Math Formatting Problems

MathJax is not consistently rendering mathematical expressions properly on the homepage. Note that this problem is not limited to raw LaTex notation being displayed. In some posts, entire mathematical expressions are missing. Mathematical expressions appear to be correct when a specific post is opened in a new tab.

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From the “Preface to the English Edition” of “The Theory of Money and Credit” by Ludwig von Mises: “All proposals that aim to do away with the consequences of perverse economic and financial policy, merely by reforming the monetary and banking system, are fundamentally misconceived. Money is nothing but a medium of exchange and it completely fulfills its function when the exchange of goods and services is carried on more easily with its help than would be possible by means of barter. Attempts to carry out economic reforms from the monetary side can never amount to anything but an artificial stimulation of economic activity by an expansion of the circulation, and this, as must constantly be emphasized, must necessarily lead to crisis and depression. Recurring economic crises are nothing but the consequence of attempts, despite all the teachings of experience and all the warnings of the economists, to stimulate economic activity by means of additional credit.

Mathematicians of the day.

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Uber against Racial Profiling by Howard Baetjer

Uber against Racial Profiling” is an excellent article about how business innovation operating on the free market solves a particular problem of discrimination against blacks and hispanics.

Baetjer notes that such discrimination in the regulated taxi industry can often make sense for the individual taxi driver. This is a good point, as all too often, racial disparities are blamed solely on hatred while the underlying incentives are ignored. Baetjer notes:

Are cab drivers indulging in irrational prejudice, or is their apparent racial profiling a rational reaction to the security and financial risks of their business? Most cabbies are from racial minorities themselves, but they reasonably worry about crime — taxi drivers are among the most frequently victimized professionals — so they might use race as one criterion in judging how safe it is to pick up different kinds of riders. And cabbies need to keep the meter running; they might worry that if they take a rider home to a low-income area, they won’t find another fare there to pay for the trip back to a busier area.

Whatever its cause, the racial profiling is a frustrating, insulting nuisance to those discriminated against. There must be a solution.

What is interesting about Uber’s solution is that it is not designed to be a solution. Rather, it is inherent in its business model of fostering trust between driver and passenger and its use of GPS technology to devise efficient routes for its drivers.

A spokesman for Uber, the for-profit ride-sharing company still effectively unregulated by government, told NPR that “with 4 in 10 Uber trips starting or ending in neighborhoods underserved by taxis, Uber is ensuring that no rider is rejected because of who they are, where they live or where they want to go.” Why would Uber-directed drivers, unregulated by any government agency, pick up passengers from minority groups that government-regulated taxi drivers refuse?

The answer is that Uber drivers are regulated by Uber, Uber is regulated by market forces, and market forces regulate far more effectively than the DC taxi commission does.

Uber gets a cut of every fare, so the more fares it arranges, the more income it earns. Arranging more fares depends on building a reputation for getting cars to riders — all riders — quickly and reliably. Hence, Uber has a strong incentive to give its drivers the incentive to pick up every rider — black, white, or brown — right away.

It does that in two ways. First, it reduces its drivers’ reasons for racial profiling. Uber has each rider’s name, cell phone number, credit card information, and the time and route of the ride, so Uber riders are unlikely to rob drivers. Riders can’t skip out on a fare because Uber charges their credit cards, and since drivers aren’t paid in cash, they’re unattractive targets for criminals. And when an Uber driver drops off a rider in an out-of-the-way place, Uber immediately shows where the next closest fare is, so the driver is less likely to get stuck with a long, no-fare trip back to a busier area.

Second, using GPS information from users’ and drivers’ smartphones, Uber “sees” in real time when a driver drives past a would-be rider. “I didn’t see him” doesn’t work; Uber shows drivers where would-be riders are. And Uber fines its drivers for refusing fares. Uber’s regulation of racial profiling is thus comprehensive and immediate.

The entire article can be read here.

H/T @powerandmarket.

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New Findings Clarify How Immunotherapy Works — and Why, In Some People, It Doesn’t

New Findings Clarify How Immunotherapy Works — and Why, In Some People, It Doesn’t” is an article/press release from Memorial Sloan Kettering Cancer Center about the use of ipilimumab, a cancer immunotherapy drug, for treating melanoma.

The field of immunotherapy, centered on the idea that a person’s own immune system can be used to fight cancer, is rife with potential breakthroughs. One such example is ipilimumab (YervoyTM), which in clinical trials has produced practice-changing results for people with melanoma. The drug works by boosting the body’s natural immune defense against tumors. For some patients, it shrinks tumors and significantly prolongs lives.

But immunotherapy doesn’t help everyone. In fact, about 80 percent of people with melanoma get little or no benefit from ipilimumab. And thus far, doctors have had no way of predicting which patients are more likely to respond to the drug.

Now Memorial Sloan Kettering scientists have gained new knowledge about how ipilimumab works and why it controls melanoma in only some people. In a report published today in the New England Journal of Medicine, the researchers show that in patients who respond to the drug, their cancer cells carry a high number of gene mutations ­— and some of these mutations make tumors more conspicuous to the immune system.

“For the first time, it might be feasible to develop a reliable diagnostic test to help guide treatment decisions by predicting who will respond,” says physician-scientist Timothy Chan, who led the research. The findings could also inspire new research that potentially may lead to more-powerful immunotherapies for melanoma as well as for other cancers.

T Cell Emancipation

MSK physicians and scientists played a major role in the development of ipilimumab, which works by blocking a protein called CTLA-4. Normally, CTLA-4 keeps the tumor-fighting activity of the immune system’s T cells in check. In the presence of the drug, T cells are unleashed and their inherent ability to recognize and destroy cancer cells is enhanced.

Recent studies have shown that about one in five patients with metastatic melanoma who are treated with the drug live for more than three years after starting treatment. Before the drug became available, the median life expectancy for the disease was seven to eight months.

Mining Clinical Samples for Clues

In the study, the researchers collected tumor samples from 64 melanoma patients who had been treated with ipilimumab or tremelimumab, an experimental drug that works in a similar way. The tumors were analyzed by whole-exome sequencing, a method of deciphering DNA changes across all parts of the genome that code for protein. About half of the tumors analyzed came from patients for whom the treatment had been successful and the other half from people who derived little or no benefit from it.

“We found that tumors that had responded to the drug had a higher mutational burden,” or overall number of DNA changes, explains fellow Alexandra Snyder Charen, the study’s first author. “But the correlation isn’t perfect. Not all patients with a high mutational burden in their tumors responded to the drug.”

“This made us ask, ‘What is the immune system seeing?’” adds Jedd Wolchok, a melanoma expert and immunologist who played a major role in the development of ipilimumab and co-led the NEJM study with Dr. Chan. “What is it about the mutational landscape of a tumor that helps the immune system recognize and attack it?”

Foreign-Looking Tumors

Using sophisticated computational tools, the researchers were able to explore their data through the lens of immunity science. They found that drug-responsive tumors share a certain type of mutation that makes cancer cells express new antigens — substances that T cells can detect and recognize as foreign to the body.

“We identified a specific subset of tumor antigens found only in patients who respond well to CTLA-4 blockade therapy,” says Dr. Chan. The researchers believe these mutations make tumors express the new antigens that the immune system then reacts to — and ipilimumab works by enhancing that reactivity.

The rest of the article can be read here.

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A Weekly Dose of Hazlitt: ‘Selective’ Credit Control

‘Selective’ Credit Control” is the title of Henry Hazlitt’s Newsweek column from March 6, 1956. Here, Hazlitt shows the inherent logic of interventionism: one intervention by the government causes an unanticipated undesirable outcome thus necessitating an additional intervention to correct it which requires yet another intervention etc. In this instance, the initial intervention was the suppression of interest rates by the socialist monetary central planning board. This sparked a boom in consumer purchases by installment credit, thus leading to cries for new government intervention to specifically limit consumer credit.

Secretary Humphrey showed political courage as well
as excellent sense when he refused to endorse the suggestion
in the President’s Economic Report for restoration
of the government’s power to regulate the terms of
consumer installment credit.

The Secretary also gave the right reasons why such
stand-by powers would be inadvisable. They would put
too much discretion in the hands of whoever was to
administer them: “You take a great responsibility on
yourself when you tell 160 million people what they can
afford to buy.” Chairman Martin of the Federal Reserve
Board also pointed out that: “Selective controls of this
nature are at best supplements and not substitutes for
the general overall credit and monetary instruments.”

The most eminent advocate of the imposition of
stand-by controls on installment credit is Allan Sproul,
president of the Federal Reserve Bank of New York.
In a speech on Dec. 29 he declared: “I do believe that
there is a temptation to abuse consumer credit in boom
times, that it can thus become a serious source of instability
in our economy, and that we would not jeopardize
our general freedom from direct controls by giving the
Federal Reserve System permanent authority to regulate
consumer credit.”

But Sproul’s argument indirectly admits that he
wishes this power in order to avoid a sufficiently firm
control over general interest rates and the total volume of
credit: “If there has grown up a form of credit extension
which . . . is introducing a dangerous element of instability
in our economy, and if it is difficult to reach this
credit area by general credit measures without adversely
affecting any of the less avid users of credit is there not
a case for a selective credit control?” What Sproul is
saying in effect is that a handful of government monetary
managers should be given the power to discriminate
among borrowers; to say which are “legitimate”
and which not; to say just who should have credit and
on what terms. No government body should have such
power. It becomes an implement for political favoritism. Continue reading

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From Medical Xpress: Startup creates VetiGel, a plant based polymer that seals wounds in seconds

Brooklyn based startup Suneris has developed a plant based polymer called VetiGel that can be used to seal virtually any type of wound in just 15 to 20 seconds, potentially saving lives—cofounded by Joe Landolina, who is now the CEO of the company, the gel is already being used by veterinarians to treat animal wounds.

Treating wounds where there is a lot of bleeding is time based—if the bleeding isn’t stopped, the patient will die, known as bleeding out. Currently, there are some gel based products for stopping bleeding but they are mostly used for superficial cuts. Other gels for more serious wounds can typically take up to five or ten minutes to stop rapid blood loss—VetiGel can get the job done in just 15 to 20 seconds, an improvement that could no doubt mean the difference between life and death for someone with a serious injury. Perhaps even more remarkable, the gel works on both skin and organ injuries, sealing up bleeding in mere seconds—that could be a real game-changer for wounds to the liver, for example, a notorious bleeder.

Landolina told the press recently that he got the idea for the gel while still a freshman at NYU—he and a fellow student created the first version of the gel, leading to the formation of the company—the fellow student subsequently left the company afterwards, leaving Landolina to forge ahead with the new product.

The gel works by binding with components in blood and tissue (Landolina calls it akin to Lego-like building blocks). It’s based on plant cell wall polymers which when exposed to blood or tissue, reassembles itself into a facsimile of blood or other body parts, allowing for very nearly instantaneous clotting. Thus when applied to a wound victim, part of the gel may morph to conform to the internal surface of a bleeding organ, another to a broken blood vessel and yet another to broken skin, stopping bleeding throughout.

The rest of the article can be read here.

Here is additional information from the Suneris website.


The Suneris gel technology is designed to accelerate hemostasis through physiomechanical methods. Because our gel is naturally adhesive, it is able to remain at the site of the injury without manual pressure, allowing the components of the gel to interact with damaged cells to initiate hemostasis. Our gel contains plant-derived polymers that mimic the cellular support system to effectively expedite the clotting process in a variety of connective and soft tissue injuries.


Suneris has engineered a polymerizing agent to enhance the durability of our gel technology. After applying the gel and ensuring that hemostasis is achieved, the polymerizing agent is sprayed onto the gel. This causes rapid restructuring of components in the gel resulting in a solid mass. Our gel is able to stop bleeding without any additional components, but solidifying the gel improves the durability of the clot, protects the wound from outside elements and allows for easy removal, if needed.


The Suneris gel technology has been effective at controlling moderate to severe blood loss from a variety of lesions. Testing suggests our gel is effective at closing wounds on the skin as well as in organs, making it ideal for use in traumatic injuries and surgical procedures, when traditional methods to control blood loss are not practical or possible.

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Political Economy Quote of the Week for 20141124

““[C]apital-intensification” or the “deepening of capital” is merely another form of Innovation. Once we have rid ourselves of the notion of capital as a homogeneous aggregate and bear in mind its essentially heterogeneous character as an agglomeration of houses, ships, machinery, etc., it is easy to see that “an increase of capital per unit of output” does not just mean the addition of another piece of machinery to an otherwise unchanged equipment park, but that as often as not it will entail a complete re-arrangement of the existing productive apparatus, including depreciation of specific factors, and possibly a change in the character of the final product.” – Ludwig Lachmann. H/T Don Boudreaux

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The Consequences of Imposing Negative Interest Rates by Pater Tenebrarum

In “The Consequences of Imposing Negative Interest Rates“, Tenebrarum raises the specter of capital consumption. Of all the economic distortions caused by inflation, capital consumption may be the most serious in the long run. One problem is that it cannot be readily measured, so that if it does occur, it is likely to be well advanced by the time anyone notices.

However, there is one hope of avoiding such a calamity given the current mindset of the political class: technological advancement. Since it is unlikely that politicians will cut spending, reduce taxes, and order their monetary socialist central planning boards to refrain from money printing and suppressing interest rates, I believe that our only salvation is sufficiently high rates of economic growth via technological innovation that counterbalances the negative effects of inflationist policies. Indeed, it may very well be the case that this has already occurred at some point since the advent of worldwide fiat money 40 years ago.

Negative Interest Rates and Capital Consumption

Ever since the ECB has introduced negative interest rates on its deposit facility, people have been waiting for commercial banks to react. After all, they are effectively losing money as a result of this bizarre directive, on excess reserves the accumulation of which they can do very little about.

At first, only a small regional bank, Deutsche Skatbank, imposed a penalty rate on large depositors – slightly in excess of the 20 basis points banks must currently pay for ECB deposits. It turns out this was a Trojan horse. Other banks were presumably watching to see if depositors would flee Skatbank, and when that didn’t happen, Commerzbank decided to go down the same road.

However, there is an obvious flaw in taking such measures – at least is seems obvious to us. The Keynesian overlords at the central bank who came up with this idea have failed to consider a warning Ludwig von Mises once uttered about the attempt to abolish interest by decree.

Obviously, the natural interest rate can never become negative, as time preferences cannot possibly become negative: ceteris paribus, consumption in the present will always be preferred to consumption in the future. Mises notes that if the natural interest rate were to decline to zero, all consumption would stop – we would die of hunger while investing all of our resources in capital goods, i.e., while directing all of our efforts and funds toward production for future consumption. This is obviously a situation that would make no sense whatsoever – it is simply not possible for this to happen in the real world of human action.

Mises warns however that if interest payments are abolished by decree, or even a negative interest rate is imposed by decree, owners of capital will indeed begin to consume their capital – precisely because want satisfaction in the present will continue to be preferred to want satisfaction in the future regardless of the decree. This threatens to eventually impoverish society and reduce it to a state of penury:

If there were no originary interest, capital goods would not be devoted to immediate consumption and capital would not be consumed. On the contrary, under such an unthinkable and unimaginable state of affairs there would be no consumption at all, but only saving, accumulation of capital, and investment.

Not the impossible disappearance of originary interest, but the abolition of payment of interest to the owners of capital, would result in capital consumption.

The capitalists would consume their capital goods and their capital precisely because there is originary interest and present want-satisfaction is preferred to later satisfaction. Therefore there cannot be any question of abolishing interest by any institutions, laws, and devices of bank manipulation. He who wants to “abolish” interest will have to induce people to value an apple available in a hundred years no less than a present apple. What can be abolished by laws and decrees is merely the right of the capitalists to receive interest. But such laws would bring about capital consumption and would very soon throw mankind back into the original state of natural poverty.”

(emphasis added)

Of course today’s central bankers to a man seem to believe that what makes the economy grow is “spending” and consumption. This is putting the cart before the horse. Since the accumulation of capital threatens to go into reverse due to their policies, there may well come a time period during which reports of aggregate economic statistics appear to indicate that “economic growth has returned”, while all they reflect in reality is the fact that scarce capital is in the process of being consumed. This process is also known colloquially as “eating one’s seed corn”.

The rest of the article can be read here.

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From The PanAm Post: Austrian Economists Put Their Heads Together for Crisis Solutions

Austrian Economists Put Their Heads Together for Crisis Solutions” is a summary of an Austrian school economics conference held in Argentina this week.

The American continent faces severe economic problems, particularly currency instability, and the Fifth International Conference of Austrian Economics — held in Rosario, Argentina, on November 17-19 — zeroed in on solutions. The 140 attendees heard prescriptions such as the closure of central banks, a return to the gold standard, and trade liberalization under the premise that such freedom produces wealth.

The biennial event, organized by the Bases Foundation of Rosario at the Catholic University of Argentina, spanned economics, political philosophy, epistemology, and methodology. The speakers came from throughout the Americas and included, among many, Axel Kaiser of the Foundation for Progress in Chile and Benjamin Powell of the Free Market Institute at Texas Tech University.

Austrian Economics a Remedy for Argentina?

One of the most anticipated lectures was offered by José Luis Espert, known for his opposition to the financial and monetary policies of Argentinean President Christina Kirchner.

He began his talk with a defense of the free trade that characterized Argentina’s economic policy in the 1920s. During that era the country experienced a significantly higher growth rate than the rest of the world.

The economist perplexed, “Where did we get the idea that liberalism is bad for the country?”

Espert said the real fight is a redistributive one being fought between the oligarchs who live off the state and those who don’t. He criticized the fact that the state has taken on an ever-increasing number of responsibilities, rather than remaining faithful to its true role: the provision of public goods.

An increasing tax burden is one of the most fundamental problems he sees with the Kirchner government: “an Argentinean works half the year to pay taxes.”

As opposed to most opposition candidates for the Argentinean presidency, Espert says the most problematic public expense is the government payroll, not public subsidies: “There’s your clientele.”

In the Q&A session, Espert was asked, “What is the solution to the country’s monetary problems?”

“Close the Central Bank [of Argentina],” he quipped.

The rest of the article can be read here.

La versión española de este artículo se puede leer aquí.

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