deja vu - escaping poverty

Once almost everyone was poor, usually extremely poor.  Eventually there was a significant change.  Over the course of a recent few centuries many people around the world were able to improve their circumstances and live further and further above a subsistence level.  Although there are stories of how brutal this change was, by  revisiting history  we can achieve a more realistic perspective on these past events.  Contrary to the conventional narrative Mark Perry presents a post titled  In defense of sweatshops  offering support for their role in lifting people out of poverty.  One item on the post is a TED talk presented by Leslie Chang about alleged exploitation of Chinese factory workers.  Here are some excerpts from the  transcript:

Chinese workers are not forced into factories because of our insatiable desire for iPods. They choose to leave their homes in order to earn money, to learn new skills, and to see the world. In the ongoing debate about globalization, what's been missing is the voices of the workers themselves. --- Chen Ying: "When I went home for the new year, everyone said I had changed. They asked me, what did you do that you have changed so much? I told them that I studied and worked hard. If you tell them more, they won't understand anyway."… 

So I spent two years getting to know assembly line workers like these in the south China factory city called Dongguan. Certain subjects came up over and over: how much money they made, what kind of husband they hoped to marry, whether they should jump to another factory or stay where they were. Other subjects came up almost never, including living conditions that to me looked close to prison life: 10 or 15 workers in one room, 50 people sharing a single bathroom, days and nights ruled by the factory clock. Everyone they knew lived in similar circumstances, and it was still better than the dormitories and homes of rural China.  

The workers rarely spoke about the products they made, and they often had great difficulty explaining what exactly they did. When I asked Lu Qingmin, the young woman I got to know best, what exactly she did on the factory floor, she said something to me in Chinese that sounded like "qiu xi." Only much later did I realize that she had been saying "QC," or quality control. She couldn't even tell me what she did on the factory floor. All she could do was parrot a garbled abbreviation in a language she didn't even understand.  

Karl Marx saw this as the tragedy of capitalism, the alienation of the worker from the product of his labor. Unlike, say, a traditional maker of shoes or cabinets, the worker in an industrial factory has no control, no pleasure, and no true satisfaction or understanding in her own work. But like so many theories that Marx arrived at sitting in the reading room of the British Museum, he got this one wrong. Just because a person spends her time making a piece of something does not mean that she becomes that, a piece of something. What she does with the money she earns, what she learns in that place, and how it changes her, these are the things that matter. What a factory makes is never the point, and the workers could not care less who buys their products.  

Journalistic coverage of Chinese factories, on the other hand, plays up this relationship between the workers and the products they make. Many articles calculate: How long would it take for this worker to work in order to earn enough money to buy what he's making? For example, an entry-level-line assembly line worker in China in an iPhone plant would have to shell out two and a half months' wages for an iPhone.  

But how meaningful is this calculation, really? For example, I recently wrote an article in The New Yorker magazine, but I can't afford to buy an ad in it. But, who cares? I don't want an ad in The New Yorker, and most of these workers don't really want iPhones. Their calculations are different. How long should I stay in this factory? How much money can I save? How much will it take to buy an apartment or a car, to get married, or to put my child through school?

 I would contend that like the historical experience of English workers had some important similarities to that of Chinese workers.  It was a rough experience, but there was a sense that they were improving their circumstances.

Is That Sexist?

My younger daughter just got her driving learner's permit. In California, after receiving one's permit, the first two hours of driving has to be with a professional driving instructor in a special car where the instructor has a brake and steering wheel as well.

My daughter wanted her instructor to be a woman. She asked me, "Is that sexist?"

The snarky comment that almost escaped my mouth was, "No, because only white males can be sexist." Fortunately, I choked that one back.

Instead, I said, "Well, I don't know, but if so, it would be an illustration of just how meaningless negative words like that can be at times. I wouldn't worry about it."

Was that the right answer?

Different paths of development

In discussions on this blog and elsewhere I sometimes have the impression that differences in cultural orientation might have a significant impact on the areas of focus in building up a base of knowledge relevant to the subject under discussion.   That in turn effects historical interpretations even before personality and other things influencing world view come into play.

The first excerpt is about how the history of development in early 1800s New England is different than the impression that most people have.

The Dawn of Innovation pp. 76-77

   Through a European lens, in fact, America looked very backward, if only because of its overwhelmingly rural demography.  In the 1820s, more than 90 percent of Americans still lived in the countryside, a pattern that had changed very little by mid-century.  In nineteenth-century Europe, rural areas were mostly peasant-ridden backwaters, but America’s agrarian patina concealed a beehive of commercial and industrial activity.  By the end of the War of 1812, Gordon Wood suggests, the northern states were possibly “the most thoroughly commercialized society in the world.”  A Rhode Island industrialist made the same point in 1829: “The manufacturing activities of the United States are carried on in little hamlets…around the water fall which serves to turn the mill wheel.” 

   American historians have suffered their own bafflements.  It is only in recent decades that a consensus of sorts has emerged on the nation’s early growth spurt.  Winifred Rothenberg did much of the groundbreaking work—twenty-five years of patient excavation of the account books, diaries, estates, mortgages, and other records of Massachusetts farmers.  What she finds is an organic, bottom-up form of modernization, originating in the increasing prosperity of ordinary farmers.  The British experience was starkly different.  The underbelly of Victorian society mapped by Charles Dickens was a rural proletariat brutally expelled from the countryside and herded into urban factories.
(Although we shouldn't exaggerate the negatives. )

Even if someone wants to point to government actions, don't be fooled - common genius was already a very significant force driving bottom-up organic growth.


Another point worth remembering was that the negative effects of slavery were obvious to visitors from  another country.

Democracy in America  pp. 344-348

   When a century had passed since the foundation of the colonies, an extraordinary fact began to strike the attention of everybody.  The population of those provinces that had practically no slaves increased in numbers, wealth, and well-being more rapidly than those that had slaves. 

   The inhabitants of the former had to cultivate the ground themselves or hire another’s services; in the latter they had laborers whom they did not need to pay.  With labor and expense on the one side and leisure and economy on the other, nonetheless the advantage lay with the former.
…
   The farther they went, the clearer it became that slavery, so cruel to the slave, was fatal to the master.
…
There is only one difference between the two states: Kentucky allows slaves, but Ohio refuses to have them. 

   So the traveler who lets the current carry him down the Ohio till it joins the Mississippi sails, so to say, between freedom and slavery; and he has only to glance around him to see instantly which is best for mankind. 

   On the left bank of the river the population is sparse; from time to time one sees a troop of slaves loitering through half-deserted fields; the primeval forest is constantly reappearing; one might say that society had gone to sleep; it is nature that seems active and alive, whereas man is idle. 

   But on the right bank a confused hum proclaims from afar that men are busily at work; fine crops cover the fields; elegant dwellings testify to the taste and industry of the workers; on all sides there is evidence of comfort; man appears rich and contented; he works. 

   The state of Kentucky was founded in 1775 and that of Ohio as much as twelve years later; twelve years in America counts for as much as half a century in Europe.  Now the population of Ohio is more than 250,000 greater than that of Kentucky.
   These contrasting effects of slavery and of freedom are easy to understand; they are enough to explain the differences between ancient civilization and modern. 

   On the left bank of the Ohio work is connected with the idea of slavery, but on the right with well-being and progress; on the one side it is degrading, but on the other honorable; on the left bank no white laborers are to be found, for they would be afraid of being like the slaves; for work people must rely on the Negroes; but one will never see a man of leisure on the right bank: the white man’s intelligent activity is used for work of every sort.
…
   Antiquity could only have a very imperfect understanding of this effect of slavery on the production of wealth.  Then slavery existed throughout the whole civilized world, only some barbarian peoples being without it.
   Christianity destroyed slavery by insisting on the slave’s rights; nowadays it can be attacked from the master’s point of view; in this respect interest and morality are in harmony.

Don Boudreaux  provides additional clarification in an article titled  What's so :

Another historical myth is that Southern slavery harmed only the blacks who were enslaved. There's no doubt that those who suffered most grievously from slavery were the slaves themselves. But slavery also inflicted great economic harm on non-slave-owning whites in the South.  

Most obviously, slavery artificially reduced the supply of workers available to work in whatever factories and businesses might have been established by non-slave-owning whites. Therefore, these whites — who outnumbered slave-owning whites, even in the South — suffered reduced opportunities to launch their own businesses. In the South, chattel slavery stymied the single greatest force for widespread and sustained economic growth: market-directed entrepreneurship.  

Also, by curbing entrepreneurship in the South, slavery reduced the rate of introduction of new goods and services that would have enriched consumers' lives.
There was yet another way that slavery kept the antebellum American South economically infantile. Here's the late economic historian Stanley Lebergott writing about the United States before the Civil War:  

“British vessels began to concentrate their voyages to New York, Boston and Philadelphia. For in these ports they could both deliver a full cargo of manufactured goods (to be consumed in the cities or sent along to the West) and also pick up return cargoes. The demand for manufactured goods and such luxuries as tea and coffee, however, grew far more slowly in such Southern centers as Charleston, Savannah, and Wilmington. One reason was that much of the nearby population were slaves, consuming little in the way of manufactured goods.”  

Lebergott sensibly argues that, had slavery not existed, Southern ports such as that at Charleston, S.C., would have gotten a great deal more shipping business. But because slavery artificially kept most Southerners — unfree  and free — poor, it kept the South from being a strong market for European manufactured goods. 

These historical realities should be kept in mind by anyone attracted to the argument that capitalism was fathered by slavery. 

As if this troubled history didn't present enough problems, there were further obstacles to escaping the impediments to progress even long after the botched or neglected Reconstruction.  Earlier in the same article other impediments to Southern development are highlighted:

Everyone knows, for example, that minimum-wage legislation is meant to help the working poor. A study of history, however, shows that this just ain't so.  

What  is so is that the Fair Labor Standards Act of 1938 — the legislation that created the national minimum wage in America — was designed to protect the higher wages of Northern textile workers, and the profits of Northern mill owners, from the intensifying competition unleashed by Southern textile mills in the Carolinas and Georgia.  

The competitive advantage enjoyed by Southern mills over their Northern rivals was access to lower-wage labor. Even at 15 cents per hour, these jobs were attractive to poor Southern workers, many of whom would otherwise have earned even less as sharecroppers. 

But being insensitive to the plight of poor Southern workers, Congress and FDR in 1938 outlawed jobs that paid less than 25 cents per hour. The purpose was to stifle competition and protect the profits of politically powerful producer groups in the North.

These obstacles, self imposed and otherwise, have delayed and slowed the economic convergence of the South.  Improvements in transportation, communication and infrastructure, combined with lower cost of living and cultural changes are improving circumstances.  Lee Habeeb is both a participant in and an observer of these changes:

When I told my friends in New Jersey nearly ten years ago that I was packing my bags and heading south, they thought I’d lost my mind. Why, they wondered, would I give up the food, shopping, and close proximity to New York City to live anywhere else, especially a place like Oxford, Miss.? I might as well have told them I was moving to Mogadishu. 

I tried to lighten things up by explaining that we had running water in Mississippi. And cable TV. Heck, we even had dentists. The planes coming and going in nearby Memphis got me most places in quick order, too. I then described the quality of life in Oxford and how far a dollar stretches. When I showed them pictures of my house and shared with them the cost of that house — and the low property-tax bill that came along with it — they got depressed.
… 

And it isn’t just millions of American citizens packing their bags and heading south. Last month, in a move that shocked residents of northern New Jersey, Daimler’s Mercedes-Benz USA announced it was moving its headquarters from Montvale (just miles from where I grew up) to Sandy Springs, Ga. And it’s bringing nearly 1,000 people along with it, at an average salary of nearly $80,000 per worker. 

“We think the infrastructure in the States has changed,” Dieter Zetsche, the chief executive of Mercedes, told reporters. “The South is much more relevant than it used to be. We think it is a new start, a rejuvenation of our company to make the move.”
… 

And there’s another angle to the southern-migration story that hasn’t received enough media attention, though it’s perhaps more profound: The past 30 years have seen an epic migration of black people to the South. Indeed, the percentage of the nation’s African-American population living in the South hit its highest point in half a century, as more and more black people moved out of declining cities in the Midwest and Northeast. 

A great many books have been written about the migration of rural black people from the South to the big cities of Chicago and Detroit during the 1940s and ’50s. Nicholas Lemann, former dean of Columbia University’s journalism school and a professor there, wrote one of them: The Promised Land: The Great Black Migration and How It Changed America. 

Why, a curious student might want to ask Professor Lemann, hasn’t he written about the reverse migration, and about the economic and cultural forces behind it? 

I think we know why he won’t. The ideological prejudices of so many journalists and media elites — and the academic elite, too, even in the South — won’t permit it. They’re so invested in the old narrative of the South, so busy reminding Americans about the tragic history of the region, they can’t bear the thought that it’s changed, let alone that black people are fleeing blue northern cities to live in red southern states.
…
But this much is self-evident: If the South is so backward, why are some of the most sophisticated foreign companies moving here? For decades, American policymakers have been worried that we would lose our manufacturing base to the world, but over the past few decades, the South has become a hub of manufacturing for the world. 

This much, too, is self-evident: If the South is so racist, why are so many black people moving back here?
…
You won’t ever see or hear any of the above stories covered in any depth in the media. They’re too busy recounting negative stories about the South’s past — stories that no doubt need telling — to notice the progress.

An appreciation for the differing perspectives that people have of the material presented here provides some understanding of how they might have divergent ideas about economic development in America.

Trifecta!

A recent post on Bookworm Room blog  pointed to post elsewhere and raised the reparations question. The real gem was an additional link to a truly outstanding post on the Wolf Howling blog titled: The Roots of Slavery & The Race Hustlers' Holy Grail - Reparations.  The three primary topics addressed are the race hustling industry and reparations, the history of slavery, and how this reflects on human nature and power.  It's worth reading the whole post.  (Video on the post as well.)

Prof. Henry L. Gates, a Prof. of African American Studies at Harvard and late of Beer Summit fame, is chasing the Holy Grail of the race-hustling industry – reparations for slavery.…Prof. Gates has no problem “parcelling out the blame” for slavery on this side of the Atlantic. It is, he tells us, the “whites.” So under Gates's theory, if you are a white American, you are born with the sin of slavery hung about your neck. What troubles Gates is the fact that the historical record shows that the people on the supply side of the African slave trade – the people selling African slaves into bondage - were not the evil white skinned devils, but rather black Africans themselves.  

… 

The issue is not divisive at all. It's ludicrous. Those who took part in slavery in America are long dead. It is a fundamental aspect of our legal system that people are held responsible for the wrongs they personally commit; responsibility for those wrongs does not follow down blood lines. But, as Prof. Gates would have us, let us leave that fundamental issue aside. Even so, over 145 years having past since the end of slavery in America, there are a host of issues associated with who should owe what to whom such that every aspect of Gate's call for reparations passes into the surreal. Obama himself perfectly encapsulates some of this. 

… 

Slavery didn't begin with the African slave trade. To the contrary, slavery, as an accepted practice in the world, ended with the African slave trade. Slavery began with the dawn of civilization and it has involved virtually every race. Indeed, unless Gates is historically illiterate, he must know that slave based agrarian economies have been the norm throughout much of the world's history.
…
And of then there are the world's most prolific slavers of history – the Arabs. Indeed,the Arabs in Saudi Arabia still teach today that it is permissible to make slaves of non-Muslims. And indeed, they still practice what they preach - enslaving blacks in Mali when it fell under al Qaeda rule. Under the Gates theory, we should all be getting reparation checks from Ridyah. 

The bottom line, if slavery is, as Gates posits, an original sin that passes not only through the generations, but also among entire races, then it hangs around the necks of most people in the world today - including President Obama and Prof. Gates. Obviously that can't be right. That doesn't fit the Gate's narrative at all. 

…  

The only way Prof. Gates call for reparations can have even a patina of legitimacy is if it holds culpable only the descendants of those who actually owned slaves and supported the institution of slavery. Fortunately, they are identifiable. The slave owning class in pre-Civil War America and the supporters of slavery as an institution were all to be found in the Democrat Party. It is beyond perverse for Gates, on this historic record, to also seek to hold culpable the Republicans who never supported slavery and whose ancestor's gave their very lives to end slavery. Do you think an Executive Order condemning the Democrat Party for slavery in America and ordering them to pay the reparations per a special levy would satisfy Dr. Gates? I for one could be persuaded to accept that as a reasonable settlement of the problem. 

… 

Gates's push for reparations has more holes than a block of Swiss cheese. If he wanted to actually do something constructive for blacks in America, then Gates would be shouting to the rafters about the call of Dr. Martin Luther King, Jr. for a color blind society. That is certainly in the best interests of both blacks and our nation. Yet instead of focusing on furthering that cause, Gates is pursuing an issue that is sure to, by its very nature, drive whites and blacks apart. 

I am sure Dr. Gates is not so dumb as to be ignorant of any of the above. Nor can he be ignorant of the fact that the descendants of slaves in this country have, today, all of the opportunities of America open to them. No one, Prof. Gates included, could possibly believe that the call for reparations will add anything to that. 

Actually, given that Prof. Gates's wants to apportion blame to all "whites" in America for slavery, it would seem self-evident that the purpose of Dr. Gate's push for reparations is to foster a permanent sense of guilt in the white population of America on one hand and, on the other hand, to separate blacks from whites in society by keeping blacks focused on past sins. That has nothing to do with justice and everything to do with politics. It is naught but a variant on the sermons of Rev. Jeremiah Wright, damning America and calling for blacks to eschew the values of "white" America. 

More specifically, this is the “sins and grievances” approach to politics about which Thomas Sowell recently wrote in his brilliant four-part essay, Race and Politics. It directs blacks and other members of 'victim classes' to “nurse their resentments, instead of advancing their skills and their prospects.” As Dr. Sowell notes, the only beneficiaries of this type of grievance politics “are politicians and race hustlers.” The losers in this equation are those blacks ignoring their opportunities and the reality of America in 2010 and instead, following the ilk of Prof. Gates on the hunt for the race hustlers' holy grail.…

The post then continues with an update that draws upon a different article by Dr. Sowell:

. . . Slavery is a classic example. The history of slavery across the centuries and in many countries around the world is a painful history to read — not only in terms of how slaves have been treated, but because of what that says about the whole human species — because slaves and enslavers alike have been of every race, religion, and nationality. 

If the history of slavery ought to teach us anything, it is that human beings cannot be trusted with unbridled power over other human beings — no matter what color or creed any of them are. The history of ancient despotism and modern totalitarianism practically shouts that same message from the blood-stained pages of history. 

But that is not the message that is being taught in our schools and colleges, or dramatized on television and in the movies. The message that is pounded home again and again is that white people enslaved black people.…If American society and Western civilization are different from other societies and civilizations, it is in that they eventually turned against slavery, and stamped it out, at a time when non-Western societies around the world were still maintaining slavery and resisting Western pressures to end slavery — including, in some cases, by armed resistance. 

Only the fact that the West had more firepower put an end to slavery in many non-Western societies during the age of Western imperialism. Yet today there are Americans who have gone to Africa to apologize for slavery — on a continent where slavery has still not been completely ended, to this very moment. 

It is not just the history of slavery that gets distorted beyond recognition by the selective filtering of facts. Those who mine history in order to find everything they can to undermine American society or Western civilization have very little interest in the Bataan death march, the atrocities of the Ottoman Empire, or similar atrocities in other times and places.
Those who mine history for sins are not searching for truth but for opportunities to denigrate their own society, or for grievances that can be cashed in today at the expense of people who were not even born when the sins of the past were committed.

The politics of grievance and division and a grossly distorted version of history are meant to undermine a free society, not to promote incremental improvement.

I think this is a terrific example of how the internet allows people to share their efforts to be more knowledgeable and aware.

Thanks GW at Wolf Howling.

Grasping the essence

It has been my experience that in studying the literature on complex subjects in social science such as economics,  many of the people with significant insights could be considered polymaths.  Some time in the past year I was discussing some ideas espoused by George Gilder with  my coblogger.  He asked if I considered Mr. Gilder to be a polymath.  I've read many articles and most of the books authored by Mr. Gilder but had not thought about that question.  After a pause to think about the matter, the reply was a clear "yes."  A few weeks later while watching a video of Deirdre McCloskey, George Gilder and his ideas came up in discussion.  It was clear that McCloskey, herself an obvious polymath, considers Gilder to be a polymath.  With that introduction, here are some excerpts from  Unleash the Mind by George Gilder:

The belief that wealth consists not chiefly in ideas, attitudes, moral codes, and mental disciplines but in definable static things that can be seized and redistributed—that is the materialist superstition. It stultified the works of Marx and other prophets of violence and envy. It betrays every person who seeks to redistribute wealth by coercion. It balks every socialist revolutionary who imagines that by seizing the so-called means of production he can capture the crucial capital of an economy. It baffles nearly every conglomerateur who believes he can safely enter new industries by buying rather than by learning them. It confounds every bureaucrat of science who imagines he can buy or steal the fruits of research and development.  

Even if it wished to, the government could not capture America’s wealth from its one percent of the one percent. As Marxist despots and tribal socialists from Cuba to Greece have discovered to their huge disappointment, governments can neither create wealth nor effectively redistribute it. They can only expropriate and watch it dissipate. If we continue to harass, overtax, and oppressively regulate entrepreneurs, our liberal politicians will be shocked and horrified to discover how swiftly the physical tokens of the means of production dissolve into so much corroded wire, abandoned batteries, scrap metal, and wasteland rot. 

Capitalism is the supreme expression of human creativity and freedom, an economy of mind overcoming the constraints of material power. It is not simply a practical success, a “worst of all systems except for the rest of them,” a faute de mieux compromise redeemed by charities and regulators and proverbially “saved by the New Deal.” It is dynamic, a force that pushes human enterprise down spirals of declining costs and greater abundance. The cost of capturing technology is mastery of the underlying science. The means of production of entrepreneurs are not land, labor, or capital but minds and hearts. Enduring are only the contributions of mind and morality.
…
Entrepreneurship is the launching of surprises. The process of wealth creation is offensive to levelers and planners because it yields mountains of new wealth in ways that could not possibly be planned. But unpredictability is fundamental to free human enterprise. It defies every econometric model and socialist scheme. It makes no sense to most professors, who attain their positions by the systematic acquisition of credentials pleasing to the establishment above them. Creativity cannot be planned because it is defined by information measured as surprise. Leading entrepreneurs—from Sam Walton to Larry Page to Mark Zuckerberg—did not ascend a hierarchy; they created a new one. They did not climb to the top of anything. They were pushed to the top by their own success. They did not capture the pinnacle; they became it.
…
Most of America’s leading entrepreneurs are bound to the masts of their fortunes. They are allowed to keep their wealth only as long as they invest it in others. In a real sense, they can keep only what they give away. It has been given to others in the form of investments. It is embodied in a vast web of enterprises that retains its worth only through constant work and sacrifice. Capitalism is a system that begins not with taking but with giving to others.
 
For this reason, wealth is nearly as difficult to maintain as it is to create. Owners are besieged on all sides by aspiring spenders—debauchers of wealth and purveyors of poverty in the name of charity, idealism, envy, or social change. Bureaucrats, politicians, bishops, raiders, robbers, short-sellers, and business writers all think they can invest money better than its owners. In fact, of all the people on the face of the globe, it is usually only the legal owners of businesses who know enough about the sources of their wealth to maintain it. It is usually they who have the clearest interest in building wealth for others rather than spending it on themselves.
…
Entrepreneurial knowledge has little to do with certified expertise, advanced degrees, or the learning of establishment schools. The fashionably educated and cultivated spurn the kind of fanatically focused learning commanded by the innovators. Wealth all too often comes from doing what other people consider insufferably boring or unendurably hard. 

The treacherous intricacies of software languages or garbage routes, the mechanics of frying and freezing potatoes, the mazes of high-yield bonds and low-collateral companies, the murky lore of petroleum leases or housing deeds or Far Eastern electronics supplies, the multiple scientific disciplines entailed by fracking for natural gas or contriving the ultimate search engine—all are considered tedious and trivial by the established powers. 

Most people consider themselves above the gritty and relentless details of life that allow the creation of great wealth. They leave it to the experts. But in general you join the one percent of the one percent not by leaving it to the experts but by creating new expertise, not by knowing what the experts know but by learning what they think is beneath them.
…
Most of the world, then as now, was engaged in one of its periodic revulsions against capitalist  “greed” and waste. Lester Thurow of MIT was proclaiming a “zero sum society,” where henceforth any gains for the rich must be extracted from the poor and middle classes. William Sloane Coffin, the formidable Yale chaplain, was inveighing against capitalist orgies of greed and environmental devastation. Howard Zinn and Noam Chomsky were denouncing Western capitalism for displacing American Indians and condemning Israelis for displacing Palestinians (rather than praising the settlers in both countries for reclaiming and redeeming wastelands and hugely enlarging the populations they could support). Edward Said was conducting his Columbia classes (fatefully introducing the works of Frantz Fanon to future president Barack Obama) on Western psychological colonization and hegemonic evisceration of the entire Third World. 

Here we go again, deep in the New Millennium. The themes of exploitation and zero-sum equality continue to preoccupy the media. Congress remains enthralled with static accounting rules that assume tax-rate reductions will not alter economic behavior. In this model, the only way to expand tax receipts is to raise rates on the “rich.”
…
By focusing on incentives rather than on information and creativity, free-market economists have encouraged the idea that capitalism is based on greed, although, as we have seen, entrepreneurs cannot in general revel in their wealth, because most of it is not liquid. Greed, in fact, only motivates capitalists to seek government guarantees and subsidies that denature and stultify the works of entrepreneurs. The financial crash of 2007 and beyond reflected orgies of greed among crony capitalists awash in government guarantees and subsidies, sitting on their Fannies and Freddies, feeding in the troughs of Treasury privileges and government insurance scams. Greed leads as by an invisible hand to an ever-growing welfare and plutocratic state—to socialism and near-fascist corporatism (see Jonah Goldberg’s Liberal Fascism for details).  

The secret of supply-side economics is not merely to incentivize people to work harder or accept more risk in order to gain a greater reward. That could be done under socialism. The reason lower marginal tax rates produce more revenues than higher ones is that the lower rates release the creativity of employers, allowing them to garner more information. They can move more rapidly down the curves of learning and experience. They can learn more because they command more capital to use in their trade. With more capital they can attract more highly skilled labor from around the globe. They reduce time and effort devoted to avoiding taxes and interpreting regulations and consulting lawyers and accountants. With fewer resources diverted to government bureaucracy, they can conduct more undetermined experiments, test more falsifiable hypotheses, try more business plans, generate more productive knowledge. 

It is not the enlargement of incentives and rewards that generates growth and progress, profits and capital gains for the entrepreneur and revenues for the government, but the combination of new knowledge with the power to test and extend it. Volatile and shifting ideas, not heavy and entrenched establishments, constitute the source of wealth.

These are not the conventional ideas that enter most discussions about economics, growth and wealth creation, but they are part of much deeper insight than most people will ever acquire.

a little is better than none

In a recent article  Jonah Goldberg provided useful guidance and clarification for conservative students:

In this exclusive Q&A with The College Fix, Goldberg explains how American progressivism was born of the same intellectual and political climate that gave rise to various European collectivist, statist and nationalistic movements – and how those mindsets are currently in control of higher education discourse today.

...

“Political correctness, speech codes, hate-crime hoaxes: these are all efforts by a very small number of people to control what is said and how it is said,” Goldberg explains. 

… 

While you rightly point out that the word “fascist” is exhausted in its use, do you think the fascist connections with American progressivism carry on in any of the clichés (i.e. those buzz phrases that stop an argument) you find when you speak at different campuses? 

Goldberg: A big point of my book was an attempt to “deflate” the idea of fascism. It wasn’t an outlier in the earlier 20th century; it was a very mainstream movement (particularly before the rise of Nazism) that was part of the fad for “experimental” social engineers. The key issue is power. 

Today, the power of fascism is in using the label to silence your opponents. No one gets called a fascist for wanting more “public-private partnerships” between the feds and big business, even though that sort of thing is central to fascist economics. No, people get called “fascist” for disagreeing with feminist radicals or supporting free speech or refusing to conform. The most fascistic things routinely said on college campuses today is “if you’re not part of the solution you’re part of the problem” or “the time for debate is over.” 

There’s no safe-harbor for disagreement. You have to get with the program or you’re a “problem” that needs to be fixed. The best working definition of fascist for the left is simply a “conservative who’s winning an argument.” Because all you have to do to get called a fascist is to disagree with a leftist. Rightwing on college campuses is just another word for “non-compliant.” 

Orwell noticed this a long time ago, which is why he said that fascism had simply come to mean “anything not desirable” or something like that.
…
You write in your latest book, The Tyranny of Clichés, that clichés are tyrannical in that they are “the use of allegedly non-ideological insights to advance starkly ideological understandings of the world.” Is academic freedom now a tyrannical cliché, and how so? 

Goldberg: Sure. Let’s start with the word ideology. Few words have a worse reputation these days. It has become synonymous with “closed-minded” and “dogmatic,” even “brainwashed.” This is nonsense. An ideology is merely a checklist of your principles. Hopefully your principles are derived from empiricism and experience, though they needn’t always be. (I have never murdered anyone, never committed incest etc., yet I am ideologically, even dogmatically, opposed to them.) 

There’s nothing wrong with being ideological or dogmatic. When people tell me they hate dogma or certainty and brag about how open-minded they are, I tell them that I am dogmatically opposed to setting orphanages on fire. I am also dogmatically opposed to slavery, genocide and the consumption of flan. Save for that last bit, does that make me more or less enlightened? 

Again, it all comes back to power. The Progressives borrowed this neat trick from Napoleon and Marx (which sounds like a fine haberdashery). They unilaterally declared all competing ideologies to be closed-mindedly “ideological” while claiming for themselves an open-minded pragmatism. So liberalism doesn’t have to defend itself as an ideology while it can accuse all of its competing ideologies of being cult-like and other-worldly. We hear this in Obama all of the time. His opponents are “ideologues” who put their “ideology” ahead of the American people, while he is merely a “problem-solver” who only wants to do “what works.” I’m sure he believes it. 

Which points to one of the big problems with liberalism; its staggering lack of self-awareness.  Liberals simply take it as a given that they are open-minded, morally superior free thinkers. At least conservatives acknowledge our dogma. Liberals have become so dogmatic they can’t even see theirs.

So some ideology is probably better than none or pretending to have none.  I believe that Peter has made this point before.  (We could call this post applying the lesson: episode 2.)  Later in the interview:

Conservatives need to get better at convincing people that we believe what we believe not just because it is good for us but because it’s good for everybody. Capitalism is the greatest anti-poverty program in human history. Yet conservatives rarely emphasize that. Why? 

More to the point of your question, the ultimate goal must never be ridicule but persuasion.

Nothing wrong with some ideology provided one avoids being blinded by it.

What can you tell us?

This article about  Brazil appeared online last week:

print version (will load quicker)

Millions of people are out demonstrating, asking for president Dilma Rousseff’s resignation. The endemic corruption of the leftist regime is being denounced by the masses that have taken to the streets, but largely ignored by the media elites, which are connected to those neo-Bolshevik channels financially supported by the Putin autocracy and its friends. The Sao Paulo Forum with its radical exhortations continues its maneuvers of hypnotizing the public opinion. Lies abound, but are starting to not be believed anymore. Protesters are being slandered as “American agents”, “spies”, “fascists” etc. Yet, less people than ever buy into these slanders. 

The protests are being organized by a grassroots initiative with an openly liberal (non-leftist) orientation – the Free Brazil Movement (MBL). Signatures are being gathered for Dilma Rousseff’s dismissal. It turns out that philosopher Olavo de Carvalho’s anti-totalitarian ideas have taken root in Brazil. Olavo, a remarkable social thinker execrated by the Left, knows a great deal about Marxism and revolutionary utopianism in general, at any rate a far greater deal than Dilma and her followers. He is familiar with the famous 11^th thesis on Feuerbach: “Philosophers have only interpreted the world in various ways, the point is to change it.” The world is changing in Brazil. 

The hyper-corrupt bureaucracy of the Workers’ Party, so outrageously obvious during the World Cup in 2014, is coming face to face with a resurgent civil society. What is being foreshadowed, it seems, is a peaceful, non-violent revolution. Marxist revolutions are explosions of violence. But not the anti-totalitarian ones. It is now clear that millions of Brazilians feel the need to expose twaddle, nonsense, irresponsible foolishness, cynical demagoguery masquerading as a springboard for collective bliss.

Clovis, what is your sense of things?

Not just the shoes

A recent Nick Gillespie interview of Camille Paglia provided some interesting perspectives.  I like the points that blogger Stuart Schneiderman lifted out on his Had Enough Therapy? blog:

If universities should not be in the business of policing student behavior, they should be in the business of forming young minds. There, according to Paglia, they have failed miserably: 

Now, I've encountered these graduates of Harvard, Yale, the University of Pennsylvania, and Princeton, I've encountered them in the media, and people in their 30s now, some of them, their minds are like Jell-O. They know nothing! They've not been trained in history. They have absolutely no structure to their minds. Their emotions are unfixed. The banality of contemporary cultural criticism, of academe, the absolute collapse of any kind of intellectual discourse in the U.S. is the result of these colleges, which should have been the best, have produced the finest minds, instead having retracted into caretaking. The whole thing is about approved social positions in a kind of misty, love of humanity without any direct knowledge of history or economics or anthropology. 

A wondrous image: minds like jello. Insubstantial, unstructured, incapable of dealing with ideas … quivering with deep feeling about nothing in particular.

He excerpts many other worthwhile points and his post is a bit shorter than the full interview.  Some other points that I liked included:

Paglia: I am an equal-opportunity feminist. I believe that all barriers to women's advancement in the social and political realm must be removed. However, I don't feel that gender is sufficient to explain all of human life. This gender myopia has become a disease, a substitute for a religion, this whole cosmic view. It's impossible that the feminist agenda can ever be the total explanation for human life. Our problem now is that this monomania—the identity politics of the 1970s so people see everything through the lens of race, gender, or class—this is an absolute madness, and in fact, it's a distortion of the '60s.
reason: You're not saying that those things—race, class, and gender—which is kind of the holy trinity of contemporary cultural studies, but all of those things are important, and they all intersect in many ways.
Paglia: They are important.
reason: But you're essentially arguing that none of these explain things totally.
Paglia: That's right. These are techniques of social analysis I find very useful. That's the way I teach and write. Race, class, and gender? Absolutely! But the point is that Marxism is, as I argue in the introduction to my last booklet, is not sufficient as a metaphysical system for explaining the cosmos. It is very limited. Marxism sees only society, but we are much greater than that. There's nature, there's eternity, there's questions of mortality, which Catholic theology of the Middle Ages addresses far more profoundly then Marxism ever has.

A solid takedown of a simplistic class only analysis of the world makes sense to me.  Another area of agreement for me was the historical cluelessness of the American press:

Paglia: [As a] writer of cultural criticism, I find that I'm happiest when I'm writing for the British press, and I write quite a bit for The Sunday Times magazine in London. I find that the general sense of cultural awareness means that I can have an authentic discourse about ideas with international journalists from Brazil or Germany or Italy or Norway or Canada even—somewhat, but they have a P.C. problem themselves. I can feel the vacuum and the nothingness of American cultural criticism at the present time. It is impossible—any journalist today, an American journalist, you cannot have any kind of deep discussion of ideas.
reason: Is that just a kind of hyper-exaggeration of the American disease, which goes back to early American literary criticism, that we're people who come from nowhere and we don't care about the past. We're freed from the burdens of the past, but we don't care about the past.
Paglia: Yes, I think this is true. The past is always present in Europe. To the extent that you're in Berlin, you can still see the bullet marks on buildings from World War II. And it's a terrible burden to have that there. I think Americans are far more ingenious and open and daring. On the other hand...people abroad have a much more sophisticated idea about [politics and ideology in] Europe…

Finally, a point I couldn't find in the transcript but was in the video, was that there is no male-bashing in her feminism.  Equal rights and opportunities are the point, not a putdown of men.

On the whole, a presentation of many sensible ideas.

Trivia of the Day

Excerpt from a Marginal Revolution post:

An American male is 4,582 times more likely to become an Army general if his father was one; 1,895 times more likely to become a famous C.E.O.; 1,639 times more likely to win a Pulitzer Prize; 1,497 times more likely to win a Grammy; and 1,361 times more likely to win an Academy Award. Those are pretty decent odds, but they do not come close to the 8,500 times more likely a senator’s son is to find himself chatting with John McCain or Dianne Feinstein in the Senate cloakroom.

Lies, Damn Lies, and Government Statistics: Part II

At Marginal Revolution, economist Tyler Cowen asks: "How much has the U.S. poverty rate declined?" He notes two government statistics:

Official percent poor in 1964: 19.0%Official percent poor in 2013: 14.5%

He then notes that depending on which government statistics are used to derive "percent poor," such as using the PCE price deflator rather than CPI-U, you can get radically different results:

Adjusted percent poor in 2013: 4.8%

You can show anything you want using government statistics.

Happy Pi Day...

...a good day to irrationally celebrate the circle of life!

The Left in a Sentence

Wisconsin: Unions Sue to Stop Law Halting Dues Collection

(AP) The state A.F.L.-C.I.O. and two local unions filed a lawsuit Tuesday seeking to at least temporarily block a new law barring unions from requiring workers to pay the equivalent of dues. The lawsuit, arguing that the law is unconstitutional, was filed in Dane County Circuit Court a day after Gov. Scott Walker signed the measure. A spokeswoman for Mr. Walker, a Republican, and Attorney General Brad Schimel, also a Republican, both said they were confident that the law would be upheld, just as federal courts have ruled in favor of such laws in Michigan and Indiana. The unions say that the law is an unconstitutional taking of their property without just compensation and that enforcement would cause them irreparable harm.

Emphasis added, perhaps unnecessarily.

Applying the lesson

In the comments to a recent post, Hey Skipper stated the following:

I could swear I've brought this up a couple times already: Left & Right are useless terms; instead we should use Collectivist & Individualist.

Old habits die hard.  In an attempt to change those habits, I thought it would be worth trying to apply this idea to a post by John Jay on one of his blogs:

Leftists Collectivists don't understand much 

Leftists Collectivists are people who know and understand a lot less than they think they do.  The classical example of that is of course in economics.  Even when they gained unfettered control of such vast countries as Russia and China, they made a hash of it.
 

At the time of the 1917 revolution, Russia was a rapidly modernizing country with railways snaking out across the land and a flourishing agricultural sector that made it a major wheat exporter.  After the revolution agricultural production dropped by about one third and right through the Soviet era Russia never managed to feed itself.  Europe's subsidized food surpluses were a Godsend to it.  A lot of those food surpluses went East. 

And in China, Mao's Great Leap Forward was an unmitigated disaster that achieved nothing but millions of deaths from starvation.  An understanding of economics as poor as Communist economics could hardly be a better proof that Leftists Collectivists are people who know and understand a lot less than they think they do. 

And what libertarian said this? “The bureaucracy is a parasite on the body of society, a parasite which ‘chokes’ all its vital pores…The state is a parasitic organism”. It was V.I. Lenin, in August 1917, before he set up his own vastly bureaucratic state.  He could see the problem but was quite incapable of solving it. 

And Leftists Collectivists understand people so badly that they judge everyone by themselves  (projection) -- leading to the generalization that to understand what is true of Leftists Collectivists you just have to see what they say about conservatives.  That is even true of Leftist Collectivist psychologists (i.e. around 95% of psychologists).
 

For example, a book by Leftist Collectivist psychologists called "The Authoritarian personality" (under the lead authorship of a prominent Marxist theoretician) was a huge hit among psychologists in the '50s and '60s and is still well-spoken of among them to this day.  The basic theme of the book was that conservatives are authoritarian.  What a towering example of projection!  It was written while the vastly authoritarian regimes in Russia and China were still extant and just after another hugely authoritarian socialist regime had collapsed, Hitler's.  Yet it was conservatives who were supposed to be authoritarian? 

The fact of the matter is that Leftism Collectivism is fundamentally authoritarian. Whether by revolution or by legislation, Leftists Collectivists aim to change what people can and must do. When in 2008 Obama said that he wanted to "fundamentally transform" America, he was not talking about America's geography or topography but rather about American people. He wanted them to stop doing things that they wanted to do and make them do things that they did not want to do. Can you get a better definition of authoritarianism than that? 

And remember Obama's 2008 diagnosis of the Midwest:
 

"You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. 

And it's not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations." 

That Midwesterners could be sincere Christians who need guns for self defence and hunting clearly did not figure in Obama's understanding of the Midwest -- and the remarks have become a byword for Leftist Collectivist incomprehension. To this day conservatives often sarcastically refer to themselves as "bitter clingers". As all the surveys show, conservatives tend to be happy people, not "bitter".  The uproar caused by  his uncomprehending remarks led Obama himself to backpedal. 

And the stock Leftist Collectivist explanation for all social ills --   It's due to poverty -- got really hilarious in the aftermath of the 9/11/2001 attacks on America by Osama bin Laden and his followers.  Leftists Collectivists insisted that bin Laden's hatred was also due to poverty.  It took some months before they could get it into their brains that bin Laden was actually a billionaire 

Leftism Collectivism is the politics of rage.  They see things about them that seem wrong to them but rather than seek to understand why that state of affairs prevails, they simply condemn it and propose the first  simplistic solution to the problem that comes into their heads -- usually some version of "MAKE people behave better".  They are incurious and impatient people and the destruction they can cause as a result is huge.
 

German philosopher Leibniz proposed many years ago that we live in "the best of all possible worlds" as a way of drawing attention to the fact that some good things necessarily have bad effects as well.  So stomping on the bad things will also destroy good things.  The whole of Leftism Collectivism is an example of that in action. To improve the world you first have to understand it.  Leftists Collectivists don't.

That's not a bad start, but it might take some more practice.

My youngest is home on break.  He was looking over my shoulder as I prepared this post.  His comment was, "that's a very opinionated piece."  I replied, "yes, but it's not wrong."  He agreed.

Lies, Damn Lies, and Government Statistics

Our favorite economic pundit, Paul Krugman (okay, maybe a wee little bit of sarcasm about "favorite"), writes: "My first chart shows wages of production and nonsupervisory workers in 2014 dollars; we have never gotten back to 1973 levels":



Scott Sumner, an economist who blogs at The Money Illusion, prior to seeing Krugman's chart wrote: "Here’s a graph showing hourly real wages, where I use the wage series excluding the higher paid managers.  I presume that’s the series people are discussing":



Both are based on "Average Hourly Earnings of Production and Nonsupervisory Employees." Seems like they should have the same shape with a different scale.

It took me awhile to figure why they look so different. The following chart provides the answer:

Krugman used the Consumer Price Index (the red line above) in order to "normalize" wages. The CPI is:

an index of the variation in prices paid by typical consumers for retail goods and other items.

Sumner used the Personal Consumption Expenditures index (the green line above) to "normalize" wages. The PCE is:

A measure of price changes in consumer goods and services. Personal consumption expenditures consist of the actual and imputed expenditures of households; the measure includes data pertaining to durables, non-durables and services.

This example shows you can paint any picture you like about just about anything just by picking which statistics (especially when it comes to price indices) you choose to use. Stagnant wages? Sure. Rising wages? No problem. Whatever you want.