Quotulatiousness

October 31, 2020

Modern Halloween costumes show us how wealthy we have become

Filed under: Cancon, Economics, History, Media, USA — Tags: , , , , , , — Nicholas @ 03:00

Richard Lorenc looks back at the “costumes” for Halloween from the 1970s and 1980s to help illustrate how much our general economic picture has improved since those dark days:

While my husband and I were recently struggling to figure out our costumes for this Halloween (and we still don’t have any idea), he pulled up some old commercials on YouTube. The off-the-shelf options that trick or treaters had were, in a word, pitiful.

Basically, costume makers thought it was ok to make a front-only plastic mask (in any color, really) of a character and top it off with a plastic smock featuring an illustration of said character with either its name or the name of the show or movie it comes from. There was no attempt to dress in the character’s actual attire. If you wanted that, you’d either have to know a professional costumer or cobble together something from your closet.

Take a look for yourself at just how costume-poor we used to be:

Obviously, every costume is an opportunity to generate interest in a brand or franchise, and slapping on a logo is an easy way to get a name out there, but these costumes truly heralded a dark time for Halloween. Some may even argue that it demonstrated crass consumerism at its worst, with cynical companies taking the easiest route to grabbing a couple of bucks from desperate parents.

The truth of the tragedy of terrible old Halloween costumes has to do with a simple idea: specialization.

[…]

The next time you compare our screen-accurate store-bought costumes of Darth Vader and Mr. Incredible to those of yesteryear, remember that we enjoy them today not because previous generations didn’t care for accurate costuming, but because growing trade across the globe has generated so much wealth for each of us that we can now demand things we may have only imagined previously.

I only realized as I got ready to schedule this post that it was an article I’d blogged a couple of years back, but the point of the story is still relevant even in our pandemic-wracked economy of 2020.

October 22, 2020

When England “Londonized”

Filed under: Britain, Economics, Europe, Health, History — Tags: , , , , — Nicholas @ 05:00

In the latest Age of Invention newsletter, Anton Howes looks at changes in urbanization in England from the Middle Ages onward and the astonishing growth of London in particular:

John Norden’s map of London in 1593. There is only one bridge across the Thames, but parts of Southwark on the south bank of the river have been developed.
Wikimedia Commons.

We must thus imagine pre-modern England as a land of tens of thousands of teeny tiny villages, each having no more than a couple of hundred people, which were in turn served by hundreds of slightly larger market towns of no more than a few hundred inhabitants, and with only a handful of regional centres of more than a few thousand people. By the 1550s, the country’s population had still not recovered to its pre-Black Death peak, and still only about 4% of the population lived in cities. London alone accounted for about half of that, with approximately 50-70,000 people (about five times the size of its closest rival, Norwich). So after a couple of centuries of recovery, London was only a little past its medieval peak.

But over the following century and a half, things began to change. At first glance, England’s continued population growth was unremarkable. By 1700, its overall population had finally reached and even surpassed the medieval 5 million barrier, despite the ravages of civil war. This was, perhaps, to be expected, with a little additional agricultural productivity allowing it to surpass the previous record. But the composition of that population had changed radically, largely thanks to the extraordinary growth of London. England’s overall population had not only recovered, but now 16% of them lived in cities of over 5,000 inhabitants — over two thirds of whom lived in London alone. Rather than simply urbanise, England londonised. By 1700, the city was nineteen times the size of second-place Norwich — even though Norwich’s population had more or less tripled.

London had, by 1700, thus risen from obscurity to become one of the largest cities in Europe. At an estimated 575,000 people, it was rivalled in Europe only by Paris and Constantinople, both of which had been massive for centuries. And although by modern standards it was still rather small, it could at least now be comfortably called a city — more or less on par with the populations of modern-day Glasgow or Baltimore or Milwaukee.

During that crucial century and a half then, London almost single-handedly began to urbanise the country. Its eighteenth-century growth was to consolidate its international position, such that by 1800 the city was approaching a million inhabitants, and from the 1820s through to the 1910s was the largest city in the world. In the mid-nineteenth century England also finally overtook Holland in terms of urbanisation rates, as various other cities also came into their own. But this was all just the continuation of the trend. London’s growth from 1550 to 1700 is the phenomenon that I think needs explaining — an achievement made all the more impressive considering how many of its inhabitants were dropping dead.

Throughout that period, urban death rates were so high that it required waves upon waves of newcomers from the countryside to simply keep the population level, let alone increase it. London was ridden with disease, crime, and filth. Not to mention the occasional mass death event. The city lost over 30,000 souls — almost of a fifth of its population — in the plague of 1603 (which was apparently exacerbated by many thousands of people failing to social distance for the coronation of James I), followed by the loss of a fifth again — 41,000 deaths — in the plague of 1625, and another 100,000 deaths — by now almost a quarter of the city’s population — in 1665. And yet, between 1550 and 1700 its population still managed to increase roughly tenfold.

I’ve been hard-pressed to find an earlier, similarly rapid rise to the half-a-million mark that was not just a recovery to a pre-disaster population or simply the result of an empire’s seat of government being moved. Chang’an, Constantinople, Ctesiphon, Agra, Edo, for example — all owed their initial, massive populations to an administrative change (often accompanied by a degree of forcible relocation), and all then grew fairly gradually up to or beyond half a million. As for a very long-term capital like Rome, it seems to have taken about three or four centuries to achieve the increases that London managed in just one and a half (though bear in mind just how rough and ready our estimates of ancient city populations are — our growth guesstimate for Rome is almost entirely based on the fact that the water supply system roughly doubled every century before its supposed peak). The rapidity of London’s rise from obscurity may thus have been unprecedented in human history — and was certainly up there with the fastest growers — though we’ll likely never know for sure.

But how? I can think of a multitude of factors that may have helped it along, but I find that each of them — even when considered altogether — aren’t quite satisfactory.

Carbon taxes may be the most efficient way to address GHG emissions, but no government has implemented them properly

I was persuaded by the economic arguments in favour of a carbon tax to address the externaly of greenhouse gas emissions, but I’ve long been skeptical that governments would actually implement them in a way to minimize economic distortion. A report from the Fraser Institute this week shows I was right to be doubtful, as none of the 31 OECD countries in the study have managed to introduce some form of carbon pricing without political “tinkering” … rather than replacing inefficient regulations, taxes and mandates with the carbon tax, they’ve generally just added carbon pricing on top of existing rules, making the carbon pricing scheme merely another tax grab that fails to achieve the stated goals:

Most economists consider human-made greenhouse gas (GHG) emissions an unintended negative externality of production and consumption. A negative externality occurs when the effects of producing or consuming goods and services impose costs on a third party which are not reflected in the prices charged for said goods and services. In the context of GHG emissions, this negative externality is calculated using the “social cost of carbon,” which is the future damage to society (adjusted to present value) of one additional tonne of carbon emitted to the atmosphere today.

Governments have a wide variety of policy alternatives to address the negative externality of emissions depending on the degree and depth of the policy intervention. They can either mandate individuals and firms to change their behaviour through com­mand-and-control regulations, grant subsidies and tax credits to foster cleaner energy sources, or use market-based mechanisms to correct the misalignment of incentives. It is widely acknowledged that carbon pricing, one of these market tools, is the most cost-effective policy to reduce emissions, as it relies on price signals and trade to provide flex­ibility to economic agents as to where and how emissions mitigation occurs.

[…]

This report includes thirty-one high-income OECD countries, where each country has either implemented a carbon tax, an ETS [emissions trading system], or a combination of both pricing mechan­isms. Carbon taxes are being implemented in 14 of them whereas 25 of these countries have their emissions covered by an ETS. Our analysis finds that, on average, 74 percent of carbon tax revenues in high-income OECD countries go directly into their general budget with no earmarking for any specific expenditure, while 12 percent are ring-fenced for environmental spending, and only 14 percent for revenue-recycling measures. This means that most governments are using carbon taxes as a revenue-raising tool rather than a mechanism to internalize the negative externalities of emissions in a cost-effective man­ner. Additionally, the vast majority of ETS revenues are being used to artificially acceler­ate the use of renewable energy sources, infrastructure, and technology.

The study also finds that no high-income OECD country has used carbon pricing to repeal emission-related regulations, but instead have introduced new ones following the adoption of the carbon tax or the ETS. Emissions caps, mandated fuel standards, technology-based standards, and renewable power mandates are just some examples of these regulations that undermine the cost-effectiveness of carbon pricing mechanisms. The majority of high-income OECD countries have a combination of support schemes for renewable energy sources, carbon pricing tools, and command-and-control regulations.

Overall, no high-income OECD country is following the textbook model of an optimal carbon pricing system, undermining their theoretical efficiency by design and implementation.

QotD: The needs of creative people

Filed under: Economics, Humour, Media, Quotations — Tags: , — Nicholas @ 01:00

… I can’t help feeling there’s a message here about supply and demand, dreary things like that. Something to bear in mind when, say, leaving school or choosing your degree course. The glamour of the artistic and literary life is, I fear, beginning to look quite thin:

    The question of where to live on such a low income while trying to write becomes crucial: in the middle of nowhere with cheap rent, or in the city where day jobs help pay for housing? Compromise clouds every decision.

And this simply will not do. You see, creative people, that’s people like Ms Delaney, must live in locales befitting their importance, not their budget. You, taxpayer, come hither. And bring your wallet.

    The city of Sydney recently tried to address the problem of artists being priced out by introducing six rent-subsidised studio spaces in Darlinghurst. Those chosen get a year-lease and pay reduced rent of $250 a week on a one-bedroom with work studio.

Creative people, being so creative, deserve nothing less than special treatment. I mean, you can’t expect a creative person to write at any old desk in any old room in any old part of town. What’s needed is a lifestyle at some other sucker’s expense. And so that garret has to be in a fashionable suburb or somewhere happening, where the creative vibrations are at their strongest and genius will surely follow. And that pad of choice has to come before the publishing deal and film rights and the swimming pool full of cash. Indeed, it has to materialise before the book itself, or any part thereof. How else can their brilliance flourish, as it most surely will, what with all that creativity. Our betters just need a little cake before they eat those damn vegetables. And possibly ice cream. Here’s some money that other, less glamorous people had to actually earn. You fabulous creature, you.

David Thompson, “The Humble Among Us”, David Thompson, 2014-01-21.

October 20, 2020

QotD: The errors of socialist experiments

Filed under: Economics, Government, Quotations — Tags: — Nicholas @ 01:00

The rock on which socialistic experiments have hitherto always foundered is human nature. Any sound political system must be based on a correct appreciation of human nature; and socialism is bound to fail because it offends the best elements of human nature and panders to the worst.

Ivor Thomas, The Socialist Tragedy, 1951.

October 15, 2020

QotD: What the GDP is failing to show (even though it’s there)

Filed under: Economics, Quotations, Technology — Tags: , , , , , — Nicholas @ 01:00

There simply isn’t a technology that has come anywhere close to arriving in the hands of actual users as fast as the smartphone and mobile internet. The next closest competitor is the mobile phone itself. All others running distant third and behind.

Our problem is that we know technological revolutions produce growth. Yet economic growth is limp at best, meagre perhaps a better description. So, there’s something wrong here. Either our basic understandings about how growth occurs are wrong and we [are] loathe to agree to that. Not because too much is bound up in that understanding but because too much of it makes sense. The other explanation is that we’re counting wrong.

[…]

We know that we’ve not quite got new products and their falling prices in our estimates of inflation quite correctly. They tend to enter the inflation indices after their first major price falls, meaning that inflation is always overstated. Given that the number we really look at is real growth – nominal growth minus inflation – this means we are consistently underestimating real growth.

[…]

The more we dig into this the more convinced I am that our only real economic problem at present is counting. Everything makes sense if we are counting output and inflation incorrectly, under-estimating the first, over- the second. If we are doing that – and we know that we are, only not quite to what extent – then all other economic numbers make sense. We’re in the midst of a large technological change, we’ve full employment by any reasonable measure, wages and productivity should be rising strongly. If we’re mismeasuring as above then those two are rising strongly, we’re just not capturing it. Oh, and if that’s also true then inequality is lower than currently estimated too.

The thing is, the more we study the details of these questions the more it becomes clear that we are mismeasuring, and mismeasuring enough that all of the claimed problems, the low growth, low productivity rises, low wage growth, simply aren’t there in the first place. And if they ain’t then nothing needs to be done about them, does it? Except, perhaps, count properly.

Tim Worstall, “Where’s All The Economic Growth? Goldman Sachs Blames Apple’s iPhone”, Continental Telegraph, 2018-07-03.

October 3, 2020

QotD: Literal first world problems

Filed under: Economics, Quotations — Tags: , , — Nicholas @ 01:00

Many of today’s concerns, however valid or invalid any of them might be, are luxury concerns. Only rich people – by which I mean people whose standard of living is roughly that of ordinary citizens of first-world countries in the early 21st century – can afford to worry about the likes of climate change, species loss, the manner in which chickens are raised, urban sprawl, how locally “sourced” is the eggplant that we eat, and rising Gini coefficients.

Again, I don’t say that these and other modern concerns are invalid. Some are and some aren’t. But it’s good to pause from time to time to be thankful that we’re wealthy enough to have escaped most of the daily, much more horrible concerns that pressed immediately upon our ancestors. It’s appropriate to be grateful that we’re rich enough to worry about, say, what might happen in a few decades to the sea level in a distant country rather than about whether or not our children will die of starvation during the night.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2018-05-27.

October 2, 2020

QotD: Price “gouging” in emergencies

Filed under: Business, Economics, Liberty, Quotations — Tags: , , , , — Nicholas @ 01:00

Consider price fixing on goods as necessary as water. During the Texas floods of last year, the price of water rose to heights of $99 per case, from the average of $5 per case. The cruelty of a store owner to do this during a time of emergency offends us all, but to people that think empathetically, it’s especially offensive. This was counterbalanced by Puerto Rico that had strict price controls on water.

In spite of the fact that per capita, there were more emergency responders sent to Puerto Rico and more funds sent to Puerto Rico than Texas, their problem persisted while the Texans very quickly received aid. The answer to the question why is: because of price fixing.

The free market, in seeing the price jump recognized the shortage of supply and responded quickly supplying Texans with an abundance of water cases because of the excessive profit margins – the increased supply eventually caused market competition and the price quickly dwindled to a more reasonable price.

Meanwhile, the market ignored Puerto Rico because the market was asked to ignore them by their own leaders through price fixing. Texans received water, quickly, and at reasonable prices, while Puerto Ricans didn’t.

If water is selling for $99/case, by the end of the day someone will have airlifted water into the region at $50/case, and the next morning water will be selling for $30/case. This will go on for a day or so, and the water crisis is quickly resolved. This was never permitted to happen in Puerto Rico.

Brandon Kirby, “Why Women Generally Aren’t Libertarian”, Being Libertarian, 2018-06-27.

October 1, 2020

English lead and the European markets of the 1600s

Filed under: Britain, Economics, Europe, History, Religion, Technology — Tags: , , , , , — Nicholas @ 05:00

In the latest Age of Invention newsletter, Anton Howes considers the meteoric rise in lead production in England and Wales from the dissolution of the monasteries under Henry VIII to the Thirty Years’ War in Europe:

The well-preserved ruins of Fountains Abbey, a Cistercian monastery near Ripon in North Yorkshire. Founded in 1132 and dissolved by order of King Henry VIII in 1539. It is now owned by the Royal Trust as part of Studley Royal Park, a UNESCO World Heritage Site.
Photo by Admiralgary via Wikimedia Commons.

In the early sixteenth century, England was a minor producer of the stuff. It was widespread and cheap enough to be used for roofing buildings (unlike much of the rest of Europe, where copper was preferred), but the country never produced more than a few hundred tons per year. It didn’t really need to. Like stone in [the game] Dawn of Man, you could amass a stockpile and not worry too much about any leaky bucket problems [where stockpiles need to be replenished due to wastage or other “drains”]. The lead in roofs could always be recycled, and hardly any more was needed for pipes or cisterns. The vast majority of the demand came from Germany, and then the New World, where it was used to extract silver from copper ore. Even this dissipated in the mid-sixteenth century, when the New World silver mines began to switch to using mercury instead.

Yet by 1600, England was producing about 3,000 tons of lead a year, up from just 300 in the 1560s. By 1700, it was producing two thirds of Europe’s lead — a whopping 20,000 tons a year. How?

Unlike copper or iron, there is no evidence that lead mining or processing techniques were imported. If anything, they seem to have emerged from the Mendips, in Somerset, where production costs fell with the introduction of furnace smelting in the 1540s. As well as raising the extraction rates from the ore coming up from the mines, the new furnaces allowed previously unusable ores — found in the easily-accessible waste tips of old mining camps — to be smelted after some simple sifting. Unfortunately, we don’t have a clear idea of who was responsible for the innovation.

Yet the source of England’s supremacy was really, at first, religious. Following the dissolution of the monasteries by Henry VIII in the 1530s, the melting down of their roofs dumped some 12,000 tons of lead onto England’s markets — at least a year’s worth of Europe’s entire output. Although the immediate effect was to annihilate England’s own lead industry, the medium-term effect was to send the other European producers into disarray. By the 1580s, once the stockpile had depleted, England’s lead producers were among the only ones left standing. The sale of monastic lead ensured that the English retained a foothold in foreign markets, while the cost-saving innovations then gave them the competitive edge. These factors explain, at least, England’s eventual hold over the European lead market.

But there was yet another phenomenon responsible for the industry’s massively increased scale: the development of hand-held firearms. Gunpowder technology was of course centuries old, but cannon had largely fired balls made of stone or cast iron. Muskets and pistols, however, used bullets made of lead. With the proliferation of the weapons over the course of the seventeenth century, lead thus acquired a major leaky bucket problem. Bullets were too costly to recycle, leading to an estimated fifth of Europe’s annual production of lead disappearing every year — a wastage that only increased as armies grew, weapons’ rate of fire improved, and the continent experienced extraordinary violence. Europe lost an estimated fifth of its population to the Thirty Years’ War, and England itself succumbed to civil strife.

England’s lead industry thus had to drastically increase its production just to maintain Europe’s stock of lead, let alone increase it. It was from soldiers entering the fray, to trade bullets across sodden fields, that it owed its extraordinary success.

QotD: Even so-called “Keynesians” fail to follow Keynes

Filed under: Economics, Government, Quotations — Tags: — Nicholas @ 01:00

The thing about deficit spending is that you should only be doing it when you need to be doing it. No, this isn’t a rejection of that Keynesian idea or ideal, it’s the point of it.

When wages are flatlining, when the economy needs that bolus of extra demand then, OK, go borrow and spend. Or, in the MMT world, print money and spend. But once you’ve delivered that bolus and the economy has recovered then you must be able to stop that spending – whether delivered by borrowing or printing. That is, a permanent increase in spending is not Keynesian demand management, only a temporary one is.

Tim Worstall, “The Guardian‘s Absurd View Of NHS Funding”, Continental Telegraph, 2018-06-15.

September 28, 2020

What Happened After The Bronze Age Collapse?

Filed under: Economics, Greece, History, Middle East — Tags: , , , , — Nicholas @ 04:00

Epimetheus
Published 17 Jun 2020

What Happened After The Bronze Age Collapse?

This video covers the period of time from the Bronze Age collapse through the Near Eastern dark age and to the first Iron Age empire.

This video is sponsored by my Patrons over on Patreon
https://www.patreon.com/Epimetheus1776

From the comments:

Epimetheus
3 months ago
Additional info some might find interesting:

Although the Arameans emerged from arid Southern Syria (in a similar manner to the earlier Amorites, taking advantage of a power vacuum) it is debated whether or not they were originally from there, with some believing they came from the Zagros mountains to Syria, before re-entering Mesopotamia. Others believe they were related to the Amorites, essentially they were the Amorites that stayed behind. There is also some debate if Ahlamu (also from the same region) is a synonym for Aramean or if it was a more broad generic term for the nomads, outlaws and ruffians of the region. (For example the Suteans, Chaldeans and Arameans may have all been considered Ahlamu) It is also interesting that many fugitives from authority in previous centuries found refuge in the frontier Ahlamu regions of the south.

All of that more or less got cut out of the video, and I thought some of you would find interesting.

September 18, 2020

From innovation to absolutism — English inventors and the Divine Right of Kings

In the latest Age of Invention newsletter, Anton Howes looks at how innovations during the late Tudor and Stuart eras sometimes bolstered the monarchy in its financial battles with Parliament (which, in turn, eventually led to actual battles during the English Civil War):

King Charles I and Prince Rupert before the Battle of Naseby 14th June 1645 during the English Civil War.
19th century artist unknown, from Wikimedia Commons.

The various schemes that innovators proposed — from finding a northeast passage to China, to starting a brass industry, to colonising Virginia, or boosting the fish industry by importing Dutch salt-making methods — all promised to benefit the public. They were to support the “common weal”, or commonwealth. And to a certain extent, many projects did. The historian Joan Thirsk did much pioneering work in the 1970s to trace the impact of various technological or commercial projects, revealing that even something as mundane as growing woad, for its blue dye, could have a dramatic impact on local economies. With woad, the income of an ordinary farm labouring household might be almost doubled, for four months in the year, by employing women and children. In the late 1580s, the 5,000 or so acres converted to woad-growing in the south of England likely employed about 20,000 people. That may seem small today, but at a time when the population of a typical market town was a paltry 800 people, even a few hundred acres of woad being cultivated here or there might draw in workers from across the whole region. In the mid-sixteenth century, even the entire population of London had only been about 50-70,000. As Thirsk discovered, innovative projectors also sometimes fulfilled their other public-spirited promises, for example by creating domestic substitutes for costly imported goods, or securing the supplies of strategic resources.

But the ideal of benefiting the commonwealth could also, all too frequently, be elided with serving the interests of the Crown. Projectors might promise the monarch a direct share of an invention’s profits, or that a stimulated industry would result in higher income from tariffs or excise taxes. Increasingly, they proposed schemes that were almost entirely focused on maximising state revenue, with little evidence of new technology. They identified “abuses” in certain industries — at this remove, it’s difficult to tell if these justifications were real — and asked for monopolies over them in order to “regulate” them, then making money by selling licences. Last week I mentioned patents over alehouses, and on playing cards. They also offered to increase the income from the Crown’s property, for example by finding so-called “concealed lands” — lands that had been seized during the Reformation, but which through local resistance or corruption had ostensibly not been paying their proper rents. The projectors would take their share of the money they identified as “missing”. And they proposed enforcing laws, especially if the punishments involved levying fines or confiscating property. The projectors offered to find the lawbreakers and prosecute them, after which they’d take their share of the financial punishments.

Projectors thus came to present themselves as state revenue-raisers and enforcers, circumventing all of the traditional constraints on the monarch’s money and power. They provided an alternative to Parliaments, as well as to city corporations and guilds, in raising money and propagating their rule. Taking it a step further, projectors offered the tantalising possibility that kings like James I and Charles I might rule through proclamation and patents alone, without having to answer to anybody. They thus experimented with absolutism for much of 1610-40, only occasionally being forced to call Parliament for as briefly as possible when the pressing financial demands of war intervened.

In the process, with the growing multitude of projects — a few bringing technological advancement, but many merely lining the pockets of courtier and king — the designation “projector” became mud. It was as if, today, the Queen were to use her prerogative to grant a few of her courtiers monopolies on collecting all traffic fines, or litter penalties, to be rewarded solely on commission. Or if she were to award an unscrupulous private company the right to award all alcohol-selling licences (perhaps on the basis that underage drinking was becoming common). The country would soon be awash with hidden speed cameras and incognito litter wardens, and the price of alcohol would go through the roof. The people responsible would not be popular. A recent book by economic historian Koji Yamamoto meticulously charts the changing public perceptions of projects, describing the ways in which innovators then struggled, for decades, to regain the public’s trust.

September 15, 2020

When you mix up cause and effect

In the Continental Telegraph, Esteban remembers a Reagan bon mot that is still observably true today:

US President Ronald Reagan and Soviet General Secretary Mikhail Gorbachev at the Hofdi House in Reykjavik, Iceland during the Reyjavik Summit in 1986.
Official US government photograph via Wikimedia Commons.

Ronald Reagan once observed that “the trouble with our liberal friends isn’t that they are ignorant, it’s that so much they know isn’t so”. I am repeatedly surprised by Leftists’ ability not to just get something wrong, but to get it spectacularly, 180 degrees wrong.

First, a couple of examples from the archives – some years ago there was an article in the NY Times (or WaPo perhaps) quite distressed that even though crime rates in the U.S. were at historically low levels the percentage of the population in prison was quite high. “Why are we putting so many people in prison when the crime rate is low?” they wondered, seriously. Hmm, how about this – when we put more bad people in prison the crime rate goes down? Keep in mind that the crime rate is what’s happening now, the prison population is who we caught and locked up over the past several years.

Then we had an article in a West Coast newspaper wondering why the homeless population in San Francisco had grown dramatically in recent years despite all the wonderful things the city had done to help them – weekly stipends, free shopping carts, etc. Note that none of this assistance to the homeless enabled them to become independent or required them to better themselves, they were all handouts. How is it that offering lots of goodies to homeless people attracts more of them here?

My point in bringing up these old stories is that it seems impossible that someone could fail to see they had cause and effect reversed. How could someone intelligent enough to write a column get these stories so backwards. The only answer I can see is that their worldview, at least in these areas, flows in only one direction and the underlying premise can never be questioned – putting people in prison is bad, there can be no possible upside, giving homeless people stuff is good, there can be no downside. So, when things get worse it’s a mystery, we can’t reconsider our starting point.

QotD: Racism and the minimum wage

Filed under: Africa, Economics, History, Quotations, USA — Tags: , , , — Nicholas @ 01:00

During South Africa’s apartheid era, racist unions, which would never accept a black member, were the major supporters of minimum wages for blacks. In 1925, the South African Economic and Wage Commission said, “The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed.” Gert Beetge, secretary of the racist Building Workers’ Union, complained, “There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans.” “Equal pay for equal work” became the rallying slogan of the South African white labor movement. These laborers knew that if employers were forced to pay black workers the same wages as white workers, there’d be reduced incentive to hire blacks.

South Africans were not alone in their minimum wage conspiracy against blacks. After a bitter 1909 strike by the Brotherhood of Locomotive Firemen and Enginemen in the U.S., an arbitration board decreed that blacks and whites were to be paid equal wages. Union members expressed their delight, saying, “If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain.”

Our nation’s first minimum wage law, the Davis-Bacon Act of 1931, had racist motivation. During its legislative debate, its congressional supporters made such statements as, “That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.” During hearings, American Federation of Labor President William Green complained, “Colored labor is being sought to demoralize wage rates.”

Walter E. Williams, “Minimum Wage and Discrimination”, Creators Syndicate, 2017-02-08.

September 13, 2020

QotD: Price controls versus reality

Filed under: Economics, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

Economic reality is not optional. Government-imposed price ceilings and price floors — although believed by those who view prices as arbitrary results of bargaining or of “power” relationships as merely changing the distribution of economic gain or pain — distort people’s view of economic reality. Price controls prevent people as consumers (including as employers of workers) and as producers (including as workers) from seeing economic reality as clearly as possible. Blinded by minimum-wage commands and other price controls, people act in ways that are the opposite of the ways that those who support the price controls ostensibly want people to act. Rent control, for example, prompts landlords and potential landlords to offer fewer rental units on the market. Minimum-wage commands lead employers to employ fewer low-skilled workers.

Non- (and poor) economists, seeing only that which is in front of their noses, observe the government-controlled prices and conclude that the results of these controls must be just what the government publicly proclaims it wishes these results to be. “Look! Rents are lower with rent controls! Wages are higher with minimum wages! We have helped the poor!

Those who fall for such superficial appearances, of course, do not grasp the nature of market forces and the role of prices. But the naiveté of such people runs much deeper: they are the sort of people who believe that if the messenger is forced to lie, the underlying reality changes, with the lie thereby converted into truth. Such people, in other words, believe in miracles. They believe that state officials performing incantations can miraculously change economic reality.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2018-05-16.

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