‘How Economic Inequality Is Essential for Successful Economic Competition by the Less Able’

Capitalism, Economy, Free Markets, Political Economy, Political Philosophy

Republicans, Democrats and conservatives—come to think of it, most people—do not fear flaunting their inveterate ignorance of economics. Thus almost all have railed against economic inequality to boost their empathy credentials and likelihood of being elected or re-elected.

The Capitalist Professor, George Reisman, has the antidote, and has been kind enough to send me a complimentary copy of his essay “Fundamental Insights into the Benevolent Nature of Capitalism.” It is available to the general public for 99¢ as a Kindle Book on Amazon.com.

An excerpt:

How Economic Inequality Is Essential for Successful Economic Competition by the Less Able

By George Reisman, Ph.D.

“As von Mises has … shown, with his development of Ricardo’s law of comparative advantage into the law of association, there is room for all in the competition of capitalism. Even those who are less capable than others in every respect have a place. In fact, in large measure, competition under capitalism, so far from being a matter of conflict among human beings, is a process of organizing that one great system of social cooperation known as the division of labor. It decides at what point in this all-embracing system of social cooperation each individual will make his specific contribution—who, for example, and for how long, will be a captain of industry, and who will be a janitor, and who will fill all the positions in between.

In this competition, each individual, however limited his abilities, is enabled to outcompete all others, however superior to him in their abilities they may be, for his special place. Quite literally, and as an everyday occurrence, those with abilities no greater than required to be a janitor are able to outcompete, hands down, without question, the world’s greatest productive geniuses—for the job of janitor. For example, Bill Gates might be so superior an individual that in addition to being able to revolutionize the software industry, he might be able to clean 5 times as many square feet of office space in the same time as any janitor now living, and do it better. But if Gates can earn $1 million an hour running Microsoft, and janitors can be found willing to work for, say, $10 an hour, their readiness to perform the job at one one-hundred thousandth of the hourly rate Gates would require, so far overcomes their lesser abilities that it is they who are the winners of this competition, without any question. For cleaning the amount of floor space that one of them can clean in an hour costs just $10, if one employs one of them, while having Gates clean that same amount of floor space costs $200,000, since the hour of his labor that would be required to clean 5 times as much floor space costs $1 million. To say the same thing slightly differently, employing 5 of them, who in combination clean as much floor space per hour as Gates, costs only $50, while employing Gates to do the same job costs $1 million.

It should go without saying that the same principle applies to all lesser degrees of productive superiority. Thus, for example, individuals capable of being janitors twice as efficient as the average janitor but also capable of doing work that the average janitor simply cannot do and that pays them more than twice as much per hour as the average janitor earns—these people will be outcompeted by the average janitor for the job of janitor. For it will be less expensive to employ two ordinary janitors than one twice-as-efficient janitor, who must be paid more than the two of them in combination, while their combined performance matches his.

There is an important implication in these examples for the subject of economic inequality. Namely, it is the ability of less capable people to work for wages sufficiently below those of more capable people that enables them to outcompete the more capable people and thereby to secure employment. It follows that all measures, such as minimum wage laws, that seek to force up the wages of less capable people operate to undercut their ability successfully to compete and thus to force them into unemployment, while depriving the rest of society of their services and forcing the movement of more capable workers into jobs that could have been filled by less capable workers.

In addition to the fact that under capitalism, there is room for even minimally capable people to be employed in the economic system, it is also the case that because productive geniuses are free to succeed in revolutionizing products and methods of production, those with minimal abilities are able to enjoy not only food, clothing, and shelter, but even such products as automobiles, television sets, and personal computers, products whose very existence they could probably never have even dreamed of on their own.”

Read the complete essay, “Fundamental Insights into the Benevolent Nature of Capitalism.”

Kerry’s Hypocrisy; Clinton’s Stupidity

Ann Coulter, Foreign Policy, Hillary Clinton, Republicans

Libertarians take issue with former Secretary of State Henry Kissinger for his many transgressions, but stupidity should not be considered one of them. Whatever he did in office, Kissinger never displayed the unadulterated dumbness of a Hillary Clinton and her even dumber replacement, John Kerry.

As to the former’s dumb credentials, a jocular Ann Coulter relayed that one of the Clintons’ professors at Yale said the following about the couple and Clarence Thomas, all of whom he taught: “I had them all. One was smart. One was really smart. And one was dumb.” “I think we know who the dumb one was,” grinned Ms. Coulter.

Alas, there is nobody of Henry Kissinger’s caliber in office to put the likes of Kerry in his place (Marie Barf’s stupidity would have caused Kissinger to keel over). About the secretary’s admonitions to the Republicans for writing their “Dear Ayatollah” letter, let me say this: Pot. Kettle. Black. A principle that applies in reverse, of course: Every single thing the Republicans accuse Obama and his minions of can be said about their head honchos as well.

According to Newsmax, “Kerry [huffed to ] the Senate Armed Services that he was in ‘utter disbelief’ about the GOP letter to the Iranian leaders.

“During my 29 years here in the Senate I never heard of nor even heard of it being proposed anything comparable to this. If I had, I can tell you, no matter what the issue and no matter who was president, I would’ve certainly rejected it.”
“No one is questioning anybody’s right to dissent,” he added, according to the Caller.
“Any senator can go to the floor any day and raise any of the questions that were raised. You write to the leaders in the middle of a negotiation — particularly the leaders that they have criticized other people for even engaging with or writing to — to write then and suggest they were going to give a constitutional lesson, which by the way was absolutely incorrect, is quite stunning.

But back in 1985, “Kerry and then-Iowa Democratic Sen. Tom Harkin had visited Nicaragua … to make a deal with the Sandinista government even though President Ronald Reagan at the time was determined to overthrow the government with the help of the Nicaraguan rebels, the contras.”

Kerry supported a deal that would see the Sandinista government agree to a cease-fire and restore civil liberties in exchange for the United States ceasing to support the contras.
“If the United States is serious about peace, this is a great opportunity,” Kerry said at the time …

“But Kissinger,” recounts Newsmax, “blasted Kerry on ‘Face the Nation,’ saying: ‘He’s not secretary of state, and if the Nicaraguans want to make an offer, they ought to make it in diplomatic channels. We can’t be negotiating with our own country and the Nicaraguans simultaneously. My own view is that what we want from the Nicaraguans is the removal of foreign military and intelligence advisers.'”

Incidentally, Kerry’s 1985 initiative seems more agreeable to the libertarian than President Ronald Reagan’s. I thanked Nancy Pelosi for pursuing the same diplomacy with Syrian President Bashar Assad, in 2007:

The White House is furious that House Speaker Nancy Pelosi has traveled to meet with Syrian President Bashar Assad in Damascus. Assad is not the only Middle-East leader Pelosi is speaking to. Nor was she the first American politician to pop in on Assad. Speaker Pelosi was preceded by a Republican posse.
That diplomacy can be presented as dangerous is a credit to the Bush administration’s success in inoculating the American public against civilized, rational conduct in international affairs. The Constitution is the other spot of bother the administration has helped obliterate from the American collective conscience.
As the Independent Institute’s Ivan Eland, points out, “The framers wanted the Congress to be the dominant branch in foreign policy, as with most other aspects of governance.” “The Congress was given the power to regulate commerce with foreign nations, declare war, raise and support armies, provide and maintain a navy, regulate the armed forces, organize, arm, and discipline the militia, and call them forth to resist invasions.”

It is not Kerry’s 1985 initiative that disgusts, but his present-day hypocrisy and indignation that are repugnant.

Cameron Todd Willingham & The Witchdoctors Who Killed Him

Crime, Criminal Injustice, Law, Pseudoscience

As it has been practiced for decades, arson investigations were more voodoo than science, and “arson sleuths” were often dabblers; “old-timers” who lay claim to a “a body of wisdom,” passed down from one old timer to the next arson investigator. The problem? An innocent individual, Cameron Todd Willingham, was “executed for the arson murder of his three young daughters,” in Texas, in 2004, based on this hocus-pocus.

Many arson investigators, it turned out, had only a high-school education. In most states, in order to be certified, investigators had to take a forty-hour course on fire investigation, and pass a written exam. Often, the bulk of an investigator’s training came on the job, learning from “old-timers” in the field, who passed down a body of wisdom about the telltale signs of arson, even though a study in 1977 warned that there was nothing in “the scientific literature to substantiate their validity.”

In 1992, the National Fire Protection Association, which promotes fire prevention and safety, published its first scientifically based guidelines to arson investigation. Still, many arson investigators believed that what they did was more an art than a science—a blend of experience and intuition. In 1997, the International Association of Arson Investigators filed a legal brief arguing that arson sleuths should not be bound by a 1993 Supreme Court decision requiring experts who testified at trials to adhere to the scientific method. What arson sleuths did, the brief claimed, was “less scientific.” By 2000, after the courts had rejected such claims, arson investigators increasingly recognized the scientific method, but there remained great variance in the field, with many practitioners still relying on the unverified techniques that had been used for generations. “People investigated fire largely with a flat-earth approach,” Hurst told me. “It looks like arson—therefore, it’s arson.” He went on, “My view is you have to have a scientific basis. Otherwise, it’s no different than witch-hunting.”

On September 7, 2009, the New Yorker’s David Grann wrote a lengthy expose, “Trial by Fire,” in which he asked, “Did Texas execute an innocent man?”

On March 9, this year, Maurice Possley, of The Marshall Project, all but confirmed that yes, Texas executed an innocent man.

Read the horror story of Cameron Todd Willingham, who “insisted upon his innocence in the deaths of his children and refused an offer to plead guilty in return for a life sentence.”

And the update.

UPDATED: The Farce Of ‘Black Arrests’ In Ferguson

Crime, Propaganda, Pseudoscience, Race

Ann Coulter channels Steve Sailer, who compared the arrest rates of blacks in various left wing precincts like the “People’s Republic of Santa Monica, CA”: “the black arrest rate in Santa Monica is three times as high as the black arrest rate in Ferguson, Mo.”

More than three times higher:

More Steve Sailer.

UPDATE (3/16): Facebook Thread:

Myron Robert Pauli: 631/1000 – that’s 63% of the entire black population although probably many are the “usual suspects” getting arrested multiple times per year! Still an enormous number. Pretty high even for whities. The arrest rate in North Dakota (evil Republican state with lots of gun owners) is 24/1000 – although apparently the oil boom is bringing in more crime. Utah also has low crime but the crime rate does not correlate that much with RED (Idaho and Utah) vs BLUE (Vermont, Maine, and Minnesota have low crime) as much as the absence of a certain population which perhaps Steven Sailer can point out – see enclosed picture.

Myron Robert Pauli: … and the District of Columbia is # 1 … with Ward 8 being the most criminal in DC (interesting fact is that a certain research lab in Ward 8 has more patents than the rest of the Department of Defense put together – but that Lab has a barbed wire fence and guards – presumably to keep the “Russians” out!!) … – just don’t get lost can have your car break down if you are coming to visit Naval Research Lab! Still, it seems rather odd that gun-friendly Idaho has lower crime than such as a paradise as the District of Columbia with its anti-gun laws… after all, don’t we get taught that guns cause crime????!!!