Celebrating Good Capitalism

We stopped by the Bush Bean Museum on our way to the Smoky Mountains last weekend. I thought it just sounded like a random, quirky, and free place to visit, but I left with an appreciation for the underlying values represented by the museum. A large part of the museum simply showcases the history of the company as they overcame hardships, innovated new canning technologies, and came up with foods that customers wanted to buy – basically, a shining example of good capitalism.

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The Politics of Abortion and the Death Penalty

Yesterday, a man named Troy Davis was executed in Georgia, thanks to capital punishment. I haven’t taken time to familiarize myself with the details of the case, but apparently there was evidence that led many people to doubt his guilty sentencing. This set off a firestorm of political debate over the interwebs about the death penalty and the political groups most likely to oppose or support it and whether or not that opposition or support is logically consistent or morally wrong. I’ve seen a lot of zingers flying back and forth in my Twitter feeds. It kind of irritated me because these zingers were wrapped in arrogance, and as you should know by now, arrogance is one of the 3 things that greatly irritate me about political commentary, so I thought I would come along and try to give some perspective to both sides.

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Why I Don’t Like Unions

My dislike of unions begins with personal experience. In my third semester of college, I got a job at a local Schnuck’s grocery store. Along with signing all the regular new-job paperwork, I had to join the union, and dues were automatically deducted from each paycheck. Now I thought that unions were supposed to exist to save the common working man from the greed of the evil business owner, and give me a better working environment than I would have otherwise. As it turned out, there was a minimum flat union fee that I was forced to pay even if I only worked one day in a week. If I worked two days a week, my wages were flirting with minimum wage, and on one occasion where I worked one day of a week, my wages after union dues were the equivalent of less than $5 an hour, far less than the $6/hour with which I had begun my first job at McDonald’s three years prior when minimum wage was still $5.75. Somehow I doubted that without the union “supporting” me I would have been doing worse, and it surprised me that such a supposedly progressive institution would have such a regressive structure for collecting its dues. As it was, those with the lowest income ended up paying the largest percentage of their income to the union.

Now one of the liberal responses to complaints about unions is that there is nothing illegal about them – that workers have a right to assemble and organize and engage in voluntary contracts with their employers and so forth, and that if I didn’t like the union I was free to work somewhere else. Indeed, I did – I got a job at the Apple Retail Store less than three months later, a horrid union-less company that started me at a raw rate of a couple dollars an hour more than Schnuck’s and also had the audacity to give me options for stocks and retirement contributions. I still find it striking that out of the four companies I have now worked for over the course of my life’s employment, the one that offered me the lowest take-home wages, before or after inflation, was the one with the union. The general working conditions of all the jobs have been equivalent, and the only advantage the grocer’s union offered me over the others was a weekly instead of bi-weekly paycheck, which may have been an advantage for a poor full-time father with bills to pay but for me just served to highlight the huge portion of my low wages that were being sucked away to benefit a mysterious organization.

So, big deal, I had a bad experience with unions at a period of my life when good working conditions weren’t very important to me. Somebody else may like unions because of a positive experience with years of great wages and a good pensions. Neither experience is inherently more valid than the other. But the things that I have learned of present-day unions since my experience have done nothing to improve their image to my eyes.

There was the automaker bailout where the unions got a better deal than anyone else. There’s the Post Office teetering on bankruptcy partly because labor makes up 80% of its costs and there’s no easy way to bring that down. There are the cities going bankrupt due to generous public pensions. There are the complaints about the difficulties of firing bad teachers. At every turn, there is the image of the greedy parasitic union, gobbling up more benefits for its members regardless of how much they deserve it, regardless of how much it threatens to destroy their host business, regardless of how much their protection of incompetent long-standing members hides jobs from competent newcomers and reduces the effectiveness of whatever organization they claim to represent. Whether it’s a story in the news about a union boss raising an unholy ruckus about a slight proposal in reduced benefits that might make their company a little more solvent, or a story from a friend who can’t join a local orchestra because the union protects its members until they quit or die regardless of their talent trajectory, I find little evidence that I should like unions or view them as anything other than primitively tribal organizations that protect their oldest members simply because they’re the oldest members, while seeking maximum benefits for its members with no regard of the cost to anyone who’s not a member, or the costs to the health of the business or to the health of society at large (Metaphorically violent rhetoric against the Tea Party doesn’t help, either).

Recently I have been made aware of claims that historical unions were instrumental in creating much of the standard work environment we take for granted today: 40-hour work weeks, overtime pay, and the like. Working conditions of the past were notoriously detriment and dangerous, and even if you’re not in a union at your job, without the unions of the past your job wouldn’t be as nice as it is now. I think I’m OK with admitting that this could be true. (There are some libertarians, of course, who argue that working conditions would have improved anyway without unions, but of course your theory can always beat someone else’s reality.) Yet I think it is perfectly intellectually consistent to concede the valuable results of historical unions while severely disliking the excesses of unions today.

Ethos vs. Logos

Or, Authority vs. Knowledge in a Complex World

I first remember coming across the terms Ethos and Logos in a college English class, where we were learning about the fundamental tools of discussion and debate. These terms were used by the ancient philosopher Aristotle in discussing means of persuasion. Logos has something to do with trusting an opinion about something based purely on the logic of the argument for that opinion, and Ethos has something to do with trusting an opinion about something due to the integrity of the person making the argument. If a Greek city was arguing about whether or not to go to war, and a young man that nobody knew stood up to make a case about how many people would die or how successful the campaign might be, he would be relying on logos. However, if a wise old leader that everyone trusted simply said what he thought everyone should do without explaining himself, he would be relying on ethos.

I think we begin our lives with ethos. When I was an infant without fully developed capabilities of reasoning, I quickly learned to trust my mother and father and the choices that they made or recommended. As we grow up I think we begin a transition to logos, where we being to reason things out for ourselves, especially when we hit the stereotypical “rebellious teenage” years where we may doubt that mother and father truly know best.

Indeed, at the time that I learned these terms, I thought it was fairly obvious that logos was a superior method for determining one’s worldview. If two people are debating an issue, why should the person with a greater perceived level of status be granted an advantage over the other? The raw arguments and facts should be the only factors that lead one to a conclusion. Logos is a level playing field where truth can rise to the top.

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3 Ways Commentators Irritate Me

I spend a lot of time on the Internet reading people’s opinions about things going on in the world, whether it’s some of my favorite bloggers in the blogroll on the sidebar, or some articles featured on Real Clear Politics, or a scathing editorial that somehow slips into the Google News feed. Some of these commentators have their own websites, but many of them have syndicated columns in major newspapers – I read Paul Krugman’s posts from the New York Times website, or Ezra Klein’s from the Washington Post.

The most popular of these commentators have the privilege of having their posts read by thousands if not millions of people every day. You might expect these famous editorialists to be full of remarkable insight, but I often finish an opinion piece with disappointment, closing my tab in frustration. Here are the 3 ways that commentators irritate me the most:

1. Partial Truth. We live in a complicated world. Fortunately, the Internet is full of information to help us make sense of everything. Unfortunately, there’s so much information that it’s impossible to grasp it all. As a result, it’s very easy to focus on the part of the information that fits our pre-conceived notions about a topic. I doubt that it’s usually intentional, but commentators do this all the time. Somebody rants about Texas’s unemployment rate not looking very good, with a bunch of facts and figures, and somebody else raves about Texas’s jobs numbers actually looking incredible, with a bunch of other facts and figures. When it comes to millionaires paying taxes, somebody says they disappear when there’s a recession and somebody else says they’re missing the point (and I say they’re missing the point). From global warming to raids on guitar companies, everybody’s got plenty of facts to throw out, but it’s hard to know if those facts are the important ones, or what context might be missing. And when you do know enough about something to know that a commentator is leaving out some very important parts of a story, it lessens the credibility you give to other arguments the commentator makes about stuff you don’t know much about, regardless of what partial facts he or she may have to support it.

2. Arrogance. The proliferation of partial truths wouldn’t be so bad if everyone was humble about it, and we could work together to combine our partial truths for a more truthful whole. But all too often partial truths are compounded by terrible arrogance. Columnists confidently assert that their partial truths prove something beyond a shadow of a doubt. (Hurricane Irene IS proof of Global Warming! Broken windows DO increase wealth! And anybody who disagrees with me IS AN ARROGANT TOOL who is willfully ignorant of all logic and reason! They’re lazy and they hate successful people. Or they’re racist. Or whatever. I’M RIGHT.) This arrogance is probably one of the biggest things that turns people off to political discussions of any kind.

3. Vacuous Conjecturing. Even the proliferation of partial truths compounded by arrogance wouldn’t be so bad if commentators merely arrogantly stated their opinions about things that were happening. Once you learn to recognize the arrogance you can see through it, pick through the different facts presented by the different points of view, and often get a feel if one is closer to the truth than the other. But commentators don’t just state their opinions about things that are happening. Their partial truth and arrogance leads to an endless barrage of inane and vacuous conjecturing about things that are going to happen in the future, and they will happen because my arrogant interpretation of my partial truths proves it beyond all doubt. Whenever anything happens everyone feels like they’re qualified to tell the world exactly what it means for the future.

That’s why we’re treated to such nonsense as the post-2008-election analysis about a coming “permanent Democratic majority,” and the post-2010-election analysis about how long the Republicans might keep a majority in the House. Self-appointed prophets see an impending collapse of the country brought about by either the Tea Party on one side or the “drunken sailor” spending of the government on the other. Instead of pervasive discussion about the policy proposals of various presidential candidates, we are treated to phony meta-analysis about who is or is not electable, based on paragraph after paragraph of Gallup poll result drill-downs or interesting historical anecdotes. And after a few years of watching these copious conjectures from overconfident commentators collapse into complete irrelevance, I read new conjectures and feel like I am completely wasting my time by taking in more. All I learn is that so-and-so thinks such-and-such group of people will do such-and-such, but why should I care any more what they think about the future than they would care what I think when we both may end up being wrong anyway?

All of these thoughts bring me back to the reason commentators exist in the first place. I think people listen to commentators – whether from a newspaper, talk radio, an op-ed column, or a blog – because they expect the commentators to add value to their understanding of the world. In our modern division of labor and interests, the average person may read the news but not have time to get to the bottom of everything or know what’s most important out of all the facts available to him, and he may seek out a commentator’s opinion on something because presumably that person has gathered enough facts and simmered them with enough honest thinking to form a qualified opinion about the topic at hand. But when these opinions are muddled by partial truths, arrogance, and vacuous conjecture, they lose their value.

I’ve been commentating on the world since I first learned about blogging sofware, and I’ve been guilty of all three of these mistakes. About four years ago I wrote a fierce post for a now defunct website expressing my confidence that Barack Obama was going to lose the primaries and become Hillary Clinton’s pick for vice-president, based on the progress of the Democratic primaries at the time, the latest polls, and the insight that I thought I had about what would happen next and why. What value did these assertions have for the dozen or so who read that post? Wouldn’t I have been better off humbly discussing some facts about either of the candidates and what kind of leader I thought that might make him or her, instead of wasting time telling people how I thought the masses were going to vote?

Arrogance is fun. Bold, sensationalist statements have shock value, but it’s a value that fades very quickly for me, and I suspect for many others as well. Every time I add bytes of text to a public server, I try to avoid drawing conclusions from partial truths, speaking arrogantly, or making vacuous conjectures. I don’t always succeed, but I think I’m getting better, and I challenge you to strive for the same. Then maybe, just maybe, we can all make the world a better place.

Why Is FEMA So Incompetent And Should It Be Abolished?

Ron Paul is, unsurprisingly, taking criticism for suggesting that there is no need for FEMA to respond to Hurricane Irene because it shouldn’t exist at all. Paul has a philosophical objection to federal intervention of this nature, but while progressives are pontificating that conservatives just don’t want to help people, they are forgetting that there is a very large difference between doing things that are supposed to help people and doing things that actually help them, and FEMA has a gross history of incompetence when it comes to actually helping people.

The Federal Emergency Management Agency is most infamous, of course, for its bungled response to Hurricane Katrina. Some progressives blame this on active actions by the Bush administration to handicap the organization or divert its resources. But while we can debate about the blame for the lack of preparedness or resources, it is also clear that even the resources that were available were often mismanaged (such as the luxurious abuse of the distributed debit cards). We can argue about why FEMA was slow to establish a presence in the affected areas, but it is also clear that even when they had a presence they were often preventing other people from assisting (There are scores of infuriating stories about FEMA stopping doctors from treating victims, turning away volunteer firefighters, prohibiting volunteer boats from entering the city, and preventing the Red Cross and Walmart from delivering goods to the needy – to name a few.)

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More on Keynesian Broken Window Disasters

Yesterday I tried to make sense of the Keynesian idea that breaking and replacing windows could be good for the economy. I found it interesting that soon after writing that broken windows could “increase growth,” Matt Yglesias linked to Nate Silver’s piece about the potential expensive catastrophe of Hurricane Irene. Nate says there could easily be billions of dollars of “incalculable” damage. So does Matt think that if Irene breaks a lot of windows, the money spent to replace them will still “increase growth”? Or are there scenarios where spending money to undo destruction actually leaves the world worse off than before? If the answer to that question is an obvious yes, than I wonder how the Keynesian knows when we have a scenario where spending money to undo destruction actually does “increase growth.”

I’ve been thinking about these Keynesian arguments over the last couple of days. I suppose I need to learn more about the concept of the liquidity trap. I can almost understand a scenario in Paul Krugman’s world where there’s a bunch of businesses that have a lot of money that they’re not spending like they usually would, and some disaster would force them all to spend that money on repairs, increasing demand and getting more money flowing through the economy and so forth. And, indeed, we are living in an interesting world where corporate profits are high but hiring levels are not. So, even without being fully educated on the argument, I think I can conceive of a theoretical scenario where a disaster stimulates the economy.

But when windows get broken in the real world, doesn’t it seem like a pretty big wildcard to expect an unfolding scenario of the stimulating variety? What if the disaster is so big that the repair costs are far greater than the present amount of trapped liquidity, and some companies go right out of business because they can’t afford to repair? Or what if they can, but the damage to the local community and infrastructure is so great that they lose some of their customer base? As far as I’m aware, the economic evidence from Katrina to Japansuggests that disasters lower economic growth.

And that’s common sense. If you have to spend money replacing your broken windows, when it’s all said and done you have the same window you had before but less money to spend on something else – just like Bastiat said a couple centuries ago. Now maybe there exists the possibility of precise scenarios (like an alien invasion in a liquidity trap?) where people who have stopped investing magically end up spending their extra investment money to repair things, and that stimulates the economy, but I think the burden of proof is on the Keynesian to prove that the convenient line of factors required to make that a net gain instead of a net loss ever conveniently line up in the real world.

 

Why Are Politicians So Corrupt These Days?

Everybody likes to rail on about corrupt politicians these days. They sling mud at their opponents, do sleazy things and try to get away with it, hang out with lobbyists, and give special favors to their political friends. Come election time, challengers from the outside always promise to end the corruption that’s inside and bring a fresh start. Then the same thing happens a few years later. Why are our politicians so corrupt?

It’s tempting to think that today’s politicians in Washington, D.C. are corrupt in an unprecedented manner, and to try to find reasons to explain it. Maybe it’s the result of social moral decay. Maybe it’s because the population of the United States has more than tripled since the number of House Representatives was fixed at 435, so representatives can no longer be as close to the people.

Maybe there are specific factors contributing to modern corruption, but I just want to point out for the sake of perspective that this is nothing new. Bill Clinton lied in the 90’s. Nixon had his Watergate scandal in the 70’s. And that’s just very recent history. The ever-helpful Wikipedia has a fantastically long list of federal political scandals going all the way back to the time of George Washington, when a senator was “expelled from the Senate for trying to aid the British in a takeover of West Florida.” One of Andrew Jackson’s appointees embezzled over a million dollars (in the 1830’s) and “fled to Europe to avoid prosecution.” Ulysses S. Grant’s administration had an infamous Whiskey Ring full of bribes and kickbacks that resulted in “110 convictions.” The list is full of suspicious behavior, unsightly cover-ups, and outright fraud. It’s true that the list gets notably longer for more recent administrations – but it’s hard to know if that’s because politicians are more corrupt or if it’s just easier to keep track of them these days. Regardless, the U.S. federal government certainly has a long history of corruption.

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What’s Wrong With Mandated Paid Vacation?

I’ve been reading The Price of Everything by Eduardo Porter, which was recommended to me by, of all things, a copy of Relevant Magazine I got from Cornerstone Festival, and it’s got a lot of interesting information in it. Some of it has to do with how money relates to happiness. We know in general that money can’t buy happiness, but Porter looks at decades’ worth of surveys done across dozens of countries that attempt to measure satisfaction, well-being, and happiness. He concludes that generally people in richer countries are happier than people in poorer countries, but that the happiness gains from income gains seem to level off once you hit a rich enough point, partially because things like time start to matter more than money:

Time is relatively more valuable to the rich, who already have money, than for the poor who don’t… The value of our time also rises with age. That’s because wages increase as we proceed on our careers, gain expertise, and acquire seniority. The number of hours in the day, by contrast, does not. (p. 34)

Porter claims that according to surveys, life satisfaction actually fell in the United States in recent years even though it has increased in most other countries. He says that while Americans are on average more than one-third richer than French or Germans, we report about the same level of happiness, and he has a pretty good theory, related to the value of time, as to why this is the case:

No other workers in the industrial world work as much as Americans. Every country in the OECD except the United States mandates a combination of paid leave and paid public holidays… While the time devoted to work has declined in most industrial countries, in the United States it has remained flat over the past thirty years…

This work has produced a lot of growth… Yet perhaps what went wrong is that all the happiness gained by Americans from the extra income was consumed by the unhappiness of having to work seventy-six more hours a year to get it. Compare this with the situation in France. The French economy has grown a little more slowly. But the French worked 260 fewer hours in 1997 than in 1975… The trade-off changes as we become richer. The value of our scarce free time increases, while the things money can buy become less important the more we have. (p. 75-76)

Well, that’s pretty interesting, isn’t it? The libertarian in me thinks there’s already way too many government requirements for businesses, and the proper response to a desire for mandated paid vacation would be to write it off without a thought. Just because all the other countries do it… yeah, that’s what they said about health care too. The more you require things out of companies, the more they just make up for it by paying employees less or charging more for products; nothing is free and everything has a cost; extra regulations just slow down the economy and make it harder for us to make progress.

But what if we’ve already made enough progress that an extra week or two of free time would make us happier than the extra economic progress from the work? That’s a tantalizing thought. (For perspective, note that it’s estimated that about 75% of American workers already receive some paid vacation, although most of them probably do not get the several weeks offered in some European countries.) I’ve already seen time become more valuable to me as I grow up, and I’m only 22. Even the poor in the modern United States are fairly well-off, as this information from the Heritage Foundation suggests:

heritage-foundation-poor-households-amenitiesWe already have plenty of stuff. Even if a mandate for paid vacation slowed economic progress in the United States, maybe we would all be happier. Of course, there are other arguments that we don’t want more vacation in the United States. CNN says, “Only 57% of U.S. workers use up all of the days they’re entitled to, compared with 89% of workers in France, a recent Reuters/Ipsos poll found… Working more makes Americans happier than Europeans, according to a study published recently in the Journal of Happiness Studies.” We get fewer vacation days, but we don’t even use them all – a bunch of us sure aren’t acting like more time off would make us happier.

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Do Fines Help Regulations Pay For Themselves?

Recently in a comment on a news article, I read someone arguing that the beauty of government regulations is that usually pay for themselves through fines, so it doesn’t make sense to blame regulations in discussions of debt and deficit. This was an interesting point, as I had never really thought before about fines from violated regulations as a source of income for the government. But the more I thought about it, the more I thought that this viewpoint contains an inherent contradiction – even if fines completely offset the cost of implementing and enforcing a regulation.

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