"Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard." 

~ H. L. Mencken, from his 1916 Little Book in C Major

Reagan: "Warmly ruthless"

 

While we await the worst election result, about the worst US candidates in living memory, you might like to cast your mind back to Ronald Reagan. A Republican president when that meant something different. Martin Anderson worked as senior policy advisor to Reagan and helped shape the platforms of each of his campaigns. He remembers him this way:

"I once described him as warmly ruthless. He had this appearance of being friendly and jovial and nice, never argued with anyone, never complained. But if you shook your head and thought about it a little bit, he always did it his way. It was like there was a steel bar right down the middle of him and everything you touched was soft and fuzzy except the steel bar in the middle. He always did it his way. No matter how many people talked to him, no matter what happened, he always did it his way. If you were in the way, you were gone, you were fired. He never took any pleasure out of it, just gone. ...
    "He was incredibly smart. I know this doesn’t sound reasonable, but he was incredibly smart. I’ve dealt with professors at Columbia and professors at Stanford, but he could look at something and understand it and grasp it and turn it around and work with it and play with it. He was incredibly quick. I’d say he had a brain that was comparable to—and I’d talk to Milton Friedman or Ed Teller and Arthur [Burns], all those guys, he could stay with them.
    "Now, he hid that. He just backed off. He never argued with staff. You could have ten different people tell him the same thing and he’d just listen. He never said to them, Look, you dumb bunny, ten years ago I wrote an article on this, a long article. He’d just say, That’s an interesting idea. So many of the policy issues that were proposed to Reagan over time, by different people, he listened, That’s very interesting. Then when he did it, even though it was something he’d decided many, many years previously he would do, all these people were delighted. He was doing what they had told him. He was happy with that, he didn’t care.
    "He used to say privately, There’s no limit to what a person can get done if you don’t care who gets the credit. And he was just very smart. 

    "The second thing is, there was this feeling that he was lazy, that he took naps. Well, I travelled with him for almost four years. He never took a nap. It was total nonsense. In fact, he worked all the time. We have uncovered evidence with this book in terms of the handwritten documents and so on, he was writing all the time. He was studying, he was writing, he was working all the time, in private. As soon as he came out in public, put on the public persona, he was friendly and jovial and talking. ... 

"So I think people made the mistake of saying, Gee, this guy is an easy-going—obviously, we never see him working, so therefore the staff must be telling him what to say. Not true. And when they ran up against him, they assumed he could be persuaded and pushed around. Big mistake. And the woods are full of people that tried to do that ...

    "I remember one little thing in the campaign where ... one of the staff was answering some questions from reporters about naming a Vice President. The staff guy got up there and said, 'What he’s saying is totally wrong politically. He’s got it all wrong, he shouldn’t be saying this, he shouldn’t be saying that, telling me to straighten it up.' So I said, 'Hey, you tell him.' So he sits down with Reagan, explains to Reagan why what he is doing is wrong. Reagan looks at him and nods and says, 'Thanks,' real pleasant, 'Thank you very much.' Next day there’s a press conference and the second or third question is dealing directly with this. And I’m standing there and I’m looking. So Reagan looks around the room, and he looks around and he finds this guy that gave him the lecture and he looks directly at him and gives the 'wrong' answer. He did this all the time, nobody noticed. To this day they don’t notice, but that’s all right, he didn’t care."

[Hat tip David R.Henderson] 

Trump isn't just for tariffs. He's enthusiastically for tariffs. He wants to build a tariff wall — and this time everyone — from producers to consumers — from American to Chinese — who will pay.

[T]he scale of what Mr. Trump is proposing is larger than any tariff increases that have been seen in nearly a century. He has floated a “universal tariff” of 10 to 20 percent on most foreign products and tariffs of 60 percent or more on China. To ban Chinese cars from coming into the United States via Mexico, he has said he would impose “whatever tariffs are required—100 percent, 200 percent, 1,000 percent.”

By the way, "in nearly a century” means “since Smoot-Hawley,” the notorious 1930 tariff act that helped precipitate the Great Depression and encourage a second Great War.

Remember that?

Yet the arguments Trump and Vance are making for tariffs were already addressed by free-trade proponents over a century ago. But, as Kody Jensen points out in this guest post, ignoramuses like Trump and Vance keep making them. So he goes back to what one of those anti-tariff agitators were saying, a pro-trade fellow called William Graham Sumner ...

What would Sumner say about Trump and Vance’s pro-tariff rhetoric?

by Kody Jensen

Sadly, all US presidents in recent times have leaned towards opposing free trade, but some have been worse than others. One has been much worse. In recent times Donald Trump has built his political reputation on being its wholehearted adversary. William Graham Sumner (1840–1910) was a wholehearted supporter of free trade. Professor, sociologist, clergyman, and advocate of laissez faire, the gold standard, and free trade — I went back to Sumner to find out how
he would respond to claims made by Trump and his running mate JD Vance about free trade in the recent debates? 

Let’s go to his writings to find a potential answer.

The Great Free Trade Debate

DT: “First of all, I have no sales tax," responds Trump to Harris characterising his tariff plan as a sales tax.. That’s an incorrect statement. We’re doing tariffs on other countries. Other countries are going to finally, after 75 years, pay us back for all that we’ve done for the world. I took in billions and billions of dollars from China.”

Sumner observes that protectionists have always shied away from referring to tariffs as taxes. Consider these comments from his 1888 book Protectionism: the -ism which teaches that waste makes wealth:

There are some who say that “a tariff is not a tax,” or as one of them said before a Congressional Committee: “We do not like to call it so!” That certainly is the most humorous of all the funny things in the tariff controversy. If a tariff is not a tax, what is it? In what category does it belong? No protectionist has ever yet told. They seem to think of it as a thing by itself, a Power, a Force, a sort of Mumbo Jumbo whose special function it is to produce national prosperity. They do not appear to have analyzed it, or given themselves an account of it, sufficiently to know what kind of a thing it is or how it acts. Any one who says that it is not a tax must suppose that it costs nothing, that it produces an effect without an expenditure of energy. They do seem to think that if Congress will say: “Let a tax of —— per cent be laid on article A,” and if none is imported, and therefore no tax is paid at the custom house, national industry will be benefited and wealth secured, and that there will be no cost or outgo. If that is so, then the tariff is magic. We have found the philosopher’s stone.

Furthermore:

A protective tax is one which is laid to act as a bar to importation, in order to keep a foreign commodity out. It does not act protectively unless it does act as a bar, and is not a tax on imports but an obstruction to imports. Hence a protective duty is a wall to inclose the domestic producer and consumer, and to prevent the latter from having access to any other source of supply for his needs, in exchange for his products, than that one which the domestic producer controls. The purpose and plan of the device is to enable the domestic producer to levy on the domestic consumer the taxes which the government has set up as a barrier, but has not collected at the port of entry. Under this device the government says: “I do not want the revenue, but I will lay the tax so that you, the selected and favoured producer, may collect it.” “I do not need to tax the consumer for myself, but I will hold him for you while you tax him.”

DT: “They aren’t gonna have higher prices," claims Trump, when asked if consumers can afford higher prices caused by tariffs. "What’s gonna have and who’s gonna have higher prices is China and all of the countries that have been ripping us off for years”

WGS: “To this it is obvious to reply: what good can they then do toward the end proposed?”

If the tariffs do not raise prices, then how do they encourage the protected industries? No doubt it would be a neat trick if the President could force foreigners to pay more for US products while not raising prices for US consumers. However, I cannot comprehend how taxes on US imports will achieve this. And nor can you.

Vance: “Think about this. If you’re trying to employ slave labourers in China at $3 a day, you’re going to do that and undercut the wages of American workers unless our country stands up for itself and says you’re not accessing our markets unless you’re paying middle-class Americans a fair wage.”

WGS:

The protectionist says that he does not want the American labourer to compete with the foreign “pauper labourer.” He assumes, that if the foreign labourer is a woolen operative, the only American who may have to compete with him is a woolen operative here. His device for saving our operatives from the assumed competition is to tax the American cotton or wheat grower on the cloth he wears, to make up and offset to the woolen operative the disadvantage under which he labors. If then, the case were true as the protectionist states it, and if his remedy were correct, he would, when he had finished his operation, simply have allowed the American woolen operative to escape, by transferring to the American cotton or wheat grower the evil results of competition with “foreign pauper labour.”

Can a tariff raise the general wage level? Sumner says no:

Wages are capital. If I promise to pay wages I must find capital somewhere with which to fulfill my contract. If the tariff makes me pay more than I otherwise would, where does the surplus come from? Disregarding money as only an intermediate term, a man’s wages are his means of subsistence—food, clothing, house rent, fuel, lights, furniture, etc. If the tariff system makes him get more of these for ten hours’ work in a shop than he would get without tariff, where does the “more” come from? Nothing but labour and capital can produce food, clothing, etc. Either the tax must make these out of nothing, or it can only get them by taking them from those who have made them, that is by subtracting them from the wages of somebody else. Taking all the wages class into account, then the tax cannot possibly increase, but is sure by waste and loss to decrease wages.

One point both Trump and Vance raised was that apparently even Joe Biden agreed with protectionist ideas, as he did not remove most of the tariffs imposed by the previous administration. I do not know what answer Sumner could give to this ubiquity of bad economics, other than to glumly shake his head.

And to point out perhaps that it is not economics that preaches tariffs to make Americans rich again—despite all the evidence against it: It's politics.

Additional Reading:

Protectionism: the -ism which teaches that waste makes wealth by William Graham Sumner

Leonard E. Read: Philosopher of Freedom by Mary Sennholz

William Graham Sumner: An Unjustly Forgotten Man by Gary M. Galles

On Liberty, Society, and Politics: The Essential Essays of William Graham Sumnerby Robert C. Bannister & John Attarian

 

"The paradox of 'Trump Derangement Syndrome' is that the phrase is used only by the very people who are suffering from it."

"[W]hen you make an argument like this, a certain type of person will immediately dismiss you with the term 'Trump Derangement Syndrome,' or TDS. ... This is obviously a lazy attempt at deflection—a phrase invoked to avoid having to think about evidence of Trump’s unfitness for office. ... You hear it from die-hard supporters and random people on the internet. But I think it is already distorting some of the press coverage of this election.
   "Here is the problem. What Trump is saying and doing is so unhinged—for example, repeating wild stories that Haitian immigrants are eating dogs and cats—that if all you do is simply describe it, you are the one who sounds crazy.
    "Trump says, for example, that he will use the military to jail his critics. ... * Or maybe Trump says he thinks we should suspend the Constitution ... ** Then your listener says, 'Oh, come on, you’re totally exaggerating. You’re suffering from Trump Derangement Syndrome.' But in dismissing you, your listener is moving himself farther away from an accurate grasp of reality. He is the one becoming—dare I say it?—deranged. ...
    "Donald Trump has intuitively mastered the techniques of propaganda, which include the Big Lie ... and also the Incredible Truth: a fact so outrageous that people refuse to accept its reality. If ... t if you go way beyond that to do or say something completely insane, no one will believe you’re doing it—even as you do it right out in the open.

“Trump Derangement Syndrome” has its origins in 'Bush Derangement Syndrome,' which was used to describe the truly hyperbolic reaction on the far left to George W. Bush ... But what Trump realised is: What happens if you yourself embrace the hyperbole and go out and embody it? All the rules intended to keep political discussion productive by protecting against hyperbole then work to protect you—and to protect you precisely because you embraced the worst possible views.
    "This is the fate that has been suffered by Godwin’s Law. ... you can talk about immigrants 'poisoning the blood' of the country and foreigners bringing in 'bad genes.' Have two of your chief supporters host and recommend an interview with an open Nazi apologist. Go onto a livestream with a guy who regularly hosts neo-Nazis. Talk about how you wish you had the kind of generals Hitler had. Refer to Nazis as very fine people. And then scream about how unfair it is when anyone points this out. ...
    "The paradox of 'Trump Derangement Syndrome' is that the phrase is used only by the very people who are suffering from it."

~ Robert Tracinski from his post 'The Anatomy of “Trump Derangement Syndrome”'

* Trump: "I think the bigger problem are the people from within. We have some very bad people. We have some sick people, radical left lunatics. And I think they're the—and it should be very easily handled by, if necessary, by National Guard, or if really necessary, by the military…. The worst people are the enemies from within, the sleaze bags, the guy that you’re going to elect to the Senate, shifty Adam Schiff."

** Trump: “A massive fraud of this type and magnitude [i.e., the election he actually lost] allows for the termination of all rules, regulations, and articles, even those found in the Constitution.”

 

"There is no such thing as western science, just science."

"At The Conversation [they say] 'We surveyed 316 researchers from research organisations across New Zealand ... A majority agreed mātauranga Māori should be valued on par with Western science.' Any academic who refers to science as 'western science' can almost certainly be dismissed as not serious. There is no such thing as western science, just science. We don’t have western gravity. ... It is about a method.
    "So an easy rule of thumb is to dismiss anyone who talks about Western science. They have no understanding of either science or history."

~ David Farrar from his post 'How to tell if academics can be ignored'

"Does denying human equality and rejecting the principles of colour-blind citizenship place you among the baddies? Yes, I’m afraid it does."

"[T]he period of roughly five months between the election of Abraham Lincoln as President in November 1860, and his inauguration in March 1861 ... were the months in which, one after the other, the slaveholding states of the South voted to secede from the Union. ...
    "The most disconcerting feature ... are the many parallels between the America of then, and the New Zealand of now. ... 

"From a strictly ideological standpoint, it is the Decolonisers who match most closely the racially-obsessed identarian radicals who rampaged through the streets of the South in 1860-61, demanding secession and violently admonishing all those suspected of harbouring Northern sympathies. Likewise, it is the Indigenisers who preach a racially-bifurcated state in which the ethnic origin of the citizen is the most crucial determinant of his or her political rights and duties.
    "Certainly, in this country, the loudest clamour and the direst threats are directed at those who argue that New Zealand must remain a democratic state in which all citizens enjoy equal rights, irrespective of wealth, gender, or ethnic origin, and in which the property rights of all citizens are safeguarded by the Rule of Law.
    "These threats escalated alarmingly following the election of what soon became the National-Act-NZ First Coalition Government. ... The profoundly undemocratic nature of the fire-eaters’ opposition was illustrated by their vehement objections to the ACT Party’s policy of holding a binding referendum to entrench, or not, the 'principles' of the Treaty of Waitangi. Like the citizens of South Carolina, the first state to secede, the only votes they are willing to recognise are their own. ...

"Those New Zealanders who believe unquestioningly in the desirability of decolonisation and indigenisation argue passionately that they are part of the same great progressive tradition that inspired the American Abolitionists of 160 years ago. But are they?
    "Did the Black Abolitionist, and former slave, Frederick Douglass, embrace the racial essentialism of Moana Jackson? Or did he, rather, wage an unceasing struggle against those who insisted, to the point of unleashing a devastating civil war, that all human-beings are not created equal?
    "What is there that in any way advances the progressive cause about the casual repudiation of Dr Martin Luther King Jnr’s dream that: 'one day my four little children will be judged not by the colour of their skin, but by the content of their character'? ...

"Does denying human equality and rejecting the principles of colour-blind citizenship place you among the baddies? Yes, I’m afraid it does."

~ Chris Trotter from his post 'Are We The Baddies?'

Pretty sure they're failing on the first reqirement too.

"Likewise with newspapers. We must be accurate, and we must be believed to be accurate. It’s a bitter pill to swallow, but we are failing on the second requirement. Most people believe the media is biased. Anyone who doesn’t see this is paying scant attention to reality, and those who fight reality lose. Reality is an undefeated champion. It would be easy to blame others for our long and continuing fall in credibility (and, therefore, decline in impact), but a victim mentality will not help. Complaining is not a strategy. We must work harder to control what we can control to increase our credibility. ... 

    "Lack of credibility isn’t unique to The Post. Our brethren newspapers have the same issue. And it’s a problem not only for media, but also for the nation. Many people are turning to off-the-cuff [and to-the-point] podcasts, inaccurate [and accurate] social media posts and other unverified [and verified ]news sources, which can quickly spread misinformation and deepen divisions [and also end them, and sow the harmony of that undefeated champion]. The Washington Post and the New York Times [and our own mainstream media] win prizes, but increasingly we talk only to a certain elite. More and more, we talk to ourselves." 

~ Jeff Bezos from his op-ed 'The hard truth: Americans don’t trust the news media'

 

"When Parliament can't do its job and pass clear, intelligible laws, then the courts & people are left with no choice but to make rules & laws on their own."

"Having said that, the Justice Minister is right. When Parliament can't do its job and pass clear, intelligible laws, then the courts & people are left with no choice but to make rules & laws on their own. So schools & universities have decided how to interpret the Treaty their way, including how pupils are taught in this regard. Government departments have ruled on how employees must act, as have Councils, and private firms. Real estate authorities have ruled on obligations of agents regards the Treaty. Meanwhile judges have gone & done their own thing. And maybe you & me, next time we swim near the foreshore, or stand on a sea bed, should make our own rules & judgements, in negotiation with others, as to what we can, or can't, do. Maybe it should be sorted out by private bargains.
    "After all, Parliament has failed to lead. Perhaps it doesn't deserve to be called "sovereign", when it can't pass proper laws anymore. Maybe its best to leave things up to the people & their organizations to make their own laws. Parliament is looking inept, embedded in a City where water pipes burst around it, red cones block streets, broken ferries are berthed nearby & few people want to go into work anymore. Maybe power should go back to the people."

~ Robert MacCulloch from his post 'Maybe NZ's Minister of Justice is Right. When Parliament Can't Make Laws, the people have no choice but to take the Law into their Own Hands.'

"I find it astonishing that out of a population that contains the wealth of talent present in the United States, two such mediocre candidates have been nominated for the most powerful office in the world."

"In a by now text book example of 'progressive' thinking, [the Herald's Simon] Wilson suggests that taxing the tech billionaires isn’t actually going to hurt them. And this is where the Left gets it wrong.
    "Wilson and his ilk are of the view that those who are better off, who are 'richer,' who have taken risks to get where they have reached, who have used initiative and creativity to develop products which the market clearly wants — that they should be made to pay. For what? Wilson isn’t clear on this.
    "The approach seems to be that the Silicon Valley elites have more than many others, and so they should have less because they can afford to do without. It is this thinking that underpins the criticisms of the socialist approach made by Ayn Rand in 'Atlas Shrugged' and 'The Fountainhead.' ...

"As far as the US election is concerned I find it astonishing that out of a population that contains the wealth of talent present in the United States, two such mediocre candidates have been nominated for the most powerful office in the world. ...
    "The problem with Trump is that he is a crook. ... [H]e will allow the dictators and fellow authoritarians in Russia, North Korea, Iran and China to flourish and become more powerful. ... Harris will do damage to the economy and it is doubtful that she has the heft to maintain the US position on the international stage.
    "Anyone but Trump, sadly, is not an answer. ...
    "One wonders if 5 November 2024 will see the beginning of the destruction of the American experiment with democracy."

~ David Harvey on 'Reflections on an Election'

Ludwig Von Mises on Anarchism

“There are people who call government an evil, although a necessary evil. However, what is needed in order to attain a definite end must not be called an evil ... . Government may even be called the most beneficial of all earthly institutions as without it no peaceful human cooperation, no civilization and no moral life would be possible.” 

~ from Economic Freedom and Interventionism, p. 57.

"Anarchism misunderstands the real nature of man." 

~ from Liberalism, pp. 36-7.

“Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists ... . Liberalism is not so foolish as to aim at the abolition of the state.” 

~ from Omnipotent Government, p. 48.

"[Anarchists are' shallow-minded, dull, [and suffer from] illusions and self-deception.” 

~ from The Ultimate Foundation of Economic Science, pp. 98-9

"I am not an 'enemy of the state' any more than I can be called an enemy of sulphuric acid because I am of the opinion that, useful though it may be for many purposes, it is not suitable either for drinking or for washing one's hands." 

~ from Liberalism, p. 38

Hat tip Stephen Hicks

"The right has to invent preposterous stories, in order to justify an anti-immigrant pogrom." [updated[

"'Anyone who is in the United States illegally is subject to deportation,' he declared during his campaign, pledging to restore the notorious Eisenhower-era program Operation Wetback, which rounded up Mexicans and ejected them from the country.
    "Since assuming office, Trump has doubled down on his calls to build a wall on the southern border. He has tried to ban travel from several Muslim-majority countries, backed a plan to slash family-based immigration, and demanded 'extreme vetting' of all foreigners.
    "[T]he most insidious weapon in Trump's anti-immigration arsenal is 'interior enforcement.' ... It involves cleansing the country of the 11 million unauthorised aliens settled inside America by targeting them wherever they live or work. ...
    "There is no way for the government to conduct the policy equivalent of drone strikes and cleanly remove millions of immigrants from the midst of America without major collateral damage to everyone's rights. Interior enforcement is more like carpet bombing; its effectiveness depends on decimating Americans' liberties."

~ Shikha Dalmia from her post 'How Immigration Crackdowns Screw Up Americans' Lives'

UPDATE:

But, but, it's really straightforward to navigate the snakes and ladders of immigration. I find it really "amusing" ...  

Arsehole. 

Kawanatanga katoa > tino rangatiratanga

"'There’s no doubt that both Māori and Pākehā in 1840 understood tino rangatiratanga to be a bigger deal than kāwanatanga” [says an idiot called Hooton]. However whilst this is undoubtedly the modernist position on how we should interpret the Treaty, the historical evidence suggests something very different.
    "Article One of the Treaty states that the chiefs agreed to 'give absolutely to the Queen of England forever, the complete Government (Kāwanatanga katoa) over their land' ...
    "[T]hat little word katoa ... is rarely mentioned. But it means complete, all-encompassing, totally, without exception. It’s no wonder [that in 1840] it focussed the minds of the chiefs on the issue of Crown authority. ...
    "Nowhere in the historical records do we find any indication that either the chiefs or the Pākehā protagonists understood anything other than that Kāwanatanga katoa meant the Crown was being established as the pre-eminent governing authority in the land. ...
    "'Te Kawenata Hou' (the 'Māori New Testament') ... would have had significant influence on how the chiefs understood the Treaty. ... In 'Te Kawenata Hou' the term rangatira is a general term for leadership. In contrast kawana is a very specific term used to denote governors who represent the authority of kings. To use [the] example of Pilate – as the kawana (governor) he represented the sovereignty of the Roman empire in Jerusalem. He had the authority to tax and to execute judgement. The local Jewish leaders who wanted Jesus crucified had to get his permission. Those leaders are described in Te Kawenata Hou as rangatira. From this the chiefs at Waitangi would have quickly understood what was being proposed in the Treaty. And it certainly did not involve them retaining 'absolute sovereignty'."

~ Ewen McQueen from his post 'Kāwanatanga katoa was the fundamental question at Waitangi'

"So why are energy policies of leading Western countries afflicted by magical thinking and irrationality?"

"What leads a country to begin winding down domestic oil and gas production while promoting the use of imported wood – a wasteful and inefficient fuel — for power generation?
    "What leads policymakers to shut down a nation’s last and still-functional coal generating power plant after almost 150 years of using coal and within months arrive at a situation where blackout prevention notices have to be issued to its power generators?
    "The UK is by no means the only Western country to go down this perverse path of deindustrialisation and national economic suicide. 

    "So why are energy policies of leading Western countries afflicted by magical thinking and irrationality? [Because] The Western World is in a hypnotic trance from 30 years of relentless propaganda pushing climate alarmism."

~ Tilak Doshi from his post 'The Irrationality of Western Energy Policies'

Do we really want "efficient and effective government"?

"This [claim] blanks out the most important question about government: the question of what it should be doing in the first place! "Should the government should censor speech, or ban abortions, or eliminate carbon emissions, or the movement of goods and people on which our prosperity depends? These are not questions of efficiency or effectiveness. And indeed when a government is doing things that are destructive, it is better that it does them ineffectively. ...
    "There’s no such thing as doing a bad thing well; there’s just doing it more or less effectively, and when the goal is bad, it’s better that one be ineffective at bringing it about. ...
    "The context of present politics is that much of what both parties want to accomplish is wrong and destructive. And in such a context it’s foolish and immoral to think about who will be more efficient or effective in a way that’s agnostic about their ends."

~ Greg Salmieri, in answer to Lex Friedman

 

"Happiness is a state of non-contradictory joy ... "

"Happiness is not to be achieved at the command of emotional whims. Happiness is not the satisfaction of whatever irrational wishes you might blindly attempt to indulge. Happiness is a state of non-contradictory joy—a joy without penalty or guilt, a joy that does not clash with any of your values and does not work for your own destruction, not the joy of escaping from your mind, but of using your mind’s fullest power, not the joy of faking reality, but of achieving values that are real, not the joy of a drunkard, but of a producer. Happiness is possible only to a rational man, the man who desires nothing but rational goals, seeks nothing but rational values and finds his joy in nothing but rational actions."

~ Ayn Rand, from 'Galt’s Speech' in her 1957 novel Atlas Shrugged. Hat tip psychologist Jean Moroney — who "chews" the paragraph sentence by sentence in her latest blog post. There's a lot packed in there, she reckons. "When I re-read this paragraph," she says, "I felt like it had taken me 30 years to understand it in detail, and I still had more to learn from it." You too, probably.

Why Johnny isn't Reading [updated]

We all know that many students emerge from universities knowing less than they did when they entered; graduating with heads full of random, un-integrated bites of information, and arguments they’re aware (deep down) they’ve never really mastered. 

We know you can leave today's universities without every having heard of the giants of your own field; that you can be given an economics degree having never read (or read of) Adam Smith; or an architecture degree without ever getting to grips with Frank Lloyd Wright; or a philosophy degree without ever even encountering, or wrestling with Aristotle.

But it gets worse. More and more young people "just don’t want to read books any more: they seem to lack either the will or the attention span."

"If you’ve been teaching at the [university]  level for a number of years," says the Atlantic in a long piece on the distressing development, "and your teaching involves reading books, you’ll have noticed the phenomenon." I have. Even fourteen years ago it was evident.

Economist George Reisman used to reckon that graduates in any discipline should really emerge possessing 

the essential content of well over a hundred major books on mathematics, science, history, literature, and philosophy, and do so in a form that is well organised and integrated, so that he can apply this internalised body of knowledge to his perception of everything in the world around him. He should be in a position to enlarge his knowledge of any subject and to express his thoughts on any subject clearly and logically, both verbally and in writing. Yet, as the result of the mis-education provided today, it is now much more often the case that college graduates fulfil the Romantic ideal of being ‘simple, uneducated men.’” [Emphasis mine.]

This is everywhere. As the Atlantic recounts, 

students now seem bewildered by the thought of finishing multiple books a semester. .... Many students no longer arrive at [university]—even at highly selective, elite [universities]—prepared to read books.

The Spectator and Daily Skeptic tell a similar tale. The problem starts even earlier than university.

[A] student told [one uni lecturer] that, at her public high school, she had never been required to read an entire book. She had been assigned excerpts, poetry, and news articles, but not a single book cover to cover.

Hard to study literature if you've never read a book. And can't. 

Twenty years ago, Dames’s classes had no problem engaging in sophisticated discussions of Pride and Prejudice one week and Crime and Punishment the next. Now his students tell him up front that the reading load feels impossible. It’s not just the frenetic pace; they struggle to attend to small details while keeping track of the overall plot.

The result:

Students arrive on campus with a narrower vocabulary and less understanding of language than they used to have. ...; students “shutting down” when confronted with ideas they don’t understand; they’re less able to persist through a challenging text than they used to be. Daniel Shore, the chair of [one] English department, told me that his students have trouble staying focused on even a sonnet.

A sonnet is only fourteen lines!

The problem is said to be the internet.

Teenagers are constantly tempted by their devices, which inhibits their preparation for the rigors of college coursework—then they get to college, and the distractions keep flowing. “It’s changed expectations about what’s worthy of attention,” Daniel Willingham, a psychologist at UVA, told me. “Being bored has become unnatural.” Reading books, even for pleasure, can’t compete with TikTok, Instagram, YouTube. In 1976, about 40 percent of high-school seniors said they had read at least six books for fun in the previous year, compared with 11.5 percent who hadn’t read any. By 2022, those percentages had flipped.

But "teenagers are not bothering with the internet either."

They don’t want to know that much to actually initiate a question of the internet. If pushed, they might ask Alexa at home but they hardly go to the bother of typing out a question.
    And this, I have finally worked, out is the reason for teenagers’ disinterest in the possibilities of the internet: the current generation of children are passive users, not active ones. They look at their phones and entertainment is presented to them via their specific feeds: reems and reems of the stuff on Snap or TikTok. Teenagers have no need to actively look for anything, as everything has already been perfectly curated for their specific needs (generally beauty for girls, fitness and jokes for boys – disappointing but there it is). Internet use is a bit like reading a magazine of old, someone else has done all the hard work for you and all you have to do is sit back and scroll. ... 

[F]or the vast majority of children, the internet is as ignored and unvisited as the libraries and bookshops of old.

 So perhaps the problem is not that regular whipping boy. Perhaps the problem is that generations of children — teachers of the teachers of the teachers of today's teachers — have been taught dis-integrated knowledge; that facts are negotiable; that the author is dead; that creators are hegemonic; and that the oceans are boiling and colonial settlement is necessarily genocidal. The hierarchy of knowledge is routinely ignored (or entirely unknown), and teachers increasingly see themselves as agents of social and political change instead of what they once were: teachers. 

Is it then any surprise, after decades of this intellectual rot emanating from philosophy departments and then teachers colleges — a result of the long 'progressive' march through the institutions —that we're not overwhelmingly seeing strong, healthy, confident, independent and knowledgeable young folk, but too many who can't write, can't read, and can't think? 

How to solve this?

Start by burning to the ground the teachers colleges from whence this poison emanates. (Or at least close them). And insist that teachers know their goddamn subject. Philosopher Leonard Peikoff is a strong advocate of this policy to fix Why Johnny Can't Think:

There is no rational purpose to these institutions (and so they do little but disseminate poisonous ideas). Teaching is not a skill acquired through years of classes; it is not improved by the study of “psychology” or “methodology” or any of the rest of the stuff the schools of education offer. Teaching requires only the obvious: motivation, common sense, experience, a few good books or courses on technique, and, above all, a knowledge of the material being taught. Teachers must be masters of their subject; this — not a degree in education — is what school boards should demand as a condition of employment.
    This one change would dramatically improve the schools. If experts in subject matter were setting the terms in the classroom, some significant content would have to reach the students, even given today’s dominant philosophy. In addition, the basket cases who know only the Newspeak of their education professors would be out of a job, which would be another big improvement.
    This reform, of course, would be resisted to the end by today’s educational establishment, and could hardly be achieved nationally without a philosophic change in the country. But it gives us a starting point to rally around that pertains specifically to the field of education. If you are a parent or a teacher or merely a concerned taxpayer, you can start the battle for quality in education by demanding loudly — even in today’s corrupt climate — that the teachers your school employs know what they are talking about, and then talk about it.
    “If a nation expects to be ignorant and free . . .” wrote Thomas Jefferson, “it expects what never was and never will be.” 
    Let us fight to make our schools once again bastions of knowledge. Then no dictator can rise among us by counting, like Big Brother in 1984, on the enshrinement of ignorance.
    And then we may once again have a human future ahead of us.

 UPDATE:

At least one youngster is fighting back. On the tech front, at least.

And one school. On the philosophical front.

"Though it's tempting to [always] blame the government for getting in the way of business, there's a lot about Kiwi business that is about getting in the way of itself."

"[T]hough it's tempting to [always] blame the government for getting in the way of business, there's a lot about Kiwi business that is about getting in the way of itself. ... The Mood of the Boardroom Survey & recent remarks by some of this nation's CEOs reflect on the (dubious) quality of New Zealand's boardrooms more than anything else. Namely that most are woke & weak. ...
    "NZ's Big Corporate CEOs will not themselves push productivity-enhancing reforms in their own firms ... They'd prefer, instead, to be Mr Nice Person. Look at the qualifications of many of them - the typical one being in Accounting. Other than that, its law. Lawyers often get on Boards because Kiwi firms want someone to help with compliance - not a person with imagination about where the future of the company should be. ...
    "Before the Productivity Commission was de-commissioned, it identified lack of 'managerial capability' as a contributor to our low productivity. ... Many of our CEOs & Boardrooms are not capable. ... The staff can't make up for a boss who is the wrong boss. ... "

~ Robert McCulloch from his post '"The Mood" of NZ's (Weak and Inbred) Boardrooms reflects on their own ineffectiveness, which has cut productivity, not on our MPs' quality'

Young men are resenting being resented

 

"Young men seem to be motivated, not so much by a specific issue, but by their resentment of the current culture. If true, the upcoming elections will express the 'Breitbart Doctrine,' named after the late conservative journalist Andrew Breitbart. This doctrine states 'politics is downstream from culture.' To change the politics of a society, you must change its culture because politics originates from culture which, in turn, originates from the values of individuals who constitute society. Simply stated, if a person’s values and culture are transformed, his politics transforms accordingly.
    "The culture surrounding young men is dramatically different from that of their fathers, and the change has not been kind. The Brookings Institute notes, 'Young men increasingly feel as though they have been experiencing discrimination.' For decades now, prominent voices of political correctness, which is now called social justice, have blamed men as a gender class for a long slate of social wrongs. And, for young men, the past few decades constitute all of their lives. This means they have heard about their collective guilt since birth, and it would be natural for them to feel resentful for being castigated as a class for social wrongs. Such young men are reportedly turning to Donald Trump as a symbol of more traditional and proud manhood. ... [!]"

   "Women need healthy and well-adjusted men to be life partners, loving family members, friends, good neighbours, co-workers, and the peaceful strangers you pass on the street. The last thing women need is to live beside a generation of resentful men who act on their resentment, especially if the feeling is justified."

~ Wendy McElroy from her post 'Ignore The New Power Demographic at Your Own Risk: Young Male Voters'

UPDATED: "The richest 20 per cent of the world’s countries are now around 30 times richer than the poorest 20 per cent. Why? Differences in a society’s institutions."

"The richest 20 per cent of the world’s countries are now around 30 times richer than the poorest 20 per cent. Moreover, the income gap between the richest and poorest countries is persistent; although the poorest countries have become richer, they are not catching up with the most prosperous. ... Why? ... [D]ifferences in a society’s institutions. ...
    Europeans’ colonis[ed] large parts of the globe. One important explanation for the current differences in prosperity is the political and economic systems that the colonisers introduced, or chose to retain, from the sixteenth century onwards. The laureates demonstrated that this led to a reversal of fortune. The places that were, relatively speaking, the richest at their time of colonisation are now among the poorest. ...
    "In [these] colonies, the purpose was to exploit the indigenous population and extract natural resources to benefit the colonisers. In other cases [however], the colonisers built inclusive political and economic systems for the long-term benefit of European settlers. ... [These] settler colonies – needed to have inclusive economic institutions that incentivised settlers to work hard and invest in their new homeland. In turn, this led to demands for political rights that gave them a share of the profits. Of course, the early European colonies were not what we would now call democracies but, compared to the densely populated colonies to which few Europeans moved, the settler colonies provided considerably more extensive political rights. ...
    "[T]hese initial differences in colonial institutions are an important explanation for the vast differences in prosperity that we see today. ...
    "[This year's Nobel laureates in economics] have uncovered a clear chain of causality. [Mercantilist] institutions that were created to exploit the masses are bad for long-run growth, while ones that establish fundamental economic freedoms and the rule of law are good for it."

~ from the 'Popular Information' released by the Nobel Prize Committee, awarding this year's Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2024 to Daron Acemoglu, Simon Johnson and James A. Robinson. [Hat tip Conversable Economist]

UPDATE: Not everyone's happy that the Prize has gone to what economist Deirdre McCloskey calls "a B+ statist": 

McCloskey of course has her own answer to what caused the prosperity that Acemoglu et al ascribe to good institutions: a cultural change before the Industrial Revolution she calls the "bourgeois revolution." Her ideas are debated here. For what it's worth, I'm in agreement with the great Joel Mokyr who says, "Ideas mattered, but so too did institutions."

"Remember, remember, this fifth of November, Fake electors, insurrection, and plot."

 

Not that I'm voting in the US elections on November 5th — and probably wouldn't if I could — but here are seven reasons not to vote for Orange Man, laid out in The Case Against Donald Trump (Part 1). Seven! Count 'em. Precised by this pithy poetry:

Remember, remember, this fifth of November, 

Fake electors, insurrection, and plot. 

I know of no reason, the sixth of January 

Should ever be forgot.

The 'poem' 's author, Rob Tracinski, reckons "Donald Trump is unfit for the presidency on about seven different levels."

No, seriously, when I began to jot down my notes for the case against him, I identified seven major issues, any one of which would be sufficient reason to vote against him:

1. January 6, 
2. his current threats against democracy, 
3. his hostility to Ukraine, 
4. his disastrous proposals on tariffs and mass deportations, 
5. his method of thinking (or lack thereof), 
6. his unrelenting series of con-man schemes, and 
7. his repellent personality.

But, but, Kamala Harris ...

Look, the thing that most recommends her for the presidency is simply that she is not Donald Trump—and to appreciate what a compelling motive that is, we first have to survey the full scope of his threat to the country.

Read on to begin that survey. It is truly repellent.

Socialists once argued that socialism was superior to capitalism because it would deliver a higher standard of living and more consumer goods. When it became abundantly clear that this was bollocks, the socialists shifted their arguments and began to claim that socialism—while perhaps economically inferior—was superior morally and philosophically. And thus was born the post-modern denial of that outrageous success in human progress, and environmentalists' objection to it. 

Stephen Hicks writes about this in his 2004 book Explaining Postmodernism. Ludwig Von Mises was on to this a half-century before when he penned his short book The Anti-Capitalist Mentality, explaining why the intellectuals of his day so loathed the free market.... 

The Noneconomic Objections to Capitalism

by Ludwig Von Mises

1. The Argument of Happiness

Critics level two charges against capitalism: First, they say, that the possession of a motor car, a television set, and a refrigerator does not make a man happy. Secondly, they complain that there are still people who own none of these gadgets. Both propositions are correct, but neither casts blame upon the capitalistic system of social cooperation.

People do not toil and trouble in order to attain perfect happiness, but in order to remove as much as possible some felt uneasiness and thus to become happier than they were before. A man who buys a television set thereby gives evidence to the effect that he thinks that the possession of this contrivance will increase his well-being and make him more content than he was without it. If it were otherwise, he would not have bought it. The task of the doctor is not to make the patient happy, but to remove his pain and to put him in better shape for the pursuit of the main concern of every living being, the fight against all factors pernicious to his life and ease.

It may be true that there are among Buddhist mendicants, living on alms in dirt and penury, some who feel perfectly happy and do not envy any nabob. However, it is a fact that for the immense majority of people such a life would appear unbearable. To them the impulse toward ceaselessly aiming at the improvement of the external conditions of existence is inwrought. ... One of the most remarkable achievements of capitalism is the drop in infant mortality. Who wants to deny that this phenomenon has at least removed one of the causes of many people’s unhappiness?

No less absurd is the second reproach thrown upon capitalism — namely, that technological and therapeutical innovations do not benefit all people. Changes in human conditions are brought about by the pioneering of the cleverest and most energetic men. They take the lead and the rest of mankind follows them little by little. The innovation is first a luxury of only a few people, until by degrees it comes into the reach of the many. 

It is not a sensible objection to the use of shoes or of forks that they spread only slowly and that even today millions do without them. The dainty ladies and gentlemen who first began to use soap were the harbingers of the big-scale production of soap for the common man. If those who have today the means to buy a television set were to abstain from the purchase because some people cannot afford it, they would not further, but hinder, the popularisation of this contrivance. 

The inherent tendency of capitalism is towards shortening the interval between the appearance of a new improvement and the moment its use becomes general.

2. The Argument of Materialism

Again there are grumblers who blame capitalism for what they call its mean materialism. They cannot help admitting that capitalism has the tendency to improve the material conditions of mankind. But, they say, it has diverted men from the higher and nobler pursuits. It feeds the bodies, but it starves the souls and the minds. It has brought about a decay of the arts. Gone are the days of the great poets, painters, sculptors and architects. Our age produces merely trash. ...

'Fallingwater,' Frank Lloyd Wright, 1936

Among those who make pretense to the appellation of educated men there is much hypocrisy. They put on an air of connoisseurship and feign enthusiasm for the art of the past and artists passed away long ago. They show no similar sympathy for the contemporary artist who still fights for recognition. Dissembled adoration for the Old Masters is with them a means to disparage and ridicule the new ones who deviate from traditional canons and create their own.

John Ruskin will be remembered — together with Carlyle, the Webbs, Bernard Shaw and some others — as one of the gravediggers of British freedom, civilisation, and prosperity. A wretched character in his private no less than in his public life, he glorified war and bloodshed and fanatically slandered the teachings of political economy which he did not understand. 

He was a bigoted detractor of the market economy and a romantic eulogist of the guilds. He paid homage to the arts of earlier centuries. But when he faced the work of a great living artist, Whistler, he dispraised it in such foul and objurgatory language that he was sued for libel and found guilty by the jury. It was the writings of Ruskin that popularised the prejudice that capitalism, apart from being a bad economic system, has substituted ugliness for beauty, pettiness for grandeur, trash for art.

'Nocturne in Black and Gold: TheFalling
Rocket,' James McNeil Whistler, 1875

As people widely disagree in the appreciation of artistic achievements, it is not possible to explode the talk about the artistic inferiority of the age of capitalism in the same apodictic way in which one may refute errors in logical reasoning or in the establishment of facts of experience. Yet no sane man would be insolent enough as to belittle the grandeur of the artistic exploits of the age of capitalism.

The preeminent art of this age of “mean materialism and money-making” was music. Wagner and Verdi, Berlioz and Bizet, Brahms and Bruckner, Hugo Wolf and Mahler, Puccini and Richard Strauss, what an illustrious cavalcade! What an era in which such masters as Schumann and Donizetti were overshadowed by still superior genius!

Then there were the great novels of Balzac, Flaubert, Maupassant, Jens Jacobsen, Proust, and the poems of Victor Hugo, Walt Whitman, Rilke, Yeats. How poor our lives would be if we had to miss the work of these giants and of many other no less sublime authors.

Let us not forget the French painters and sculptors who taught us new ways of looking at the world and enjoying light and color.

Nobody ever contested that this age has encouraged all branches of scientific activities. But, say the grumblers, this was mainly the work of specialists while “synthesis” was lacking. One can hardly misconstrue in a more absurd way the teachings of modern mathematics, physics, and biology. And what about the books of philosophers like Croce, Bergson, Husserl, and Whitehead?

Each epoch has its own character in its artistic exploits. Imitation of masterworks of the past is not art; it is routine. What gives value to a work is those features in which it differs from other works. This is what is called the style of a period.

In one respect the eulogists of the past seem to be justified. The last generations did not bequeath to the future such monuments as the pyramids, the Greek temples, the Gothic cathedrals and the churches and palaces of the Renaissance and the Baroque. In the last hundred years many churches and even cathedrals were built and many more government palaces, schools and libraries. But they do not show any original conception; they reflect old styles or hybridise diverse old styles. Only in apartment houses, office buildings, and private homes have we seen something develop that may be qualified as an architectural style of our age. Although it would be mere pedantry not to appreciate the peculiar grandeur of such sights as the New York skyline, it can be admitted that modern architecture has not attained the distinction of that of past centuries.

The reasons are various. As far as religious buildings are concerned, the accentuated conservatism of the churches shuns any innovation. With the passing of dynasties and aristocracies, the impulse to construct new palaces disappeared. The wealth of entrepreneurs and capitalists is, whatever the anticapitalistic demagogues may fable, so much inferior to that of kings and princes that they cannot indulge in such luxurious construction. No one is today rich enough to plan such palaces as that of Versailles or the Escorial. The orders for the construction of government buildings do no longer emanate from despots who were free, in defiance of public opinion, to choose a master whom they themselves held in esteem and to sponsor a project that scandalised the dull majority. Committees and councils are not likely to adopt the ideas of bold pioneers. They prefer to range themselves on the safe side.

Side table by Eileen Gray, chair by Marcel Breuer

There has never been an era in which the many were prepared to do justice to contemporary art. Reverence to the great authors and artists has always been limited to small groups. What characterises capitalism is not the bad taste of the crowds, but the fact that these crowds, made prosperous by capitalism, became “consumers” of literature — of course, of trashy literature. The book market is flooded by a downpour of trivial fiction for the semi-barbarians. But this does not prevent great authors from creating imperishable works.

The critics shed tears on the alleged decay of the industrial arts. They contrast, e.g., old furniture as preserved in the castles of European aristocratic families and in the collections of the museums with the cheap things turned out by big-scale production. They fail to see that these collectors’ items were made exclusively for the well-to-do. The carved chests and the intarsia tables could not be found in the miserable huts of the poorer strata. 

Those caviling about the inexpensive furniture of the American wage earner should ... [realise that w]hen modern industry began to provide the masses with the paraphernalia of a better life, their main concern was to produce as cheaply as possible without any regard to aesthetic values. Later, when the progress of capitalism had raised the masses’ standard of living, they turned step by step to the fabrication of things which do not lack refinement and beauty. Only romantic prepossession can induce an observer to ignore the fact that more and more citizens of the capitalistic countries live in an environment which cannot be simply dismissed as ugly.

3. The Argument of Injustice

The most passionate detractors of capitalism are those who reject it on account of its alleged injustice.

It is a gratuitous pastime to depict what ought to be and is not because it is contrary to inflexible laws of the real universe. Such reveries may be considered as innocuous as long as they remain daydreams. But when their authors begin to ignore the difference between fantasy and reality, they become the most serious obstacle to human endeavours to improve the external conditions of life and well-being.

The worst of all these delusions is the idea that “nature” has bestowed upon every man certain rights. According to this doctrine nature is openhanded toward every child born. There is plenty of everything for everybody, they say. Consequently, everyone has a fair inalienable claim against all his fellowmen and against society that he should get the full portion which nature has already allotted to him. The eternal laws of natural and divine justice require that nobody should appropriate to himself what by rights belongs to other people. The poor are needy therefore only because unjust people have deprived them of their birthright. It is the task of the church and the secular authorities to prevent such spoliation and to make all people prosperous.

Every word of this doctrine is false. Nature is not bountiful but stingy. It has restricted the supply of all things indispensable for the preservation of human life. It has populated the world with animals and plants to whom the impulse to destroy human life and welfare is inwrought. It displays powers and elements whose operation is damaging to human life and to human endeavours to preserve it. Man’s survival and well-being are an achievement of the skill with which he has utilised the main instrument with which nature has equipped him — reason.

Men, cooperating under the system of the division of labour, have created all the wealth which the daydreamers consider as a free gift of nature. With regard to the “distribution” of this wealth, it is nonsensical to refer to an allegedly divine or natural principle of justice. What matters is not the allocation of portions out of a fund presented to man by nature. The problem is rather to further those social institutions which enable people to continue and to enlarge the production of all those things which they need.

The World Council of Churches, an ecumenical organisation of Protestant Churches, declared in 1948: “Justice demands that the inhabitants of Asia and Africa, for instance, should have the benefits of more machine production.” This makes sense only if one implies that the Lord presented mankind with a definite quantity of machines and expected that these contrivances will be distributed equally among the various nations. Yet the capitalistic countries were bad enough to take possession of much more of this stock than “justice” would have assigned to them and thus to deprive the inhabitants of Asia and Africa of their fair portion. What a shame!

The truth is that the accumulation of capital and its investment in machines, the source of the comparatively greater wealth of the Western peoples, are due exclusively to laissez-faire capitalism which the same document of the churches passionately misrepresents and rejects on moral grounds. 

It is not the fault of the capitalists that the poorer countries did not adopt those ideologies and policies which would have made the evolution of autochthonous capitalism possible. 

Neither is it the fault of the capitalists that the policies of these nations thwarted the attempts of foreign investors to give them “the benefits of more machine production.” No one contests that what makes hundreds of millions in these nations destitute is that they cling to primitive methods of production and miss the benefits which the employment of better tools and up-to-date technological designs could bestow upon them. But there is only one means to relieve their distress — namely, the full adoption of laissez-faire capitalism. What they need is private enterprise and the accumulation of new capital, capitalists, and entrepreneurs. It is nonsensical to blame capitalism and the capitalistic nations of the West for the plight the backward peoples have brought upon themselves. The remedy indicated is not “justice” but the substitution of sound, i.e., laissez-faire, policies for unsound policies.

It was not vain disquisitions about a vague concept of justice that raised the standard of living of the common man in the capitalistic countries to its present height, but the activities of men dubbed as “rugged individualists” and “exploiters.” The poverty of the backward nations is due to the fact that their policies of expropriation, discriminatory taxation, and foreign exchange control prevent the investment of foreign capital while their domestic policies preclude the accumulation of indigenous capital.

All those rejecting capitalism on moral grounds as an unfair system are deluded by their failure to comprehend what capital is, how it comes into existence, and how it is maintained — and what the benefits are which are derived from its employment in production processes.

The only source of the generation of additional capital goods is saving. If all the goods produced are consumed, no new capital comes into being. But if consumption lags behind production and the surplus of goods newly produced over goods consumed is utilised in further production processes, these processes are henceforth carried out by the aid of more capital goods. 

All the capital goods are intermediary goods, stages on the road that leads from the first employment of the original factors of production, i.e., natural resources and human labour, to the final turning out of goods ready for consumption. They all are perishable. They are, sooner or later, worn out in the processes of production. If all the products are consumed without replacement of the capital goods which have been used up in their production, capital is consumed. If this happens, further production will be aided only by a smaller amount of capital goods and will therefore render a smaller output per unit of the natural resources and labor employed. To prevent this sort of dissaving and disinvestment, one must dedicate a part of the productive effort to capital maintenance, to the replacement of the capital goods absorbed in the production of usable goods.

Capital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving.

Neither have capital or capital goods in themselves the power to raise the productivity of natural resources and of human labor. Only if the fruits of saving are wisely employed or invested, do they increase the output per unit of the input of natural resources and of labor. If this is not the case, they are dissipated or wasted.

The accumulation of new capital, the maintenance of previously accumulated capital and the utilisation of capital for raising the productivity of human effort are the fruits of purposive human action. They are the outcome of the conduct of thrifty people who save and abstain from dissaving, viz., the capitalists who earn interest; and of people who succeed in utilizing the capital available for the best possible satisfaction of the needs of the consumers, viz., the entrepreneurs who earn profit.

Neither capital (or capital goods) nor the conduct of the capitalists and entrepreneurs in dealing with capital could improve the standard of living for the rest of the people, if these noncapitalists and nonentrepreneurs did not react in a certain way. If the wage earners were to behave in the way which the spurious “iron law of wages” describes and would know of no use for their earnings other than to feed and to procreate more offspring, the increase in capital accumulated would keep pace with the increase in population figures. All the benefits derived from the accumulation of additional capital would be absorbed by multiplying the number of people. However, men do not respond to an improvement in the external conditions of their lives in the way in which rodents and germs do. They know also of other satisfactions than feeding and proliferation. Consequently, in the countries of capitalistic civilisation, the increase of capital accumulated outruns the increase in population figures. To the extent that this happens, the marginal productivity of labour is increased as against the marginal productivity of the material factors of production. There emerges a tendency toward higher wage rates. The proportion of the total output of production that goes to the wage earners is enhanced as against that which goes as interest to the capitalists and as rent to the land owners. 

To speak of the productivity of labour makes sense only if one refers to the marginal productivity of labour, i.e., to the deduction in net output to be caused by the elimination of one worker. Then it refers to a definite economic quantity, to a determinate amount of goods or its equivalent in money. The concept of a general productivity of labour as resorted to in popular talk about an allegedly natural right of the workers to claim the total increase in productivity is empty and indefinable. It is based on the illusion that it is possible to determine the shares that each of the various complementary factors of production has physically contributed to the turning out of the product. If one cuts a sheet of paper with scissors, it is impossible to ascertain quotas of the outcome to the scissors (or to each of the two blades) and to the man who handled them. To manufacture a car one needs various machines and tools, various raw materials, the labour of various manual workers and, first of all, the plan of a designer. But nobody can decide what quota of the finished car is to be physically ascribed to each of the various factors the cooperation of which was required for the production of the car.

For the sake of argument, we may for a moment set aside all the considerations which show the fallacies of the popular treatment of the problem and ask: Which of the two factors, labour or capital, caused the increase in productivity? But precisely if we put the question in this way, the answer must be: capital. What renders the total output in the present-day United States higher (per head of manpower employed) than output in earlier ages or in economically backward countries is the fact that the contemporary American worker is aided by more and better tools. If capital equipment (per head of the worker) were not more abundant than it was three hundred years ago, say, then output (per head of the worker) would not be higher. What is required to raise, in the absence of an increase in the number of workers employed, the total amount of America’s industrial output is the investment of additional capital that can only be accumulated by new saving. It is those saving and investing to whom credit is to be given for the multiplication of the productivity of the total labour force.

What raises wage rates and allots to the wage earners an ever increasing portion out of the output which has been enhanced by additional capital accumulation is the fact that the rate of capital accumulation exceeds the rate of increase in population. The official doctrine passes over this fact in silence or even denies it emphatically. But the policies of bureaucrats and labour unions clearly show that their leaders are fully aware of the correctness of the theory which they publicly smear as silly bourgeois apologetics. They are eager to restrict the number of job seekers in the whole country by occupational licensing and anti-immigration laws, and in each segment of the labour market by preventing the influx of newcomers.

That the increase in wage rates does not depend on the individual worker’s “productivity,” but on the marginal productivity of labour, is clearly demonstrated by the fact that wage rates are moving upward also for performances in which the “productivity” of the individual has not changed at all. There are many such jobs. A barber shaves a customer today precisely in the same manner his predecessors used to shave people two hundred years ago. A butler waits at the table of the British prime minister in the same way in which once butlers served Pitt and Palmerston. In agriculture some kinds of work are still performed with the same tools in the same way in which they were performed centuries ago. Yet the wage rates earned by all such workers are today much higher than they were in the past. They are higher because they are determined by the marginal productivity of labour. The employer of a butler withholds this man from employment in a factory and must therefore pay the equivalent of the increase in output which the additional employment of one man in a factory would bring about. It is not any merit on the part of the butler that causes this rise in his wages, but the fact that the increase in capital invested surpasses the increase in the number of hands.

All pseudo-economic doctrines which depreciate the role of saving and capital accumulation are absurd. What constitutes the greater wealth of a capitalistic society as against the smaller wealth of a noncapitalistic society is the fact that the available supply of capital goods is greater in the former than in the latter. 

What has improved the wage earners’ standard of living is the fact that the capital equipment per head of the men eager to earn wages has increased. It is a consequence of this fact that an ever increasing portion of the total amount of usable goods produced goes to the wage earners. None of the passionate tirades of Marx, Keynes and a host of less well known authors could show a weak point in the statement that there is only one means to raise wage rates permanently and for the benefit of all those eager to earn wages — namely, to accelerate the increase in capital available as against population. If this be “unjust,” then the blame rests with nature and not with man.

* * * * 

Ludwig von Mises (1881-1973) was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. Mises' writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. (Some cogent quotes here from the great man.)

This post previously appeared at the Mises Blog.