Bezdržavni ekvilibrijum

Za ilustraciju se zahvaljujem:

Upr­kos uvre­že­nom mišlje­nju da je bez­dr­žavno dru­štvo uto­pija, postoje dobri razlozi da se veruje da je ovo dru­štvo ne samo eko­nom­ski izvo­dljivo nego i da pruža kon­ti­nu­i­rane pod­sti­caje za nena­si­lje. Doži­vlja­va­nje države kao nei­zbe­žne, kao i doži­vlja­va­nje bez­dr­žav­nog dru­štva kao neo­dr­ži­vog, zasni­vaju se na pogre­šnom eko­nom­skom raz­mi­šlja­nju i ira­ci­o­nal­nom strahu. Ovde možete pročitati ostatak teksta.

The Myth of Canadian Tolerance: The Case of Health Care

And your definition of thoughtful is?
(Photo taken at a public facility in Ontario) 

If you want to be hated by Canadians, just say that their healthcare system is broken. This is the link to a Globe and Mail piece referring to my analysis of the economics of wait times in Canadian emergency rooms. If you click on the comments section you will see the degree of negative sentiment toward this analysis.

Here, you can follow the thread of comments on this post on my Facebook page.

Three simple tips for quitting smoking

These are the three main principles that I used while quitting smoking. They worked for me, and they might work for you if you want to quit or significantly reduce your smoking. I started smoking when I was fifteen years old and smoked for eight years after that. For most of that time, I smoked at least a pack of cigarettes a day. Now, I am eight years completely smoke-free. Before that, there were two years when I had maybe two or three cigarettes in total. These are my three principles:

1. Focus on short time periods.

Live your non-smoking life one day at a time. Every day, set yourself a goal that you will not smoke that day. This will take away the burden of identifying yourself as an absolute non-smoker. Identify yourself simply as a person that will not smoke today. You don’t have to carry the burden of transforming yourself into a non-smoker right now. Instantaneous and complete personality transformations are very rare (if not impossible). Setting yourself a complete personality transformation as a goal will almost certainly be overwhelming. Thus, avoid it. Remember, you can start smoking tomorrow if you decide to do so. Quitting smoking is not a prison sentence. It is a choice that you made.

2. Within those shorter time periods, focus on the immediate present. Be proud of the fact you are not smoking NOW, at this moment.

This will make you even prouder if you feel strong craving for cigarettes. If you focus on being proud of not smoking, you will be proud that you are overcoming this craving. If you focus on the NOW, you will always be in a position to be proud of not smoking. This also means that you will avoid thoughts like this one: Wouldn’t it be nice to light up a cigarette. This thought is about the future. And, if you focus on your present non-smoking, this will displace thoughts about your future smoking. Again, remember, you can start smoking any moment in the future if you decide to do so. The reason why you are not smoking right now is because you don’t want to.

3. Know that your past does not determine your future; your present determines your future.

There is no reason to feel bad about your past attempts to quit smoking. The fact that you did not become a complete non-smoker in the past does not determine whether or not you will smoke now. If our past determined our future, then no one would ever learn anything. Learning is impossible without “failure”. If you have never “failed”, you have never learned anything.

Why negotiating with your children is a bad idea

It is a bad idea because if you decide to negotiate, you are sending the message that your first offer was not the most you can do for your child. This is a message of dishonesty and reservation. You are hoping they won’t ask for more. You are hiding your true capacity to go in their direction. If you want to build trust and clarity with your child, offer your maximum right away.

Five Common Misconceptions about Employment “Off the Books”

We want to buy more when we don’t pay the tax
 on goods. Similarly, employers want to employ more
workers when they don’t have to pay a tax on labour.
There is a stigma attached to the productive activity commonly called employment “off the books” or “under the table”. This is the case in which the employer and the employee hide their relationship from the state and thus avoid being forced to pay levies to the state or comply with state regulations.

The stigma attached to employment “off the books” is unfortunate for at least two interrelated reasons. First, this stigma is based on widespread misconceptions about the nature of the productive relationship between the employer and the employee. Second, the misconceptions about the nature of employment “off the books” facilitate policies that end up harming those same people these policies were designed to help—the poorest members of society. I will address the most common five of these misconceptions I have encountered so far.

1. If workers refuse to work “off the books”, the employer will have no choice but to hire them legally.

There is economic theory behind work “off the books”, and it is clear that many of those who advocate condemnation and punishment of this type of productive activity don’t understand this theory. I too worked “off the books” as a new immigrant in Canada, and I did this because this was the only way for me to be profitable to the employer. In other words, my contribution to the profit of the company was not large enough to pay for the government-required fees and regulations. If my employer had to pay all the fees and comply with all the regulations, he would have been better off not employing me at all. Employing me under those conditions would have been a waste of money for him. Many people who work “off the books”, like I did in my first years in Canada, would not have been offered their present job if they demanded to be employed legally.

In many cases, working “off the books” is the best option not only for the workers and employers but also for other members of society. If a person were to be prevented from working “off the books” and ended up being unemployed, other citizens (i.e., tax-payers) would have to provide him with the goods and services necessary for living. The unemployed person would, however, not provide anything in return. In contrast, by remaining employed “off the books” he would keep providing a productive service to others.

2. Working “off the books” is unlawful and therefore it should be strongly condemned and severely punished.
The fact that something is illegal does not mean that it is in itself bad or immoral. I often use the example of keeping black cats in one’s home during the Middle Ages to illustrate this point. Raising black cats in the Middle Ages was illegal, but now we see how absurd and arbitrary this law was.
Suppose that the state parliament votes on a new law that requires every employer to increase his contribution to the state budget by 25% per every employee. At the moment the new law is introduced, all those who are employed under the old law become criminals, and, according to the new law, they should be condemned and punished. But, the only difference between how they do their business now and how they did it before is that some people (i.e., 250 or so members of parliament) don’t like it any more. These members of parliament want more money now, and if you don’t give this money to the state, you will be labeled as a criminal. 
To avoid being labeled as criminals, some employers would have to lay off the least productive workers. Alternatively, the employers could keep these workers off the books. Working “off the books” is the way the the employer and the employee try to avoid state levies and thus maintain their productive relationship. The magnitude of the state levies is always a result of arbitrary decisions of those in power.
3. Hiring “off the books” always gives an employer extra profit and therefore always represents the exploitation of the poor by the rich.
This statement is problematic for two reasons. First, let us note that hiring “off the books” gives employers “extra profit” only in the case of those workers whose marginal value products (i.e., their contribution to firm’s profit) is significantly higher than their current salary. For all others, hiring “off the books” provides employers with just enough profit to keep the marginal workers (i.e., workers whose marginal value product is only slightly higher than their salaries) in their jobs. If these workers were to be employed legally, they would become too expensive for the employer and he would have to find a way to terminate their employment.
Second, even in the case of those more productive employees, whose marginal value product is significantly higher than their salary, it is problematic to say that they are being exploited by the employer. These employees are in a voluntary relationship with the employer. As long as the employer is not using a threat of physical violence to keep them on the job, there is no objective basis for claiming this is an exploitative relationship. We may not like the conditions of this relationship, and we may want the employee to be paid more, but this is nothing more than one subjective judgement, one of millions of equally subjective judgements of other people. How are we to persuade someone that our judgement is more correct than any other judgement? We can’t. Other than the absence of physical invasion and a threat of force, there is no objective criterion against which we could measure the “exploitative” nature of any relationship.
4. Employment “off the books” destroys the competition by firms that are doing business legally.
It is not employment “off the books” that destroys competition. It is the regulations. Why? Suppose an employer decides not to hire a worker “off the books” because he does not want to “cheat the state.” If this worker is not profitable when hired legally by this employer, then he will not be profitable if hired legally by another, similar employer. The employee will become unemployed and either turn to the welfare office or become a burden to his family and friends. So, by refusing to hire workers “off the books” the employer did not help someone who would want to hire the same workers legally. He has just added another person to the number of those that are already living at the expense of the tax payers.
5. Our country is poor because employment “off the books” does not contribute to the state budget.
This is a statement that can often be heard in the so called developing countries. People somehow perceive illegal, yet voluntary and peaceful labor to be the cause of the relatively low level of well being in the country.
In fact, the true causal relationship runs in the opposite direction. Employment “off the books” is common in poor countries precisely because regulatory compliance is costly. Each new regulation requires a pre-existing stock of goods that will be spent on compliance activities. Regulations require producers to perform additional activates that they did not perform before. These activities require time and other resources. Without an increase in productivity, new regulations cause a reduction in the available stock of goods and services. In other words, regulations deplete our wealth.  Thus, compliance with various state regulations is a luxury that only rich economies can afford.
Contrary to the common belief, it is not employment “off the books” that impoverishes a nation; it is compliance with the ever increasing number of arbitrary demands by the state that impoverishes many productive individuals. Employment “off the books” is the last ditch attempt by these individuals to escape this impoverishment and thus remain productive members of society.
Working “off the books” is a special kind of productive activity. It is special not for its alleged immoral character but for its unique economic features.  It is one of those activities that keep the poorest and the least productive members of society from getting even poorer by becoming unemployed. This productive activity also saves the rest of society from becoming the sole provider of living expenses for these unfortunate individuals. Thus, those who want to help the poor ought to advocate for decriminalizing the poor’s secretive, “off the books” relationship with their employers, not threaten them with fees, fines, imprisonment or other forms of state force. 

Writing about War

I don’t think I’ve ever written a structured blog post or an article about war. I just realized that as being somewhat strange, given my belief that war was the most traumatic experience in my life. Ok, maybe it’s not that strange; who rushes to write about traumatic experiences, especially the most traumatic ones?

I did write about being a refugee, within an economic context, but that’s only a small part of war, and it is generally the part that I consider the least troubling. In fact, I learned a lot about the functioning of the market by being a refugee in a country in which the state was losing its grip.

However, I’ve thought about war quite a bit, and I even have had a working title in mind for quite a while. I just never got to that part of actually writing down the damn thing. Maybe this is so also because I have high hopes for this future piece. My intention is to show people how one gets trapped into thinking that war is a good idea. And, when you realize it’s actually a terrible idea for most of us, it’s already too late.

So, what I’ve decided now is to make the first step–to open a Word file and write down the working title on the first page and then save this file in “My Articles” folder.

Updating my list of oxymorons

Words that Don’t Belong Together: 

(My old list of oxymorons (or oxymora))

       scientific consensus

       religious tolerance

       military intelligence and

       university innovation!

Scientific Consensus

         This is not the validation criterion for science

       Darwin  and Galileo were not initially in the majority

       Science is fragmented – there is no correspondence between the scope of disciplinary coverage and the boundaries of disputed issues

       Consensus is usually the precursor of paradigm shift (Kuhnian scientific revolution)


A new oxymoron for my list, used yesterday by the British Prime Minister David Cameron:
Free market politics (why is this an oxymoron?)

Ego can be a great motivator


A long time ago, when I was still in Belgrade studying forestry, I loved the first and second year courses, and I ended up having a top average in my generation. Then, at the end of the second year, due to various circumstances, I lost interest in school. I thought then–I know I can do it if I want to, but why should I? Who cares? I need something more challenging.

Soon after, I learned many things I hadn’t known before, but I failed third year, twice. I simply didn’t care. There were more important issues to resolve, like how to use Jung’s psychoanalysis to resolve your inner conflicts; how to live in peace with the past; how to look forward to the future.

Then, one event moved me. Some guys, very limited in their abilities, talked to me with a noticeable sense of superiority. Their condescending tone was awakening. At that moment, even though I knew I would be going to Canada in a few months, I decided to show to myself that I can still do what I used to do before. I took our soil science textbook, read it from cover to cover, went to an exam after more than a year of not taking any exam, and got a 90%. The professor even asked me if I was considering graduate studies in soil science. I said–maybe, I don’t know yet.

I don’t remember if I ever met those guys again, but I will always remember the last few minutes of the conversation I had with my soil science professor. The way he talked to me brought back the sense of self worth to me at that moment.

What planning is and what it is not, in one minute

If those that believe in material determinism (i.e.,natural scientists) are right, planning of an economy is just an illusion. It was all predetermined by the strict laws of nature. If those that believe in free will are right, planning of an economy is impossible. You cannot plan someone else’s choice. That’s just impossible by definition. In either case, the “planners” are just fooling themselves.

Note that I am not saying planning is useless. I am saying that planning of other people’s choices is a logical contradiction. Planning of your own actions is not a contradiction. Thus, like any one of us, the planners can only plan their own actions, close their eyes and hope for the best. But, your planning of your own actions is not the same as planning of the economy.

If people have free will, then the degree of our “influence” on them is a matter of their choice. A more accurate description of what people mean (or ought to mean) when they talk about planning within society is–coordination of individual plans. Every individual plans his/her own actions while taking into account what he/she believes about the plans of others.