Elitism in Democratic Drag: Why liberals opposed BREXIT

I was out of town when the British thumbed their noses at the EU and much of their own government by voting to leave the European Union. I walked back to my hotel room from the convention I was at and turned on CNN, where commentator after commentator declared that BREXIT was the end of British civilization as we know it, and that, in general the sky was falling and we're all going to die.

The curious thing about all the hand-ringing is that it was accompanied by virtually no explanation as to why, exactly, BREXIT was bad for Britain or anyone else. I watched for a full two hours and didn't hear a single reason why this was such a disaster, other than that it was upsetting to liberals. There may very well be a downside, but you wouldn't have been able to actually detect it in any of the apocalyptic rhetoric coming from the media.

In fact, for some of us, large numbers of upset liberals is itself a good sign. 

Why did liberals oppose BREXIT? This question is of course related to the question of why liberals like the EU so much in the first place. 

The reason liberals opposed BREXIT (and like the EU) is that liberals are elitist. Despite all the rhetoric about democracy and egalitarianism, liberals are fundamentally and philosophically opposed to both.

What inclusion in the EU means for the common person is that he will have important decisions made for him by faceless bureaucrats in Brussels, the capital of the EU. 

It is a maxim of organizational political dynamics that the bigger the bureaucracy, the more liberal is its leadership. Exhibits A and B: the EU, the UN. Elite bureaucracies are always more liberal than the people.

In addition, having a governing system in which decisions are made by anonymous people in faraway places means never having to say you're sorry. And to be a liberal leader in a member country puts you in the position, when you are criticized for some absurd liberal policy imposed on you by the technocratic elites in Belgium's capital city, to be able to simply shrug your shoulders and say, "I'm sorry, but we have no choice but to comply because we're EU members."

Most liberal policies would never see the light of day if liberals had to depend upon the ordinary processes of an even vaguely democratic government. The only way most of them can ever succeed in being implemented is if they are forced on the public by institutions that are unaccountable to the people.

This is how here in the United States we got abortion-on-demand, same-sex marriage, and now transgender bathrooms. Only rarely are these kinds of policies the result of the democratic process. They are almost exclusively the product of some unelected and unaccountable bureaucratic or judicial elite. And that's how we get trade deals that enrich trans-national corporations and line the pockets of people like Hillary Clinton while putting middle class Americans out of work.

Like all elite institutions, the EU is peopled by "progressives," the Anointed Ones, who know better than the rest of us how we should live our lives. 

And that's the way liberals want to keep it. That's why they are in favor of the Supreme Court in the United States being able to rewrite the U. S. Constitution on a whim without going through the constitutionally appointed process of amending it. It's why they want the bureaucracy in Washington to be able to issue proclamations that have no grounding in any law passed by Congress. It's why they like the UN.

And it's why they opposed BREXIT. 

Ludd Lives: Another great article on how machines are taking our jobs

I posted about the economic threat that is posed by the rise of technology a week or two back. In that post, I gave a number of irrefutable examples of kinds of jobs that have been eliminated by technology, most of which have not been replaced by equivalent kinds of jobs elsewhere in the economy--or any other kinds of jobs for that matter.

One of the points I made was that many of the services performed by real, living human beings were not performed as well by the technology that replaced them. What I didn't mention were examples of newer technology that does not work as well as older technology. I forgot to mention automated toilets.

Whenever I walk into an airport men's room, I notice that anywhere from one to about a third of the toilets don't flush. The same thing for many of the sinks and towel dispensers. Some brainiac somewhere thought that it would be a great idea to, instead of simply letting us use the simple lever (is this really a problem for 99 percent of people?), instead have us have to rely on sensors that electronically detect whether someone is getting up from the toilet or has their hands in the sink or has them in front of the towel dispenser.

Of course, they break. And when the break, there is literally no way to flush or turn on the spigot or get a towel. So often there are several toilets that are simply unusable. Is this really better than the more primitive technology they had before?

So you stand there in front of the towel dispenser, dancing around trying to get the machine to recognize you. Finally, you just give up and go on.

Anyway, that just my little introduction to a new article expressing the Neo-Luddite philosophy. I'm telling you folks, it's our economic undoing:

Very few of us can be sure that our jobs will not, in the near future, be done by machines. We know about cars built by robots, cashpoints replacing bank tellers, ticket dispensers replacing train staff, self-service checkouts replacing supermarket staff, tele­phone operators replaced by “call trees”, and so on. But this is small stuff compared with what might happen next. 

Nursing may be done by robots, delivery men replaced by drones, GPs replaced by artificially “intelligent” diagnosers and health-sensing skin patches, back-room grunt work in law offices done by clerical automatons and remote teaching conducted by computers. In fact, it is quite hard to think of a job that cannot be partly or fully automated. And technology is a classless wrecking ball – the old blue-collar jobs have been disappearing for years; now they are being followed by white-collar ones.

Read more here.

Is there really a connection between education and economics?

If you listen to education debates even casually, you soon begin to realize that the universal assumption is that there is some strong correlation between education and economic performance. We need "workers for the 21st century," we are told. Our "economic future is dependent on our education system," and so forth an so on.

But here's a graph comparing NAEP test scores (accounted to be the most reliable national education measures) and U.S. economic performance.

All this is not to say that there is no correlation between real education and a good economic system, just that there doesn't seem to be any between education as it is measured by tests and the economy. I suspect that if there was a way to measure the individual economic success of students with a good liberal arts education, you would get a very different result.

But even so this evidence should make us rethink the whole connection everyone likes to make between education and economics and should make us ask whether our materialist fixation with economic success isn't actually hurting both education and the economy.

Ever since the purpose of education was changed from the old classical education (in which the purpose was to pass on a culture) to the progressivism of the 1920s (in which the purpose was to use schools to reform the culture), and the pragmatism that came in in the 1940s (in which the purpose was to fit children to the culture through directly teaching job skills), our education system has been in decline.

In other words, we ought to reassess whether economic performance should even be a goal of education.

As long as our education system continues to focus on external goals such as "career readiness" and "social skills" (not to mention multiculturalism and political correctness) and neglects the true goal of education, which is to acculturate students and develop their ability to know and think, it will continue its long downhill slide.

Maybe if we got back to trying to make students better human beings, rather than better workers, they would be both better human beings and better workers.

HT: Schools Matter

Fairy Tale Economics: The minimum wage debate another example of why it's so easy to be a liberal

While the rest of the world is celebrating May Day by Morris dancing, or crowning a May Queen, or enjoying a bank holiday, or recovering from Walpurgis Night, Democrats here in America are celebrating it as International Workers Day, an international socialist holiday.

And that's only appropriate. The minimum wage issue is a paradigm case of the liberal mindset on policy issues. It is a case study showing the key features of the liberal worldview:

• Good intentions count for everything
• The mere passing of well-intentioned legislation is sufficient to discharge one's obligations as a statesman
• Disagreement with liberal policy positions is evidence of evil intentions and bad faith and is sufficient to prove the moral evil of the person disagreeing

It is also an example of how easy it is to be a liberal.

Liberalism is the political path of least resistance. It is the position that requires the least critical thought because it does not require you to ask hard questions about your policy stance. It merely requires a pledge of good faith.

In the case of the minimum wage, the only thing you need think about is that workers at the bottom of the economic ladder will get paid more. Period. Stop there. No more questions are to be asked. You simply declare that you are in favor of workers making more money.

The problems with this position are not evident until a step or two into the economic thought process, a thought process that is never pursued because it would make the good intentions problematic.

And because the consideration of minimum wage laws never extends beyond the intention of helping workers to the reality of their actual effect, it never has to be considered.

The actual effect, of course, is that many workers--many of them new to the job market or trying to find their first job--will either lose their jobs or be faced with fewer job opportunities.

The extent of this effect is subject to debate, but the actuality of it is not. And those who attempt to deny it (the discussion never really gets to that point because this effect is seldom argued against and is more often simply ignored) should simply be asked, "Why are you settling for setting the minimum wage at $10.10 per hour?" "Wouldn't workers benefit more by raising it higher?"

In Seattle there is a movement to raise the minimum wage to $15.00 per hour--a proposal that is garnering the opposition of even politically liberal businessmen to whom good intentions are all-of-a-sudden not enough. Recent immigrants who run businesses in the city are particularly upset by the prospect, since their profit margins are lower than most other small businesses.

But what is the problem with $15 an hour? Why not $20? Why not $25? Why not $50? Would the person opposing such proposals be opposed to the well-being of workers in the same way they are characterized by minimum wage supporters as being in the case of the $10.10 legislation?

The problem, of course, is that such legislation would throw a lot of people out of work--something the $10.10 minimum wage would do as well, just not quite as much.

This is an election year political move, of course, of the kind both parties engage in when the prospect of facing the voters draw nigh. But that fact doesn't make it any less odious.

Rush Limbaugh criticizes Jesus for being a Marxist ... er, wait a second

A prominent conservative pundit today condemned Jesus Christ for expressing what he said were clearly Marxist sentiments in a recent statement. According to a reporter named "Matthew" (no last name was included in the byline), Jesus said "You cannot serve both God and mammon." The comment has set off a firestorm of protest from prominent conservatives.

On his radio show, Rush Limbaugh responded, "This is just pure Marxism coming out of the mouth of the Savior of the world." He criticized Jesus' understanding of economics and added, "If it weren't for capitalism, I don't know where Christianity would be."

Limbaugh went on to ....

Um, wait. Let me check this again. Hmmm. I, ... er, think maybe I've got a couple things wrong here.

It wasn't actually Jesus Limbaugh was criticizing. It was actually the Pope he was taking to task ... for saying pretty much the same thing.

Never mind.

Conservatives and the Religion of the Free Market

Russell Kirk often used to make the point that conservatism (properly so called, as George F. Will would say) is not an ideology. This was implicit in his deeming of conservatism as the "politics of prudence." An ideology is a political philosophy operating like a religion: It is apocalyptic, messianic, utopian, and radical.

You know you are a ideologue if, solely on the basis of your political views, you can fill in the blank of the following question: "The world will be brought to perfection when ____________."

A conservative can complete this statement on the basis of his religion, but he cannot answer it on the basis of his politics. From a political perspective, he has to completely beg off. The world, until it is redeemed by something transcendent, will never be perfect. It is the place of imperfection. It is a place of good and evil and the good we can only see through a glass, darkly.

Modern left-wing liberalism has always been ideological in this sense. They can complete the statement above. For them, the world will be perfect when the society no longer interferes with our advance toward self-fulfillment. There can be a utopia if we take radical action to bring it about. It will be established in that Last Battle, when the forces of political darkness (conservatives) are defeated by the forces of the political light (left-wing liberals). In the meantime, we must settle for passing government programs.

This is what William F. Buckley (quoting Eric Voegelin) meant when he accused liberals of "immanentizing the eschaton": They want to bring about in the here and now what can only be brought about in the afterlife or in the religious apocalypse that will ensue before a Last Judgment they don't believe in.

Left-wing liberalism being a religious belief masquerading as a political one, it only makes sense that its most central belief would be theological: The denial of Original Sin. Left-wing liberalism is the political analog of the Ghost Dance movement, the cargo cults, and the Shakers, only without the religious trappings. They all sought a heaven here on earth and thought that through their actions they could either prepare for it or help bring it about.

Jean Jacques Rousseau, not Karl Marx, is the left-wing liberal's patron saint. Rousseau's "natural man," uncorrupted by civilization contrasts with the conservative idea that civilization is the only thing keeping man from destroying himself and everybody else.

Left wing liberalism's view that utopia is possible and that man is perfectible--and that all this can be accomplished through the right policies--is an idea that is increasingly characteristic of modern conservatism. And this is why we had the knee-jerk reaction of so many so-called conservatives to Pope Francis' comments that the free market was not sufficient to accomplish what needed to be accomplished with the poor.

The idea of the free market now serves the same role for many conservatives as government action serves for many liberals: It has become the policy by which we can reach an earthly Nirvana. Conservatives now seem to see the right set of policies as the route by which we can reach terrestrial perfection. The way to do this, they say, is a completely free market.

Traditional conservatives do not view the free market in this way. It does not view it as a cultural panacea. Free market capitalism is indeed the most efficient economic system, but that doesn't mean that it's perfect. It is the worst economic policy ever developed by mankind, to borrow an expression from Winston Churchill about systems of government, except all the other economic policies that have been developed from time to time throughout history.

All the Pope was trying to say was that the free market was not a panacea and it didn't release us from the obligation to help the poor. Many conservatives interpreted this as the Pope attacking the free market per se. But an attack on the idea that the free market is not a panacea is not an attack on the free market. It is an attack on a mistaken belief about the free market.

It is a plea from a religious leader not to make politics (or economics) into a religion.

This is why many conservatives do what traditional conservatives would never have done: called their political position an ideology--a "conservative ideology." They too place celestial faith in earthly things. Conservatism is not an ideology and when it becomes one, then it isn't conservatism any more.

It's Not About the Pope: Modern conservatives need to get back in touch with their traditional economic selves

The Pope's comments in an official Vatican document yesterday are being portrayed as an indictment of free market economics by the liberal media—and the misrepresentation has been swallowed whole by many conservatives. They're wrong. In fact, it isn't the Pope who's a liberal: It's conservatives who have abandoned their own traditions and whose liberalism on economic issues is now being shown up.

Any school of philosophical thought suffers from popularity, and conservatism is no different. Ever since conservatism grew out of its remnant status about 35 or 40 years ago, it has been in a process of degradation that continues to this day. It has been victimized by its own success.

The conservatism that produced Ronald Reagan and that in large part dominated the old National Review magazine until somewhere along in the 1990s has been beset with what can only be called a liberal infection.

The conservatism of Edmund Burke has been quietly traded in by modern conservatism for the liberalism of John Stuart Mill, Thomas Hobbes, and John Locke. The problem is aggravated by the fact that, due to almost universal philosophical illiteracy, most modern conservatives don't even know who these thinkers are.

Utilitarianism has replaced respect for custom and tradition. Raw libertarianism has replaced ordered liberty. Free market ideology has replaced a common sense economic liberty that once understood the difference between the empirical laws of economics and the normative obligations of a Christian culture.

The process has been helped along by conservative talk radio and now Fox News. People like Rush Limbaugh and Sean Hannity, right as they are on many issues, are now seen as the standard bearers for conservatism when, in fact, their political philosophies are at serious odds with the conservative tradition itself.

A large part of the problem with modern conservatism has to do with the fact that conservatives have forgotten their own tradition. Just look at the most popular conservative books (and weep). No movement that takes as its chief intellectual nourishment itself on people like Glenn Beck, Sarah Palin, and Bill O'Reilly deserves to be taken seriously.

This was not the case with the old conservatism. There were no popular conservative authors back in the conservative day, so we couldn't be corrupted by them. We had to resort to Russell Kirk, Richard Weaver, Michael Oakeshott, and F. A. Hayek, and T. S. Eliot for our political nourishment. Even the conservative journalists were intellectuals, not former disc jockeys and beauty queens: Wilmore Kendall, Frank Burnham, Joseph Sobran, and William F. Buckley, Jr.

These were people who a) knew what they were talking about, and b) actually authored the books that they claimed to author.

Modern conservatives can see conservatism from their house.

I have a simple rule for any conservative who wants to learn better what conservatism is: Don't read any book by anyone claiming to be a conservative that purports to explain it who didn't actually write the book that bears their name.

That would eliminate just about every popular conservative author with the exception of Charles Krauthammer, a liberal-turned-conservative (what we used to call a "neoconservative") who only had to change half his political philosophy in order to fit in to the new modern "conservatism" that is only half conservative. And we'll make an exception for Ann Coulter, any of whose lapses from true conservatism are more than made up for in sheer wit.

Allan Bloom once famously divided the political public into right-wing liberals and left-wing liberals. Modern conservatism is right-wing liberalism.

And this is why so-called conservatives have a problem with Pope Francis: He has challenged the liberal element within their thinking that has developed during a 40 year-long gestational period and has now experienced a coming out like the monster in the movie "Alien."

Conservatism has traditionally fought for a proper balance between justice, order, and freedom; and a belief in an economy that is free, but still subordinate to these goals. They believed freedom was a means, not an end.

What modern conservatism has done is to subordinate every other aspect of political conservatism to one thing and one thing only: free market economics. Everything else is dispensable.

Marriage for example.

Just look at the number of "conservative" leaders who, as soon as the political winds changed, abandoned ship on conservatism's central cultural position. It's pretty sad.

You can take my culture, but don't mess with my free market economics.

Once upon a time, conservatives advocated ordered liberty—both as a political and an economic principle. They were never in favor of unrestricted market actions. Never.

What the current critics of Pope Francis who think they are conservatives need to do is take account of Russell Kirk, the author of the most influential and authoritative book on conservatism, The Conservative Mind: From Burke to Eliot (the Ur text of modern conservatism), and legendary defender of the free market, who writes in another book:

Sometimes, indeed, vociferous American devotees of "American capitalism" and the "American standard of living" do more mischief and benefit to their own cause, generating more heat than light, and substituting facile slogans for first principles ... 

... We ought not to exaggerate the importance of our economic arguments or of our American economy. In many ways the free market economy of the United States is a good thing in itself; yet it is not the whole of life. No economy, however productive materially, could be a good thing if it were founded upon injustice, disorder, slavery, and dishonor. The slave-labor camps of the Soviet Union were efficient, after a fashion—but only because they took no reckoning of human lives or moral principles. Thus our American economy, though good in itself, is important not merely for its own sake: its real importance is the contribution it makes to our justice and order and freedom, our ability to live in dignity as truly human persons. Our "standard of living," though often enjoyable in itself, is not the be-all and end-all of life. Economic production is merely th e means to certain ends. One of those ends is the satisfaction of man's material wants. And there are other ends served by this means of economic production: the satisfaction of certain profound desires in human nature, such as the desire for fruitful work and sufficient leisure and hopeful competition, for one; and the maintenance of a decent society for another.

Now take this view and the read what Pope Francis said again, and ask yourself where there is any contradiction between this and what the Pope said.

Modern conservatives have made a religion of the free market in a way traditional conservatives never would have done. The free market is not the sum and summation of conservatism; it is rather one principle to be balanced with others. As C. S. Lewis once said, "Second things suffer from being put first." This is what modern conservatives have done with economics.

Conservatism is not an ideology, it is a set of political first principles in constant tension. There's a big difference.

So-called "conservatives" get in on the act of misrepresenting the Pope

The supply of mischaracterizations about today's remarks on economics by Pope Francis is creating an even greater demand for people to point out what the Pope actually said.

Todd Zywicki at the Volokh Conspiracy takes the Catholic Church to task for being against free market economics on the basis of remarks Pope Francis made in an Apostolic Exhortation earlier today opposing the idea that invisible hand of the free market is sufficient for the bringing about of justice:

It appears that he is agin’ it (full document here). 

I’m not going to go into the wrongheaded economics here. Instead, what I think is curious about this document is a longstanding peeve of mine. Ever since the Galileo incident, the Catholic Church has generally tried to be careful to get its science right before it opines on ethical matters related to science. It takes seriously questions of bioethics and has developed internal expertise on those issues. Yet when it comes to economics, the Church seems to have no qualms about opining on issues of economics without even the slightest idea of what it is talking about.

Now first of all let's take note of the assumption implicit in this charge: that economics is some kind of hard science. Really? I would love to hear the argument for that. Economics is surely a moral science (Adam Smith was, after all, a moral philosopher), but it is hardly a hard science. If it were, you wouldn't see the wide divergence of economic opinion on even basic economic questions.

But  more importantly, Zywicki's criticism betrays the fact that he isn't to make even basic distinctions. The Pope is primarily making a moral point here, and where he does make economic assertions (as he does about the empirical fact that a free market does not automatically produce a just society), they're clearly accurate.

Of course Zywicki, who claims the intellectual high ground in relation to the Church, doesn't even bother to argue that the Pope is wrong--either on the ethical fact that we should take some kind of action in addition to just letting the free market work or on the economic fact of what the free market does and doesn't inevitably do. All he does is make snide remarks over what he thinks the Pope said.

In instead of an argument Zywicki simply employs and assumption about what the Pope said that is clearly inaccurate. The title of his post was "The Pope doesn't heart the free market." And he links to an equally inaccurate post titled, "In which the Pope informs us that the free market is very, very bad."

But the Pope didn't say the free market was bad; he said the free market was insufficient.

In order to criticize something, you have to be accurate about what you are criticizing. The Pope thinks that a just society requires more than just watching the invisible hand do its work. So what's Zywicki's refutation of this? He needs to offer one if he wants to appear as something other than what many supposedly conservative economic thinkers seem to be, which is not advocates for the free market, but apologists for large corporations.

Economics in its limited, social science sense has to do with the "laws" (as that word is loosely used in economics) of production, consumption, distribution, and so on. If a person or group of persons does X, then Y happens. But economics, in the larger sense of being a moral science, has to do with the normative decisions we make on the basis of these economic "laws." The former is empirical, the latter is ethical.

Writers like Zywicki would do well to understand the difference.

Is STEM a SCAM? Are all those predictions of future technology jobs really legit?

There are two kinds of economic obsessions and both involve attempts at prophecy: The first involves predictions that the economic End is Near; the second involves someone telling us what the economy will need in the future. The STEM movement is an example of the latter.

We are now in the midst of the STEM craze. We are told, with religious zeal, that the economy will need STEM jobs in the coming years. Millions of dollars are now being spent to promote STEM education--just like I was told in college that your future job prospects were in learning Fortran and Pascal.

Watch for the 21st century economic equivalent of the 17th century tulip craze in Holland.

In a recent article in IEEE Spectrum (as well as in several other articles), Robert N. Charette points out a few facts about STEM that its advocates aren't talking about:

You must have seen the warning a thousand times: Too few young people study scientific or technical subjects, businesses can’t find enough workers in those fields, and the country’s competitive edge is threatened.

... And yet, alongside such dire projections, you’ll also find reports suggesting just the opposite—that there are more STEM workers than suitable jobs. One study found, for example, that wages for U.S. workers in computer and math fields have largely stagnated since 2000. Even as the Great Recession slowly recedes, STEM workers at every stage of the career pipeline, from freshly minted grads to mid- and late-career Ph.D.s, still struggle to find employment as many companies, including Boeing, IBM , and Symantec , continue to lay off thousands of STEM workers.  

 ... Another surprise was the apparent mismatch between earning a STEM degree and having a STEM job. Of the 7.6 million STEM workers counted by the Commerce Department, only 3.3 million possess STEM degrees. Viewed another way, about 15 million U.S. residents hold at least a bachelor’s degree in a STEM discipline, but three-fourths of them—11.4 million—work outside of STEM. The departure of STEM graduates to other fields starts early. In 2008, the NSF surveyed STEM graduates who’d earned bachelor’s and master’s degrees in 2006 and 2007. It found that 2 out of 10 were already working in non-STEM fields .And 10 years after receiving a STEM degree, 58 percent of STEM graduates had left the field , according to a 2011 study from Georgetown University. The takeaway? At least in the United States, you don’t need a STEM degree to get a STEM job, and if you do get a degree, you won’t necessarily work in that field after you graduate. If there is in fact a STEM worker shortage, wouldn’t you expect more people with STEM degrees to be filling those jobs? And if many STEM jobs can be filled by people who don’t have STEM degrees, then why the big push to get more students to pursue STEM? 

Read the rest here.

How much does Obama care about the middle class? Apparently, not enough

The speakers at the Democratic National Convention keep talking about the middle class, and how they care about the middle class. Unfortunately, they may be caring them out of existence.

What voters need to do is remember one number: $4,019. According to the Census Bureau, this is the amount  of the decline in income over Obama's term  of office. Here is the Wall Street Journal, on the result of Obama's "care" of the middle class:

In January 2009, the month President Obama entered the Oval Office and shortly before he signed his stimulus spending bill, median household income was $54,983. By June 2012, it had tumbled to $50,964, adjusted for inflation. (See the chart nearby.) That's $4,019 in lost real income, a little less than a month's income every year. 

How did this happen, what with all the Obama administration's care and concern? Maybe the problem is that they just didn't care enough--or maybe just expressing your concern and making speeches about it is not enough to actually change the situation.

But, you say, didn't Obama inherit the recession?

Well, even if you start the analysis when the recession ended in June 2009, the numbers are dismal. Three years after the economy hit its trough, median household income is down $2,544, or nearly 5%.

That's actually worse that the first part of the recession. You know, the one caused by Bush.

Distributism 101: Is predatory capitalism a conservative doctrine?

There are some so-called "conservatives" who are really liberals.

The Bain controversy is the perfect case study to illustrate the distinction at the center of the economic school of thought called "Distributism." And it is a case study in the Fallacy of the Appeal to the Aggregate that seems to infect the rhetoric of a lot of people who call themselves "conservative."

The Bain controversy, let us remember, involves Republican presidential candidate Mitt Romney's involvement in Bain Capital, a private equity firm. As a private equity company, Bain has invested in numerous companies and, in the course of its regular business, employees were laid off and jobs were outsourced.

In our last installment of Distributism 101, I discussed the Distributist distinction between theoretical and applied economics. "On the one hand," said Hillaire Belloc, "theoretical economics focuses on the way economics laws work. On the other hand, applied economics tell us what the economic state of affairs ought to be."

What people like Romney do to justify their own individual actions in pursuing profits is to clothe themselves in the mantle of "conservatism." But in doing so, they confound the two modes of economic thought: Whatever "works" economically, they seem to suggest, is ipso facto the way it ought to be.

Furthermore, among such people the definition of what "works" is always cast in aggregate terms: if an economic action produces greater aggregate income or greater aggregate employment, etc., then it is automatically considered to be the result the individual ought to pursue.

To propound this doctrine on a policy level is one thing. There, it has a certain air of plausibility--although it is still not unproblematic. But to propound it on the personal level, as Romney has done, is to completely confound both economic and ethical categories.

To say that your personal action is right because it contributes to the greatest good of the greatest number may or may not be the doctrine of Adam Smith, but it is certainly the doctrine of John Stuart Mill. More specifically, it is the doctrine of utilitarianism, the doctrine of which Mill was the most prominent historical exponent. And to acquiesce to such arguments in the name of conservatism is to imply that conservatism itself is a utilitarian doctrine, which it most certainly is not.

The problem, of course, is that there are people running around calling themselves conservatives who are spouting economic utilitarianism and don't seem to realize it, and Romney is one them.

Predatory capitalism is not a conservative doctrine. It is economic utilitarianism, and economic utilitarianism is the soul of liberalism properly so-called. American political rhetoric has developed in a rather strange way and has seen the term "liberal" turned into a reference to someone who believes in socialism. "Liberalism" used to mean--and still does mean in Europe--someone who believes in economic freedom.

In fact, I think partly because of the changed application of the word in American politics, we seem to have come up with a new word to mean what "liberal" used to mean: libertarian. I suppose it gets us out of the problem of calling people we think of as conservatives "liberals."

When Romney was called out for this, out came all the libertarians who have convinced people that they are conservatives to defend him: David Boaz at the Cato Institute, Grover Norquist of Americans for Tax Reform, and Tim Phillips of Americans for Prosperity.

But, as I have pointed out on this blog before, libertarianism is not conservatism. In fact, pure libertarianism is almost the exact opposite. This is why social conservatives (the ones who really understand their social conservatism, anyway) should have a troubled conscience in making common cause with libertarians. I'm not saying they should never do it. Sometimes the predations of socialism require it. But we shouldn't forget that conservatism is ultimately inimical to libertarianism. And I'm afraid we forgot that some time ago.

People who think it is right to lay people off and outsource their jobs purely for the purpose of padding their own profits are not conservatives. Conservatives are about conserving things--things like families and communities. This requires an acknowledgement of the efficiencies of the free market in subordination to common good, to which the efficiencies of the free market are sometimes blind.

The extreme individualist utilitarianism that is espoused by some people who want to call themselves "conservative" is corrosive of these things.

They are utilitarian capitalists, which is another word for "liberal."

Distributism 101: The two economic fallacies

Before all the Occupy protesters freeze and lose consciousness, I'd like to point out to them (and anyone else willing to listen) what it is that they should have been protesting about. Instead of taking to the streets and acting like a bunch of spoiled children, they could have been making intelligent criticisms of our economic systems that actually, like, matter.

In this first in a series of posts on the economic theory of Distributism, I want to explain what it is and how it differs from the two extremes in economics: libertarian capitalism and liberal socialism.

Distributism is an economic and social theory that has been gaining a lot of attention for several reasons, I think. The first is a sort of revival in interest in the thought of G. K. Chesterton is recent years. The second is that many of the ideas articulated by Distributists like Chesterton, Hillaire Belloc, E. F. Schumacher--as well as the more contemporary Wendell Berry, seem to be underly the thinking of Philip Blond and the Red Tory movement in England.

Distributism is the idea that capital should be spread widely in society--not concentrated in the hands of government and not concentrated in the hands of big business.

The problem with the Occupy protesters is not that they are wrong about a small number of capitalists having too much power: they're problem is that they seem to think that the solution to the problem is a more powerful government. And the problem with the critics of the Occupy movement is, first, that they think there is no economic problem; and, second, that they think the only right kind of economy and society is a libertarian capitalist one.

Our economic discussion, in other words, is cast in a Scylla and Charibdis form: either you are a capitalist and right (or wrong) or you are a socialist and you are wrong (or right). Well, to put it simply: no, not necessarily.

The best simple introduction to distributist economic ideas is Hillaire Belloc's Economics for Helen, a book out of print for many years, but now back in print thanks to IHS Press.

Belloc makes a distinction that could serve as the first lesson for anyone interested in knowing more about Distributism, a distinction that makes sense of so much of the nonsense in the debate over the Occupy movement and its critics: There is economics considered theoretically and economics considered practically--theoretical economics, if you will, and applied economics.

On the one hand, theoretical economics focuses on the way economics laws work. On the other hand, applied economics tell us what the economic state of affairs ought to be. The main problem in economic debates between so-called conservatives (who are really liberals [in the classical sense] on economics) is that they emphasize the theoretical aspect of economics in disregard of the applied, and the problem of the so-called liberals (many of whom are really socialists) emphasize applied economics in disregard of the theoretical.

In regard to the emphasis on theoretical economics, the law of supply and demand and the law of diminishing returns really are all they're cracked up to be. The Law of Comparative Advantage compares very advantageously, and Say's Law does just what Say said. The market, in other words, works in the abstract and in the aggregate. If it were to operate in total freedom without any interference it would produce the most efficient result--in the abstract and in the aggregate.


The trouble is that all the equations and analyses of the increasing mathematical discipline of economics only tells us about those things that are quantifiable. The gross national product may be higher than it's ever been, but that doesn't mean people are happier than they ever were.

To say, as the libertarian capitalists say, that we should just get out of the way and let the market work, is a value judgment, and one that assumes that the kind of abstract, theoretical efficiency that the market produces is the best state of affairs. And often this value judgment of the best state of affairs is spoken of as if it were a judgment that was part of theoretical aspect of economics, when, in fact, it's not.

Economics (in its theoretical sense--applied economics is really a part of politics) is like mathematics: it can tell us how to get to the right amount of whatever it is we want: it cannot tell us what the right amount is. Economics, like math, is completely theoretical in that respect. Economics cannot tell us what is the best allocation of resources: it can only tell us what we should do to get the allocation of resources we already know is, in fact, the best.

The mistake that assumes that the unfettered market automatically produces the best outcome is the typical mistake of capitalists, and it results from the overemphasis on the theoretical aspect of economics.

The second mistake--that made by socialists--is the mistake of thinking that we can merely transfer more power to well-intentioned big government and trust it to do the right thing regardless of the actual quantifiable damage it can do.

The means to success, thinks this school of thought, is to get together, pass policies with nice sounding names (legislation with "children" in the title always works), and simply command that these good things happen. Unfortunately, because of their disregard for the theoretical aspect of economics, there are usually unintended consequences of these actions. Because of the ignorance of laws of theoretical economics, these actions often result in the mitigation of the sought-for good result or the accentuation of some economic evil that was unforeseen.

Great Society programs, intended to help the poor, instead helped foster and sustain an increasingly permanent underclass through a set of bad economic incentives. Minimum wage laws, intended to raise the wages of workers in low paying jobs, often simply resulted in higher unemployment for those seeking entry-level jobs.


The first mistake is utilitarian, since it sees mere quantifiable results as the measure of economic success, and sees quantifiable results as the test of economic success. The second mistake is romantic, and sees good intentions as the test of economic success.

Neither takes real human beings into adequate account.

Comparing economic plans

Herman Cain just pitched, once again, his 999 plan at the Republican debate, which involves a 9 percent tax on personal income, a 9 percent business tax, and a 9 percent national sales tax. It occurred to me that Cain's 999 compares favorable to Obama's Plan, which might be called the 666 plan.

Are there really 15.1 percent of Americans really living in poverty?

A multi-millionaire who owns several houses (with servants' quarters), matching his and hers Bentleys, a luxury yacht, and a private jet could find himself listed as "in poverty" in the United States. In fact, Warren Buffet could easily find himself categorized as "in poverty."

How?

Because the United State Census--where all those statistics are coming from telling us that 15.1 percent of Americans are living in poverty--takes account only of income for the year. So if a rich person shows a loss (which is quite common) or has fancy accountants who can reduce his adjusted gross income to below about $22,000 (assuming a family of four), he is counted as poor by the Census.

Go figure.

The liberal's favorite economist said social security based on a "Ponzi" scheme

Is Rick Perry really out in political left field because he called social security a "Ponzi scheme"? That's what many liberal commentators have charged. But Harvard economist Greg Mankiw has dug up a gem of the quote from the most influential liberal economist of the late 20th century, Paul Samuelson, the Keynesian economist who authored of the most popular economics textbook of all time: Economics: An Introductory Analysis.

When I was studying economics at the University of California in the early 1980s, Samuelson's book was reviled by the monetarists--and worshiped by the Kenynesians--who peopled the economics department there. Samuelson was Keynes' bulldog. Here is Samuelson, in a remark that was intended, ironically, as a compliment to social security, using the "P" word:

The beauty of social insurance is that it is actuarially unsound. Everyone who reaches retirement age is given benefit privileges that far exceed anything he has paid in -- exceed his payments by more than ten times (or five times counting employer payments)! 

How is it possible? It stems from the fact that the national product is growing at a compound interest rate and can be expected to do so for as far ahead as the eye cannot see. Always there are more youths than old folks in a growing population. 

More important, with real income going up at 3% per year, the taxable base on which benefits rest is always much greater than the taxes paid historically by the generation now retired. 

Social Security is squarely based on what has been called the eighth wonder of the world -- compound interest. A growing nation is the greatest Ponzi game ever contrived.

Read the rest here.

Where is Jack Conway when you need him to interfere in the free market outside of Louisville?

Gas prices in Louisville have been consistently lower, by about 20 cents, than surrounding areas. Where are the investigations! Wake up, Attorney General Jack Conway! I mean, when gas prices were higher in Jefferson County lat year, Jack's office launched an investigation, and filed an injunction against Marathon Oil.  Of course, it was dismissed by a judge because Jack didn't meet the burden of proof he needed to interfere with the free market (just like when his predecessor, Greg Stumbo did the very same thing for the very same reason--political popularity). But now it is 20 cents higher in counties surrounding Jefferson.

Why no investigations when gas prices are 20 cents higher than Jefferson County in other counties? Isn't this unfair to consumers in other counties? Why does Jack only try to interfere with the free market when the price for a commodity is high in Louisville?

Get on the stick, Jack!

Seinfeld Economics: Obama's nonexistent economic policy

The distinguishing feature of the Seinfeld show, it has been said, is that it was not about anything. If you scratched just slightly below the surface, there was nothing there. It is becoming increasingly clear that the Obama administration's economic plan suffers from the same problem: there isn't one.

Even the liberals are beginning to express the worry that the man they bowed the knee to as "the One" are wondering "one what?" As my good friend Mike Allen has pointed out, if a liberal president can't even maintain Maureen Dowd's support, he's in trouble.

Let's take ourselves back to the new Reagan administration of the early 1980s for a moment. The Reagan administration took the national helm at a time of high inflation and high unemployment. When it took office, it announced a plan to deal with the problems, which included:

1. Reducing the growth rate of government spending
2. Reducing the marginal tax rate and the capital gains tax
3. Reducing government regulation of private business
4. Controlling the money supply.

The plan did not work immediately, resulting in criticism from his political detractors. Reagan's response was that his plan would take time to work. For months, Reagan urged the country, "Stay the course." It became the theme of his communication strategy in 1981 and 82.

Now let's contrast the early 80s with the current economic crisis. If Obama were to hold a press conference tomorrow and said to reporters, "We need to stay the course," would anyone know what he was talking about? What course? What could he say he was referring to?

People worried in the early 80s. But whatever you think of Reaganomics, everyone knew what the then president was going to do about it. He could give you a detailed, point by point plan. If it worked, everyone would breath easy; if it didn't, then we would have to try something else.

But the problem with the Obama administration is that there are no details. There is no point by point plan. In fact, there is no plan at all. There is nothing about which we can say, "Yes, it worked," or "No, it didn't work" so we can try something else.

Here is Obama's Economic Plan:

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The only thing the Obama administration has done is to throw money at the problem. But throwing money at the problem is not an economic policy.

I think the reason the U. S. stock market is now so volatile, and world economy so skittish is not because the Obama administration's plan is no good. The reason for the fear and uncertainty in the United States and around the world is not that the Obama administration's plan is not working. The problem is that the Obama administration has no plan.

And the lack of a plan to deal with the problem is a part of the problem.

Why a Republican victory on Tuesday won't solve our problems: An introduction to Red Toryism

As soon as we get this Tea Party thing out of our system this Tuesday--which is simply the attempt to replace one form of political individualism with another--let's talk about Philip Blond and Red Toryism.

Blond, a British cultural critic who runs Res Publica, is an influential British thinker who is closely associated with Prime Minister David Cameron. His economic views, which incorporate Catholic social teaching and the economic thought of Hillaire Belloc and G. K. Chesterton, are the basis of "Red Toryism."

Red Toryism rejects both the valueless, plutocratic capitalism that infects much of conservative thought as well as the quasi-moralist socialism articulated by the left. The right, he says, is controlled by monopoly capitalism that concentrates capital in the hands of a small economic elite, while welfare state socialism plays its part in the system of monopoly capitalism by trying to redistribute some of the capital of the economic elite back down to the poor and lower middle classes through a huge government bureaucracy. They are the Tweedledee and Tweedledum of the capitalist system, each with its captive constituency that returns it to office again and again--and gives each a turn in power from time to time, as is about to happen in America.

There's got to be something more than a Republican Party that takes money from the middle class and gives it to the rich in the form of corporate welfare to assuage it's big corporation constituency and a Democratic Party that takes money from the rich and gives it to the poor in the form of socialist welfare to get re-elected.

Blond is leading a movement in Britain which advocates steering a course between capitalist conservatism, which serves the interests of big business, and welfare state socialism, which serves the interests of big government.

The original proponents of this "middle way" between monopoly capitalism and state socialism were Chesterton and Belloc, who called it "Distributism." They advocated this view from the offices of the periodical the New Witness (later, the Eye Witness). The principles of Distributism were set forth most notably in two books: Chesterton's The Outline of Sanity and Belloc's Servile State. It stressed the important of individual ownership of property as the central economic principle and the institution of marriage and the family as the central social unit.

Many of the ideas underlying Distributism can be seen in the various agrarian movements of the 20th century and is central to the writings of the Kentucky writer Wendell Berry.

A third political way like Red Toryism is simply absent in America, but the possibility of something like it arising is latent in the social conservative movement. Social conservatives play the same role in the national Republican Party as minorities play in the national Democratic Party: they are in thrall to their respective parties, who use them for their own political purposes but in large part don't really have any serious intention of advancing their agendas.

The social policy of Red Toryism, being a fundamentally Christian movement (Blond is a trained academic theologian whose mentor was John Milbank of Radical Orthodoxy fame), is understandably conservative (in the true sense of that word). Blond explains his pilgrimage from the left:

My leftish affiliation ended. Many of my left-wing friends suddenly seemed to me to be right-wing….Despite all their rhetoric, all they really believed in was unlimited choice and unrestricted personal freedom. They seemed in important ways to have been stripped of integral values and to have embraced a rootless cultural relativism…They seemed to delight in abortion, for example, and made a fetish to choose, as if this were a real exercise of human freedom and unimpeded will, but they hated fox hunting because they thought it was cruel.

In America, Distributism is currently being propounded at the Distributist Review, which has recently reviewed Blond's book.

If we're going to have a real revolution, it's going to have to be into something better, not just one of two versions of same political individualism.

Public employee benefit plans need to be the same as everyone else's

The next time you hear the latest news on some government pension plan that is facing a multi-million dollar shortfall and threatening the benefits for those who are scheduled to retire, ask yourself this question: "Do I have a defined benefit plan where I work?"

Public employees and many unions have defined benefit plans, which give beneficiaries a set amount on retirement. It's a pretty cushy deal, really. The rest of have to make due with defined contribution plans, like 401Ks, which have a set contribution, but not a set benefit. This is what the vast majority of private businesses use. By definition they cannot have a shortfall, since the benefit is always based on whatever the value of the account is at retirement.

Other than mostly union plans, private companies began moving away from defined benefit plans many years ago, and no they have been superseded by defined contribution plans.

Employees love defined benefit plans, of course, since their benefits are a guaranteed amount. But the thing about it is that when a recession comes along, the actuarial calculations go out the window, and the amount in the plan is not enough meet the guaranteed benefits. So what happens? There are only two possibilities:

1. Public employees don't get benefits they were guaranteed
2. The government entity that guaranteed the benefits has to spend more public money making up the gap

Since employees have been guaranteed the money, 1. can't happen, which means that the rest of us who are on defined contribution plans have to belly up for it through our taxes. This is an absolutely absurd situation.

States like Kentucky need to pass laws forcing their executive branches to phase out defined benefit plans and institute the same kind of defined contribution plans everybody else is using.

Is Europe driving itself off the socialist cliff?

From the Washington Post:

ATHENS -- The massive emergency fund assembled to defend the value of the euro is backed by a political gamble with an uncertain outcome: that European governments will rewrite a post-World War II social contract that has been generous to workers and retirees but has become increasingly unaffordable for an aging population.

The trillion-dollar program, to be underwritten largely by the 16 nations that use the euro and by the International Monetary Fund, represents a virtual discarding of Europe's rule book.

In other words, socialism in Europe may be failing. Hey, I've got a great idea: now that Europe is about to go financially belly-up because of socialism, let's try it here and see if we can get it to work!

Oh. Wait. Somebody has already thought of that.

Nevermind.

HT: Gene Edward Vieth