A Claim about Wealth Redistribution

In another forum I heard the claim, in response to an objection to wealth redistribution, that “capitalism” and “free trade” are all about “wealth redistribution. Indeed, this individual claimed, all economics was wealth redistribution.  This is based on the myth that in any exchange someone gains and someone else loses.

That turns out not to be the case.

One of the basic principles of economics, taught literally the first day in the microeconomics class I took in college, was that the “value” of any given “something” varies with circumstance.

One example of that is the principle that the more of something you have, the less each unit of that something is worth to you.  For example, if I have one apple, that apple has a certain value to me.  If I have 100 apples, each individual apple has a lot less value to me than if I only had one.  If I have a hundred apples I’m going to be pretty sick of apples by the time I eat that hundredth one.  If I have a thousand, I don’t think I could eat them all before they go bad.  If I have ten thousand, I know I can’t.  The apples beyond the point where eating them becomes a chore rather than a pleasure are worthless to me.

If someone else has one pear or 100 or thousand or 10,000 pears the same principle applies.

Now, if I meet that person with 100 pears I can trade him some of my apples for some of his pears.  Those apples I trade away are worth more to him than they are to me and the pears the other person trades away are worth more to me than they are to him.  The end result is that we both come away from the trade with more “wealth” (in terms of what each of us value than we started).  So long as the trade is voluntary, i.e. “free trade” (not coerced by force) that will always be the case.  The trade will only happen if both parties .  It only goes away when the trade stops being “free.”

Thus, the economics of free trade, of voluntary exchange, is not a zero sum game.  It is about as far from a zero sum game as its possible to be.  It’s the very antithesis of a zero sum game.

And it can’t be “wealth redistribution” in that both parties of the trade end up with _more_ wealth based on their own values.  The only way it even looks like “wealth redistribution” is when you have a third party, outside the trade, looking at it from the POV it values.  When that third party decides that the 20 apples I traded were worth less than the 30 pears I got back the claim is made that I “took advantage” of the pear person.  However, the pear person wouldn’t have traded those 30 pears unless they wanted the 20 apples more, unless they valued the 20 apples more.  From their point of view they may think they took advantage of me–except that I made the trade freely.

It’s possible, of course, for some individuals to amass a great deal of wealth in terms of what they value–more than some other individuals amass.  That does not invalidate the principle.  So long as the exchanges are voluntary, they only amass that wealth as they see it by providing something that other people value at least as much as they see it.  Henry Ford accumulated a great deal of wealth (in terms of money) by selling Ford cars.  He did so by making a great many other people personally wealthier (in terms of mobility and the freedom that entails) such that they were willing to give him that money for his cars.

Voluntary exchanges make everybody who engage in them richer. It’s only when force is involved (“you pay or I will do violence to you”) or deliberate deception (only the top layer of this basket is apples, the rest is just dirt but I’ll claim it’s apples) or failure to deliver (“thank you for these pears.  Apples?  What apples?”) does that principle break down.  And therein lies the three things government can do that actually help the economy–protect the individual from use of force, forbid the misrepresentation of goods and services being exchanged (i.e. act against fraud) and enforce freely entered into contracts.

In the end, free trade, voluntary exchange = “everybody wins.”

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Rest in Peace, Little Buddy

Kaiden, Albino Hybrid Hedgehog, December 2013 to January 15, 2019.  Feisty ’til the end.

kaiden

Kaiden’s passing was no surprise.  He was old and had some severe health problems these last few months.  We hung onto him as long as he was willing to fight it out.  But when he stopped eating, it was time to go.

My daughter, Athena, was pretty broken up about it.  Recently, once we knew Kaiden wouldn’t be with us much longer, she had been talking about her next small animal being a ferret.

This evening, I suggested we visit the local pet store that has small animals and see if they had any “just to look at for now.”

Well, they did have ferrets. Athena, as I was more than half expecting, immediately fell in love. After much anguish over “which one, I love all of them” she picked one. And just under $300 later we have the ferret, ferret food, some toys for it to play with, and a ferret leash to take it on walks (weather permitting). Given that the ferret is still a juvenile on the small side, the hedgehog cage–after a thorough scrubbing and disinfection, including wipe down with bleach water–will do for the time being. We’ll get a more appropriate cage with plenty of play room for the adult it will become later.

And then we had to get a second one because ferrets, singly, get bored and destructive, can get depressed and it’s just not good for them.

As I expected, having not just one, but two new animals to care for and love has done much to lift Athena’s spirits. And, yeah, they’re cute little things.

Mugger Shot in the Act and Killed

Saw this on the book of faces:

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First off 19 year old.  That’s a legal adult.  Old enough to vote, to join the military, to sign binding contracts and basically do anything except drink alcohol (legally) or buy handguns (legally).

Second, mugging is not just “theft.” Theft is when someone sees something they want, nobody around, and they take it and walk away.  Theft is breaking into an unoccupied car and boosting it’s stereo.  Theft is a pure property crime.  Mugging is a subset of robbery.  It’s a violent crime.  It’s using the threat of death or serious bodily injury to induce someone to hand over their personal property in a face to face confrontation.

After the fact, our judicial system uses whether the criminal actually caused death or serious bodily injury as part of determining the appropriate penalty.  But the person facing the mugger doesn’t have the luxury of an after-the-fact determination.  They have to go with what they have in front of them right then with no crystal ball to see how it will turn out.

The mugger might say “hand over your wallet and you won’t get hurt” but, really, how much can you trust that?  After all, the mugger is robbing you.  Is it really that much of a stretch to consider that he might lie to you too?  While some people advocate cooperating with the criminal, statistics show that resistance reduces the risk not only of property loss but the likelihood of injury.

And that, right there, is the crux of the matter.

I have a daughter at home.  I am her sole means of support.   I have not only a right but a duty to return home safely to my daughter so I can care for, provide for, and protect her. That means that I have not only a right but a duty to do whatever is necessary to stop someone who threatens my ability to do that. A mugger might, might be satisfied with the contents of my wallet. But I have no way to know that.

Thus, I have not just a right but a duty to treat any face to face confrontation with a criminal as a potentially violent, potentially lethal threat.  And when you consider the vast majority of violent criminals, including muggers, don’t stop with just one, it’s not just me and my daughter at question, but all the other fathers, mothers, daughters, and sons who could be victimized after me.  I may not owe them a specific duty, but they remain part of the consideration as to why I can, and indeed must, treat that confrontation as a threat not just to me and mine but to them as well.

And if the criminal doesn’t like that he has a simple way to avoid it: don’t put me in that position.

Don’t start none, won’t be none.

“If You Don’t Like It, Move.”

People tend to get upset when you suggest that if they like a particular government or form of government so much that they should go where they already have it.  I can understand that.  It’s a lot of trouble to pull up stakes and relocate to someplace that would supposedly be more congenial.  Of course it’s also a lot of trouble to force the changes that one might want on the unwilling here.

OTOH, America was built on that very concept: ” if you don’t like it, move.” The Pilgrims wanted a place where they could raise their families without other religious influences (not for religious freedom–they had that in Amsterdam) so they moved.  Daniel Boone thought that Kentucky was getting too crowded, so he moved.  Other folk wanted a piece of land to call their own where they could build a life of their own so they moved.  Folk wanted economic opportunities they weren’t finding at home so them moved.

“If you don’t like it, move” is one of the foundations of American history.  Yet there is a problem today.  Today the folk more likely to actually follow that philosophy, the folk who want social and economic liberty, the folk who want to live and build their own lives with the minimal interference of government, don’t have anyplace to go.  There are no more frontiers into which they can expand.

Other folk, however, folk who want the government to “look after” them, can find endless examples of just what they say they want.  There are all sorts of options which have “government health care” and extensive “safety nets” and so forth.  But these same people, the ones who could find a “better life” in terms of what they say they want are the very ones who are the least willing to actually pick up stakes and move to where what they say they want is already available.

People have said to me “If you like guns so much, go start a country where they’re allowed.”  To which my answer of course is, “We did.  You’re the one set on changing that.”

Personally, I’d move in a heartbeat if . . . if . . . there were any place to go.

There. is. no. place. I. can. go.

Is it really too much to ask to leave one place on the planet where individual liberty, individual responsibility, and conservative/libertarian (small “l”) values are given more than lip service?  Just one?  Why are you so adamant to take away the last place on Earth where what I value is given any more than the barest lip service (and even that not much these days)?

Oh, some wags will give me a snarky “if you hate the government so much, move to Somalia.” However, what I want is a Constitutional Republic of sharply limited powers where maximum individual liberty is the goal and only such government as serves that goal.  “To secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.” At no point in there did I say that I wanted to live in a failed state controlled by competing warlords whose power is near absolute within their particular territories and where I can be quite sure the “international community (read “France and Germany, mostly Germany”) would be sure to intervene to prevent me from actually doing what would be necessary to build the kind of state I want to live in.

Please, just leave me one place where I can live my life in peace.  Just one.

How “Common Sense” are Those Restrictions?

Every  year the Brady Campaign to steal our Freedom (okay, they call themselves the Brady Campaign to Prevent Gun Violence, but I call them as I see them) comes up with a “scorecard” of how well various states conform to their proposed “common sense gun laws.”  The claim is that we need these “reasonable restrictions” in order to reduce crime and violence.

Well, some years ago I took the time to gather up the numbers on violent crime for the various States and their Brady Scores.  Plug them into a spreadsheet and chart the results:

bradyscore
Notice something here?  There’s no discernible trend of reduced violent crime with greater implementation of the Brady Campaign’s “wish list” either overall or for most of the individual violent crimes.  While I originally did this some years ago the overall results have not noticeably changed.

The Brady Campaign keeps talking about “common sense gun regulation.” Yet one has to wonder what’s “common sense” about regulations that don’t do anything about the problem they are supposed to address, namely violence.  If you look at the chart, you can see quite clearly that increased gun regulation has little, if any, effect on the commission/attempt of violent crime (NB:  crimes that were stopped in progress would still be counted in these statistics so long as the attempt was reported to the police).

Now, I’m sure someone will grab onto the yellow triangles which do show a clear downward trend with increasing Brady score.  However, that’s a classic example of a spurious correlation.  Firearms are involved in only 6% of rape cases and the State to State difference in the rate is large enough that it must come from other causes.  If anything, it illustrates how little “gun control” affects actual crime rates. Other factors are dominant.

If one crunches the numbers, one can see a very small negative correlation between Brady Score and violent crime–very small.  However, many random data sets will also have correlations.  The correlation is not “statistically significant” which means that we cannot tell with 95% probability that it’s due to anything other than the random variation in the data–i.e. it’s the smallest correlation that we can reliably say “there’s something there”, let alone being large enough to matter in any meaningful way to the chances of a person on the street meeting with violent crime. This correlation is not significant either statistically (the low bar) or practically (the high bar).  The only one of those that has a “significant” (not expected by the random variations within the data) is the one for rape, but we’ve just disposed of there being a direct causal link in that one.

This, of course, is the point where gun control proponents come back with the claim that relaxed gun control doesn’t reduce the incidence of violent crime, and they’re correct that this data does not support such a contention (while not eliminating the possibility that other, more extensive analyses can support such a claim–such analyses are beyond the scope of this post).  However, there is no need to show that.  The burden of proof is on those who want to restrict individual rights and the data shows that their simply isn’t a justification for doing so.
Thus, the available evidence indicates what pretty I pretty much already knew–that Gun Control has no appreciable effect on violent crime.  But in particular, that the Brady Bunch’s “common sense gun regulation” is worthless when it comes to crime control.

So how, you might ask do gun control proponents keep coming up with claims for the results of gun control?  Well, leaving aside outright lying, there are a number of tricks they use.  One is “gun violence” vs. violence.  That is summed up in “would you rather they was pushed out of windows, little girl?” Instead of using a gun they use a knife, or poison, or a baseball bat. or gang up on an individual, or… The murdered person is still murdered, the robbery victim is still robbed, and the rape victim is still raped, just using different means.  But that’s actually a small effect.  The big one is including suicide victims as part of “gun violence”.  You see the presence or absence of a gun has no bearing on whether a person is suicidal or not.  But if a suicidal person has a gun they are more likely to use that (rather than jumping from a high place, stepping in front of a moving bus, taking poison, hanging, run their car in a closed garage, or any of a host of other ways a person may choose to end their life) than a person who doesn’t have a gun.  So the more people who have guns, the greater number of the suicides that would happen anyway would use guns rather than other means.

It comes down to the simple fact that the justifications given for restricting private ownership of firearms, either in general or of some specific type, do not hold up under examination.  While the average gun control supporter “on the street” is simply uncritically accepting what they are told by the Brady Campaign or other such groups, the people behind such groups know full well that their arguments are utter and complet nonsense.

In short, people, you’re being lied to.

“Reasonable Restrictions”

There has been a lot of talk about “common sense” gun laws and “reasonable restrictions” on the 2nd Amendment.  I wrote the following to summarize my thoughts on that.

The full text of the 2nd Amendment of the US Constitution reads as follows:

A well regulated Militia, being necessary to the security of a free State, the right of the People to keep and bear Arms, shall not be infringed.

To anyone but a lawyer or a political agenda, it’s pretty straightforward. However, very few, even among diehard arms rights supporters would claim that it’s truly unlimited: that literally everybody with a body temperature somewhere near 98.6 degrees Farenheight (say within about 20 degrees) must be permitted to own, possess, carry, and use any kind of weapon they can get their hands on. The controversy is generally over just what constitutes a “reasonable restriction” particularly since there is no allowance in the Constitution for any restrictions whatsoever . . . or is there?

The 5th Amendment of the US Constitution contains the following text:

nor be deprived of life, liberty, or property, without due process of law;

A person cannot have life, liberty, or property taken without “due process of law.” Implication then, is that with due process life, liberty, and/or property can be taken away. And therein, lies the heart of what “reasonable restrictions” can be permitted. A specific incidence of one’s liberty, the Right to Keep and Bear Arms, can be taken away by “due process of law.” The most basic example of this is criminal conviction: part of a criminal sentence can be that one loses this particular liberty. Now, this doesn’t just apply to criminal convictions. Courts can find an individual incompetent to manage their own affairs, mandating institutionalization or other forms of “supervision.” In these cases, too, “due process of law” constitutes a legitimate means of reducing/restricting one’s liberty, including the Right to Keep and Bear Arms.

I would also note that minors are generally not granted the full liberty of adults: minors are not permitted to vote, their parents have the right to search their rooms/possessions, etc. This has been true since the very beginning of the nation so it’s not a recent “reinterpretation” of the Constitution as so many things are. These various rights would seem to be “held in trust” by the parents/guardians on the minor’s behalf. The parent decides if a search is permitted. The parent decides if the child can run a press and what will be in it. The parent decides if and to which church the child will attend. And the parent decides how much of those decisions to allow the child to make for his or her self. In like vein, then, the parent should be the one to decide whether the child may keep and bear arms or not. But, as in all things, the parent’s authority carries with it (or should carry with it) responsibility as well. The parent needs to be held fully accountable for misuse of any such liberties. If the child shoots a classmate with a parentally authorized firearm, the parent needs to be tried right alongside the child–and facing adjoining cells. This should encourage the parent to be very, very sure that the child has sufficient maturity and responsibility before permitting the child to bear arms.

The other side of the coin is the “what” rather than the “who.” In other words, instead of limitations on who may keep and bear arms, what kinds of weapons should be permitted. Here, Constitutionally speaking, the issue is completely clear cut: the Constitution puts no limits on what constitutes “arms” therefore there should be no limit on the what. This is where people start saying “but…nukes!” Well, there’s a solution to that:  the Amendment process. You want to exclude “Weapons of mass destruction” from being “arms” that people have the right to keep and bear?  Then draft a Constitutional Amendment that clearly defines such weapons and removes them from coverage under the 2nd Amendment. The key there is “clearly defined” and it may well be that only the Nuclear component of WMD can be so defined. Chemical weapons? How do you define a chemical weapon that doesn’t also include common household chemicals? Biological? How do you tell whether those bulging cans were just a case of careless storage or deliberate cultivation of botulin bacteria? These may be a genie that can’t be put back in the bottle. Still, a Constitutional Amendment restricting Nuclear Weapons to properly licensed groups and individuals (provided it’s worded well enough to distinguish between, for example, nuclear weapons and a tritium watch dial, or night sight) would likely receive widespread popular support.  You should have no trouble getting 2/3 of the House and 2/3 of the Senate to approve such an Amendment and 3/4 of the States to ratify it.  That is, if you’re really worried about nukes and not just using that as a red herring when what you really want to restrict are ordinary personal arms which have nothing to do with nukes.

But that’s why the anti-gun folks would never go for such a Constitutional Amenment.  It would underline that anything not so exempted is actually covered by the 2nd.  It’s not nukes they’re worried about.  That’s just an excuse to attempt to ban century old firearms technology.

And that, is my thought on what is, or should, constitute “reasonable restrictions” on the Right to Keep and Bear Arms.  Criminals or the mentally unsound, if so judged after proper due process may have their rights restricted.  And minor children have their rights “held in trust” by their parents or guardians’ suffrage, with the parents or guardians taking responsibility for the results of what they allow their children to exercise.

Anything else?  Amend the Constitution properly…if you can.

The “Invisible Hand” Vs Planned Economies

Still under the weather to the point that I’m very surprised this turned out as long as it did.  I was really expecting to do a short one.

Let’s go back to the beginnings of economics as a science, with Adam Smith and the Wealth of Nations.  One of the key elements of The Wealth of Nations was Smith’s “invisible hand”–each individual acting according to his or her self-interest in combination with all the others engaging in voluntary exchanges, with each only making the exchange if they believe they’ll benefit from it.  We might think of that as much like the way the mostly random individual motion of molecules biased toward higher to lower energy states causes the wind and the rain without the direction of any particular molecule or group of molecules.

In the 18th and 19th centuries much of our understanding of the natural world through the mechanism of science blossomed.  With so much increased understanding, and new discoveries on a regular basis, it was perhaps inevitable that people would think that conscious direct, “managed” or “controlled” economies would be more efficient than the unconscious action of Smith’s “invisible hand.”

The result was the development of socialism–the idea that the “means of production” (capital) should be taken out of individual hands and directed for the “common good.” Marx and Engles added the idea of a “workers revolution” with violent overthrow of the existing order to accomplish that transfer of means of production from those who have built and accumulated it to “the workers”.

It was an interesting idea, of scientifically managing the economy for everyone’s benefit.  And it’s popularity was widespread.  By the early 20th century it was considered the inevitable wave of the future.

There were, however, problems.  For example, whether one was taking outright ownership of the means of production (socialism/communism) or leaving people with ownership “on paper” and “merely” taking control (fascism/naziism) you’re left with the problem of who makes the decisions and how to ensure the decisions they make are actually for the “common good” and not for their own self-interest.  That, by itself, is a serious problem that remains unsolved to this day.

As serious as that problem is, a second problem is even worse.  In an economy based on voluntary exchange, each individual, knowledgeable about their own particular situation, makes the best choices for themselves.  If I, for instance, am going to buy a car, I can look at the various offerings and find the combination of price, features, and performance that best suits my needs.  If the cars available are too expensive, or don’t suit my needs, I can look at motor scooters or even bicycles.  If a lot of people decide cars are too expensive, the people producing cars find they aren’t able to sell them and have to do something to either increase their sales (reduce prices or add features that attract people back to car buying) or accept lower sales volumes which will mean less resources (steel, plastic, energy, and labor among many others) going into car production and instead being available for other industries.

But it’s not just cars.  The same kind of decision is made for each of the thousands upon thousands of goods and services people trade each day.  Do we raise price on paperclips and increase production, using more steel for this and less for butter knives?  Do we produce more laptop computers and fewer desktops?  Do we string more fiber optic cable or maybe put up more satellites for computer networking?

It is simply not possible for any human or committee to have sufficient knowledge to make those decisions in such a way as to provide the goods and services that the people want in amounts coming anywhere close to matching demand.  Indeed, it might not even be something that could be solved by sufficient knowledge.  Economies may well be chaotic systems where even a very small difference in one part could lead to large and unpredictable changes elsewhere.

Milton Friedman used the example of a pencil to illustrate that idea.  No one person can make a pencil.  You have the wood, that comes from certain trees.  There’s the steel of the saws used to cut the tree.  The people making the brass for the ferrules do not need to know how many pencils will be produced.  They only need to know the price people are willing to pay for that brass.  The people mining graphite don’t need to know the mix of graphite and clay for a number 2 pencil.  Again, they just need to know how much they can sell at what price.  And so on and so on, thousands of people from around the world cooperating without even knowing it simply because of the action of the price mechanism.

Consider instead the old Soviet Union.  The planning committees would get catalogs from the West so that they could get some idea of what relative prices “should be”–relying on societies where the price system and voluntary exchanges worked things out to figure out what they simply could not from scratch.

It’s even worse when the price to be determined is that of labor.  Consider unpleasant or dangerous jobs in the US–lineman working for electric utilities, garbage collection.  These jobs usually pay pretty well.  The danger or unpleasantness of the job is going to make many people hesitant to enter those fields.  Going up tall towers in the middle of thunderstorms to restore electricity to people’s homes?  Not me.  Going around in a truck, picking up disgusting, vile smelling garbage cans to dump into the back of that truck?  I’ll pass, thank you.  But somebody’s got to do those jobs so how do you entice them?  Wages and benefits are the usual method.  If you’re not getting enough people to do it, then you end up having to offer more to get people to decide it’s worth it.

For a command economy it’s simply not possible for the decision makers to know what wages and benefits will attract enough people to each of the myriad jobs that go into making up an economy.  The result is that one has to use some kind of “force” to accomplish it.  A common tactic is simply to set arbitrary standards (often “competitive examination”) for the safe jobs with more pleasant working conditions and leave others with no choice but to take jobs they would never take at that level of pay and benefits in a freer market economy.

In the end, due not just to the venality but the insufficient knowledge, command economies begin to resemble feudal states, with people bound to their status not because of their individual abilities and choices, but because of what those “commanding” the command economy decides.  The bulk of the people become, essentially, serfs.

But don’t just take my word for it.  F. A. Hayek said it much better, and at greater length, in his book “The Road to Serfdom”: