It is still vacation time for the Christensen family. So far we have been extremely lucky with the weather in Skåne in Southern Sweden. There has also been time for a bit of blogging. So here are a bit more random and disorganised thoughts on money and the world in general – actually not too much on money. So consider this yet another attempt to throw a curveball.

Peter I of Serbia – a Hayekian liberal dictator?

My recent blog post on the connection between Hayek and Pinochet has made me think more of the issue of the possibility of what I generally would consider an oxymoronic idea – the “liberal dictator”.

Could we really imagine a situation where somebody gains power through a military coup and then start to reform the country during a period of dictatorship or isn’t it so that there is no such thing as a “benevolent dictator”? I would think – because I have studied Austrian economists like Hayek and Mises – that the idea of a benevolent dictator is foolish. Even the most liberal and would-be-reformist military dictators will sooner or later be corrupted by the situation. Or so I thought…

A couple of days ago I (again) started reading Christopher Clark’s book “The Sleepwalkers” about how Europe sleepwalked into war in 1914. The first chapter is among other things about pre-World War I Serbian history. Clark among other things writes about how Peter I of Serbia became King in 1903 after a very bloody military coup.

Peter was a very interesting person. Among other things he had translated John Stuart Mills’ “On Liberty” into Serbian when he was young and he seemed like a genuine reformer when he came to power. And sure enough – according to what I have read about him (and it is not a lot) he also moved to reform Serbia’s political and economic system. So maybe Peter’s rule was in fact a Hayekian style “liberal” dictatorship. Or rather during Peter’s rule Serbia moved towards constitutional monarchy and in that sense it is hard to talk about a dictatorship.

I have very little knowledge of Serbian history during this period, but when I read about it in The Sleepwalkers I clearly came to think about relevance for discussing Hayek’s concept of a “liberal dictatorship”. Again I am not making a value judgement. I am just saying that political scientists with interest in Hayek’s historical relevance might want to study Peter I’s rule.

Finally if any of my readers know Serbian history please enlighten me on Peter I. I would love to be hear that in fact Peter I turned out to be a horrible and tyrannical king who soon forgot about the liberalism of his youth. That would show that the idea of a liberal dictatorship indeed is oxymoronic.

I hate when Americans use the term “liberal”

Above I use the term “liberal” and I pretty well know what I mean by liberal and it is certainly not the same as when you generally hear Americans use that term. In US political lingo “liberal” means somebody who is in favour of big government and who is critical about the free market. In Europe it normally means exactly the opposite – somebody who are in favour of free markets.

I certainly consider myself a liberal – as did Hayek and Friedman. But when I speak to Americans I always make sure to say classical liberal. I refuse ever to call myself a conservative.

I find it extremely frustrating when I hear especially conservative pundits in the US talk about the “liberals” – these evil people who love big government and want to take away the guns from law-abiding US citizens. Could you please stop using that term? If you think people are socialists then use that term, but stop calling people who hates free markets “liberal”.

Yeah, I know it will make absolutely no difference what I think about this – after all Americans also call a sport where you hardly kick the ball “football”.  And no I don’t hate Americans…

By the way I equally hate when classical liberals like Milton, Hayek and Buchanan are called “conservatives”. Sure enough – there is such a thing as genuine conservatives, but these brilliant economists where not conservative. Something they all again and again stressed.

Dopingnomics?

Yesterday I was watching a great stage in the Tour de France. Danes generally love to watch bike racing and particularly the Tour de France and I am not exception. Kenyan-born Brit Chris Froome won the stage after a fantastic performance on the climb of Mont Ventoux.

Anybody who have followed professional cycling over the last decade or so knows about the major problems with doping in the sport so it was hardly surprise that the discussion of doping resurfaced yesterday and numerous commentators once again said that Froome’s fantastic performance had to be a result of doping.

I have no clue whether or not Froome is “clean” or not, but nerdy as I am I came to think that economics might help the cycling sport understand the doping problem.

So I have an idea for a working paper on “dopingnomics”. Now I just need to find somebody who will write it – or at least do the econometrics!

The riders in the Tour de France have climbed Mont Ventoux numerous time in Tour history so that makes for the perfect empirical test. As far as I know there are records of the time it has taken the winners of the stages to Mont Ventoux to climbed the mountain.

So why not estimate a regression for the time it have taken the stage winners to climb the Mont Ventoux? And then use the predicted “climb time” as a benchmark to which to compare with the actual time. That should give a pretty good indication of whether the winning rider on Mont Ventoux s is superhuman or not.

Here are some ideas for explanatory variable in the regression:

1)   Weather – was it sunny or rainy? Hot or cold?

2)   Number of kilometres on the stage prior to climbing the mountain

3)   Number of kilometres in the Tour prior to the Mont Ventoux stage

4)   Did the winner have a strong or a weak team?

5)   Tactics – what position did the winner of the stage have in the Tour? Was he a favourite or not?

6)   Technology – estimate the level of technology (basically the quality of the cycles) by looking at for example Total Factor Productivity in the US economy over time.

7)   Health and fitness of the general population – for example average living age or child mortality in for example France.

I am sure somebody interested in this topic could come up with more and better variables to use in the regression, but if you do the analysis we would have an “economic” measure of whether or not certain riders are super humans (doped) or not. That at least would be better than the present hearsay.

Why I still am (not) a Georgist

My good friend professor Peter Kurrild-Klitgaard likes to tease me with my (alleged) Georgist past (I tease him with something about privatized fire engines). Only a few days ago Pete did it again on Facebook – teased me with my Georgist past. I promised him to write a “response”. So here it is.

A Georgist of course is an admirer of the 19^th century economist and social reformer Henry George. Henry George of course is famous for being a proponent of the so-called Single Tax – a tax on “land rents”.

Pete is right that when I was in my early twenties – so around two decades ago – I had some interest in Henry George’s work. In fact I have to admit that I still have a lot of sympathy for Henry George. In that sense I am still (if I ever were to begin with) a Georgist. However, my reason for my George sympathies is not his views on land taxation (which I find deeply flawed), but rather his view on free trade.

Henry George did not understand marginalism, which of course is the foundation of all modern microeconomic thinking and as a result his analysis “land rents” was rather foolish – in the same way as Ricardo and Marx failed in their thinking of wages, profits and rents.

However, I love Henry George’s thinking and his advocacy on free trade. Not because his arguments were particularly strong in an economic sense, but rather because of his genuine outrage over the negative social implications of protectionism. I must say this is exactly how I feel about the trade question. I never understood anybody who would try to make sense of protectionism (I was going to write something bad about Paul Krugman here), but I won’t). Frankly speaking it is not only idiotic in an economic sense I also find it deeply chauvinistic. I think Henry George felt exactly the same way. (For some reason he had the “wrong” view on immigration).

And since my “vacation posts” very much have been about books and book recommendation here is another book recommendation. Take a look at Henry George’s fantastic defence of free trade “Protection and Free Trade” from 1886.

So what I really wanted to say is that I still am a Georgist when it comes to defending free trade. To me it is pretty much an emotional issue and simply can’t understand how anybody who calls himself an economist would ever defend any form of protectionism.

PS I will get out of this ranting phase and I will return to regular monetary blogging…