Chris Dillow — On arms races

There’s a nice headline in the Times today:

Make us sell healthy food, supermarkets implore May.

This invites the obvious reply: if you want to sell healthy food, why don’t you just do so?

The answer lies in competitive pressures. If any individual supermarket tries to cut salt in its products or refrains from special offers on unhealthy foods, it would lose market share to rivals.

Each individual supermarket’s rational attempts to maximize profits thus leads to an outcome which none of them really wants – the over-marketing of unhealthy food. This is an example of an arms race, a process whereby individually rational behaviour has results which are collectively undesirable. Here are some other examples:….

Stumbling and Mumbling
On arms races
Chris Dillow | Investors Chronicle

Sheldon Richman — My Kind of Candidate...

…would support polycentric law and spontaneous order.

Would require a much higher level of collective consciousness with a much more expanded appreciation of universality than at present.

There is also the issue of getting from here to there.

Conclusion: utopian thinking, akin to magical thinking at this point.

The practical question is how to evolve the requisite level of collective consciousness for spontaneous order based on appreciation of universality. At minimum, it requires a reconfiguration of educational systems, advancing beyond tribalism, etc.

Free Association
My Kind of Candidate...
Sheldon Richman

Jag Bhalla — The Epic Ptolemy-Sized Epicycling Errors of Free Market Fans

Jag Bhalla is a very clear writer. This is an excellent albeit summary smackdown of the assumptions that underlie conventional economic discourse that have shaped the debate even among non-economists. In Steven Colbert's epic takedown, "truthiness." Short and worth a read.

Evonomics
The Epic Ptolemy-Sized Epicycling Errors of Free Market Fans
Jag Bhalla

Larry Arnhart — What Bernie Sanders and David Sloan Wilson Should Learn from Adam Smith

This is an interesting article written from the perspective of social Darwinism as the driving force behind the so-called invisible hand of Adam Smith, which Smith himself never articulated in that way.

Arnhart essentially argues that crime is simply pursuing rational interest and government should get out of the way and let natural order arise spontaneously.

Most of the economic development in the developing world–particularly in Latin America, Africa, and many parts of Asia–is through the economic self-development of the illegal economy. In Lagos, Nigeria, the largest city in Africa, over 80% of the working people are in the underground economy.

Much of the global trade between the developed and developing countries is through the illegal economy. For example, poor people in Nigeria working in illegal markets can save enough money to travel to China, where they buy Chinese goods illegally and then have them smuggled back into Nigeria for sale, avoiding restrictive trade laws and huge import duties. There are some estimates that as many as 300,000 Africans are living in Guangzhou, the south China trading city formerly known as Canton.

This confirms Adam Smith’s insight that the evolved human propensity “to truck, barter, and exchange” is so strong that it can be expressed in a complex economic life even without the support of a legal system, because people can solve their own economic problems for themselves through self-organizing social orders.

For example, Neuwith describes how street merchants in Lagos have set up their own private courts for settling disputes between dealers and customers. One arbitrator explained: “Arbitration is our work. Most often we arrive at a peaceful solution. This is how we have harmonized the market.” This is what one should expect from human beings who have evolved natural instincts for cooperation.

Smith thought illegal economic activity could be seen as an expression of the “system of natural liberty” or “natural justice.” So he suggested that we should identify a smuggler as “a person who, though no doubt highly blamable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen, had not the laws of his country made that a crime which nature never meant to be so” (Wealth of Nations, Liberty Fund edition, p. 898).

Smugglers are part of the greatest evolutionary story of humanity, which is the progressive improvement in human life that comes from human beings asserting their freedom to trade.

Let the free-for-all begin.

Evonomics
What Bernie Sanders and David Sloan Wilson Should Learn from Adam Smith
Larry Arnhart is a Presidential Research Professor of Political Science at Northern Illinois University