The United States Is a Nuclear Dictatorship

The United States Is a Nuclear Dictatorship

11/15/2017Ryan McMaken

Thanks in part to Trump's bombastic and unpredictable style — but more likely due to his lack of friends in Washington — members of Congress have suddenly realized that maybe, just maybe, it's a bad thing that the President of the United States can unilaterally blow up the world. 

And when I say "President of the United States" I don't mean that as a metonym for the US government as in the phrase "Washington today is considering a pact with Mexico." 

No, a single specific individual really does have the ability to make that decision and give that order — unimpeded in any way. 

This fact — which should daily be regarded by all Americans as an excellent illustration of what a farce "constitutional government" is — is now a topic of debate in Washington. It is now being suggested that some of those alleged "checks and balances" we're always being told about might be applied to the most destructive and apocalyptic power enjoyed by a US government agent. 

CNN reports

Congressional lawmakers raised concerns about President Donald Trump's ability to use nuclear weapons during a hearing Capitol Hill Tuesday amid bipartisan anxiety over launch process procedures and indications that the administration has considered the option of a first strike on North Korea.

Members of the Senate foreign affairs committee called into question a decades-old presidential authority to deploy nuclear weapons in what was the first congressional hearing on nuclear authorization in decades.

You read that right. This is the first time Congress has considered the question of a president's nuclear-warmaking prerogatives in decades. Congress, on the other hand, has been quite busy during that time holding hearings about steroid use in sports, and violence on television.

As it stands right now, the president can start a nuclear war all by himself. We're talking about first strike capability here, and not about merely a response to military action by another state.

The LATimes tells us how easy it is: 

All he has to do is call in the military officer who carries the “football,” the bulky briefcase containing the nuclear codes, and work through a brief procedure to transmit launch orders to U.S. Strategic Command...There are really no checks and balances,” said Bruce G. Blair, a former nuclear launch control officer who is now a researcher at Princeton University. “The presidency has become a nuclear monarchy.”

"Nuclear dictatorship" probably better captures the reality of the situation.

Thus, all the president has to do is decide — perhaps based on whatever unreliable information the CIA is feeding him — that now is the time to unleash a nuclear holocaust on, say, North Korea. Once the bombers are flying, or once the missiles are launched, of course, we'll then have to hope that none of them are interpreted as threats to major nuclear powers like China and Russia, both of which are right next door. 

Indeed, it's this unpredictability of how a nuclear strike might get out of hand has long been a limiting factor on the use of the weapons. During the Vietnam War, for example, using nuclear weapons were discussed as a possible alternative to the failed bombing strategy at the time. The problem strategists encountered was the sheer volume of unpredictable consequences that could result from usage. 

The downsides of starting a nuclear conflict are immense, both in terms of global diplomacy, and in terms of actual risk to the American population. 

But even with this reality staring us in the face, Washington is so obsessed with maintaining an aggressive military stance, that it's unwilling to seriously consider any limitation on the President. 

This why we should expect no real changes out of these Congressional hearings. Not surprisingly, Congress has already taken any meaningful change off the table: 

Ultimately, the panel warned against legislative changes to rein in the President's authority to exercise nuclear authority.

"I think hard cases make bad law, and I think if we were to change the decision-making process in some way because of a distrust of this President, I think that would be an unfortunate precedent," said Brian Mckeon, who previously served as Principal Deputy Under Secretary of Defense for Policy during the Obama administration.
This pretty much sums up how Washington's foreign policy works. Limiting the power of the President in any way, we're told "would be an unfortunate precedent." After all, this Trump guy may be a jerk, but all the other Presidents are totally wonderful human beings. We wouldn't want to limit their power to blow up the planet.
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Ikigai: Meaning and Purpose in Life

02/09/2018Jonathan Newman

We all strive for satisfaction and purpose in our lives. We want to do what we love, love what we do, and do it well enough to pay bills and buy groceries. The Japanese have a word for this “sweet spot”: Ikigai, which translates to “a reason for being”. Artists have rendered the overlapping criteria like this:

ikigai_0.png

The main four overlapping circles are what you love, what the world needs, what you can be paid for, and what you are good at. According to the diagram, the intersection of what you are good at and what you can be paid for is your profession. The intersection of what the world needs and what you love is your mission.

Sometimes three of the criteria overlap, like the case where your passion (what you are good and and what you love) and your mission (what you love and what the world needs) overlap. In that case, you have “delight and fullness, but no wealth.” Ikigai is when all four criteria are satisfied.

What the world needs, and what people will pay for, are the same

An economist wouldn’t really see a difference between the what the world needs (red circle) and what you can be paid for (blue circle). If somebody needs something, then they would be willing to pay for it. If somebody is willing to pay for something, then they necessarily want or need it.

Even if we consider social problems like poverty and homelessness, those with resources are willing to pay to help alleviate these problems. We economize on the use of resources to alleviate social problems through voluntary donations from others. Thus, somebody with a need who cannot pay for that need to be met is still covered by the blue-red total eclipse.

The law of association guarantees you a spot in the division of labor

Furthermore, the law of association guarantees that everyone has a comparative advantage. Using the language of the ikigai graphic above, everybody has a guaranteed spot in the what you are good at (green) and what you can be paid for (blue) overlap. And since the blue and the red circles are really the same, what this means is that everybody has the profession-vocation combination.

Everybody has a comparative advantage because even if somebody is really good at something, it means they incur a high cost by doing anything else. Said another way, if somebody is really good at something, then somebody else can produce something else at a relatively lower cost. The law of association is based on this logic. One man’s relative productivity in A is necessarily another man’s relative productivity in B.

Individuals find their comparative advantage by interacting with others in the market. It is only by surveying existing producers, goods, and the prices of those goods that one can make an informed decision on what to produce or where to apply for jobs.

Government gets in the way

The only thing that can hinder the natural process of individuals finding what they are good at, what they can be paid for, and what the world needs is government intervention. Price controls (including minimum wages), regulations, taxes, subsidies, and crowding-out effects can only prevent individuals from finding ikigai.

Government can also separate the what the world needs category from the what you can be paid for category. When the government removes resources from the market to pursue a separate set of ends, certain people get paid, but not necessarily to produce what the world needs. The use of the resources is no longer subject to the strict profit and loss test of the market.

We know that consumers value what producers do by the profit earned by the producer. Losses indicate that the resources used by the producer have higher-valued uses elsewhere. Since there are no market prices for anything the government does, there is no way to calculate profit and loss.

Government budget surpluses and deficits do not proxy for profit and loss because tax revenues are not related to the citizens’ satisfaction with the government’s projects. Thus we get a lot of what we don’t need and not enough of what we do need through the government.

What you love and what you prefer

So far, we’ve seen how economic theory guarantees everyone a job that satisfies three out of four of the ikigai criteria: what the world needs, what you can be paid for, and what you are good at.

Unfortunately, economic theory cannot guarantee the fourth criterion: that you love what you do. That part is up to you and your values.

Economics can guarantee, however, that you will do what you prefer, which might be considered a broader category that encompasses what you love to do.

Anything that you do voluntarily is necessarily your most-preferred course of action given your circumstances. This concept is called demonstrated preference. Murray Rothbard famously employed it in his article “Toward a Reconstruction of Utility and Welfare Economics”:

The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man's preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis.

Demonstrated preference does not just apply to one’s purchasing decisions. It also applies to selling decisions. If you sell your labor to an employer for a certain wage, you demonstrate that you prefer that arrangement over any other alternative given your current knowledge and preferences. You may not “love” your job, but you certainly prefer it to not working or working somewhere else, or else you would choose those paths.

One way to interpret the economic concept of demonstrated preference in a psychological way is to reflect at any given moment on all the choices you have made that have led you to your current situation. Every choice you’ve ever made has been the best one you could have made given your circumstances at the time of your choice. If you look back and see some choices you regret, this has only added to your set of information, allowing you to make more informed decisions going forward.

No matter what, we can find a certain level of contentment in the thought that all of our past experiences and choices have brought about either better circumstances or more complete information to help us make even better choices.

Conclusion

The demonstrated preference concept and the law of association have delightfully optimistic implications. Find your comparative advantage and participate in the division of labor and you will find purpose in your life knowing that you are helping the world, taking care of yourself and your family, and making the best use of your skills. While finding a profession/vocation that you love can be difficult, you can rest assured that you are always doing something you prefer to all other alternatives and that any regret can be chalked up as a learning experience.

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According to the Fed's Other Inflation Measure, Inflation's at an 11-year High

02/08/2018Ryan McMaken

According to the Federal Reserve's Underlying Inflation Gauge, the 12-month inflation growth in December was at 2.98 percent. That's the highest rate recorded in 136 months, or about 11 years. The last time the UIG measure was as high was in September 2006, when it was at 3 percent. 

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The Fed began publicly reporting on new measure in December of last year, and takes into account a broader measure of inflation than the more-often used CPI measure.

Not shockingly, the UIG shows a higher rate of inflation than the CPI, and also shows a different trend. the UIG has been increasing in recent years while consumer price trends have been falling.

In December, while the UIG was 2.98 percent, the CPI came in at a mere 2.1 percent, which is a four-month low. 

As we reported earlier today, central banks continue to remain reticent as far as raising interest rate targets and scaling back QE. The excuse is often that the economy is not hitting the "two-percent target." Two-percent, of course, indicates inflation levels that are "just right" according to the arbitrary goal set by central banks. 

Politically speaking, it is also assumed that a two-percent inflation rate is palatable since it is though to offer a reasonable amount of price stability. 

But what if inflation as experienced by real people — and as indicated by the broader UIG measure — is closer to three percent, and is more like the inflation rate encountered during the days of the super-heated housing bubble in 2006? That would seem to suggest more urgency in raising rates in order to put a lid on price inflation while lessen malinvestment. 

According to the CPI, though, current price inflation is no where near where it was prior to the last financial crisis. 

So according to the CPI at least, everything looks well under control. The UIG tells a different story, but that's not used as the basis for monetary policy. 

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Stakeholders and Corporate Social Responsibility

02/08/2018Peter G. Klein

Nicolai Foss and I have written a paper criticizing currently fashionable "stakeholder" approaches to the firm and the idea that managers should pursue "corporate social responsibility." BlackRock CEO Larry Fink, who manages $6 trillion in corporate assets, made a splash last month by insisting that corporate executives focus not on shareholders, but on a broader segment of society: "Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that that will help them achieve their goals?"

Foss and I argue that this view ignores the basic function of ownership, which is to exercise responsibility for productive resources. Building on Mises's judgment-based view of entrepreneurship, we argue that corporations should be run in the interests of owners -- and that not everyone affected by a company's actions, let alone society at large, is an owner. Here is the abstract:

We argue that the stakeholder and CSR literatures can benefit from more systematic thinking about ownership. We discuss general notions of ownership in economics and law and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with ownership as an economic function that can be exercised with greater or lesser ability, may be complementary to other economic functions, and works better when assigned to homogeneous groups. Some stakeholder groups are likely to lack what we call “ownership competence,” even if they have made relationship-specific investments, in part because of diverse interests. We also discuss CSR from the perspective of ownership and support Friedman’s original position, but with a twist. The point of Fried-man’s paper is not that firms “should” maximize profits, but that managerial pursuit of “socially responsible” activities in a discretionary way imposes costs on owners. We suggest this problem is exacerbated with entrepreneurial managers who can devise new ways to disguise self-interested actions as CSR initiatives.

The paper is titled "Stakeholders and Corporate Social Responsibility: An Ownership Perspective" and is forthcoming in Advances in Strategic Management. A manuscript copy can be downloaded at SSRN.

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Building a Market for Private Education in Romania

In Liberalism (p.115), Mises argued that "the state, the government, the laws must not in any way concern themselves with schooling or education, [which] must be left entirely to parents and to private associations and institutions."

The Private Academy project, founded under the umbrella of the Romanian Mises Institute in 2015, started out to do just this: to offer an alternative to the decades of nationalized higher education from which learning needed to be reclaimed and repaired. 

The purely private endeavor started small, with seminars on Austrian economics, and is now growing to encompass philosophy, literature, politics, religion, and the arts, in an effort to recover the "lost tools of learning". You can find out more about the project here, and visit the website here

This a great undertaking, and a difficult one. But I hope to see many more like it in all the corners of the world. 

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Rand Paul May Stop Marvin Goodfriend's Nomination

02/08/2018Tho Bishop

I'm not a fan of Marvin Goodfriend. His views are dangerous, and he has been blatantly dishonest in order to hide them. Ron Paul even personally introduced a bill back in 2000 targeted directly at his idea of taxing cash

Today, Goodfriend received the endorsement of the Senate Banking Committee with a 13 to 12 vote down partisan lines. While it's not surprising to see a nominee driven purely by party preference, it is worth noting that Jay Powell managed to get Democratic support when he went through the nomination process. Multiple reports from Washington indicate that Democrats will stand opposed to Goodfriend when his vote comes before the full Senate.

That is when things could get interesting. John McCain has yet to make a Senate appearance yet due to his health, meaning a single Republican dissenter could stop Goodfriend's nomination. Today, following the Committee's approval, Rand Paul has said he will oppose Marvin Goodfriend's nomination.

Of course, bad ideas have a way of never truly going away. It is likely that Senator Paul will be tempted with a deal - perhaps another vote on Audit the Fed - to turn his no to a yes. Of course, since a majority of Senators still cling to the absurd notion that a Fed audit would erode the Fed's mythical "independence", this vote would be purely symbolic and end in defeat. Considering the very real danger Mr. Goodfriend poses, particularly with tremors rumbling in US and global markets, this would be a terrible deal. 

There is also the risk that John McCain could be rolled back to Washington in order to push the nomination through. Hopefully the handful of other Senators who occasionally talk a good game about the Fed, including Ted Cruz and Mike Lee, can be convinced that the last thing America needs is an economist more radical than Ben Bernanke on the Fed. 

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Leftists Now Rushing to Defend CIA Torture Advocates

02/07/2018Ryan McMaken

In the early 1960s, Ronald Hamowy criticized the American conservative movement for degenerating into a movement defending "the rack, the thumbscrew, the whip, and the firing squad." The movement had become, Hamowy concluded, a party of knee-jerk allegiance to the American state in the name of fighting foreign threats, both real and imagined. 

Whether or not the American right is on the road to rehabilitation on this matter remains an open question. 

Meanwhile, the American left appears to have traveled far down this same road in recent decades. 

Back in 2013, this trend was already being examined by Sean Scallon at The American Conservative who noted the rise of the "nationalist left" which was becoming increasingly militaristic and deferential toward the American security state. 

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The trend has only accelerated more recently, and now, thanks to anti-Russian hysteria on the left, even former 60's "counter culture" leftists are coming to the defense of the CIA and the military establishment. 

Caitlin Johnstone writes:

In the hit 1970s sitcom All in the Family, Rob Reiner played Michael Stivic, whose progressive countercultural 1960s sensibilities made him a perfect foil for his bigoted, conservative father-in-law Archie Bunker's struggles to adapt to a rapidly changing world.

Now a celebrated advocate of the Democratic party, Reiner's great artistic achievement in 2017 was collaborating with neoconservatives and intelligence community insiders to produce a jarring propaganda videofeaturing Morgan Freeman warning that "we are at war" with Russia. So far his masterpiece of 2018 is a tweet declaring that if you "libel" Russophobic eugenicist James Clapper and CIA torture facilitator-turned-MSNBC pundit John Brennan you are libeling America.

We never set out to become our parents. A counterculture never sets out to become the thing it rebelled against. An actor never sets out to become a twisted mockery of the character he once played. But it happens.

That video Johnstone mentions, by the way, is a sight to behold. It's right up there with the rightwing propaganda of the immediate post-9/11 world which presented George W. Bush as some sort of savior of Western civilization. But at least that stuff was in line with the American right's openly-stated militaristic tendencies.

While Reiner and friends rush to the defense of America's primary advocates for torture, spying, and endless war, they also claim to be part of "the resistance" and the defenders of the little guy. In truth, the American left has become yet another party of "the rack and the thumbscrew." 

It all just illustrates yet again that American politics is now nearly impossible to parody. 

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The Us Government Is Worried About Crypto so They Want To... Educate Librarians About It

02/06/2018Tho Bishop

The Senate Banking Committee today is hosting the head of the SEC and CFTC to discuss cryptocurrency. Since many Senators are disinterested in using email, it’s interesting watching legislators attempt to articulate the benefits, and potential risks, involved with cryptocurrency and blockchain technology.

One particular highlight came when CFTC Chairman Christopher Giancarlo discussed one particular initiative the Federal government is considering in their war on crypto-mania.

According to Mr. Giancarlo mentioned that, according to government reports, a lot of people use public libraries to research crypto. Because of this, the CFTC and CFPB are looking at a program to educate librarians on the “risks” involved with investing in Bitcoin.

It is unclear at this time whether librarians will have to become registered financial advisers, but it is comforting to see that US financial markets are under the watchful eye of regulators who clearly have such a firm grasp on the industries they’re evaluating. 

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Bovard in The Hill: Will FISA secrecy doom democracy?

02/05/2018James Bovard

“Democracy Dies in the Darkness” is the proud motto of the Washington Post. But, considering the past week’s frenzy, the new motto for much of the media and many Democrats is, “Disclosure is the Death of Democracy.” Unfortunately, the uproar around the release of the Nunes memo totally missed the deadly political peril posed by pervasive federal secrecy.

Shortly before the memo became public, President Trump tweeted that “the top Leadership and Investigators of the FBI and the Justice Department have politicized the sacred investigative process.” But any “sacred investigative process” exists only in the imaginations of pro-government pundits and high school civics textbooks. The FBI and Justice Department have a century-long history of skewering targets to gratify their political masters, while the FISA court routinely heaves buckets of judicial hogwash to countenance the wholesale destruction of Americans’ constitutional rights.

Former FBI agent Asha Rangappa, writing in the New York Times, labeled the Nunes memo a “shame” and urged Americans to presume that “most government servants are ultimately acting in good faith and within the constraints of the law.” But blindly relying on positive thinking is a recipe for political servitude. The FISA court has been a fount of outrages because it is an American Star Chamber: the court meets in secret, only hears the government’s side, and approves 99 percent+ of all the search warrants requested.

Much of the backlash against the memo’s release portrayed the FBI as a FISA Vestal Virgin. The FBI issued with a grim statement: “We are committed to working with the appropriate oversight entities to ensure the continuing integrity of the FISA process." Former FBI chief James Comey tweeted that the Nunes memo “wrecked the House intel committee, destroyed trust with Intelligence Community, damaged relationship with FISA court.”

But for more than a decade, the FISA court has repeatedly complained about deceptive FBI agents seeking turbo-charged secret FISA warrants. In 2002, the court revealed that FBI agents had false or misleading claims in 75 cases. In 2005, FISA chief judge Colleen Kollar-Kotelly proposed requiring FBI agents to swear to the accuracy of the information they presented; that never happened because it could have “slowed such investigations drastically,” the Washington Post reported. So FBI agents continued to have a license to exploit FISA secrecy to lie to the judges.

Last year, a FISA court decision included a 10-page litany of FBI violations, which “ranged from illegally sharing raw intelligence with unauthorized third parties to accessing intercepted attorney-client privileged communications without proper oversight.” How many times did FBI agents make false claims to FISA judges while Comey was boss? It’s a secret. The FISA court also complained that the National Security Agency was guilty of “an institutional lack of candor” connected to “a very serious Fourth Amendment issue” — i.e, ravaging Americans’ constitutional right to privacy.

Syracuse University law school professor William Banks asserted, “I can't recall any instance in 40 years when there's been a partisan leaning of a FISA court judge when their opinions have been released."  But this is only because, inside the Beltway, being pro-Leviathan is pragmatic, not partisan. The FISA court has repeatedly presumed that if the feds violate everyone’s privacy, they violate no one’s privacy -— so there is no constitutional problem.

In 2006, the FISA court signed off on effectively treating all Americans as terrorist suspects. The court swallowed the Bush administration’s lawyers’ bizarre interpretation of the Patriot Act, claiming that the telephone records of all Americans were “relevant” to a terrorist investigation.

In 2009, the FISA court upheld surveillance based on a 2007 law that effectively decreed that any American who exchanged emails or phone calls with foreigners forfeited their right to privacy.  A FISA Appeals Court decision dismissed concerns because the government had “instituted several layers of serviceable safeguards to protect individuals against unwarranted harms” — so anyone whose privacy was zapped had no right to complain.

Read the rest at The Hill
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Orwell's Meaningless Words, Redux

02/05/2018Jeff Deist

George Orwell's wonderful essay Politics and the English Language reads as true today as it must have in 1946, just a few years before smoking and tuberculosis would cut short his life.

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His exhortations against "meaningless words," in particular, sound fresh today:

Many political words are similarly abused. The word fascism now no meaning except in so far as it signifies ‘something not desirable’. The words democracy, socialism, freedom, patriotic, realistic, justice have each of them several different meanings which cannot be reconciled with one another. In the case of a word like democracy, not only is there no agreed definition, but the attempt to make one is resisted from all sides. It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using that word if it were tied down to any one meaning. Words of this kind are often used in a consciously dishonest way. That is, the person who uses them has his own private definition, but allows his hearer to think he means something quite different. 

Words like social justice, bigot, xenophobe, racist, fascist, misogynist, socialist, Dreamer, snowflake, liberal, conservative, and democracy are the meaningless words of our day. Nobody knows what they mean anymore. They are used as bullets in a form of verbal warfare, not as honest descriptions. In fact they are used quite dishonestly, with the “intent to deceive” as Orwell put it. In other words, they are used to serve the speaker’s or writer’s agenda rather than to create understanding. Political jargon is abused until it loses all value, either to describe, praise, or insult.

It's ironic that the great anti-authoritarian Orwell remained an ardent socialist, even after witnessing what Stalin brought to the former USSR. And of course 1984 is thought to be Orwell's metaphor for life under Stalin. But at least one biographer contends that Orwell didn’t see the USSR as truly socialist despite its name, and maybe that’s fair enough: consider that nobody considers the Democratic People’s Republic of Korea to be democratic. But one wonders how he missed the association between collectivism and murder, between central planning and the authoritarian hellscape it produced following the Russian revolution.

In Orwell's words, "a real Socialist is one who wishes – not merely conceives it as desirable, but actively wishes – to see tyranny overthrown." He recognized Stalin as a tyrant, but failed to draw the connection between the system and its inevitable rulers.

 

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Belichick the Economist?

02/03/2018Peter G. Klein

"Could Bill Belichick’s grasp of economics be the key to the Patriots’ success?" asks Paul Solman at PBS's Making Sen$e. He gives examples of Belichick seemingly understanding the concepts of opportunity cost and diminishing returns (from the perspective of neoclassical economics). I much prefer Carl Menger's way of formulating these concepts (more technical discussion here). And Tho Bishop's excellent discussion of Belichick as entrepreneur provides a more comprehensive explanation of how the Patriot coach operates. But it's always nice to have some economics included with your Super Bowl enjoyment. 

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