Ask The Philosophical Muser: Reader Response To Trump & Tariffs

A reader asks about my recent post on Trump's tariffs:

"I don't get everyone's blathering about Trump issuing tariffs to help our domestic steel industry. The President of the United States has an obligation to the steel workers in the US not to steel workers in foreign countries. That's one of the basis on which he was elected, to compensate the home economy for it's (sic) losses"

My response:

Even if we ignore the central point of what I wrote - that Americans themselves are better off without the tariffs (and heaven knows why we'd ignore it, but let's do it anyway for the moment) - one of the rules of thumbs I find generally reliable is that if you transplant a proposition to analogous real life examples and find it doesn't fly analogically, there is a good chance that your proposition doesn't fly in the case you want it to either.

I will offer some examples. So remember the proposition here is that Trump should compensate domestic workers from the threat of foreign competition. So I ask you to think of one other instance in real life where we would countenance such an idea as a moral or rational equivalent.

When Tesco opens a superstore in a nearby town, we don't have an obligation to compensation the local high street businesses. When Amazon can deliver CDs and books to your door at the cheapest rate, we have no obligation to compensate HMV and Waterstones. When average looking Dave loses out to handsome Mike in the pursuit of Kerry's affections, we don't think they have an obligation to compensate Dave for remaining single. When more and more women began to enter the labour market, no one thinks that the government should have compensated men for the increased competition for their jobs. The list goes on.

Similarly, when Americans are made better off by foreign competition in the form of lower consumer costs, the fact that no analogous compensatory situation exists anywhere else in society speaks volumes about its absurdity. Foreign competition should no more be punished for entering the US economy and making Americans better off than increased competition from women, online traders and large supermarkets should be punished for making people better off.

Finally, as I said in a Facebook post in March, when Trump was first tweeting threats about tariffs against the EU:

"Trade is not like a race where you try to untie the laces of fellow competitors in order to make it harder for them to cross the line. In trade deals, the best situation for all the runners is everyone crossing the line together with their laces intact: that is, by all participants removing tariffs and subsidies. Trying to partake in a trade war with other countries by imposing tariffs is like trying to slow them down in a race by tying your own laces to theirs - you both become inhibited in trying to run."

And here is what so many don't understand about trade that they would understand with absolute clarity if it were a running race: even if others wish to run with their laces untied, you are still better off if you run with yours tied up, and encourage others to tie up their own laces and join you over the finish line.

Ask The Philosophical Muser: On Seatbelts

Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

A Facebook friend made contact to query my claim that it's obvious that people drive less safely with seatbelts on. The query was along the lines of this: "I don't see why this is the case, surely even with a seat belt on people try to drive as carefully as possible because it's in their self-interest to do so?"

My answer: It seems obviously true, but like many supposedly obviously true things, it is false. To see why, you only need consider the statement when said this way - "If a driver has no seat belt he or she will drive more carefully" - a statement that is very obviously true, and one that no one has any issue with.

Consequently, saying "people drive less safely with seatbelts on" is just another way of saying "people drive more safely with seatbelts off". Both are equally true, they are just different words to say the same thing.

Ask The Philosophical Muser: On Washing Up and Cycle Helmets

Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

Q) My husband and I both work full time, and take it in turns to cook the evening meal. He thinks it is better if the one who cooks also washes up, giving each of us one night off from the kitchen out of every two. I would prefer a system where one cooks and the other washes up. Who is right?

A) You both have points in your favour. Your case makes the best out of utility but the worst out of efficiency, whereas his does the opposite. After cooking dinner, the cook has diminishing utility which makes washing up harder for him or her than for the other, which is an argument in favouring of a system where one cooks and the other washes up. But preparing and cooking dinner involves externalities in the form of making mess, so a system whereby the cook also washes up incentivises him or her to make as little mess along the way as possible. In an ideal scenario, your system if preferable, as long as you both signal your care for the other one by making as little mess as possible along the way. Failing that, get a dishwasher!

Q) Dear Philosophical Muser, What is the overall effect of cycling helmets on accident and emergency units in the hospital?

A) Dear Reader, I've no idea, but I could hazard a guess. While cycle helmets greatly reduce what would otherwise be minor injuries, they also convert some accidents from fatal to near-fatal or serious injury - meaning, if that is the principal concern of your enquiry, they are likely to place an extra strain on the NHS. 

The other thing to consider is that even in absolute terms they may not benefit the cyclist, particularly if drivers are more likely to drive less cautiously around a cyclist with a helmet on. Equally, it may also be the case that people who ride with cycle helmets on are, on average, safer and more conscientious riders than those that do not. Or it may be true that cyclist with helmets on feel safer and therefore ride less safely. All these have to be factored in to the analysis.

EDIT TO ADD: There is a debate going on at the moment as the government is considering whether to make it mandatory for riders to wear a cycle helmet. Alas, both those for the proposal and those against it are basing all their arguments only on what they perceive is the least risky and statistically safer - they are giving almost no thought to the most important factor: the freedom of individuals to decide how they wish to ride - with or without a cycle helmet.

It is not the state's job to try to govern in loco parentis, whether that's on the matter of cycle helmets, alcohol, cigarettes, fatty foods, or whatever. There are costs and benefits to all things, and it is the job of the individual to decide how they weigh up those costs and benefits with regard to their own utility.

Some prefer to cycle without a helmet, saving on the cost of the helmet, increasing their awareness of what's going on around them, and knowing that they will cycle more cautiously without a helmet on, and drivers around them will likely to the same. Some, on the other hand, prefer to buy the helmet because the costs of having a helmet are less to them than the benefits. Both those decisions are absolutely fine, which is why the state should not a pass a law that makes wearing cycle helmets compulsory.

 

Ask The Philosophical Muser: On MPs' Salaries

Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

Q) When people have been moaning about our mediocre MPs being overpaid, some people have historically argued the opposite: that if we actually raised MPs' salaries we might attract better quality. My question is, what does economics suggest would be more likely, that higher salaries would attract better MPs or that it would just make our current run of the mill MPs even more overpaid?

A) In all probability it would be both. However, while we can all agree that overpaid mediocrity is a bad thing, I'm not sure that raising MPs' salaries to attract better politicians would necessarily be as desirable as you may think.

The reason being, you have to factor in the opportunity costs of having talented people in Parliament. Opportunity costs are the foregone opportunities that occur as a result of something taking place. For example, choosing to go bowling with the lads costs not just the price of the game, it costs in terms of what you might have done instead; a quiet night in with your wife, or a meal out with your family or a trip to the cinema with other friends.

Similarly there are opportunity costs to having very bright and talented MPs in that what is foregone is whatever they would do if they were not an MP. If a talented businesswoman becomes an MP then the UK must lose out on not having her in the business sector where she would probably create more value for society. If a brilliant male scientist becomes a brilliant politician then the UK may miss out on some important scientific discoveries or beneficial fieldwork.

It is far from obvious that a talented businesswoman and a brilliant scientist would do more good in the House of Commons than they would in their fields of expertise - in fact, my off-the-peg hunch is: almost certainly the opposite. Consequently, then, there may even be a good argument for keeping MPs' salaries low in order to dissuade very talented people from entering Parliament and costing society what they would have contributed instead.

Ask The Philosophical Muser: On Attacking Burglars and Good Gift Buying

Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

Q) What is the economics consideration regarding whether society is better off if house owners can attack burglars that enter their property?

A) Well firstly, I wholeheartedly support a victim's right to defend themselves if a burglar illegally enters their property. I support this on grounds that I think people should be entitled to defend themselves and their family when in danger, and when someone forces their way into your home their incentive not to get caught and arrested is enough to make them a viable threat.

As for the economics, burglary has an immense social cost for the victims (not just having your valuables stolen, but also the sense of being intruded upon), but a relatively low cost for the perpetrators because conviction rates are low, and for many burglars addicted to drugs, life in prison won't be much worse than their current life situation. Therefore, a law that increases the costs for victims and decreases the costs for burglars is a highly questionable one.

The other thing to consider is that the law probably wouldn't do much good anyway. The kind of people that feel sufficiently threatened to the extent that they would use physical force against a burglar are unlikely to be the kind of people that would refrain from doing so because of a law that forbids them from doing so.

Q) What’s good wisdom for mastering the art of great gift buying?

A) The best gift people buy are the gifts I didn’t even know I needed, but was chuffed to bits when I received them. That’s the epitome of a good gift. The other bit of wisdom I’ve distilled is that gifts are well chosen when they are gifts the receiver wants but wouldn’t necessarily buy for themselves.

Good gifts do other things too – they make the giver and receiver emotionally closer, and they help create memories (either experiences or objects) that stay with the receiver long after the gift is given. Great gift-buying exhibits a signal that you understand the tastes, wants and needs of the person for whom you’re buying – making the gift as much about the thought behind it as the thing or experience in itself. If you can perfect all that, you’ll be a) a great gift buyer, and b) mastering something I haven’t yet mastered.

Ask The Philosophical Muser: On The Value Of Middle Men

You may recall a while ago that I invited readers to submit any questions they might have to j.knight423@btinternet.com and I would publish some of them in some Ask The Philosophical Muser articles.

I have finally got round to putting some of them together (which was easy as there have only been six or seven thus far), as well as extrapolating some questions/comments/queries I've stored from my time on debating forums.

The questions that appear henceforward in the Ask The Philosophical Muser articles are a heady mix of actual reader questions, varying enquires and feedback that have come my way on social media, and some semi-factual/semi-fictional elaborations where I've taken segments of actual discussions I recall over the years and turned them into fun questions and answers for this Blog. I promise I have taken no liberties that depart from actual questions people have in some way been curious about either in written or spoken conversations.

For the first one, a reader probed me with a very intelligent question that I'd not really thought about in quite this way before. I'm not quoting him verbatim, but the gist of what he asks is this:

Q) If governments are bad when they provide an unnecessary filter between provider and consumer, then why aren't many shops bad when they provide an unnecessary filter between wholesaler and consumer?

A) It's one of those great questions because the logic is pretty robust, it's just that the information needs a little tweak. By which I mean, yes, at face value the logic suggests that any middle men (or middle women, of course) between provider and consumer are going to cream off a share of the value for themselves, because if I want to buy £3000 worth of envelopes from a paper mill via the middle man involvement of a stationery company like Espo, then by the time Espo have taken their cut, I will be paying something closer to £3200 or £3300 for the same product.

But what you don't always get to see about middle men is that they bring to the transaction certain specialities in which they have the comparative advantage, and through which they actually make your transaction with the manufacturer/wholesaler more financially beneficial.

To see why, imagine a baker who is also a pretty good driver with good knowledge of the city in which he bakes. If he wanted to provide a service where he delivered pizzas and cakes around the city, it would obviously not pay him to make the goods and deliver them himself, even if he is a slightly better driver and navigator than the person he hires to do his deliveries.

The reason being; it is more economically efficient for the baker to pay someone else to do the deliveries because what he'd gain in forgone wage costs he'd lose two or threefold in lost opportunity for baking. Suppose in terms of gross profit our baker can make £50 worth of baked good per hour (revenue minus cost of ingredients) and pay someone else £10 per hour to deliver the goods. The baker's profit goes down to £40 per hour, but if the baker spent 3 hours a day doing his own deliveries it would cost him £120 of baking profit to save just £30 of delivery costs.

Similarly, shops are good for consumers and providers alike, because even though the shops have to take their cut as middle men, they have the comparative advantage in things like market research and sourcing information on behalf of consumers. In fact, one can go so far as to say that the fact that the wholesaler chooses the services of retailers shows that the presence of retailers reduce costs by performing actions that would otherwise have to be performed by the wholesalers and the consumers.

As ever, any questions for this Blog can be sent to me and may become part of the series, consistent with the four golden rules:

* Please don't ask me to do homework, coursework or an assignment for you. No reader or blogger is interested in that.

* Before asking something, please check the *Labels* section on the right side-bar, as that topic may well have been covered before on here.

* There's no point asking a question about facts or information that you'd be better off typing in Google.

* Please keep your question short. You have a better chance of getting an answer if your question would comfortably fit on a post-it note.

  

Cheers!

Ask The Philosophical Muser

Since increasing my readership over the past couple of years, through a growing following, but also in no small part due to high(er) profile writing elsewhere, I've not been short of interesting enquiries in the form of comments, questions well worth answering, or even on occasion requests for advice regarding matters of daily life. Even as we speak, I have one or two interesting enquiries from readers that might make good future blog posts.

With that in mind, I thought I'd mention, dear readers, that if it helps or adds anything to your life in any way, you are quite welcome to ask any questions on any subject you like, or even ask advice, whereby if it's witty, intriguing or intelligent enough for public consumption, I'd be willing to make a blog post on it (with the questioner remaining anonymous if preferred).  

You can either email me (email address at the bottom), or if you prefer message me on Facebook, and excepting a few conditions below, you may well find your question becomes a new blog post.

* Please don't ask me to do homework, coursework or an assignment for you. No reader or blogger is interested in that.

* Before asking something, please check the *Labels* section on the right side-bar, as that topic may well have been covered before on here.

 

* There's no point asking a question about facts or information that you'd be better off typing in Google.

* Please keep your question short. You have a better chance of getting an answer if your question would comfortably fit on a post-it note.

As always, thanks for reading.

j.knight423@btinternet.com