Wednesday, October 14, 2015

Classically liberal

RE-BLOG: Classically Liberal

There is a lot of poor thinking going on when it comes to poverty. I hear more absurd or irrational statements made about poverty than almost anything else except, perhaps, the environment.

Here are a couple of common errors about poverty and why they are wrong.

The cause of poverty myth: This one is found in statements that usually begin with “Poverty is caused by....” Now it really does not matter how you fill in the blank. Poverty is not caused. It is the default nature of man. It is like asking: “What causes nudity?” Nothing! We are born naked.

As the saying goes we come into this world with nothing and we leave with nothing. Poverty is the natural state of existence while wealth is artificial. Wealth is created. Wealth, like clothes, has a cause where poverty does not. The proper question to ask is what causes wealth not what causes poverty?

If you understand the wealth creation process then you can see ways to end poverty. And when you realize that wealth creation is a process you can investigate what blocks it. Almost without exception the process is blocked by force. That force can be from marauding gangs who pillage
production or governments who tax it.

The block can be naturally caused or man-made. But roadblocks exist that have to be torn down. People want to make exchanges because through exchange they maximize wealth even when no new wealth is created. If I trade an orange for an apple I am ‘wealthier” by my own standards and so is the person who got the orange. That is because I only make the exchange because I value the apple more than the orange and my trading partner only does so when he values the orange more than the apple. We each walk away from the exchange with an increase in our own well being according to our own values.

But if someone comes along and prevents or inhibits the exchange then both traders are worse off. If they ban the trade, because my partner lives within one set of imaginary lines drawn on a map, and I live within another set, it matters not. We are still worse off. If they forbid the exchange because they don’t like my race or nationality there is still a reduction in well being.

Or if they come in and tax the exchange we are still worse off than we would be. All uses of force to interfere with voluntary exchange, by definition, substitutes the values of the one who uses the force for those of the traders. That inhibits wealth creation. And when this is inhibited the natural state of poverty either continues or the state of things revert. Wealth is man-made, poverty is natural. And that means wealth, once made, must be preserved as later interference with the process can cause poverty to reassert itself. When the process is stopped things revert to their default state.

The "equality matters" myth: If Bill Gates get richer I am supposedly worse off. But I have never heard anyone explain how this is the case. This is called relative poverty. I may be well off but if you are better off then I am relatively impoverished compared to you.

That’s like calling someone who is 6’ tall “relatively short” because someone else may be 6’4”. A person who weighs 150 lbs is “relatively” fat compared to a person who is anorexic.

This concept of “relative poverty” is absolutely irrational. It tells us nothing. You can make almost any case you wish by using a “relative” comparison. I could argue that the average American is “relatively poor” if I use the wealth of the top 10% of the population as my point of comparison. Or I can argue they are “relatively rich” if I compare them to the average income of people in the developing world.

And the Left, who are notorious at stripping words of any rational content, does this all the time. If they want to attack capitalism and make Americans feel “exploited” and envious they will compare the average working income to that of the average CEO. From this they conclude that Americans are made worse off by capitalism because “relative poverty” or wealth inequality is growing.

But when they want to make the average worker feel as if he is an exploiter, and appeal to his guilt, they compare the same income to that of poor people. One day you can be “too poor” and the next day you can be “too rich” simply by shifting the goal posts.

Such concepts add nothing to a discussion. But they are not meant to. They are used precisely because they allow one to make any argument anytime.

The poor as a static group myth: This has two variations. One is that there are X number of poor people in nation in one year, and then X number later down the road, indicating that no progress has been made. The assumption is that the people, who were poor, say in 1990, are the same people who are poor in 2005.

In fact people who are “poor” in any one year are mostly a changing group. A university student can be poor in his 20s because he is a part-time employee while studying. But with a valuable degree he may become one of the rich 20 years down the road. The category “poor” is not necessarily static but may be a changing one.

Another variation of the static concept is to define “poor” as some arbitrary percentage of the population. A popular definition of poverty is one where the “poor” are defined as anyone in the bottom 10 or 20 percent when it comes to income. The problem is that this definition means it is impossible to eradicate poverty. Even in a community of millionaires someone will be in the bottom percentage.

While this is a static definition it really is a fallacy that is similar to the first one discussed - that of “relative poverty”. This is so because the bottom percentage is always determined in relation to the income of others. This is a popular theory with some special interest groups because you cannot eradicate poverty since you cannot abolish the bottom percentage no matter what you do. It is always there. And that justifies the existence of the antipoverty group or its programs for eternity. That appeals to them.

Just clearing up the poor thinking around poverty can do a lot to clarify what needs to be done, or needn’t be done, when it comes to wealth creation. And poverty will only be ended when wealth creation is allowed to flourish.

For some information on the actual state of American poverty go here.

Tuesday, October 13, 2015

guns against genocide and tyranny

I just witnessed a conversation in which a previous professor of mine discounted the disarmament of Jews in Germany prior to World War II. The gist being that disarming them had no effect on their ability to defend themselves from the coming genocide; that their meager arms would not have stopped the Nazi machine.

"On July 28, 1942, a meeting was held of He-Halutz and its youth-movement branches: Ha-Shomer Ha-Za’ir, Dror, and Akiva. It was decided to set up the Jewish Fighting Organization YKA (Yidishe-Kamf-Organizatsie). The organization signed proclamations which it issued in the Polish language with the initials ZOB: Zydowska Organizacja Bojowa– Jewish Fighting Organization. The members of the Command were: Bresler, Cukierman, Zivia Lubetkin, Mordecai Tenenbaum and Josef Kaplan. A delegation was sent to the Aryan side [i.e., outside the ghetto], to the Poles: Tosia Altman, Plotnicka, Leah Perlstein and Arie-Jurek Wilner, in order to make contact with the Polish Underground and to obtain weapons for the ghetto.
The fighting organization had been set up, but all the weapons there were in the ghetto at that time consisted of just one pistol...!"
- Yitzhak Arad, Yisrael Gutman, and Avraham Margaliot, eds., Documents on the Holocaust, Selected Sources on the Destruction of the Jews of Germany and Austria, Poland and the Soviet Union (Jerusalem: Yad Vashem, 1981), 293–294.

It may not have stopped the "machine", but it might have slowed it down enough to save many. In a corollary, guns sure could have helped many other groups in their fight for survival.

Ottoman Turkey 1915-1917 Armenians 1-1.5 million 1886-1911 Art. 166, Penal Code
Soviet Union 1929-1953 Anti-Communists / Anti-Stalinists 20 million 1929 Art. 182 Penal Code
Nazi Germany & Occupied Europe 1933-1945 Jews, Gypsies, Anti-Nazis 13 million 1928-1938 Law on Firearms & Ammunition, April 12 Weapons Law, March 18
China 1949-1952 1957-1960 1966-1976 Anti- Communists Rural Populations Pro-Reform Grou 20 million 1935-1957 Arts. 186-7, Penal Code Art. 9, Security Law, Oct. 22
Guatemala 1960-1981 Maya Indians 100,000 1871-1964 Decree 36, Nov 25 Decree 283, Oct 27
Uganda 1971-1979 Christians Political Rivals 300,000 1955-1970 Firearms Ordinance Firearms Act
Cambodia 1975-1979 Educated Persons 1 million 1956 Arts. 322-8, Penal Code

Gun Control & Genocide

"The Minister of the Interior, Frick, passed Regulations Against Jew’s Possession of Weapons on November 11, 1938, which effectively deprived all Jews of the right to possess firearms or other weapons. It was a regulation prohibiting Jews from having any dangerous weapon — not just guns. Under the regulations, Jews “are prohibited from acquiring, possessing, and carrying firearms and ammunition, as well as truncheons or stabbing weapons. Those now possessing weapons and ammunition are at once to turn them over to the local police authority.” Moreover, prior to that, the German police and Nazis used the 1938 firearms law as an excuse to disarm Jews. In Breslau, for instance, the city police chief decreed the seizure of all firearms from Jews on the ground that “the Jewish population ‘cannot be regarded as trustworthy’” — the language from the 1928 and 1938 firearms laws." - Bernard E. Harcourt, On Gun Registration, the NRA, Adolf Hitler, and Nazi Gun Laws: Exploding the Gun Culture Wars (A Call to Historians), 73 Fordham L. Rev. 653 (2004)

Friday, October 9, 2015

the only people retiring are the young

Okay, I have done the math for y'all.

between 1984 and 2014, the total population of the US increased by about 83 million... the labor force (16 and older) in that time period increased by only 48 million... of that 48 million, 19 million were 55 years old and older... we LOST 2 million workers between the ages of 16 and 24... (maybe they retired?)

as a rule, the labor force steadily increases... part of this is the increase in population, but also trends in the economy... more women are entering the work force... youth work younger... retirement age getting older.

but from 2008 until now, the labor force has plateaued... it is true that between 2008 and 2014, the Under-55 demographic has not expanded as in the past... and the Over-55 demographic has indeed increased due to the Baby-Boomers... but the plateau is dramatic by the greater scope of the population... between 1984 and 2008, the labor force increased by 41 million; that's about 1.7 million per year... were that to continue from 2008, by 2014 there would have been an extra 10 million in the labor force... but that didn't happen.

so where did they go?... did 10 million retire?... as stated earlier, we've INCREASED the number of retirement age people in the labor force... in fact, an additional 11 million Over-55 were added to the work force between 2004 to 2014, while we only gained 3 million 16-54 year olds.

so, the argument that the Baby-Boomers are retiring, causing the slump in the labor force is false.

Labor force projections to 2014: retiring boomers
GroupLevel (thousands)Change (thousands)
Total, 16 years and older113,544131,056147,401162,10017,51216,34514,699
16 to 24 years23,98921,61222,26822,158–2,377656–110
25 to 54 years74,66193,898102,122105,62719,2378,2243,505
55 years and older14,89415,54623,01134,3156527,46511,304

Population, totals
Population - 235,825,000
Population - 318,857,056

Population 55 Years and Over by Sex and Age: 2012
Under 55 - 229,349,000
Over 55 - 79,477,000
Population 55 Years and Over by Sex and Age: 2008
Under 55 - 229,014,000
Over 55 - 70,091,000

Civilian labor force participation rate (percent of population 16 years old and older)

Jan. 1984 - 63.9%
Jan. 2000 - 67.3% (peak)
Jan. 2008 - 66.2%
Jan. 2014 - 63.0%

Civilian labor force

Jan. 1984 - 112,209,000
Jan. 2000 - 142,267,000 (peak)
Jan. 2008 - 154,063,000
Jan. 2014 - 155,486,000