There is a profound lesson to be found in the simple courtesy that is part of most transactions in the free market.  We are taught very young that when someone gives you something or does something for you, you say, “thank you,” and the other person responds, “you’re welcome.”  But most of the time when we buy something, both parties say, “thank you.”  Listen for it the next time you’re at the store, restaurant, bar, or coffee shop.

Voluntary transactions increase the utility of both parties in their own judgments.  Otherwise they wouldn’t do it.  That is why both parties say, “thank you,” and that is ultimately how we survive – billions and billions of utility-increasing transactions sustain us and fulfill the desires of our hearts.

Think about it the next time the cashier says, “thank you,” and you respond, “thank you.”

I’m behind on my blogging because this post is about a movie I watched over a week ago.  It is so inspiring that I actually made my kids watch it.  (Hey, other parents make their kids go to church for inspiration.)

My son has Asperger’s which increased my interest in the movie.

This movie is about the school years of Temple Grandin who was diagnosed with Autism at age 4, but went on to revolutionize how the cattle industry handles cattle, write books, get a PhD, and become a famous speaker on Autism.  (The movie also made cowboys look pretty stupid but that’s beside the point.)

Temple’s mother was advised to institutionalize her at 4 years old, but her mother worked hard and “fought the system” hard.  She insisted her daughter get the education she needed – she was different, not less.

This movie is very, well, moving, very educational, very recommended by me.  Must see.

Find it on HBO.

One of the fallacies we have adopted in our society is that some producsts/services are so special or some particular situations are so special that we should abandon free market principles and let government take over.  We’re being suckers when we do this for several reasons.  First, almost never is a product/service really that special.  Economists look for “externalities” when discussing whether or not government might be able to address some weakness in the free market.  If there is no externality there is no opportunity for government to help. What percentage of voters know what an externality is? (Externalities are not common enough to justify all the intervention that government and special interests desire to inflict on us so you don’t hear much about them.)

Second, it is a slippery slope. Every special interest thinks it is special and lobbies for some special interference that, surprise, surprise, happens to benefit their special interest a lot while it takes care of some special problem in the free market.

Third, thanks to rational ignorance, we will never study these issues enough to influence government towards interfering where it makes sense rather than interfering where it is just benefiting some special interest.

The result is an ugly free-for-all among special interests for the national treasury while the general public naively thinks, “I guess if the free market is not working then the government needs to step in.”  Its a global robbery.

This book describes what would probably happen if we never said government can step in.  Its extreme, but we should all be required to read it before we can vote.  At least we would not be so knee jerk anti-free-market.

Click on the image of the book to purchase on Amazon. I’m an affiliate of Amazon so it helps support this blog.

I recently read an article from Liberty analyzing the Cash For Clunkers program.  It made a compelling case that the program made our country about $2B poorer on net.  (No value assigned to the environmental impact, but the program did not decrease our carbon footprint either because car companies use more carbon to build a car than the car will ever burn.)  Yet, Obama called the program an outstanding success, and the general public mostly agrees it was at least “not bad.”

One could argue that other experts might disagree and the program might be beneficial by some other analysis, but an understanding of free market economics should make us highly skeptical.  How can paying people to destroy serviceable automobiles be a net benefit to society? This program was a text book fallacy described in a famous essay by Frédéric Bastiat called The Broken Window.  In 1848!

Think about how much work it is to make $2B.  If any company were to announce that they had raised $2B for cancer research, they’d probably get on the cover of Time Magazine.  Then think about how swiftly government can destroy $2B and call it a success.

How would you feel if you just spent 10 years of your life raising that $2B for cancer research and then read that Obama is celebrating his program that destroyed $2B?  Net zero for society, thanks for trying.

And Cash for Clunkers was a tiny program.  It probably really was a success compared to other government programs, in destroying less of our national wealth.

As a people, we are ignorant of basic economic principles that could be mastered by anyone able to complete a high school education.  This ignorance must be costing us dramatically more (in destroyed wealth from poor public policy) than it would cost us to educate a majority of voters, right?  (Great public choice research assignment there.)  If we don’t do it we are just destroying what we create.

This is why I call educating the masses about economics (more specifically, free market economics and public choice theory) the Ultimate Cause.  Dramatically more resources would be available to all other causes if we truly understood the fundamentals of these subjects, the power of the free market’s Invisible Hand, for example.

Here’s a great video that relates.

After a long break, this blog is back.

Most religions are largely about individuals being good, or doing good, for society, for others.  That’s probably why religion is an integral part of the all societies that have survived.  Survival of the fittest works on the societal level maybe even more importantly than it works on an individual level.  The fittest societies (with religion) must have conquered, destroyed, dominated, and/or assimilated societies without religion.  Robert Heinlein talked about this when he talked about the importance of patriotism for a society’s survival.  Of course, he called it patriotism rather than religion, but I think they both are selected in the same way.

If you have a job in the free market, that job, or a job that will follow, is probably the greatest good you will ever do for society – maybe not for yourself, maybe not for your family, but for the rest of society.  (And probably for yourself and family, too.)  Your work is helping keep fellow employees employed.  Your work is helping customers improve their wealth with every single transaction with your company.  Why else would they transact if not to get something worth more than what they are paying?  In the judgment of those who have studied the matter the most and who are most invested in getting the judgment right (spenders of their own money), your work is producing more value to society than society is paying you for the work.  Your work is profitable to society.

Of course, this is also one more reason for society to keep as many jobs as possible in the free market system. Such jobs are the only jobs we know to be generally profitable to society.

If you are looking for noble purpose in your life don’t forget how important ordinary work is to others who also receive the fruits of your labor.

Added a page to list my favorite celebrities:

http://rogercollins.com/fav-celebs/

Check it out.  Who are yours?

If society had a good understanding of economics then everyone would laugh at a proposal like  Obama’s “spend our way out of a recession” plan.  We would laugh because we would all know better and it would be funny for someone to propose something so stupid, like proposing that maybe the earth is flat after all.  Don’t laugh about what our ultimate cause should be: educating society about economics.

Dr. Friedman provides the best material for this cause.  In one short blog post he elegantly corrects one of the most harmful and common misconceptions:

http://daviddfriedman.blogspot.com/2009/05/two-great-depressions.html

Keep up the great work, David.

Like most parents I want my children to be happy.

One of my goals as a Dad is to teach my kids the essentials of economics and public choice theory (political economics for short). I know to most that sounds as ridiculous as, “I must teach my kids thermodynamics,” so I’ll explain the difference. There is a peacefulness we get from understanding how stuff works. And the more something affects us the more important it is to understand it.

We are all affected tremendously by politics and economics. The markets and government affect our jobs, income, the laws we live by, the prices of stuff, our standard of living, behaviors in ourselves and others, almost everything. If we understand how these systems work, we won’t be frustrated wondering why this or that is happening instead of something else. We’ll understand the problems, the solutions, why some things work so well, and why other things do not.

Once one understands these two systems, politics and economics, and combines a minimal dose of morality, he will adopt a libertarian philosophy. So in the end my goal is to teach my children to be libertarians.

Later I will write about how I try to teach these abstract concepts to kids and my progress. Wish me luck.

Every business manager should understand Theory of Constraints (TOC).  I usually don’t use such hyperbole unless I’m joking, so I have to add that I’m serious when I say “every manager.”  Before I quit blogging I want to have included an article about every important item I have to pass on to “the public,” and this is one item checked off the list.

The inventor, Goldratt, wrote several novels to teach the theory in the most accessible way. Here are links to the books. (If you buy them from these links I should get a kickback from Amazon.)

The Goal: A Process of Ongoing Improvement

Critical Chain : A Business Novel

It’s Not Luck

Trying to cover almost all the things your mother told you not to talk about here. In the context of Palin’s selection as VP candidate, David Friedman does a good job of dismissing a common fear among people being governed by other people of different religions/world views.  See his post, Worrying About Religion.

It is one of the most amazing features of the human psyche that we often “believe” conflicting ideas.  For example, everything is in God’s hands and everything is in our hands.  Theologians may cleverly write how both can be true at the same time but that reads more like poetry than logic. It is clearer to me that we use the God’s hands idea (or meme) as a thought that comforts us when we have no (other) control over something.  Even the most pure believer must necessarily believe in his own hands most of the time, just like the rest of us.  It seems our minds were created or evolved rather spectacularly to live comfortably with, and even utilize, blatant contradictions.