Have BFA in film and photography, studied graduate economics, lived in Yemen. Lo
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The APBA Blog

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musictubes
779 days ago
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The APBA Blog
Falls Church, Virginia
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1980: Atari 800 ad “It will never become obsolete”

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Atari 800 ad "It will never become obsolete"

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musictubes
2921 days ago
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The Atari 800 will never become obsolete!
Falls Church, Virginia
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The Market on Piketty

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With all the fuss about the French economist’s tome on capital and perpetually growing inequality, one perspective that is uncommon in the commentary is what “the market” thinks of Piketty’s characterization of it. In other words, do those involved in investing and developing capital agree with Piketty’s analysis?

Whereas one should hesitate to place too much value on individual people’s anecdotes, the “real world” rather than outrageously simplified models should be close to any Austrian’s heart on economic theory. After all, we are proponents of causal-realist analysis of the market and economy. So whereas it may not serve as scientific evidence, this comment by well-known investor Marc Andreessen is as interesting as it is revealing about the “socialist calculation” view of the economy held by the likes of Piketty:

The funny thing about Piketty is that he has a lot more faith in returns on invested capital than any professional investor I’ve ever met. It’s actually very interesting about his book. This is exactly what you’d expect form a French socialist economist. He assumes it’s really easy to put money in the market for 40 years or 80 years or 100 years and have it compound at these amazing rates. He never explains how that’s supposed to happen.

The comment, from an interview in Vox, goes to the core mechanistic assumption in Piketty’s system – and shows why it is wrong: it includes neither uncertainty nor entrepreneurship. Sometimes economists would benefit from listening to “the market.”

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musictubes
2927 days ago
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An amazingly concise critique of Piketty. I trust model based econ less and less.
Falls Church, Virginia
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c. 1970s: Tattoo Parlour

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Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

Tattoo Parlour

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musictubes
2951 days ago
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These tattoos are quite a bit more involved than anything I remember seeing back in the 7@s and 80s. I'm guessing the bicentennial was on the mind of a lot of these guys. Lots of eagles...
Falls Church, Virginia
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Sweden has lots of wealth inequality

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From Tino:

Sweden is viewed as an egalitarian utopia by outsiders, but reality is complex. In some ways Sweden has less social equality than the United States. While the American upper class is largely meritocratic, the upper class in Sweden are still mostly defined by birth.

Historically, Sweden, Norway and Finland alone in Europe never developed Feudalism (Denmark was closer to continental Europe). The Nordic nobility was a small share of the population and not as powerful as the nobility in continental Europe, though still influential. The upper class in Sweden today consists of the nobility and of wealthy bourgeoisie families that socially merged with them. Wealthy bourgeois families live in the same neighborhoods and have adopted similar behavior and identity as the nobility. Despite long Social Democratic dominance they remain a coherent social group, with a distinct and recognizable accent, way of dressing, values etc.

Belonging to the upper-class is not defined merely by wealth, depending more on blood. Just as in historical times, a Nouveau riche member of the middle class will not automatically be accepted as a member of the upper-classes, unless they actively adapt their behavior and are accepted by the upper-classes socially.

The upper classes in Sweden retain a disproportional hold on wealth and power. The formal nobility in Sweden constitutes around 0.2% of the population. A couple of years ago I looked through the list of the wealthiest Swedes. Fully 10% of the richest Swedes are members of the nobility. By contrast not a single one of the richest Swedes was a non-European immigrant. Of Sweden’s prime-ministers Sweden during the modern era 20% belonged to the nobility.

Sweden is known for income equality. Increasingly, studies also point to Sweden as a country characterized by high intergenerational mobility of income. Income-distribution and wealth distribution are however not the same thing. What some may not know is that wealth-inequality is relatively high in Sweden. The top one percent own around 35% of wealth in the United States. In Sweden, because of extensive tax evasion, the number is harder to calculate. When including estimates of wealth held outside of Sweden, Roine and Waldenström estimate that the top one percent richest Swedes own 25-40% of total wealth, not far from American inequality levels, and increasing more rapidly.

At the same time, the intergenerational mobility of top wealth is chokingly low. A recent studyfound that a astonishing 80-90% of inequality of top wealth is transmitted to the next generation in Sweden!

According to one studythe share of the richest Swedes who inherited their wealth is around, 2/3 with 1/3 being entrepreneurs, while in the United States it was the opposite, with 1/3 of the wealthiest inherited their wealth while around 2/3 are entrepreneurs.

Thus while the Swedish middle class is large and has a compressed earning distribution, at the very top you have a small number of aristocratic families controlling much of the wealth. Mobility into this group is rare, probably rares than it is in the United States. One reason are stronger informal class-barriers, merely earning wealth is not enough to be accepted a member of the aristocratic upper-class. Another more interesting reason may be the unintended effect of welfare-state economic policies.

During the era of Social Democratic dominance, they wondered how to deal with wealth inequality. The dilemma facing the Social Democrats was this: The upper-class business families did a very good job managing Swedish export industry, the key to Sweden’s wealth. This is especially true for the Wallenberg family, the leading industrial family in Sweden, controlling amongst others ABB, Ericsson, Electrolux, Atlas Copco, SKF, AstraZeneca and Saab and doing an excellent job.

The Social Democrats decided to accept the unequal distribution of assets, but simply make these assets worth less using punitive high tax rates. Because of high inflation capital taxes were often 80-100%.

The upper-class families still owned most of private industry, but because of taxes those assets were simply not worth much. Paradoxically the high taxes and capital regulations which prevented foreign investments seem to have helped freeze the asset distribution into place, with the share of wealth owned by the rich being fairly constant between 1970 to the 1990s.

The OECD also reports that Sweden is quite unequal in wealth, hat tips go to Old Whig and Luis Pedro Coelho.

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musictubes
2957 days ago
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Swedish wealth inequality. Locked in by laws meant to reduce inequality.
Falls Church, Virginia
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2 public comments
ahofer
2467 days ago
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"The Social Democrats decided to accept the unequal distribution of assets, but simply make these assets worth less using punitive high tax rates. Because of high inflation capital taxes were often 80-100%." and prompting the Wallenbergs to become more global citizens....
Princeton, NJ or NYC
adamgurri
2957 days ago
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Didn't realize
New York, NY

Bryan Caplan Writes to Nationalism

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(Don Boudreaux)

Here, in full, is my colleague Bryan Caplan’s open letter to Nationalism – a letter whose every sentiment I share:

Dear Nationalism,

We’ve grown up together.  In a sense, you and I have been together our whole lives.  In a deeper sense, though, we’ve neverbeen together.  I’ve tried to let you down easy a hundred times.  But subtlety doesn’t work on you, Nationalism.  I don’t want to hurt you.  But Nationalism, you’re constantly hurting me.  The only way to protect myself, I’m afraid, is to tell you how I feel, loud and clear.

I know that I was born inside “your” national borders.  But I don’t love you, Nationalism.  I don’t even like you.  I don’t want “patriotic solidarity” with you.  I want you to leave me alone.  Stop acting like you own me.  Stop calling me.  I don’t want to be with you.  The mere fact that I haven’t fled the country doesn’t turn my “No” into a “Yes.”

Do you know what you’re like, Nationalism?  You’re like medieval Religion.  In the bad old days, authorities assignedpeople a religion – and effectively forbade them quit.  Sometimes quitting was itself a crime.  In other cases, Religion expelled its exesfrom the country.  The common theme: Religion didn’t take no for an answer.

In hindsight, the past abusiveness of Religion is plain.  But you’re no better, Nationalism.  Violation is a way of life for you.  You’re as unwilling to take no for an answer as the intolerant Religion of yesteryear.

Nationalism, I know you’re itching to lecture me about how you’re better than all the other Nationalisms out there.  That may be true, but it’s no excuse for the way you treat me.  Stop talking like you own the house I live in, the air I breath, or me.  You don’t.  You never did.  Frankly, Nationalism, you make my flesh crawl.

Am I cruel?  No crueler than I have to be to make my wishes known.  There are plenty of fish in the sea, Nationalism.  Lots of them love you already.  Go have patriotic solidarity with them.  Just leave me out of it.  Goodbye.

Well and truly said, Bryan.

One way to distinguish most libertarians and many classical liberals from conservatives is to note that conservatives (in the U.S.) often talk of “saving America.”  I don’t care about America as such.  I care about freedom and human flourishing.  If America is a useful set of institutions to make humans more free than they would otherwise be, then I am all for “saving” it – but only because America is then a means to the end of a freer and more prosperous human civilization.  If America is not a useful set of institutions to make humans more free than otherwise, then I am, at best, indifferent to it.  If America is a set of institutions that makes humans less free than they would otherwise be, then I oppose it.

There is the question of what, exactly, is the “it” to which I refer above as “America.”  Using blogger’s license, it’s a question that I’ll not here explore, except to say that I emphatically reject the notion that the U.S. Government is synonymous with America.  I reject also the superstition that that particular political institution – Uncle Sam – is a faithful representative of that multitudinous and extraordinarily complex and diverse group of individuals commonly called “the American people.”  Indeed, I go further and reject even the possibility that such a group of people can possibly ever have anything reasonably called “a representative” or an agent or agency that carries out its ‘will.’  (Groups of people have no ‘will.’  It is mistaken anthropomorphism to imagine otherwise.)

I feel no, I owe no, and I will never give any allegiance to any nation or any government as such.  My allegiance is to whatever peoples and institutions promote human freedom, flourishing, and peace.   (And I hardly need to add that nationalism and governments have a damn poor record on this front.)

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musictubes
2958 days ago
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Nationalism I'm done with you. A wonderful breakup letter from Caplan and a fantastic summation of classic liberal (aka libertarianism) ideals.
Falls Church, Virginia
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