I’m emigrating

The internet has no “borders.” I cannot dictate to others to post the content I produce, but I am free to take that content to wherever I decide. Therefore, I’ve decided to omit the .wordpress. feature of my website, and emigrate to a more legitimate website by the same name: TheDismalReview.com. Check it out. Still similar content but I just really wanted to shed the .wordpress., that’s the only reason for the change.

I would love to feature guest posts, so if you have any content laying around feel free to contact me! Unfortunately I’m not in a position to pay for it, hopefully one day!

76 Percent Free

Today was payday at one of my jobs. For my own bank account, I was permitted to keep 76 percent of the entire product I produced during the pay period. If I had insisted on keeping 100 percent and nothing less, men with guns would have thrown me into a cage.

It wasn’t greedy oil companies or slave-wage-paying Wal-Mart standing next to me with a gun to my head for dibs on the remaining 24 percent.

It was the Federal Government. It was the State of Michigan. More specifically, it was Political Bandits.

Actually, to be even more specific it was the countless masses of people throughout history who have been able to summon not a single moral objection to the idea of delegating robbery to those who call themselves “Public Servants”, or “Representatives”, or “Senators”, or etc….

I just call them Political Bandits. The very idea of “government” rests on taxation, which means to take money by force whether the producer consents or objects.

Maybe somebody would try to ease my frustration from being robbed and ensure me of every beneficial way these “Public Servants” are planning on spending my money to make me happy. After all, they give us roads!

Thanks, but doing something “nice” or “beneficial” isn’t a just cause to take somebody’s money without asking.

It would be as if I took the time and effort to shovel every inch of snow from your driveway before you left for work in the morning. And by the time you made it home from a long day you noticed that I helped myself to a healthy sum of your money, without your consent.

“By what right,” you snap, alarmed by the fact you’ve been robbed in pure daylight.

If we accept the notion that a Politician has every right to my money—provided he does something “nice” for me in return—well then by a swift extension of logic I must pronounce myself not only innocent, but in this day and age of political idolization I’d have to tap my ego and call myself a bit of a hero. Without me, who would shovel the driveways?!

Every time somebody tells me taxation is necessary for civilization, because it funds the institutions that purportedly secure our rights to property, I reflect (in surprisingly good humor) upon the fact that we’re all supposed to accept such an invalid line of thought, wherein we’re all robbed so that nobody gets robbed.

No Reason to Automatically Resist High Income Inequality

Suppose some left-leaning organization (Oxfam, for example) produces a table of income statistics showing that less than one percent of a given population owns slightly more than half of the total wealth. A quick glance at the raw numbers might raise some eyebrows. Surely such a “distribution” of wealth is a drastic aberration from the normal course of things. Who in their right minds would oppose with hard hearts efforts from public minded politicians who promise to make things more equal?

Enter Gary North, who recently posted and offered a counter-intuitive conclusion–“economic inequality hasn’t increased since at least 1897.” In fact, North argues that such a wide disparity in incomes or wealth ownership–which today is all the rage for those Americans on the political left–isn’t really an aberration at all.

For support, North leads our attention to the Pareto Principle, discovered in 1897:

The Pareto principle is a principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes. Also referred to as the “Pareto rule” or the “80/20 rule”.

This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. For instance, the efforts of 20% of a corporation’s staff could drive 80% of the firm’s profits. In terms of personal time management, 80% of your work-related output could come from only 20% of your time at work.

The Pareto Principle can be applied in a wide range of areas such as manufacturing, management and human resources. In Pareto’s case, he used the rule to explain how 80% of property in Italy was owned by 20% of the country’s population.

(Via Investopedia)

In 1896, Pareto observed in his garden that 20 percent of the peapods contained 80 percent of the peas, and proceeded to show that about 80 percent of the land in Italy was owned by just 20 percent of the population. In other words, Pareto discovered the principle in which a natural social order (whether in a garden, a private company, or even a national economy) will tend to produce about a 20/80 relationship between inputs and outputs.

In identifying how the social world naturally operates (namely, unequally), it immediately extirpates any notion that 1)an equal distribution of incomes within a given nation has historically been the long term trend, that 2)a highly unequal society (in terms of income, not political, equality) is an immoral one, and that 3)the government has a moral duty to fight income inequality.

The left’s balloon full of hot air has been refreshingly popped.

Unfortunately I haven’t seen many conservatives/libertarians using the Pareto Principle to counter the left’s incessant assault on economic liberty during their crusade to make a group of central planners responsible for distributing incomes. I know for a fact I heard Tom Woods bring it up in one of his brilliant podcasts, but he and North are the minority.

I’m currently reading Equal is Unfair, a new book from Don Watkins and Yaron Brook. I’ll be thrilled if they included such a discussion.

P.S. As I’ve noted before, income inequality per se isn’t even an issue. What matters is the means which people employ to seek economic gain, and so long as they’re of a productive nature, as opposed to a predative nature, then the resulting inequality is of absolutely no concern to me. Furthermore, in terms of our moral outrage, the resulting income inequality from predative behavior doesn’t trump the injustice/immorality of the behavior, so that I repeat: income inequality per se is no issue.

I DON’T GIVE A DAMN ABOUT INCOME INEQUALITY

When asked in an informal conversation about income inequality, sometimes hyped as the defining challenge of our time, I’ll look into my peer’s eyes with sincerity, and quite frankly admit that I don’t give a damn. And then, like Clark Gable I turn my back and disappear into the fog, the most dramatic mic drop of all time.*

Let us remember that individuals have essentially two alternatives for economic gain: either through predation or through production.

Predation can take many different forms: robbing a bank, sending out false information, lobbying politicians for monopolistic privileges or barriers to entry, et cetera. The distinctive feature is that the “winners” only gain at the expense and to the harm of the other parties (simply because the other parties–the “losers”– did not consent to the “transaction”).

Productive economic behavior–exchange based on mutual consent–has no such losers. As economists wonderfully point out, we all gain from trade. When Apple (which today has gone over the hill) sells a new iPhone or laptop to a customer, has anybody “lost”? Both parties voluntarily consented, and it’s not in human nature to voluntarily shoot yourself in the foot.

Both species of economic behavior will affect the so-called income distribution. But so what? As a libertarian I don’t reflect with joy when Apple posts high profits on the basis that the resulting income inequality is “the good kind.” I’m simply happy that 1)Apple is filling consumer desires by pursuing its own self-interest, that 2)the profits are an invitation to other companies to enter, and 3)that scarce resources are being used efficiently. On the flip side, when news surfaced that Boeing essentially operates the federal government created Ex-Im bank, and can grant itself exclusive privileges not available on the free market, I didn’t pause bitterly on the “bad inequality” that was sure to follow. I was outraged by 1)the economic folly propagated by intellectuals, by 2)the injustice of the situation, and 3)by the fact that scarce resources were being allocated via political channels.

The real meat of the matter, then, is not what kind of inequality is desirable or undesirable, but rather how individuals are pursuing their self-interest.

Just this one mental adjustment has a few really important implications in the inequality debate.

Most importantly, fighting income inequality as an end in itself would no longer hold such popular appeal. With the focus now on the means employed for economic gain, people would debate less on class issues and more on questions of principle. “The rich have become richer and the poor have become poorer” would become “we must protect the producers from the predators.”**

This implication would translate into completely different political responses than those being thrown around by Sanders, et al. “The rich” as such would not be identified as a monolithic entity of capitalists who have it out for the little guys. Instead we would see each individual as a unique end in himself, regardless of how much income he earns, and therefore would not propose sweeping solutions that only penalize or “reward” folks on the basis of association. In other words, under the current terms of debate, those rich producers stand to be penalized simply because they earn a comparable income to the rich predators. It’s guilt by association, and the way I see it, that’s morally objectionable.

My apathy of income inequality, then, is not the product of an apathy for the welfare of my fellow man. Just the opposite is true: I wish to stand up for the producers and expose the predators. It’s based on morality, and from the conviction that this will make the world a better place.


*Actually this only happens in my mind. In reality what normally happens is my counterpart informs me just how devastated the middle class and poor are in this country, and why it’s so important that we elect leaders who are actually committed to “doing something about it.”
**Producers vs. Predators is not synonymous with Rich vs. Poor. Producers are anybody–rich and poor–who earns their lot through free exchange based on mutual consent and value creation. Predators are anybody–rich and poor–who gain economically through coercion, i.e., through transactions not based on consent.

Some Interesting Opportunities

In an email I just received from the Foundation for Economic Education (FEE), I am absolutely delighted to have come across three different internship opportunities for the summer at the Mackinac Center for Public Policy. I list them here for my records:

  1. Education Policy Intern.
  2. Fiscal Policy Intern
  3. Labor Policy Intern

Due date to apply for each is March 31. This is exactly the type of real-world experience I’m looking for, and I’d be thrilled to learn from all of the professionals associated with a premier research organization. Wish me luck!