Thursday, August 30, 2012

FOUR ASSUMPTIONS OF CAPITALISM



In one of my college classes that focused on the interaction between business, society and government, we discussed a set of principles that was referred to as “the 5 assumptions of capitalism”. Here's a link to the powerpoint document from the class just to prove I'm not making this up (it's the 16th slide).

www.suu.edu/faculty/johnsonr/4200/CLASS2.PPT 

Capitalism is touted as the most efficient economic system.  Theoretically, when one or more of these 5 elements are missing or are interfered with, the economic system reaches a lower level of efficiency, and becomes something less than pure, unadulterated capitalism. I'll be addressing only four of the assumptions – I've been out of school for several years, and I don't recall much about the fifth assumption, which was referred to as “Institutions Functioning as Designed”.

On face value, these are common sense assumptions, but when you consider them carefully, I think they raise some interesting questions as to whether common practices, policies, and ways of thinking that we tend to accept as part of a free market concept are in fact taking us further away from capitalism. 

Also, the explanations of these four assumptions are my own words according to my own understanding, so please take the following with a grain of salt, and feel free to tell me where I've erred.

Assumption #1- The rational consumer. The inherent assumption here is that consumers will act in their own best interest, will not pay more than they need to for a product or service, will prioritize necessities above frivolous or unnecessary purchases, etc.

Assumption #2 - Full and accurate information. Buyers and sellers will both have access to basic, important information relevant to the transaction at hand. This is closely related to the first assumption, because how can a consumer make rational decisions if they are unaware of important information pertaining to the product or service they are considering?

Assumption #3 - Costs and benefits are fully contained within the transaction. Whenever the costs of a transaction are borne by someone other than the buyer and the seller, and whenever the benefits of a transaction are enjoyed by those who are not party to the transaction or the intended recipients of the benefits of the transaction, then the transaction results in a less efficient allocation of resources. In its most simplistic form, this assumption states that theft will decrease the efficiency of capitalism.

Assumption #4 – Income is distributed fairly. The income any person receives is a direct result of the value of they have created. Thus the wealth any one of us accumulates (or fails to accumulate) should be basically a reflection of our own choices, the career path we choose to pursue, the level of effort we put forth, the risks we are willing to take, etc.

Now that I've briefly explained these four assumptions of capitalism, I'll cite a few examples of how our society fails to meet these basic requirements, resulting in a less than optimum economic system than would be attainable under true capitalism.

Marketing/Advertising/Sales
In theory, advertising fulfills an important function – making full and accurate information available to potential buyers. In practice, advertising tends to focus heavily on the positive aspects of a product or service, while downplaying or even failing to address the negative aspects. 

A prime example would be the pharmaceutical commercials that spend the first 30 seconds telling you how the new drug will cure your depression or restore your balding hair, and showing you images of happy, beautiful people. And then they cram ten different disclaimers in the last ten seconds about how possible side effects include sudden onset of schizophrenia, nasal spasms, and PTRF (Premature Termination of Respiratory Functions). 

This is actually a good example of how government intervention can play an essential role in maintaining capitalist ideals. Without government regulation, would advertisements even include any of those disclaimers?  Would there be any chance that consumers of such prescription drugs would be making rational decisions based on accurate information?

Looking at other examples, it's apparent that the purpose of advertising is often not to present the all the facts, but to only present some of the facts from a skewed perspective. 

A commercial can tout a small car as having the government's highest crash test rating, but omit the fact that there are five comparable small cars built by other companies, all five of which also have the highest crash test rating, are less expensive, get better mileage and have better warranties.

Celebrity endorsements, humor and special effects are used to make commercials more appealing. Companies spend hundreds of millions of dollars each year on these strategies, but these strategies don’t add any value to the products and services being touted, nor do they lead to better informed consumers. And these strategies work. Sometimes they are alarmingly effective, leading to very irrational purchasing behavior, like people living in abject poverty who buy $120 shoes endorsed by the all-star basketball players.

Inheritance Taxes
If I were asked to define “royalty” in the most simple, basic terms, I'd say it is “people who come into a position of extreme wealth and power by virtue of the fact that they were born to extremely wealthy and powerful parents.”

Is there anything less American than the notion of a monarchy? If we allocate wealth to people based on lineage, rather than what they themselves have done to earn it, is that compatible with capitalism? Yet, that is what we allow to happen on a regular basis. 

I'll refer to a study that was conducted in 1997 that analyzed how the 400 wealthiest individuals and 50 wealthiest families on the Forbes 400 list made their fortunes. The study concluded:

·         42% were “born on home plate”, meaning their inheritances alone would have put them on the Forbes 400 list.
·         6% were “born on third base”, meaning they inherited substantial wealth in excess of $50 million or a large and prosperous company, and grew their initial fortune into membership in the Forbes 400.
·         7% were “born on second base”, meaning they inherited a medium-sized business or wealth of more than $1million, or received substantial start-up capital for a business from a family member.
·         14% were “born on first base”, meaning they came from an upper class background, and received substantial inheritance or start-up capital from family worth less than $1 million. (Due to the conservative nature of the rankings, it is probable that some of the people in this category should have actually been assigned to 2nd or 3rd base).
·         31% were “born in the batter's box”, meaning their parents did not have great wealth or own a business with more than a few employees.

The conclusion of the study is, “The data, then, do not support the assumption that the United States is a true meritocracy where the most able rise to their rightful positions. Nor do they defend the contention that the United States is structured so that authentic equality of opportunity prevails. Inheritances undermine the achievement-reward equation.


I'll leave it at that for now, but I'd like to know what you guys think. Do you agree or disagree with the “four assumptions of capitalism” as I've presented them here? Are any of my conclusions somehow flawed? If you agree with assumption #3, then wouldn't you at least agree that “cap-and-trade” proposals are based upon solid capitalist principles? Do those four principles bring to mind any other flaws in the way we do things?

Saturday, February 18, 2012

Response to the response to the response to the response

Australia could very well have a dictator sometime within the next couple hundred years, but if that happens, I believe it will be because Australia failed to address the warning signs listed in my prior post.   Gun control laws would be a side note, not a major reason for the downfall of their freedom.

Drawing a straight line between a country’s freedom and its guns is a one-dimensional approach.  It is true that we have a high level of freedom here in the U.S., and it is also true that a lot of people own firearms in our nation.  In fact, in a comparison of the rate of private gun ownership in 179 countries across the globe, the United States ranked #1 (A). 

However, in that same study, Yemen’s rate of private gun ownership ranked #2 (B), Saudi Arabia ranked #7 (C), and Iraq ranked #8 (D).  Are these countries less likely to have a dictator at some point in the next couple hundred years than Australia?

I’d also like to clarify what I meant when I wrote, “a gun that is incapable of inflicting bodily damage or death has lost all of its intrinsic value.”

This statement was not meant to suggest that guns don’t provide any benefit beyond inflicting death, or that gun owners are violent people overtaken by their own unrelenting blood-lust.

The “intrinsic” value of an item is the fundamental benefit that the object provides because it is what it is – it’s the function for which it was designed.  I argued that any comparison of a gun to a refrigerator, a baseball bat, or an automobile is misleading – those items can be used (or misused) as weapons, but the intrinsic value of those items is unrelated to their lethality.

An object can have value in addition to and beyond its intrinsic value.  For example, my guitar is an Epiphone Dot Archtop, which sells for $400.  However, its value to me is much greater because it was a gift, and I have used it for a long time and am now very attached to it.  In spite of its relatively low dollar value, I intend to keep my guitar until the day I die.

An object can have value in spite of the fact that it has lost most or all of its intrinsic value.  For example, the intrinsic value of a book is in its ability to be read, but some books that are several hundred years old are worth over $100,000, and you wouldn’t want to flip through those books for fear of damaging them.  They are valued as rare artifacts, not as books.

A gun can also be valued as a gift, a family inheritance, an antique, or a rare artifact.  Like a frisbee, or a fishing rod, a gun can also because it’s fun to use with family and friends, and gives us an excuse to enjoy the outdoors.  But the intrinsic value of a firearm is that it enables its user to injure or kill with ease.  This is the basic characteristic that separates a gun from a guitar, or a rare book.  This is the reason a person opts to spend $450 on a Glock instead of $2 on a frisbee, or $35 on a fishing rod.






Wednesday, February 8, 2012

Response to the response to the response

In regards to "government being the problem, not the solution".

I was using a sweeping generalization because that is how I felt when the president stated a problem and then stated how the government is here to solve it for you. I feel that in order to be a leader you have to use ideas and the idea that Reagan stated in that quote is what I am behind.

The ideal expressed by saying that "government is the problem not the solution" does excite certain people, but 235 years ago "We hold these truths to be self evident that all men are created equal" excited a lot of people too, I think some other people when they read or heard it may have thought "These words show that even now, the most successful politicians are adept at riling up their base supporters by using ambiguous, sweeping generalizations which fail to address any particular issue with even the slightest bit of intelligence, insight or nuance."

If you step back and realize that when president Reagan took office and throughout his presidency congress was controlled by the opposite party except for 2 years when republicans controlled the senate it may offer some insight into the growth of government that you are blaming on Reagan. In fact the tax hikes that you cite were finally agreed to contingent on promises of spending decreases. If you are referring to a growth in the military to effect "peace through strength" that ended the cold war, that is growth in government that ended the cold war. Chris Edwards makes the point I am trying to make better than I can.

When the budget is looked at as a share of the economy, Reagan's legacy looks a bit better from a small-government perspective. Federal revenues as a share of gross domestic product fell from 19.6 percent in 1981 to 18.3 percent by 1989. Spending fell from 22.2 percent to 21.2 percent. Thus, Ronald Reagan shrank the federal government by about 5 percent — a less radical change than supporters or detractors often claim. (1)

In summary, whether or not the gipper lived up to the ideal stated in the quote has been and will continue to be a subject of debate. All politicians and anyone who has ideas find their idealism attenuated by the practical realities of their circumstances. The political realities of what happened after the quote was said doesn't in my opinion dilute the impact. I feel that this also applies to the Reagan quote I chose on gun control.

I feel like your cost benefit analysis makes some great points and I agree with them but I like to be concise and get to the bottom line. I feel that the point of the 2nd amendment intends to give us the right to bear arms so that our personal security from criminals as well as tyrants is
possible to be retained as a personal responsibility. When you cite Australia as a gun free country that has not given rise to a tyrant, they have only been gun free since 1996. I say wait a couple hundred years and let's see.

Another point about your cost benefit analysis that I wanted to address is that you unequivocally state that guns have no intrinsic value except to kill people. I think that comes from a view of a person who just doesn't like guns. The same way I don't like sports. It would be like me saying that we should ban the NBA because a lot of NBA players commit crimes and are a menace to society. I enjoy shooting guns personally and with my family and friends in a way that is difficult to quantify just like I imagine it is difficult for a basketball fan to quantify his enjoyment of watching NBA games. I do not feel that the NBA should be banned because I don't like it or because there is some negative consequences to having an NBA.


RESPONSE TO RONALDUS’ RESPONSE TO MY POST ON GUN CONTROL

I’ll begin with a quick aside about the whole, “government is not the solution to our problem; government is the problem” thing. 

This quote shows that even 30 years ago, the most successful politicians were adept at riling up their base supporters by using ambiguous, sweeping generalizations which fail to address any particular issue with even the slightest bit of intelligence, insight or nuance.  I’m sure this quote is often cited by people who strongly feel that smaller is better when it comes to government (except when it comes to military spending same-sex marriage, abortion, constructing a fence along the Mexican border, preemptive strikes, building a permanent Moon colony, etc).  I also wonder whether the government-is-not-the-solution crowd realize that two bills Reagan passed in 1982 and 1984 together constituted the biggest tax increase ever enacted during peacetime (1), and that the federal government grew by 2.8% in real terms under President Reagan (2).  

Anyways, on to gun control. 

In my original post, I argued that the drawbacks of making firearms easily accessible to the general population outweighed the benefits.  My argument was presented as a cost-benefit analysis, in which I reasoned that although guns do save lives in some instances, society ultimately pays a much higher price in terms of lives lost, gun-related injuries, decreased security, and over $2 billion in annual medical costs.    I was pleasantly surprised to find that Ronaldus’ response didn’t contest any of these conclusions; I had been worried that I had overlooked some critical flaw in my original argument. 

Instead, Ronaldus simply posted a quote by Ronald Reagan, in which the Gipper contended that a society that gives up its right to bear arms is giving up its means of “protection from what has always been the chief source of despotism — government.”

Reagan said, “if we give it the power to confiscate our arms we also give up the ultimate means to combat that corrupt power. In doing so we can only assure that we will eventually be totally subject to it. When dictators come to power, the first thing they do is take away the people's weapons. It makes it so much easier for the secret police to operate, it makes it so much easier to force the will of the ruler upon the ruled.”

My initial thought was that it was interesting that this quote was taken from an article published in 1975, five and a half years before Reagan and three others were shot and wounded in an assassination attempt.  Although gun control laws did not change significantly during his administration, Reagan did later support the two most significant and controversial gun control measures in the last 30 years: 1993’s Brady Bill and 1994’s Assault Weapons Ban (3).

Seriously though, if we’re going to identify factors that lead to evil dictatorships, we need to begin with mustaches.  Gaddafi, Stalin, Castro, Saddam Hussein, Hitler, Assad, and Ming the Merciless were all mustached men, so mustaches must play a crucial role in any dictator’s rise to power. 

But wait!  Gandhi had a mustache too.  Damn.  There goes that theory.

Similarly, strict gun control laws may have been enforced in some countries where dictators took control, but we would be mistaken to conclude that those gun control laws were a key factor that enabled the rise of the dictators.

What about the U.K., Japan, Australia, and scores of other countries where there are strict gun control laws in place?  If gun control is such an important determining factor in regards to a nation’s liberty, why are these countries still enjoying freedom?

Is it possible that Reagan’s comments were overly-simplistic, and that while some dictators have used gun control to their advantage, other dictators have also used lack or gun control to their advantage as well?  If gun control is such an essential component of a dictatorship, then how do we explain African warlords and dictators (such as Charles Taylor), who have been able to gain control of nations or parts of nations in spite of rampant firearm proliferation and absolutely no effective gun control measures?

Based on my own limited knowledge and understanding, I’d say that the following elements play a crucial role in the rise of dictatorships:

1.     A persuasive, intelligent, and driven leader.

2.     The ability to capitalize on the widespread fear and/or anger of a society, usually through the demonization of a minority group within the country itself or another foreign country.

3.     Legal/constitutional controls designed to prevent the consolidation of political and military power are ineffective or absent.

4.     The rising dictator has the ability to gain a high level of financial backing.

5.     Effective use of propaganda to promote a sense of hyper-patriotism and a cult of personality.

6.     The demonization of a minority group within the country and/or another foreign country

7.     Powerful (and often violent) suppression of political opposition, to create an environment where nobody dares voice their dissent.

8.     State control of the media.

9.     The dictator is physically isolated from the general population, and surrounded by his cronies and yes-men whose success, lifestyles and safety are absolutely dependent upon the dictatorship maintaining control.

This is not an all-inclusive list, but these are the warning signs I would be worried about.  The infusion of astronomical amounts of money into politics, the demonization of those who follow a “different” religion or lifestyle, saber-rattling, inflammatory rhetoric intentionally rousing people to anger, the overriding of constitutionally established separation of powers, the increasing use of  labels and name-calling in place of thoughtful debate, placing a higher priority on a candidate’s personality than his/her credentials, treating politicians as celebrities, these are the red flags that have me concerned about both sides in American politics. 

Sorry I’m not as concise as Ronaldus.



Tuesday, January 24, 2012

Answer to Aarons post on gun control and my personal reaction to the state of the union address.

The most concise way I can respond to Aaron:

"There are those in America today who have come to depend absolutely on government for their security. And when government fails they seek to rectify that failure in the form of granting government more power. So, as government has failed to control crime and violence with the means given it by the Constitution, they seek to give it more power at the expense of the Constitution. But in doing so, in their willingness to give up their arms in the name of safety, they are really giving up their protection from what has always been the chief source of despotism — government. Lord Acton said power corrupts. Surely then, if this is true, the more power we give the government the more corrupt it will become. And if we give it the power to confiscate our arms we also give up the ultimate means to combat that corrupt power. In doing so we can only assure that we will eventually be totally subject to it. When dictators come to power, the first thing they do is take away the people's weapons. It makes it so much easier for the secret police to operate, it makes it so much easier to force the will of the ruler upon the ruled" Ronald Reagan from a column published in Guns and Ammo (1 September 1975)

All I could think during the State of the Union, maybe I am being to simplistic:

"In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden" Ronald Reagan from his first inaugural address.


Both Quotes are from,

Sunday, July 31, 2011

Quality of life considerations

In light of a recent discussion I had with Merril concerning the cancellation of some oil and gas drilling leases in Utah, I’m posting this op-ed that I sent to the Spectrum a few months ago.  I don’t know if any of you already saw it in the paper.  I’ve also included three links to articles concerning the cancellation.  The Washington Post is probably the most balanced.  The individual identifying himself as left wing nut job is the least, but is included due to his providing a picture of one of the areas which had been leased for drilling.  Enjoy!

My father came to Southern Utah 28 years ago after finishing his residency to become an orthopedic surgeon.  He had not intended to move here, but after spending a weekend enjoying hiking and skiing in Southern Utah's spectacular surroundings he was convinced.  He brought a skill the community needed and ran a small business that employed several people for the next 25 years until he retired.  

I work as a computer programmer for a California based company that has its software development shop in St. George, because this is where the developers want to live.  Our business is not constrained by geography. We could work from anywhere, but we choose Utah and the beauty of the area plays heavily into why we make that choice.

There's been a lot of discussion about the impact extraction activities would have on jobs. Sometimes someone will point out that Utah benefits from tourist and outdoor industry jobs as well, but that will often be countered by the argument that the extractive industries create better, higher paying jobs than those that benefit from our spectacular scenery. I feel that jobs like mine or those my father created are all too often ignored in this equation.

In the growing knowledge economy there are more and more jobs that will not be constrained by location.  Entrepreneurs and skilled workers will be able to choose where they want to work and they will often make those choices based on standard of living considerations such as air and water quality and opportunities for outdoor recreation.  To trade away such standard of living considerations for the jobs and money that will be brought by extractive industries strikes me as a devil's bargain.

In our stunning natural surroundings we, in Utah, have a goose that has been laying a Golden Egg for us every day for years, but I fear that like the foolish farmer in the fairy tale we're convincing ourselves that by cutting the goose open we'll discover untold wealth. I strongly suspect that if we pursue reckless extractive activities such as Oil Shale development, we will find ourselves consigned to the same disappointment that the farmer experienced after having killed his goose.


http://www.washingtonpost.com/wp-dyn/content/article/2009/02/04/AR2009020401785_2.html/


http://www.msnbc.msn.com/id/29017638/ns/us_news-environment/t/bush-era-energy-drilling-leases-utah-canceled/


http://leftwingnutjob.blogspot.com/2009/02/77-drilling-leases-canceled-in-utah.html

Tuesday, May 17, 2011

An interesting question

I have some good responses for Aaron's gun essay but haven't taken the time to post them, but I wanted to throw this out there before it is forgotten. Chris Wallace asked Tom Donalin http://dailycaller.com/2011/05/09/chris-wallace-shooting-bin-laden-in-the-head-is-ok-but-not-waterboarding-ksm/

WALLACE: I’m not asking you why it was OK to shoot Usama bin Laden. I fully understand the threat. And I’m not second-guessing the SEALs.

DONILON: Right.

WALLACE: What I am second guessing is, if that’s OK, why can’t you do waterboarding? What can’t you do enhanced interrogation of Khalid Sheikh Mohammed, who was just as bad an operator as Usama bin Laden?

DONILON: Because, well, our judgment is that it’s not consistent with our values, not consistent and not necessary in terms of getting the kind of intelligence that we need.

WALLACE: But shooting bin Laden in the head is consistent with our values?

DONILON: We are at war with Usama bin Laden.

WALLACE: We’re at war with Khalid Sheikh Mohammed.


In the light of our prior debate on waterboarding and current debate on gun control, I have two questions, #1 what do you think about the SEALS shooting Osama? FYI: I have no problem with it. #2 if that’s OK, why can’t you do waterboarding? What can’t you do enhanced interrogation of Khalid Sheikh Mohammed, who was just as bad an operator as Usama bin Laden?(stolen from Chris Wallace)

Wednesday, April 6, 2011

GUNS IN AMERICA: A COST-BENEFIT ARGUMENT

In this essay, I will be arguing that the drawbacks of the widespread availability of firearms outweigh the benefits. Lest I unintentionally offend anyone, let me first acknowledge that the majority of gun owners are good, upstanding, responsible people, many of whom I consider to be the best of friends, neighbors and associates. My argument here is not commentary, observation or judgment on anyone I personally know.

There are many arguments used to justify the widespread availability of firearms. From here on, I will address some of the more common arguments.

Argument #1: Guns are tools, and like any other tool, a gun can be misused.

I'll begin by stating the obvious - a gun is a lethal weapon. For this essay, I will define a lethal weapon as an item which is valued primarily because of its capability to be used to inflict bodily harm or death. In other words, its intrinsic value/utility is directly linked to its lethality.

The argument is made that thousands of people die in car crashes every year, and baseball bats, pencils, refrigerators and kitchen knives can be used to inflict bodily harm or death, so if we're going to limit access to guns, then we should limit access to these other items as well.

This sort of comparison is flawed because it fails to acknowledge the fact that the intrinsic benefit of a car, baseball bat, pencil, refrigerator or kitchen knife is not directly linked to its lethality. The intrinsic benefit of a car is its ability to transport people and goods. Yes, a car may be used to kill people. However, if we could design and produce an automobile that was capable of doing everything a car is supposed to do, but could not be used to hurt or kill people, none of its intrinsic value would be lost. In fact, society would place a much higher value on that car because of its safety features. Same thing goes for pencils, refrigerators, etc.

On the other hand, a gun that is incapable of inflicting bodily damage or death has lost all of its intrinsic value.

Societies all over the world, including our own, have restricted or outlawed the production, distribution and ownership of many types of lethal weapons. Examples of lethal weapons not available to ordinary citizens in our country include anti-tank rockets, bombs, deadly chemicals and biological weapons, fighter jets, nuclear tactile missiles, etc. Society has determined it is not in our best interest to allow regular citizens to own these things. Why? Because the risk to the public is too great, and the need for widespread use of such weapons is nonexistent. It is a cost-benefit issue, and the cost is just too high.

Argument #2: The right to bear arms is provided for in the constitution, and if you don't like it, move to Europe, end of story.

While constitutionally guaranteed rights should not be taken lightly, neither should the flexibility of the Constitution itself be disregarded. As well as providing for an amendment process, the flexibility of the constitution allows for Supreme Court interpretations. Without its flexibility, we would still have slavery, and women would not be allowed to vote. The Supreme Court has interpreted the 2nd amendment as a protection of the individual's right to own firearms, but there are many people who disagree with this interpretation and would like to see it overturned. A person who disagrees with the Supreme Court in this matter is no more anti-American than someone who disagrees with Roe v. Wade ruling.

Argument #3: Guns save lives and prevent crimes.

It is a fact that guns save lives in many instances. The NRA makes it a point to highlight real-life instances where victims or a potential victims use guns to deter or kill their attackers. But how often do these instances occur?

The Gun Owners of America website includes a fact sheet stating,

guns (are) used 2.5 million times a year in self-defense. Law-abiding citizens use guns to defend themselves against criminals as many as 2.5 million times every year – or about 6,850 times a day. This means that each year, firearms are used more than 80 times more often to protect the lives of honest citizens than to take lives.” [1]

Based on my own foray into pro-gun websites, this 2.5 million figure appears to be an almost universally-cited estimate of annual U.S. defensive gun uses (DGU). The Armed Citizen, an NRA-sponsored blog, even references this estimate on its home page:

Studies indicate that firearms are used over 2 million times a year for personal protection, and that the presence of a firearm, without a shot being fired, prevents crime in many instances.” [2]

So where does this 2.5 million estimate come from? In the late 80's and early 90's, Gary Kleck and Marc Gertz, professors in the School of Criminology & Criminal Justice at Florida State University, collaborated on studies centered on defensive gun use in the U.S. Aside from providing some of the most widely-accepted statistics in the pro-gun community, Gary Kleck has testified before Congress and state legislatures on gun control proposals. His research was cited in the Supreme Court's District of Columbia v. Heller decision, which struck down the D.C. Handgun ban and held that the Second Amendment protects an individual right to keep and bear arms. [3]

An article in the Journal of Criminal Law & Criminology (Northwestern) explains why the Kleck-Gertz research methodology and results are absolute garbage. I will include some of the most interesting points below, but I would recommend reading the entire article if you have time:

In 1992, Kleck and Gertz conducted a national random-digit-dial survey of five thousand dwelling units, asking detailed questions about self-defense gun use. Their estimates of civilian self-defense gun use range from 1 million to 2.5 million times per year. The 2.5 million figure is the one they believe to be most accurate and the one Kleck has publicized, so that figure will be discussed.

Kleck and Gertz derive their 2.5 million estimate from the fact that 1.33% of the individuals surveyed reported that they themselves used a gun in self-defense during the past year; in other words, about 66 people out of 5000 reported such a use. Extrapolating the 1.33% figure to the entire population of almost 200 million adults gives 2.5 million uses....

...Since a small percentage of people may report virtually anything on a telephone survey, there are serious risks of overestimation in using such surveys to measure rare events. The problem becomes particularly severe when the issue has even a remote possibility of positive social desirability response bias.

Consider the responses to a national random-digit-dial telephone survey of over 1500 adults conducted in May 1994 by ABC News and the Washington Post. One question asked: "Have you yourself ever seen anything that you believe was a spacecraft from another planet?" Ten percent of respondents answered in the affirmative. These 150 individuals were then asked, "Have you personally ever been in contact with aliens from another planet or not?" and 6% answered "Yes."
By extrapolating to the national population, we might conclude that almost 20 million Americans have seen spacecraft from another planet, and over a million have been in personal contact with aliens from other planets. That more than a million Americans had contact with aliens would be incredible news--but not the kind actively publicized by reputable scientists. Yet the ABC News/Washington Post data on aliens are as good as or better than that from any of the thirteen surveys cited by (Kleck and Gertz) as supporting their conclusions about self-defense gun use.

...Were we to accept their claims, people using guns in self-defense are saving about 400,000 people each year from being murdered. Yet most people do not have guns and there were only a total of 27,000 homicides in 1992...

(The Kleck – Gertz study) reported that 207,000 times per year the gun defender thought he wounded or killed the offender. However, only about 100,000 people are treated in emergency rooms each year for non-fatal firearm-related injuries; almost all of these are victims of assault, suicide attempts and unintentional gun shootings rather than criminals shot by defenders...

(Kleck and Gertz) report that 392,000 times per year a gun defender thought that someone almost certainly would have been killed had the gun not been used; that another 355,000 times someone probably would have been killed; and another 405,000 times someone might have been killed if the gun had not been used for protection. The results imply that many hundreds of thousands of murders should have been occurring when a private gun was not available for protection. Yet guns are rarely carried, less than a third of adult Americans personally own guns, and only 27,000 homicides occurred in 1992...

...Finally, the 2.5 million figure would lead us to conclude that, in a serious crime, the victim is three to four times more likely than the offender to have and use a gun. Although the criminal determines when and where a crime occurs, although pro-gun advocates claim that criminals can always get guns, although few potential victims carry guns away from home, the criminal, according to (Kleck and Gertz), is usually outgunned by the individual he is trying to assault, burglarize, rob or rape. [4]

In the same article, the author mentions the National Victimization Surveys (NCVS), which are conducted by the Census Bureau for the Bureau of Justice Statistics. According to data collected in these surveys, defensive gun uses only average approximately 65,000 times per year.

Remember, DGUs not only include instances where the perpetrator was injured or killed, but also instances where a gun was never actually fired. In fact, data provided by the FBI suggests that the in large majority of these DGUs, the gun was probably not fired. According to the FBI, the annual average number of justifiable homicides in which a firearm was used for the 5-year period from 2005 to 2009 was 195 per year (975 total justified firearm homicides for the 5-year period). [5]

Even if the 65,000 DGUs per year is an accurate figure, the notion of using surveys to compile data, estimate defensive gun-use, and attribute a benefit to such instances of gun use is problematic. The underlying assumptions are that the survey respondents are giving a truthful, accurate and unbiased account, and that the gun itself plays a positive role in the resolution of crimes and potential crimes, rather than a neutral or negative role. In how many of these instances did the respondent actually start the fight? In how many of these instances did the respondent misinterpret another person's actions to be hostile or criminal in nature? How many of these instances would have been ended peacefully even if the gun had not been present? Who's to say a peeping tom wouldn't have been scared off if he were confronted with a knife, or bare fists, or if the respondent simply turned on the porch light instead of running outside with a gun? How do we know the incident would not have resolved if level heads prevailed and apologies were offered? Is the respondent sure they frightened away a burglar in their back yard in the middle of the night, and not a kid acting on a dare during a neighborhood sleepover?

For the sake of this argument, though, let's assume the 65,000 DGUs per year is a reliable number. In other words, lets assume the the benefits of widespread firearm availability can be quantified and stated as 65,000 instances per year where a crime in progress was stopped, or a crime was avoided altogether. Remember the severity of these crimes vary from attempted rape and murder to vandalism and petty theft. And 195 times per year, the DGU results in a justifiable homicide.

Now, let's address the costs of widespread availability of guns.

In the six year period from 2002 through 2007, there were a total of 182,761 gun fatalities in the U.S. [6].

This works out to be an average of 30,460 gun deaths per year. These gun deaths can be further broken down into the following categories:
  • Suicides: 102,002 total (17,000 annual average)
  • Homicides: 73,148 total (12,191 annual average)
  • Accidental: 4,185 (697 annual average)
  • Legal Shootings: 1,999 (333 annual average)
  • Undetermined: 1,427 (238 annual average)

As a comparison, a total of 5,907 American armed service personnel have been killed in the wars in Iraq and Afghanistan from the inception of those wars to February 15, 2011 [7].

In addition to gun deaths, there are also non-fatal firearm injuries to consider, which have been anywhere from 60,000 to 100,000 per year in the past few decades.  Firearm deaths were the third-leading cause of injury-related deaths nationwide in 2007, following motor vehicle accidents and poisoning. Firearm-related deaths and injuries result in estimated medical costs of $2.3 billion each year, half of which are borne by U.S. taxpayers [8].

Now I admit it's not fair to claim all of the above deaths would have been avoided if a gun had not been present. The absence of a gun wouldn't necessarily prevent someone from committing suicide or murder using some other means. The problem is that we have no way of determining exactly how many of these suicides and murders would have not occurred if a gun was not available, just as we have no way to calculate how many of the 65,000 annual prevented crimes due to defensive gun use would have been prevented even if a gun was not available. If we assume the gun is directly attributable to all of those prevented crimes, logically we also need to assume the gun is directly attributable to all of the annual homicides and suicides.

In any case, we know that guns are the preferred instrument of death in a high number of suicides and murders because they are such effective lethal weapons. They make the act of killing easy, and in the case of homicides, they make it very difficult for law enforcement to track the killer. If you remove this effective lethal weapon from the situation, it is reasonable to assume that the increased difficulty of committing the act would many murders and suicides. There is a reason that firearms account for around 67% of the homicides committed in America [9].

Even if we ignored homicides and suicides, we are still left with 697 accidental firearm deaths annually that definitely would not occur if a gun were not present.

Furthermore, An article published in the Journal of the American Medical Association suggests a correlation between gun ownership and an increased risk of death:

What advice, if any, can clinicians offer to their patients who are considering the purchase of a gun? Based on criteria for judging whether an association is causal, the evidence from comparative observational studies appears consistent with the inference that owning a gun increases the risk of suicide. Most studies show a moderately strong association, the biological mechanism is plausible, the exposure precedes the outcome, the association has been replicated in several populations, and there is evidence of a dose response (greater risk with more or more available guns). Evidence that a gun in the home increases the risk of homicide comes from only 2 studies and seems weaker; however, these studies offer no support for the view that gun ownership confers a net benefit in terms of protection against homicide.

Based on the evidence currently available, it appears that gun ownership is associated with a net increase in the risk of death for a typical individual. Clinicians might advise their patients accordingly. [10]

Argument #4: Laws restricting gun ownership only affect law-abiding citizens, and turn the tables in favor of criminals who ignore those laws anyways.

Okay, now it's getting late, and I'm sleepy, and tired of working on this essay, which I started a couple of months ago, so I'm going to try to keep this brief.

According to the Bureau of Justice Statistics, there was an average of about 341,000 gun theft incidents per year in the U.S. in the period from 1987 to 1992 [11].

A major theme highlighted in a 1986 survey of incarcerated felons was that theft was an important means of obtaining firearms for those with criminal intentions: 32 percent of surveyed felons had stolen their most recently acquired handgun [12].

Also, 90% of the guns recovered in Mexico and successfully traced by the ATF were found to have come from the United States [13].

My point being, the widespread availability of guns in our society is the reason criminals find it so easy to acquire firearms.

I agree that most of our gun control laws are ineffective for many reasons. These laws differ greatly from state to state, but crime doesn't respect these borders. Further, if I want to sell my guns as a private citizen, there is no law requiring the purchaser to have a background check that would be required if they tried to purchase a gun from a dealer. As of now (10:26 pm on April 6th, 2011), there are 4,832 firearms listed on KSL.com classifieds.

However, I'm not really focusing on gun control laws here. The point I'm making is that citizens who possess guns legally are unintentionally making it easier for criminals to acquire firearms.