Bitcoin, as I have argued, is a store of value that is now more attractive than bad fiat currencies and is likely to become even more attractive over time. It is an innovation that replaces trust in government with trust in a decentralized order— an order run by the miners—who verify transactions over a transparent blockchain. The interests of these miners are well aligned with holders of bitcoins, because the miners are partially compensated in bitcoins. It is this alignment that has sustained Bitcoin’s trajectory to ever higher valuations—a more than tenfold increase in this calendar year alone.
Bitcoin’s market order is strengthening because other markets are arising to improve the function of the underlying market. Yesterday the Chicago Board of Trade provided a futures market in Bitcoin, just it has for other commodities, like gold and oil, and as other exchanges have for fiat currencies.
Google and our elite universities appear to inhabit the same ideological bubble and intone the same diversity mantras. And that is not surprising, because almost everyone at Google is a product of the modern university and those at its HR department the likely product of its more PC inflected half—the humanities or soft social sciences. And Google must live within the world of mainstream media and government regulation, and these two sectors are also dominated by elite university graduates of the last quarter century.
But nevertheless the institutions and their employees operate under different constraints. Google is the elite university without tenure and the elite university is Google without market discipline. You might think that tenure is the more important obstacle to enforcing an orthodoxy like modern diversity policy. After all, a professor at an elite university would not be fired for making the largely accurate factual claims about the average differences in temperament between women and men that the Googler did in the memo that got him sacked.
In A Culture of Growth: The Origins of the Modern Economy Joel Mokyr has located the source of the industrial revolution in the culture of the Enlightenment. The Enlightenment prioritized the idea of human progress. As a result, people began to think constantly of finding material in the world to make new technologies for human betterment. The Enlightenment also replaced more scholastic modes of thought with scientific method. As a result, people began intensively to test both new theories to see if they explained the world and new mechanisms to see how they would move the world. As a consequence, the Western economy began to grow at a rate never before seen in history.
A Culture for Growth is a wonderful book to which I cannot do justice in a short post. Mokyr is in equal measures a great intellectual historian and a great economist. He sees the cultural change of the Enlightenment as transforming the incentives for economic and intellectual activity. It removed taboos that impeded progress and created a market where the best new ideas rapidly gained a large market share of elite approval. This book is welcome for many reasons, but not least because it is a blow to tedious, tendentious, and false political correctness about the roots our our prosperity. The Enlightenment was indeed key to material progress that helped the least well off, first in the West and now more broadly throughout the globe. And yes, it was the product almost entirely of dead white men, and relatively wealthy ones at that.
Although this is not his focus, I believe Mokyr’s book also establishes the crucial link between the levers of the Enlightenment and the growth of liberty.
Tesla provides an autopilot that allows its cars to drive themselves in certain circumstances. Recently, while on autopilot, a Tesla car crashed and killed the driver. The autopilot apparently did not distinguish between a white tractor-trailer and a brightly lit sky in the background of the trailer. The driver is rumored to have been looking at a movie, against the express mandate that a driver using the autopilot keep his hands on the steering wheel.
The National Highway Traffic Safety Administration (NHTSA) is investigating the crash, and the government is now considering how to regulate autopilots. I fear that if regulators aren’t careful, they may kill more people than they save. The basic problem is that first recognized by the great French economist Frederic Bastiat. People too often consider effects that can be seen, but not those that are invisible. Here the focus is likely to be on lives lost by the autopilot, often in fiery crashes that get attention. But lives may be saved as well by its introduction and these lives will receive almost no attention. Statically, the current autopilot itself may save some lives. Dynamically, permitting autopilots may lead to faster improvement in self-driving cars that may save more lives in the future. There are a lot of such lives to be saved. More than 30,000 people die each year in car crashes in the United States, and most such crashes are caused by driver error.
This problem is compounded by the prism though which government bureaucrats view regulation.
The last hundred years have witnessed a great struggle between state control and more libertarian forms of social ordering. Now that socialism—the hard-edged way of state control—has been largely discredited, a softer edged way—government control over primary and secondary education—is perhaps the most important fault line in this battle.
Thus, it is very welcome news that in Hart v. State the North Carolina Supreme Court last week upheld a school voucher program. The plan would provide $4,200 to parents with income at 133 percent or below the poverty line to send their children to a private school of their choice. The case turned on the state rather than the federal constitution, because happily the Supreme Court has already upheld school vouchers against an Establishment Clause challenge.
I am not an expert in North Carolina constitutional law, but one argument in particular interested me. The dissenters in the case contended that the voucher program did not serve only public purposes, because the private schools did not have to comply with government standards to assure that students “would participate and compete in society” by receiving a sound education. The legislation did require that schools receiving vouchers require attendance, meet certain health and safety standards, and provide periodic standardized testing. But these requirements were not enough for the dissent.
What was remarkable in my view was that the dissenters dismissed the capacity of parental choice to promote education accountability and indeed excellence.
Recently, my co-blogger John McGinnis had a great post on surge pricing. His basic point was that surge pricing has both static and dynamic benefits – allocating cabs to those who most need them and increasing the supply of cabbies willing to work at needed times. John also notes that these benefits are missed by most people because of political ignorance.
I agree with all of this, but I want to add a couple of things. Part of the problem with surge pricing is that it conflicts with a social or economic norm that is (partially) accepted in our society. The idea is that prices should be set and should not be adjusted to take advantage of people’s situations. Stores do not increase the price of umbrellas in the rain and people expect that and criticize departures from the norm. Restaurants do not generally charge more to eat at 7:00 than to eat at 5 (except for the rare early bird specials or for lunch menus, which often have smaller portions).
Yet, in other ways surge pricing is permitted. Certainly airplanes adjust the prices based on when they are purchased, as do many other services. So what is going on?
It is not entirely clear, but my guess is that people are simply reacting to norms that they are used to. Some years ago, everyone in the airplane had paid the same price for a coach seat – not so these days. (It helps that not everyone knows what others paid for their seat.) People get used to it. It used to be the case in law firms that people were paid based on seniority – not so these days. Many people did not initially like the changes, but they got used to them.