What Ashlee is Reading

 Chapter XX Do Unions Really Raise Wages? "Wages are basically determined by labor productivity." In other words, wages are simply another manifestation of the law of supply and demand. Employers demand productive employees. The supply can fluctuate, but employers must either pay competitive wages or put up with sub par employees while their competitors get better, more efficient employees.  "Emotional economics has given birth to theories that calm examination cannot justify. One of these is the idea that labor is being "underpaid" generally . This would be analogous to the notion that in a free market prices in general are chronically too low." I loved this quote for the phrase, 'emotional economics' which I do recognize as a problem all too often.  Hazlitt offers an example as to why unions don't raise real wages. He gives several groups, and assumes they all unions, to different levels of effectiveness. One group succeeds in raising their w...

 Chapter X: The Fetish of Full Employment I find this book so much more fun to read than to write about, but I read a quote today on twitter about how reading only gives you the materials of knowledge, it is the act of thinking about it that makes that knowledge your own. I committed to this blog as a means of forcing myself to think about what I was reading in order to make it my own, so onward. My saving grace is that the chapters are short, so I'll try to to feel too bad if my explanations are even shorter.  Obviously, high unemployment is a bad thing. But the inverse isn't necessarily true, high employment isn't necessarily a great goal in and of itself. If it were, slave labor would be a good thing.  "It is because we have become increasingly wealthy as a nation that we have been able virtually to eliminate child labor, to remove the necessity of work for many of the aged and to make it unnecessary for millions of women to take jobs." That's a lot fewer p...

 I actually read another book since finishing the Bitcoin Standard. I didn't feel like writing about it here, since it was a different kind of non-fiction. It is by my friend Ben Schilaty and it's called A Walk in My Shoes, about his experiences as a gay Latter-Day Saint. Some of it I'd already read from his blog, and some of the things I "learned" were spiritual and personal, meaningful to me because my testimony needed his testimony to buoy it up. Not exactly what this blog is for. But if anyone actually ever reads this, I do recommend Ben's book. I offered it up on my local Buy Nothing FB page when I was done and there are several going to pass the book around, so that was fun.  So now I'm onto Economics in One Lesson by Henry Hazlitt. The Mises Institute was shipping them to people for free, so I said, "Why not?"  The "one lesson" is taught right at the beginning, all other chapters offering different ways this lesson is forgotten o...

 Well, I did it, I finished reading the Bitcoin Standard. Ok, I sort of finished it. Confession: I skimmed over a large portion of the last chapter, since it was largely repetition of earlier points and glowing praise of why Bitcoin is worth the large amount of energy it uses. I did want to write about one thing that I don't think I mentioned before that was reviewed in this final chapter.  Bitcoin uses a lot of redundancy in its blockchain, which is why it consumes so much power and also why it is so impervious to manipulation. This means that one of the weaknesses in Bitcoin is that it is limited in how many transactions it can handle in a given period of time. Visa and Mastercard handle around 2.000 transactions per second, while Bitcoin can handle around 4. (I think those are the numbers given in the book. In any case, Visa and Mastercard handle much more than Bitcoin can). This means that Bitcoin's blockchain can never take over all transactions. This does not mean that B...

 Chapter 8 Bitcoin as Digital Cash Paying in cash is handy, because it is instantaneous, requires no third party or regulate or guarantee against double spending (you can swipe your card with no money in the bank, but you can't pay with cash the you don't have), there are no transaction fees, cash can't be hacked, and the government can't track or control cash payments. Digital payments are handy because you don't need to actually carry around all your money, do math, worry about having the right change, etc. Bitcoin has most of the best of both of these worlds, although you do pay small fees-it it typically less than the fees you currently pay with sending fiat money, especially if you are sending large amounts over large distances, like to family in other countries. More on this later.  At this point the author explains proof of work, the process by which Bitcoin transactions are recorded on the blockchain. In simplest terms, (the only ones I'm capable of usin...

 Ch. 6  Money plays a vital role at a societal level as a means of communication. Recently, we've seen the prices of lumber change dramatically. What did this tell you? We could have inferred that the supply was low, perhaps a processing facility was shut down for some reason, or that the supply chain was compromised. Perhaps that communicated to you that a project you had been planning should be put off until lumber becomes more easily available, or that you should charge more for the products you are putting out in anticipation of increased costs of business when you next need to purchase lumber. In a centralized economy, the government decides what lumber should cost. Yay, no more skyrocketing prices for lumber, how lovely! Except now you don't know to put off your project so you go out and buy the tools you will need and start excavating or whatever prep you need. Now you don't increase your prices to offset the incoming increase in raw materials that you use. Now peopl...

 The key concept to understand from this chapter is "time preference". You can understand time preference if you think of the classic experiment with kids and marshmallows. Here's a marshmallow. You can eat it now, but if you wait fifteen minutes, I'll give you another one. Children with high time preferences eat the marshmallow immediately. Children with low time preferences wait for the double reward. In economic terms, when you are confident that your money will retain or increase its value, you have a low time preference, you are willing to be patient as you collect interest or invest in order to have more money in the future. If your money is rapidly losing value, you are better off spending it now, as you will not have enough to buy the same things in the future; you have a high time preference.  Societies with sound money have low time preferences. This allows them to invest in innovation and future growth. This is essential for the growth of civilization not j...