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Friday, March 6

  1. msg Assignment (Parts 3 & 4) message posted Assignment (Parts 3 & 4) 1) Education is good for society. I do not think anyone disagrees on this point. The question is ho…
    Assignment (Parts 3 & 4)
    1) Education is good for society. I do not think anyone disagrees on this point. The question is how to organise a good educational system, and what role the state has to play.
    Should the state provide schools? In my country the state provides a part of the schools, and it pays for all the schools that match the educational standards. Any religious or philosofical community is allowed to found schools, and the government pays for them, as long as their quality is good enough. Most of the primary schools and high schools have once been founded by protestant or catholic institutions. Even some of the universities are (or were formerly) either catholic or protestant. Nowadays there are also islamic communities that found schools.
    This system works well. The only serious problem is a certain segregation. Schools that educate many immigrant children are less attractive for Dutch parents, because the education is slowed down by language problems. This leads to undesirable differences between schools. In order to have equal opportunities for all, this problem must be dealt with. In parliament there is a lot of discussion about this. The question is not if the state has to deal with it, but how. This system has been working for a century now. It has made possible an enormous social mobility. In my country education has shown to be the most effective way for poor people to provide a better future for their children.
    Should the state make attendance mandatory? I think there is a difference in perspective. When education gives you a lot of opportunities, everybody who uses her/his common sense, knows that going to school is better than going to work at the age of 10. If children or youngsters skip school, there is something wrong. Mandatory attendance can help to correct either lazy pupils or bad situations in families. But when you do not have great expectations of what education can bring you, mandatory attendance will not help a lot. In countries with very high unemployment, the government had better take care of that first, before educating young people for being jobless.

    2) Providing food for all is a good thing. The question is, again, to what extent this is a responsability of the state. The European Economic Community (from which the European Union has evolved) had as one of its main tasks the promotion of cheap food production. Hunger should be banished forever in Western Europe. Subsidies for agriculture are up to this day a major part of the EU spendings. Of course, for these subsidies, taxes were necessary. So the situation in Europe is a bit like it is described in the statement of this assignment. The system is more sophisticated. There is no distribution of food, the food is just sold at prices that are supposed to be affordable.
    In the course of time the system of subsidies has shown problematic aspects. It costs an enormous amount of money. Farmers get very low prices for their produce, so they have to make their farms bigger and bigger, or quit. In the meantime it is very questionable if the prices in the supermarket are really lower than they would have been without subsidies. For a kilo of potatoes, a farmer gets some € 0.12, but it is sold in the supermarket for, let us say, € 0.80. For farmers in other continents the system of subsidies is a disaster. The local production of chicken meat in Ghana was destroyed by subsidised dumping of Dutch chicken meat. The food subsidies of the EU are a good example of good intentions, that end up working out very badly. Such a system is hard to abolish because it would bring unpredictable changes for the farmers and for all the companies involved in food production. Apart from that it would disturb the balance between the European countries that receive a lot of subsidies and the ones that receive only a bit.
    1:25 am

Thursday, March 5

  1. msg Assignment (Part 3) message posted Assignment (Part 3) See the uploaded file "Part 3 unit 7 - Tom Boesten.pdf". One thing that surprised me was …
    Assignment (Part 3)
    See the uploaded file "Part 3 unit 7 - Tom Boesten.pdf". One thing that surprised me was that the Gini-index in countries that used to be communist, was higher than the countries that always have been capitalist and rich. Another thing was the enormous difference in Trade per GDP between the Netherlands and all its neighboring countries. Something that did not surprise me was that poor countries in my little survey score high on the Gini-index.
    11:43 pm

Sunday, March 1

  1. msg Assignment (Part 2) message posted Assignment (Part 2) For my assignment see the uploaded file "Health care in the Netherlands.pdf"
    Assignment (Part 2)
    For my assignment see the uploaded file "Health care in the Netherlands.pdf"
    1:28 pm
  2. msg Assignment (Part 1) message posted Assignment (Part 1) For my assignment see the uploaded file "Health care in the Netherlands.pdf"
    Assignment (Part 1)
    For my assignment see the uploaded file "Health care in the Netherlands.pdf"
    1:28 pm

Friday, February 27

  1. msg Assignment (Part 3) message posted Assignment (Part 3) I am afraid I do not agree with the comment of moormang. The article bij Landsburg is rather intere…
    Assignment (Part 3)
    I am afraid I do not agree with the comment of moormang. The article bij Landsburg is rather interesting and challenging. In my opinion it is a philosophical enquiry into the notion of efficiency. It made clear to me that efficiency is a very important concept in economics, but that it looks very different from what we spontaneously would see as efficiency. We have to dig deeper to get a proper understanding of it.
    Throughout the article Landsburg seems to suggest that efficiency should be the moral compass on which we navigate through economic life, both in public policies and in personal decisions. I think it is very relevant that, at the end of the article, he gives a certain twist to his reflection on efficiency and economy: usually we do not decide on the basis of efficiency, and we do not even feel bad about it.
    Turning the pages back, his analysis of the notion of efficiency leads to statements and conclusions that are not obvious at all. Such as the statement in the title that tax paying is bad. What he writes about deadweight loss is certainly something to keep in mind. Taxation, subsidies, incentives and all other mechanisms governments use to stimulate or discourage citizens to do something, have effects that can be contrary to what everybody wants. Landsburg writes that taxing things is wrong because tax can be avoided (e.g. by not buying things), and thus creates deadweight loss. This should be a reason for all policy makers to think twice before they invent some new kind of taxation.
    On the other hand there is (as moormang states) something disembodied to Landsburg's argument. In the efficient world economic mechanisms work like theory says them to do. An example of this is the reflection on the consumer's surplus. If I see a shirt that costs $20 and I would be prepared to pay $25 for it, my consumer's surplus is $5. Then I should buy it. But I arrived in the shop with two of my friends. One of the would be ready to pay $23, the other thinks the shirt is worth $28. In that case, it would be a sin against efficiency if I should buy it, because when my latter friend would buy it, the consumer's surplus would be bigger. But actually none of us should buy it now, because we know that next week the shop will start a sale, and the shirt will only cost $16. And what about the beggar in front of the shop? For him, the shirt would protect him from dying of cold, and would be worth $100. The problem is that he does not have $100. What I mean to say is that it is impossible to figure out exactly what the consumer's surplus is.
    Landsburg states on pages 64-65 that this is partly true but wholly irrelevant. It is inevitable to make economic decisions, and efficiency should play a significant role in that process. The problem is that economic reality is not the same for everybody. The freedom to determine what the consumer's surplus is, depends heavily on how rich the consumer is. The freedom to determine if the wages an employer offers to a worker, create enough surplus for the worker, depends heavily on the alternative ways the worker has to earn a living. The Landsburg argument on efficiency presupposes freedom of al the economic actors. This freedom is an illusion.
    5:06 am
  2. msg Assignment (Part 2) message posted Assignment (Part 2) The story of Mr. Choi is remarkable. At first sight it seems to be a Kafkaesque situation in which …
    Assignment (Part 2)
    The story of Mr. Choi is remarkable. At first sight it seems to be a Kafkaesque situation in which a government moloch crushes an individual. I was surprised to see this happen in a country in which the government is supposed to be very hesitant in intervening in economic issues. In Europe bureaucracy is usually much stronger than in the USA.
    Looking at it more carefully, things get a little more complicated. Mr. Choi owns a store in a neighborhood where racial tensions are quite strong. This has a lot to do with poverty. In contexts in which people fight a day-to-day struggle to make ends meet, shop owners are always mistrusted. They own things that other people have to buy, so they are the first to ask money from the poor. In cases where shop owners are from a different ethnic group than the majority of their customers, the ethnic tensions add up to this. It seems that Mr. Choi has had several experiences of this kind.
    An important question in this matter is how the Labor Department has been operating here. Upon the complaint of some citizen, they acted promptly. Was the Labor Department aware of the possibility of bias against the shop owner with the complainer? There might even be a bias against shop owners on the side of the Labor Department.
    2:33 am
  3. msg Assignment (Parts 1 & 2) message posted Assignment (Parts 1 & 2) 1) Giving subsidies for solar energy panels has kept the prices of these panels high for a long tim…
    Assignment (Parts 1 & 2)
    1) Giving subsidies for solar energy panels has kept the prices of these panels high for a long time.
    2) In the last two decades the government of the Netherlands has tried in several ways to stimulate people to buy solar energy panels, as a renewable source of energy. Comparing these ways is interesting for how incentives work (or do not work).
    Investment in sun panels is rather expensive for individuals. That is why subsidies have always played an important role as an incentive. Years in which the government gave little, it got little in return. In 2003 there was a peak, when 20 MW was installed in a single year, which is more than in the years 2004-2008 all together. From 2008 the figure went up (58 MW in 2011, 220 MW in 2012).
    The first subsidies were given to cover a part of the purchasing price of the panels. This subsidy did not work out well, because in many cases the panels were not installed, but sold. The increase in MW energy did not correspond to the money that was invested by the government.
    In recent years subsidies have been given in the form of a reward per kWh of energy that is produced. The most profitable way for the owners of solar energy panels is to receive the same price as they pay for the electricity. This is a common practice now. When a household produces more electricity than it uses, the price it will get is lower.
    Reality shows that sun panels get cheaper and better in time, but also that they get more expensive when they are subsidised. After the abolition of a certain subsidy, the price of sun panels dropped dramatically.
    Another effect of subsidy is seen on the side of the producers of the panels. Most European producers of solar energy panels have collapsed, as a result of the very cheap panels from China. China gives subsidies to its manufacturers of solar energy panels.
    1:01 am

Wednesday, March 5

  1. msg Assignment (Parts 3 & 4) message posted Assignment (Parts 3 & 4) 1) Education is good for society, therefore the state should provide schools and make attendance m…
    Assignment (Parts 3 & 4)
    1) Education is good for society, therefore the state should provide schools and make attendance mandatory.
    Yes, I fully agree that education is important for society, and it definitely is good too: but then it should be made possible for all also for the poorer in society. This is often not at all the case. And moreover the poorer children are often also the most vulnerable because of their social background.
    Here in the town where I live we are often confronted by diaconal workgroups, somehow connected to one of the churches and/another charitable organisation that tries to assist in one way or another to help those children to go to school, and to find assistance for the parents as well. .
    In general in the Netherlands it appears that the government rather supports the confessional schools. The government states that education is important and it therefore should -so I think- protect and take care first of all that all children, including the most vulnerable- do have access to it. Property is also- as is stated important. I do agree that property should be protected. But I am afraid that when property really needs protection it does have to do a lot with economy. I am afraid -thinking practically looking around in my daily life; I must say that for me -dealing with people who do have to fight for survival daily, then human dignity is more important than economy. Conclusion: Education is important, but all human beings should have access to it. Not only those who can afford it. (excuse my mistakes in the spelling)
    8:30 am

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