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The annual student program at PERC is just fabulous. It really is aimed at students who have not have had much exposure to thinking about the environment through an economic lens, especially with an eye toward the role property rights play in environmental quality. It is a really fun, interactive program with students from a diverse set of intellectual backgrounds, and the field trips and Bozeman are obviously spectacular.

Applications are due on March 19.

Bryan Caplan makes the case in his new book that students are regularly bored, and much of what they learn in school is not very useful. I would add that not only is much of it not very useful, but that a non-negligible portion of it is wrong, false and harmful to developing our children’s reasoning skills. Here is the latest example from my son’s 5th grade class (and yes, emails asking if they would learn about “alternative views” or why so much energy focused on this particular issue and not other more important ones, have yet to be responded to):

Hello Parents,
[Our school] is excited for students to participate in our next STEAM Center Event, called “RECYCLE IT!”, happening February 27th, 28th , and March 2nd!  In our upcoming event, students will learn about “Single Stream” Recycling.  In our Recycling Lab, students will simulate the recycling experience using VEX Robots to sort recyclables.  Students will also cycle through stations where they will learn about what happens to plastics, glass, metals, and paper once they leave the Recycling Centers.
This event’s success relies on the help of our awesome volunteers!  Volunteers are needed to help students with:
  • Robots (Students will be using the robots to sort recyclables into bins so volunteers would need to observe and assist.)
  • Help lead a recyclable station with a craft (Explain to students what happens at the processing centers once the recyclables leave the facilities –don’t worry, slides and pictures will be printed out so parents just have to read them)!  A small craft will be done at each station.
We need 5 parent volunteers per classroom for each grade level teacher.   Each class will report to the STEAM Center room (103) on the day and time your teacher has signed up for.  Please use the link below to sign up :

From the Feynman Lectures on Physics, Volume 1, Chapter 2:

Why Are Atoms So Big?

Why are atoms so big? Why is the nucleus at the center with the electrons around it? It was first thought that this was because the nucleus was so big; but no, the nucleus is very small. An atom has a diameter of about 10−810−8 cm. The nucleus has a diameter of about 10−1310−13 cm. If we had an atom and wished to see the nucleus, we would have to magnify it until the whole atom was the size of a large room, and then the nucleus would be a bare speck which you could just about make out with the eye, but very nearly all the weight of the atom is in that infinitesimal nucleus. What keeps the electrons from simply falling in? This principle: If they were in the nucleus, we would know their position precisely, and the uncertainty principle would then require that they have a very large (but uncertain) momentum, i.e., a very large kinetic energy. With this energy they would break away from the nucleus. They make a compromise: they leave themselves a little room for this uncertainty and then jiggle with a certain amount of minimum motion in accordance with this rule. (Remember that when a crystal is cooled to absolute zero, we said that the atoms do not stop moving, they still jiggle. Why? If they stopped moving, we would know where they were and that they had zero motion, and that is against the uncertainty principle. We cannot know where they are and how fast they are moving, so they must be continually wiggling in there!)
Another most interesting change in the ideas and philosophy of science brought about by quantum mechanics is this: it is not possible to predict exactly  what will happen in any circumstance. For example, it is possible to arrange an atom which is ready to emit light, and we can measure when it has emitted light by picking up a photon particle, which we shall describe shortly. We cannot, however, predict when it is going to emit the light or, with several atoms, which one is going to. You may say that this is because there are some internal “wheels” which we have not looked at closely enough. No, there are no internal wheels; nature, as we understand it today, behaves in such a way that it is fundamentally impossible to make a precise prediction of exactly what will happen in a given experiment. This is a horrible thing; in fact, philosophers have said before that one of the fundamental requisites of science is that whenever you set up the same conditions, the same thing must happen. This is simply not true, it is not a fundamental condition of science. The fact is that the same thing does not happen, that we can find only an average, statistically, as to what happens. Nevertheless, science has not completely collapsed. Philosophers, incidentally, say a great deal about what is absolutely necessary for science, and it is always, so far as one can see, rather naive, and probably wrong. For example, some philosopher or other said it is fundamental to the scientific effort that if an experiment is performed in, say, Stockholm, and then the same experiment is done in, say, Quito, the same results must occur. That is quite false. It is not necessary that science do that; it may be a fact of experience, but it is not necessary. For example, if one of the experiments is to look out at the sky and see the aurora borealis in Stockholm, you do not see it in Quito; that is a different phenomenon. “But,” you say, “that is something that has to do with the outside; can you close yourself up in a box in Stockholm and pull down the shade and get any difference?” Surely. If we take a pendulum on a universal joint, and pull it out and let go, then the pendulum will swing almost in a plane, but not quite. Slowly the plane keeps changing in Stockholm, but not in Quito. The blinds are down, too. The fact that this happened does not bring on the destruction of science. What is the fundamental hypothesis of science, the fundamental philosophy? We stated it in the first chapter: the sole test of the validity of any idea is experiment. If it turns out that most experiments work out the same in Quito as they do in Stockholm, then those “most experiments” will be used to formulate some general law, and those experiments which do not come out the same we will say were a result of the environment near Stockholm. We will invent some way to summarize the results of the experiment, and we do not have to be told ahead of time what this way will look like. If we are told that the same experiment will always produce the same result, that is all very well, but if when we try it, it does not, then it does not. We just have to take what we see, and then formulate all the rest of our ideas in terms of our actual experience

Yes, I am now becoming an internet meme where basically anything and everything can be tied into climate change. I’d like to make a few short observations today.

  1. What happened to the climate change discussion? It really does seem to be low-level background noise. My advice to those people who are posting regularly about the insanity of the Chump Administration and getting apoplectic about the daily news, probably want to take this time to refocus our discussions and debates to longer-term bigger issues. It’s not just climate change I am referring to of course.
  2. A student and I were discussing what psychologists have been learning about happiness and we got to talking about the 5 things psychologists say are most important for happiness. I of course suspected that one of the things that contributes to happiness (actually, I should be clearer, when we say, “contributes to happiness” we really mean, “how much of the difference in happiness between different people is thought to be explained by factor X?”) was the freedom to control one’s own life and destiny and make choices, but he mentioned to me that psychologists now seem to think that 50% of the variance is explained by … genetics!

  3. In addition, we discussed how people quite readily adapted to changes in life conditions, and even in the extreme circumstances where humans suffer incredible misfortunes, after a time they adapt to a baseline level of happiness that is no worse than people who are not afflicted with the same misfortune. Here is a short article illustrating.

I’d like to focus for a moment on (3). If it turns out that what “society” cares about most is maximizing human happiness, but that our happiness is largely determined by genetic factors, and that changes to our material and physical well-being are but one-time adjustments to happiness which ultimately get replaced … then what is the case for worrying about the damages that climate change will bring? After all, we can physically adapt to much of the problems that are going to be caused by climate change by moving (slowly over time by the way) and by changing the patterns of farming and production (which will be changing anyway, so this is a matter of the type of change, not whether we change at all). And even if climate change physically threatens us, wouldn’t the implications of this behavioral literature be obvious? We would quickly adapt to the new world we live in, and it would not be worse (or better) than the one we are in right now?

I am not saying here that this is the reason to do nothing about climate change, but what I am suggesting was that to the extent that activists and professors and policymakers wish to weaponize happiness and behavioral research, I am not sure the weapons are not easily turned onto themselves. My deeper point is that this observation probably (1) lowers the social cost of carbon and (2) probably should encourage folks to appreciate the economics of climate change more and not less. After all, if people used to feel “free” to discard the economic insight of thinking of costs and benefits because it doesn’t capture happiness correctly, and now it turns out that the insights from happiness research suggest climate change won’t alter our happiness very much, then what else are you to rely upon if you are claiming “science” as the reason to “do something?” Now, using economics, you simply have to demonstrate that the benefits of mitigation exceed the costs, regardless of the implications for happiness.


I have written this a zillion times before … but I have been in and around economics since 1993, and never in my entire career have I had a teacher or article or book teach me about “trickle down” economics. This is a perjorative term conjured from the ether by anti-market proponents, and the strawiest of straw men with which to criticize markets.

I will give a dollar (or produce a short blog post in your honor) to anyone who can name who said the following:

Unlike Friedman the “evangelical,” added _____, ______ was more of an “anthropologist” with little interest in influencing policymakers or becoming one himself. At a press briefing following a meeting with President Reagan shortly after he won the Nobel, _____famously remarked that the economy was in a “depression” and that if he had been Reagan’s economics professor, he would have given the president an “incomplete.” When asked what he thought of trickle-down/supply-side economics—the bedrock of Reaganomics—_____ called it “a gimmick.” Shortly thereafter, he was booted offstage.

No peeking. And no, it was not Paul Krugman.

As you might imagine, I sort of put this fellow in the economics version of Richard Feynman, and I believe his work is still understudied at least at the intro level. Here is another excerpt:

He could also be fiercely independent in his views. ____ recalled a debate between ____ and Friedrich Hayek over welfare capitalism. Hayek believed even a little bit of welfare capitalism would eventually lead to a totalitarian, Soviet-like regime. _____ disagreed. “To paraphrase, ____ said we already have a great deal of welfare capitalism and nothing seems to have been destroyed. We still have a great economy and a great political system which gives consumers the opportunity to express themselves, both through their purchasing and also through their electoral behavior, and they seem to be satisfied. Maybe there isn’t a slippery slope.” The debate between the two continued up until _______’s death in December 1991. Hayek followed suit a few months later.

Go Green!

Solar powered picnic tables? Check.

Solar powered trash cans? Check.

Dedicated green blog? Check.

Recycling cans everywhere? Check.

Water bottle filling stations? Check.

Stopping our snowblowers from leaking gas/oil all over the sidewalks and into our waterways? Ummmm …

Go Gassy

As you ponder the inane debates about tax “reform” (i.e. deck chairs and symbolism), suppose you take the work of Martin Feldstein seriously. He has previously estimated that the dead weight loss in an economy due to taxation would be up to 30% of the size of the tax take. Now, I suspect the direct effect is smaller if only because not all taxes are equally distorting.

But for fun, take this to be true.

The US federal government in 2016 collected $3.27 trillion in taxes. The states collected $1.60 trillion in taxes. Local entities collected $1.26 trillion in taxes. Therefore, in total, the government in the U.S. collects $6.13 trillion in taxes.

Note, that taxes are neither bad nor good from a pure economic standpoint. They are transfers. The reason economists may be frustrated with taxes is that the collection of taxes themselves generates distortions in economic activity by shielding the role that prices play in a market mechanism. In other words, taxes generate inefficiency – which means that even if we collected the same amount of taxes, we could still have all of the current government programs we want AND be considerably richer. I do not think many critics of economists understand this point.

How inefficient might our tax system be? (now, I think it is in many regards worse than this, I am just talking about the direct dead weight losses here). Well, if the tax take is $6.13 trillion, then simply because we do a terrible job of collecting taxes our country is poorer by $1.84 trillion!

Let me say it again. We could have exactly the government we have right now, yet could generate an additional $1.84 trillion in economic transactions every year, just by restructuring the tax system to be efficient. Lest you think this is chump change, can you name ANY program that could generate even a fraction of those gains? And not only that, these are not one time gains, this is activity that happens each and every year.

To put that in context, the inefficiency of our current tax system is the equivalent of putting an entire economy the size of Brazil into the trash, each and every year. The dead weight loss of our tax system is larger than the entire economy of Brazil, South Korea, Russia and even Australia and Canada. Let that sink in a little bit as you all argue over the crumbs in the corner.

I would prefer to be the only propertyless person in a propertied world rather than the only propertied person in a propertyless world.

I will preface this again by arguing that universities, when they are not functioning like kindergartens, are still a shining example of US excellence, sources of research and learning and hopefully positive spillovers, and we probably want to not destroy that. That said, redistributing priorities within many universities is probably in order and this tax bill is probably not going to encourage that.

Obviously, our university is alarmed at the prospect of having the “benefits” it pays certain students taxed, and for potentially having a share of its endowment income taxed. It is moderately entertaining to see our university now, forcefully, argue that the law of demand actually exists and that corporations are, in fact, people (the U of R is a corporation, no less than Exxon is). It is also moderately entertaining to hear our university discuss cost, access and affordability all the while sponsoring football teams, entire departments that suck resources and value away from the valuable enterprises on campus, spend hundreds of thousands (probably millions, but we are not told) on “sustainability” efforts, and much much more. Furthermore, despite what universities say about how important their mission is, in terms of access to opportunity, it may already be the case that “too many” people go to college, and it is also undeniably the case that college is a place for the world’s rich and soon-to-be rich are housed. If ever there was a regressive idea, tax support for higher education is. We are all supposed to be progressive advocates for redistribution, correct? It would seem to me that arguing for tax relief for universities is akin to the much maligned (and of course unicorny) “trickle down” economics that is the hobgoblin of many critics of the last 40 years.

On the other hand, and kudos to SSC for pointing this out, for the mostly stupid stuff in the current tax bill (and don’t believe the budget shenanigans, it will increase deficits over the long run) providing a giant pile of money to universities across the board, or making a large number of universities “free” for students would probably have been smarter and more fiscally responsible than the turb-bomb we are going to have dropped on us.

But the chickens are returning like the prodigal chicks they are – for years I have been having it rammed down my throats that we could all pay more in taxes, that minimum wages do not distort the choices of firms, that the “rich” could pay more, and so on. And now we see what happens when the scope is turned onto you. It’s the same thing for the absolute ecstasy and enthusiasm with which executive power and administrative fiat was celebrated just one short Administration ago, never paying attention to our warnings that some day someone you don’t trust or like is going to be at the steering wheel.

My prediction – none of those lessons will be learned. And your government will get bigger and more expansive the next time the Administration turns over.  And your universities will _____ …

Somehow, I do not think that even the current train wreck of both our actual political governance and our political discourse will encourage anyone to actually question whether government should be as big, powerful and as expansive as it is.

As one of my favorite Twitter feeds now reminds me, “Eat Arby’s.”

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