"Logical fallacies are not the only errors that retard thinking. Conceptual fallacies do, too, and often in subtler, more destructive ways."

"Logical fallacies are not the only errors that retard thinking. Conceptual fallacies do, too, and often in subtler, more destructive ways. ..."[These f]allacies ... include package-deals, anti-concepts, frozen abstractions, floating abstractions, and stolen concepts. Below are definitions and examples of each, along with brief indications of the principles they violate. ...

"The fallacy of package-dealing consists in conceptually combining things that are superficially similar but essentially different and, thus, logically do not belong under the same concept. If and when we commit this fallacy, we muddle our thinking about the subject in question and make clear communication impossible. ... 

    "An extremely common instance of package-dealing is the mental blending of 'majority rule' and 'rights-protecting social system' under the term 'democracy.' ... 'Power' is a[nother] package-deal when used to equate 'economic power' with 'political power.' ...

"An anti-concept is a kind of package-deal, in that it combines ideas that logically don’t belong together. But an anti-concept is different from a regular package-deal, in that it is intended to cause conceptual confusion and harm. As [Ayn] Rand defines it, an anti-concept is an unnecessary and rationally unusable term intended to replace and obliterate some legitimate concept(s) in people’s minds. ...

    "The alleged meaning of 'social justice' [for example] is 'the moral imperative of treating people fairly with respect to various social matters.' Its actual meaning is 'the moral imperative of coercively redistributing wealth and forcing individuals and institutions to act against their judgment for the sake of various groups whose individual members allegedly can’t think or live on their own.' In other words, 'social justice' is the soft bigotry of low expectations—fused with the hard coercion of a government gun.
    "The purpose of the anti-concept of 'social justice' is to obliterate the concept of actual justice in people’s minds. And, when people accept the phrase as legitimate and try to use it, that is what it does. ...

"The fallacy of freezing an abstraction consists in making a false equation by substituting a particular conceptual concrete for the wider abstract class to which it belongs. Like a package-deal, it involves integrating concepts in disregard of the need for crucial distinctions.
    "[Ayn] Rand’s seminal example of this fallacy is the equating of 'morality' with 'altruism' by substituting a particular morality (the morality of self-sacrifice) for the whole, general class 'morality.' ...

"Conceptual knowledge is hierarchical. Higher-level concepts, such as mammal, animal, mile, and tyranny, presuppose and depend on lower-level concepts, all the way down to first-level concepts, whose referents are at the perceptual level, such as dog, bird, inch, and force (e.g., a punch in the face). In order to know what a mammal is, you must first understand a chain of more basic concepts, including fertilization, reproduction, animal, and various kinds of animals (e.g., cats, dogs, birds, fish). Without this more basic knowledge, the concept of mammal wouldn’t and couldn’t have meaning in your mind.
    "This principle of hierarchy applies to all conceptual knowledge. Higher-level (more abstract) concepts can be understood and have meaning in someone’s mind only to the extent that he grasps the lower-level (more basic) concepts that give rise to them. And there are essentially two ways people can violate this principle: via floating abstractions and via stolen concepts. 

    "When someone uses a word or phrase that is not supported in his mind by a structure of more basic ideas that are ultimately grounded in perceptual facts, he is using a floating abstraction—an abstraction disconnected from reality in his mind, disconnected from the things the idea refers to, disconnected from the facts that give 't meaning.
    "For example: 'Everyone has a right to a living wage.' If someone uses the word 'right' this way, he doesn’t know what a right is. He doesn’t know what the concept means, what it refers to in reality. He doesn’t know the facts that give rise to our need for the concept. (Or, if he does, he is committing a more grievous fallacy; see concept-stealing below.) ... 'America is a democracy.' If someone thinks or says such a thing, he doesn’t know what “democracy” means (see “democracy” as a package-deal above). The term is a floating abstraction in his mind. 'From the river to the sea, Palestine will be free.' If someone chants such nonsense, he has no idea what 'free' means. The term is a floating abstraction in his mind.
    "Floating abstractions abound. Be on the lookout for them in your own mind and in the claims of others. ...

"Now, if someone goes beyond merely using a concept that is disconnected from reality and uses a concept while denying or ignoring more basic, lower-level concepts on which it logically depends, he is committing the fallacy of concept-stealing.
    "Here, as with floating abstractions, the operative principle is the hierarchical nature of conceptual knowledge. Higher-level, more abstract knowledge is built on lower-level, more basic knowledge, all the way down to sensory perception, our direct cognitive contact with reality. Concept-stealing consists in using a higher-level concept while denying or ignoring a lower-level concept(s) on which it depends for its meaning.

    "Examples: ... When someone claims that an experiment has shown that determinism is true—that all human action is antecedently necessitated by forces beyond our control—he steals the concepts of 'experiment' and 'true.' ... When someone claims the senses are invalid, he steals the concept of 'invalid.' (Invalid, in this context, means 'incapable of delivering knowledge of reality.') ....

    "Stolen concepts are rampant in philosophic discussions. And they not only cause confusion; they also make way for much mischief and lead people to waste ungodly amounts of time pondering and debating things that don’t exist, don’t make sense, or don’t matter. Be on the lookout for them. ...

"Keeping your thinking connected to reality is essential to success in reality. And that’s the only kind of success there can be."

~ Craig Biddle from his post 'Conceptual Fallacies and How to Avoid Them'

"How is it conservative to back Putin’s Russia?"

"Donald Trump’s selection of Ohio Senator J D Vance as his running mate on Monday ... was a death knell marking the end of the American conservative movement as it was constituted from the mid-20th century until now.
    "The movement’s birth date is typically traced back to 1955 ...  Ronald Reagan would go on to restate the [founding] principles by observing that the [modern] Republican Party ... was held up by a 'three-legged stool' of social and fiscal conservatism, as well as anti-communism. After the fall of the Soviet Union, this third tenet was unofficially amended to emphasise the importance of American leadership on the world stage.
    "Though the GOP has always represented these values to varying degrees, Trump was the first to seriously stress-test the stool during the 2016 Republican presidential primaries. By promising to implement tariffs, leave entitlements untouched, and seek a rapprochement with Vladimir Putin’s Russia, Trump threatened to kick at least two of the movement’s legs out from under it. ...
    "By making Vance his heir apparent, Trump has not only set the tone for what his second term would look like, but what the GOP will stand for in the years that follow.
    "Vance is not merely an advocate of a more restrained foreign policy, he’s a demagogue plagued by a single minded obsession: rewarding Putin for waging a bloody, unprovoked war on Ukraine. ...  

    "He may claim to put America first, but Vance can be better understood as a member of the 'Blame America First' crowd that conservatives once rightly deplored.
    "His economic outlook is similarly indistinguishable from the Right’s ancestral opponents. ... resort[ing] to the simpleminded, envy-laden demagoguery of the Left since entering the political fray.
    "He supports minimum wage hikes and indiscriminate protectionism. He opposes Right-to-Work laws and tax cuts. ... and has suggested that Senators Bernie Sanders (a socialist) and Elizabeth Warren (a quasi-socialist) were his favorite candidates among the 2020 Democratic presidential field.
    "Moreover, Vance’s prioritisation of his own personal ambition over all else throws even his claim to being a committed social conservative into doubt. ... This should come as no surprise. Vance now claims to be proud to be the running mate of a man he once compared to Hitler and agreed was a serial sex predator. ...

"Reagan, and their contemporaries ... fought and won an uphill battle to bring much-needed contrast, not to mention wisdom, back to American politics.
    "By contrast, Vance’s rapid rise has been characterised by his sycophancy toward a single charismatic figure whose coat-tails he hoped to ride.
    "With Trump and Vance cemented as American 'conservatism’s' frontmen for the foreseeable future, it is no exaggeration to say that the values – and the spirit – of the conservative movement shaped by  Reagan [et a] are functionally dormant, if not dead."

~ Isaac Schorr from his column 'JD Vance as Trump’s running mate is the death knell of American conservatism'

The Discomforting Solution to Homelessness

"PEOPLE ARE UPSET OVER THE homelessness problem in American cities," writes Jacob Hornberger. NZers are just as disturbed about our homelessness problem here. Visit any of our major towns and cities and you'll see the streets playing host to many poor souls unable to put a roof over their heads.

 

Most people pass them by, perhaps with a sinking sense of guilt. Or perhaps not. But the problem seems so intractable, so most do very little. 

If there's nothing to be done, why do anything at all? 

But there is something to be done, says Hornberger, and should be done by anybody who cares. Two things in particular, which you'll find at the bottom of the post. And could be done bloody quickly - iff there were a will.

But first, just think for a minute and compare two sorts of places. You see homeless folk on the streets when you walk the main streets of our major towns and cities. But think for a minute: do you see them so often, or at all, in any of the smaller towns or cities?? Even the poorer of our small towns and cities???

Hornberger grew up in what was officially the poorest city in the U.S. Located right on the U.S.-Mexican border, Laredo, Texas, his hometown, was also home to many new immigrants, both legal and illegal. And yet, as he says, for all the very visible poverty, "There was no homelessness. That is, there was no one living on the streets or in their cars, as we see in many American [or New Zealand] cities today."

Now, think about that for a moment. People say that poverty is the cause of homelessness. But if that’s the case, why wasn’t there any homelessness in Laredo?
    The answer is: At that time, there was was no zoning in Laredo. Anyone could establish low-income housing anywhere he wanted, including such things as trailer parks, low-priced rental units, and multiple-family housing.
    Thus, everyone was able to find housing at some price.

It's breathtakingly simple when you think about it -- and it's not because of any "wrap-around care" or any of the welfare buzzwords you hear that have been so unsuccessful at helping our own homeless folk.  And the simple fact is this: If governments restrict where and how many roofs can be put up (which is what zoning is designed to do: for the town planner it's a feature, not a bug), then there will be fewer roofs available for people to put over their heads. And those few will be at higher prices than they otherwise would.

Licensed under Creative Commons Attribution-
Share Alike 4.0 International license.

I should point out that Laredo also had public-housing units (which, ironically, had been started by my grandfather). But even if the government had not entered into the housing market, there still wouldn’t have been a homelessness problem in Laredo.
    When I returned to Laredo after graduating from law school, one of our legal clients was a man who specialised in building and providing low-cost housing for the poor — for a profit. He would buy his building supplies in Mexico, where he could get them at a much lower price, bring them back to Laredo, and use them to build low-cost motels. His motel rooms were oriented toward the very poor. They were clean and simple. People could rent the rooms on a daily, weekly, monthly, or yearly basis.     He always had a very high occupancy rate.
    He was free to situate his rental units anywhere in town. That same freedom applied to mobile-home parks. That’s because there were no zoning laws.

Take a short break and think about that again:  no homeless people because homes of all kinds (trailer parks, low-priced rental units, multiple-family housing, clean and simple motel units, mobile-home parks) could be situated anywhere in town. And they could be situated could be situated anywhere in town because there were no zoning laws.

Forgive me for writing this as if you, dear reader, were a six-year old. And for underlining those conclusions. But it seems as if those who refuse to understand this have less understanding of the world and how it works than even the most stunted young child. Allow builders the freedom to build where there is demand for it, and of the type that's demanded, and you will have more buildings at better prices that are warm, and dry, and occupied by those who were formerly homeless. That's the experience of places like Laredo. (Do you understand, Chloe Swarbrick, who walks past the homeless every day on K Rd, who says new homes should be built only in places town planners dictate. Do you even give a shit, Chris Bishop, averting his gaze, who says new homes should only be built where, and how, he dictates. Are you listening David Seymour, ignoring the waifs and strays around the less-leafy edges of his electorate, who says we must "fix infrastructure first"?)

That same freedom [says Hornberger] does not apply in cities where there is a homelessness problem today. I guarantee you: Show me a city that has a big homelessness problem and I will show you a city that has zoning.
    To protect citizens’ property values from such things as mobile-home parks and low-price housing, local officials enacted zoning laws. They figured that they could abolish “blight” by simply using the force of zoning laws to make low-cost housing illegal. What they ended up doing is producing a massive homelessness problem.
    Today, much of the anger that arises from the homelessness problem is directed toward the homeless. But what are they supposed to do — commit suicide? They can’t afford to rent a place in which to live because zoning laws have knocked out low-priced housing within the city.

Indeed.

Zoning only came to New Zealand in 1928 with the Town Planning Act (brought in by a conservative government, wouldn't you know). Back then, it was a relatively new phenomenon. But if you observe things today, you will notice that town planners and the like today much prefer to live in those places like Devonport, Ponsonby Parnell and the like that were built before town planners infested the country -- and the places that are built today based on town planners' rules are those like Albany and Manukau and (gulp) Hobsonville.

Unattractive. And (still) unaffordable by most measures. Especially to those sleeping on the streets.

Think about it.

AND THINK ABOUT THIS too, especially if you castigate homeless folk because "they should just get a job." Have you ever considered that government-mandated minimum-wage laws prevent them from getting a job at a wage that is lower than that government-mandated minimum? 

It's all very well for "Chippy" to crow about "raising the minimum wage," as if that has magically "lifted all boats" to that government-mandated level. But what he ignores, or hopes that you do, is that the real minimum wage is zero. Which is what most of those homeless are currently "earning." 

And most of those are only earning that because Chippy's much-touted raise in the government-mandated wages level simply places a large gulf between what they're earning, what they could earn, and what employers are allowed to pay them.

It's as if the Prime Minister were gloating about taking several rungs out of the ladder they might have climbed themselves, if he hadn't taken them away.

It would be one thing if they were free to get a job at less than the governmentally set minimum wage. In that case, one could legitimately say, “Get a job, you bum.” But when their labour in the marketplace is valued by employers at less than the artificially-set minimum wage, the state has locked them out of the labor market with its minimum-wage law. Thus, telling them to “Get a job, you bum” is nothing less than cruel and abusive. And if they can’t get a job, then how are they supposed to be able to pay rent for housing, especially when rents are exorbitantly high because of zoning laws?

It's a tragedy. But it's not intractable. It is fixable. It's fixable iff there were a political will to to do it.

Want to do something about the homeless? Tell your politicians to fix it. And make sure you tell them how:

(1) repeal zoning laws, and
(2) repeal minimum-wage laws.

It's election season, so be careful of "trendy economics"

"With the rise of social media (especially Twitter), it has becomes easier to observe changes in the zeitgeist. Over the past few years, I’ve seen the following trends:

1. Claims that increases in the minimum wage do not have negative side effects.
2. Claims that we don’t have to worry about big budget deficits when the interest rate is low.
3. Claims that changes in the money supply don’t impact inflation.
4. Claims that 'neoliberalism' no longer works, and that we need an industrial policy. 

"In each case, trendy pundits rejected long established economic principles. And now the chickens are coming home to roost. [See post for the various chickens' flight paths.] ...
    "To summarise, stay away from trendy economic fads. The eternal verities never change:

1. Price controls are bad (whether on wages, prices rents or interest rates.)
2. Large budget deficits are bad, even if interest rates are low at the time. 
3. Persistent inflation is always and everywhere a monetary phenomenon.
4. Free market economies do better than statist economies. Emulate Denmark, not Argentina."

~ Scott Sumner, from his post 'Avoid trendy economics'

"The effects of redistribution are completely dwarfed by the effects of technological progress on long run economic growth."

"During the late 1920s, the living standard of American blue collar workers was far higher than 100 years earlier. And yet almost none of the 'progressive' ideas advocated by leftists had been put in place. There was no minimum wage, no federal unemployment compensation, no [Health & Safety Act], [no 'wealth taxes']and labour unions were fairly weak. In 1929, the federal government spent only a bit over 3% of GDP.
    "When trying to understand living standards, it is more helpful to focus on output, not money... As American industry began churning out vast quantities of consumer goods, it was almost inevitable that the living standard of the average American would rise sharply. If Apple and Samsung produce a billion phones, then lots of people will end up owning smartphones.
    "That’s not to say that income distribution plays no role in living standards... But the effects of [re]distribution are completely dwarfed by the effects of technological progress on long run economic growth."

~ Scott Sumner, from his post 'A Rising Tide Lifts Yachts and Rowboats'

INFLATION: '...the stork did not bring it from overseas.'

"Sigh.

    "Did nobody have 'The Talk' with Kiwis? 

    "Inflation isn't made by minimum wages going up. 

    "Neither is it made by supermarkets. 

    "Nor did the stork bring it from overseas. 

    "Inflation is made when a Reserve Bank Governor loves a Minister of Finance very much and prints lots of money."

~ economist Eric Crampton, explaining reality to a Twit [see also here for The Talk]

 

"In reality, the long history of unionisation ... is replete with homegrown racism"

"In reality, the long history of unionisation in the United States is replete with homegrown racism, as organised labor has sought to increase white workers’ wages by driving African Americans out of the competitive workforce. Many early-20th-century union initiatives, including working-hour restrictions, minimum wages, and collectively codified seniority privileges for existing workers allowed organisers to cartelise white labor against wage competition from African Americans and immigrants. The mostly white union sector benefited from artificially higher pay under these measures, whereas blacks found themselves excluded from employment entirely."

~ Phil Magness, from his article 'The 1619 Project's Confusion on Capitalism'

“It’s impossible to understand early twentieth-century progressives without eugenics. Even worker-friendly reforms like the minimum wage were part of a racial hygiene agenda… The minimum wage, in addition to providing some workers with a better standard of living, would guard white men from competition.”

~ Malcolm Harris from his article 'The Dark History of Liberal Reform', reviewing the book Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era  

"Racist views were widespread in New Zealand [too] during the nineteenth century but it was in the Labour movement that these views received their fullest expression. The emotive appeal of nationalism, the social Darwinist vision of the battle of the races and feared economic competition fused in the Labour movement to produce a series of anti- Chinese campaigns. Racism in the Labour movement peaked in the early twentieth century when the White New Zealand policy was established. Regulations which discriminated against groups on a racial basis were a feature of trade unionism in New Zealand from its early beginnings and these policies were defended in this period with great vigour by Labour racists."

~ G.R. Warburton, from his 1982 Masters thesis 'The Attitudes and Policies of the New Zealand Labour Movement toward Non-Union Immigration to New Zealand, 1878 - 1928' (p. 179)

"The Auckland Labour MPs were spurred by the Grocers' Assistants and the Furniture Trade Union into sending a telegram to the Prime Minister protesting that all this cheap [foreign] labour would lower living standards and probably lead to deterioration of the physical vigour of the race. M. J. Savage was particularly alarmist. The teeming millions of the East were less than a stone's throw away and New Zealand was faced by a rushing horde of Asiatics which it must try to stem both by laws of its own and by negotia- tions with Asian governments themselves.45 The Auckland Water- siders also recorded their fears for the living standards of the workers and their abhorrence of the 'piebald New Zealand' which now threatened..."

~. P.S. O'Connor, citing Auckland Star reports from 1920, from his 1968 article 'Keeping New Zealand White, 1908-1920'

 

The real minimum-wage is zero

“When you are unemployed, your wages are zero, regardless of what the minimum-wage law specifies.”

~ Thomas Sowell, Fact-Free Liberals: Part II

 

"Inclusion?"

"How many are the people who earnestly call for modern society to encourage greater 'inclusion,' yet who also support minimum-wage legislation? I suspect that the number of such people is large.
    "These people obviously miss what should be, but apparently isn’t, obvious – namely, by criminalising the ability of low-skilled workers to compete for employment by offering to work at wages below the legislated minimum, minimum-wage legislation is the opposite of 'inclusive.' Such legislation excludes from the above-ground job market workers with the lowest skills."
          ~ Don Boudreaux, from his post 'Inclusion?'

What's 'not seen' by social engineers is generally even more important than what is, explains Don Boudreaux in this Guest Post. Social engineers see only a relatively few surface phenomena, he observes, and remain blind to the astonishing complexity that is ever-churning beneath the surface that goes to create those surface phenomena. They need to turn off their tendency to push their simple coercive solutions at the expense of the freedom that would otherwise solve them.

'Turn off that tendency to coerce,' says Don Boudreaux

Beware the Allure of Simple ‘Solutions’

by Don Boudreaux

The attitudes and opinions of today’s so-called “elite” – those public-opinion formers who Deirdre McCloskey calls “the clerisy” – are childish. And not in a good way. Most journalists and writers working for most premier media and entertainment companies, along with most professors and public intellectuals, think, talk, and write about society with less insight than the average toddler.

This sad truth is masked by the one feature that does distinguish the clerisy from young children: verbal virtuosity. Yet beneath the fine words, beautiful phrases, arresting metaphors, and affected allusions lies a notable immaturity of thought. Every social and economic problem is believed to have a solution, and that solution is almost always superficial.

Unlike children, adults understand that living life well begins with accepting the inescapability of trade-offs. Contrary to what you might have heard, you cannot “have it all.” You cannot have more of this thing unless you’re willing to have less of that other thing. And what’s true for you as an individual is true for any group of individuals. We cannot support governments artificially raising the cost of producing and using carbon fuels, for example, unless we are willing to pay higher prices at the pump and, thus, have less income to spend on acquiring other goods and services. Equally, we cannot use money creation to ease the pain today of COVID lockdowns without enduring the greater pain tomorrow of inflation.

While children stomp their little feet in protest when confronted with the need to make trade-offs, adults accept the necessity of trade-offs. Except, of course, for those childish adults who are paid-up members of the clerisy.

No less importantly, adults -- real adults, those who understand this point -- are not beguiled by the superficial. They understand that not everything immediate noticeable is always important, and that -- all too frequently -- it's the things we don't see that are more important. Especially when the latter cause the former.

Pay close attention to how the clerisy (who are mostly, although not exclusively, Progressives) propose to ‘solve’ almost any problem, real or imaginary. You’ll discover that the proposed ‘solution’ is superficial; it’s rooted in the naïve assumption that social reality beyond what is immediately observable either doesn’t exist or is unaffected by attempts to rearrange surface phenomena. In the clerisy’s view, the only reality that matters is the reality that is easily seen and seemingly easily manipulated -- and manipulated, always and everywhere, with coercion. The clerisy’s proposed ‘solutions,’ therefore, involve simply rearranging, or attempting to rearrange, surface phenomena by means of the government's guns.

• Do some people use their own guns to murder other people? Yes, sadly. The clerisy’s superficial ‘solution’ to this real problem is to outlaw private guns (which ignores that this tends to leave guns in the hands of outlaws). 
• Do some people have substantially higher net financial worths than other people? Yes. The clerisy’s juvenile ‘solution’ to this fake problem is to heavily tax the rich and transfer the proceeds to the less rich (ignoring that there are too few rich to make the coercive transfer worthwhile, while reducing incentives for the less rich to get rich themselves). 
• Are some workers paid wages that are too low to support a modern family? Yes. The clerisy’s simplistic ‘solution’ to this fake problem – “fake” because most workers earning such low wages are not heads of households – is to have government prohibit the payment of wages below some stipulated minimum (ignoring that this tends to price marginal workers out of all employment altogether).
• Do some people suffer substantial property damage, or even loss of life, because of hurricanes, droughts, and other bouts of severe weather? Yes. The clerisy’s lazy ‘solution’ to this real problem focuses on changing the weather by reducing the emissions of an element, carbon, that is now (a bit too simplistically) believed to heavily determine the weather.

I could go on ... and I will.

• Do prices of many ‘essential’ goods and services rise significantly in the immediate aftermath of natural disasters? Yes. The clerisy’s counterproductive ‘solution’ to this fake problem (“counterproductive” and “fake” because these high prices accurately reflect and signal underlying economic realities) is to prohibit the charging and payment of these high prices. 
• When real inflationary pressures build up because of excessive monetary growth, are these pressures vented in the form of rising prices? Yes indeed. The clerisy’s infantile ‘solution’ to the very real problem of inflation is to blame it on greed while raising taxes on profits.
• Is the SARS-CoV-2 virus contagious and potentially dangerous to humans? Yes. The clerisy’s simple-minded ‘solution’ to this real problem is to forcibly prevent people from mingling with each other.
• Do many youngsters still not receive schooling of minimum acceptable quality? Yes. The clerisy’s lazy ‘solution’ to this real problem is to give pay raises to teachers and spend more money on school administrators.
• Do some American workers lose jobs when American consumers buy more imports? Yes. The clerisy’s ‘solution’ is to obstruct consumers’ ability to buy imports. Are some people bigoted and beset with irrational dislike or fear of blacks, gays, lesbians, and bisexuals? Yes. The clerisy’s ‘solution’ to this real problem is to outlaw “hate” and to compel bigoted persons to behave as if they aren’t bigoted.
• Do many persons who are eligible to vote in political elections refrain from voting? Yes. The ‘solution’ favoured by at least some of the clerisy to this fake problem – “fake” because in a free society each person has a right to refrain from participating in politics – is to make voting mandatory.

The above list of simplistic and superficial ‘solutions’ to problems real and imaginary can easily be expanded.

The clerisy, mistaking words for realities, assumes that success at verbally describing realities more to their liking proves that these imagined realities can be made real by merely rearranging the relevant surface phenomena. Members of the clerisy ignore unintended consequences. And they overlook the fact that many of the social and economic realities that they abhor are the result, not of villainy or of correctible imperfections, but of complex trade-offs made by countless individuals.

Social engineering appears doable only to those persons who, seeing only a relatively few surface phenomena, are blind to the astonishing complexity that is ever-churning beneath the surface to create those surface phenomena. To such persons, social reality appears as it does to a simple child: simple and easily manipulated to achieve whatever are the desires that motivate the manipulators.

The clerisy’s ranks are filled overwhelmingly with simple-minded people who mistake their felicity with words and their good intentions for serious thinking. They convey to each other, and to the unsuspecting public, the appearance of being deep thinkers while seldom thinking with more sophistication and nuance than is on display in every classroom of toddlers today.

* * * * 

Don Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites & Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. 

He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.

A version of his post first appeared at the American Institute for Economic Research blog.

"Socialists imagine that the minimum wage increases wages paid. But the fact is that it increases, not the wage paid to a given worker, but the threshold. That is, it raises the bar on what employment is legally permissible." #QotD

"In an attempt to raise wages, the government imposes a minimum wage by law. Socialists imagine that this increases wages paid. But the fact is that it increases, not the wage paid to a given worker, but the threshold. That is, it raises the bar on what employment is legally permissible..."
    "A price fixing scheme like minimum wage is based on the idea that ... there is a magically right wage—nowadays called “living” ... And the government, of course, has the job to ensure it is paid. Of course, the government cannot guarantee any such thing....
    "On one side, there are people who go without work. They suffer the hardships of poverty .... On the other side, there are entrepreneurs who go without workers. ...
    "By fixing price, they think to fix the economic outcomes. But the reality is the opposite ... government intrusion into the market causes dis-coordination. There are people who lack for work, and at the same time companies who lack for workers. This is an extraordinary thing, for all that we take it for granted and accept it as if it were normal."
          ~ Keith Weiner, from his post 'Distortion Due to Minimum Wage Law'
.

"Define 'low-income workers' any way you wish and you will find that, by pricing them out of the labour market, a minimum-wage hike decreased some of these workers’ incomes to $0." #QotD

"You mistake the term low-income workers' for a relevant category with well-defined, objective boundaries. But no such category here exists.
    "Which persons are we to classify as 'low-income workers'? Are they all people currently working for $17.75 per hour or less? Or are they all people working or actively looking for work at $17.75 per hour or less? What about all people who are working for $18.00 per hour or less? Or all people who are working for $18.25 per hour or less? Or $18.50 per hour or less?
    "And what do you count as income? Wages only? Wages plus fringe benefits? And do you or don’t you count as 'income' the value to each worker of on-the-job training and work experience?
    "Does your category 'low-income workers' include only full-time workers, or does it include also part-time workers? And how do you handle variations across jobs in the availability of overtime work?
    "There are no 'scientific' or objective answers to these (and many other similar) questions – meaning, there is no objective boundary separating 'low-income workers' from other workers...
    "Define 'low-income workers' any way you wish and you will find that, by pricing them out of the labour market, a minimum-wage hike decreased some of these workers’ incomes to $0."
        ~ Don Boudreaux, from 'Another Open Letter to Thomas Hutcheson' 

[NB: Numbers changed to reflect NZ rates.]

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QotD: The marginal business busted by minimum wage laws

"When socialists want to hike the minimum wage, they tell you workers need more. Because that's how socialists work.When the minimum wage is hiked, it ruins the marginal business. Because that's how economics works.And when those businesses fail, socialists tell you they deserve it. Because that's how envy works."
~ Keith Weiner

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You can’t fix poverty with loot-and-plunder economics

Anti-poverty campaigners in general exhibit little understanding of what it would take to actually relieve poverty.

They claim, for example, that high taxes and a so-called “living wage” will alleviate poverty and raise general wealth, without realising that it is the goods and services those wages buy (that must first be produced) that constitute the real wage by which everyone is finally paid – that production of these goods and services, this wealth, cannot be raised simply by legislative fiat.

They fail to grasp that it is actually poverty that is mankind’s natural state, and that it is past wealth production (not redistribution) that has been rescuing people from poverty worldwide in ever-expanding numbers – the great (but almost unheard) story of our era --  but the campaigners’ own knowledge of (and interest in) the process whereby all this wealth is produced is less than that of a small child – and their efforts to simply legislate higher wages by law amounts to little more than a “loot and plunder” approach to economics.

The science of wealth production (which used to be called political economy) begins with the observation that one person alone can barely produce enough to satisfy a small percentage of their wants, as George Reisman explains:

A man can do the labour of one but would like to benefit from the labor of many. Thus labour is scarce and needs to be made more productive.
     Unemployment is not the result of a lack of work to do, but of wages that are too high and a capital supply that is too low.
    A fall in money wages and increase in capital supply can quickly achieve full employment, and at rising real wages [i.e., at increased amounts of goods and services able to be purchased with a given money wage].
    But our contemporaries think that prosperity can be achieved by forcing up wages and taxing away additions to capital. These beliefs, which are held by most of the educators and journalists who shape public opinion, are responsible for mass unemployment. People just don’t know that wealthier capitalists and more capital translates into a larger supply of products and greater demand for labour.
     Minimum wage laws violate the freedom of opportunity. They deprive people of the opportunity for employment by making money wages too high. The higher are wages, the smaller is the number of opportunities for employment offered in the market.
    For example, at a minimum wage of $15 per hour, all the jobs that would have been offered at wages below $15 are prohibited. All those employment opportunities are wiped out. A rising minimum wage traces a path of declining job opportunities. A free labour market [by contrast] reates employment opportunities equal to or greater than the number of workers seeking employment.
      Advocates of minimum-wage laws are both profoundly ignorant and implicitly advocates of physical force. Only the threat of physical force is what makes employers pay the minimum wage. Advocates of minimum wages know nothing of economics and want the government to use physical force to raise wages.
    The fundamental policy tools of statist politicians are clubs, guns, and prisons... What allows statist politicians to conceal the fact that they’re thugs is the belief that they have a special account with Santa Claus. As though Santa Claus, rather than extortion, were the source of the funds extorted by the politicians.
      The statist politicians and the leftist “intellectuals” dismiss the teachings of sound economics by calling it “trickle down.” They do not allow themselves to see that their theory of economics is the loot and plunder theory. They propose to enrich the country by plundering its capital through ever higher taxes and reducing the buying power of what remains.

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Labour dreams Little & make-work

 

Given that modern Labour seems resolved to fix every social and economic problem they see with a new tax, I was astonished to hear that news from their weekend conference that the Labour leadership are proposing a policy to remove a tax – or at least a tax burden.

No joke this: leader Andrew Little has recognised that many NZers work several jobs to either make ends meet, or make life liveable, and he says Labour policy will be to remove the iniquitous secondary tax that penalises these hard workers. These are my words, not his.

Business NZ agrees with him. And so do I.

Unfortunately the sensible comes packaged with the nonsensical in the form of a make-work scheme and at least one more new tax (see, they really are true to form).  Called a “levy” that will apply “to companies in sectors with skills shortages which were therefore reliant on migrant labour,” it is in effect a tax on businesses who struggle to find skilled labour. Bizarre, but true. Instead of

This new tax – a favourite of Little’s runtish deputy Grant Robertson, is already being called the Robertson Tax. It should never fly.

It does however at least seek to solve a real problem: that we live in a small country in which youth unemployment is much higher than it should be, while the number of skilled employees who want to work is much lower. There is an obvious gap there which makes one wonder if the two problems shouldn’t be fixing each othet.

Instead of the obvious approach of seeking answers in the minimum-wage laws that both Red and Blue parties uphold (which all around the world leads to higher levels of youth unemployment) and the frequent and misguided changes by both parties in how apprentices are trained that have decimated the number of skilled workers, these Labour Party rocket surgeons instead propose to pay these young folk who are being priced out of the market by minimum wage laws to be welfare serfs in somebody else’s charity army.

The jobs policy would be for those on the Jobseeker benefit for more than six months, and would not be compulsory. “We will give these young Kiwis the kick-start they need to get back on the right track,” said leader Andrew Little. “This job experience will help them develop strong work ethics and make them more attractive to employers. We will get them ready for work.

So just to be clear: this make-work scheme will “get these young Kiwis back on track” by teaching them that the state will always be there to hold their hand once it has priced them out of the market  And it “will not be compulsory” but “there will be an expectation they take part – and possible sanctions if they don’t.”  Which if it isn’t exactly compulsion just yet then it is surely ust one arse-kicking away from it.

Which is at least a few dozen short of what these dickheads deserve for dreaming this shit up.

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Sugary drinks & minimum wages

 

The drums are beating to tax sugary drinks to lower their consumption, just as they continue to beat to strangle smokers by the wallet using the same approach.

But I wonder if the many advocates of this approach – who also advocate taxes on carbon to lessen its use – ever wake up in the morning and wonder why, if raising costs with new taxes stifle these things, as they argue, then why wouldn’t it do the same to other things as well?

Or as Donald Boudreaux puts it, if the Law of Demand applies to sugary drinks, then why not to wages?

The World Health Organization recently endorsed a global hike in the tax on sugary drinks. The stated goal, of course, is to improve people’s health by raising their costs of consuming high-calorie drinks. 
    Let's ignore here the officiousness of bureaucrats who arrogantly fancy themselves to be entitled to recommend the forcible extraction of money from people who act in ways that those bureaucrats have divined are ‘bad’ for those people. 
    (I’m not one to propose taxes, but if – as is often asserted – we ‘must’ have taxes, I propose that stiff taxes be levied on all proposals to butt into the private affairs of others, and that stiff X 10 taxes be levied on all actual acts of butting into the private affairs of others.)
    Let's instead credit the WHO staff at least for correctly understanding basic economics: artificially raising the cost to buyers of acquiring drinks of kind X and Y will reduce (at least in above-ground markets) the number of drinks of kind X and Y that are purchased.
    Yet I wonder how many pundits, professors, politicians, and preachers who will favourably and self-righteously wave the WHO’s recent proposal as they support hiking taxes on sugary drinks because they predict that such taxes will reduce the quantity of such drinks demanded, and who also self-righteously support hiking minimum wages because they predict that such minimum-wage hikes will not reduce the quantity of low-skilled labour demanded.
    I’ll bet that the number of such inconsistent people is large.

I trust you, gentle reader, are not among their number.

 

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The economics of the minimum wage in one diagram

 

UPDATE: The dinosaur has a follow-up question to ponder: Why, or why not?

[Hat tip Keith Weiner, Tom Woods]

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Quote of the Day: On fully developing ‘human capital’

 

“Outside of STEM [i.e., learning Science, Technology, Engineering and Maths],
I believe work experience is a more important means of developing human
capital than is most academic coursework. But between laws against unpaid
internships, rampant occupational licensing, and minimum-wage legislation,
we are asymptotically approaching a point at which we have de-facto outlawed
work experience for young people who have not yet graduated from college.
    “The quasi-religious belief in ‘education’ then supports the shenanigans of
rent-seeking universities with bloated administrations and often delusional
professors in the humanities and soft social sciences (e.g. sociology). The
result will be increasing youth unemployment and a weak economy, all of
which will then be blamed on ‘capitalism’ by the delusional professors and
their deluded students. This leads to demands for even more anti-capitalist
regulation and more faux investments in ‘education’ which then exacerbates
the problem even further. Rinse, repeat.”
~ Michael Strong, CEO at Radical Social Entrepreneurs, Co-Founder at Kọ School + Incubator
and Chief ‘Visionary’ Officer at FLOW: Liberating the Entrepreneurial Spirit for Good

[Hat tip Stephen Hicks]

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Trump: Cashing in on a century of fetid ideas

 

Okay now, a question for you for a bonus point: What’s the connection between the minimum wage, the idea of “race suicide,” of all those racist responses to the refugeee crisis (“they’re oubreeding us!”), and to the rise and the appeal of that man pictured above.

Got it yet?

To give you one big clue from which you might get all the rest, I’ll let Leonard Thomas explain the first part of it (from his recent highly-recommended book Illiberal Reformers: Race, Eugenics, and American Economics in the Progressive Era), beginning with the rise of turn-of-the-century Progressive reformers “during the brutal re-establishment of white supremacy in the Jim Crow South.” The re-establishment of white supremacy was intended, argued these economic “progressives,” to maintain a higher level of wages for whites by legally excluding black would-be employees from competing with them.

Progressive economists [also] provided essential intellectual support to the cause of race-based immigration restriction, which, in the early 1920s, all but ended immigration from Asia and southern and eastern Europe. Such progressive exemplars as Richard T. Ely, John R. Commons, and Edward A. Ross promoted an influential theory known as race suicide, Ross’s term for the notion that racially inferior immigrants, by undercutting American workers’ wages, outbred and displaced their Anglo-Saxon betters.
    The same theory— that so-called unemployable workers were innately disposed to accept lower wages— was readily adapted to apply to African Americans, the disabled, and women. The leading lights of American economic reform advocated regulation of workers’ wages and hours to bar or remove the unemployable from employment, on the grounds that their inferior nationality, race, gender, or intelligence made their economic competition a threat to the American workingman and to Anglo-Saxon racial integrity.
    It is important to understand that the progressive campaign to exclude the inferior from employment [in practice, only white men of Anglo-Saxon background escaped the charge of hereditary inferiority] was not (merely) the product of an unreflective prejudice. Progressive arguments warning of inferiority were deeply informed by elaborate scientific discourses of heredity. Darwinism, eugenics, and race science recast spiritual or moral failure as biological inferiority and offered scientific legitimacy to established American hierarchies of race, gender, class, and intellect.

Bigotry has always liked to borrow a veneer of intellectual backing, even as it dreams up forms of legal exclusion.

And thus, with these self-titled Progressive economists was born the idea of a minimum wage: to permanently price out of the market non-white inferiors who would otherwise “outbreed and displace their Anglo-Saxon betters. (Thomas Sowell can tell you much more about that, if you want more.)

At the same time was born the banning, if possible, of non-white immigration.

As Simon Nelson Patten observed, “the cry of race suicide has replaced the old fear of overpopulation” “Race suicide” was a Progressive Era catchphrase, coined by the captious Edward A. Ross to describe the theory that races compete, and racial competition is subject to a kind of Gresham’s Law (that is, bad heredity drives out good).
     Workers of inferior races, because they are able to live on less than the American workingman, accept lower wages. American workers refuse to reduce their living standards to the immigrant’s low level, so, in the face of lower wages, opt to have fewer children. Thus did the inferior races outbreed their biological betters. The low-standard or undercutting-of-wages part of the theory got its start with the violent activism of white Americans against Chinese immigrant workers. … If wages were determined by living standards rather than by productivity, then the meat-eating Anglo-Saxon could not compete with the Chinese worker accustomed to rice. …
    White labourers, unable to “live upon a handful of rice for a pittance,” could not compete with the Chinese, “who with their yellow skin and strange debasing habits of life seemed to them hardly fellow men at all but evil spirits, rather.” …
    The most serious threat from immigrants, [social worker] Robert Hunter wrote [in his influential tome ‘Poverty’], was not their tendency to pauperism and criminality but their higher fertility. More immigrant children threatened the “annihilation of the native American stock,” and with it American freedom, American religion, and American standards of living. …
    Suicide, annihilation, displacement, invasion, and murder— this was the language of American scholars warning of race suicide.

This was the language of professional ‘progressive’ economists who are still feted today like Irving Fisher, John Bates Clark and the neanderthals to whom they offered house room.

You can hear in this the squalid fear that motivates both today’s race-suicide advocates fearful of Muslim fertility outbreeding good white European stock (as if race alone were the predictor of a person’s ideas), and today’s anti-free-trade zealots fearful of outsourcing “good local jobs” to low-paid Chinese workers accustomed apparently to just a handful of rice in their pay packet.

So, do you have the answer yet?

What links them both in the present American election campaign is one Donald J. Trump, harnessing both these ignorantly bigoted notions in his fatuous promise to Make America Great Again by building walls, banning trade, and generally excluding and expelling from the once-great country the very people and the ethos that attracted them that once helped to make it so great.

These are things that Donald Trump is saying that make his supporters say they are the things that most need to be said. Things that really should be unspoken and unsupported because they are both unsupportable and unspeakably vile. It needs to be said in response that these things are foul beyond words. They were when first floated, and they are even moreso now.

Born in bigotry and and fashioned by the economic progressives so well skewered in Leonard Thomas’s book, who would have thought a modern-day presidential candidate for the once-grand party that once freed the slaves would not just resurrect these fetid notions, but float them out there to (apparently) coast to victory in his party’s primaries.

We are living in interesting times.

But we do not have to accept either the intellectual viruses that gave them birth – or the people who help to spread and incubate them.

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Minimum wage rise: looking ‘good’ while not doing good

 

You’ll be aware that with no real prodding whatsoever, the Key Government last week raised the minimum wage by 50 cents, to the loud cheers of economic illiterates everywhere.

Here is perhaps the clearest illustration possible of how the enforced minimium wage hurts most those its supporters claim will be helped:

Not that this fact will bother the illiterates.

Like their loud support for many other policies of equally destructive power, it’s more about looking good to their right-on friends than actually doing good for those they claim they want to help.

Oh, some of the illiterates will still say, but if employers pay people more when they can’t afford it, consumption will increase across the board so that we can all afford more!  It is certainly true that higher money wages will increase total consumption—for a time anyway. This is not however a means by which anyone is actually made richer. This argument foolishly assumes that consumption is what produces weath, and that more of it produces an increasing amount. It ignores the source of those higher wages – which was capital that could have otherwise be spent more productively. It ignores the source of all real wealth, which is real production, not increasing consumption -- and that the ‘seed corn’ for all real production is this capital, of which the world is always desperately short. It ignores the fact that if more capital is spent paying a level of wages above what is being produced, then even less will be produced. It ignores the fact that if more capital were instead to be spent producing ever more wealth, instead of being spend unproductively or on more consmption, then production can increase and real wages really will increase right across the board!

Oh, some other folk will say, but if shitty employers will only pay shittier wages then they should be driven out of business anyway! Which, when you think about it, is simply reiterating the point made in the cartoon above. Because if those employers are driven out of business, then who do they think is going to emply those whose skills are worth less than this idealised minimum?

The minimum wage: making people into unemployable since the concept was first invented.