Quotes

Let’s Make Low Income Workers Unemployed!

2020-01-26 Leave a Comment

On June 16th, 1933 F.D.R. gave a speech on the just-enacted National Industrial Recovery Act. Although the law never lived to see its second birthday, being declared unconstitutional in 1935 (Schechter Poultry Corp. v. The United States), it did yield a snappy line that, zombie-like, never dies, and lives on in the memedom of the internet:

It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.

In lieu of silver bullets or a wood stake, let’s try to dispatch the undead with an even more lethal weapon: brutal, unflinching logic.

Let’s imagine three businesses, all selling roughly the same thing, say baseball bats.

Company X, the oldest of the companies, makes their bats in Alabama. They have old equipment, from the 1950s. It is not the fastest in the world, but it gets the job done. The process is completed by 10 low skill workers who do the final sanding, varnishing and inspection. They earn minimum wage.
Company Y is a new entrant to the field. They use computer-controlled lathes and all the latest automation. Their automation even does the sanding and varnishing. To supervise this process requires fewer workers. In fact they only need 2 people. But because of the higher skills these two need, the company needs to offer 5x minimum wage in order to attract workers with the right skills.
Company Z has a website. They sell baseball bats drop shipped from suppliers in China and Vietnam. Workers there get paid far below U.S. minimum wage. But Company Z doesn’t know, or care. They hire one full-stack web developer to build and maintain the website. He is not cheap, but is worth it.

Let’s further assume that all three produce a product that satisfies some segment of the market, in terms of price/quality trade-offs, and that all three companies operate at a profit.

So, what do you think the impact of forcing Company X to shut down, because it could not afford to pay a “living wage”?

Would this increase or decrease unemployment in the United States?
Would this result in more workers, or fewer workers needing welfare?
Would this result in those already on welfare requiring more or less assistance?
Would this result in more workers, or fewer workers displaced by overseas competition?
Would this accelerate or slow down the push toward more workers being displaced by technological improvements?
Would this increase or decrease competition for baseball bats?
Would this change in competition increase or decrease the price of baseball bats?

It seems to me to be plain that forcing Company X to shut down will make things worse, not better, for the company’s owners, their employees, and their customers. It is hard to imagine a worse policy.

The Heart of Libertarian Foreign Policy

2019-08-15 Leave a Comment

As I write this, protests continue to escalate in Hong Kong, protests widely described as “pro-democracy.” At the same time there are also reports of a build up of Chinese People’s Liberation Army forced nearby.

What should the U.S. do? Should we do nothing, say nothing, with a policy of total non-interference? Should we make a show of military force, and send an aircraft carrier to the South China Sea? Should we threaten economic sanctions if China reacts with force to restore order in their territory?

What is a libertarian to think? Surely, libertarians support freedom?

I think the wisest perspective on this was offered by John Quincy Adams, in 1821, when he was Secretary of State. In a speech honoring the 45th anniversary of the Declaration of Independence, Adams said:

Wherever the standard of freedom and Independence has been or shall be unfurled, there will her [America’s] heart, her benedictions and her prayers be. But she goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own. She will commend the general cause by the countenance of her voice, and the benignant sympathy of her example. She well knows that by once enlisting under other banners than her own, were they even the banners of foreign independence, she would involve herself beyond the power of extrication, in all the wars of interest and intrigue, of individual avarice, envy, and ambition, which assume the colors and usurp the standard of freedom. The fundamental maxims of her policy would insensibly change from liberty to force…. She might become the dictatress of the world. She would be no longer the ruler of her own spirit….

At nearly 200 years old, this remains the heart of libertarian foreign policy.

That Rothbard Race Quote

2019-01-22 Leave a Comment

WHY TALK ABOUT RACE AT ALL?If, then, the Race Question is really a problem for statists and not for paleos, why should we talk about the race matter at all? Why should it be a political concern for us; why not leave the issue entirely to the scientists?

Two reasons we have already mentioned; to celebrate the victory of freedom of inquiry and of truth for its own sake; and a bullet through the heart of the egalitarian-socialist project. But there is a third reason as well: as a powerful defense of the results of the free market. If and when we as populists and libertarians abolish the welfare state in all of its aspects, and property rights and the free market shall be triumphant once more, many individuals and groups will predictably not like the end result. In that case, those ethnic and other groups who might be concentrated in lower-income or less prestigious occupations, guided by their socialistic mentors, will predictably raise the cry that free-market capitalism is evil and “discriminatory” and that therefore collectivism is needed to redress the balance. In that case, the intelligence argument will become useful to defend the market economy and the free society from ignorant or self-serving attacks. In short; racialist science is properly not an act of aggression or a cover for oppression of one group over another, but, on the contrary, an operation in defense of private property against assaults by aggressors.—Murray Rothbard (1994).

This quotation is from the December 1994 issue of a newsletter, the Rothbard-Rockwell Report, that came out three months after Herrnstein/Muray’s book, The Bell Curve, was published. As many did at the time (the book got a warm review in the New York Times Sunday Review of Books, for example), Rothbard took the findings of the book, about the heritiability of intelligence, and the racial correlations, at face value.

Rothbard saw this as having two implications, depending on whether you were a statist or a libertarian (or “paleo,” the term he promoting at the time).

A statist would see this as reaffirming the necessity of a paternalistic, technocratic state, a justification for the need of a ruling elite:

Liberals neocons are “sorters,” they aim to sort people out, to subsidize here, to control and restrict there. So, to the neocon or liberal power elite, ethnic or racial science is a big thing because it tells these sorters who exactly they should subsidize, who they should control, who they should restrict and limit.

Rothbard, argued, on the contrary, that even if the The Bell Curve was correct in its science:

Paleos believe in liberty; paleos believe in the rights of person and property; paleos want no government subsidizers or controllers. Paleos want Big Government off all of our backs, be we smart or dumb, black, brown or white.

It is truly fascinating that, while liberals and neocons have been deriding paleos for years as notorious “racists,” “fascists,” “sexists,” and all the rest, that actually we, as libertarians, are the last group who deserve such a label: that, in fact, liberals and neocons, as people who all stand with the power elite over the ordinary Americans, are far more deserving of the statist-racist-fascist label.

Of course, in the months and years following the publication of The Bell Curve, critiques of the science emerged. But Rothbard died the next month, just weeks after the above quoted article went to print, so we will never know if or how he would have adjusted his views based on those challenges.

At the time, in late 1994, however, it was certainly in the mainstream of debate, in American, to discuss studies of race, IQ and genetics, and the ramifications of it. It was no longer a taboo subject. If doing so was racist, then every newspaper and magazine of record was racist, every public intellectual was racist, every Sunday news show was racist, and every college had racist tenured professors.

Of course, quoting Rothbard out-of-context, is easier than trying to understand or refute what he actually said.

Misquoting Mises

2019-01-17 Leave a Comment

“Nothing, however, is as ill founded as the assertion of the alleged equality of all members of the human race.”— Ludwig Von Mises, Liberalism, p. 28.

This sentence has floated around the web for a few years now, in libertarian-bashing articles and comment threads, purporting to show Mises as a vile, racist person. (You are free to search for the uses, in context, yourself. I won’t reward them with a link.)

It is, in fact, and as you would expect, an out-of-context quotation, one which means exactly the opposite of what, in isolation, it might appear to be saying.

The full passage, from Ralph Raico’s translation, pp 27-29, with the line-in-question bolded, is:

Nowhere is the difference between the reasoning of the older liberalism and that of neoliberalism clearer and easier to demonstrate than in their treatment of the problem of equality. The liberals of the eighteenth century, guided by the ideas of natural law and of the Enlightenment, demanded for everyone equality of political and civil rights because they assumed that all men are equal. God created all men equal, endowing them with fundamentally the same capabilities and talents breathing into all of them the breath of His spirit. All distinctions between men are only artificial, the product of social, human—that is to say, transitory—institutions. What is imperishable in man—his spirit—is undoubtedly the same in rich and poor, noble and commoner, white and colored.

Nothing, however, is as ill-founded as the assertion of the alleged equality of all members of the human race. Men are altogether unequal. Even between brothers there exist the most marked differences in physical and mental attributes. Nature never repeats itself in its creations; it produces nothing by the dozen, nor are its products standardized. Each man who leaves her workshop bears the imprint of the individual, the unique, the never-to-recur. Men are not equal, and the demand for equality under the law can by no means be grounded in the contention that equal treatment is due to equals.

There are two distinct reasons why all men should receive equal treatment under the law. One was already mentioned when we analyzed the objections to involuntary servitude. In order for human labor to realize its highest attainable productivity, the worker must be free, because only the free worker, enjoying in the form of wages the fruits of his own industry, will exert himself to the full. The second consideration in favor of the equality of all men under the law is the maintenance of social peace. It has already been pointed out that every disturbance of the peaceful development of the division of labor must be avoided. But it is wellnigh impossible to preserve lasting peace in a society in which the rights and duties of the respective classes are different. Whoever denies rights to a part of the population must always be prepared for a united attack by the disenfranchised on the privileged. Class privileges must disappear so that the conflict over them may cease.

It is therefore quite unjustifiable to find fault with the manner in which liberalism put into effect its postulate of equality, on the ground that what it created was only equality before the law, and not real equality. All human power would be insufficient to make men really equal. Men are and will always remain unequal. It is sober considerations of utility such as those we have here presented that constitute the argument in favor of the equality of all men under the law. Liberalism never aimed at anything more than this, nor could it ask for anything more. It is beyond human power to make a Negro white. But the Negro can be granted the same rights as the white man and thereby offered the possibility of earning as much if he produces as much.

In other words, Mises note that classical liberals spoke of equality of rights among all men. However, all men are, in fact, not identical in “physical and mental attributes.” Therefore, the equality of rights must have some other basis. He then suggested two reasons for nevertheless recognizing equality of rights: 1) that equality of rights leads to a more productive society, and 2) that it preserves social peace. Mises finally then states his unequivocal support for equal rights on this basis.

Quoting an out-of-context portion of this passage, and suggesting Mises was saying something illiberal (in a book called Liberalism), is intellectually shallow and mendacious.