Don Boudreaux illustrates how wrong a Professor of Philosophy can be on Economics

The moral of Don's comment, below, illustrates that people with advanced degrees and high academic status can miss the point just as effectively as someone who never went to college.  I conjecture that the difference between the two is that the latter may be more likely to appreciate that he may be wrong than the former.



 Princeton University Press generously sent to me a copy of Princeton University philosopher Harry Frankfurt’s hot-off-the-press book, On Inequality.  This book is very short and so, although I’m an exceptionally slow reader, I’ve already read about half of it.

Depending upon my time and inclination, I might or might not in the near future blog more on this book.  But I here wish to quote a passage in it that occurs very early on (on page 4):

"In extracting from the economic wealth of the nation much more than they require in order to live well, those who are excessively affluent are guilty of a kind of economic gluttony."

While I agree with what I (so far) detect to be a principal theme of Frankfurt’s book – namely, that income inequality itself is morally unobjectionable – this quoted statement conveys in about as short a compass as I’ve ever encountered the deep misunderstanding of the economy that is shared by far too many people.  What follows is only a partial review of the errors that infect the above quotation:

(1) Wealth in a market economy is not ‘extracted.’  Instead, wealth is created and produced.

(2) Therefore, there is no “economic wealth of the nation” that exists independently of the efforts of entrepreneurs, innovators, and producers to create such wealth.  Such wealth, once created, can be stolen from its creators and producers.  But it is a fundamental conceptual error to suppose that there is some national wealth that exists in natura, independently of human innovative and productive efforts.

(3)  The nation in such a discussion is of no relevance.  Even if (contrary to fact) wealth is created by nature and is simply ‘extracted’ from the earth by humans, why focus on the nation rather than on the globe?  Surely nature cares not a whit for the arbitrary political boundaries that her human spawn draw (and alter over time).  Surely nature regards an epsilon increase or decrease in the well-being of an individual who resides in nation X with no more or less interest than she regards an epsilon increase or decrease in the well-being of an individual who resides in nation Y or in nation Z.

(4) There is no objective meaning to the phrase “require in order to live well.”  “Require” could – indeed, strictly does – mean only “enough to subsist.”  As such, therefore, no one requires aspirin.  No one requires hard (as opposed to thatched) roofs.  No one requires more than one change of clothing.  No one requires literacy, or numeracy beyond a grasp of basic arithmetic.  No one requires running water or flush toilets or telephony or access to electrical power or artificial lighting or inexpensive birth-control methods or that the “digital divide” be bridged.  (Indeed, the vast majority of human beings throughout history have never experienced such luxuries.)

(5) So to accuse someone of being “excessively affluent” inevitably is to make what amounts only to a value judgment rather than to refer to some colorably objective criterion.

(6) The “economic gluttony” ending of the above quotation reveals that its author has, if not strictly a fixed-in-size-pie view of wealth, a view in which wealth is seen to be largely independent of human creativity, effort, risk-taking, gumption, and choice.  Someone who becomes very rich is, in this view, someone who gluttonously grabbed more from the common store than is his or her due.

In short, the conception of human prosperity conveyed by the above-quoted statement is horribly, totally, and calamitously mistaken.  Yet it is a conception held by, I’m sure, at least 80 percent of the world’s population.  Sad.  And scary

Women in Combat Units

Ray Mabus, current SecNav, has “made it clear he opposes the proposal from Marine Gen. Joseph Dunford and has recommended that women be allowed to compete for any Navy or Marine Corps combat jobs (Lolita C. Baldor, WashPost.com, September 19, 2015).” This was predictable and there is no practical value of railing against his decision. There is, however, a sound alternative to integrating women into mixed combat units.

We should form all-female combat units. The SecNav and others claim that women who meet standards are equal to the men who meet the same standards. Based on this assertion, the combat efficiency of an all-female unit should be equal to any all-male unit and any argument to the contrary would weaken their opening assumptions.

There are some very serious reasons for doing this:

·         There is an inherent protectiveness on the part of most men toward women and this could get men killed if they treat a female comrade any differently than they would a male comrade. While the frequency would be hard to predict, it is certain that this would happen at least occasionally in integrated units.

·         It is impossible in any mixed organization for attractions not to emerge between men and women and the bonding (especially if it is sexual) will be different than male-male bonding (unless this too is sexual). In addition, sexual harassment, while regrettable and criminal is pervasive in all of our society and will not be different in integrated units.

·         There is an inherent intimacy that is associated with the normal elimination of bodily waste. Men have a preference for privacy relative to other men and this is much more important for men in the presence of women and women in the presence of men. In live combat, this is near impossible.

Each of the above seriously impacts unit cohesion and unit effectiveness and all-female units are seen as the best way of addressing these concerns.

Over time, opportunities for promotion for women in combat arms would be available and increase proportionally as the number and size of all-female units increased. Further, female commanders certainly could be considered for command of company level and larger units comprised of all male platoons or a combination of male and female platoons so there would be no discrimination in the opportunities for promotion.

John R. Powers

Colonel   USMCR (ret.)

jrpowers@us.net

An Obituary

Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape. He will be remembered as having cultivated such valuable lessons as:

                  - Knowing when to come in out of the rain;

                  - Why the early bird gets the worm;

                  - Life isn't always fair;

                  - And maybe it was my fault.

Common Sense lived by simple, sound financial policies (don't spend more than you can earn) and reliable strategies (adults, not children, are in charge).

His health began to deteriorate rapidly when well-intentioned but overbearing regulations were set in place. Reports of a 6-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.

Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children.

It declined even further when schools were required to get parental consent to administer sun lotion or an aspirin to a student; but could not inform parents when a student became pregnant and wanted to have an abortion.

Common Sense lost the will to live as the churches became businesses; and criminals received better treatment than their victims.

Common Sense took a beating when you couldn't defend yourself from a burglar in your own home and the burglar could sue you for assault.

Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement.

                  Common Sense was preceded in death,

                  -by his parents, Truth and Trust,

                  -by his wife, Discretion,

                  -by his daughter, Responsibility,

                  -and by his son, Reason.

                  He is survived by his 5 stepbrothers;

                  - I Know My Rights

                  - I Want It Now

                  - Someone Else Is To Blame

                  - I'm A Victim

                  - Pay me for Doing Nothing

Guns can protect you

George Will: Pope Francis’ fact-free flamboyance

Here is a link to a column by George Will about Pope Francis's economic ignorance.

The column begins with:

Pope Francis embodies sanctity but comes trailing clouds of sanctimony. With a convert’s indiscriminate zeal, he embraces ideas impeccably fashionable, demonstrably false and deeply reactionary. They would devastate the poor on whose behalf he purports to speak — if his policy prescriptions were not as implausible as his social diagnoses are shrill.

Putin's gambit, Obama's puzzlement

Here is a link to a column by Charles Krauthammer on Putin's strategy in Syria.

Krauthammer is on target.

Don Boudreaux gets it right about Pope Francis

Here’s a letter to the New York Times:

You describe Pope Francis as “humble” (“A Humble Pope, Challenging the World,” Sept. 19).  I disagree; the Pope is a gusher of hubris.

A truly humble person does not pronounce dispositively upon matters about which he knows nothing – and Francis, who is forever pronouncing dispositively upon economic matters, knows nothing of economics.  A truly humble person does not presume that entire societies should be remade through the use of force to conform to the details of his ethical fancies – especially when many of the details of those fancies are highly controversial.  A truly humble person does not jet ostentatiously around the globe to advocate the forcible imposition of policies that would deny economic freedom to billions of people – especially when a great deal of economic scholarship and history (including the history of Francis’s own native continent) warn that such a denial of freedom will impoverish the masses.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Twelve reasons to like Jeb’s tax plan

Here is a comment from Greg Mankiw on his blog.

Twelve reasons to like Jeb’s tax plan

Jeb Bush has released a tax plan.  Here are some elements of it that I find attractive:

1. It lowers the top rate on personal income to 28 percent, the same rate as the bipartisan 1986 tax reform.
2.  It broadens the base by capping the use of itemized deductions.
3.  It eliminates the deductibility of state and local taxes, so low-tax states and towns no longer subsidize high-tax ones.
4.  It maintains the deductibility of charitable giving, encouraging private solutions to social problems.
5.  It reforms the tax treatment of secondary earners and seniors, who are more responsive to tax incentives than primary earners.
6.  It eliminates the stealth marginal tax rates from PEP and Pease.
7.  It eliminates the estate tax, so the tax system no longer penalizes those who want to help their children and grandchildren.
8.  It lowers the corporate tax rate to be close to international norms.
9.  It moves from a global to a territorial tax system, like most other nations have.
10.  It eliminates the deductibility of interest expenses, putting debt finance and equity finance on a more level planning field.
11.  It includes full expensing of investment expenditure, moving the system toward a consumption-based tax.
12.  It expands the earned income tax credit for childless taxpayers, strengthening the social safety net.

Here is an assessment of the plan by John Cogan, Martin Feldstein, Glenn Hubbard, and Kevin Warsh.

"Food insecurity" doesn't mean what you'd think

James Boyard takes the Agricultural Department to task for doing one of the things Government excels at - misleading you.  So, when you end up in a discussion about food insecurity and how many people in the US are starving, etc., Speak up.

Here is the link.

Rob Holland shows you what freestyle aerobatics is about

Here is a link to Rob Holland's third freestyle victory at the World Aerobatic Championship.  Check out the video and the article.

This is flying!!!!