In his biography of Charlemagne, Notker the Stammerer relates a story of two “Scotchmen [who] were unrivalled for their skill in sacred and secular learning.” These men would go into the market and call out, “Ho, everyone that desires wisdom, let him draw near and take it at our hands; for it is wisdom that we have for sale.” This claim drew in the crowds and, ultimately, the attention of the emperor.
The twist in the story, however, is that the Scotsmen really had no interest in marketing their learning to make a profit. They had simply come to realize that if they offered to teach for free, nobody would be interested. Because the price tag is the first signal that the market sees, things that are being given away for free or sold cheaply are assumed to have little worth. Likewise, some people put extremely high prices on their products (even if they intend ultimately to sell for a much lower price) in the hopes that the product will appear more desirable.
I was a tangential party to a real life example of how asking price affects perception. One of my side jobs in college was dealing cards for a promotional company that ran poker tournaments as fund-raisers. The tournaments were well organized and quite successful. However, the owner of the business quickly discovered that some prospective clients saw his very reasonable prices and decided that they wanted to go with a more up-scale competitor. His solution was to raise the prices without changing anything about the product. And it worked. New prospective clients assumed that the high price was a good indicator of the product’s high quality. Business actually increased after the price went up, precisely because the price went up. Like Notker’s Scotsmen, the owner of the promotional company learned that sometimes you have to ask for more than you need, just to get people’s attention.
Beer of the week: Modelo Especial – The head on this beer faded so quickly that I couldn’t get a good photo of it before it was gone. Modelo Especial is a clear, gold brew. It has little aroma or flavor to speak of, really. It’d be easy enough to drink a bunch of this stuff at a party Cinco de Mayo fiesta, but otherwise, why bother? And don’t get me started on the price!
Reading of the week: The Life of Charlemagne by Notker the Stammerer, Book I, 1-4 – Charlemagne filled his court with educated men, such as the aforementioned Scotsmen, and had them educate the children of his kingdom. He found that the highborn children did not take to their lessons as well as the commoners. The lesson, again, seems to be that certain assumptions about value need to be carefully scrutinized.
Question of the week: How much does the asking price affect your perception of a product’s value?
There is a general sense that the history of humanity has been a general march of progress. Progress economically, intellectually, socially. Everybody acknowledges that there have been missteps along the way, but on the whole our species moves ever upward. Assuming that this is the case, (which is not totally evident,) perhaps the most interesting parts of history are those missteps. When humanity turns away from progress and things become appreciably worse. We would be well advised to see the earliest signs of our errors so that they could be corrected before we find that we have strayed too far.
At the beginning of The Economic Consequences of the Peace, John Maynard Keynes describes European society before it was plunged into the Great War. Let’s see how far we have come:
“The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep;”
This is still the case, but the internet has removed the need for any human interaction, even placing the order with a person on the other end of the phone line. Thanks to Amazon Prime, many city dwellers can get most things in under a day. There are also myriad more products available, and the internet allows more and smaller vendors to reach each individual.
“he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend.”
Again, the internet has vastly improved the opportunity for individual investment. Not only can one buy stocks online, one can invest in a friend’s invention, an artist’s project, or a potato salad. And the ability to invest internationally is unprecedented.
“He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference.”
From personal experience, knowledge of the native language is almost never required (although it can obviously be very helpful.) Being a native English speaker is the next best thing to being multilingual. Otherwise, travel has certainly changed considerably since Keynes’s youth. Commercial airlines have made it possible to travel quickly, safely, and cheaply all over the world. (To say nothing of the availability of highway automobile traffic, which doubtless accounts for the bulk of the increase in personal travel since the beginning of the 20th century.) There certainly are passport requirements for some travel, but a modern Londoner can go nearly anywhere in Europe without a visa.
But the security measures of air travel are substantially more than “the least interference.” Something tells me that Keynes’s pre-war gentlemen would be extremely indignant about being forced to partially disrobe in the airport and subject himself to the invasive measures that every modern traveler has to endure.
Finally, modern states eschew the use of specie, and are engaged in a war against cash. But credit cards can be used in a great many countries, even in the smallest towns. In many respects, this makes travel much safer and easier.
“But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable.”
Like us, the early 20th Century man was confident that society was always improving, becoming ever more convenient and secure. Then the bombs started to drop.
Beer of the week: Anchor Steam Beer – The progress of beer production in the United States has certainly had some missteps. (One so large that it resulted in two Amendments to the Constitution.) However, this beer represents a return to progress. Anchor Steam claims to be America’s first craft brewery, and this is their signature brew. In the past, I enjoyed this beer on draft, but I don’t much care for it in the bottle. It is an attractive, almost orange-colored beer with lots of foam. The aroma is yeasty. There is a certain bitterness in the finish that I don’t care for. It doesn’t seem like the same as usual bitterness from hops.
Reading of the week: The Economic Consequences of the Peace by John Maynard Keynes – This polemic is probably best known for explaining why the terms of the Treaties of Versailles doomed Europe to future strife. But this section focuses on the state of Europe before the war even began.
Question of the week: Is there any field where humanity is clearly moving in the wrong direction? Or, more importantly, is there such a thing as progress?
The night before Thanksgiving, I visited the Lutheran church where my friend’s father is the pastor. His sermon, as one might expect, was about giving thanks. Specifically, he argued that one of the principle advantages of giving thanks is to prolong enjoyment of the blessing. Taking the time to enunciate what one is thankful for effectively draws out the enjoyment of it. Giving thanks beforehand allows one to enjoy the anticipation. Giving thanks afterwards allows the enjoyment to linger. Giving thanks during forces one to focus on what is enjoyable. The sermon really rang true to me. Also, there was a pie social after the service.
The desire to extend enjoyment indefinitely is a constant factor in my day-to-day life. I have watched countless re-runs late into the night rather than go to bed and “give up” on the day. I also have looked for reasons to have another beer rather than stop drinking. The bulk of this blog post, in fact, was written late at night as an excuse to stay up and have another beer rather than go to bed and end my enjoyment of the day.
I not only attempt to drag out time; I am a great hoarder of consumable goods. Halloween candy lasted for months in my childhood because I was keenly interested in prolonging my enjoyment from it for as long as possible. When there is good beer in the house, I ration it carefully. As I mentioned in an earlier post, an elderly Australian man once mocked me for how slowly I consumed a glass of Coopers. He was not a beer drinker himself, so my efforts to explain the purpose of savoring a good beer were wasted on him.
Attempts at prolonged enjoyment are not always successful. I have also let things go to waste rather than accept the finality of their enjoyment. I have let my tea grow cold rather than finish it and accept that it is gone. When I was little, I had toys that I would hardly play with for fear that they would break and thus end my enjoyment. I grew out of nice clothes that I had barely worn since I did not want to risk staining or tearing them. When I was small, I would use my roller-skates only occasionally to minimize the chances that they would get scuffed or damaged. One day, they no longer fit. I had tried so hard to preserve them for future enjoyment that they had become no use to me at all.
No pleasure can be extended indefinitely, but there is usually the option to prolong the enjoyment somewhat by patience and focus and thanksgiving. In the end, a fine touch is required. Neither let the beer grow warm and unpleasant, nor gulp it down without savoring.
Beer of the week: Troegs Perpetual IPA – If only this beer could be enjoyed perpetually. Troegs Perpetual is a lovely golden IPA with a nice foamy head. The aroma is dominated by sweet floral hops, but the bitterness of the hops is very well balanced with nice malt body.
Reading for the week: Gorgias by Plato, lines 493d-495b – A crucial question that this post does not address is whether prolonging pleasure is actually a good thing. In the dialogue Gorgias, Socrates makes his interlocutors squirm by forcing them to address whether even the most base and immoral pleasure seeking can be considered good.
Question for the week: Are efforts to prolong pleasure at odds with an ideal of “taking life as it comes”?
Economics and morality have strange intersections. Many people cannot help but assign moral value to commercial transactions. “It is wrong for athletes to be paid so much while the beer vendor is paid so little.” “It is wrong for bottled water to cost so much.” “It is wrong to sell mustard gas at any price.” For the first two examples, the complaint might as well be against the laws of supply and demand themselves. Baseball players make as much money as they do because the demand for top-level athletic ability is very high and the supply is very low. There is relatively little moral ambiguity in that case. The mustard gas example, however, reaches something beyond economics.
In Steinbeck’s East of Eden, Adam’s son Caleb gives him a gift of $15,000. Caleb insists that he came by the money honestly, having invested in bean futures in anticipation of America’s entry into the First World War. Adam refuses the gift. He makes two claims about why he can’t accept the money: first, the money was stolen from the farmers who could have realized that profit themselves if Caleb hadn’t bought the futures; and second, war profiteering is morally reprehensible.
In response to the first of Adam’s objections, Caleb rightfully denies that the farmer’s were robbed. The farmers were paid nearly 60% over market price for their beans. The profit that Caleb realized on his investment only reflected the risk that he took on himself. If the US had not entered the war and bean prices had remained stable, Caleb would have lost a sizable part of his investment.
The second objection, however, is much sticker. Adam is a member of the draft board. He signs orders sending young men to go and die in a foreign land. Profiting from such a terrible thing as war is, in Adam’s mind, utterly unthinkable. This complaint does not go away simply by saying that somebody was going to profit from the war, so why not Caleb? But is selling beans to the army any different from selling mustard gas to the army? Maybe it is all just supply and demand.
It really is hard to think about this rationally because Caleb is so sympathetic. All Caleb wants is his father’s love. He is convinced that he has done a good job, but his gift is rejected. It is so easy to side with Caleb and to find fault with Adam’s rejection, but maybe there really was something wrong with Caleb’s gift. Maybe it was wrong to profit from the war.
Beer of the week: Boot Tread Belgium Amber Ale – This beer comes from Martens NV, brewers of Willianbräu, Hackenberg, Kinroo Blue, and Damburger. Boot Tread is a pretty amber beer available at the discount grocery store down the street. Even a nation with as proud a brewing tradition as Belgium has its cheap beers, but I suspect that this particular brew is for export only. There is a bit of sweet caramel in the aroma, though not much. Overall, this is a standard, inoffensive cheap ale. Not much more to say.
Reading for the week: War is a Racket by Major General Smedley Butler – After a long career as hired muscle for American economic concerns, Butler finally decides to speak out against the military industrial complex. He maintains that Woodrow Wilson went back on his campaign promise to keep the United States out of the First World War to appease American bankers and manufacturers who stood to lose loads of money if Germany won the war. In this chapter, Butler reviews the obscene amounts of money made by the du Ponts, Bethlehem Steel, and other profiteers during the First World War. Needless to say, Caleb’s $15,000 pales in comparison.
Question for the week: Assuming that it is morally wrong to sell mustard gas to the army because it may be used to kill innocent people, is it morally wrong to sell beans to the army because the soldiers who eat the beans may be used to kill innocent people? What about selling beans to the factory worker who makes the gas? What about selling beans to the mechanic who fixes the car of the factory worker who makes the gas? How far removed must the transaction be before it is no longer “profiteering”?
Everybody ought to be familiar with Thoreau’s motto: “That government is best which governs least.” But does assessment not depend on what government is and where it comes from?
One understanding of the origin of government is the banding together of individuals for their common defense. “If every man has the right of defending, even by force, his person, his liberty, and his property,” writes Frédéric Bastiat, “a number of men have the right to combine together, to extend, to organize a common force, to provide regularly for this defense.” A government so organized may only do what each individual could legitimately do himself. And if the action of government is properly limited to the common defense, it is surely the best government that needs to act the least.
Such a government could not take from one group of citizens to line the pockets of another group any more than an individual could steal from his neighbor. Neither could such a government subsidize a given industry any more than an industrialist could demand that his neighbors fund the building of his new factory. When these things are done by individuals, they are called theft and extortion, so why should they be permitted on a larger scale?
But the idea that government sprang from the collective right of self defense is not universally accepted. John Stuart Mill identifies the origin of government (or at least most governments) as separate from “the people”. In many instances, government did not derive from organized self defense of the governed but from conquest of the strong over the weak. Such governments were “in a necessarily antagonistic position to the people whom they ruled.”
Again, is it not clear that Thoreau’s maxim holds true? At least for those who are subjugated by the hostile ruling class, the government is best which governs (or, if you prefer, subjugates) least.
The twist is that when the people take control of the government, either from the beginning as Bastiat suggests or after popular uprisings occur as identified by Mill, they almost invariably go beyond the scope of simple defense. The tyranny of the majority is every bit as dangerous as the outside forces that Bastiat’s society banded together to defend against. The majority is also every bit as dangerous as the conquering rulers that subjugated Mill’s society.
It seems that however the government comes to be, Thoreau hit the nail on the head.
Beer of the week: Berghoff Granola Shambler – It is still technically summer, and it is still warm out, so pumpkin beers can wait. A radler (also known as a shandy) is usually beer mixed with a soft drink such as pop or lemonade. Traditionally, the base beer is a cheap pale lager. Berghoff has attempted to make their radler a bit more fancy. First, they brew the beer with wheat, oats, rye, and barley malt to get a full, rich base. Then they add grape juice and citrus fruits for a refreshing tang. Personally, I think that the amount of fruit they use is over the top. But I do like the idea of trying to make a high-end shandy.
Reading for the week: On Liberty by John Stuart Mill – Language is always equivocal, so it is important to start any serious work with definitions. On Liberty starts with the definition of liberty, not as freedom of will, but freedom from tyranny.
Question for the week: Is the organization of government for the common defense, like “Rousseau’s noble savage in smock and jerkin”, merely a fanciful tale to explain the creation of government?
In the Commonwealth of Massachusetts, it is illegal for bars offer special prices on alcohol. There are no “Happy Hours”. There are no “beer of the night” deals. Never can a patron purchase a wristband that entitles them to an indefinite number of drinks. Nominally, this statutory ban on non-uniform pricing is intended to reduce the incidence of drunk driving. In reality, however, it smacks of good old fashioned Puritanical objection to enjoyment.
The only effect that the law may reasonably be considered to have on drunk driving is that it may reduce drunkenness by making alcohol more expensive. The law does not mean that a patron may not drink 6 beers immediately after work; it only means that doing so must be as expensive as drinking 6 beers at any other time of the day. Likewise, the law does not prevent a bar from selling a beer at a very low price; it only requires that the same beer always be sold for that price. Since drunk driving was already illegal when Massachusetts passed this legislation in the mid 1980’s, it is clear that this law serves a different purpose. Keeping the price of alcohol artificially high (and therefore discouraging drinking) is not only the direct result of the law, but it is also the law’s true intent.
John Stuart Mill railed against this sort of “social rights” legislation. The right of society to be free of the dangers inherent in drunk driving is not a valid reason to prohibit bars from soliciting patronage by offering discounts. If the problem is drunk driving, penalize drunk driving; don’t penalize the admittedly free and unobjectionable choice of merchants and customers to agree to a bargain.
To be fair, Mill tip-toed around this particular sort of problem. He objected to blanket prohibition on purely individualistic grounds. He acknowledged that although the consumption of alcohol is a personal right, the sale of alcohol is a “social act” and therefore (implicitly) more rightly subjected to social regulation. However, this distinction carries little weight in the current context. In the first place, I contend that the freedom of contract is improperly interfered with in the instant case. The right of merchants to offer sale prices is an inherent extension of their property rights. The right to sell beer (to persons of age and subject to other regulation) includes the right to set a price. Additionally, the this law serves the exact purpose objected to by Mill: to limit the amount consumed by individuals. True, the law does not specifically prohibit excessive drinking, but that is the only practical effect that could be hoped for.
The law against happy hour pricing relies on an “unlimited right in the public not only to prohibit by law everything which it thinks wrong, but in order to get at what it thinks wrong, to prohibit any number of things which it admits to be innocent.” And that, as Mill would say, is a noxious philosophy.
Beer of the week: Samuel Adams Double Agent IPL – Among the beers that Bay Staters can never drink at a discount is this local brew. The idea behind Double Agent is apparently “what if a lager were hopped as strongly as an IPA?” The smell is much like most American IPAs. The hops aroma is strong and sweet and floral with strong citrus notes. The taste has just a hint of vanilla and plenty of floral hops and the bitterness of grapefruit rind. The beer may be a bit lighter and crisper than most IPAs, but I would never have guessed that this was actually a lager. It really is a delicious beer, but don’t expect anything but an IPA.
Reading of the week: On Liberty by John Stuart Mill – The fourth chapter of this essay is dedicated to the relationship between personal freedom and societal duty. “Though society is not founded on a contract, and though no good purpose is answered by inventing a contract in order to deduce social obligations from it, every one who receives the protection of society owes a return for the benefit, and the fact of living in society renders it indispensable that each should be bound to observe a certain line of conduct towards the rest.”
Question of the week: Mill starts this week’s reading with three questions: “WHAT, then, is the rightful limit to the sovereignty of the individual over himself? Where does the authority of society begin? How much of human life should be assigned to individuality, and how much to society?”