I have “Liked” their page so that I will be notified for all of their future events. A friend and I will attend, with video equipment to film some interviews.
Later today I’ll post some of the questions I was planning on asking. I’ve also reached out via email to the event’s coordinator with a list of these questions. If I get a reply it’ll be posted here at The Dismal Review.
Continuing with my review of Lanny Ebenstein’s new book, Chicagonomics, I have some preliminary thoughts from the very brief amount of the book I’ve had time to read. Before I begin, let me say that the subtitle of the book could more accurately than its current heading be titled “The Evolution of Chicago Egalitarianism.”
Ebenstein is obsessed with income inequality. He writes that he desires to see a “greater economic equality in the distribution of income and wealth” by restoring the high tax rates of the 1950s, “when rates of progressive income taxation were highest.” Later in the book (page 196) he asserts that income inequality is the greatest problem we face today in the United States.
The introductory chapter is more of an apologia for egalitarianism than it is for free markets and voluntary exchange. Instead of extolling the virtues of capitalism, he writes that “As historically understood at the University of Chicago, classical liberalism and capitalism require a strong egalitarian element achieved through progressive income and estate taxation.” Any of the several impressive snippets of praise for free markets and voluntary exchange are totally drowned out by the incessant calls for more egalitarianism.
Ebenstein grossly mischaracterizes the libertarian approach to income inequality. Here are three passages to illustrate my point [emphasis added]:
Page 9: “The classical liberal economic ideal was not and is not a society divided into a very few, ultra-wealthy makers and creators and a great mass of impoverished workers and indigents, though this may rapidly be approaching the American reality for tens of millions—and, indeed, this reality is rapidly attaining the status of an ideal for many contemporary libertarian writers and thinkers.”
Page 10: “…contemporary libertarians and many conservatives seek inequality as among their highest practical goals.”
Page 10-11: He claims that our (libertarians) “opinion of the appropriate and optimal society is one in which income and wealth are very unequally received and held, such as, for example, the contemporary United States.” Then he says that our view “on the desirability of inequality is not a part of the classical liberal tradition.”
I’d urge any skeptic of libertarianism to spend a few weeks perusing the libertarian blogosphere and libertarian books. He or she will notice that we do not speak in such terms as an “appropriate and optimal society” or eagerly await the day when a few wealthy overlords rule over the rest of us puny proletarians. He or she also will never see greater degrees of income inequality expressed as among our “highest practical goals.” Ebenstein so clearly mischaracterized our views that he almost strikes me as somebody who doesn’t really understand our views, but nevertheless invents strawmen to refute, to make our side look like intellectual Neanderthals.
Finally, to get a grasp of Ebenstein’s outlook of the Chicago School, consider the names he mentions as carrying on the legacy of traditional, classical liberalism (pages 17-18). Among them are Joseph Stiglitz, Paul Krugman, Larry Summers, Robert Reich, Ben Bernanke, and Janet Yellen. It’d probably be redundant for me to note that Thomas Sowell didn’t cut the list.
After briefly describing utility maximization theory (the view that individuals act to achieve their own greatest happiness), Ebenstein states on page 11:
“…Chicago economists have typically advocated public policies that are intended to result in the highest standard of living possible for all people—not a small group among them. The goal of free market economists from Smith to the present is to maximize everyone’s happiness…” [Emphasis added]
(Note: Ebenstein uses this passage and the concept of utility maximization theory to justify his obsession with egalitarian measures—high progressive taxation and income redistribution—to lessen income inequality.)
Second, is the final sentence of that passage not a load of hogwash? The idea that you and I want economists (let alone even believe they’re informed enough) to spend their days in ivory towers conjuring up ways to maximize our own happiness is just creepy! Nor is it necessary. Consider that the iPhone wasn’t invented because some economists were concerned with our welfare, but the Americans with Disabilities Act of 1990 was the direct result of economists and politicians acting to “maximize the utility” of a certain demographic. How did that turn out for the disabled, do-gooder economists?
The best thing an economist with Ebenstein’s mindset could do is to immediately retire from the profession. It’s enough to allow to private individuals and profit seeking enterprises the discretion over “maximizing” their own “utility.”
If one is truly a free market economist, he ought to spend his days improving his ability to combat the fallacies and half-truths presented by interest groups who lobby government officials for plausible sounding policies which in the end will result in unintended consequences.
I think I’ve made it perfectly clear my love of the sharing economy and the gig economy. These new styles of doing things represents a massive revolution in our global economy (I dare say on par with the Industrial Revolution). With a simple smartphone app, people are able to transform their possessions into revenue-earning capital and circumvent the established ways of “doing things.” Just as the Industrial Revolution ended slave and child labor and broke down the monopolies of large landowners, merchants, and GSEs, so is the sharing economy destroying established monopolies like the taxi cartels, hotel chains, and government regulatory boards. ‘Tis a glorious thing.
What this process also demonstrates is the powerful idea Matt Ridley articulated:“ideas having sex.” Essentially, different ideas come together and form new cultural memes or inventions. Computer + telephone = Internet. Engine + cart = car. And now, Internet + phone = smartphones (this is fleshed out much better than I can do in the TED talk linked above and in his excellent 2010 book The Rational Optimist. If you’ve not read it, you’re missing out!).
The most amazing thing about this process is these outcomes are just about impossible to know ahead of time. 30 years ago, when cellphones first came out, no one could have predicted they’d become small supercomputers in our pockets, nearly ubiquitous in the First World (and soon the whole world). 10 years ago, when the iPhone first came out, who would have thought the vast development of apps that would occur? Everything from crowdsourced GPS letting you avoid speed traps to talking cats. This massive development in human advancement, this revolution, was not driven by central planners in Washington or Brussels or Beijing (in fact, considering the efforts they’re devoting to stop this advancement, I’d say they’re pretty upset about it). It was developed spontaneously by individuals who thought they had a better way of doing things and combined resources in ways never thought before to create something new and exciting.
I don’t know what the world will look like in 10 years. But, like Ridley, I am rationally optimistic about the future of mankind. As long as human beings remain relatively free, free to invent, free to profit, and free to share ideas, then these ideas will continue to mate and produce offspring that will further enhance our well-being in ways be could not possibly anticipate.
“A sound test of a person’s intelligence is to gauge how seriously he or she takes any politician who stands a better-than-even chance of winning high political office. Anyone who takes such a politician seriously is quite likely to be unintelligent. His or her I.Q. might be high, but he or she is almost certainly not ‘intelligent’ in any practical meaning of that word. Politicians’ public statements are not always faithful to the underlying reality.”–Don Boudreaux
On a personal note, this advice would have been tremendously helpful to me in the course of the 2012 election, when I was a Mitt Romney fanatic. And I use that word with its most strict definition in mind:
fa·nat·ic (fəˈnadik/) noun 1. a person filled with excessive and single-minded zeal, especially for an extreme religious or political cause.
Hey all, at my college (Western Michigan University) next Wednesday, November 18th, students are going to be protesting for free college coercing taxpayers to fund tuition. More details below. I’ll be there to cover the event just out of curiosity. I disagree with all of their proposed solutions but I am still interested in asking them deeper philosophical questions than they may be used to. I’d love some input if you have any questions you’d want to ask, or any points that I should bring up. Hopefully I’ll film it and post it here on The Dismal Review for ya’ll to see. Thanks!
Congratulations, If you graduated from college this past spring, you’re part of the most indebted graduating class ever! According to a government data analysis by financial aid experts at Edvisors, the class of 2014 graduated with an average student loan debt of $33,000.
The United States is one of the richest countries in the world, yet students have to take on crippling debt in order to get a college education. We need change, and change starts in the streets when the people demand it.
Over 40 million Americans share a total of $1.2 trillion in student debt and over half of that is held by the poorest 25 percent of Americans. While top administrators take home six
and seven figure salaries, campus workers are paid poverty wages.
We will no longer sit idly by. With students, college graduates, and workers united we can build a movement capable of winning debt-free college for all and a $15/hr minimum wage for all campus workers!
Join the movement for:
1 – Tuition-free public college
2 – Cancellation of all student debt
3 – $15/hr campus-wide minimum wage at every college in the country
Email KalamazooMillionStudentMarch@gmail.com for more info!
An initiative of students across the country and various organizations including but not limited to: College Students for Bernie, Occupy Wall St., Socialist Alternative, 15 Now, The People For Bernie Sanders 2016, and more!
I caught a clip from last night’s GOP Debate of Sen. Ted Cruz (R-TX), and Oh. My. God! Have a look for yourself.
What Cruz accomplished here was nothing short of remarkable.
When Neil Cavuto asked him if Bank of America should be allowed to fail, even though millions of depositors would be on the line, Cruz courageously and unequivocally stated: “Yes.”
But he didn’t appear to respond in the affirmative simply because he’s been told by advisers what opinion to hold on the matter. Instead, his explanation is much too penetrating and accurate to consider Cruz an empty suit on this subject.
For example, aside from referring to Federal Reserve (Fed) officials as “Philosopher-Kings” who try “to guess what’s happening with the economy,” he also placed the Federal Reserve System at the heart of boom-bust cycles:
“…one of the reasons we had the financial crash is–throughout the 2000s we had loose money, we had an asset bubble, it drove up the price of real estate, it drove up the price of commodities. And then in the third quarter of 2008 (snaps fingers) the Fed tightened the money. And crashed those asset prices which caused a cascading collapse.”
According to Cruz, then, another bailout would merely kick the can of another recession down the road, rendering depositors no better off! Therefore, the Fed only makes things worse when it starts “adjusting monetary policy according to whims” because this simply causes recurring booms and busts.
If Cruz is correct, then getting to the heart of the matter–monetary policy–ought to trump temporary “solutions.” He mentioned tying the money to gold, and although that may not be an ideal alternative would it not improve drastically upon what we currently have? Plus, it seems better than what anybody else on the stage is proposing.
Even if you disagree with Cruz on this issue, can we at least agree that he deserves a loud applause for his bravery to stand on principle? I mean, he clearly wasn’t up there just to pander to the crowd, because talk about a snooze-fest out in the audience!
Jon Murphy, over at Force 4 Good, has given me permission to reprint this concise and beautiful post. I often fall into the trap of taking everyday things like a simple cup of coffee for granted, and it takes something like this article to make me realize just how much I have to be thankful for, thanks to free markets and the resulting spontaneous order which is absent in the command and control jungle of central planners. The remaining words are all Jon’s.
Last night, I was reading the delightfully spooky/silly book Welcome to Night Vale by Joseph Fink and Jeffery Cranor. On pages 62-63 were these lines:
Josie produced a glass of water, through practiced manipulation of cupboards and valves and municipal plumbing. Neither she nor Jackie was impressed with the human miracle represented by how easily the glass of water was produced.
Leonard Reed could have written these words, as their sentiment is shared in his famous essay I, Pencil. Every day we are faced with these human miracles that allow us to live better lives. My coffee was grown in South America, roasted and ground in Seattle, shipped to Hooksett, and consumed in Concord, all without me having to know any part of the process. Every day, we bring water to desert cities like Phoenix or Las Vegas, bring tropical fruits to cold climates like Boston or London. Medical supplies are directed to where they need to be. People are satisfied the world ’round.
The greatest miracle of all is that there is no one directing this process. To paraphrase Adam Smith’s famous metaphor, it is as if some invisible hand were guiding it.
When we think “miracle,” the big, grandiose ones tend to come to mind: Jesus raising Lazarus from the dead, Moses parting the Red Sea, etc. But we would be remiss to ignore the human miracles around us that have transformed our world to the closest thing to Eden we’ve had since we were kicked out.
Bernie Sanders is winning people’s hearts and minds largely because he justifies his outlandish policies on the assumption that Scandinavia “proves” they’re viable. But just how much do his followers know about Sweden and Denmark? Based on research from the Tax Foundation, it’s definitely not the soak-the-rich nirvana they’re imagining.
The Scandinavian model is less progressive than our own. Despite all of the anti-rich rhetoric from Sanders’ campaign, Sweden and Denmark tax the middle class at much higher rates than the American government. In fact, implementing Denmark’s tax system would mean all income above $60,000 would be taxed at 60.4 percent! There is no such thing as a free lunch.
Denmark and Sweden collect more revenue from consumption taxes than the United States. Each has a 25 percent Value Added Tax (VAT), which is an indirect sales tax which falls heaviest on those who spend a greater proportion of their incomes on consumption (lower and middle income earners). The United States, which has no national sales tax, collects less revenue from state sales taxes, which aggregate for an average of about 7 percent.
Our tax rate on corporate income (39.1 percent) dwarfs that of Sweden (22 percent) and that of Denmark (24.5 percent). Sanders spills plenty of vitriol for income inequality, so the image of him advocating to decrease the corporate income tax rate (because, you know, it’s the Scandinavian model, after all) is absolutely hysterical.
Suffice it to say that most of Sanders’ followers don’t really understand the Scandinavian model. These are just some useful debating points to bring up when one of your friends defends Bernie’s policies on the basis that they work in Sweden and Denmark.