The poor-but-oh-so-happy sentiment pops up without fail in any crappy travel magazine version of a visit to Myanmar, Laos, or Nepal (and probably any other desperately poor and badly governed country), in which “the people” are always gleeful, generous, and colorful. I’m not exactly sure what it is about being ruled by insane dictators that makes people so damn nice, but here’s an idea: If you’re a Western travel writer, or, say, German tourist, and you’re going to an impoverished country full of hungry people in which you clearly stand out as someone with money to spend, people might be extra nice to you.
Kerry Howley, “But the People Are So Friendly“, Hit and Run, 2005-08-18.
February 27, 2020
QotD: Clichés of bad travel writing
February 7, 2020
QotD: The negative economic and human value of foreign aid
I’d like nothing better than to be proven wrong, but I’m gloomily confident that my prediction of failure will be verified. History and sound economics both warn that foreign aid is far more likely to harm than to help economies.
During the past four decades, Western governments have lavished on Africa nearly a half-trillion dollars in aid. But to no good effect. Everyone agrees that Africans remain desperately poor.
Academic studies confirm aid’s ineffectiveness. In his celebrated 2001 book, The Elusive Quest for Growth, former World Bank economist William Easterly carefully reviews aid’s history and concludes that it is one of abject failure.
Indeed, many studies find that aid harms economies. For example, University of Regina economist Tomi Ovaska, writing in the Cato Journal, finds that “a 1 percent increase in aid as a percent of GDP (gross domestic product) decreased annual real GDP per capita growth by 3.65 percent.”
The reasons for this dismal record should be plain to anyone with a rudimentary understanding of economics. Failure of economies to develop is not because of lack of resources. Instead, it’s because of overbearing and corrupt governments, as well as to the dysfunctional social and cultural institutions that keep such governments in power and that are themselves fostered by such governments.
As long as a country is cursed by a malignant government and dysfunctional institutions, no amount of foreign aid will help it.
Don Boudreaux, “Faulty Band-Aid”, Pittsburgh Tribune-Review, 2005-06-18.
January 21, 2020
Amity Shlaes’ Great Society: A New History
In City Journal, Edward Short reviews the latest American economic history book by Amity Shlaes:
In Great Society: A New History, Amity Shlaes revisits the welfare programs of the Kennedy, Johnson, and Nixon administrations to show not only how misguided they were but also what a warning they present to those who wish to resurrect and extend such programs. “The contest between capitalism and socialism is on again,” the author writes in her introduction. Despite the Trump administration’s thriving economy, or perhaps because of it, Democratic Party progressives are calling for new welfare programs even more radical than those advocated in the 1960s by the socialist architect of Lyndon Johnson’s War on Poverty, Michael Harrington. In the new schemes for wealth redistribution, student debt relief, socialized medicine, and universal guaranteed income that make up the Democrats’ political platform in 2020, Shlaes rightly sees a recycling of Great Society hobby horses — and she worries that a good portion of the electorate may be taken in by them. “Once again many Americans rate socialism as the generous philosophy,” she observes, and she has written her admirable, sobering study to make sure that readers realize that the “results of our socialism were not generous.”
Reviewing how ungenerous makes for salutary reading. After all, socialism of any stripe, whether in Russia, South America, Europe, or America, has always been an inherently deceitful enterprise. Shales captures the essence of this imposture when she describes one of its manifestations as “Prettifying a political grab by dressing it up as an economic rescue.” In totting up these receipts for deceit, Shlaes has done a genuine public service. […]
On display here are all of Shlaes’s strengths as an author: her clear and unpretentious prose, sound critical judgment, readiness to enter into the thinking of her subjects with sympathy (even when she regards it as mistaken), and, perhaps most impressively, understanding how history can help us fathom what might otherwise be obscure in our own more immediate history.
Accordingly, she describes the influence that Roosevelt’s New Deal had on Johnson, who saw it as a model for maintaining and consolidating his Democratic majorities, as well as focusing his Cabinet’s talents. “The men around Johnson,” Shlaes points out, including Robert McNamara, McGeorge Bundy, Richard Goodwin, and Sargent Shriver, “felt the weight of his faith on them, and strove hard. Vietnam would be sorted out. There would be a Great Society. Poverty would be cured. Blacks of the South would win full citizenship. The Great Society would succeed.” Yet the president’s men could not help asking “by what measures” it would succeed.
Moynihan’s answer to this question is one that still mesmerizes social-engineering elites. The Great Society would be achieved by social science. “Progress begins on social problems when it becomes possible to measure them,” Moynihan declared. Improved quantitative analysis would give the centralized power of planners a new credibility.
Whether Johnson himself ever truly believed in such claims is questionable. When aides asked the exuberant Texan what he thought of the risks of going forward with his wildly ambitious program, his reply epitomized the hubris at the heart of his Great Society: “Well, what the hell’s the presidency for?”
January 2, 2020
The 2010s … the best decade (so far) in human history
Matt Ridley explains why, despite all the doom and gloom in the daily headlines, the last ten years have been the best by almost any measure:
Let nobody tell you that the second decade of the 21st century has been a bad time. We are living through the greatest improvement in human living standards in history. Extreme poverty has fallen below 10 per cent of the world’s population for the first time. It was 60 per cent when I was born. Global inequality has been plunging as Africa and Asia experience faster economic growth than Europe and North America; child mortality has fallen to record low levels; famine virtually went extinct; malaria, polio and heart disease are all in decline.
Little of this made the news, because good news is no news. But I’ve been watching it all closely. Ever since I wrote The Rational Optimist in 2010, I’ve been faced with “what about …” questions: what about the great recession, the euro crisis, Syria, Ukraine, Donald Trump? How can I possibly say that things are getting better, given all that? The answer is: because bad things happen while the world still gets better. Yet get better it does, and it has done so over the course of this decade at a rate that has astonished even starry-eyed me.
Perhaps one of the least fashionable predictions I made nine years ago was that “the ecological footprint of human activity is probably shrinking” and “we are getting more sustainable, not less, in the way we use the planet”. That is to say: our population and economy would grow, but we’d learn how to reduce what we take from the planet. And so it has proved. An MIT scientist, Andrew McAfee, recently documented this in a book called More from Less, showing how some nations are beginning to use less stuff: less metal, less water, less land. Not just in proportion to productivity: less stuff overall.
This does not quite fit with what the Extinction Rebellion lot are telling us. But the next time you hear Sir David Attenborough say: “Anyone who thinks that you can have infinite growth on a planet with finite resources is either a madman or an economist”, ask him this: “But what if economic growth means using less stuff, not more?” For example, a normal drink can today contains 13 grams of aluminium, much of it recycled. In 1959, it contained 85 grams. Substituting the former for the latter is a contribution to economic growth, but it reduces the resources consumed per drink.
As for Britain, our consumption of “stuff” probably peaked around the turn of the century — an achievement that has gone almost entirely unnoticed. But the evidence is there. In 2011 Chris Goodall, an investor in electric vehicles, published research showing that the UK was now using not just relatively less “stuff” every year, but absolutely less. Events have since vindicated his thesis. The quantity of all resources consumed per person in Britain (domestic extraction of biomass, metals, minerals and fossil fuels, plus imports minus exports) fell by a third between 2000 and 2017, from 12.5 tonnes to 8.5 tonnes. That’s a faster decline than the increase in the number of people, so it means fewer resources consumed overall.
H/T to Damian Penny for the link.
November 27, 2019
The “Gentrification” debate
In Quillette, Coleman Hughes explains the furor over gentrification in many big American cities:
The word “gentrification” was coined in 1964 to describe the influx of wealthy newcomers into low-income inner-city neighborhoods, resulting in rising property values, changes in neighborhood culture, and displacement of original residents. Though gentrification predates the modern era, it has only become the target of criticism in recent decades, as cities like Washington, D.C., Atlanta, and Boston have witnessed rapid transformations. Opponents of gentrification have ranged from residents directly affected by it to wealthy college students directly responsible for it, as well as prominent Democrats such as Bernie Sanders, Cory Booker, and Alexandria Ocasio-Cortez.
Critics of gentrification give two main reasons for their opposition: (1) wealthy newcomers drive up monthly rents, thereby displacing original residents; and (2) rapid change to neighborhood culture represents an injustice to original residents. Both critiques are magnified by the presumed skin color of the gentrifiers and the gentrified, who tend to be white and black or Hispanic, respectively.
Though such critiques may seem reasonable at first glance, neither of them survive scrutiny. Not only is gentrification harmless, it’s actually beneficial. Indeed, for reasons I will lay out, it’s exactly the kind of thing that progressives should support.
Let’s begin with the charge that gentrification displaces original residents. Two economists used data from the 2000 U.S. Census and the 2010-2014 American Community Survey to track individual outcomes for all residents of “gentrifiable” — or low-income inner-city — neighborhoods in America’s one hundred largest metropolitan areas. The largest study of its kind, it divided residents of gentrifiable neighborhoods into two categories based on educational attainment. Their findings refute the displacement narrative conclusively.
[…]
On the whole, progressives ought to love gentrification. It makes black inner-city homeowners wealthier. Among less-educated homeowners — who are majority non-white and comprise over a quarter of the total population in gentrifiable neighborhoods — those who remained in gentrified neighborhoods saw a $15,000 increase in the value of their homes due to gentrification. Among more-educated homeowners — who are also majority non-white — those who remained saw a $20,000 increase in property value.
What’s more, gentrification breaks up concentrated poverty and reduces residential segregation. Progressives have frequently observed that poor blacks are more likely to live in concentrated poverty than poor whites. As a result, they lose out on the advantages that come with living in a mixed-income neighborhood. Gentrification helps solve this problem. Moreover, progressives often observe that residential segregation remains pervasive half a century after the 1968 Fair Housing Act. Gentrification helps solve that problem too.
November 4, 2019
QotD: Ludwig von Mises explains the fall of the western Roman empire
Knowledge of the effects of government interference with market prices makes us comprehend the economic causes of a momentous historical event, the decline of ancient civilization.
[…]
The Roman Empire in the second century, the age of the Antonines, the “good” emperors, had reached a high stage of the social division of labour and of interregional commerce. Several metropolitan centres, a considerable number of middle-sized towns, and many small towns were the seats of a refined civilisation […]. There was an extensive trade between the various regions of the vast empire. Not only in the processing industries, but also in agriculture there was a tendency toward further specialization. The various parts of the empire were no longer economically self-sufficient. They were interdependent.
What brought about the decline of the empire and the decay of its civilization was the disintegration of this economic interconnectedness, not the barbarian invasions. The alien aggressors merely took advantage of an opportunity which the internal weakness of the empire offered to them. From a military point of view the tribes which invaded the empire in the fourth and fifth centuries were not more formidable than the armies which the legions had easily defeated in earlier times. But the empire had changed. Its economic and social structure was already medieval […]
[I]n the political troubles of the third and fourth centuries the emperors resorted to currency debasement. With the system of maximum prices the practice of debasement completely paralysed both the production and the marketing of the vital foodstuffs and disintegrated society’s economic organisation. The more eagerness the authorities displayed in enforcing the maximum prices, the more desperate became the conditions of the urban masses dependent on the purchase of food. Commerce in grain and other necessities vanished altogether. To avoid starving, people deserted the cities, settled on the countryside, and tried to grow grain, oil, wine, and other necessities for themselves.
Ludwig von Mises, Human Action, 1949.
October 21, 2019
September 3, 2019
QotD: Fencing out the London poor
I see that the railings are returning — only wooden ones, it is true, but still railings — in one London square after another. So the lawful denizens of the squares can make use of their treasured keys again, and the children of the poor can be kept out.When the railings round the parks and squares were removed, the object was partly to accumulate scrap-iron, but the removal was also felt to be a democratic gesture. Many more green spaces were now open to the public, and you could stay in the parks till all hours instead of being hounded out at closing times by grim-faced keepers. It was also discovered that these railings were not only unnecessary but hideously ugly. The parks were improved out of recognition by being laid open, acquiring a friendly, almost rural look that they had never had before. And had the railings vanished permanently, another improvement would probably have followed. The dreary shrubberies of laurel and privet — plants not suited to England and always dusty, at any rate in London — would probably have been grubbed up and replaced by flower beds. Like the railings, they were merely put there to keep the populace out. However, the higher-ups managed to avert this reform, like so many others, and everywhere the wooden palisades are going up, regardless of the wastage of labour and timber.
George Orwell, “As I Please” Tribune, 1944-08-04.
July 6, 2019
Putting global worker pay into perspective
Tim Worstall explains why the headline-friendly numbers in a recent ILO report are nothing to be surprised at:
“Nearly half of all global pay is scooped up by only 10% of workers, according to the International Labour Organization, while the lowest-paid 50% receive only 6.4%.
“The lowest-paid 20% – about 650 million workers – get less than 1% of total pay, a figure that has barely moved in 13 years, ILO analysis found. It used labour income figures from 189 countries between 2004 and 2017, the latest available data.
“A worker in the top 10% receives $7,445 a month (£5,866), while a worker in the bottom 10% gets only $22. The average pay of the bottom half of the world’s workers is $198 a month.”
[…]
The explanation? To be in the top 10% of the global pay distribution you need to be making around and about minimum wage in one of the rich countries. Via another calculation route, perhaps median income in those rich countries. No, that £5,800 is the average of all the top 10%.
Note that this is in USD. About £2,000 a month puts you in the second decile, that’s about UK median income of 24,000 a year.
And as it happens about 20% of the people around the world are in one of the already rich countries. So, above median in a rich country and we’re there. Our definition of rich here not quite extending as far as all of the OECD countries even. Western Europe – plus offshoots like Oz and NZ, North America, Japan, S. Korea and, well, there’s not much else. Sure, it’s not exactly 10% of the people there but it’s not hugely off either.
So, what is it that these places have in common? They’ve been largely free market, largely capitalist, economies for more than a few decades. The most recent arrival, S. Korea, only just managing that few decades. It is also true that nowhere that hasn’t been such is in that listing. It’s even true that nowhere that is such hasn’t made it – not that we’d go to the wall for that last insistence although it’s difficult to think of places that breach that condition.
June 28, 2019
June 19, 2019
June 18, 2019
QotD: The birth of Jesus and the open concept house
Jesus was not born in a stable. That’s not to say the birth wasn’t attended by farm animals — the Gospel of Luke tells us twice the baby’s first bed was a feeding trough — but rather that the animals lived in the house.
Peasant homes in first century Bethlehem were designed with what we would today call an “open concept.” They typically had one large room with the nicer living space in an open loft or on the roof, while the main floor area was where the family’s animals would be brought for safekeeping at night. The guestroom that was unavailable to Jesus, Mary, and Joseph was that loft or roof space, and the big room where they stayed instead served as the kitchen, living room, dining room, and farmyard all at once. The defining feature of Jesus’ birthplace was not isolation, as we often tend to think, but an utter lack of privacy: Mary delivered in a crowded farmhouse with few, if any, interior walls.
And that was perfectly normal, if not exactly desirable, for our modern fixation on the open floor plan is a historical anomaly. It flies in the face of literally millennia of consensus that more rooms is better, and it is a dreadful mistake. The last 70 years of open concept construction and remodeling has left us with dysfunctional houses, homes that are less conducive to hospitality, less energy efficient, and more given to mess.
Bonnie Kristian, “Open concept homes are for peasants”, The Week, 2019-05-12.
April 26, 2019
The ill-founded notion that rural peasants had a better life than the city-dwelling poor
Historical illiteracy — encouraged by totally unrealistic historical fiction and highly selective memories — places the lifestyle of farm workers, herders, and other rural people before the industrial era in almost a Disneyfied state of Arcadian paradise. This misunderstanding of reality fed many of the complaints about the terrible living conditions of the poor in industrial towns and cities up to almost living memory — which, to be fair, were terrible, by the standards of the upper and middle classes of the day. Marian L. Tupy provides a bit of evidence for the horrible poverty and miserable living conditions of the majority of Europeans living outside the major towns and cities:
In my last two pieces for CapX, I sketched out the miserable existence of our ancestors in the pre-industrial era. My focus was on life in the city, a task made easier by the fact that urban folk, thanks to higher literacy rates, have left us more detailed accounts of their lives.
This week I want to look at rural life, for that is where most people lived. At least theoretically, country folk could have enjoyed a better standard of living due to their “access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity,” which the anthropologist Jason Hickel praised in a recent article in The Guardian. In fact, the life of a peasant was, in some important aspects, worse than that of a city dweller.
[…]
An account of rural life in 16th century Lombardy found that “the peasants live on wheat … and it seems to us that we can disregard their other expenses because it is the shortage of wheat that induces the labourers to raise their claims; their expenses for clothing and other needs are practically non-existent”. In 15th century England, 80 per cent of private expenditure went on food. Of that amount, 20 per cent was spent on bread alone.
By comparison, by 2013 only 10 per cent of private expenditure in the United States was spent on food, a figure which is itself inflated by the amount Americans spend in restaurants. For health reasons, many Americans today eschew eating bread altogether.
What about food derived from water, forests and livestock? “In pre-industrial England,” Cipolla notes, “people were convinced that vegetables ‘ingender ylle humours and be oftetymes the cause of putrid fevers,’ melancholy and flatulence. As a consequence of these ideas there was little demand for fruit and vegetables and the population lived in a prescorbutic state”. For cultural reasons, most people also avoided fresh cow’s milk, which is an excellent source of protein. Instead, the well-off preferred to pay wet nurses to suckle milk directly from their breasts.
The diet on the continent was somewhat more varied, though peasants’ standard of living was, if anything, lower than that in England. According to a 17th century account of rural living in France: “As for the poore paisant, he fareth very hardly and feedeth most upon bread and fruits, but yet he may comfort himselfe with this, and though his fare be nothing so good as the ploughmans and poore artificers in England, yet it is much better than that of the villano [peasant] in Italy.”
The pursuit of sufficient calories to survive preoccupied the crushing majority of our ancestors, including, of course, women and children. In addition to employment as domestic servants, women produced marketable commodities, such as bread, pasta, woollen garments and socks. Miniatures going back to the 14th century show women employed in agriculture as well. As late as the 18th century, an Austrian physician wrote, “In many villages [of the Austrian Empire] the dung has to be carried on human backs up high mountains and the soil has to be scraped in a crouching position; this is the reason why most of the young people [men and women] are deformed and misshapen.”
April 13, 2019
QotD: School vouchers
I am still a supporter of school vouchers. I don’t think they’ve lived up to the hopes that I (and a bunch of other folks) had for them. But that said, the best opponents can say is that they don’t do all that much better than the public schools on academic measures. Parents like them, kids like them, and they cost less. I just don’t see a good argument against them.
I think it’s telling that of the folks I know who oppose vouchers, not one of them has voluntarily kept their kids in a failing urban school. When they move, they choose a house in a good school district. I don’t see how you can morally do that and then tell some other, poorer parent that they need to lean into the strike zone and take one for the team.
That said, maybe there’s an argument for restricting them to kids in failing schools, or below a certain income. I don’t see any need for the government to subsidize Exeter. But for the kids who are trapped, I think they should get the same chance middle class kids do, even if it’s not the panacea we once hoped.
Megan McArdle, “Ask Me Anything”, Reddit, 2017-04-10.