Dynamic Equilibrium

23Nov07

I keep wondering if this is stupid and wrong or brilliant and subtle. I will try to elaborate and deepen the idea in another post later. I have a feeling this may be something useful.

Bear with me for an outlandish thought experiment. Imagine an empty water tank with a special tap. The tap is special because it would follow what we will call an “exponential law”. This is how it works:

•  It would deliver water to the tank in infinitely short but regular, periodic bursts

•  The amount of water in each burst would be exactly proportional to the remaining empty capacity during the immediately preceding period

A little bit of thinking will make you see why this is an “exponential” law – the first burst would deliver the most amount of water, the subsequent ones would deliver ever lower amounts. The tank would never be full, but would only approach full capacity while the bursts would get nearly but not quite zero. This state would still be dynamic, although, after a long, long time, it would look static. Aha, say the engineers among the readers – this is nothing but a single-pole negative feedback system!

Now imagine a second tap with similar properties, but with shorter time periods between bursts – as if it could process faster than the first tap how much water to deliver in each subsequent burst. The total instantaneous water level in the tank would now be decided by the net result, which would be a sum of a fast exponent and a slow exponent. Overall, the tank would reach its “nearly full” state faster than with only one tap.

Now stretch your imagination further. Each tap has an operator, whose employers have a magical device. They can find out the exact contributions from each tap in the total water at the end and proportionately define the pay of each operator. Obviously, rational operators would have an incentive to increase the size of their bursts (meaning raise the multiplication factor between their burst size and the instantaneous empty tank capacity) while still following the exponential law. Similarly, they would try to reduce their processing times and try to make their bursts at shorter intervals. In following their self-interest, they would inevitably improve the speed at which the tank fills up. This process would only intensify with the addition of more taps.

Financial economists among the readers will be quick to notice that this is really an analogy for arbitrage – competition to maximize payoffs arising from exploiting the water level gap. In financial markets, when going from one dynamic equilibrium to another, agents compete to maximize their gains from arbitrage and have to be quick enough to exploit their advantage before the word is out. A proliferation of such agents intensifies competition and shortens the “processing delays” so much that it seems like we always maintain a steady state, which is actually dynamic but looks static – called efficient markets by economists.

Businessmen, on the other hand, will see in this example a model for competition in real life. Competition looks static, but in reality, each competitor is constantly working on improving his arbitrage gains and agility in the face of change. A shock to the existing dynamic equilibrium means either a sudden “doubling of the tank size” – say addition of a new market – or a technological innovation where a new upstart tap operator comes in with a radically “faster exponent”.

The time elapsed between the sudden change and the new dynamic equilibrium is one of upheaval. Overall, it is essential to minimize this time to maintain an efficient market system. For this to take place, tap operators need freedom to maximize their water bursts and minimize their processing times – in other words, benefit from and seek out arbitrage opportunities. Also, potential new tap operators need freedom to set up taps and keep incumbent operators on their toes.

Control engineers might mistakenly (but understandably) think that I am making a case for designing systems that are not slew-rate limited. Finance buffs and economists would understand that I am really making a case for freedom of financial innovation and business innovation. This is a case for the Hayekian and Schumpeterian view of “competition as a verb rather than as a noun”.

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Warm… Warmer…. Cold!

05Nov07

Ramesh Ramanathan writes in his column “What’s wrong with babus”:

I have long been a champion of people within government—both bureaucrats and politicians—almost to a fault. My views have been shaped by years of deep engagement with “the system”, during which time I have learnt first-hand about the enormous constraints that they work under. I have come to the conclusion that the inability of government to deliver on most public good issues is driven substantially by institutional constraints and not individual competencies—if we were in the same place, I doubt that our record would be substantially different from theirs.

Most people are exasperated by my soft views, given the visible examples of poor government functioning. They say: “How can you excuse these people for the poor quality of our roads or the terrible public schooling system? These are not rocket science challenges! There is no excuse for poor delivery. The problem is that these people don’t care.” 

In other words, he is saying that institutions matter, but people vastly prefer a heroes and villains narrative. But then, he withdraws from the brink. His solution? The villains should start thinking like heroes:

If only our bureaucrats could open their minds, and think beyond the steel frame and antiquated silos of the past, they will be astonished to discover the wealth of ideas and energy that they can harness. As well as the goodwill and sympathy that they can garner. This would in turn modify their mindset about their work—rather than feeling like martyrs, toiling away in unappreciated isolation, they will begin to feel the burden of their work lifting. The crust of cynicism will erode, the original idealism with which they joined public service could return. The arrogance of denial will give way to the humility of partnerships. After all, concern for the country is not a fiefdom.  

And one more thing: He explains that his early thoughts used to separate policy matters from implementation. The former would always be a political process and the latter a bureaucratic one. While he does not explain the status of these thoughts now, did (does) he really believe the two are clearly separable?

Filed under: Incentives, Political Auction   |  1 Comment

Steve Wozniak on iWoz

02Nov07

This is somewhat long, but it really moved me. Probably none of the genius, but I can certainly claim the same childlike enthusiasm myself. I ordered manuals and chip samples as well, though in my case it was internet registrations with fake company names, not postcards in magazines. Now, of course I am on the other side of the manuals, designing chips myself, but I doubt if it will be for long. The enthusiasm of “designing stuff for other engineers” persists though. Nachiket, if you are reading this, you will appreciate this:

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Cure the disease, not the symptoms

01Nov07

Update:This letter appears in condensed form in the November 20, 2007 Mint.

Drawing inspiration from Don Boudreaux, I sent this letter today to Mint.

To
The Editor,
Mint 
November 1, 2007

Freising, Germany

In the column “Cafe Economics – Games hedge funds play, Niranjan Rajadhyaksha extends his support to the view that finds hedge funds in sinister light and central banks in benevolent light. He uses the HKMA example to endorse the Reserve Bank of India’s ostensibly heroic “ears to the ground” posturing while erecting capital controls and fuelling inflation by defending an exchange rate peg.

Far from being an exemplar of laissez-faire macroeconomics, the HKMA precipitated the speculative attacks in the 1990s as a result of its deviation from orthodoxy. An orthodox currency board never has to act defensively, just as nobody “defends” the rupee exchange rate between different states of India. A unified monetary zone does not elicit speculated attacks from within, sudden and coordinated or otherwise. By the way, the interest rate meddling and stock market prop up were bugs, not features.

A good a civil engineer does not prefer seismic sensors to strong foundations. A good electrician seeks out the short circuit before he rushes to replace the fuse. A good parent teaches his child that sand-castles are inherently risky, not that waves are evil. Economists should likewise prefer sound institutions to circuit breakers.

Sincerely

Sumeet Kulkarni

Filed under: Fatal Conceit, Indian Media, Inflation, RBI   |  Leave a Comment

End the tyranny of conceited kibitzers

10May07

The latest Cicero has an essay titled “Endet die Diktatur der kurzen Frist” (End the tyranny of the short term), where Michael Müller and Andreas Troge write what they call a “plea with six suggestions”:

The ideology of the pure economism is programming our life radically to the here and now. But extreme short term thinking prevents the necessary reflection and prudent decision making. Can the bond between time and money be broken?

The essay is charged with emotion, makes the required anti-capitalistic noises and takes the Ostrich View of implicit intellectual superiority of the European social model over mere “economism”. Short term thinking imported from the cowboy capitalism of the Anglo-Saxon world, argue the authors, is the reason why the social model has failed.

For some years now, a transformational process has been taking place. Its center has been the radical programming of life to an extreme short-term mentality. This template [of life] comes from the Anglo-Saxon economy and is highly resistent against social and ecological attempts at modernisation. Driven by the large finance corporations, the coupling of time and money becomes a tyranny of the short term. This regime rewards quick profits, short-term availability and immediate mobility. It contradicts the basic principles of the social market economy, which needs time because it builds upon the productive balance of interests.[Translations mine]

Predictably, their solution to the “problem” of economic short-sightedness is an increased role for the state in corporate governance and the environment coupled with that uniquely German social beast – forced consensus between “stakeholders”. This statist weasel-word, sounding like “shareholder”, serves the function of appeasing the casual free-marketeer while slyly serving the interests of incumbent business by raising barriers to disruptive non-”stakeholding” newcomers. Not quite incidentally, both authors hold high positions in the German environmental bureacracy – Müller is member of the Bundestag and parliamentary secretary in the environment ministry, while Troge is president of the federal environmental agency and professor of environmental economics.

It is bad enough that the authors think themselves enlightened enough to know better about financial matters than successful businessmen. The peak of ignorance is reached when they assign the trivial “economism” – “a mere exchange of goods” – to a rich concept like Hayek’s spontaneous extended order. If they had been even slightly less intellectually lazy they would not have attributed a “necessity of social considerations going beyond the individual” to Hayek, for the most rudimentary reading of Hayek would reveal that he calls the word “social” a poison mixed in our languuage and vows never to use that word.

It is a wonder to me how people who bemoan the short-term thinking in business are so eager to give up their liberties to posturing politicians, and seldom want to wait out the time it takes for markets to arrive at far deeper and more meaningful outcomes than these enlightened 68ers would ever manage to. Heck, the long term nature of the market even forgave them for their delusion in their youth, providing them with their cushy armchairs to pontificate out of. Good people of Germany, join me as I call for freedom from arrogant deluded hippies!

Filed under: Environment, Fatal Conceit, Hayek, Politicians   |  Leave a Comment

Why Indians should pay attention to Lou Dobbs

29Apr07

Indians who think rupee devaluation by the RBI is an important macroeconomic strategy to (a) sustain growth and (b) encourage exports by keeping the rupee cheap should definitely listen carefully to Lou Dobbs. Lou Dobbs sees clearly what Indians don’t see: Asian central banks (including India’s) routinely stockpile large dollar assets to boost their exports. While he and other protectionist rabble-rousers are woefully mistaken in their assessment of the threat posed by this strategy to Americans, their observation should awaken Indians to the unseen tax being imposed on them to subsidize American consumption.

Here is Don Boudreaux on the American trade deficit:

To accumulate such huge amounts [of dollar-denominated assets] the foreign government would have to tax its citizens heavily – so heavily, in fact, that sour economic consequences likely would befall that foreign country long before, and to a greater degree than, such consequences befall the United States. And such massive investments in dollar-denominated assets would make Americans noticeably wealthier and, hence, better able to withstand a sudden, politically induced negative shock to their prosperity.

Filed under: Indian Media, Inflation, Money, RBI   |  Leave a Comment

Windfall profits out of “thin” air

28Apr07

Governments and politicians are expert professionals at generating windfall profits out of thin air for themselves and their cronies. But at the margin, they would of course create more windfall profits for themselves rather than their corporate cronies.

Filed under: Cap-and-Trade, Energy, Environment, European Union, Political Auction, Special Interests   |  1 Comment

How to and how not to de-socialize

24Apr07

It is, again, generally accepted that free markets must be arrived at quickly, and that phasing them in slowly and gradually will only delay the goal indefinitely. It is well known that the giant socialist bureaucracy will only seize upon such delay to obstruct the goal altogether. But there are further important reasons for speed. One, because the free market is an interconnected web or lattice-work; it is made of innumerable parts which intricately mesh together through a network of producers and entrepreneurs exchanging property titles, motivated by a search for profits and avoidance of losses, and calculating by means of a free price system.

Holding back, freeing only a few areas at a time, will only impose continuous distortions that will cripple the workings of the market and discredit it in the eyes of an already fearful and suspicious public. But there is also another vital point: the fact that you cannot plan markets applies also to planning for phasing them in. Much as they might delude themselves otherwise, governments and their economic advisers are not in a position of wise Olympians above the economic arena, carefully planning to install the market step by measured step, deciding what to do first, what second, etc. Economists and bureaucrats are no better at planning phase-ins than they are at dictating any other aspect of the market.

Go read this 1992 essay by Murray Rothbard. As I had said before, Indians have no love for liberty that comes from the gut. Those of us who enjoy the fruits of increased prosperity tend to overrate the process of “reform” while those of us who get a peek in from outside tend to overstate the causal link between their misery and “reform”. Reforms in India have always been in the form of handouts from the maai-baap sarkar. We never really demanded them in 1991, nor do we demand them now. There is no structural change in our outlook towards liberty or the role of government in civil society.

Corporate interest groups getting their way does little to liberate civil society, but more dangerously, it strengthens the cause of the already intellectually bankrupt left. Utilitarians may rejoice at the partial opening of markets, but I am not yet holding my breath for liberty.

Filed under: Indian Politics, Liberty, Special Interests   |  1 Comment

Inflation for dummies – by a dummy

19Apr07

This post is the result of millions of hours of reading of excellent articles and books on inflation from the Austrian perspective and the Friedman perspective, millions of hours of current reading of Ajay Shah (1, 2, 3) and Ila Patnaik (1, 2, 3, 4) as well as the mistaken editorials, op-eds, columns and interviews in the Indian media. I just had to get this post out of my system. Mint, as an aside, disappoints me completely and I feel somewhat (perhaps in a silly way) cheated at being promised a libertarian publication and receiving an intellectually dishonest pro-welfare state, regulation-monger.

Here is my attempt at explaining inflation with an intuitive and hand-waving approach. I am of course hardly trained to provide a formal, rigorous approach, but as anyone who has done analog design would know, intuition and knowledge of the basic handles to turn is often more important that mathematical precision. Feel free to critique my explanation, hopefully without nitpicking on technical details. Keep in mind that this is a vast simplification of the underlying dynamics, intended for dummies from a dummy.

Inflation is entirely and only due to an increase in the money supply in the economy. In fact, if you look at the original definition of inflation before it was manipulated by media-savvy central bankers covering their behinds, inflation is the increase in the money supply. Price rise is an inevitable consequence of inflation. I think only the Austrians say this nowadays. However, the main point is: there are no such things as “cost-push” or “demand-pull” inflation as you hear in the media. Just disregard it if someone explains inflation through taxes, duties, speculators or some other kinds of “pressures”. These are theories that have already been debunked decades ago, yet they persist, mainly because politicians and central bankers – the creators of inflation – want to push the blame on abstract technical terms. A simple straining of the logical faculties of one’s mind should make the fallacy in these theories at least intuitively obvious.

If the cost-push theory is valid, then inflation should result from increase in costs of some items in the economy even when the amount of money in circulation is constant. Cost-push means that some goods and services in the economy become costlier (say food grains, petroleum, cement, wages etc as well as those that depend on these goods and services) due to various factors such as a drop in supply – say a bad year for agriculture, war in the Middle East, increased sales taxes, export subsidies causing scarcity in domestic markets, engineers exporting themselves abroad raising the wages of engineers staying back etc. If the total amount of money chasing the total amount of goods and services is constant, and some of those goods become more expensive, the total amount of money chasing the remainder should reduce. Also, since the total amount of goods and services has been simultaneously increasing in a growing economy, there must be less money chasing more goods and services, except those ones that became more expensive, making those goods and services cheaper. Thus, if money supply is constant, there cannot be a general rise in the price of everything based on a rise in costs of some things. Such a price-rise, across the board, can take place only if the total money chasing the total goods and services has increased.

Similarly, if the demand-pull theory is correct, then an increased demand for some goods and services should produce a general price rise in the economy. This is clearly impossible as well. If the total money supply in the economy is constant, then increased demand for some goods and services should mean reduced demand for certain other goods (in a growing economy which produces more goods and services per year even more so), thus leading to a drop in their prices. Again, under constant money supply, a general rise in prices of everything is impossible.

The Reserve Bank of India creates inflation. It is simultaneously a bank, bank regulator, part of the executive branch with the Ministry of Finance and a large player in the foreign currency market. It prints banknotes, tries to regulate interest rates and manipulates the rupee price.

It needs to print money for two reasons. Since it is part of the ministry of finance, whenever the government runs a large project it cannot cover with taxes, the RBI prints money. Printing more money means inflation. That is, among many others, an important reason to be wary of government projects. Many such projects are thus financed by money generated out of nothing, producing inflation. That’s why inflation is a tax which we pay equally, independent of our income, and do not even realize it as such.

The second reason why the RBI prints money (inflates, to be sure) is when it tries to keep the exchange rate of the rupee with the US dollar nearly constant. The rupee is officially a floating currency whose price is defined by the market, but the RBI intervenes heavily to manipulate the price of the rupee at regular intervals. How does it do this? By buying dollars with freshly printed rupees in order to keep the price of the rupee low (i.e. more rupees per dollar). It needs to do this because many foreign investors want to put their capital in a globally interesting economy like India, thus increasing inward dollar flows. These dollars need to be converted into rupees before they can be used, hence pushing the demand for rupees higher. This would have made the rupee more expensive (less rupees per dollar) unless the RBI bought dollars with new rupees. These new rupees “created out of nothing” find their way back into the Indian economy, since that is the only place they can be used to buy material stuff with, and result in inflation. Why would the RBI want to keep the rupee cheaper? One reason is to keep enough dollar reserves in the country (itself an artificially created necessity, whose basis is not at all obvious to me). Remember to wince the next time you hear a chest-thumping article on India’s dollar reserves that you and every citizen of India paid for them without being aware of it or understanding why they were needed (If a restaurant did that to you, you’d call it cheating). Even assuming a valid basis for maintaining dollar reserves, India has long had more of them than prescribed by experts according to all possible criteria of sufficiency. Why then is the RBI interested in keeping the rupee cheap? The reason for this comes from the deeply flawed belief that exports are the most important thing in international trade. I will come to the absurdity of the importance given to exporters shortly. Since we believe exports are crucial, we feel the need to encourage them by keeping the dollar more expensive. This increases exporters’ rupee profits. However, the fall in the prices of the rupee (more rupees per dollar) is accompanied by a fall in the purchasing power of the rupee in India, thus simultaneously increasing the costs of production of the exporters. The RBI tries to aim at an exchange price which optimizes the net gains of the exporters from the increase in their rupee profits as well as costs of production. However, the other job of the RBI – to keep prices low – conflicts with exporters’ interests. Hence the knee-jerk responses of the RBI trying to satisfy varying special interests and creating artificial boom-bust cycles. To realize how severe the currency manipulation has been, note the recent over 10% gain in the rupee price (less rupees per dollar) in three days when the RBI didn’t step in to buy dollars.

I am an exporter myself. I have exported myself abroad and earn a salary in foreign currency. When I send money to India, I benefit from the cheap rupee, since it gives me more rupees to spend in India. Several of my relatives earn salaries in dollars and have their savings tied to the exchange rate. If we returned to India for good, we stand to lose a dramatic amount of our savings if the RBI lets the rupee really be determined by market rates. So the next time you hear of India’s export successes, including the human exports of workers, remember it was you and every Indian citizen – including the poorest – that subsidized that success through inflation without even knowing it. The RBI has decided that we exporters should profit by theft. Be sure to view the next exporter’s cries of help at the doors of the RBI with utmost contempt.

The RBI should be decoupled from the executive branch of government, stop manipulating the currency and most crucially – stop printing it. Ideally, it should freeze the amount of liquid money and permanently close the printing presses and mints. I am too amateurish to think of a way to make it stop manipulating the interest rates through its fractional reserve system, but the least it can do is to end the conflicts in its mandates and the funding of inefficient government projects as well as special export interests through mass theft.

Now, an excursion to understand why exports are overrated. The importance of exports is a spurious notion perpetuated by the idea of applying national borders to economies. The standard of living of the people of a country is not decided by how much they sell to people of other countries. It is decided by what they consume. In a market, individual people produce goods and services that other individuals would like to buy and thus increase their wealth. The concept of national borders is simply absurd. When an Indian exporter sells something abroad, “India” does not benefit. The individual participants in that transaction do. Similarly when Indian individuals import something, “India” does not suffer. The individual participants in that transaction benefit. If the “export-import balance” of nations is so crucial, why not go further? Why not measure the “export-import” balance of states, or cities or households then?

Here is a simple analogy. I used to live in angalore a couple of years ago. I shared an apartment with four friends. Barring some minimal costs we shared, everyone was pretty much on his own. Each had a job and an income. Each of us sold his labor independently of the others and received an income independent of the others. We conducted transactions with the world outside our house boundaries independent of the others. Some of us had surpluses with the external world, while maybe some of us had a debt. Heck, suppose most of us had a lot of debt. Whatever our debt or surplus positions, they were individual. Does it make sense to measure the debt/surplus from the sum of our financial positions and call it a “household” debt or surplus? It is an absurd notion. Would it have made sense to cheat everyone in the house into subsidizing one person to achieve a “household surplus”? Our standard of living was individually defined and the standard of living of the household was a completely incidental sum of our individual values. The idea of optimizing our transactions conducted independently with the external world in order to achieve a surplus for the household sum would be absurd. Yet, that is exactly what export promoters wants to do in a country.

Finally, let us return to inflation. Regardless of which theory of inflation you buy and what you believe should be done to counter inflation, there is a deeper lesson we should learn from the recent discussion on inflation (which you get to learn if you came this far!). Think about it. If some remote official in the RBI changes the interest rates, issues orders to print more notes or buy and sell dollars, thus changing the money supply – without normal laypeople even knowing – why do prices rise? How do all kinds of people from the neighborhood plumber, vegetable vendor, hairdresser, grocery store to industrial houses producing cement, steel, cars, paper to service providers like banks, restaurants, tea-stalls and beauticians, sellers of carpets and haulers of garbage, producers of wheat and drivers of buses find out? How do all these people with whom we engage in meaningful economic exchange every single moment of our lives – many of whom are illiterate and supposedly helpless, while most are educated but unaware of inflation in any concrete sense – find out? How do these people know what to change in their production, how much to change and calibrate exactly how much to sell it for? If an increase in money takes place without anyone explicitly knowing it or understanding its implications, how come every single one of us acts as if we did understand them in an almost coordinated manner? The reason is, we are constantly managing and optimizing our choices and behavior in our own micro-world in our own bumbling ways. We may get it right many times, most times or all the time. But we have the greatest incentives to make the right choices given our own surroundings. The element of the economy which helps us make those choices are prices. Prices are the signals of availability and scarcity of things we want and of how much we want or value them in relation to what we already have. Prices are conveyors of deep and dispersed information. Our daily, heck hourly transactions are the choices we make about the utilization of our time, money and minds. It is futile and inconceivable that a government, even one that is truly honest and benevolent, can amass and utilize this dispersed and deep knowledge to implement policy. A corrupt one with perverse incentives even less so. It is immensely crucial to not distort the messages carried by prices through intervention, even if it benefits the majority, as it inevitably harms someone whose life depends upon reception of correct price signals. This is what we call the “market”. The insight to be gained here is the following: even in the absence of a free market, even in a severely restricted society like India’s where rules and regulations prohibit and restrict transactions, the market does not cease to work. We continue to find our local optima in our behavior and continue to use the price signals around us to make our choices and try to improve them. No amount of regulation or rules will ever be able to stop us from trying to find our micro-optima. Those rules can only restrict our freedom to find better choices than the ones allowed to us, they can only distort the signals we receive, leading us to make bad choices. Considering the futility of trying to find a centrally led global optimum, our best bet is to allow individuals the freedom to find their local optima and grow more prosperous.

Filed under: Incentives, Indian Media, Inflation, Money, Prices, RBI, Special Interests   |  30 Comments

New EU rules for professional drivers

12Apr07

The European Union is learning fast from local municipalities and city governments in Europe that make criminals out of drivers to fill their empty coffers. A new rule is to come into effect today that makes criminals out of a huge number of transport and bus tour operators throughout the EU.

Professional drivers must rest more and spend less time on the roads: the EU has raised the prescribed daily minimum resting time from 8 hours to 9 to enhance traffic safety. From today, every driver may sit at the wheel a maximum of 54 hours per week; so far upto 74 hours were allowed.

Exceptions, that allowed travel bus drivers to drive on upto 12 consecutive days, will be discontinued. A longer refresher break of 45 continuous hours is now also mandated every two weeks. Effective immediately, the employers will be accountable for infringements in all EU nations.

At the same time, the checks will be beefed up. This way, penalties can now be handed out independent of the EU country where the infringement took place. (translation mine)

The rule has to be enforced through legislation in each EU country separately, resulting in the German transport ministry having to work under pressure to formalize it so that it can be passed before the parliamentary summer break.

The EU reasons that this rule will reduce the number of accidents on European highways, since 20% of all major crashes involving trucks and buses take place due to fatigue. By this rule, claims the EU Commission, the drivers could enjoy social advances, the companies would get fair competition rules and the highways would be safer for all.

 Whether the seemingly arbitrary mandates on the duration of breaks for drivers makes streets safer or for that matter enhances transport competition, makes drivers happier or consumers better off are empirical questions. Questions also include whether certain types of transport operators benefit over others in the new regime, or how the rules affect the market for truck drivers. They may even benefit those companies whose internal policies already comply with the rule and reduce competition by increasing barriers to entry. The broader point is, the EU should not be monetizing what people do or not do with their time, nor should it be dealing with uncertainties.

Insurance companies and participants in highway traffic may or may not be in a better position to judge risks of accidents than the EU Commission in Brussels, but they certainly have much greater incentives to mitigate those risks.

This might sound like a small issue, but is just another symptom of the creeping central planning in the European political economy.

Filed under: European Union, Incentives, Liberty   |  Leave a Comment