Archives for category: Economics

Remember President Barack Obama’s annoying “You didn’t build that”?

Today I watched President Donald Trump “explain” how awful trade deficits are. In that explanation he basically said to China, “You didn’t build that.”

The line should still be familiar. Obama had purloined it from the lips of Senator Elizabeth Warren. With this argumentative gambit, these two politicians revealed themselves for what they are, demagogues out to fan the flames of resentment and entitlement. In trying to give to government the credit for the entrepreneurial accomplishments of businessfolk, they were honing an agenda: de-legitimize the achievements of the successful the better to take their wealth away.

But while Obama gave to government the credit for business successes, Trump gave America the credit for China’s.

His logic?

Trump said previous presidents had allowed China to get away with trade policies that disfavored the U.S. to such an extent that no future deal could be 50/50; then, that a deal had been made, but China changed it, so he put up the wall of high tariffs.

Next, Trump boasted of the huge increase in government revenues from his taxes, er, tariffs.

And then the kicker: “We rebuilt China because they got so much money” under freer trade.

That is how Trump had America take the credit for Chinese growth.

And he was more than implying that there is something wrong with Americans helping Chinese grow in this manner.

Trump seems not to understand that when people trade (it is not, really, countries trading) both sides gain. The farmers who support Trump can imagine selling more agricultural product had President Xi’s own protectionist measures been lower, and it is on the basis of those lost opportunities that Trump makes his pitch to American farmers. But it is Chinese consumers who have the greater cause to complain for past Chinese protectionism, for had Xi allowed more trade, China would have grown even faster. Because of all the exchanges. 

Like in all trade, neither side to a trade is irrelevant. China could with just as much justification take credit for American progress in all that past trade.

Every instance of which was an advance for both sides.

The Chinese built what they built, with American help. And could’ve built more had their government gotten out of the way.

And right now, with Trump’s high tariffs in place, American consumers will have to pay more for what we buy from China.

And elsewhere.

Trump is apparently trying to get Xi to take down his protectionist barriers by putting up American barriers. And if Trump succeeds, we do indeed all win. If he fails, we all lose. Meanwhile, we are hurting as much as the Chinese.

And what Trump is saying encourages resentment and economic superstition. So, even if he wins, what we may end up with is more resentment and a greater reservoir of protectionist sentiment in the American electorate.

And that almost guarantees disaster.

twv

Why isn’t corporatism talked about as an alternative to capitalism and socialism?

…an answer on Quora by Ethan Lee:

‘Corporatism’ is not an alternative to capitalism, it is capitalism. Albeit not free market capitalism, it is capitalism none the less. Calling X corporatist is just a cop out to avoid admitting that is in fact capitalism.

Capitalism = Private ownership over the means of production

Socialism = Worker ownership over the means of production

Is that exactly right? Workers can own the means of production in capitalism. 

I own my small business. There do exist workers’ cooperatives. And laborers’ pensions often own stock in companies, though most often not majority stock in any one company, and not in their own — which, since they invest at their own discretion, suggests that workers, generally, do not want to own the means of production. Only a few exceptional people do.

And, interestingly, under several of the socialist societies that have existed — the most prominent one, anyway, that called itself socialist, explicitly — small business was not exactly tolerated, was it? And workers did not own their factories, etc., the State did. And, further, it was industrial workers that were focused on: agricultural workers were despised, expropriated, and killed en masse. For “workers” owning “the means of production” was not the point of socialism, historically. Not really. It was “everybody” owning the means of production through a central planning office, through the State. Which in practice just means tyranny.

And I note that the socialists I know personally, and the ones I see on TV, do not seem much interested in workers as such, or the means of production as such. They are concerned with consumers, making sure that everyone can consume about the same amount of goods: equal access to healthcare, equal access to housing, equal access to iPhones, complete financial security for all, etc. Which suggests, once again, that “workers” is the reddest of red herrings. Socialism always comes back to a form of consumerism. State-supported and -enabled consumerism.

What “corporatism” means is not always clear, either. We have a lot of publicly* traded stockholders’ corporations in these United States, and they sure look like market institutions, and not a few are even basically operating within something like a free market. But many — though, once again, certainly not all — of the most successful are dependent for their success on government contracts (some of the biggest corporations are those within the ambit of the military-industrial complex) and, when the biggest fail (most recently in the financial sector) they are bailed out, at taxpayer expense. Further they are regulated in such a way that “just so happens” to protect established businesses from upstart competitors. This system is certainly not laissez faire, as stated in the answer, above. But its capitalist nature, while being there, is certainly open to some interrogation. What it looks like to me might best be called “producerism.” A form of it. Producerist arguments were dominant in 19th century support for protective tariffs, and they now dominate the government practice of regulation and bailouts.

Which should indicate my approach to free-market capitalism: it is consumerist-producerist . . . both. We produce to consumer, sure, but no consumer and no producer should really be given special favors. “Workers” and “business” do not compete so much as cooperate, and foisting a class narrative on their relations is a bad idea. They are just two special interests, and our rule of law should serve the general interest, not any specifically identified class or group. Neither consumer-oriented socialism nor worker-oriented socialism make sense, and corporatisms that focus on bolstering up specific industries for the sake of stability are not much better.

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* Note that we call publicly traded stock companies “private” — our nomenclature sure must confuse the young.

Gustave de Molinari

The economist must not confound interest with selfishness, still less with the satisfaction of such needs as are purely material. It signifies rather the sum of the requirements of human nature, material as well as moral. A man does not impose upon himself the sufferings which are inseparable from effort, nor abstain from enjoying the fruits of his toil, for the sole purpose of satisfying selfish wants, whether present or future. Altruistic intention is a frequent and often the more powerful factor in determining labours or abstentions. Altruism includes the love of family and the race, of truth and justice; and its scope is only limited by that of the moral sentiment. Under its spur men have died for each other, a cause, even a cherished idea. There is no real warrant for the opposition between interest and duty, a contradiction that has been too often reiterated. Duty is no more than the obligation to act in conformity with justice, the criterion of which is the general and permanent interest of the species. The sense of justice — in other words the moral sense — naturally predisposes us to conform action to duty. This sense is, no doubt, distributed most unequally. Certain individuals find that obedience to its dictates yields a joy which outweighs any pain, and such men pursue duty at all costs and in face of every obstacle; others are less conscious of the stimulus. A sense of obligation is often disobeyed, but every lapse is followed by that feeling of pain which is called remorse. Finally, there are many persons whose moral sense, the sense of justice, is quite rudimentary; they commit every kind of injustice or immorality to satisfy their passions or vices, and are a menace to society and the race. Mere self-defence compels society to supplement such enfeebled sense of the obligations. It therefore imposes penalties, regulating their incidence in such a way that the amount of pleasure obtained by comitting an injustice is more than neutralised by the punishment which follows.

Society’s first duty is, therefore, to foster the sense of justice — the moral sense. And it is equally imperative to define the distinction between just and unjust, moral and immoral, since the hurt or benefit of society and the species is bound up with the opposition between these two ideas. The interests of the individual and the species are, in their regard, identical.

Gustave de Molinari

The Society of To-morrow: A Forecast of Its Political and Economic Organisation (1904)

from the Preface, third footnote (to the passage in the title on this page)

To believe that “deficits don’t matter” and “public debt is no problem” requires one to believe that government, and government alone, has solved the problem of scarcity.

Furthermore, governments have mastered this magic by doing the one thing that politicians most like doing: bestowing benefits on some constituents without immediately raising taxes on others.

Suspicious. Stretches the credulity, if you ask me. I have never been shown the mechanism how this could possibly work.

Most defenses of deficit spending are Keynesian, and Keynesian fiscal prescriptions only make sense on their own terms when counter-cyclical, that is, when deficit spending is parlayed in bad times to be offset by budget surpluses used to pay off debt in good times. But that no longer ever happens. If it ever did.

Politicians just get too few rewards from paying down debt.

So, as near as I can make out, the modern State’s “solving” of the “problem of scarcity” is not a solution at all, but is, instead, a con job. It depends wholly upon misdirection. As is so often the case, we come back to Bastiat’s “the seen and the unseen.”

The populace? Blind to it. But politicians and their pet economists? They squeak and take their politic soundings for mastery of flight.

Batty.

Cultic behavior is not limited to marginal groups.

Indeed, it has become increasingly clear in recent years that the social controls we associate with cults are the prime drivers (with interesting differences) of almost all center-dominant cultural organizations, institutions and movements.

Most people adopt center-dominant beliefs not because of the beliefs’ truth-values, but for pragmatic reasons and for signalling. Think of it as “innocence by association.”

We should expect nothing else.

And it is for this reason that whole cultures can lurch into extremely perverse directions, whether they be Aztec mass sacrifice, communist political centralism, or even dietetic “science” and eating habits.

My favorite modern example is usually deficit spending by governments and debt accumulation — often excused by half-adopted, half-assessed Keynesianism while being driven by very different but very obvious Public Choice factors.

twv

I asked a question about Menippean satire and the works of Jack Vance, in a Facebook discussion group, and in the conversation that followed I encountered this:

What is remarkable about this passage from a fellow Vancian is how easy it would be to satirize, in Menippean fashion.

But instead of doing so, I will just explain: the truth of the matter is almost precisely the opposite of the notions for which my interlocutor expresses certainty.

“We” do not destroy the environment to enrich the “1 percent.” This “1 percent” works mightily to fulfil our desires, and in the course of the process some damage is done to the “environment.” Trendy progressives — by which I mean “trendy anti-progress doomsayers” — never seem to understand how the world works. They seem to think that if the 1 percent goes about enriching themselves, we allow them to do that because we are suckers. Not quite. We allow them to invest, and to build businesses, so that those businesses can increase the quality of our lives. The dreaded Greenhouse gases do not come, primarily, from the recreational activities of the very rich. They come from all of our driving in automobiles, heating our domiciles, and eating meat. Sure, many people get rich providing us with cars and fuel, electricity and natural gas, and raising beef animals that fart up methane. It is because we engage in consumption that production is developed, and some people — serving vast hordes of consumers — get very rich.

Capitalism is mass production for the masses.

It is a defect of leftist thought that what leftists object to is the great successes of the most productive, not the real drivers of the market system, consumers.

I find it hysterical coming from folks who readily parrot Keynesian doctrine, since Keynesians fixate almost wholly on consumer spending as the driver of market activity. I think the actual implementation of capital is way more complicated than Keynesians think, but nevertheless I more than acknowledge the consumer sovereignty idea embedded (perhaps precariously) within Keynesian dogma.

But leftists and environmentalists and other responsibility-evaders must always shift blame for unfortunate social patterns away from themselves and onto the dreaded Rich.

I guess this allows them to justify their lust to tear away at other people. And because they do not see the integral role of entrepreneurs in markets, or recognize the symbiotic relationship of all market participants, including between “classes,” they eagerly attack one sector, in vulgar fashion, while inflicting harm more generally.

Then, of course, they blame the rich for not being more productive.

This general attitude is what I think of as a satirizable — and is satirized in some of the character types to be found in many of Vance’s best work, such as Wyst and Emphyrio.

It is not just the attitude that is bothersome, however. Also latent in my interlocutor’s sort of complaint is lack of recognition of a fairly basic truth: it is only the comparatively rich societies that find ways to make industry cleaner. America and Europe developed strategies for cleaning up industrial excess only after a level of wealth was reached, far in advance of what big polluters in India and China now possess.

This may be a sad truth, but it is a truth regardless.

Environmentalists so rarely recognize it.

And yet they often do so tacitly, by focusing their ire on First World polluters more than in China and Africa, for instance.

Pure comedy gold.

twv

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What would happen if the world stopped using money?

As Answered on Quora

Billions of people would die.

Without a medium of exchange and unit of account, coördination of capital would become utterly incoherent, and the established interdependence of the modern age would vanish.

Most people would become useless to others, unrewardable.

And violence would reign supreme, as there would be a scramble to capture existing resources. Economists would utter the words “consumption of capital” before they were placed against the wall and shot en masse.

Mass starvation, rioting, tyranny, and death would follow, and quickly. Progress would not merely halt, regress would set in. We would go back to a stone age. A few technological utopias may survive, but the cost would be extraordinary.

For billions and billions of people would die miserable, horrifying deaths.

And the population would reduce itself to something like twice the population of bears.

In the meantime, certain infrastructure elements, like nuclear power plants, might very well fail and poison the planet . . . that is, if the malign individuals who capture the nuclear arsenal do not usher in nuclear winter, first.

I try to read the MoveOn emails I receive several times a week. Yes, I try. But they are very trying.

Just this morning I got an email from “Bernie Sanders” . . . which began “Hi Timothy — I just wanted to make sure you saw my message from the other day.”

Must be important.

So what does “Bernie Sanders” say?

Well, he pushes what he (or his copywriter) call “the progressive agenda,” which is dead set against the “corporate giveaway” in the new tax reform bill. Here is how he begins:

Throughout my political career, I have asked us all to imagine what our nation’s future could be: a country with a minimum wage that is a living wage; with students graduating college without crushing debt that stifles their ability to pursue their dreams; where health care is recognized as a right for every man, woman, and child; and where we lead other nations in the fight against climate change.

I have asked us to believe that we could level the playing field and create a vibrant democracy where the billionaire class would no longer be able to buy and sell our candidates and elections.

I will always believe in that vision of America — even as I watch Republicans try to pass a tax scam that is literally the opposite agenda of what you and I have championed over the years.

A tax scam. I wonder: does it increase taxes on the poor and the proverbial “middle class”? I doubt it, but I honestly do not know. The only “fact” about the tax bill given is that it decreases taxes on the wealthy.

I assume by that he means decreases tax rates on the wealthy. There is a difference between rate and revenue. The difference should affect the way we talk about taxes. Somehow, it almost never does.

Bernie, if you could help me on this, please explain. Comments are open below.

Lacking many specifics from this pitch letter (and, after all, that is what most MoveOn emails are, pleas for funds — the only other regular pitch being calls for action, usually to complain to my congressperson), I wander back up to the top. Bernie Sanders imagines an America with “a minimum wage that is a living wage”; with college students not starting their remunerative careers buried in debt; “health care” treated “as a right” for all; and the country leading the world “in the fight against climate change.” Each point is worth thinking about. But I am going to avoid the “climate change” issue entirely, focusing, instead, on the climate-of-opinion change regarding matters nearer at hand.*

The Ass Ceiling

Minimum wage laws were one of the two big issues regarding economic policy that turned me away, forever, from Bernie’s brand of politics. The first time I heard someone assert that minimum wage laws hurt some low-skilled workers while helping competing workers with higher perceived skills, I got really interested in economics. As a science. I wanted to see how this could be the case, if it could at all.

I learned two things right away: one must move beyond slogans and look at what laws are at base, and then what their effects are beyond the policy’s immediate targets.

At base, minimum wage laws proscribe hiring people at a rate lower than set by the “minimum.” A minimum wage regulation does not require businesses to hire anybody at that rate. Such regulations prohibit businesses from hiring anybody below that rate. So, by their very nature, minimum wage laws are employment-limiting laws.

That puts the burden of proof on the proponent of the “minimum wage” to explain how it could increase the ranks of the employed, or, at the very least, not decrease those ranks. If employment decreases — either immediately or in the future — then minimum wage laws are not boons to the poor, lifting poor workers out of poverty. Instead, they would constitute mere redistribution-of-wealth schemes: in effect taking from some poor and giving to others, making them less poor.

The import of this idea has yet to hit at least half of the population.

The working out of the wider and long-term effects of wage-rate floors (as economists tend to characterize the regulation) gets complicated. It comes down to productivity — the marginal product, actually — and interesting scientific study can work out the complexities. There are debates to be had.† But what is interesting about political discussion, particularly from Bernie Sanders and his cadres, is that such discussion is never forthcoming. The usual defenses of minimum wage regulations that I hear point to the bizarre Card and Krueger studies, and not as economic explanations, but as excuses, as authority to dismiss economic reasoning entirely — with no more intellectual integrity than nyah-nyah taunting. “My study is better than your study”!

The popular use of these contrarian studies (and yes, most studies of minimum wage law effects disconfirm the stated utility of the regulations) is not to advance knowledge, much less explore how any particular study is constructed, but because it gives an excuse to hold to a policy endorsed for non-scientific reasons.

imageI know this because I felt their pull. The love of “minimum wage” regulations is part of a belief in the efficacy not merely of government but of activists who propound simple nostrums. It is a very religious commitment, and when I looked into the issue, nearly four decades ago, and studied my own psychology as well as economic theory, I concluded that my motives in promoting the wage floor were not pristine.

As always in such issues, it comes back to the Seen and Not Seen. What we “see” is a minimum wage law, and people employed above the prohibited low rates. We do not — and cannot — see the people that would have been employed had such regulations not existed. The counter-factual world is closed to us. And yet the reality of our experience is entirely encompassed precisely by such counter-factuals, since, when we choose either a job or a policy (or a career or a spouse or a philosophy) we are forecasting two or more possible worlds of effects that would result from a choice one way or the other, and those forecasts are not illusions, but guesses as to possible realities that, after the choice is made and the action (or policy) instantiated, only one of which becomes factual, actual.

By sticking to the Seen effects of minimum wage regulations, the enforced floor’s proponents allow themselves a smug sense of “sticking to the facts” while denying a basic part of reality. Meanwhile, they become acolytes to a particular religious view of life, wherein the State is savior and activism is ritual and prayer.

And, all the while they go about promoting one of their favored nostrums, they ignore the reality: wage floors are worse than the proverbial “glass ceilings” of feminist lore. The floor is raised, hiking the productivity requirements of workers, placing those unable to perform at the set level below the floor, looking up at the . . . feet and asses of those who remain employed. The People Under the Floor have been condemned by the regulation, with no more hope for them other than subsidy.

Oh, sure, they could get more skills, and that is indeed one thing progressives have always insisted upon: that people who want to work go to progressive-run schools where productivity is allegedly taught (it isn’t, for the most part) and the bills are paid from taxpayers. Indeed, unable to work because prohibited from doing so, the likelihood of skill acquisition is diminished for the low-skilled, since actual work is the single most important source for acquiring skills. And, indeed, most of those trapped under the floor are there in no small part because our society’s prescribed basic training ground, the public school, has proved to be ineffective (for a variety of reasons). No wonder, then, that The People Under the Floor turn to black markets and government handouts. That is pretty much all that is left them.

That is what Bernie Sanders and his kind have left them.

I shudder when I think about the People Under the Floor. And I try (often not successfully) not to be angered at the progressives most intent on policies that keep them there.

The takeaway that is so rarely taken, is this: the wage floor is an ass ceiling for the forcibly unemployed.

But Wouldn’t It Be Nice?

The interesting thing about progressivism is its relentless moralism. The subject line of Bernie’s email is “Stop this immoral disaster.” Calling something “immoral” often excuses one from thinking about it in any practical way. Bernie was talking about the tax issue, but his lack of any specifics is just indicative of this sort of mindset.

When I call something “immoral” or “evil,” that means that I have stopped careful consideration of it, too. Them’s fighting words, words of action.

One just hopes that there is some thought upon which that judgment of immorality can be based.

In his earnest (if under-thought) wishes for a debt-free beginning to careers (Bernie himself was a slacker, and then entered Congress in a great binge of living off the system) and for automatic, care-free medical assistance for all, Bernie seems driven by a utopian vision, an Edenic myth, backed only by

  1. activism and
  2. subsidy from the rich

IMG_4679Indeed, this email sums up his whole approach. It is an appeal to activists to support more activism that would (the scheme runs) lead to government action that would take from the rich and give to the not-rich. So no wonder, in all this, it is important to mention the awful spectacle of billionaires “buying and selling” — no talk of renting, interestingly enough — “our candidates and elections.” The big money game in politics is there, of course, because big money is what it is all about. Bernie S. and his fellow B.S.ers demand that “the rich” subsidize them more. Which is about money. Lots of it. The mere presence of the B.S. agenda ensures that those whom B.S.ers wish to plunder will lobby government to keep a bit more of what they have.

This is simply the nature of politics. When it is not about offense, it is about defense. And the more hits in offense a group takes, the more the group will spend in defense.

And by complaining about the rich defending themselves, the B.S.ers are trying to stack the game in their favor. Not only do they think it would be “nice” if other people paid for their college educations and their health care, they think it would be especially nice if those people who pay do not have a say in the “deal.”

How convenient.

Yet they are the ones always talking about “greed”!

This whole approach that they push seems a huge grab from a few to give to the many.

Quite a scheme they got, there.

None of This Is New

Nothing I have written here should strike anyone as in any way novel — except perhaps for a few quips and phrasings. After all, this is a very old debate. As soon as “socialism” became a word on the lips of reformers and revolutionaries, these debates became ubiquitous.

When I was young, the people who pushed the B.S. line were often called “liberals,” but with the rise of Reaganite conservatism, the l-word because a term of opprobrium. The word “progressive” became more popular. When I was younger, I read The Progressive magazine. I have been following this sort of thing all my adult life. But not close enough, apparently, for that magazine still exists. I have not seen it in years.

IMG_4680Indeed, I dropped the rag about the time I helped found Liberty magazine, which was published from Port Townsend until the death of its publisher in 2005. The third issue of Liberty appeared about 30 years ago exactly; the first had hit the mails in July (I think it was) of 1987. Liberty was a libertarian zine, and I had considered myself some sort of a libertarian for less than a decade at the time of its founding. But I had read a great deal of literature in both the individualist and collectivist movements. I had made an informed choice.

Perhaps I was destined to become a libertarian, for my individualism was built into the warp and woof of my psyche. Thinking in terms of groups seemed nuts to me. Indeed, I had interpreted my anti-racism and anti-sexism so big in the decades of my youth as anti-groupthink ethical philosophies. The error of sexism was to judge a person primarily in sex role terms, “by his or her sex” not his or her personhood. What an affront to civility, it seemed to me. And racism? Even less justifiable, for while the differences between men and women, boys and girls, were quite obvious and pronounced on the biological level, and even in psychological terms, the differences among the races were not that large, and from one person to another in any racial category could easily stretch the whole of human diversity.

And yet now the B.S. folks talk relentlessly of groups, of group identity, of one’s personal identity in terms of groups, and of victim groups and groups to be victimized (I mean, “oppressor” groups to be brought down and made “to pay”). Collectivism is alive and well. I have no sympathy for it any more. The whole “thinking in group terms” groupthink strikes me as pure madness.

And why “madness”? Why not use a nicer term? Well, madness is a word we usually use to describe the passionate people who are in some important way unhinged from reality.

The reality I see is that, right now, there are two federal governments: the constitutional government funded by income taxes, corporate taxes, other taxes, tariffs and “fees”; and the extra-constitutional government (consisting of Social Security and Medicare and Medicaid, mainly) funded by FICA and SECA and similar taxes. Interestingly, the unconstitutional government (which I designate as unconstitutional simply because, uh, none of its functions are listed in the Constitution) is basically run on a rough parity, mimic-insurance-contracts “public utility” basis, and what one gets out of the system does indeed depend on what one puts into it. The constitutional part is paid for mostly by the wealthy.

The nature of this tax situation is indeed quite amazing. The B.S.ers often yammer about “making the rich pay their fair share,” but the constitutional government is paid for almost entirely by the rich. This video explains this pretty well:

So when Bernie writes me to warn that current moves by the Republicans are designed to benefit the rich at the expense of “working families,” I am a bit skeptical:

And I’m going on the road again because we have to defeat this bill, too — a tax bill that will slash taxes for the rich, raise taxes on working families, and lay the groundwork for a massive attack on the most vulnerable people in our country.

This bill is an immoral disaster. If it passes, 13 million fewer Americans will be insured, and health care premiums will surge for tens of millions more. Further, the Republican budget cuts Medicaid by $1 trillion over 10 years and Medicare by over $400 billion. In order to give huge tax breaks to billionaires and large corporations, the Republican budget also makes enormous cuts to education, nutrition, affordable housing, and transportation — and will crush college students and college graduates struggling with debt.

In short: This budget will do incalculable harm to tens of millions of working families, women, kids, the sick, the elderly, and the poor. We have to fight this budget and stop it. That’s why I’m hitting the road with MoveOn, and why I’m asking you to support the work that we’re doing.

Then he asks for $3.

Thanks, but no thanks. I will spend $3 on a Coke. Or two. Or three.

Bernie makes no mention of how “rickety” is the current unconstitutional government sector, the Social Security/Medicare/Medicaid division. That is where most of his complaints about cuts are. But if it be unstable, financially unsound, we (if there is a “we” at all here . . . I know I have no power of choice in the matter) have basically two things to do: cut services and/or raise revenues. A normal person would probably suggest doing both, though one could see problems associated with doing either. The consequences of doing nothing? Almost unthinkable, for most people.

The fact that Bernie makes no mention of the problem, just focuses, instead, on the problem he sees with one solution, strikes me as irresponsible. If you want to know why there is such a strong divide, these day, look not merely the rhetoric on both sides, but on what they do not say. Bernie is mum about the secular disorder of the federal government, in which he serves as a prominent leader.

And his solution — make the rich pay more, not less — is even less responsible. He wishes to bail out the unconstitutional system that he himself helped strain (by voting for more benefits in the past) from the constitutional half of government, which already is paid for mainly by the very people he wants to soak further in his bailout.

I just shake my head.

I realize, this rambling blog entry is of little value. I am not really writing to convince anyone of any particular thing. Do I have any hope of convincing the progressives? No. They live in their reality, and its irreality they hope to impose on the rest of us. Meanwhile, we watch the Republicans speak only in half truths, and attempt only half-responsible reforms. I am just venting between jobs. (I have a video project to get to.)

I have never been less hopeful about the political future of the United States than I am right now. And I ascribe most of this to the unwillingness of partisans to deal with reality. Two sides and the middle are caught in a game where not seeing the whole is the most obvious feature.

It looks like the worst sort of game: not win-win; not win-lose; but lose-lose.

twv

 



* The willingness of people to become convinced of governments’ ability to manage the planetary climate while our federal government cannot even balance a budget is so astounding to me that I am, right now, at a loss for words. On that goofy subject.

† One of my readers made an astounding caveat to an earlier expression of mine about the marginal productivity theory of wages, which depended upon what seemed to me like a bizarre misreading of equilibrium theory, and a complete elision of knowledge problems —  but I confess, many of these are beyond my ken.)

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McInnes on Hannity with feminist

Gavin McInnes makes some good points in his recent video on a certain type of “journalist” he does not like, a group of censorious, moralistic women he calls the Spinster Police:

But he insists that these women writers are not good at their job. An odd charge. For it is quite obvious that the female journalists he is talking about are doing precisely what they are hired to do: give half-assed and half-assessed arguments mixed with invective, calumny and virtue signaling — all in the cause of “social justice” and “feminism” and a bunch of allied isms.

I would say that they are doing a fine job as demagogues, as harridans, as scolds. They may even win, and reap the whirlwind as ultimate reward. Cultists sometimes do.

Now, McInnes often repeats a claim that women would be happier, on the whole, were they to do what they are evolutionary designed to be best at, something that men cannot do: give birth to and nurture human life. Wasting time on once-predominantly male occupations does not make them happy, he says, it makes them frustrated.

And kind of pathetic.

This is no doubt true for many such women. The Cat Lady phenomenon is a little hard to take. And all the mantras of “independence,” the repeated rationales. Methinks the ladies do protest too much.

But from this it does not follow that women who forswear family life for dubious careers are bad at their careers. Many are fantastic writers, lawyers, doctors, what-have-you. But still unsatisfied. Why? For the simple reason that careers qua careers are not as satisfying as women have been told, have been telling themselves.

Feminism gained much impetus from envy. Or at least plain covetousness. Some women coveted the positions of successful, alpha males. And out of this covetousness feminism grew. In the cause of equal rights and responsibilities, this was fine, so far as it goes, but covetousness, once upgraded from vice to virtue, becomes all-consuming.

And the trouble with desiring what somebody else has is the tendency to forget what one already has, or has the best chance of obtaining. It is not much different than other vices, especially miserliness. The miser so obsesses about money that he forgets what money is for: spending now and saving to spend in the future. It is not about hoarding. Similarly, covetousness over-values what others have and under-values what the covetous have. And in the case of feminist women, what became under-valued is motherhood itself, the biological function and social institution necessary for the continuation of the species.

If you choose against your nature, prepare for the consequences. They can be vast.

In the case of many women, what careers get them is often a stunted or negligible family life: often no marriage, and either no children, one child only, or (the worst) de facto fatherless children.

Now, having only one or two children is part of a major pattern that comes with wealth acquisition: the substitution of quantity of children for quality of children. (See Theodore Schultz’s 1981 opus, Investing in People.) And, because of the small size of families, each child becomes super-important to the mothers, and that is quite a bond, one that I wish not to challenge at all — well, other than to note how big the cultural change is when most children come from small homes: risk averse parenting (because of the increased marginal utility of each child) leads to sheltered, over-protected children which in turn engenders spoiled, whiny, demanding, insufferable adults.

But back to our career women, especially those who are single and childless. They may be very good at what they do. But that does not mean that they have chosen wisely. Even if they are extremely competent, it can still be the case that it makes more sense to invest their lives in motherhood. Motherhood is natural, and one would have to cultivate an Epicurean or an existentialist anti-naturalism to make that pay off. More importantly, however, may be comparative advantage.

Say a woman has found a suitable mate with whom to procreate and establish a family. Even if the woman is better at her market-based job than be her husband, her comparative advantage may still be motherhood. What one should do is not always a maximization of a particular goal, but a situation- and opportunity-dependent satisficing.

No man can bear a child; most women can. Though men can indeed nurture children, women do tend to have a developed-by-evolution skillset to do that much better. Which means that time spent away from making a home and producing future humans, with all the joys and sorrows that entails, is apt to appear (ceteris paribus) much more enticing than doing the career thing.

Besides, as Dr. Jordan Peterson insists, most people do not have careers. They have jobs. Real careers are demanding and all-absorbing. Not univocally good life choices. Not without tremendous costs. If one can be fulfilled outside the market environment, why preclude it?

So, my point against Gavin McInnes is not that he is wrong about the advantages that women can find by embracing motherhood, or his oft-expressed arguments about how very different the fatherhood role is. It is just that the case for more women choosing motherhood and family life over careerism does not rest on the idea that they tend to suck at careers. It is, instead, that they have such a comparative advantage for family work that even in many cases where they are extremely competent — even genius — at their jobs, opting for family life often makes more sense.

The cream of the jest, though, resides in the cases Gavin focuses on: of extremely attractive women in media jobs. He mocks a professional woman who scorned the family option of motherhood but nevertheless got a facelift. Wives rarely get facelifts for husbands, unless very rich. They get facelifts to land a husband, or — and this is key — keep them in the job market longer.

You see, in media, as in the performing arts, it really helps to look great.

It is amazing, to me, to see so many good looking musicians. Does good looks naturally skew with musical talent? Writing talent? News commentary? Lawyering? That has not been my street-level, workplace-level experience. But it is so at the higher levels. Why? Because people like to look at good-looking people, and so, when the public is involved, or many clients are involved, good looks aids and even trumps talent.

Which brings us not to sexism but to lookism.

Looks, for women, has long been the chief lire for sexual attraction. But instead of honing their looks to obtain the coöperation of one man, for mating, career women hone their looks to obtain repeat business from a long string of customers, clients, and fans. This means they are nudged to pay more attention to their looks than they likely would under family life. Farding up for one man, invested primarily early in the relationship, swapped for farding up late in life for a huge audience? A daring exchange.

What a woman who swaps marriage for career finds out is what many men have long known: whoring is at the core of capitalism. The woman who marries and has children does is whore herself but once. In a career, she does what workingmen do: whore herself out every day.

Quite an inglorious end to the coveting of “what men have.”

And it is interesting to see what has really happened here: women have coveted only the top positions in society. They rarely covet the dangerous jobs, the messy jobs. There is, as is now common to notice, no cry for women’s workplace parity with men in logging, fishing, trash removal, etc. And the demands for the more glamorous of dangerous jobs, like policing and firefighting, have led to the erosion of standards in those callings. Women tend not to be as strong and hardy as men, so becoming cops and firefighters is harder for them, unless the bars for entrance are often lowered, to the public’s endangerment.

The problem with high-profile women scorning family life and marriage and even men, and scorning child-bearing, is not that it does not work for some of these women. After all, we want people of both sexes to choose what best suits them. The real problem is that it sets up a class system. The really attractive career women succeed in front of our eyes; they constantly defend their cause, ballyhooing their life choices — and this is not, for reasons unknown to me, usually interpreted as elaborate self-justification. And by doing this they provide a horrible example . . . for less attractive women, less career-oriented women. These less-blessed women go on to adopt values that channel them into unprofitable lifestyles wherein they become stuck in bad jobs while under-producing the one good that might make them happier: children. The reward is minimal, the opportunity cost tremendous.

And the now-common feminist scorn for men, the belief they are unimportant for women, sends too many mothers and their children into the Dependent Caste, perpetually stuck on state aid, trapped.

So, it is time for feminists to find it within themselves to praise motherhood. Further,

  • hating on men as fathers is not doing women in general any good;
  • the substitution of the welfare state for fathers has been a bad deal;
  • the valorization of that most unnatural of activities, market labor, above the more natural economy of family life, was doomed from the start to frustrate women.

And the great irony of this shift? Women forever courting the dreaded “male gaze” — but instead of to please one man, they fard up to please the masses of men.

Some swap.

twv

 

yet another attempt at a coherent answer:

I run hot and cold on the word “capitalism.” The institutional system? Fine with it. Would want more of it. But the word itself is less than perfect. (Like capitalism itself!)

AdamSmithA “capitalist” is not an advocate of “capitalism.” When I see the word used that way I flinch. A capitalist is someone who invests capital, specifically someone for whom such investment is a major source of income. Not all that many people are really capitalists.

But “capitalism” seems inapt for a more profound reason: the major institutional features of the capitalist system are

  1. extensive private property holdings
  2. self-ownership in one’s actions, meaning, especially
  3. free labor (not “free” in terms of price or fantasy, of course)
  4. free trade (unencumbered by prohibitions, regulations, etc)
  5. private markets in capital goods

Now, that last point might justify the term. It’s a profound concept that most people have no idea about. Even economists have balled it up.

But we traditionally note three factors of production: land, labor, and capital. And yet, when we use the word capitalism we identify the lack of criminal and governmental interference in the management of these factors by only one factor. That’s prejudicial. It’s rather lame.

There are huge demarcation problems associated with the word, too.

The economists of France and Britain began developing the science of the study of this set of institutions with the critique of a particular form of government policy, which Adam Smith called “mercantilism.” That’s a good term, an apt term, since it refers to the close relationship between some merchants and the State. It seems an apt moniker for the policy.

Under mercantilism, governments favors some over others, engages in various forms of protectionist trade restriction policies, and generally tries to keep production within a nation rather than outsource it (“free international trade” being the thing established, well-connected merchants most fear) while aiming to increase the supply of money (in the early cases, gold and silver) within the boundaries of a nation, and especially into the coffers of the king.

But mercantilism is not a bad term for what we have today, in many ways. Sure, international trade has been encouraged — but in a rather regulated way. The amount of regulations in America and Europe is astounding. The secular trend regarding this has been growth. And this hardly seems very “capitalistic,” if you mean it in the robust sense. And it certainly favors some capitalists and entrepreneurs and managers over their competitors, immediate and possible.

And yes, this feature makes a difference. The general effect of government regulation of markets — what Mises called “interventionism” and what Pareto called “restrictionism,” but which everybody else calls progressivism, fascism, democratic socialism, or the Administrative State — is to favor established business over upstarts. This is known. There is no real way around this. Current trends in hollowing out the upper-working class economy is largely a result of mechanization in combination with the suppression of small business by the regulatory state.*

So, while we certainly now live under “capitalism,” it is nothing like the laissez faire that economists dreamed up to regulate not business and market life, but the State itself (limited government being the flip side of laissez faire, with the constitutional limits it establishes being a form of anti-corruption regulation).

Recently, folks have been using the term “crony capitalism” to refer to the regulated/subsidized (“bailed out”) nature of current American economic policy. This reflects the old mercantilist practice of favoring well-connected insiders (“cronies”) at the expense of the masses of workers and entrepreneurs.

Anthony de Jasay calls the current form of governance/policy “the churning state,” since there is so much forced wealth distribution that we cannot really keep track of net winners  — instead, the interests and the transfers are merely “churned.”

I tend to dub the current mode of capitalism “neo-mercantilism,” but an adjective is in order: technocratic neo-mercantilism. The technocracy is important to this, for it gives college graduates cushy jobs while they pretend to manage “the economy.” Which doesn’t exist . . . but that’s another issue.

The crucial thing to understand about capitalism is that it rests on rights to private property (including one’s own body and person) and mostly unencumbered trade.

Destutt_de_TracyAnd trade, or market exchange, is pretty much what Thomas Jefferson’s favorite economist said it was, “a transaction in which the two contracting parties both gain. Whenever I make an exchange freely, and without constraint, it is because I desire the thing I receive more than that I give; and, on the contrary, he with whom I bargain desires what I offer more than that which he renders me. When I give my labour for wages it is because I esteem the wages more than what I should have been able to produce by labouring for myself; and he who pays me prizes more the services I render him than what he gives me in return.”

This is an elaboration of Condillac’s chief notion in his 1776 treatise. How this made sense in terms of value and distribution — how to think about it precisely — took another century of stumbling by economists. The work of Carl Menger and William Stanley Jevons, especially, clarified the exact nature of mutual benefit through exchange.

And it is indeed this concept, of ex ante mutual benefit in trade, that is the most essential feature of “capitalism.” The mutual benefit aspect is the core aspect. And it is why freedom — a division of responsibility and a general lack of coercive bullying — is the key concept, the entelechy, of the very idea of capitalism.

And it is what politicians of nearly all parties — and their supporters — attack daily, to the hobbling of civilization.

twv

 

* John Kenneth Galbraith’s notion of “countervailing powers” gets it exactly wrong. Big Government to adjudicate between Big Business and Big Labor is a nice model, and all. Nice and technocratic. But it ignores how things really work. These powers do not countervail, they reinforce each other. It just so happens that the Reinforcing Powers of the major institutional forces bolster each other up, at the expense of the masses. Which is why technocracy is anti-democratic and would only have a chance of working without free access to government bureaus and power centers. Only by setting up a caste of trained technocrats could government really ride herd over business in general. And only by prohibiting the right to petition one’s government — lobbying — and the revolving door between government and the private sector, could Galbraith’s vision even have a hope of a chance. And still, I hazard, the outcomes would likely be horrific, for reason described in The Road to Serfdom: the worst would get on top, because giving some people unchecked power of control over others cannot be a recipe for civilized life.