticide poisoning in

A case of the internalization of negative externalities via technological change and market forces w/o taxes or  new regulations. 


While substantial research on the productivity and profit effects of Bt cotton has been carried out recently, the economic evaluation of positive and negative externalities has received much less attention. Here, we focus on farmer health impacts resulting from Bt-related changes in chemical pesticide use. Previous studies have documented that Bt cotton has reduced the problem of pesticide poisoning in developing countries, but they have failed to account for unobserved heterogeneity between technology adopters and non-adopters. We use unique panel survey data from India to estimate unbiased effects and their developments over time. Bt cotton has reduced pesticide applications by 50%, with the largest reductions of 70% occurring in the most toxic types of chemicals. Results of fixed-effects Poisson models confirm that Bt has notably reduced the incidence of acute pesticide poisoning among cotton growers. These effects have become more pronounced with increasing technology adoption rates. Bt cotton now helps to avoid several million cases of pesticide poisoning in India every year, which also entails sizeable health cost savings.