Thursday, October 30, 2014

Revisionism Strikes Again

NOTE: I am reproducing this article originally published in the now defunct Random Notes blog as I find it an interesting topic.

I was a bit puzzled recently. I received my bachelor's degree in history, without any specialization, but I took most of my courses in British history, specifically the development of the British legal system from the earliest Saxon kingdoms through the Glorious Revolution. A few courses obviously fell outside of that area, a few were in British social and military history, a few in later periods of English history, a few in German history and, by choice, several were in classical history. I admit I have not kept up with the subject, but I thought myself well read in the area.

So, imagine my surprise when I was reading online about a particular film and read it was set "in the aftermath of the War of the Three Kingdoms". I was a bit puzzled. I thought myself knowledgeable in British history, but here was an entire war about which I had never heard. Was this some strange way to refer to the War of the Roses? There were only two real houses there, but if you somehow made the Tudors a third house, and called each house a kingdom... Or maybe I read wrong, and this was really set in China, where I did know of a war of three kingdoms, though it seemed a bit early (and quite insufficiently British)for the setting described... Well, I was puzzled, so I decided to do a bit of digging.

Despite my misgivings about Wikipedia (see "Why I Won't Be Contributing to Wikipedia", "The Taxonomy of Trivia" and "The Tragedy of the Creative Commons" and the articles cited in those essays), I know it is the best place to find all the latest foolish fads in academia, and so I checked. And, sure enough, it appears there is a fad in academia to rename what I call "The English Civil War" as "the War of the Three Kingdoms". Apparently, the name we have used since 1660 or so is not good enough, it does not place enough emphasis on the plight of the Irish and Scottish, and does not stress strongly enough the trivia that the three kingdoms were only united in a "personal union", and were not "Great Britain" until the Act of Union. (Which might surprise a lot of subjects of the era, who used the term "Great Britain" without waiting for the three parliaments to be formally united in a legislative act.)

What makes this so silly, besides the fact that it creates a needless renaming of a well known designation, is that it actually obscures more than clarifies. Yes, the kingdoms of Ireland and Scotland were involved, and yes they played a driving role in many events, but after the Stuart monarchs ascended the English throne, events in England really did drive the politics of the other two kingdoms as well. And in this particular case, it is particularly absurd, as it was the English parliament which warred on King Charles, creating an "English", or -- if you wish to be more "inclusive" -- "British", civil war. Scotland became involved later as the defenders of the Stuarts (for several reasons), but they were basically intervening in the English Civil War. 

I know, it is foolish to criticize pointless revisionism and the tendency of academics to come up with silly innovations. (See my many gripes on Greek transliteration in "Inversion of Traditional Values" [notes], "Bad Economics Part 6" [footnote 4], "A Thought on Iran" [note], "For Those Who Would Sit It Out" [postscript], "Protectionism" [footnote] and "Brief Note", similar complaints about pointless changes in English in "A Question About Language", "Oh No, Not Again", "In Defense of Standards", "Grammar Nazi Comment on Greco-Latin Words", "Ye Olde Grammar Nazi", "The Grammar Nazi Versus George Lucas", and my gripes about academia's foolishness in general in "Deceiving Themselves?", "Why People Don't Take Academics Seriously", "Endangered Species", "Funny Numbers" and "Opinion Masquerading as Fact".) But really, other than hurt Irish and Scottish pride, and academics wishing to innovate in some way to see their name in print, is there any good reason to rename this war?

Originally posted in Random Notes on 2011/12/24.

UPDATE (2014/10/30): It is interesting to read on the talk page someone who says something almost identical to what I wrote, for instance "This unhelpful name to me is all of a piece with the enthusiasts who change the German navy to the 'Kriegsmarine', or who change all ancient Greek names to a new spelling convention which is mysteriously supposed to be closer to the Greek alphabet (like 'Konstantinoupolis' or 'Ioustinianos'). Can we revert to something which most people will recognise?" It is especially interesting as the author hits upon one of my other favorite topics, the absurd, and pointless, changes to Greek transliteration.

Wednesday, October 22, 2014

Self Perpetuating Delusion

I have written before about how many conspiracy theories are designed in such a way that they are impossible to disprove ("Self-Sustaining Beliefs"). For example, if evidence exists to disprove a particular facet, then it is "FBI disinformation" or something similar. Likewise, any eye witnesses who argue against the theory are obviously agents or plants. In short, the beliefs of many conspiracy minded souls are such that nothing could possibly convince them of the falsehood of those ideas.

This came to mind when reading Amazon reviews of "Thanks for the Memories", the supposed chronicle of the mind control and sexual abuse of "Brice Taylor". What made this so amusing is that many of those who were even slightly critical were not denying mind control, many even bought into the most extreme versions of MKULTRA paranoia, all they claimed was that either photographs contradicted the author's claims of attending certain functions, or, even more mildly, asked why there is not a single bit of evidence to support the claims.

Yet, the true believers were up in arms. Immediately charges were leveled of "blaming the victim". And often the statement was made that those who wanted evidence would do better to "educate themselves" on the evils of the government. In short, because this boo agrees with beliefs held by these souls, there is no need for evidence, and to ask for such is to show you are a tool of the conspiracy.

Now, obviously, many of those writing such responses are on the lunatic fringe. But, what frightens me is that day by day, both the right and left seem be moving more and more into that fringe, as conspiracy theory becomes more and more a part of the mainstream. From claims of blown levees in New Orleans to Bush engineering the Iraq War for nefarious reasons to the claims of Birthers and Truthers it seems more and more of the mainstream is willing to accept such unsubstantiated, ludicrous claims on the slender foundation that -- for whatever reason -- they distrust the state, or even specific administrations. Sadly, as we come more and more to see the opposite side as evil enemies and not misguided rivals ("Technophobes and Conservatives -- The Risk of Assumptions","The Futility of Blame") we now have come to accept conspiracy theories ever more readily, and that makes me worry for our future.

POSTSCRIPT

For those interested in my thoughts on conspiracy theories, I suggest "Ritual Abuse, Backwards Logic and Conspiracy Theories", "Mumia, the DaVinci Code, Full Body Scans, and Loose Change - How Conspiracy Theories Arise", "False Flag Theories and 9/11", "Backwards Logic", "Maybe Obama Was Born in Gulf Breeze, Florida", "Can Hawaiians Travel Overseas?", "Conspiracies Vs. Conspiracy Theories", "Sleight of Hand" and "Self-Sustaining Beliefs" .

Tuesday, October 21, 2014

Two Wrongs

We all heard it in nursery school, "two wrongs don't make a right", and yet, it seems that this simple truism was lost on many of those offended by "social injustice". For example, a number of black activists, upset that history over emphasized European contributions1, decided to correct that error by mistakenly confusing Egyptians and sub-Saharan Africans, and then attributed absolutely every discovery, invention, philosophy and scientific discipline to the land of the pharaohs. And like the portraits of "black Jesus"2, intended to raise cultural pride, instead these exaggerations tended to make those activists look foolish to most, and created a racially charged environment where many were afraid to point out numerous facts for fear of appearing insensitive, or treading on touchy racial sensitivities.

Well, it seems black Americans are not alone in this sort of foolishness, as I discovered when reading reviews of "Persian Fire" on Amazon. Apparently, Persians3, upset that the current regime in Iran has been giving them a bad name among many Americans, have adopted a similarly delusional history concerning the Persian Empire (that of Cyrus, Darius, et al., I don't know if it extends to the many successors that persisted up until they were extinguished by the rise of Islam).

Not that the nonsense I read was entirely the fault of Persian pride. There were also a number of Chomsky-lite, blame the west first sorts who, being fed up with "clash of cultures"4 arguments have decided to correct what they see as the mistake of pride in western culture by praising anything non-western. Of course, since their effort at inverting the normal valuation of the west ends up playing into the same nonsense as the efforts at elevating the Persian Empire, the result is much the same.

For example, ignoring the fact that the head of the Persian Empire literally claimed ownership of everything within its borders, and ruled through satraps who were, in turn spied upon by his other agents, these revisionists have tried to portray Persia as a land of freedom and civil rights, claiming that Cyrus (or Darius, they don't seem to agree which) publish an elevated declaration of human rights, more enlightened than any in the west. Ignoring the anachronism of this5, does anyone really believe it is true? I grant, the Greeks have been whitewashed in history, especially with the recent pop history fascination with "the 300", but Persia was hardly the Sweden of the ancient world, replete with civil rights and respect for the liberties of citizens. Despite the claims, for example, of religious tolerance, the truth is that such tolerance was at the whim of the ruler, and was often used for political ends, such as the freeing of the Jews to establish a dependent border state between Persia and Egypt. Or later (in one of the late successor states), harboring various heretical Christian sects to provide a future tool to use against the Romans/Byzantines. And, at various points in history, this religious tolerance was also revoked, often not wholesale, but rather for specific troublesome groups6. Still, neither this tolerance, nor the nominal elimination of slavery7, was exactly the enlightened policy these people would have us believe. If anything, the religious tolerance was less enlightened than that of Rome, where faiths were not only accepted but embraced, as opposed to the Persians, who for the most part tolerated faiths in order to avoid rebellions in a far flung empire8.

But before anyone thinks I am being overly critical of the Persian empire, allow me to say that I do not have any particular bones to pick with the Persians or any of their successor states. As I said, our reliance on Greek histories for much of our knowledge of Persia does tend to paint a one-sided picture. On the other hand, Persia was not always the enemy and works like those of Xenophon, who spent quite some time in Persian employ, do tend to give us a more balanced picture. And that picture, like that of ancient Greece, portrays what one would expect, an ancient kingdom, with all that entails, the good and bad. Granted, in some ways Persia may have surpassed the Greeks, and there were many aspects of Greek culture -- Athenian as well as Spartan -- which would not be acceptable to a modern individual, but that does not justify rewriting history to turn the Greeks into villains and the Persians into the inhabitants of the faculty lounge at Ann Arbor. Persia was still an autocratic state, and a militarist one, which seems undeniable when we consider the best known appearance of Persia -- at least prior to Alexander -- is during its attempt to extend rule into mainland Greece. Now, I am sure some will tell me how the Greeks provoked this conflict and Persia was happy to be a peaceful neighbor until driven to war, but the truth remains that many of the "Persian" city states in Asia Minor were settled by Greeks, peopled by Greeks and yet somehow ruled by Persia. If that doe snot justify seeing Persia as an aggressor, I don't know what will9.

But enough of my thoughts on Persia for now, I simply wanted to point out how interesting it is that among every groups which feels itself put upon we are likely to find someone who will decide to rewrite history to elevate their ancestors by making them into absurdly exaggerated caricatures of good. Not that those of European extraction are innocent of this particular ill10, but  it does seem that those from lands outside of Europe are even more prone to this particularly absurd means of self-aggrandizement.

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1. It is arguable whether Europe was over-emphasized or not in history classes. Viewed objectively, European history does form almost the whole of our cultural heritage. While there was much going on in Asia, Africa and the Americas, coming from a European culture, the events in those places had little influence on our cultural development. (As, until the age of empires came about, did our history on them.) So, if we view history as a means of understanding our origins, an emphasis on Europe makes sense. Not that we should deny there were significant events elsewhere, but mainstream history, as taught to ordinary students not specializing in historical studies, needs to have a limited focus, and it does seem that focus would logically be limited for the most part to Europe.

2. If the point of "black Jesus" pictures is to demonstrate Jesus' message was universal, I have no objection. However, I know at least a few hold to the belief Jesus truly was black, which is as absurd as claims that he was "Aryan". He no more resembled black Jesus than he did the fair haired Nordic gentleman seen in a number of European devotional paintings. However, I give a bit more leeway to the European paintings, as they were simply the result of an artist painting everyone as if they were the people around him, while "black Jesus" is inevitably an attempt to consciously portray Jesus as belonging to a particular race. (A sin of which the many white supremacist-Christian groups are also guilty.)

3. As with the revisionist history espoused by black activists, I am sure this is the province of a small minority of Persians. Having a number of coworkers and friends who are Persian/Iranian, I know that this sort of delusional grasping at national/racial pride is not widespread. But it is still interesting to see how loudly it is voiced on the Amazon reviews.

4. I am myself not fond of the "clash of cultures" arguments, but mostly because it leads a certain number to adopt an error similar to those I describe. For example, there are some cultural conservatives who argue that one must be Christian to be conservative, or to argue that one must adopt a specific set of beliefs. While I value western culture, see great value in our traditions, and agree that there are other cultural traditions which are inimical to western traditions and liberties, I would also point out that the beliefs of modern liberals, and the romantic philosophy on which they rest (see "I Blame the Romantics", "Juvenile Culture and Totalitarianism", "Revival of an Old Romantic Folly", "Self-Interest Versus Narcissism", "O Tempora! O Mores!, or, The High Cost of Supposed Freedom", "Self-Serving Cynicism and Our Cultural Immaturity", "The Path of Least Resistance", "Ideological Entanglement", "Inversion of Traditional Values" and "Tolerance, Agnostic Prostelytizing and Liberal Activism") are also part of that western tradition, so we do not need foreign influences to destroy ourselves, there are plenty of clashes within our own culture as well, and as many destructive concepts in our culture as outside of it. (CF "In Defense of Standards", "Addenda to 'In Defense of Standards'", "The Virute of Novelty and the Value of Tradition". See also "What About the Crusades?".)

5. "Human rights" is a concept that even the most enlightened states of the era would have found puzzling. Even the most democratic states did not recognize a set of privileges one enjoyed simply by being human. Nor did the Persians, despite the hyperbolic claims you will see in the negative reviews of this book. Rights came from family ties, from being a citizen, in some states from holding wealth, from military service, from proximity to the ruler, from inherited rank, from one's sex and age, and so on. "Rights" were more akin to "privileges", at least as a modern would understand the two words, and were gained in a number of ways, but simply existing did not entitle one to anything. And this was not merely a Greek or Roman perspective, it is a truth that was -- as far as I can tell -- universal in the ancient world. The idea of inherent human rights was unheard of until sometime in the 16th or 17th century at the absolute earliest, and more likely not until a century later. (I admit, a related concept, the inherent value of individual souls, and the individual responsibility for his own salvation, as well as his ability to achieve the same, arose early in Christianity, and most likely laid the groundwork for the intellectual concept of individual rights, but Christian thinkers of earlier times never managed to extrapolate from individual worth and individual salvation to individual rights.)

6. Unfortunately, much of our knowledge comes from either Greek sources -- which many dismiss as biased -- or from writers describing later successor states. So I am afraid many of my statements will be challenged, as I am relying upon sources which are not entirely reliable. On the other hand, those making these claims rely upon most of the same sources, so I don't see how they can claim any better evidence. As for the earliest Persian empire, yes there was a noteworthy degree of tolerance for cultures and religions, but given the scope of the Persian conquests, it is nearly inevitable this would be the case, as the alternatives would be constant rebellion or depopulation of much of the empire. Throughout history, tolerance of some degree has been the inevitable outcome of imperial conquest, thus the Persians are noteworthy only in being one of the earliest to discover this truth. (The singular exception, China, managed to impose a [mostly] homogeneous culture on a large empire, but it took a considerable amount of time, and even then the homogeneity was more apparent than real in many respects.)

7. Slavery existed in many forms in the ancient world, and many states which did not have explicit slaves still had individuals with varying degrees of legal disability. In Persia it is true these were almost all bound to the ruler, rather than being in the hands of private citizens, but does losing your rights to the ruler make it any less oppressive than losing them to another citizen?

8. One of those arguing for Persia's tolerant history mentioned that "everyone was free to follow their own religion as long as they paid a tax", which is interesting, as special taxes on religious minorities (as seen in both medieval Christian and Moslem societies) was seen as a sign of intolerance, rather than tolerance. On the other hand, it is also a commonplace of multiethnic empires, from the Ottomans to the Crusader states. Once a nation grows into an empire, it becomes difficult to enforce religious uniformity and most end up accepting some form of tolerance, usually in exchange for financial concessions. So Persia may have been one of the earliest to discover this truth, but they were hardly unique, nor is it much of a badge of honor to have conquered so many different faiths you have to accept some degree of tolerance.

9. I mention Persia's aggression to dismiss the silly idea that Persia was some enlightened champion of liberty and human rights. If it was a land so dedicated to freedom and rights, then why was it also bent on dominating the Greeks? The two ideas seem quite antithetical. (Then again, as liberals do seem to enjoy forcing others to behave the "right way" for their own good, perhaps it is not so antithetical and Persia was just the first left wing state. See "Liberalism, Its Origins and Consequences".)

10. I have a book which claims for the Scottish almost every improvement of the age of reason and the industrial revolution. And, while I admit Scotland was over-represented in many industrial and academic spheres, I have to say to claim for that nation as much as this particular book does is a bit absurd.

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POSTSCRIPT

One other item of interest in reading these reviews is the very negative view of Rome (and even the  earlier Athenian empire) held by many pro-Persian, anti-Western commenters. (See here and here.) While Rome was quite brutal in subjugating certain regions, it was no more brutal than most of its contemporaries, and in the long run was more tolerant of regional differences than most. If anything Rome was much more inclined to use "the carrot" than "the stick", granting benefits to those who emulated Roman culture and values, rather than punishing holdouts. With exception of a few banned sects (eg the Magna Mater cult) and retaliation against particularly rebellious subjects (eg the Jews following Bar Khokba and the Alexandrian uprisings), Rome did little to force Roman customs on the locals, much less suppress any local cultural practices. So to hear Roman run down as "brutal" is rather surprising to say the least. (See "The Victory of Assimilation - America and Rome" for some more thoughts on Rome.)

POSTSCRIPT II

Obviously history is always open to debate, as so much rests on interpretation of rather slender evidence. In addition, when discussing an empire such as Persia which persisted for so long, it is hard to make generalizations. For example, Perhaps under Cyrus Persia was relatively free and citizens enjoyed some degree of protection from government abuse and so on. On the other hand, I could say the same of several periods of Roman history, but that does not eliminate the truth that the Roman imperial system, just like the Persian, was designed to grant absolute authority to a monarch, which is hardly consistent with either individual rights or liberty. That it was not abused by some, or that certain enlightened rulers used it for good does not make it a good system. (Cf "Power and Disorder", "Elective Government Versus Monarchy", "The Right People, The Wrong People and 'Just Plain Folks'", "Madmen, Tyrants and Big Government", "Common Sense,Philosopher Kings, Arbitrary Law and Dictatorship", "Misunderstanding Democracy" and "Modern Marius and Sulla")

Wednesday, October 15, 2014

Two Sided Processes and Claims of "Unfair" Outcomes

I was reading my essay "Equivalent Jobs" and was struck by a distinction I made. In discussing the way wages are established, I wrote the following:
First, and perhaps most importantly, though people love to speak of education increasing wages, or jobs paying more to compensate for poor conditions or physical demands, the truth is, that is a rather absurd way to look at jobs. Wages depend on one factor, what the employee will produce for the employer, and that is it. Now, yes, if the wages are so low that no one would accept the working conditions, or the low wage was unappealing to people with requisite education and so on, then the job would likely go unfilled, but that does not mean such factors determine wages. Rather, they determine whether those wages are adequate to employ anyone in that position. 
Perhaps it would be easier to understand if we looked at it differently. Wages are offered by employers, and then accepted or rejected by employees. Granted, at times there is some negotiation, but before a job is even offered, an employer knows, in general, how high he can go to fill a position. He may try to obtain labor for less, but no matter how hard the negotiations, there is always a level above which he will not go. And that is why I say employers set wages, and all the factors such as education, workplace quality and so on, all those only determine whether someone will accept those wages. 
This is important to recall, because wages, from the employer's perspective, are set by what he expects to realize through hiring someone. If your labors will bring him $X, he will never offer more than $X for your salary. And that doe snot depend on your education, your skills, your sex or anything else. Employers will offer wages based on their expected returns.
Reading over it, I can see how some may find the distinction I drew somewhat academic. After all, if an employer is only offering wages no one will accept, then there will be no hiring. Or, if the level of education, skill, and so on suggests a willingness to work at a wage somewhere in the range of potential salaries offered, then would not that effectively "set" the wage at that point, even if employers might potentially be willing to offer more?

But those two examples actually show the point I was making, that employee expectations do not set wages, but rather determine the quantity of labor that will be available at a given wage, while the wages themselves are determined by the expected value of that labor.

Let us look first at the example where wages being offered are lower than anyone qualified would accept. This, being one of the two most extreme cases, helps to anchor the range of outcomes. If a given position would produce profits so low that no one would accept the wages it would support, then there would be no available labor and the job would never be filled, at least not until the market changed to either lower wage expectations, or raise the profitability --and hence wages offered -- for the job. This is a hard case for which to find real life examples, since in most cases, the jobs are never even offered, but, perhaps we could find something of an analogy in those jobs often filled by illegal aliens or "off the book"/"under the table" employees, since the wages offered fall below minimum wage.

At the other extreme, if a given job were so profitable that even the lowest offer made by a company were greater than the wage requirements of all the potential candidates, then there would be, effectively, unlimited labor available, at least so long as qualified applicants remained available. This one is easier to find examples, as it tends to reproduce those circumstances where a "gold rush" situation results in tremendous returns, making it possible to pay labor extremely well. (Eg. Programmers during the dot-com boom.) However, this situation tends to last only a limited time, since higher wages tend to cause increased expectations on the part of potential employees, and eventually the wages expected rise to match the wages being offered, making circumstances resemble our third case, the most common situation, that being where wage expectations fall somewhere within the range of all potential wage offers for a given position.

I suppose I should first make clear why I am discussing a range of offers rather than a single offer. I said wages are set by the expected profits, and that would suggest there was a single value for a given position. Granted, employers may try to offer less to increase profits, but, effectively, there is some upper limit which defines the probable wage for a job, assuming there is competitive bidding. However, that description limits our viewpoint to a single firm. In most situations there are multiple firms seeking employees with similar skills and experience for very similar jobs. While they jobs and applicant pools are not absolutely identical, they are close enough that the employers can be viewed as bidding for the same labor. And since these employers, due to any number of factors, do not anticipate precisely the same return from these workers, they will have a range of salaries they will be offering. As a result, for any position -- defined as similar positions with various employers1 -- we can view the market as offering a range of salaries.

I mention this range because, for the most part, when jobs are offered, the average wage expectation2 falls somewhere within that range. If it does not, then we are in one of the two previously mentioned situations, which do occur, but rarely. Most often, employees are generally expecting a wage somewhere between the highest and lowest wages offered. As a result, anyone with an offer equal to or greater than the expected wage will be able to fill positions -- perhaps with those offering somewhat more getting first pick, maybe snatching up the best candidates -- while those whose expected profits keep their offer below the age expectations will find their jobs are not being filled.

All of this should sound familiar, as it is nothing but a restatement of our old friends the supply and demand curves, except with one little twist. In most economics course, we are told the meeting point of the two determines the price and quantity, and in general that is true, but it ignores a simple fact, that, in the case of most sales situations, it is the supplier who sets the price, with the buyer (demand) then determining the quantity. Excepting a dew unusual circumstances (auctions, retail auto sales, bulk purchases from wholesalers), buyers do not negotiate a price, the seller offers goods at a given price and the buyers decide whether, and how much, to buy. Admittedly, if sales indicate the price is too high or too low, it is adjusted until it approaches that ideal point where supply and demand meet, but for the most part, real supply and demand is not exactly like that in the textbooks.

Wages are slightly different, at least if we look at labor as the good being sold. If labor worked the same way as a grocer or pharmacy, then employees would offer themselves up for a given wage, and employers would then accept or reject them. However, again with a few exceptions (eg the hiring of day laborers in some construction markets), this model is the opposite of the real world. In the real world, employers advertise a need for labor, as well as the amount, or maybe range of amounts, they will pay for labor to fill the need, laborers then choose whether or not to fill those positions. Again, if the results are not satisfactory, the employer may change his offers to more closely match market supply and demand, but otherwise this case is the reverse of most competitive markets.

Not that it makes much difference in most regards. In general the supply and demand model, and the assumption of simultaneous adjustments producing optimal outcomes, is close enough to the truth that it does not matter. Yet we must keep in mind that these simplifications do obscure some differences, and hide some of the processes, as otherwise we may reach invalid conclusions.

For example, this model ignored two factors that are very significant in the filling of actual positions, time and outliers. In our example above, we basically envisioned the posting of job openings as a simultaneous happening, with all employers seeking labor simultaneously. At the same time we also treated labor as a homogeneous mass, with all those having comparable skills, education and experience expecting the same wage. Both of these assumptions make it easier to examine the labor market, but they also obscure many realities which explain cases which deviate from our assumptions.

In one way, it is not inaccurate to treat all job offers as taking place simultaneously, as even those who are currently employed may choose to leave their position should a better offer appear3. Thus, even if one job offer comes a week later than another, they are still competing for the same employees, since those hired for the earlier position may still jump ship to accept the later, should the offer prove sufficiently attractive. However, in many other ways, time does make a difference, and often a significant one. To refer to the example we just gave, for instance, while someone who just took a job last week may jump ship for a sufficiently attractive offer, in reality most people do not leave jobs they have just accepted, they wait at least a few months, more often a few years, before considering a new position. Thus, a job posting coming out a month or two after a period of heavy hiring will likely find a much diminished pool of potential employees, as those who recently changed jobs will not be considering a new position.

Time also matters in another way. For example, when the job market is good, and it is easy to find new employment, workers may be willing to take positions with firms that seem less reliable, such as speculative ventures. On the other hand, when the job market is weak and it is hard to find work, employees may not jump ship unless their new employer is at least as stable and reliable as their current position. Likewise, the wages one would be willing to accept can be influenced by the job market. In a time of numerous jobs, one would look for a higher wage than during times of scarcity, when jobs are hard to come by.

Besides time, our model also completely ignored the problem of outliers, or, perhaps more precisely, it ignored all sorts of individual circumstances. To provide just one example, one seen quite often in the job market, an applicant who is unemployed, especially one who has been unemployed for some time, is likely to accept lower wages than a similar applicant who is currently employed. Even among those who are employed, there is still variation. For example, an employee who dislikes his current jobs is more open to a lower wage than one who loves his current position. And among the unemployed there are similar disparities, such as those responsible for an entire family being more inclined to accept any offer than those responsible only for themselves.

But outliers are not just limited to such obvious cases of differing circumstances. Some applicants simply think they are worth more then others, even if they are objectively of almost identical value to the employer. Those just entering the market, or those changing jobs after a long time in a single position may also be unfamiliar with current trends in salaries and may demand too much or too little. Some may have interest in nonmonetary aspects of the jobs, such as location, employee benefits, working hours, working environment and others, and thus may accept less pay to gain other things they desire. There are a host of little individual quirks which could make one demand more pay, or less.

I mention all of this because, while my generalization described at the start is true, the wages are set, for the most part, by the same old curves of supply and demand, there are also any number of other cases, individual data points falling in unexpected places on the chart, where time and circumstance resulted in employer and employee reaching agreement on a wage no one would have expected. Perhaps an employer offering an unusually low wage did so at a time when the market was weak, and others were not hiring, and so obtained an employee at a wage well below the norm. Or maybe an employee had the good fortune to find an both employer expecting very high returns from a new hire and a job market with little competition. Whatever the case, in each circumstance, the employer made an offer based upon an expected return, and the employee, for any number of reasons, accepted the wages offered.

Which brings me to the final point, that, when all is said and done, the hiring process is a two sided one. The employer does, in one sense "set"4 the wage, as critics often claim, as he determines what wage he will offer, but he does so based upon what he expects as a return, so it is not an arbitrary wage. Still, he is the one who states what salary will be offered for a given position. On the other side of the process, an employee decides whether or not to offer to fill a given position  at a given wage, and thus always has the option of not taking a job. That an employee accepts a position indicates that the position is acceptable, offering a wage for which the employee would work. Thus, in the end, it is foolish to speak of unfair wages, of exploitation and so on, as an employee chose to accept a position, so must have found it acceptable5.

Needless to say, some will argue with this interpretation, postulating that the market offered nothing but unacceptable jobs, forcing employees to accept jobs for substandard wages. Or perhaps they will argue that certain groups, be they women or racial minorities,are offered only insufficient wages, forcing them to accept jobs for less than their male or white counterparts. And such arguments must have an appeal to some, or at least some must find them persuasive, as I have heard them repeated often enough, used to justify all manner of interventions. But, viewed objectively, all such arguments fall apart, such circumstances simply cannot exist in the real world, or, if they could exist, would exist for only a short time, being nothing a but a transient inconvenience.

The full argument for this point has been made in several other essays, already cited, so I will not go into detail, but will simply give a brief summary. As I stated above, employers will offer salaries based upon the expected return. Of course they will try to offer less, as it will increase their profits, but there are two factors preventing them from consistently underpaying workers. First, there are the workers themselves. If an employer is clearly offering far too little, laborers will simply refuse the position. Or, if they feel they may change the employer's position, they may try to negotiate for a more reasonable salary. Whatever the case, they will obviously fight for their own interests, making it hard for an employer to underpay his laborers.

But, some will object, what if all employers routinely underpay, either for all labor, or for certain groups such as women and minorities? What if they either explicitly collude, or simply implicitly collude through traditional practices, to keep wages low? Will not employees be forced to work below their worth? Won't this make an environment where "voluntary agreement" is meaningless as no better options are offered?

This sounds good, I suppose, if you want to argue for government regulation, minimum wage, or maybe write some updated Upton Sinclair novel, but the truth is, there is no way such a system could work. First, especially in this day, labor is mobile. Not just physical mobility, the willingness to relocate for better opportunity, but with technology allowing many to work from remote locations6, we have many types of jobs where individuals can accept jobs in remote locations without the cost of moving or the inconvenience. Given this reality, in many situations it would be necessary for such wage setting conspiracies to be quite broad, perhaps nationwide, as otherwise the labor pool would simply relocate, leaving the employers with the choice of offering reasonable wages or else going out of business.

Obviously, this is not always a possibility. Heavy industry, personal services, retail jobs and many others are clearly tied to a single location, and the workers need to be physically present. And, some will argue, not all laborers are willing or able to relocate to chase better wages. Or, even if we allow for mobility, some may argue that it is not unthinkable that all the employers in a given industry, especially one where there are only a small number of competitors, it might still be possible for the employers to fix their wages below the actual return expected.

That is where the second limiting factor comes into play, and that limiting factor is simple greed.

You have probably heard at one time or another that communism works, it simply has not been run by the right people7, or maybe you have heard someone argue that the free market needs government to watch out for immoral actors. Well, the truth is the free market is such an ideal system for the simple reason that, provided the government prevents force, theft and fraud, the baser instincts of the participants actually drive the system. The greedier the competitors, the more likely they are to act for the benefit of their fellow men, and the less likely the system will display those "inequities" of which so many complain8.

And wages provide a perfect example of just how this works.

First, and most obviously, if wages are well below the profit the employees are producing, and this is kept in place due to some sort of collusion, then it is to the interest of one of the conspirators to violate the agreement. After all, if he raises his wages just slightly9, he can still earn high profits, but he can poach the best labor from his competitors, expand as much as he wishes, and thus will enjoy higher profits10. Of course, once he does that, it will be clear to his rivals that they can do the same, raising wages slightly above his and stealing his labor. And this cycle will continue until wages reach somewhere close to the expected return at which point there is no more profit to be made by raising wages.

Some will argue that, while possible, the benefits of continuing a cartel to enforce low wages make it unlikely anyone will break the cartel's rules. I do not agree, but for the sake of argument, let us assume this is true, and look at other ways in which such cartels will fail.

If a market is operating in such a way that labor is being paid wages well below the amount of profit they generate, then profits in that industry will be higher than normal, which will attract outside attention, as well as capital. Thus, if none of the competitors are willing to raise wages, the fact of their high profits will still create an environment where capital will exist to fund new entrants into the market, who will serve the same purpose as the disloyal cartel member in the previous example. With outside funds drawn in by the high profits, a new entrant can pay higher wages, poach the best employees, and generally reap the benefits of out bidding the cartel. Of course, that only lasts until he is outbid himself. And so on, and so on, until the price of labor reaches close to the profit generated by labor.

There is only one way that this system will not work, only one force which can cause the free market in wages to break down. When government becomes involved, either limiting entry into the market, or granting special powers to employers, unions or others, that intervention can result in a rigid market, where employers can choose to uniformly underpay labor. Which is ironic, as most who worry about discrimination in pay suggest giving the government more power as the best solution, while in truth government power is the one thing which can create and make permanent the ills about which they worry.

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1. As I said in "Equivalent Jobs", no two jobs are identical, and I am not contradicting that here. We are speaking here about jobs which are basically bidding for the same labor pool and asking them to do work those employees would view as roughly comparable. Clearly there is a degree of approximation here, as no two jobs would suit every member of the same labor pool, nor would all those applying to two jobs see them as comparable in the same way. But, making some allowances for this imprecision, it can still be useful to view certain jobs as effectively part of the same hiring effort, competing for the same laborers. So long as we do not forget this approximation and come to think of our fuzzy definitions as being more precise than they are. (Just as it is useful to think of the broad category of "dogs" in many contexts, but when choosing a pet it pays to remember the differences between great danes and chihuahuas.)

2. Again, the idea of an average expected wage is a useful fiction. People with identical skills, education, experience and so on can still find quite different wages acceptable. But we shall discuss this nuance shortly, so I won't go into detail here.

3. There are some exceptions to this, such as those tied to contracts for a fixed period, such as professional athletes, certain upper management, those in the military and so on. However, even in a number of those cases, if the job is sufficiently attractive, it may be worth paying the cost of breaking a contract. (Though it would have to be quite a difference in wages to justify accepting some penalties.)

4. I have written a few times criticizing this formulation, as wages are no more "set" by employers than the amount of labor available is "set" by employees. Employers do eventually decide what to offer, but they do so based on many factors outside their control. Were they to choose wages arbitrarily, they would not last long. (See "The Cart Before the Horse, or, Some Thoughts on the Iron Law of Wages" and "Stupid Quote of the Day (January 3, 2012)".)

5. For more details on the arguments to follow, see "Another Look At Exploitation", "Exploiting Workers?", "Fairness and the Free Market", "Capital Investment", "Exploited Labor", "Every Kid Likes Hot Dogs", "Capitalism and Its Consequences", "Child Labor and the Industrial Revolution", "Child Labor", "The Basics" , "Contracts and Freedom" and "In Praise of Contracts".

6. In my current job, we have offices in both Washington and northern Virginia (actually two locations in VA), with workers in all three locations collaborating over the phone, email and instant messaging. In addition, we have at least one employee who kept his job despite moving to New England. For that matter, I have gone on vacation before and still carried out certain essential tasks. For example, once, when I had scheduled a trip to Ocean City, MD, there was a major upgrade scheduled for the same weekend. And so, from midnight until near dawn I sat on a balcony overlooking the ocean and performed my tests. Obviously, not all jobs lend themselves to this sort of distributed work force, but it is possible for many industries.

7. See "The Right People, The Wrong People and 'Just Plain Folks'".

8. See "Third Best Economy", "Competition", "Planning for Imperfection", "The Case for Small Government" and "Greed Versus Evil".

9. As an alternative, the employer could lower prices while holding wages constant. This will also increase his profits, as his lower priced goods will capture more of the market. Of course, this is unlikely to be as attractive to the labor pool as raising wages, and so will not allow him to capture more and better workers, but it will allow him to expand market share.

10. Cartels in a competitive market are notoriously difficult to maintain. (See "The Difference Between Public and Private, Or, The Real Monopolies and Cartels" , "The Problem of Antitrust", "Consumer Protection, Cartels and the Failure of Regulation" and "Imperfect Competition, Abstraction and Anti-Trust") Even those created through government support have a tendency to fall apart when one member sees an advantage to violating the agreement. We can see this from time to time in OPEC, where members either simply begin pumping more than their quota, or else ask for a waiver, with the implicit threat that if not granted one they will pump more anyway. Despite the arguments made in ECON 101 texts about the advantages to cartel pricing, in truth individual members often find it beneficial to break with the cartel, and thus, all members continually worry about their fellows, making it even more likely any individual member will break the rules, basically doing it to the others before they can do it to him.


Capital Investment


NOTE:These four essays are cited in my most recent essay. All four originally appeared in my now defunct blog, Random Notes.

Earlier I wrote about the difference between US workers and foreign workers, and I mentioned that the investment in US workers in terms of education and capital investment makes them simply too expensive for certain types of work. Yes, there are other factors, such as OSHA, unions and so on that distort this somewhat, but in general, jobs are outsourced because they are too expensive when performed with US labor, and so are only economically viable when the company uses workers whose cost is minimal, because they have little invested in them in terms of education or capital investment. As I said in a reply to a comment, we can use only US labor for manually labor intensive manufacture, but do we want to buy plain white t-shirts at $100 each?

However, inevitably, when I bring this up in conversation, people express doubt about my claims. They look at the least skilled US jobs and question my claims that there is a huge disparity in capital and education between a US worker and one in the third world. But the problem is not my statement, but that people do not truly understand capital investment, and do not realize how little exists in many countries to which jobs are sent.

For example, our workers have some access to health care. Even if they currently do not have access to a doctor, their childhood series of inoculations represents a considerable investment which prevents them from seeing large periods of downtime due to illness. That is a capital investment in labor which gives us a more consistent, reliable labor pool, and one which is built into the cost of labor. Similarly, even if they do not have a car, workers have access to some form of transportation, allowing them to work more hours as they do not spend hours in transit. True, transport exists in most nations, but thanks to our infrastructure and quality of vehicles, ours is more reliable and results in less wasted time. Similarly, poor as our education may be, at least it is likely most workers will have minimal literacy, basic math skills, and so on. Maybe poor skills, but more than can be expected in several of the poorer nations to which our work is often exported.

And that is the problem in these debates. People often do not think of capital investment properly. They look at one aspect, say that Indian workers are generally as well educated as American workers, and argue that there is no difference between India and the US. But that ignores the massive capital infrastructure that exists in the US and not in India. We can see this clearly in the cost of living of each nation, if nothing else. Were the two nations identical, the cost of living and many other aspects would be the same. That they are not suggests that India, as with the even more impoverished nation, enjoys a competitive advantage, because within its niche, its labor is cheaper because of less having been invested in a combination of education and infrastructure. And we can see this is true. India may be receiving labor intensive service jobs, such as collections, tech support and so on, but we are not exporting programming jobs or engineering tasks to India. Again, the US is retaining the jobs for which high cost labor is appropriate and taking those jobs which are labor intensive and thus too costly inside the US.

Granted, this appears to be bad news for those in the US who did not pursue education ardently, or who are unable, for whatever reason, to learn, but that is true in every nation. Anyone, in any nation, who falls below the normal education for that nation will be employed in the most marginal positions, and may have to change jobs frequently as a lack of skills means that one can be easily replaced. It is not India which is causing uneducated Americans to lose jobs, it is their lack of education. And, in fact, they still are not losing jobs, simply being forced to change jobs. Thanks to massive capital investment, those lacking education still enjoy a higher standard of living than they would elsewhere, and, thanks to costs cut by exporting jobs, they can get more for whatever they do earn due to lower costs. Yes, when we ship labor intensive jobs overseas, they do have to change careers, but, fortunately for them, most low education jobs require little special training, so shifting careers is easier at the bottom of the economic spectrum than at the top. And with our infrastructure, capital investment, and so on, jobs are plentiful*, meaning that they should have little difficulty finding alternate employment**.

So, in short, though it is popular to denounce "sending jobs to India and China", in reality we are sending labor intensive tasks to India and China, freeing American labor to perform more productive tasks at home. It is not a zero sum game. There is always more work, more unsatisfied wants, and those can now be filled. In other words, when India does one of our jobs, we can now do something that was not being done before. Outsourcing creates opportunities, it does not close them.

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* Of course, if the government tries to inflate us into wealth, and that inflationary bubble then bursts, we will likely find ourselves with fewer job opportunities than normal. However, that is not a normal economic situation but the outcome of government attempts to manipulate the market. Under normal circumstance jobs are not in short supply.

** There is some difficulty in changing jobs within unionized fields, as there are artificial barriers to entry and to changing jobs, as well as artificial unemployment created by mandatory union membership and the overpricing of union labor. However, as union jobs usually are usually at least semiskilled, if not skilled, positions, they are not the jobs which are being shipped overseas to unskilled labor. Admittedly, some union jobs do go offshore to avoid the inflated costs of union labor, but that could be solved simply by reducing the most absurd union demands. Unions have only themselves to blame for any problems in unionized fields. Just as I would be to blame for my unemployment if I refused to accept anything less than $100 and hour while my labor was really worth $50 and hour.

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POSTSCRIPT
I plan to write a very short follow up post expanding on my final paragraph. It should be posted later today.


Originally posted in Random Notes on  2009/01/15. 


Exploited Labor


NOTE:These four essays are cited in my most recent essay. All four originally appeared in my now defunct blog, Random Notes.

We constantly hear about how government ended child labor, or how government brought higher wages for workers, or ended "exploitative hours" of 12 or 16 hours a day. Now first of all, many of these myths are just that, myths. Child labor largely ended because it was not economically feasible to employ children in industrialized nations. Hours went down because worker productivity improved, and so on. However, let us forget that for a moment, and ask ourselves, if the government had ended these practices, or if it were to end the "exploitation" of foreign labor working for "pennies a day", would it be a good thing?

Why do people allow their children to work in industry? Why would someone work a 16 hour week? Why would someone take a job for $0.10 an hour? Because it is the best job available, that's why. If your choice is starvation or a $0.10 an hour job, you take the $0.10 an hour job. You only send your children to work because the other option is your children starving. Though many who decry "exploitation" forget it, people take jobs voluntarily, and they take these "exploitative" jobs because they believe they are the best options available. To prevent them from taking it by government decree is to give them no options, in other words to condemn them to starvation.

But some will argue that is not true. All employers would exploit the workers but for the government. Employers would all pay $0.10 an hour except for the government. So, by forcing them to pay higher wages, the government secures better wages for everyone.

That is simply not true. Employers pay what the market demands. They simply cannot get away with paying workers too little, say $0.10 an hour, as another employer would see the possibility of paying $0.15 an hour and still making a profit while stealing the best employees. And so on, up the scale, until the wages reach what an employee is truly worth. So, if employers in a country or int eh past were paying $0.,10 and hour that is because workers' efforts were worth $0.10 an hour.

But some will argue that employers will collude to keep wages low. However, that makes no sense. Employers are so greedy they will exploit workers to the utmost, but they are not greedy enough to betray one another to make more money by paying their workers more? Nor will one of them worry that another might betray their cartel, and thus pay more in a preventative bid to avoid another trying to bid away his workers?

Sorry, but if employers are greedy and committed to nothing but making money, it, ironically, means that they will pay close to market wages, as any other option leaves the possibility of someone else swooping in, stealing the best employees, and making better profits.

Which brings me back to my point. At any point in history, or in any nation, excepting where there is actual slavery, people take jobs because they are the best available, and employer pay what they do because those are the terms on which the job turns a profit. So if employees are working 12 hours a day, if children are working, or if people are making pennies an hour, that is because the market will not support better wages or conditions.

And to make those conditions illegal is to simply prevent anyone form working. It does not benefit workers, it impoverishes them.

POSTSCRIPT

I wrote on this before in my posts "Exploiting Workers?", "Beware Populist Deception", "Cheap Lighters, Overseas Dumping and Monopolies", "Jobs, Jobs, Jobs, and More Jobs", "Capital Investment", and "Clarifiying My Argument". However, as I have seen this myth mentioned again and again recently, I felt the need to address it once more.

Originally posted in Random Notes on  2009/03/18. 


Every Kid Likes Hot Dogs


NOTE:These four essays are cited in my most recent essay. All four originally appeared in my now defunct blog, Random Notes.

I have been reading my old posts recently and have come to the conclusion that, in a number of areas, I have covered most of the important points pretty well. That is not to say that I will not have some new revelations that will require additional explanation, or that my understanding of matters might not change, or at least evolve over time. But as I have largely moved away from current events and begun writing almost entirely on general principles of government and analysis of erroneous political theories, I lack the constant influx of material available to topical pundits, and so I tend to cover the same ground over and over again. You would think that would lead to quite a bit of repetition, and to some degree that has been the case, but I have also found it has allowed me to elaborate upon points I normally gloss over, and thus has led to a very thorough explanation of many points I would not normally have covered in detail. But, having covered those points, and fleshed out my theories, and even written very thorough rebuttals of many political theories, I find that I am fast approaching a point where additional explanation would begin to verge on redundancy. 

To avoid such a fate, I have decided to concentrate on two areas1, though the two overlap and could arguably be seen as a single approach. The first are essays intended to provide alternate views of the topic at hand, taking differing approaches to allow those who did not previously grasp an argument to see the rationale. The second are persuasive essays, intended to convince those who were previously antagonistic that my theories are valid. As you can see, the two are closely related, as different approaches are generally used to persuade those not previously convinced, and when approaching those not previously persuaded, the best method is usually to try a new means of explanation. 

The reason I mention all this is that it occurred to me that many of my arguments on a specific topic have been rather abstract, and, when not abstract, were still rather generic, lacking the specificity that makes for the best examples. To remedy this, I began thinking of very specific examples, and came up with a number of very mundane, but quite telling, illustrations.

And what were these examples? Or the topic to which they relate? Allow me to provide an illustration or two, and both should become clear.

When I discuss mathematics with anyone, specifically high school or middle school math classes, the first statement I hear from anyone I meet is "I was fine with math until I took geometry." I cannot count the number of times I have heard that statement. It seems that hatred of geometry is near universal. It appears, no matter how much they enjoyed or excelled at basic mathematics and algebra, when anyone began geometry they were left confused.

Which is completely puzzling to me, as I hated math until I took geometry. Well, "hated" is a bit strong... I enjoyed basic arithmetic and other elementary school math, and, though I found it tedious and boring, I did well enough in algebra. But geometry was the first math class I truly enjoyed. And it was where I received my best grades, achieving perfect scores on my midterm and final exams. Which makes it very hard for me to understand how anyone could find geometry difficult.

Or, perhaps I should offer up the example of my son. While I hear any number of parents complaining o their children being obsessed with soda, or longing for candy, that too is alien to me. I never stopped my son from consuming either, and he drank some soda, and tried some candy, but he just has little interest in either. He has a fondness for cakes, though even that is off and on, but as far as most candy is concerned, and all soda, he is either indifferent, or rejects it. Nor has it anything to do with any active discouragement on my part, he just doesn't seem interested, he has other things he would rather eat2.

Or an even more mundane example. I simply cannot find much of interest in most "sex symbols". I am told that a certain actress, say Angelina Jolie, or more recently Megan Fox, is beautiful, or even perfect, and I just can't see it. There are plenty of attractive women, even attractive actresses, but it seems the ones who are held forth as "sex symbols" simply don't hold any appeal for me3.

So far I am sure my readers are wondering what my point may be. Yes, people like different things. Yes, some things which are generally accepted, such as the attractiveness of some actress or the difficulty of geometry, are not true for everyone. So what?

But the fact that readers recognize that fact is itself the point. Readers understand that there is a range of opinions, that individual valuations of various things differ. That some people like chocolate and others vanilla. That, even though, as the title says, people believe all children like hot dogs or ice cream, there are some who do not. In short, there is no opinion to which all men subscribe, and even if there were, they would agree to differing degrees, and so what agreement there was would be only a very superficial one.

So, why does everyone forget this when it comes to government?

All government action, beyond the most basic protection of rights, is a matter of enforcing specific values. ( "The Inherent Disappointment of Authoritarianism", "The Right Way") When the government protects citizens against force, theft and fraud, or acts as an arbiter of disputes through civil court enforcement of contracts ("In Praise of Contracts"), even when it settles those rare harmful interactions between strangers through tort cases, it is basically creating the minimum environment required for human society to function. ("My Vision of Government", "My Vision of Government Part II", "Why I Am Not A Libertarian", "The Benefits of Federalism", "An Analogy For Government", "A Simple Proposal", "Man's Nature and Government", "Prelude", "Negative and Positive Rights", "Symmetry and Asymmetry in Government", "Why Freedom Is Essential",)

But when it goes beyond that minimal protection of individuals, it moves into the realm of valuation, and of necessity that means forcing one specific set of values upon all citizens. ("A New Look At Intervention", "Liberalism, Its Origins and Consequences") I discussed this before in "In The Most Favorable Light" and "Slippery Slopes", but for the sake of readers, allow me to go through it one more time, hopefully from a slightly different angle.

Government, at least in its present form, engages in three types of actions. 

The first is to act as an arbiter between two parties, enforcing either a set of private agreements (contracts) or a body of generally accepted rules (torts), or in a few cases (probate court, custody hearings, divorces) a little of each, modifying the established rules through the application of private agreements, at least to some aspects. 

The second action is the protection of one or more individual from another, either preventing the use of force theft or fraud, or punishing the act afterward. ("Compassionate Execution", "The Death Penalty", "A Rational Approach to Punishment", "The Ends Justify the Means?", "Fair or Functional?", "Not Completely One Sided", "Motives Unimportant", "Sunday Morning Talking Heads", "Civilization and the Fear of Death") This applies not only domestically, but internationally as well, as foreign policy ideally should be informed by the basic principle that the government exists to protect citizens' rights4.

The final action, which includes the vast majority of must laws currently on the books, as well as almost all regulations promulgated by executive agencies, are rules and laws which require an individual, or more than one, to either avoid making a choice he would otherwise make, or requiring him to act in a way he otherwise would not. This sometimes is disguised as an effort to protect one individual against another (eg. minimum wage "protecting" the employee, or rent control "protecting" the renter5 -- see "He's Bad So He Must Be Wrong"), but in reality these laws simply tell both renter and owner the prices for which they may contract, regardless of their own wishes, or the wages which are permissible, regardless of their own decisions.

And each such rule embodies an implicit set of values. Granted, the government does not say so. They pretend the rules they enforce are somehow rational laws based on absolute values. ("Absolute Values", ""It's Our Top Priority!"") But as I have argued again and again, there is no rational way to establish such rules. ("Who Will Decide", "Envy Kills", "Envy And Analogy", "Saving Us From Lower Prices", "Price Gouging", "Put Your Money Where Your Mouth Is, Or The Logical Implications of Price Gouging Laws", ""True" Prices", "Excuse Me?") The government may claim a given wage is not a "livable wage" ("Exploited Labor", "Exploiting Workers?", "Capital Investment", "Fairness and the Free Market"), but "livable" is a meaningless word, as are the other favorites "necessity" and "luxury" ("The Most Misleading Word", "Luxury and Necessity"). Instead, any such rule is nothing more than the opinion of one or more bureaucrats dressed up in scientific sounding jargon, or perhaps populist rhetoric, and passed off as established fact.

For example, look at workplace safety regulations. Clearly, all other things being equal, we would prefer a workplace to be more safe rather than less. But all things are not equal, and increasing safety tends to increase costs, which either raises prices, reduces available jobs, or both, meaning we have fewer and more expensive goods or services as well as fewer workers with smaller paychecks. And so any safety decision ends up being a balancing test between the improvement of safety and the cost of that improvement.

Of course the agitator will tell us employers will always try to make no improvements and so must be forced to do so, but that is nonsense. As I argued in "Mistaken Perceptions of the Industrial Age" and "Fairness and the Free Market", every employer wants to retain his existing workforce, from pure greed, if nothing else,, as both the skills they have acquired through work experience and his knowledge of their work habits, make them more valuable to him than comparable new hires, not to mention the cost of hiring and training new workers. But beyond that, workers consider safety when choosing a job, or deciding whether to remain at a current job, which makes unsafe conditions an impediment to getting the workers one needs6. All of which is considered by an employer when deciding which safety related changes to make.

But safety regulations short circuit this process. Decreeing that a specific safety measure must be instituted, these regulations effectively declare that that measure is worth any cost, which is clearly a value judgment. And by smuggling in this value judgment, regulations effectively substitute their own values for those of both employers and employees. Employers are no longer allowed to weigh the alternatives, but are forced to institute measures important to the regulators. Similarly, workers can no longer agree to forgo a safety measure, either for more pay or just because it does not matter to them. They must labor under the given measure, and accept the lower pay or reduced number of jobs caused by the cost of the measure.

And there you have the simple truth that all regulation is nothing but the imposition of an outsider's values upon individuals. And you also have the reason for my introductory paragraphs.

We recognize in everyday life that individuals differ in their choices, and thus in their values. We would not want to see everyone forced to eat the same food, nor would we make everyone dress the same. We do not force everyone to embrace the same religion or join the same political party. We do not make everyone listen to the same music or read the same books. For that matter, we consider it a triumph that we have gone from three networks, to four, and then to hundreds, offering countless options, specifically because individuals have different tastes.

So, if we revel in the "on demand" era, in the ability of each individual to tailor every aspect of life to his specific wishes, why do we forget this when it comes to government? Why do we suddenly think that no one would ever want to work for less than minimum wage? That no worker and employer could agree that certain safety measures are not important? That someone could want to buy food with transfats ( "Salt, Transfats, DDT, Bad Science and Even Worse Law") or could be willing to let a packager call a meat "ham" even if it is made from pressed shoulder meat? ("Why Regulation Makes So Little Sense", "Bad Economics Part 12", "Terrifying ", "Just a Thought") We suddenly imagine that the government imposed choice is the only rational one, the only possible decision.

In short, when it comes to government, we think we would be much happier if we all were forced to watch one television channel, listen to one song, read one single book, wear identical clothes, and all marry the same girl. For a culture so obsessed with choice, when it comes to the coercive power of the state, we suddenly show little interest in the topic.

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1. This is not entirely true, as I am still working on my series "Liberalism", and as new revelations strike me, I write them out on this blog, but for the most part, I feel I have covered the theoretical basis for all the major topics, and debunked many of the worst fallacies, and so it is time for me to attempt to persuade those who were not convinced before, and to ensure my points are completely clear and understood by everyone who reads them, friendly or hostile.

2. Don't take this to mean he eats a perfectly healthy diet. At one time he was obsessed with cauliflower, broccoli and celery, but that passed like most of his fascinations, and was replaced by a fondness for cake, which passed as well. But as far as actual candy is concerned, excepting two periods when he was fascinated with Reese's Peanut Butter Cups and Three Musketeer bars for a few weeks each time, he has never had much interest.

3. This might be a problem of my seemingly anachronistic values, as I find the beauties of many early and mid 60's films much more appealing than their modern counterparts. Though, even there I tend to find the less famous actresses (say Marisa Mell or Kumi Mizuno) more appealing than the better know actresses.

4. This does not mean I endorse the Ron Paul-like minimalism in foreign policy favored by many libertarians ("The Problem With Ron Paul", "War As Last Resort"). See "Rational National Defense", "Rights Versus Laws", "Last Word on Defense", "Fiction, Play and Violence", "An End to War" and "Foreign Policy".

5. I have discussed at great length the ways in which such supposed "protection" is no real protection. For example, "Professional Education", "Licensing", "Business Licensing and Regulation", "Bad Economics Part 12", "Real Life and Regulation", "Insider Trading", "Gun Control, The FDA and Regulating the Law Abiding", "Medical Regulations", "Medical Regulation II", "Manipulating the Law", "Government Intervention and the Purpose of Government", "Another Thought on Regulation","Trickle Down Freedom", "Selling Yourself Cheap", "Science and Government Intervention", "Politicians and Economic Ignorance", "Adaptability and Government", "Perverse Incentives", "When Help Hurts". I am working on another essay on a similar topic, but until that is complete, the essay "The Irrationality of Government Redistribution" provides an example of a similar misunderstanding, showing how the supposed benefits enjoyed by the recipients of redistributed wealth are actually nothing of the kind.   

6. This obviously leads to a balancing test, where owners must see whether it is more cost effective to improve safety, or to offer salaries high enough to make workers overlook unsafe situations. Similarly, workers are forced into the opposite decisions, whether the pay is high enough to make up for the risk of injury.

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POSTSCRIPT


It is amusing that older science fiction, from the era when it was generally assumed the future would be some semi-socialist utopia, without money ("Utopian Pipe Dream", "Wow! That was painful."), that everyone DOES wear the same clothes, that religious differences seem to be absent, and that they all seem to enjoy the same music, art, dance and entertainment. In that single case, it seems the writers admitted what proponents of interventionist government usually work hard to conceal, that government intervention eliminates all choice. ("A Question for Artists of the Left")

(Actually, the lack of religious discord may be because the writers assumed, as do most "rational atheists", that the rationalists of the future will simply "move beyond religion". It is a common conceit of atheists that their position is somehow more rational, even if that claim is largely based upon their habit of stacking the deck in their favor then proclaiming victory.See "Atheism's Circular Reasoning","Standard of Proof" and, the somewhat related, "The Nonsensical Nature of Some Statistical Analysis".)

Originally posted in Random Notes on 2010/11/30.