Amartya Sen on Adam Smith

Amartya Sen agrees that trust is the necessary foundation of successful capitalism:

Even though people seek trade because of self-interest (nothing more than self-interest is needed, as Smith famously put it, in explaining why bakers, brewers, butchers, and consumers seek trade), nevertheless an economy can operate effectively only on the basis of trust among different parties...

[I]n his [Adam Smith's] first book, The Theory of Moral Sentiments, which was published exactly a quarter of a millennium ago in 1759, that he extensively investigated the strong need for actions based on values that go well beyond profit seeking. While he wrote that "prudence" was "of all the virtues that which is most useful to the individual," Adam Smith went on to argue that "humanity, justice, generosity, and public spirit, are the qualities most useful to others."

Profit-oriented capitalism has always drawn on support from other institutional values...

The moral and legal obligations and responsibilities associated with transactions have in recent years become much harder to trace, thanks to the rapid development of secondary markets involving derivatives and other financial instruments. A subprime lender who misleads a borrower into taking unwise risks can now pass off the financial assets to third parties—who are remote from the original transaction. Accountability has been badly undermined, and the need for supervision and regulation has become much stronger.

I like almost everything Mr. Sen writes. Even when I disagree with him, I see his point of view. I also like Mr. Sen's idea that all Americans deserve basic healthcare: "The failure of the market mechanism to provide health care for all has been flagrant, most noticeably in the United States." Still, I don't see how he gets "the need for regulation" from "accountability has been badly undermined." I suppose it depends on the definition and scope of "regulation"; even so, Congress cannot solve the problem of attenuated responsibility by written fiat. It seems that Mr. Sen gets the root cause (attenuated profit-making) right, but the solution (Congressional acts) wrong. More on this topic here.

Judges and Francis Bacon

Francis Bacon has written eleven rules on how to be a good judge. Click here for more.

The first is this: "You should draw your learning out of your books, not out of your brain."

My favorite? "That you should be truly impartial, and not so as men may see affection through fine carriage."

Not Just Guantanamo Bay

If you believed America considered "due process" an imaginary term only in Guantanamo Bay, you'd be wrong. See this story, about Ali Al-Marri. The United States held him, a legal U.S. resident, "without charges for more than five years at a Navy brig in South Carolina." (See WSJ, 3/24/09, A7). Apparently, President Obama has finally ordered a trial.

I've said it before, and I'll say it again. The rule of law isn't America's saving grace--the law always arrives last to an important event. If I'm wrong, then Mr. Al-Marri would have had a trial at some point in his five years in jail. People who place their faith in the law do not have recent history to support them.

Incredible Romantic Movie

I highly recommend the 2005 film, Sweet Land. It's not a chick flick, but a sincere, heartfelt film about love in early America. Relevant links are below:

Movie's website: http://www.sweetlandmovie.com/

Interview with director: http://www.movienet.com/sweetland.html

The world really is a small place and, as we move around it and commingle, we have the ability to recognize our similarities, to go beyond tolerance toward acceptance, to redefine communities and humanity out of new combinations of people, sounds, stories and, of course, food.

Hamiltonian Wisdom

I've always favored Jefferson over Hamilton, but this Federalist Papers excerpt is making me reconsider my anti-Hamilton stance:

http://avalon.law.yale.edu/18th_century/fed01.asp

It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force...

So numerous indeed and so powerful are the causes which serve to give a false bias to the judgment, that we, upon many occasions, see wise and good men on the wrong as well as on the right side of questions of the first magnitude to society. This circumstance, if duly attended to, would furnish a lesson of moderation to those who are ever so much persuaded of their being in the right in any controversy. And a further reason for caution, in this respect, might be drawn from the reflection that we are not always sure that those who advocate the truth are influenced by purer principles than their antagonists. Ambition, avarice, personal animosity, party opposition, and many other motives not more laudable than these, are apt to operate as well upon those who support as those who oppose the right side of a question. Were there not even these inducements to moderation, nothing could be more ill-judged than that intolerant spirit which has, at all times, characterized political parties. For in politics, as in religion, it is equally absurd to aim at making proselytes by fire and sword. Heresies in either can rarely be cured by persecution...

On the other hand, it will be equally forgotten that the vigor of government is essential to the security of liberty; that, in the contemplation of a sound and well-informed judgment, their interest can never be separated; and that a dangerous ambition more often lurks behind the specious mask of zeal for the rights of the people than under the forbidden appearance of zeal for the firmness and efficiency of government. History will teach us that the former has been found a much more certain road to the introduction of despotism than the latter, and that of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people; commencing demagogues, and ending tyrants.

Hamilton's ideas triumphed over Jefferson's. As a direct consequence of Hamilton's writing and influence, America received its foundation for modern governance and economic regulation. Could Hamilton envision, at the time he was writing, the kind of country we have today? Of course not. He had, at most, general ideas with no specifics. He could not have known that he was putting in place a framework that would eventually produce the modern car, iPhones, eBay, and other economic wonders. It just goes to show you that when you're doing something, even if you know it's historic, you can never know the full panoply of potential ramifications.

It is a shame that The Federalist Papers are not required reading at every American high school. Unfortunately, it was not until after I graduated law school that I bought a copy and read it. How can we be graduating so many Americans who have little idea of their own country's founding principles? If the test of an enduring empire is whether its citizens know and respect its history, America's longevity may be in question.

Thoughts on Reno, Nevada

I just got back from Reno, Nevada. Some thoughts on my short vacation:

1. Not including the more isolated Peppermill and Atlantis hotels, the best downtown Reno buffet is El Dorado, especially if you have a sweet tooth. Their dessert options were incredible. Fruit tarts, cakes, little chocolate pies, flan, more tarts, and gelato.

2. When factoring cost, the best overall Reno restaurant is Harrah's Cafe Napa. I had a wonderful steak and shrimp scampi there ($9.99) and a rib-eye steak the next day. (The Peppermill would be a close second, but it's not really on the downtown strip).

3. I discovered a new drink, the "Brandy Separator." I don't usually drink at all--I order virgin pina coladas and mineral water with lime when gambling--but when I saw this milky concoction, I had to try it. Absolutely yummy. Otherwise known as "Gorilla Milk," it's 1 1/4 parts brandy, 3/4 part Kahlúa liqueur, and 3/4 part heavy cream.

4. The first two rounds of 2009's March Madness were fantastic. At one point, two games were in OT, and then one of them went to double OT. That, my friends, is why you want to be in Nevada during March Madness. You can watch all the games on the multiple casino screens instead of relying on CBS to switch you to a particular game.

One complaint? I hated the refereeing. Some calls were atrocious. Not to take anything away from Siena, but one foul call against an Ohio State player during the last twenty seconds might have cost Ohio State the game. (The player never touched his man.)

Best coached team? Utah State. Every single play was perfectly executed. If their two best players hadn't fouled out at the last minute, they would have won. (See comment about refereeing above.)

Softest team? Wake Forest, i.e. this year's bracket buster. Wake Forest had no defense whatsoever. They could shoot well, but couldn't guard anyone. Wake hasn't produced a Final Four team in several decades, despite counting Tim Duncan and Chris Paul as alumni.

Biggest heart? University of Northern Iowa. After barely making it to the dance (they had to mount a miraculous comeback in an OT conference game to get an invite), they pushed Purdue to the limit. If some calls had gone UNI's way, we'd be looking at a potential Cinderella.

UNI also has the player with the coolest name: Ali Farokhmanesh.

MVP so far? UNC's Ty Lawson. Without him, UNC would be at home right now, watching the games on television. At one point, he was the only UNC player who scored in a four minute time span, which stopped the other team's run.

5. Best Reno sportsbook? Club Cal Neva (not to be confused with Tahoe's CalNeva). Club Cal Neva, during March Madness, had everything a guy and his buddies would want. Two girls in skimpy outfits offering jello shots; huge nachos for five bucks; multiple pitchers of beer everywhere; three rooms of television screens and plenty of seating; and drawings for sports memorabilia. If it wasn't March Madness, though, I'd probably go to Harrah's. They have a classy joint, and it shows.

America's Defense Spending

Military-industrial complex, anyone? President Eisenhower is rolling in his grave.

Source: The Economist

Hat tip to http://nahnopenotquite.com/