Tag Archives: Robert Nozick

What determines the prices of goods and services in a market economy?

Basic Economics: Prices are set by supply and demand
Basic Economics: In a free market, prices are set by supply and demand

A few days ago, I posted the meme above on the blog’s Facebook page. The meme makes fun of unionized public school teachers, who feel entitled to the same salary and benefits as doctors, software engineers, etc. in the private sector. I thought that all Americans were familiar with basic economics. But judging from some of the comments to the meme, that is not the case. This post will help.

So, the point of this meme is simple, it’s to point out that the teachers who belong to teacher unions are ignorant of basic economics, specifically, the law of supply and demand. As we’ll see in a minute, this is literally lesson 1 of Economics 101.

When there is more demand for a product or service than there is a supply for it, then prices go up. When there is more supply for a product or service than there is a demand for it, prices go down.

A good place to see this explained is in a book by famous black economist Thomas Sowell. Thomas Sowell has written many books, but he wrote one book in particular for people who have no knowledge of basic economics. It’s called “Basic Economics: A Citizen’s Guide to the Economy“. And the first few chapters explain how prices are set by supply and demand:

  1. What is Economics?
  2. The Role of Prices
  3. Price Controls
  4. An Overview of Prices

Most people who commented on the meme had some knowledge of basic economics, and how prices are determined.

Here’s Bruce:

Wages–the prices of labor–are set by free people bidding in an open market for the labor of people willing to work. They are not set by an emperor weighing abstractions. There are 3.7 million teachers working in the US, and only about 5000 professional athletes.

And Chris:

My coworkers and I (we are fintech people with highly specialized knowledge and computer skills) were talking about some computer-related consultants who are so specialized and so good that they command hundreds (if not thousands of dollars per hour). The top of the top cyber security guys, who do presentations at conferences on threats and vectors? Yeah, thousands if not tens of thousands of dollars per hour.

So far, so good. But others argued that the prices of goods and services are determined by a sinister cabal of politicians and other elites, who paid athletes lots of money in order to distract the masses with “bread and circuses”. Now, I know what you’re thinking. How does paying athletes MORE get people to care about sports? It doesn’t. Actually, it’s the (widespread) demand to see the performance of (scarce) elite athletes that causes the wages of those athletes to increase. It’s not a conspiracy – it’s free people making choices about what they want to buy in a free market.

It turns out that there are two views of how wages are set in an economy:

The labor theory of value (LTV) is a theory of value that argues that the economic value of a good or service is determined by the total amount of “socially necessary labor” required to produce it.

LTV is usually associated with Marxian economics… The LTV is central to Marxist theory, which holds that the working class is exploited under capitalism, and dissociates price and value. Marx did not refer to his own theory of value as a “labour theory of value”.

Mainstream neoclassical economics tends to reject the need for a LTV, concentrating instead on a theory of price determined by supply and demand.

Marxists economists believe that the value of a good or service is determined by the social utility of the work produced. But classical (“free market”) economists believe that value is determined by the scarcity of the good or service relative to the demand from consumers.

So, a Marxist economist might say “teaching English is valuable because it is relevant and meaningful”. But, a classical economist would say “conducting a security audit on distributed point-of-sale system is valuable, because few people can do it, but many people want it”.

So, the conspiracy theorists view of economics, which asserts that teachers should be paid more than software engineers and doctors, is actually based on Marxist (atheistic) assumptions. And yet many of the people who hold to the conspiracy view of prices fancy themselves to be Christians and conservatives.

I’ve noticed that school teachers and non-STEM university students and professors are very likely  to hold to the conspiracy theory view of prices and wages. Robert Nozick wrote a paper about why this happens. It turns out that “wordsmiths” (his word) are conditioned by their performance in the classroom to expect success in the free market economy. But when they find that their “brilliance” in English poetry, Medieval history, or lesbian dance theory has no value to anyone else, they fall in with these Marxist assumptions and conspiracy theory views of the economy. It’s a coping mechanism for people who value academic acclaim more than doing something useful for their neighbors.

Consider this article from College Pulse about a survey of 10,590 undergraduate students:

Students with certain majors are far more likely than their peers to approve of socialism. Philosophy majors, in particular, have a positive view of socialism. Nearly 8 in 10 (78%) say they view the economic system favorably, followed by 64% of anthropology majors, and 58% of both English and international relations majors. Accounting and finance majors are least likely to view socialism positively (20% and 22% respectively).

Do you know what accounting and finance students have to study? Basic economics.

I noticed that the practical commenters who were trying to explain why teachers earn less than software engineers all had some experience working for a living in the private sector. A couple of them mentioned how studying economics on their own had led them to a correct understanding of how the economy works. That’s what happened to me, as well.

As soon as I got my first job as a software engineer, and finished my study of Christian apologetics, the very next thing I studied was economics. It was Dr. Jay Richards who got me interested in it, when I heard him speaking about economics in an apologetics lecture for Stand to Reason. I contacted him, and he recommended the works of two famous economists, F. A. Hayek and Thomas Sowell. And that’s what I want to recommend to you, too. Our continued liberty and prosperity depends on ordinary Americans taking the time to educate themselves about basic economics.

Debating the Kalam argument in a YouTube thread

A new reader to the blog read my article on the Kalam cosmological argument, and he decided to try it out on youtube here. He presented the argument PERFECTLY, and then he got some responses. He asked me to comment, so I will below. But I want you guys to comment, too! (UPDATE: Comment in this post – I don’t recommend commenting in YouTube discussions)

Anyway, here’s the page. (I didn’t watch the video)

And here’s his initial presentation of the argument:

1 Whatever begins to exist requires a cause
2 The universe began to exist
3 Therefore, the universe requires a cause

The cause for the universe (time, space, matter, etc) must be something entirely different (outside the realm of time, space, and matter) since a thing cannot be the cause of itself.

Now I’ll reply to his opponents, but you can reply too in the comments, because he’s reading this post, and we should all try to offer him our thoughts. At the end, I recommend some additional resources, all free online, to help everyone understand the details of this fine argument.

Responses to the Kalam argument

Here’s the first reply:

Just because we don’t know the cause yet doesn’t mean it’s not something scientific. I’m not saying it is, I’m just saying it’s possible.

By “scientific”, I am thinking that this challenger is hoping for a material cause, but the problem is that the origin of the universe is the origin of all space and matter – so no “scientific” cause is possible. So it is not possible that the origin of the universe was caused by something “scientific”, because it’s an absolute origin of all matter, and the physical laws that govern matter, as well. Tell him that there is only one kind of non-material entity capable of causing effects and that is a mind.

Here’s another reply:

What if the universe always existed? We don’t know that it has started to exist, we just know that it exists and that it has existed for very long. So it is possible that it has always existed. So that doesn’t prove anything.

I would ask this person why they hate science so much to deny the good data about the measurements of red-shift in light from distant galaxies, the helium-hydrogen abundance measurements, the cosmic microwave background radiation, the second law of thermodynamics, the star formation cycle, etc. As them what is wrong with science, and why must they push their religion (naturalism) on science?

Here’s another reply:

The same principle can apply to god as well, so this argument doesn’t prove or disprove either it is just pointless.

My response is that the cause of the universe causes the beginning of time as well, and so therefore the cause exists necessarily, outside of time. Things that exist outside of time are eternal, they don’t not exist at time t1 and then begin to exist at time t2. The cause of time’s beginning cannot come into being itself, because there is no t1 and t2 before time is created.

Here’s another reply:

uhm .. no, there is no definition of god like that and even if it is it’s invalid, why ? well mostly because apart from a book “The Bible” there is no real proof he existed, no one has seen him and I’ll wager that no one ever will, henceforth you cannot define something that you really know nothing about, something that might not even exist, it’s like saying that bigfoot is a mammal. you can’t prove that either since you haven’t seen it and don’t even know if it exists

Notice that onlinesid produced an argument for the existence of God, and now this guy is bringing in the Bible (red herring), no proof (red herring), why can’t I see God (red herring), no one knows anything about God (red herring and self-refuting), and bigfoot (red herring). This person is clearly brain-damaged and not one of the things he write is worth a response. Note: I am being mean, but you can’t be mean when you reply to him, you have to tell them to stay focused on your argument and deny premise 1 or premise 2.

And here’s another:

You assume that the universe began to exist.

We currently don’t know if it did or not; the present hypothesis is expansion from a single point that is infinitely small.

You also assume that the cause of the universe doesn’t have a cause. You need to account for the cause of the cause, and the cause of that cause, ad infinitum.

And on “God being outside of” reality, then he shouldn’t be able to affect reality in any observable way. God is untestable.

Again, tell him he is a science-hating flat-earther and ask which of the empirical evidences for the Big Bang he denies. We need to get off of his speculations and evasions and ask him to deny a premise or to deny some scientific data. As soon as he does, ask him for peer-reviewed data that refutes the scientific observations. The cause of the universe doesn’t have a cause because it is outside of time and doesn’t begin to exist. The premise is that only things that begin to exist require a cause. Regarding God not being able to cause effects, you should say that God is a mind and causes effects in time subsequent to creation the same way that humans cause effects using their wills on their bodies.

Here’s another:

It’s called the “Big Bang” hypothesis. Even simple Wikipedia will besufficient for an understanding of it. Or videos on Youtube, if you are that lazy and/or ignorant.

The “evidence” for it is background electromagnetic radiation and the appearance that the universe is expanding. Among other things

The “mind” we perceive is the function of electrochemical impulses between our brain cells. We classify it as a “mind”. And as a physical system of reality, it is affected by physical reality..

Again ask him what is his scientific evidence that the universe is eternal, and ask him what is wrong with your scientific evidence showing that it isn’t eternal. You must make him make a claim and supply evidence for his claim. You need to buy a book called “God and the Astronomers” by agnostic Robert Jastrow and read it. It explains all the discoveries that led to the Big Bang, but get the second edition. Also, if he thinks that mind is biologically determined, then you need to explain that biological determinism makes rationality impossible, since all of our outputs are determined by inputs and DNA programming that has the goal of reproducing, not finding truth.

More challenges:

…The beginning of the universe need not be “God”. Could have been made by a pencil. Or could have always been, like a trigonomic function, repeating and diverging into two dimensions.

I think our boy is beginning to wear him down. He now thinks a pencil caused the entire physical universe to appear out of nothing. But the problem is that a pencil is made of matter and cannot have caused the beginning of all matter. But do go on and make him identify what he thinks the cause is. It can’t be in time, it can’t be matter.

More:

And the theist-point-of-view actually can in no way prove God because there are many OTHER ways it could have happened. A pencil could have been the original cause of the big-bang, or it could repeat like a trig function, eternally epanding, collapsing, expanding in another
dimension, etc.

He’s raising the oscillating model, which is falsified theoretically and observationally. In 1998, the discovery of the year was that the universe would expand forever. The oscillating model also faces theoretical problems with the “bounce” mechanism. Sid, if you still can, try your best in physics class, and take astronomy and physics in university, along with philosophy and logic. It will help you to have more fun in these debates and you’ll know more details.

More:

I did not say that the physical realm is all there is. (Thought there could be two realms, or more.) BUT asuming that an entity exists outside the physical realm and created this universe from that dimension IS illogical.

Ask him for a logical argument that proves that God cannot create matter out of nothing. These assertions need to be backed up with deductive arguments, with premises supported by scientific observations. You can’t just throw around that word “illogical”. It sounds like he is just saying “I don’t like it”. Make sure that you ask him for peer-reviewed papers for anything he says about science, and formal arguments for anything he says is “illogical”.

This time he argues quatum mechanics:

Small particles of matter, at least as I understand it, CAN be “created” from energy. The only real “trouble” is the creation of energy, which “god made it” faces the problem of “what made god?”…

If he wants to argue quantum mechanics, you need to remind him that virtual particles can only appear in a quantum vaccuum, which exists in space. It is not nothing. Also, virtual particles are not as massive as a universe, and those virtual particles only stay in existence for a fraction of a second. So this is not a good analogy for the origin of the entire physical universe.

Further study

You did well, you just need to be meaner in demanding that he bear his share of the burdern of proof. Ask him why you should accept his speculations and assertions, where are his arguments, where is his scientific evidence.

I think that this book would be a good one along with God and the Astronomers, second edition. But read this paper, too, and every William Lane Craig debate you can get your hands on, especially the one with physicist Victor Stenger (video, audio), the follow-up lecture at UC Boulder where Stenger is in the audience, and the second Craig-Dacey debate. When you’re done with that, listen to this lecture and this lecture (I know it’s similar to the first one, but tough!) and this lecture and this lecture. And study more physics if you’re still in school!

God meant for us to enjoy ourselves arguing in his universe. Jesus cured the paralytic to provide evidence for his claims. Similarly, we can use the evidence of nature miracles that science is just now discovering to get the same effect as though we could perform miracles. But we need to understand philosophy and physics down to the details.

How childhood experiences shape our view of economics

Last time, we looked at how childhood experiences influence our views of religion. This time, I want to go over an article from the Cato Institute from the famous Harvard philosopher Robert Nozick. This article will give you insights into why leftist academics are against capitalism, and what specifically causes them to have that belief.

Here’s a blurb about Nozick:

Robert Nozick is Arthur Kingsley Porter Professor of Philosophy at Harvard University and the author of Anarchy, State, and Utopia and other books. This article is excerpted from his essay “Why Do Intellectuals Oppose Capitalism?” which originally appeared in The Future of Private Enterprise, ed. Craig Aronoff et al. (Georgia State University Business Press, 1986) and is reprinted in Robert Nozick, Socratic Puzzles (Harvard University Press, 1997).

Nozick’s thesis is that the school environment encourages “wordsmith intellectuals” to be hostile to free market capitalism and prefer centralized systems.

First, let’s see what a wordsmith intellectual is:

By intellectuals, I do not mean all people of intelligence or of a certain level of education, but those who, in their vocation, deal with ideas as expressed in words, shaping the word flow others receive. These wordsmiths include poets, novelists, literary critics, newspaper and magazine journalists, and many professors. It does not include those who primarily produce and transmit quantitatively or mathematically formulated information (the numbersmiths) or those working in visual media, painters, sculptors, cameramen. Unlike the wordsmiths, people in these occupations do not disproportionately oppose capitalism. The wordsmiths are concentrated in certain occupational sites: academia, the media, government bureaucracy.

Nozick’s argument is that wordsmiths oppose capitalism because the free market doesn’t provide them with the rewards and adulation from authority figures that they received in their school years.

He writes:

Schools became the major institution outside of the family to shape the attitudes of young people, and almost all those who later became intellectuals went through schools. There they were successful. They were judged against others and deemed superior. They were praised and rewarded, the teacher’s favorites. How could they fail to see themselves as superior? Daily, they experienced differences in facility with ideas, in quick-wittedness. The schools told them, and showed them, they were better.

The schools, too, exhibited and thereby taught the principle of reward in accordance with (intellectual) merit. To the intellectually meritorious went the praise, the teacher’s smiles, and the highest grades. In the currency the schools had to offer, the smartest constituted the upper class. Though not part of the official curricula, in the schools the intellectuals learned the lessons of their own greater value in comparison with the others, and of how this greater value entitled them to greater rewards.

But what happens when these pampered wordsmith intellectuals hit the job market?

The wider market society, however, taught a different lesson. There the greatest rewards did not go to the verbally brightest. There the intellectual skills were not most highly valued. Schooled in the lesson that they were most valuable, the most deserving of reward, the most entitled to reward, how could the intellectuals, by and large, fail to resent the capitalist society which deprived them of the just deserts to which their superiority “entitled” them? Is it surprising that what the schooled intellectuals felt for capitalist society was a deep and sullen animus that, although clothed with various publicly appropriate reasons, continued even when those particular reasons were shown to be inadequate?

So, what economic system do wordsmith intellectuals advocate for instead of capitalism?

The intellectual wants the whole society to be a school writ large, to be like the environment where he did so well and was so well appreciated. By incorporating standards of reward that are different from the wider society, the schools guarantee that some will experience downward mobility later. Those at the top of the school’s hierarchy will feel entitled to a top position, not only in that micro-society but in the wider one, a society whose system they will resent when it fails to treat them according to their self-prescribed wants and entitlements.

Intellectuals can’t make money degreez in Marxist Studies, Peace Studies, or <Insert_Victim_Group_Here> Studies. And yet, they feel entitled because of their classroom experiences. So, the answer is to confiscate the wealth of the productive entrepreneurs and redistribute them to the intellectuals.

But there are further unrelated points I must add to this article.

What makes people less religious the more educated they become?

OK, if you watch the debate between Peter Atkins and Bill Craig, or Lewis Wolpert and Bill Craig, etc. then it’s pretty clear that these “intellectuals” have not rejected God for intellectual reasons. On the contrary, they rejected God based on the reasoning of a 12 year old and never bothered to look for answers since they were 12.

The real reason that more educated people reject God is due to pride. Specifically, they do not want to be identified as believing the same spiritual things as the masses. Their great education makes them feel pressure to please their colleagues by embracing views that are different from the benighted masses.

So, it comes down to peer-pressure. They simply don’t want to be different from their colleagues. They want to be able to look down at the benighted masses.

What makes researchers support socialist dogma and pseudoscience?

Researchers are funded by government grants. Grants proposals have to get the attention of government bureaucrats. Bureaucrats are always looking for a crisis that they can sell to the public in order to increase the size of government and regulate the free market.

Therefore, researchers tend to embrace whatever the latest Chicken Little crisis is, be it global cooling, global warming, or unsafe consumer products, etc. Grant proposals that open up opportunities for government to control the free market will get the most funding.

What makes government-run schools and media support socialism?

Again, government-run schools and media receive funds based on the size of government. NPR, PBS and the whole public school system can never be objective about anything. They must always side with government and against individual liberty. They also oppose competition from private alternatives like Fox News and vouchers.