Man-of-System Madness!

Merch madness…

(Don Boudreaux) Tweet Every Spring in the U.S., many Americans are tuned in to what is called “March Madness.” (This madness usually occurs in early April, but because of Covid-19, it actually is occurring in 2021 in March. In 2020 it was cancelled by Covid Craziness.) Sixty-four – well, now more, but traditionally 64 – college basketball teams are invited to participate in the NCAA Division I basketball tournament.


Café Hayek isn’t a sports or betting blog; it’s an economics blog.

Here’s the relevance.

Production involves matching different inputs together in ways that generate outputs that are useful to human beings. And production is ‘better’ the more useful are the outputs produced relative to the value of the inputs used to produce these outputs. If McDonald’s produces one million Big Macs this year using only half of the inputs that it used last year to produce one million Big Macs, there are more resources available this year to produce goods and services that last year were too costly to produce. McDonald’s improved efficiency at producing Big Macs makes increases the wealth not only of McDonald’s shareholders but of countless people who have nothing at all to do with McDonald’s, either as owners, workers, or customers.

And so we, simply as denizens of the modern economy, should care how well different inputs are combined with each other to produce outputs. Suppose that $X value of some good can be produced in one of two ways: (1) by combining input A with input B; or (2) by combining input A with inputs C and D.

Which is the better way? The answer is easy: the one with the lowest cost. If here using inputs A, C, and D costs less than using inputs A and B, we should all want this good produced with inputs A, C, and D.

Nothing is easier than to write ‘We should produce as efficiently as possible’ – which, in effect, is just what I wrote. The challenge in this complex reality of ours is to actually achieve production that is as efficient as possible.

To the extent that we let government override market decisions and processes, we let government do the equivalent of trying to fill out a perfect NCAA tournament bracket. The actual play of each game determines which team, at least under the particular circumstances – and at the particular times – of the games, is the best team. Likewise, the actual play of market competition determines which particular combination of inputs is the best way of producing some (given) output.

It would be folly to think that we can eliminate the need to actually carry out the competition of tournament games by having some ‘experts’ fill out the brackets in order to determine which teams are best. It would be even greater folly to think that we can eliminate the need to actually carry out market competition by having some ‘experts’ write down ahead of time which is the ‘best’ method of producing some (given) output.

The latter folly would be greater than in the basketball-tournament case for at least two reasons. First, unlike in the basketball-tournament case, in the economy we must also somehow figure out what is the best combination of goods and services to produce. The ‘best’ outcomes in the basketball tournament are simply those outcomes that emerge from the playing of the games fairly. In the economy, though, the relative ranking of ultimate outputs – of consumer goods and services – must be made such that all production effort is geared to producing those goods and services.

Second, there are only 64 teams in the NCAA tournament, with only one eventual ‘winner’ (which can be thought of as a final consumer good). In the economy, there are literally trillions of resources and hundreds of billions of ‘winners’ – that is, final consumer goods and services the production of which justifies using inputs. The complexity of the economy is untold magnitudes greater than is the complexity of the NCAA basketball tournament.

Source: Man-of-System Madness!

Quotation of the day on illogical alarmism over COVID and the biggest power grab ever….

 …. is from Alyssa’s Ahlghen’s article “ Panic, power and the pandemic “: We have lost our minds. We have said goodbye to any semblance of rationality or assessment of data and said hello to illogical alarmism.


A logical coronavirus “policy” when it comes to the public is quite simple. If you’re at risk, stay home and be safe. If you’re concerned, stay home and be safe. Take measures you believe are necessary to reduce the spread of the virus. As for everyone else, live your life. The health of an individual and the decisions surrounding it lies with the individual. As human beings, we have incredibly powerful amygdalae, the part of the brain that makes you feel fear. We are intuitive in doing what is best for our health and the health of our loved ones. The government doesn’t have an amygdala. The government has one thing — a desire for power.

Here’s the dirty, little secret: politicians know this. Within a span of months, 15 prominent Democrats were caught violating their own COVID policies. Getting haircuts, going on vacations, not wearing masks, participating in gatherings, eating indoors — all things you and I cannot do but our bureaucratic elite can. Politicians are allowed to make their own risk assessment but believe the people are too inept to do the same. The constant hypocrisy and illogical flexes of power have been taunting us as people’s livelihoods are being mercilessly destroyed.

Source: Quotation of the day on illogical alarmism over COVID and the biggest power grab ever….

How State lockdowns make actual planning difficult, if not impossible

One of the paradoxes of the current lockdowns/restrictions that have been imposed by the State is that they make it much harder for private firms and individuals to plan ahead, particularly when the rules are nonsensical and change regularly. (Examples being how in the UK you can have a drink in a bar in certain places but you have to have it with a “substantial meal” , but the definition of latter is left unclear).

Critics of open societies and classical liberal conceptions of how things should be will argue that said classical liberals don’t fully appreciate the need for planning. Sometimes the phenomenon of the market is characterised as anarchic, and in need of planning and control. Markets are messy, so this argument goes, and wasteful and chaotic. So much neater to run things centrally. Now the arguments used to debunk this – such as from the Austrian school – are fairly well known and should be familiar to many of the readers of this blog (such as how no central planner, even aided by modern IT, can possibly know the vast array of tastes, desires and resources to make an extended market order actually work, etc).


The need to plan ahead is in fact a central fact of life in a free society. We do it all the time. (Every day I jot down my work tasks for the day, for example.) The key is that these plans are those of free individuals acting on their judgement, and not because of some central, coercive authority standing over them.

When the State expands above a certain minimum level, this private planning becomes more, not less, difficult. It is in fact a classic rebuttal to President Barack Obama’s nonsensical “you did not build that” speech of a few years ago. People can and do build a great deal, provided the rules are clear and enforced. All too often, the State does a crummy job in defending legitimate boundaries, and as we see now, does a great deal of damage.

Source: How State lockdowns make actual planning difficult, if not impossible

Substantial CA Forest Management Changes Needed ESPECIALLY If You Think The Fires Are Caused by Climate Change

There is a debate raging between the usual suspects as to whether the larger fires in California are the inevitable result of manmade climate change or whether they are the result of poor forest management practices. For this post I actually am not going to weigh in right on this , except to say that long-time readers will know I am skeptical of most claims that tie tail-of-the-distribution events to manmade CO2 and I find it hard to correlate large fire loss years with actual temperature / drought data for the same year.

Source: Substantial CA Forest Management Changes Needed ESPECIALLY If You Think The Fires Are Caused by Climate Change

‘We could open up again and forget the whole thing’ Epidemiologist Knut Wittkowski on the deadly consequences of lockdo…

‘We could open up again and forget the whole thing’ Epidemiologist Knut Wittkowski on the deadly consequences of lockdown Governments around the world say they are following ‘The Science’ with their draconian measures to stem the spread of the virus.

Source: ‘We could open up again and forget the whole thing’ Epidemiologist Knut Wittkowski on the deadly consequences of lockdo…

Nails, Pencils, and Chains by Vicki

For want of a nail, a shoe was lost;

For want of a shoe, a horse was lost;

For want of a horse, a rider was lost;

For want of a rider, a message was lost;

For want of a message, a battle was lost;

For want of a battle, a kingdom was lost;

And all for the want of a horseshoe nail.

Wikipedia says that proverb is many centuries old. It’s usually repeated as a cautionary tale. Do all your tasks well, keep everything clean and neat and well-maintained, don’t get sloppy, or bad things will happen. But it can also be read another way: a little problem that no one noticed, that very few people even could have noticed, leads to a big problem for everyone.


There are a lot of jobs that have been deemed “essential” in the current situation, and a lot more that have been deemed “non-essential.” Some of those non-essential jobs are in factories, which are shut down and not making more stuff. Any stuff we’re using from those factories is coming from inventory.


It turns out that, on a long enough timescale, almost every legal job that touches “stuff” is essential, and that timescale is not as long as some politicians seem to think. Most of the jobs that touch money are essential, too, because stuff doesn’t move without matching moves of money. Most of the rest are essential as well, if only for the mental health of the workers in the first two categories. People are people, not molding machines.

Source: Nails, Pencils, and Chains by Vicki

“Reasonable Restrictions”

The Writer in Black

There has been a lot of talk about “common sense” gun laws and “reasonable restrictions” on the 2nd Amendment.  I wrote the following to summarize my thoughts on that.

The full text of the 2nd Amendment of the US Constitution reads as follows:

A well regulated Militia, being necessary to the security of a free State, the right of the People to keep and bear Arms, shall not be infringed.

To anyone but a lawyer or a political agenda, it’s pretty straightforward. However, very few, even among diehard arms rights supporters would claim that it’s truly unlimited: that literally everybody with a body temperature somewhere near 98.6 degrees Farenheight (say within about 20 degrees) must be permitted to own, possess, carry, and use any kind of weapon they can get their hands on. The controversy is generally over just what constitutes a “reasonable restriction” particularly since there is no allowance in…

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How “Common Sense” are Those Restrictions?

The Writer in Black

Every  year the Brady Campaign to steal our Freedom (okay, they call themselves the Brady Campaign to Prevent Gun Violence, but I call them as I see them) comes up with a “scorecard” of how well various states conform to their proposed “common sense gun laws.”  The claim is that we need these “reasonable restrictions” in order to reduce crime and violence.

Well, some years ago I took the time to gather up the numbers on violent crime for the various States and their Brady Scores.  Plug them into a spreadsheet and chart the results:

Notice something here?  There’s no discernible trend of reduced violent crime with greater implementation of the Brady Campaign’s “wish list” either overall or for most of the individual violent crimes.  While I originally did this some years ago the overall results have not noticeably changed.

The Brady Campaign keeps talking about “common sense gun regulation.”…

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