Williams on 'Lump of Labor'

Thursday, February 22, 2018

In a recent column, Walter Williams demolishes an economic fallacy that helps altruists rationalize both protectionism and universal welfare:

Just imagine how many people we could employ to transport hay if we got rid of those job-stealing tractors! (Original Photo by Gozha Net on Unsplash)
People always want more of something that will create a job for someone. To suggest that there are a finite number of jobs commits an error known as the "lump of labor fallacy." That fallacy suggests that when automation or technology eliminates a job, there's nothing that people want that would create employment for the person displaced by the automation. In other words, all human wants have been satisfied.

Let's look at a few examples. In 1790, farmers were 90 percent of the U.S. labor force. By 1900, only about 41 percent of our workers were employed in agriculture. Today less than 3 percent of Americans are employed in agriculture. And it's a good thing. If 90 percent or 41 percent of our labor force were still employed in agriculture, where in the world would we find the workforce to produce all those goods and services that weren't around in 1790 or 1900, such as cars, aircraft, TVs, computers, aircraft carriers, etc.? Indeed, if technology had not destroyed all of those agricultural jobs, we would be a much, much poorer nation.
And, yes, in case you were wondering, Wiliams does talk about how technology affects manufacturing jobs.

-- CAV

Robots Are Coming! Hurry Up and Steal!

Wednesday, February 21, 2018

Over at Investor's Business Daily is an editorial arguing against a British proposal to tax major technology companies in order to fund welfare for everyone, aka "Universal Basic Income." Insofar as their argument goes, they are on the right track, economically, but some mention of the right of someone to keep his own earnings would have been helpful. Why? Because this idea is even more contemptible than it is absurd. You may have to ponder that point, though, because the welfare state has normalized massive theft from the productive for decades.

In any event, the editorial provides the following warning just a wee bit too late:

Yet, this is how the far-left thinks. Money is magic. All you have to do is imagine a need, and you can take whatever you want from producers to satisfy that need. And don't worry: Like all bad ideas, this one will jump the pond and soon be discussed by the economically illiterate far-left in the U.S. as an "answer" to our welfare problems.
This idea has actually already "jumped the pond." Admittedly, he is a fringe candidate, but one Andrew Yang has already thrown his hat into the 2020 Democrat presidential ring on a platform of technophobic demagoguery cum goodies-for-all:
Robots will make life easier, but not to the point we can quit working altogether. (Photo by Franck Veschi on Unsplash)
That candidate is Andrew Yang, a well-connected New York businessman who is mounting a longer-than-long-shot bid for the White House. Mr. Yang, a former tech executive who started the nonprofit organization Venture for America, believes that automation and advanced artificial intelligence will soon make millions of jobs obsolete -- yours, mine, those of our accountants and radiologists and grocery store cashiers. He says America needs to take radical steps to prevent Great Depression-level unemployment and a total societal meltdown, including handing out trillions of dollars in cash. [link omitted]
This may be, as IBD put it, "an absurd idea" (just like robots wiping out all our jobs), but it has indeed arrived. Yang himself may be a long-shot, but I am sure his stronger competitors will seriously consider whether his idea -- like your money -- is worth stealing.

-- CAV

Price and Context, Part II

Tuesday, February 20, 2018

After learning the latest on Barnes and Noble, one might imagine that the accountant I mentioned in last week's blog post had somehow taken over the struggling chain:

Fortunately for me, I'm more of an Amazon or Half Price Books guy... (Image via Pixabay.)
... Following the "how to slit your own business throat in one easy lesson" plan, it is laying off head cashiers, digital leads and others in their stores who are 1) full-time employees and 2) have the experience and knowledge that helps a store run smoothly. The company says it will save them tens of millions of dollars a year. Which it might, on a protected profit and loss sheet. What those projections don't show are the number of customers and individual transactions that will be lost because customers can't get help when needed, can't get their questions answered and can't find the books they want because they haven't been unloaded from their boxes yet.
Oh, and that's not all. Employee morale and training opportunities, a valuable part of any business, apparently didn't factor in to the decision making, either:
... The remaining employees have just seen a huge round of layoffs and wonder if they're going to be next. Moreover, they don't have the experience to do the jobs of those let go. Is it any wonder they are feeling worried and depressed about their work situation?
The only rational explanation I can come up with for this is that those in charge see a very short time horizon. I suppose I could be wrong since I am not a businessman. Nevertheless it looks to me like if they had a chance to return to viability before, they just blew it.

-- CAV

"Even" Corporations Value Education

Monday, February 19, 2018

In a recent column at Inc. is a proof by counterexample that several rationalizations for public education are wrong:

Photo by Nicola Tolin on Unsplash.
When I worked there, the chairman (Robert Wegman, who died in 2006) funded several private Catholic elementary schools in Rochester, New York, where the company is headquartered. I had the privilege of meeting with him, one on one, to report on the success of these schools. I asked why he did this, and he said that he saw failing public schools that weren't capable of producing the kind of people he needed to make his stores successful, so he decided to do something, and that was funding the private schools. There was no requirement that the scholarship students one day work for Wegmans, but I'm sure many of them did. [bold added]
Just off the top of my head, this blasts to flinders the following excuses for government schools: (1) businessmen are too "blinded" by the almighty dollar to spend money on improving their communities, (2) education is "too important" to leave to private parties, and (3) if the government didn't guarantee this vital resource (as if government schools provide a decent education), nobody would because they are "too selfish". Feel free to add any others you can think of in the comments.

Most people -- the secularized Christians of the left especially included -- are oblivious to the dangers of religion, so I'll give the late Robert Wegman a pass for supporting parochial schools rather than, say, secular Montessori schools. In addition, there could be other good reasons for his choice, including no other viable alternatives at the time. The point is, the short paragraph above should give pause to anyone who values education and imagines that we need or even want the government to be involved. We see the results of the latter all the time, and have a solid reason here to consider the free market alternative.

-- CAV

Friday Hodgepodge

Friday, February 16, 2018

Notable Commentary

"... I am ... deeply disturbed by any prospect of psychiatric diagnoses being used (or misused) for political purposes." -- Paul Hsieh, in "You Might Not Like the President, but That Doesn't Mean He's Crazy " at Forbes.

"If [Susan Stamper] Brown sincerely wants conditions in Haiti to improve she should speak against their government." -- Bob Stubblefield, in "Letter: Haiti, America Should Have More Respect for Rights" at The Aiken Standard.

"In the quest to protect misguided notions of freedom, ... it is freedom that will suffer." -- Tara Smith, in "The Free Speech Vernacular: Conceptual Confusions in the Way We Speak About Speech" at The Texas Review of Law and Politics, vol. 22, no.1, pp. 57-92. (2018, PDF, blogged here).

"The advocates of the restrictions frame every new way to speak about politics as a 'loophole' that must be sealed up." -- Talbot Manvel, in "We Don't Need More Campaign Finance Laws" at The Capitol Gazette.

"If one values romantic love, the idea of multiple sexual partners is repugnant, as it is and should be, for the civilized man -- the man who values himself as an individual." -- Charlotte Cushman, in "Monogamy is Moral, Promiscuity is Not" at The American Thinker.

From the Blogs

The latest post at You Can and Did Build It, about the beginning of the philosophical discussion of free will, closes with an interesting observation:

Image via Wikipedia,
Aristotle's view that man's character is shaped by the man himself, and therefore he is responsible for it (and its consequences), is the most important part of his discussion. If men learned nothing from Aristotle's view of free will but this conclusion, much of the current debate (certainly in ethics, politics and law) would end. No one who accepted Aristotle's view would argue that a criminal should be excused because he "felt," in the moment, that he wanted to slaughter a whole family, or because he was too drunk to know what he was doing when he tee-boned another car. Maybe all that is true -- maybe he didn't, in the moment, know what he was doing. But according to reason, and to Aristotle, that is beside the point. The criminal brought himself to this moment by his own choices, and could have done otherwise. That is why we do, and should continue to, "punish a man for his very ignorance, if he is ... responsible for the ignorance." [bold added]
Incidentally, you may be interested to learn of The Internet Classics Archive, which has brought "the wisdom of the classics to the Internet since 1994." I had either forgotten about or did not know of this resource until I followed a link from that post to the Nichomachean Ethics.

-- CAV

Price and Context

Thursday, February 15, 2018

What do travel expense audits and smart phone apps have in common? Both offer excellent examples of how meaningless price can be when that number is yanked from all context.

The first example comes to us from Allison Green's excellent Ask a Manager blog, where a reader has run afoul of an accountant with a myopic concern with airline ticket prices:

He may have lost two hours of sleep and can't get any real work done today, but he saved the company fifty bucks. (Photo by Harry Knight on Unsplash)
I replied that the added expense of ground transport to farther-flung airports would routinely add at least $100 to each round-trip, which always makes flying from my preferred airport a wash, and that my status on American means an additional $25-35 savings each way on checked baggage that I'd have to pay on other airlines.

The accounting rep then said that I should use the alternative airports and use public transit, which takes far longer to use (even though our employee manual specifically says the organization reimburses for cabs). The accounting rep said I could also save money by taking flights that leave at 5 a.m. and return after 10 p.m., even though my business needs often call for spending the morning in the office and taking an afternoon flight. As part of the "audit follow up," he instructed me to send accounting screenshots of all flights on Kayak available ANYTIME ON THE SAME DAY to ensure I am choosing the cheapest option regardless of time of day.
The above passage doesn't even mention further costs, such as lost productivity to the business that such a selection process would entail, although that does come up. Obviously, it's harder to cut costs than just looking at a bunch of numbers for just one of the costs.

In a similar vein, a software developer tackles a lament common among those involved in smart phone software, urging his compatriots to "Stop using the cup of coffee vs. $0.99 app analogy":
Fact: Your $1 App is a Total Gamble

Now, contrast this with your app, Mr. Developer. I don't know you from Adam. You're pitching digital Instant Refresher Juice 1.0 to me in the form of a new app. The return I'm going to get is questionable at best. I already have 30 games on my phone, some of them very good. Do I need another one? I don't play the 30 I have. The experience I'm going to get from adding one more game is not trustable. I'm assured of nothing. Last week I bought a game for 99 cents and it was terrible. I played it once, for 15 seconds. I could be shoving $1 straight down the toilet again for all I know. Your app, good sir, is a total gamble. Sure, it's only a $1 gamble ... but it's a gamble and that fact matters more than any price you might place on it. [format edits]
Offering a lower dollar price for something is pointless if doing so fails to solve other, greater costs that exist whether or not they, too, are priced in dollars.

Numbers may not lie, but they cannot contain the full truth, as both of these examples attest.

-- CAV

Smith on Debating Freedom of Speech

Wednesday, February 14, 2018

Philosopher Tara Smith has just published a timely and much-needed corrective (PDF) to the ongoing debate about freedom of speech. Although this has been published in an academic journal, the combination of the subject matter and Smith's clear writing will make the material accessible to any intelligent reader. Since I strongly recommend reading it, let me add that you should not be put off by its nominal length of 34 pages: In addition to this article being a pleasure to read, these are small pages and often only partially filled by the main article, with the remaining space for footnotes. These, although often interesting, can be skipped.

If you've ever had a conversation with someone about freedom of speech and been perplexed by, say, nonchalance about censorship or an odd conflation of the content of speech with the idea of freedom of speech, this article is especially for you: You are probably well aware that people are confused about at least one aspect of this vital debate, and you will likely profit from Smith's clarity regarding what people are confused about, how widespread the confusion is, and what is causing the confusion. I'll provide a few excerpts below, but even these won't do justice as a teaser. But perhaps they'll show why I think that if you share my concern about our continued ability to enjoy the right to freedom of speech, you should read this piece in its entirety. Its title is, "The Free Speech Vernacular: Conceptual Confusions in the Way We Speak About Speech."

Even if one is aware that many or most people have serious misconceptions about freedom of speech, Smith may surprise with some of her examples of intellectuals and opinion leaders offering muddled opinions on the matter. Noting that "not only rubes" use the terms "censorship" and "freedom" pliably, Smith provides an example from academia:

[I]n a recent law review article, Brian Leiter argues that, because much of what people have to say is of little value, we should temper our adoration of free speech and rein in its protection. In support, Leiter reasons that "[t]here is no free speech in the courtroom [where speakers must adhere to rules of admissible evidence and the like], and (almost) no one thinks there should be." We also accept restrictions on speech in classrooms and scientific research; therefore, he concludes, we would be justified in placing legal restrictions on all speech. Unfortunately, this, too, relies on a flagrant equivocation -- this time, between freedom of speech and standards of constructive speech. Freedom is not immunity from all standards of judgment (such as standards of logical strength, probative relevance, or pedagogical import). Rather, it is the absence of coercion; one's speech is free when it is not forcibly restricted by other people. [footnotes omitted, bold added] (71)
The number and severity of Smith's examples are, fortunately, matched by her clarity about what is going on. Shortly after the above comes the following list of "Confusions Concerning the Referent of 'Freedom' of Speech":
The point is, people sling around the phrase "freedom of speech" to mean several different and often inaccurate things.

An inventory (which is not necessarily exhaustive):
  1. People confuse the absence of external coercion of speech with the absence of normative standards' applicability to speech (such as in Leiter's reasoning).
  2. People confuse freedom of speech with the quality of speech -- with its objectivity or truth or wisdom, for instance (as in [Bill] O'Reilly's remark about a free press).
  3. People confuse freedom of speech with the value of speech or with the value of a particular thing that is said. Yet the fact that a particular person's speech makes no positive contribution to the advance of knowledge or to the resolution of a question tells us nothing about whether his speech is free. (Leiter's contention that we should rein in freedom of speech because much speech has little value reflects this confusion.)
  4. Closely related, people confuse the value of speech with the value of freedom of speech. Yet in fact, the value of a particular exercise of the right to speak (e.g., of Jim's particular utterance at the meeting last Friday) does not dictate the value of his, or of anyone's, having the freedom to say what he likes. The value of particular instances of speaking is not identical with the value of freedom of speech -- of that general condition.
  5. People often mistake freedom for license -- for the prerogative to do as one pleases, subject to no boundaries whatsoever. This notion is implicit in [Steven] Pinker, [Jeremy] Waldron, [Eric] Heinze, and [Emma] Teitel, for instance, each of whom viewed legal limits as exceptions to free speech that demonstrate its not being absolute. In fact, these would be exceptions (abnormalities) only on the supposition that the governing norm should be utterly boundless, that respect for true freedom demands allowing individuals carte blanche. Yet as John Locke recognized, "[f]reedom is not, as we are told, [a l]iberty for every [m]an to do as he lists: (For who could be free, when every other [m]an's [h]umour might domineer over him?)." And this mistake is linked with yet another.
  6. People often overlook the fact that "speech" is a wider category than "freedom of speech." "Speech" does not mean "freedom of speech."
    Image of inscription of First Amendment via Wikipedia.
    Indeed, it is for this reason that the First Amendment decrees that "Congress shall make no law . . . abridging the freedom of speech" rather than "no law abridging speech." "Freedom of speech" refers to a specific subset of speech: of all the speaking that a person is capable of engaging in, it is that portion that he may rightfully engage in (i.e., without infringing on others' rights). The Amendment's language respects the difference between that which a person can say and that which a person is entitled to say. Correspondingly, the fact that a person's speech is restricted does not entail that his freedom of speech is restricted. It might be or might not be, depending on whether the restricted speech falls within his rightful freedom of speech, that is, the speech that he is entitled to engage in. And in light of this, we should be able to appreciate a final confusion:
  7. People sometimes treat the ability to do something interchangeably with the freedom to do that thing. This is reflected in the complaints that because a person can no longer use Facebook or broadcast his political views at work, his rights are violated. On just a bit of reflection, it is easy to see that there are plenty of things that a person is unable to do that he remains free to do. I cannot speak Polish, as it happens, and I do not know how to juggle, yet no one has interfered with my freedom to do either. Had I wanted to learn, I have been free to do so. My inability results from factors other than others' coercion. Admittedly, other people play a more influential role in a person's inability to broadcast his beliefs through certain media (T-shirts at work, on Facebook, etc.). Yet those uncooperative people are not coercing him. His freedom is intact, although his desires may be frustrated. For freedom does not mean: "I get what I want." (Again, such a notion of freedom could only be fulfilled by trampling on others' freedom. It is thus not an internally coherent conception.) The larger point is simply that an inability does not entail a lack of freedom.
In short, this inventory makes plain that we often employ the term "freedom" of speech indiscriminately. We use it to refer to a range of phenomena that are actually distinct. [footnotes omitted, format edits] (71-74)
There are more kinds of serious confusion about freedom of speech than you probably think. And they are more widespread among intellectuals and pundits than you might imagine. Likewise, even if you appreciate the importance of freedom of speech, you will likely find even more reasons to insist on a clearer debate. I will leave here with Smith's warning about the danger attendant to the widespread, sloppy use of the term, "censorship":
The danger, in short, is the normalization of censorship. Whether or not that term is used, this is what takes place under a bloated conception of "freedom" of speech and under the latitude granted by the rejection of absolutes and the embrace of exceptions. Such normalization is not simply a far-off possibility. It occurs already. When an FCC Chair declares that, "there is censorship by ratings, by advertisers," conveniently excusing unwarranted government restrictions by effectively pleading, "don't object to the government for censoring -- we all censor, it's all the same," this is normalizing. When a Wall Street Journal columnist criticizes Google and Facebook for "excessive censorship," implying that some censorship would be fine, this is normalizing. [notes omitted] (p. 81)
I highly recommend reading this piece thoroughly, first as a means of improving one's own thinking about the matter (including Smith's indication of where the confusions originate), and second, to be able to recommend it to others intelligently.

-- CAV