Friday, August 28, 2015

Inherit Wealth, Not Culpability

A man is robbed, kidnapped, and driven 2,000 miles from his home.  In the 20 years he's held captive, his assailant uses the money he stole and forced labor of the kidnapped man to build a successful business, the profits from which enable him to buy a mansion and several cars.

The kidnapper dies, and all of his possessions pass on to his nephew, who is surprised to find the  prisoner locked in the basement.

"Please let me go free!" the victim begs.
"Of course you can go!  I'm not some kind of barbarian.  I'm ashamed to learn that my uncle would do this!  I would never think of doing such an atrocious thing!  Please, you may go at once!" says the nephew.

"Thank you, thank you!" the victim replies. "But, how will I get home?  I was taken over 2,000 miles and I have nothing but the clothes on my back."

"I recommend, then, that you get a job," replies the nephew, "nothing in this world is free."

"For 20 years your uncle forced me to work to support his business, which he started with money he took from me.  Without my contributions, you wouldn't have this house, your car, your business.  Can you at least spare me enough of these ill-gotten gains to get me home and back on my feet?  Maybe drive me home, if nothing else?"

"Well, that wouldn't be fair.  I didn't do this to you, so I'm not going to give you any hand-outs to make up for what somebody else did.  But... tell you what: I help those who help themselves. I'll give you a loan at slightly reduced interest so you can attend school to learn the skills you need for a job opening I've got at my uncle's -- I mean my -- company. You can pay me back out of your wages, if you get the job, otherwise you can work somewhere else and pay me back anyway." replied the nephew, who was definitely not some kind of barbarian.

"But --" started the victim.

"That's my final offer.  Take it or leave it." the nephew cut off.

The victim looked at the filthy rags he'd called clothing, felt around in his empty pocket, and listened to his stomach growling before biting his tongue, hanging his head, and taking the loan.

A few years later, after he got the job, his co-workers said they thought he'd been given special consideration in the hiring process because of his history with the owner. "It's just not fair," one was heard to gripe.  He was right, of course.  It wasn't fair at all.

Saturday, August 22, 2015

The Fidelity of Man

Lo, every man who's born bears the same curse,
About his thirteenth year, 'twill activate,
Any lass, with the right act rehearsed,
Can steal his will; his thinking captivate.

All she must do is speak the magic words,
Twist her shape just so, gently touch him here,
He may resist at first, but it's absurd:
If she persists, his mind she'll domineer.

Through strength of will, this fate he can delay,
But o'er long term, he has just one defense,
If one begins the spell, he cannot stay;
To keep self-rule, he must leave her presence.

So if he seeks never to be cajoled,
A faithful man will flee while in control.

Tuesday, August 11, 2015

I'm (We're) Obviously Not Outraged By Michael Brown's Death

I'm not outraged by Michael Brown's death.  Don't get me wrong, I definitely recognize his death as an atrocity. I am ashamed of its occurrence in my country by my government.  I would much rather that it hadn't happened, and that things like it wouldn't happen in the future.  However, I'm definitely not outraged.  I probably said, on hearing the news, that I was outraged, but it wasn't true.  If I were outraged, I probably would have written and published something in the first few hours of hearing about it before looking around for something else more substantial I could do.  It's been a year now, and I'm finally getting around to finishing this draft I last edited 8/16/14.

That's not what outrage looks like. It's horrible, really, when you think of how many high profile names I could have used for this title, in just the past couple of years, and how many low profile names I could probably find if I looked. It's also horrible that Black people have to keep dying for me to remain focused on the topic of changing the system that's killing them. That wouldn't be the case if I were outraged; I'd be thinking about it all the time, not just when I read about another execution-without-trial in the news, or see another anniversary roll by without any substantial changes to prevent it happening again.

If I am being honest, for me it is merely a shame. A damned shame. Much like if I heard of a lion being poached. That's in contrast to somebody who, for instance, has to wonder every time they drive a car, shop for s'mores, call the police for protection, call for an ambulance, share a home, be out near other Black people, (to name but a few activities) whether an encounter with the police could prove ultimately fatal. For me to claim outrage would be an attempt at appropriating the moral high ground of being opposed to an injustice without either facing its effects myself or actively attempting to undo it. Exaggerating my feelings about it to position myself as "one of the good ones" cheapens the impact of everyone whose outrage is authentic.

I know I'm not alone, here.  The fact that police really only gear up to contain protests in Black neighborhoods after they shoot an innocent Black person proves that nobody else must be truly outraged.  The fact that even our "Progressive" politicians typically ignore the Black Lives Matter campaign shows that we don't even prioritize it on an intellectual basis.  It's not something we're going to disrupt our own lives to try to change; expect no uprising from us.  We know what the police do is wrong, but we have also been so successfully distanced from the people being oppressed that it doesn't register to us as our problem.  We believe so firmly that this could never happen to us that we won't risk anything to protest to enforce the rule of law and the constitutional rights of Black citizens. We allow the rule of law to decay and the application of "justice" to become arbitrary and excessive because we believe ourselves unlikely to be personally harmed.  Unlawful police killings of Black Americans are outrageous, but I'm not outraged.  I'm complacent at best, complicit at worst.

So unless and until I actually do something that takes real commitment, I'm not going to say I'm outraged anymore even though I know I should be, and I don't think anyone else who isn't being targeted should either. Let me be clear: I'm not saying I want everyone to stop saying they're outraged; what I want is for everyone to demonstrate their outrage through action (pun definitely intended). Imagine, for instance, if everyone who says they're outraged when these atrocities occur actually took to the streets to demand national changes in police policies and additional constitutional protections.  If everyone called up their congressmen with the same message.  If everyone attended meetings of their political party primary to demand it be a top agenda item (Oh, or maybe something like this?). If everyone researched judges, District attorneys, police chiefs, sheriffs, and any other elected law enforcement VIPs to change police policies in their own localities.

But most of us are not outraged.  Perhaps if we stop saying we are without accompanying action, we'll remember that we need to contribute more than words and really get involved in bringing social justice. It doesn't matter what I feel or think about racism; all that matters is what I do. May this serve as a reminder, to me more than anyone, that it's time to get outraged; it's time to do something, and then another thing, and then another thing, and then another thing, until #BlackLivesMatter to our society.

Monday, July 27, 2015


Let's imagine a world.  It's a fairly simple world.  Everyone is given tokens every day to go to the local casino, and they can spend those tokens on the games there.  Some games pay out better if you're skilled or really smart, some pay off if you put in tremendous amounts of time, some are just pure chance.  So, the most talented and dedicated almost always do the best within their respective localities.
However, there are differences between these locations.  In some, the jackpots for the games are all higher.  In others, the odds are stacked in favor of the player, so most people are winners and some amass huge fortunes.  In some, the players are all given more tokens to begin with, so they have much better odds.  In others, the prices are all lower, giving players virtually infinite chances to win.  In some lucky places, two or more of these bonuses are applied.

The end result is that there are huge differences in outcomes for neighborhoods who should be statistically equal absent their local circumstances.  Within each neighborhood, the most talented and dedicated usually become the most successful, with a few others matching them through pure luck.  However, the biggest winners in the country are almost invariably determined by where somebody grew up rather than what they did while they were there.

Wouldn't that be a batshit crazy world?

Monday, June 2, 2014

A Fresh Consideration of the Minimum Wage

For generations, our society has been having a discussion about what constitutes a "fair" wage.  In the current debate, I am able to discern to prominent sides.  The conservative position states that wages represent the market value of a worker's labor in a particular field, and so are naturally fair.  Furthermore, any attempt to raise those wages artificially will make workers cost more than they are worth, and therefore "kill" jobs.  The liberal side says that the market will naturally lead to exploitation of low-skilled workers, and so an arbitrarily determined minimum wage must be established to protect workers from accepting jobs that do not pay well enough.

First, let's examine what it means that wages represent "market value."  The conservative assumption is that a wage represents the value a worker contributes to their firm (their productivity).  This means, basically, that each worker is being paid the exact amount that they add in revenue to a firm, so that raising their wage would make them cost more than they produce, killing their job.  However, in reality, workers tend to produce more value for a firm than they cost, resulting in profit for the firm.  A worker's productivity is the upper limit to what they can be paid, but they would only be paid that much if an employer couldn't find somebody else willing to work for less.  This is the primary reason why jobs with specialized skills pay more than jobs that any bozo could do.  The fewer people could replace you, the more bargaining power you have, and the higher wage you can demand.

There is another aspect to productivity that bears further consideration.  It is literally impossible to determine the actual productivity of any individual worker in a firm.  One can measure the marginal productivity of adding a worker of a particular type, but that is almost meaningless in determining one's actual, individual productivity.  The reality of the modern business is that all of the workers contribute to a larger whole, and how much each contributes is hopelessly entangled with how much the others contribute, and what productive capital is available.

Think about it this way: the CEO at McDonald's appears to be producing several million dollars of value, because that is what he is paid.  And yet, if you removed all of the cooks, cashiers, and managers, the CEO would produce exactly $0 in revenue for the firm.  How, then, can it be said that he is producing several million dollars worth of value for the firm?  How can you separate his productivity from the rest of the employees' when the productivity of each relies on all the others?

The truth about our society is that we have developed such an extensive infrastructure of productive capital that each worker actually contributes very little; most of it is the machines, structures, procedures, systems, and culture that form the environment in which they work.  The wages workers receive are thus more representative of how replaceable they are, not how valuable they are.  The conservative belief that the market will produce wages that reflect a worker's productive value is based on deeply flawed assumptions.

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Now, let us examine the liberal proposition that the government should set a minimum wage to protect workers from taking jobs below a threshold pay level.  First, we must consider the primary objection: does the minimum wage increase unemployment? The answer, I believe, is "it depends."  As stated earlier, the productivity of any given worker is impossible to determine, but the average productivity of all workers can be.  What is certain is that if the minimum wage rises above the average productivity of workers, then some will have to be laid off.  Some will also probably be laid off at lower levels than that if their marginal productivity is found to be lower than the wage they are paid.  Thus, if the minimum wage is low enough, it will not significantly impact employment, but if it is set too high, it will kill jobs and increase the workload for those who remain.

This is intuitively obvious; if the government raises the minimum wage by $0.10 an hour, it will almost certainly not have an impact on employment.  However, if the minimum wage were suddenly raised to $400 per hour, the vast majority of jobs would be instantly terminated.  The trick, then, is finding the highest wage at which employers will not have to reduce employment.

Unfortunately, there is not one such level.  Each firm has its own average wage, and each type of worker within each firm has its own marginal productivity curve, so some firms will end up cutting positions at much lower wages than others, and some types of positions are much more vulnerable than others.  

Luckily, there are at least some patterns in the distribution of which firms would lay off workers at which level.  Basically, the more industrialized a region is, the higher a minimum wage it can support.  This is because productive capital increases the productivity of each worker.  This is why urban centers like Los Angeles, New York, and San Francisco have relatively high wages, whereas rural areas tend to have much lower wages.  The disparity in wages between these areas implies that minimum wages should not be uniform between them, or else they will either be insufficient for the cities or stifling for the rural ones.

Basically, that means state-by-state or, better yet, municipality-by-municipality laws would make it easier to target the minimum wage to the appropriate level for each area.  Even so, achieving the correct level would be quite a technocratic feat, and adjusting it with enough flexibility to match the constant flux of markets would be virtually impossible.  Perhaps it could be argued that we'd have it close enough to be worth the losses in the job market, but I think we should approach the problem from the other direction.

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The job market, like any market, determines prices through supply and demand.  In our case, there is a much greater supply of workers than demand for them -- that is, a lot more people want to work than companies want to hire.  Relatedly, there are huge legal, financial, and inertial barriers to self-employment, so most people must work for an existing firm in order to generate income (as opposed to going into business for themselves).

Additionally, we now live in a society where the majority of people have virtually no assets and a lot of debt.  This means that almost everyone must work in order to afford basic necessities like food, clothing, and shelter.

This is great news for employers, because it means they will be able to find lots of people who are desperate for jobs, and will therefore work for very low amounts.  And, because of the huge capital infrastructure, those workers will generate great profits for their employer.  The situation is not so great for workers, and even worse for the unemployed.

The solution to this problem is to shrink the work force.  Reduce the supply of laborers and their wages will rise.  No need to force employers not to hire below a certain wage; just reduce the number of workers so that each has more negotiating power and higher marginal productivity.  There are various ways we could achieve this, and I'll post about that another time.  Stay tuned for my solution to increasing income and wealth inequality!

Wednesday, November 27, 2013

10 Tips for a Liberal Thanksgiving

My step-dad posted this silly attack on Libertarianism, and I figured one good caricature deserves another, so please enjoy my 10 Tips for a Liberal Thanksgiving.

1.  Pick up your FREE* turkey from your local Federal distribution center.  We decided that since so many people buy turkey on Thanksgiving, it would be better if we all pooled our resources and negotiated a really good deal with one producer.  All you have to do is make an appointment at the distribution center, fill out the attached 17 forms in triplicate, provide 2 forms of photo I.D., and wait 2-4 weeks for delivery of your FREE* turkey!

Of course, you’re not required to get one, but *your taxes already paid for it (and the delivery and distribution centers and their workers) so you probably should.  If you wanted ham, nobody’s stopping you from buying one of those in addition to what you already paid, or if you want a higher end turkey than we provide, you can probably afford to have paid twice anyway, so don’t complain.  Be thankful that you can afford luxury items, you greedy fat cat!

2.  Anyone who does the cooking during Thanksgiving must be paid $10 per hour, doubled for Holiday pay, and taxed at roughly 20%.  Families found to have neglected to pay the cook(s) or pay taxes will be subject to fines and jail time.

3.  Enjoy your meal, but please be aware that a Social Welfare Officer will be joining you for dinner!  He is there to guarantee that nobody takes in more than their daily recommended caloric requirements, as decided by a team of bureaucrats in Washington.  Trust us, it’s for your own good, as it will keep you healthier and keep your health care costs lower, which in turn will keep your taxes low!  Everybody wins!

4.  Once each family member has had his or her daily sustenance needs met, your Social Welfare Officer will collect the leftovers for redistribution to families that have not had their daily caloric requirements met.  This ensures that everyone gives and receives their fair share, and everyone will have something to be thankful for!

5.  All dinners must begin between 4:00-5:00 p.m.  This is to help ensure that ample time will be available after the meal for redistribution of leftovers to needy families.  Families found to be eating outside of the appointed dinner time may be subject to fines.

6.  Do not be alarmed that your Social Welfare Officer is armed.  He is part of a special class of citizens that are trustworthy, and would never misuse his weapon under any circumstances.  Also, it’s almost inevitable that some fat, wealthy families will refuse to share their leftovers with the truly needy, so a show of force may be required to ensure that everyone can have a great Thanksgiving.

7.  Please select all recipes from the federally provided list of acceptable options.  Remember, you’re not just cooking for your own family; you are cooking for all of the needy as well.  Families will be fined for any dishes that do not conform to the federal list, as those confiscated leftovers cannot safely be redistributed and must be replaced at taxpayer expense.
8.  You are free to say grace, and encouraged, as this is a fine American tradition and your right under the First Amendment.  However, please be aware that if you choose to bless the food, you must bless it according to each tradition represented in America, as the food may be distributed to members of various religious affiliations.  Attached you will find federally approved methods of blessing foods according to each religion to which your meal may later be redistributed.

9.  Be careful while you are eating not to exceed your caloric limits before desert.  It would be tragic if you were unable to consume one of the two government-approved options of Apple of Pumpkin pie!  Our favored corporate producer has worked long and hard to provide this sub-quality, subsidized delicacy at prices far more astounding than their flavor.

10.  Please be prepared to welcome a government-assigned guest to your table.  Each family will be required to sponsor one guest per five family members (minimum one) who would otherwise have nowhere to share a family meal.  Many are mentally unstable or criminally dangerous, so you will be glad that your Social Welfare Officer is armed.  Please treat your guests exactly as you would treat your own family.  Remember, we’re all in this together, and everyone should have something to be thankful for!

Monday, August 19, 2013

GDP: The Great Deceiver

Gross Domestic Product (GDP) is commonly referenced in public discussion and policy decisions.  It could be argued that GDP is the most important statistic in the world of politics, both domestic and international.  Given how important this particular measurement has become to our political decision-making, it is alarming when we consider that it is a very loose approximation for economic output, not a precise measurement.

 GDP does not measure what was produced in a year, as it claims to.  Rather, it measures what people paid for in taxable transactions in a year.  Though related, these two values can diverge quite significantly, and growth or decay in one does not necessitate a similar move in the other.  Consider the following scenarios:

 A family has a small plot of land behind their home which they use to grow vegetables and fruits.  They eat all that they produce, and they never sell any of it.  One year, there is a drought and all of their fruits die.  They produced less, so production is down.  But they have to go out and buy their produce now, so GDP actually goes up!

A jewelry store charges $500 for a necklace.  Each one sold increases GDP by $500.  Then they have a sale, 30% off!  Now the exact same necklaces only raise GDP by $350 each.  GDP changes while actual production remains constant.

A man stays at home to cook food, educate his children, maintain the house and their belongings, and bargain hunt.  Then, he decides to enter the workforce to bring in more money.  To achieve this, the children go to school and a teacher is paid, but they the kids actually receive less education.  Repairmen and cleaners are hired, but the home and garden are kept in worse condition.  Restaurants and delivery boys receive payments, but the family receives less nutrition.  The man works and receives payment, but has less free time left over and a very similar income:expenditure ratio.  GDP expands tremendously while production improves only slightly.

A fishery improves net technology and manages to capture 99% of the fish stocks in its area.  GDP rises sharply (that year), but the productive capacity of  fishery was actually severely reduced.

A band of hooligans breaks all the store windows on a street.  The store owners all pay for replacements, so at the end of the day they have the same amount of stuff minus the cost of window repair.  Yet GDP has risen!

A large, thriving shadow market exists for a banned substance.  The government lifts the ban, and all of the shady operations move into formal economy.  GDP rises even if less of the substance is produced there.

 In conclusion, an increase in GDP could reflect an increase in production.  However, it could also reflect liquidation of productive resources, replacement of damaged capital or goods, formalization of shadow markets, inflation, price gouging, or a decrease in self-reliance.  Given how ambiguous this term is, it seems crazy to me how much policy is tied directly to it.