Mallomar SF

Mallomar SF has a superficial shell of crunchy hard science, but when you bite into it’s full of fluffy, gooey magical science and bad science.

Take Heinlein’s The Moon Is a Harsh Mistress, which I loved when I was twelve. Heinlein lovingly calculates the kinetic energy of the lunar bombardment, while completely omitting the amount of energy lost as the projectiles go through the atmosphere. Or the glaringly obvious heat signature of the second catapult’s radiator.

Or the economic absurdity of growing wheat in lunar caves with fossil ice for export to Earth. That’s pretty silly even before the ice starts running out.

Given the presumption of competitive fusion power, that would would be hopelessly more expensive than, for example, growing wheat underneath Antartica.

Seven Samurai: an Anarcho-Capitalist Parable.

Anarcho-Capitalism is the belief that it is practical to replace government coercion with voluntary private agreements.

This idea has several failure modes. The most obvious is portrayed in Kurosawa's great Seven Samurai.  If you haven't seen it, I beg you to do so a soon as possible. It is a great piece of cinema.

If you have, you will recall that during the 16th century, a time of civil war, a Japanese village discovers that they are on the do list of about 40 marauding bandits, who decide to postpone looting until the harvest is in. After consultation with the local matriarch and crone, the villagers agree that their best course of action is to hire a small group of samurai for protection. Hungry samurai, since the village can only afford to pay room and board.

Fortunately, the villagers delegated to hire security encounter Kambei Shimada, an aging, altruistic samurai played by the great Takashi Shimura. He concludes that the village defense requires no less than seven samurai, more than the delegates were authorized to hire, and eventually assembles a team, many of whom follow him for reasons beyond the meagre room and board offered by the village.

After Kambei arrives at the village, he begins planning a defensive perimeter that will leave several farms undefended because they are indefensible. The outlying farmers attempt to opt out of the defense agreement and defect. They are quickly coerced back into the ranks by the samurai. Because the protection agency that the village voluntarily hired can coerce, and it will coerce if that's the only way to win, and it was. And these are the good guys.

Italian history is full of condotieri who concluded 'Nice city-state you've got there. I'll take it.'

How Did Scrooge Get Rich?

Scrooge was rich, and a man of business. What was his business? How did he get so rich?

Our first clue comes in the first paragraph: "...and Scrooge’s name was good upon ’Change, for anything he chose to put his hand to." That is to say, he could easily raise money on the London Stock Exchange, where bonds, commodities and other investments were also traded.

There is one reference to his warehouse. Given his wealth, this implies some wholesale element to his enterprise.

The Ghost of Christmas Yet to Come shows Scrooge a young couple who owe him a debt they cannot immediately repay, saved from ruin by his death.

For more information, we might look at Nicholas Nickleby, where Dickens gives us a more detailed view of another greedy and covetous Dickensian businessman, Ralph Nickleby.  His main line of business is stock manipulation. Historically, there were plenty of 19th c. examples:  Drew,  Fisk and Gould will do for starters. The loose rules of the era provided opportunities to cheat even sophisticated and cynical investors like Cornelius Vanderbilt. For the naive or even average investor, so much the worse.

Ralph Nickleby, like Scrooge, also profits from moneylending.  Because of the plot we know some details of one of the debts owed to him: a bit under a thousand pounds, owed by a spendthrift gentleman. It is likely that Scrooge's lending was on a similar scale: a practical man like Scrooge would much rather lend 1,000 pounds to one man than 50 each to twenty.

It would be ludicrous to claim that Scrooge's miserly nature did  "a great deal of good". It simply pushed a bit more money into the already ample market of London capital seeking investment opportunities, at the cost of reducing demand for goods and services.

Some of the investment, like Ralph Nickleby's predatory stock manipulation, was probably actively bad. The purchase of previously issued shares and bonds, or existing ground rents, would only have benefitted the sellers of those assets, typically not very needy. Only when the investment financed an actual productivity improvement was the impact clearly good.

In contrast, redeemed Scrooge immediately puts money into the pocket of a street urchin, a poulterer, and a cabdriver. It did them good, surely, and penny for penny, probably more good than any of unredeemed Scrooge's careful investments.

Why Libertarians Can't Have Nice Things

So, just in time for the holiday, I read another libertarian essay on why the unredeemed Ebenezer Scrooge wasn't so bad:

So, why is Scrooge supposed to be so in need of redemption? Well, he refuses to contribute to the comfort of the poor (and even suggests that they should die, to reduce the surplus population!), he begrudges his clerk a paid vacation at Christmas, and he’s a merciless creditor, demanding payment when it’s due from his debtors. And he shuns the company of his fellow man, except to the extent required for him to be in good standing with the business community. 

But these are hardly serious moral failings. 

Well, actually, they are. In Christian terms, Scrooge at the time of the visitations is entirely lacking in charity. Not just in the common sense of giving to the poor when you can bloody well afford it, but in the broader Christian sense of loving others as himself. He has no friends. His clerk's wages, working conditions and benefits are the worst he can get away with. He doesn't tip Christmas Carolers. He repeatedly snubs his nephew, apparently his only living relative. Earlier, his fiancee has released him from their engagement because she believed he loves wealth more than her, and he does not contradict her. Children know better than to ask him the time of day on the street, and seeing-eye dogs drag their blind masters out of his path. If he continues on this track he's going to die alone and unloved.

So, the Gospels, St. Paul, and Dickens are in broad agreement that his pre-visitation afterlife prospects are not good. The lack of charity is pretty much a show-stopper.

But, you may say, that's just Christian dogma, which I reject.

Look, going in, you knew it was A Christmas Carol, not An Objectivist Carol. You were warned.

Second, the Golden Rule is so broadly believed among so many different religious and ethical traditions that it may well be a valid moral intuition. At least, it will do till something better comes along, even if you don't believe in Yahweh, Jesus or Mohammad.

And unredeemed Scrooge is an epic fail at the Golden Rule.

One of his happiest memories is working for a moderately benevolent employer,  Fezziwig.  Fezziwig spends a modest sum on the Christmas party, lets off work early on Christmas eve, and generally treats his employees generously in small ways. It was a golden memory for young Scrooge. When it's his turn to be boss, unredeemed Scrooge does nothing of the sort.

Another happy memory for Scrooge is being rescued from a cheerless boarding school by his younger sister Fan. She died in childbirth, and you might think that he could show some warmth to his nephew, her son, but no.

There's a concept in economics called diminishing marginal utility. If you are $1 away from starving to death, another dollar is immensely valuable. If you are Bill Gates, another dollar isn't worth noticing. Even though the absolute value in money the same.

It then follows that a moderately charitable rich man, like redeemed Scrooge, can improve the net subjective welfare of his society a lot by even a moderate tithe of his wealth to the less fortunate.

But also, if you treat others as you would like to .be treated, they are more likely to respond in kind.

Long story short: don't be unredeemed Scrooge. Be redeemed Scrooge, or Fred, or Bob Cratchit,  or the Fezziwigs.

God bless us, every one.

The Dunning-Krugerrand Effect

This is a cognitive bias in which incompetent individuals overestimate their own competence, and so make excessive investments in a bright and shiny commodity metal, in the false belief that it is undervalued compared to other investments.

Artists, Art and Politics

The nominations for the 2014 Hugo awards include in the best novelette category, one work by the memorably odious racist sexist homophobic author writing as Vox Day.

Is this a big problem? I think not.

First, very bad people can still produce good art. For example, Francois Villon, Caravaggio and Benvenuto Cellini. Love the art, hang the artist.

Second, if the artist's false worldview damages their art, that should count against their art as art. The racism in Gone With the Wind and Stalinism in Alexander Nevsky were odious, and both works would have been far better without them.

Third, I think that Vox Day writes poorly enough that his work can and will be rejected on its merits.

Virtuous Redistribution

The repeal of the Corn Laws in 1846 was one of the great policy changes of 19th century Britain. It had the effect of lowering the incomes of wealthy landowners and raising the real incomes of most other people by lowering the cost of grain. Since it allowed Britons to buy grain from the places where it was cheapest to grow and concentrate on producing the goods where Britain had a comparative advantage, it was good for the overall economy.

If we see inequality as a problem, we should concentrate on policies that similarly increase the pie at the same time we redistribute income.

My candidates:

Reduce copyright term to the Berne Convention minimum. Current law is an expensive and inefficient way to hand excessive monopoly rents to a relatively small number of individuals.

Reduce or eliminate entirely the number of patents granted for software: again, this is a very expensive way to grant monopoly rents.

Lower the cap on the mortgage interest deduction: it's regressive and distorts the housing market.

Cap the tax exclusion of employer provided health insurance: it's regressive and distorting. Better yet,  replace it with a tax credit of the same total value.

Reduce and eventually eliminate agricultural subsidies and tariffs: they're regressive and distorting.

Charge market rates for all Federal mineral rights.

Reform immigration and zoning.

These are all policies that would be good for equality and good for the economy.

Picketty and Rentier Dynasties

Thomas Picketty in his Capital in the Twenty-First Century seems to be arguing that if the real return on capital is greater than the real growth in the whole economy, then capital's share of the economy will inevitably rise.

I don't see how that follows. It would be true if all the owners of capital were all crazed misers that never spent any of the income from their capital and reinvested everything for the benefit of their future selves. But they aren't.

In fact, Picketty suggests a more sophisticated model. If the generations of a rentier dynasty love their offspring like they love themselves and care nothing about anyone else, they will save just enough to keep their income growing at the same rate as the general economy, and consume the rest.

However, this results in capital's share of the economy staying static rather than growing.

But! The wealthy don't always care only about their own heirs. Warren Buffet and Bill Gates are only the latest examples of philanthropists who concluded that there were some people who needed their money more than their children did. For an earlier example, see Andrew Carnegie.

Also, even when a benefactor decides to pass his estate entirely to his heirs, you have the issue of multiplying heirs.  An estate of $1 billion could easily by divided among 10 heirs two generations later.

Also, dynastic fortunes can go downhill quickly if something bad happens to the founder's industry and the heirs can't diversify quickly. Looking at the gilded age robber barons, you see a lot of fortunes built on railroads, steel and coal. Not industries that have done well since then. But, for example, the Vanderbilts couldn't just dump all their shares in the New York Central to diversify: not only would this depress  the value of their shares, but a controlling interest was worth more to them than a minority stake.

Tyler Cowen reviews Picketty here.  He raises good points.

The Puzzle of Federal Land in the West: Cui Bono?

The recent standoff between the scofflaw deadbeat rancher Cliven Bundy and the Bureau of Land Management over the question of whether he should graze his cattle on Federal land for free because, well because, highlights an interesting question: why does the Federal Government own so much land in the west?

The obvious simple answer is that the Federal Government is grinding the states beneath its iron heel. But obvious answers are often wrong. Congress gets to decide what happens to Federal land, and the states most affected are relatively low population states with disproportionate power in the Senate. We need a better answer.

We need to step back and look at ranchers like Bundy. Before 1936, they could graze on what became BLM land for free. The more public land, the better, for them.

By 1936, the ranchers had noticed that with everyone using the free Federal rangeland on a first-come-first-served basis, the land was overgrazed, so the best solution for the ranchers was to negotiate finite grazing rights, with grazing fees set at the lowest possible level. This was adopted.

From 1916 to 1976, it was possible to homestead 640 acres of grazing land if the homesteader made modest improvements of $1.25 an acre. Demand for these homesteads was depressed by free Federal forage before 1936 and below-market federal grazing fees after.

There have been repeated attempts to bring Federal grazing fees closer to market rates for similar private land, without success.  Rates are a bit closer to market than ludicrously low fees of the 1930s, but far below what they would bring on a competitive market. Grazing lease prices set by other Federal and state agencies by competitive bidding or other market based methods were almost always higher, and often by quite a lot.

So. Who benefits from the current status quo of the Federal Government owning so much western land and leasing at current rates? Western ranchers.

John Hinderaker gives the game away a bit:

Over the last two or three decades, the Bureau has squeezed the ranchers in southern Nevada by limiting the acres on which their cattle can graze, reducing the number of cattle that can be on federal land, and charging grazing fees for the ever-diminishing privilege.

But charging grazing fees is nothing new, and in fact the current, per-head fees for BLM land are lower than in 1981.

The rancher complaint then seems to be that that the Federal government is offering fewer leases at the subsidized rates that ranchers understandably prefer. The western ranchers, while flying the banner of rugged individualism, are addicted to the implicit subsidy of underpriced Federal leases.

But they feel squeezed because fewer of the underpriced and implicitly subsidized leases are available.

It's a variation on the complaint that the food is terrible and also the portions are too small.

I feel some sympathy for ranchers who bought private land in the last few decades, since by then the ability to exploit nearby underpriced Federal grazing leases was built into the price demanded by previous owners. Who then walked away with their gains.

Families that got in cheap in 1871 and have been milking the system ever since? Not so much.

Medieval Return to Capital

From 1150-1350 English land returned about 10% of the purchase price each year in rent. After the plague, from 1350-1600 real returns were about 6%. Rented land was a relatively safe and easily managed investment. Other investments required a higher rate of return: the London orphan's court charged 10% interest for commercial loans to merchants with sound security. Building rents would also be higher because of depreciation.

Thrupp, Sylvia L. 1976. The merchant class of medieval London, 1300-1500. [Ann Arbor, Mich.]: University of Michigan Press. p. 107

Media Bias

News media are biased, but the biggest problem isn't the ideological bias that conservatives complain about.

Media are biased in favor of covering a story quickly, because viewers want their news when it's new. Information that comes in later that gives a fuller picture will be discounted accordingly.

Media are biased in favor of presenting a simple dramatic narrative.  Complex stories without clear villains and heroes and a clear conclusion are less compelling for the average viewer or reader, and less satisfying for reporters and editors.

Media are biased in favor of stories that can be presented with a compelling visual image.

Media are biased in favor of stories that are cheap to present. Rerunning a video of an incident released first and calling in a pair of talking heads that you can expect to argue with each other is cheap. Sending a real reporter to the scene to find out what actually happened costs more.

You Know Nothing About Feudalism. Nothing.

Some ignorant people have attempted to compare medieval feudalism to our modern life.  The ignorance and error of the original comparison burns like a thousand suns.

OK, let's start with the medieval top 1%, perhaps 5,000 households in late 14th c. England.

At the top is the Royal Household, the top .0002%

One step down are dukes and archbishops, about .0014%

The peerage, lords spiritual and temporal, are about .02%, including the level above.

The whole nobility, including non-peerage lords and prelates of similar rank and commoners of similar wealth, about .04%

Knightly rank and above, .2%.

Now, when you look at the left side of the Amendment Gazette pyramid, it really doesn't correspond to medieval feudalism. The presence of the East India Company at level three is something of a giveaway,  as well as the clergy occupying a single level .

I am guessing that the creator relied very much on Gregory King's Natural and Political Observations, and then tossed in some arithmetic errors, such as the one that put the landed gentry at .0001% of the population. The problem, of course, is that King was writing about the post-feudal England of 1688.

Now, in feudalism, there was a very, very strong correlation between wealth and power. Less so today.

The Forbes 400 is a list of what they think are the 400 wealthiest people or households in the US, all billionaires: about .0004% of the population. Since England was a very much smaller country in the Middle Ages, this is equal to the royal household and the richest duke.

Well, it's nice to be a billionaire, but that doesn't necessarily translate to great power. Just ask Ross Perrot.

Now, who are the most powerful people in the US?

Elected and appointed officials: Obama, Bernanke, Roberts, Boehner and Yellen.

People willing to spend a lot of their money on other people, or persuade others to do so: Gates, Buffet and Clinton. Elon Musk fits best in this category: he's gambling a lot on his efforts to create a cheaper launcher. He will bear most of the losses if he fails, and others will reap most of the benefits if he succeeds.

People who run companies that create products or services that a lot of people value: the people running Wal-Mart, Berkshire Hathaway, Amazon, Exxon, Google, Apple, Facebook, IBM and Oracle. Doing this better or worse matters a lot.

People running large financial services companies, with their amazing ability to produce lavish profits if run well and economic collapse if not.

Passionate plutocrats like the Koch brothers and Bloomberg: willing to spend much more than their peers on political causes, they will have more influence as a result.

People running effective media companies.

People whose father was duke? Not so much.

Liberty, Coercion and Just Redistribution

An unrelated stranger can't decide to take your money and spend it on something you don't want to.

But there are entities that can. There are libertarians who will immediately assume I'm talking about governments. "How can this be just?", they will say. "Taxation is theft!"

In this case, I'm not. The description also applies to a simple partnership where you are outvoted by the other partners. Or any corporation where you are a minority shareholder. Or a homeowner's association.

"But that's different! The non-government entities are voluntary agreements!"

Except they aren't always. You can inherit a minority interest in any of the above. You had no role in negotiating the original terms, and perhaps you never agreed to them, but you are still bound by them. Unless it's a publicly traded corporation, you may find it very difficult to sell your assets on acceptable terms. It may actually be easier to move to a different country.

A common libertarian position is that being outvoted in a non-government entity is freedom of contract, but when a government does it it becomes something akin to or even identical to theft.

"Yes, well, but the government only took the rights they claim by force and theft!" But almost all private landholdings have a similar problem. The rights of previous occupants were extinguished by violence, and the current occupants trace their claim back to that theft, with rare exceptions. Lockean homesteading is a just-so fable, and at best only held true for a distant past when unimproved land was so abundant that it could be privatized without later claimers being measurably disadvantaged. That social contract, if it ever existed, was torn up and rewritten in England in 1066 at the edge of the sword.

We come to a final puzzle. An individual with specific skills can usually earn significantly more in the United States than Mexico, even if some of the skills (fluency in Spanish, for example) are less useful in the United States than Mexico. How can exactly the same labor be worth much more after crossing the border?

I suggest that the answer is that an individual's productivity results from at least two factors. The first depends purely on what he can provide as a a self-owning person. The second depends on where they add their labor to the final product. Working in a polity that has abundant natural resources, favorable geography and climate, and efficient infrastructure and institutions will allow them to be more productive than they would in a less favorable state or in a state of nature like Robinson Crusoe. I will call this productivity boost the commonwealth surplus.

I don't know of any state today that allows entirely unrestricted immigration. There is clearly some level of immigration that can disrupt native culture and institutions: this was the case for Mexico before 1835, the kingdom of Hawaii, and Palestine. Totally unrestricted immigration is not a right that any state  now recognizes.

The United States allowed unrestricted immigration only briefly, from 1776 to 1875 under federal law. In practice, the window was less than that, since California passed several laws intended to discourage immigration from 1850 on, and we didn't control California and its west coast ports until 1846. Before that, restricting Chinese immigration required no law: distance was more than sufficient.

In most rich and developed states, the allocation of the commonwealth surplus is somewhat arbitrary. In the United States, it it goes to those lucky enough to be born within the borders, other children of citizens, the lucky individuals that have been able to legally migrate, and illegal immigrants that haven't been detected and deported yet.

Given that the commonwealth surplus is scarce and valuable, there is much to be said for charging those that enjoy it a rent equal to its value, and distributing the amount collected equally among all legal inhabitants of the commonwealth. Or perhaps a portion could go to foreigners who wish to immigrate, but are prevented because the natives believe the limited level of immigration they allow is justified by necessity.

So. I arrive at a theory that in a developed state like the US that does not allow unlimited immigration, some level of redistribution is just and desirable, even according to many libertarian theories of rights.

Proprietary Communities Are Not Local Governments

David Friedman seems to be arguing that proprietary communities are pretty much like local governments, only better.

This is incorrect, at least in Pennsylvania.

There are some pretty important things proprietary communities can't do that even local governments can. In particular, they cant't put you in jail and they can't tax people who don't own real estate in the community. Also, no eminent domain.

At the same time, they can do things that government can't. They are mostly unbound by the bill of rights. And they typically if not always restrict voting rights to those that own real estate. Bug or feature? You decide. Or not. I'm going with bug, myself.

The most dysfunctional community of which I have personal knowledge was a proprietary community in Northwestern Pennsylvania. The developers had strong incentives to make the development appear attractive, but none to make it actually be attractive. Once the lots were sold it wasn't their problem.

The Obscene Horror of Subsidized Maternity Care

One of the objections to the Affordable Care Act is that it forces people who currently don't intend to have any, or at least any more,  children to pay higher premiums than they would if they could select a policy that excludes maternity coverage.

The most obtuse version is the men that complain about being charged for maternity coverage. Dude, the insurance company knows that offering you maternity coverage costs them nothing, and you will be charged accordingly.

Greg Mankiw, who is a pretty smart guy, and usually smarter than this, presents a somewhat less stupid version:

In the law, having children has been deemed a pre-existing condition, although it is not quite described as such. Everyone is now expected to buy insurance to pay for pregnancy and maternity care, even those who never intend to have children. The goal is to spread the risk of childbirth among the larger community. 

But having children is more a choice than a random act of nature. People who drive a new Porsche pay more for car insurance than those who drive an old Chevy. We consider that fair because which car you drive is a choice. Why isn't having children viewed in the same way? 

I don't know the answer to these questions. But it does seem that fairness in health insurance pricing is being viewed very differently than fairness in pricing other types of insurance. I wonder why.

I don't. Children aren't just consumer goods. Little Porsches don't grow up to be workers and inventors and  entrepreneurs.  Children who become productive adults do. They produce surplus, and most of that doesn't go to the parent.

The person who would rather buy a Chevy doesn't care if nobody buys a Porsche. The person who chooses not to have children is usually making an implicit assumption that someone else will raise the generation that empties their bedpan and keeps the electricity running when they are too old to do it themselves. And I'm fine with that choice, as long as they don't start treating raising a child to productive adulthood as a purely selfish act of personal consumption exactly like buying a more expensive car.

So even the childless by choice have some interest being generous to those that aren't.

But where will it end? Conceivably the tax code might some day give a deduction for dependent children.

The Proportions of the Denominations in English Mint Outputs, 1351-1485

This is a useful article for people interested in this question. Like, for example, people who are doing living history who wonder what ratio of coins they should have in their purse.

A lot of the evidence conflicts, and some is clearly biased. Coin hoards were biased towards the largest denomination available to the hoarder.  There are repeated complaints that the mints underproduced smaller denominations, regardless of their indentures.  Coins reserved for pyx trials in each denomination may not have been directly proportional to the total minted. Coin dies for larger denominations may have produced fewer coins per die.

Taking all this into account, we may still make some very rough guesses for the period covered, taking the second highest value coin in each metal as a benchmark.

For every 10 gold half nobles, there were three nobles and five quarter nobles in circulation.

For every 10 half groats, there were 5 groats, 14 pence, six halfpennies and six farthings.

Gold Coins in England 1351-1465

How common were gold coins in use England in the late 14th and Early 15th century? Coin hoards give some indication. 62 hoards were dated between 1351 and 1465. 34 contained only silver coins, 8 a mixture of gold and silver, and 20 only gold, typically all nobles. The all silver hoards averaged 7s 6d in value, a little more than the value of a single gold noble. The mixed hoards averaged 10 pounds 7.5d in value and the all gold hoards 15 pounds 6s 5d.

Gold was used, then, for sums of money large enough to make gold more convenient. Martin Allen suggests by 1377 the value of gold coins circulating in England was greater than the silver coins, although of course the number of coins was much smaller.

Allen notes a common petition in Parliament in 1363, asking that, in addition to half pence and farthings, half nobles be minted "for the purchase of food and other commodities." The government responded that this was already being done.

What Should Replace Obamacare?

David Friedman offers a critical view of US health insurance prior to the Affordable Care Act:

A recent post on the Forbes site offers a convincing explanation of what was wrong with the current system of health insurance before Obama, hence what both it and Obamacare ought to be replaced by. Its central point is that what we call medical insurance is in part actual insurance, protection against low probability/high cost risks, in part prepayment of ordinary medical expenditures. The reason insurance policies take that form, also the reason that most of them are provided by the employer and so not portable, is that employer provided health insurance is bought with pre-tax dollars, ordinary medical care with after tax dollars.  

 One result is that individual consumers have little incentive to be careful shoppers for health care services, since for the most part they are not the ones paying for them.

This contains a number of misunderstandings. What we call health insurance is even more complicated.  In part it is what Friedman says, but also an agent that serves to negotiate favorable pricing for the consumer in advance, which is difficult to do when you are lying on the gurney,  or even when not: an organization that buys a lot of a product can often drive a better bargain than an individual. And sometimes, as an HMO, it bundles in the actual provision of health care.

If group health care was driven purely by tax considerations as described above we would expect employers to pay for almost all employee coverage.  This is in fact rare: most employers require a substantial employee contributions, for a share of the premiums, as well as deductibles, co-pays and uncovered expenses.

In part this is because many ordinary expenses are also paid with pre-tax dollars: flexible spending accounts, health savings accounts and health reimbursement accounts also offer tax savings.

But there is another reason. If you as an employer offer to pay health insurance costs in full, you let an outside organization drive your compensation policy. If you don't absorb price increases that drive up total compensation more than you think desirable, your only alternative is to cut nominal wages or fire some employees. Employers hate doing either: neither is good for morale.

There is also another reason why employer provided insurance is common that has nothing to do with tax policy. For the average consumer, group insurance is cheaper than an individual policy for the same level of coverage because the individual policy has higher marketing, screening, underwriting and administrative costs. Even without favorable tax treatment, expect this to continue.

Then we have the argument that insured individuals are reckless consumers of health care services, since they are for most part, not paying. If that's the problem, than we've had the solution for some time: the high deductible policy. Let the insured pay the first $3,000, or $6,000 or $10,000 of medical expenses before the insurer pays anything. That will surely encourage careful shopping.

This is still an option under ACA, actually. In my state, a significant number of the ACA conforming policies have deductibles over $5,000 for a single adult.

But this runs somewhat contrary to the goal of insurance. People pay an actuarial premium to avoid unpleasant surprises. Not everyone wants to accept the potential for $6,000 in unexpected expenses for a somewhat cheaper policy.

Some changes could be made to make current law more equitable and efficient. Extend the subsidy in the market for conforming individual plans so that the subsidy at 400% of the poverty line goes to higher incomes as well. Replace the tax exclusion for employer provided plans with a capped tax credit so that this and the prior change are revenue neutral, since it's absurd that the greatest subsidy for employee coverage goes to those that need it least. Change the fine for not buying insurance to a different penalty: people that maintain continuous conforming coverage individually or through a group can't be discriminated against based on their health history but people who don't go into the separate I Thought I'd Be Healthy Forever pool when they decide they want individual coverage after all.  Remove the limit on charging older individuals more because they are more expensive to insure. Allow employers to count the cost of employer provided insurance against minimum wage requirements since it is, after all, compensation. Replace the complicated higher subsidies in the exchanges for lower incomes with an increased Earned Income Tax Credit.

These changes would be more equitable, but create losers as well as winners. I expect them to be politically difficult.

The Great Divergence

It looks like Europe started to pull away from Asia in economic performance a lot earlier than previously thought, in the case of Italy as early as 1300.

Europe as a whole had a critical advantage over China: being further away from Mongolia, and also benefited from the introduction of of the vertical windmill. Italy was improving shipbuilding as it married the capacious hull of the northern cog to a handier multi-mast Mediterranean rig, and introducing some powerful and important business innovations: double-entry bookkeeping, foreign exchange and insurance contracts, and the legal fictions that allowed Christians to be bankers.

We take these technologies of doing business for granted today, but the difference between having them and not having them was huge.

Could the Roman Republic Have Been Saved?

I think with the right choices the Republic could have been saved.  What it needed was bigger government, more government benefits, more taxes, and less political privilege for its oligarchy.

This completely contradicts the Taylor Caldwell idea that the Republic fell because they were like Great Society liberals, so let me explain.

Republican Rome had nothing like a police force or fire department, although many Greek cities had had them for centuries. It finally got both under Augustus: urban cohorts and the vigiles, a combination of night watch and firemen. Their absence allowed the political gang violence of people like to Clodius and Milo to be highly effective in the late Republic, and allowed people rich enough to own their own fire department, like Crassus, to show up at your burning house and demand an extortionate fee to put it out.

The late Republic made little use of civil servants to collect taxes, instead selling the right to collect particular taxes for a flat fee. The tax farmers had strong incentives to collect excessive taxes, and there were frequent complaints that they did so. It was a bad deal for the state and the average citizen, but it allowed those wealthy enough to advance the payment an opportunity to become even richer.

It also had no regular policy for rewarding soldiers who had completed their term of service with land to support themselves after their service. Such grants were made, but only when successful and powerful generals  pressured the Senate to do so. This, of course, tended to align soldiers loyalties with the generals rather than the state.

A sales tax on slaves would have raised  considerable revenue, and one was instituted under Augustus, but the Republic had none. Such a tax could have funded public services like police and fire fighters, and civil servants to collect taxes. Also, anything that made slaves more expensive would have mitigate the negative impact of the slave worked latifundia on free farmers of small holdings.

The Roman Republic made many unwise choices, in large part because the Senatorial oligarchy had an inordinate share of power under the Roman constitution, and they tended to make choices that favored their own self interest, rather than that of the Republic as a whole. But the constitution of the Roman Republic was not immutable: it had at times been amended to force the privileged to cede power to the less powerful.

It is one of the great tragedies of the late Republic that the reformers were too bold and the conservatives too obdurate. It ended in tears, and imperial rule.