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How to Argue
How to Argue
On the weekend, I read a very good article which asked the question, “Just how charitable are you supposed to be when criticizing the views of an opponent?” It had an immediate impact on me as I often struggle to not disparage those who are innocently uninformed, ignore or try to pervert economic science. Embarrassing or insulting someone is not likely to motivate them to see, understand and to become convinced of the insights gained from the economic way of thinking.
Maria Popova, the author of the article, suggested that American philosopher Daniel Dennett had identified the best antidote for the tendency to lampoon one’s opponent. According Dennett the remedy is contained in a list of rules formulated by mathematical psychologist Anatol Rapoport, best-known for devising the famous tit-for-tat strategy of game theory in the 1960s. Dennett synthesized Papoport’s method in four steps:
- You should attempt to re-express your target’s position so clearly, vividly, and fairly that your target says, “Thanks, I wish I’d thought of putting it that way.”
- You should list any points of agreement (especially if they are not matters of general or widespread agreement).
- You should mention anything you have learned from your target.
- Only then are you permitted to say so much as a word of rebuttal or criticism.
I can improve my ability tremendously as a social scientist by following this code of conduct. In fact, its applicability transcends my professional life and extends to all aspects of my everyday interpersonal interactions. Rather than being viewed as intransigent, impertinent and prejudiced I prefer that others, especially those with whom I disagree, regard me as understanding, respectful and rational.
Remember the people involved
Remember the people involved
When I was in University, I vividly remember one of my economics professors telling students to always remember the people involved when analyzing a policy change. I was reminded of this sage advice upon reading Matthew McCaffery’s Mises Daily article titled, “Who will pay for it?” is the wrong question to ask politicians. McCaffery’s point is the question often focuses too much on the question of who and how to pay which distracts from more important issues such as what is being paid for? I would add to that, who is being paid? By emphasizing the basic problem of finding the money, what is sometimes overlooked is the problem of whether new government programs will actually work of whether they will be wasteful and counterproductive, and who the tax consumers are.
Asking questions such as “who will pay for it?” and “what, specifically, is being paid for?” are particularly pertinent given the federal budget is to be unveiled today. Early reportssuggest cumulative budget deficits over the next two years will be well above $50 billion (about 1.3% of GDP). The question, “who will pay for it?” is answered quickly as the federal government has only three sources of revenue: current taxpayers, future taxpayers and increasing the money supply (inflation) by selling bonds to the Bank of Canada.
The consequences of higher taxes and more inflation doesn’t seem to faze many people, including some well-known economists in Canada. Doug Bandow observed that left-wing activists tend to favor corporate taxation. They imagine a society divided between businesses and people. However, firms are owned by people, employ people, sell to people, and contract with people. Taxing companies means taxing people.
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More Central Bank Trouble in Canada
More Central Bank Trouble in Canada
Yesterday, the Governor of the Bank of Canada Stephen Poloz surprised many by not lowering the target for the overnight rate to 0.25% from 0.50%. The central bank cut this rate twice last year in an attempt to stimulate the economy. During the past nine months the TSX index has fallen from more than 15,500 to below 11,800, the Canadian dollar has depreciated from US$0.84 to below US$0.69 and crude oil prices have fallen from US$60/bbl to less than US$28/bbl. Consumer prices for imported products are rising quickly and government tax revenues are falling. In other words, the circumstances that usually motivate the Bank of Canada to act did not trigger a response from authorities this time.
The decision on the overnight rate may make the Bank of Canada an exception among other central banks that have reduced their key lending rates to zero or less. Bucking the trend does not mean that Canadians are going to escape the consequences of seven years of an overnight rate of 1.0% or less.
It is widely expected the Federal budget is going to contain borrowing $15 billion in the next fiscal year, ostensibly to “stimulate the economy”. Borrowing by the provincial government in Alberta could easily be more than half the Federal level of borrowing. Incredibly, the provincial government in Quebec may be the most parsimonious of all provincial governments.
Governments have no wealth of their own that is not first taken from someone else. There are only three sources available: current taxpayers, future taxpayers and in the case of the federal government, creating inflation by selling government bonds to the Bank of Canada. Stimulus spending likely means that future taxpayers will be confiscated to a greater extent than they would be otherwise. Inflation will erode further the purchasing power of every Canadian dollar in existence. Initial recipients of stimulus transfers will benefit; most Canadians will not.
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