Middle-of-the-Road Policy Leads to Socialism

Mises vs. Mises: The Death of Socialism

by Gary North

The most influential thing that Ludwig von Mises (1881-1973) ever wrote was a brief article in 1920 on socialist economic calculation.

He argued that socialist central planning is impossible, because without a system of free markets, nobody knows what anything costs, and therefore nobody knows what anything is worth.

That argument convinced a whole generation of young men to abandon socialism. F. A. Hayek was one of them. Wilhelm Roepke was another. There were dozens of them, and for a time they became pioneers of Austrian school economics. But, one by one, they abandoned the position. There were various reasons, but none of the recruits of the early 1920s remained a supporter by 1950. Hayek stuck with more of it than most of them did and so did Roepke. They ceased to be Austrian school economists.

In 1950, Mises gave a lecture, and that lecture became an article. The article was widely read in Misesean in circles, which were outside of academia. It was a great article. It had a great title. In fact, it probably was best title he ever came up with. It was even a great marketing title. Here was the title: “Middle-of-the-Road Policy Leads to Socialism.”

The article was published in a collection of articles written by Mises and collected by Mises: Planning for Freedom. It was published in 1952. It was the most effective book Mises ever wrote in terms of getting his ideas across to laymen. The lectures were easy to understand, and the book sold pretty well. I am not saying it was his greatest book, but I think it is probably the best book for somebody with no training in economics to be introduced to Austrian school economics. The Mises Institute makes available both the book and the article.

Let me summarize it for you. Mises argued that state intervention distorts the free market economy. These distortions lead to public complaints by voters that the economy is not working properly. The voters pressure the government to fix it, so the government passes another law. Law by law, distortion by distortion, the economy gets worse. The society does not start out on a path to socialism, but the interventions of the market expand the state’s power, so the result is ultimately the establishment of a socialist economy. He wrote: “The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”

In the last section, he denied that socialism is inevitable. But his article offered only evidence to the contrary. He lamented:

Even in this country which owes to a century of “rugged individualism” the highest standard of living ever attained by any nation, public opinion condemns laissez-faire. In the last fifty years thousands of books have been published to indict capitalism and to advocate radical interventionism, the welfare state and socialism. The few books which tried to explain adequately the working of the free market economy were hardly noticed by the public.

He ended the essay with this:

The impact of this state of affairs is that practically very little is done to preserve the system of private enterprise. There are only middle-of-the-roaders who think they have been successful when they have delayed for some time an especially ruinous measure. They are always in retreat. They put up today with measures which only ten or twenty years ago they would have considered as undiscussable. They will in a few years acquiesce in other measures which they today consider as simply out of the question. What can prevent the coming of totalitarian socialism is only a thorough change in ideologies. What we need is neither anti-socialism nor anti-communism but an open positive endorsement of that system to which we owe all the wealth that distinguishes our age from the comparatively straitened conditions of ages gone by.

Detroit’s death by democracy

When there is no penalty for failure, failures proliferate

By George F. Will

In 1860, an uneasy Charles Darwin confided in a letter to a friend: “I had no intention to write atheistically” but “I cannot persuade myself that a beneficent and omnipotent God would have designedly created the Ichneumonidae with the express intention of their feeding within the living bodies of caterpillars.” What appalled him had fascinated entomologist William Kirby (1759-1850): The ichneumon fly inserts an egg in a caterpillar, and the larva hatched from the egg, he said, “gnaws the inside of the caterpillar, and though at last it has devoured almost every part of it except the skin and intestines, carefully all this time avoids injuring the vital organs, as if aware that its own existence depends on that of the insect on which it preys!”

Government employees’ unions living parasitically on Detroit have been less aware than ichneumon larvae. About them, and their collaborators in the political class, the question is: What. Were. They. Thinking? Well, how did Bernie Madoff or the Enron executives convince themselves their houses of cards would never collapse?

Here, where cattle could graze in vast swaths of this depopulated city, democracy ratified a double delusion: Magic would rescue the city (consult the Bible, the bit about the multiplication of the loaves and fishes), or Washington would deem Detroit, as it recently did some banks and two of the three Detroit-based automobile companies, “too big to fail.” But Detroit failed long ago. And not even Washington, whose recklessness is almost limitless, is oblivious to the minefield of moral hazard it would stride into if it rescued this city and, then inevitably, others that are buckling beneath the weight of their cumulative follies. It is axiomatic: When there is no penalty for failure, failures proliferate.

This bedraggled city’s decay poses no theological conundrum of the sort that troubled Darwin, but it does pose worrisome questions about the viability of democracy in jurisdictions where big government and its unionized employees collaborate in pillaging taxpayers. Self-government has failed in what once was America’s fourth-­largest city and now is smaller than Charlotte.

Competing Currencies in Somalia

The Great Debate

by Finbar Feehan-Fitzgerald

For years a debate has raged in monetary economics over the credibility of the theory that a more stable monetary system would emerge were the system to allow for concurrent currencies operating under no legal restrictions.

One side of the debate, represented most prominently by Milton Friedman, believes that the emergence and acceptance of a new currency would be hindered — and its ability to supplant an incumbent currency all but eliminated — by network effects and/or switching costs.

In general, a network effect results when the desirability of an item depends upon the number of others using it. Since money is demanded due to its acceptability among others for future payment, money would appear to have network effects.

The other side of the debate, represented most notably by Friedrich Hayek, blames legal restrictions for preventing people from switching currencies during times of poor monetary management in the incumbent money.

In Hayek’s ideal system there was no contractual obligation on the part of the money issuers to redeem their notes with some underlying commodity. The unbacked, irredeemable notes then trade against each other and other commodities at fluctuating exchange rates on the open market.

It was Hayek’s belief that competition for customers would force issuers of particular currencies to maintain a stable exchange rate and desist from engaging in reckless monetary practices.

The Somali Shilling

Most economists have come to accept Friedman’s position. There has, however, until recently, been no empirical illustrations of the validity of each opposing view. Any example of poor monetary management in the past has been marred by significant legal restrictions on the use of other currencies.

The Hayek versus Friedman debate cannot be solved empirically; however, a real-life example of concurrent currencies circulating absent any legal restrictions would contain some heuristic value.

The real-life example is Somalia. The collapse of Mohamed Siad Barre’s Democratic Republic of Somalia in 1991 gave us the unique opportunity to observe concurrent currencies absent any legal restrictions in practice.

Leisure, The Basis of Culture

How Much Should We Work?

by MARK SKOUSEN

“How inscrutable is the civilization where men toil and work and worry their hair gray to get a living and forget to play!” —Lin Yutang¹

Ever since moving to the Bahamas in 1984, I have been intrigued by the idea of leisure—shedding the workaholic rat race to be “free and easy” and “letting oneself go,” to quote the German philosopher Josef Pieper. To Pieper, leisure is more than merely getting off work at the end of the day or taking a vacation; rather “the soul of leisure lies in celebration” of nature, life, and the divine in perfect calm and relaxation.²

During my two-year sojourn in the “island of June,”³ I picked up a copy of Bertrand Russell’s celebrated book In Praise of Idleness. Russell, author of more than 60 books, was never idle—what he really meant was leisure time to pursue one’s own loves and goals rather than working for someone else’s objectives. In typical contemptuous style, Russell lambasted the Western penchant for hard labor: “The morality of work is the morality of slaves, and the modern world has no need of slavery.” Furthermore, “The wise use of leisure . . . is a product of civilization and education. A man who has worked long hours all his life will be bored if he becomes suddenly idle. But without a considerable amount of leisure a man is cut off from many of the best things. . . . We attach too little importance to enjoyment and simple happiness.” Russell believed that ideally man should work only four hours and spend the rest of the time engaged in playful activities, not passive activities like watching sports or television, but intellectual and scientific pursuits.⁴

Work Ethics: The East Versus the West

The Judeo-Christian West has always emphasized a strong work ethic, but what about the East? Lin Yutang, the celebrated Chinese libertarian philosopher, insisted that the American virtues of efficiency, punctuality, and goal-setting are actually “vices.” “From the Chinese point of view,” declared Lin, “the man who is wisely idle is the most cultured man. . . . Those who are wise won’t be busy, and those who are too busy can’t be wise.” Referring to Western business practices, Lin ruminated, “Americans have now come to such a sad state that they are booked up not only for the following day, or the following week, but even for the following month. An appointment three weeks ahead of time is a thing unknown in China.”⁵

Lin wrote his essay on loafing in 1937. Today Lin would be aghast at the degree in which the East has adopted the West’s working patterns, and even surpassed them. Anyone who has been to Hong Kong, Japan, or Korea would laugh at any suggestion that Americans are overworked.

Is Overwork an Inherent Defect in Capitalism?

Yet that is precisely what Harvard economist Juliet Schor claims in her bestseller, The Overworked American, first written in the early 1990s. Critics of the market complain that the capitalist system inherently promotes overwork and discourages leisure. According to Schor, the constant demands of the consumer society and global competition are mandating more work hours and exploding consumer debt. Leisure time is on the decline, she says. Eight million Americans are holding two or more jobs, the highest figure since data were first collected 25 years ago. Schor writes that U.S. manufacturing employees work 320 more hours per year than their German or French counterparts. She proposes, among other things, a government-mandated three-week paid vacation for all U.S. employees.⁶

The Price Is Right

The Ongoing Folly of Just Price Theory

by ANDREW HAINES

If you want a veneer of moralism on your economic policy, send in the bishops. 

In recent testimony given to the U.S. Senate Committee on Health, Employment, Labor and Pensions the Bishop of Stockton, California, Stephen E. Blaire, argued for an increase in the minimum wage on the grounds that a just wage is necessary to promote and protect human dignity.

“Work has an inherent dignity,” said Bishop Blaire, “so just wages gained from work support that dignity. Insufficient wages violate it.”  

His words jibe with the teachings of medieval philosopher St. Thomas Aquinas. Aquinas believed that goods held an objective value, and selling a good for more than that objective value would be unjust. So the theory of just price holds that a good or service has, well, an objectively just price. Purchasing or selling a good for anything but the established just price violates justice. 

The trouble is, the only true just price is determined by the desires of buyers and sellers. Not the priest. Not the statesman.

In other words, the theory of a just price prompts the question, “Who decides what price is just?” Economics outgrew the theory of a just price during the Enlightenment and again in the late nineteenth century. Economists William Stanley Jevons, Léon Walras, and Carl Menger all revolutionized economics by focusing upon subjective valuations. All people have different preferences. For example, Joe wants to buy a candy bar with his dollar while Mary wants to buy a Coke with hers. 

All people have the inherent ability to rank their preferences in order of satisfaction. Scarcity, being a fact of nature, forces us to make such preference rankings. Since we cannot satisfy all of our desires, we must choose some over others. The very act of choosing one preference over another implies a ranking and reveals which good or service is more satisfying to the individual. 

If value is subjective, then each person values goods differently. Any one person or group of people cannot establish a “just price”—and matters don’t change in the case of labor. The natural interaction between the buyer who wants to get the most for the cheapest price, and the seller who wants to sell the least amount for the highest price, will form a happy median called equilibrium. Equilibrium assumes there are multiple buyers and multiple sellers, all of whom are having that same set of natural interactions. Equilibrium serves as the price determined by simple supply and demand. 

Apply this logic to wages. Arguing for just wages is the same as arguing for just prices. In that line of thinking lays the idea that someone’s labor has a defined value. Many potential employees value and rank their time the same way they rank everything else. Some people value their time more than others. Those who do not value their time highly will be willing to work for less than those who do. The wage is simply the price established between the buyer of labor (the employer) and the seller of labor (the employee). Wages cannot be established by fiat—nor by any other method than the agreement struck between the employer and employee—without running afoul of each party’s preferences. The ethicist must surely have something to say about the “justice” of tossing out the preferences of two parties to an agreement.

A judicial coup d’état in Britain

In a democracy, parliament, not the judiciary, must have the last word on policy

by Jon Holbrook

This week has been an important one for welfare benefit reform in the UK. Which is strange, given that the House of Commons is in recess and the Welfare Reform Act received royal assent in March 2012.

The reason for this is that, having been unable to prevent the Welfare Reform Act from clearing its democratic hurdles, a number of campaigners and their lawyers have been busy seeking to hinder the act’s implementation by undemocratic means: an appeal to the judiciary. In addition to Tuesday’s failed judicial reviewsagainst the bedroom tax, other legal challenges against the benefit cap, whereby no household may receive more than £500 of benefits each week, are currently working their way through the corridors of the Royal Courts of Justice.

The problem of judicial involvement is not limited to government policy on welfare benefits. On Monday, the High Court gave the trade union Unison permission to challenge government policy that now requires applicants to pay fees before issuing claims in the Employment Tribunal. In fact, since the failed legal challenge to the coalition budget in June 2010, the government has faced a succession of judicial challenges to its policies. Local authorities have also faced regular judicial reviews on policy issues, particularly on budget cuts.

Most of these judicial challenges fail, but some succeed, such as the Burnip casewhere a different aspect of the government’s housing benefit policy was declared unlawful by the Court of Appeal in 2012. However, focusing on whether the claimants win or lose misses the point. And that point is: individuals and organisations are challenging policies in the courts that have been made by our elected representatives in central and local government.

It doesn’t matter that judges often spell out the limited ambit of their jurisdiction to intervene. Lord Justice Laws stressed this point in the recent bedroom-tax cases, when noting that secretary of state for work and pensions, Iain Duncan Smith, enjoyed a broad margin of discretion on the formulation of policy. Note, however, that this is not an unfettered margin of discretion with boundaries set only by parliament; no, it’s a margin of discretion with boundaries set by the courts.

More chilling are dicta from the House of Lords in another welfare benefit case (Carson, 2005), which assert how the courts will set limits on the extent of parliament’s discretion: ‘The essential question for the court is whether the alleged discrimination… can withstand scrutiny.’ Unless the answer is plain, ‘the court’s scrutiny may best be directed at considering whether the differentiation has a legitimate aim and whether the means chosen to achieve the aim is appropriate and not disproportionate in its adverse impact’.

These words make clear that it is not for parliament to decide if a policy has a legitimate aim. Rather, it is the courts which have the final say on both the aim and the means of achieving it. If judges find the aim illegitimate, or the means disproportionate, then they can declare a policy unlawful.

The Childless City

It’s hip, it’s entertaining—but where are the families?

by Joel Kotkin and Ali Modarres

What is a city for? Ever since cities first emerged thousands of years ago, they have been places where families could congregate and flourish. The family hearth formed the core of the ancient Greek and Roman city, observed the nineteenth-century French historian Fustel de Coulanges. Family was likewise the foundation of the great ancient cities of China and the Middle East. As for modern European cities, the historian Philippe Ariès argued that the contemporary “concept of the family” itself originated in the urbanizing northern Europe shown in Rembrandt’s paintings of bourgeois life. Another historian, Simon Schama, described the seventeenth-century Dutch city as “the Republic of Children.” European immigrants carried the institution of the family-oriented city across the Atlantic to America. In the American city until the 1950s, urbanist Sam Bass Warner observed, the “basic custom” was “commitment to familialism.”

But more recently, we have embarked on an experiment to rid our cities of children. In the 1960s, sociologist Herbert Gans identified a growing chasm between family-oriented suburbanites and people who favored city life—“the rich, the poor, the non-white as well as the unmarried and childless middle class.” Families abandoned cities for the suburbs, driven away by policies that failed to keep streets safe, allowed decent schools to decline, and made living spaces unaffordable. Even the partial rebirth of American cities since then hasn’t been enough to lure families back. The much-ballyhooed and self-celebrating “creative class”—a demographic group that includes not only single professionals but also well-heeled childless couples, empty nesters, and college students—occupies much of the urban space once filled by families. Increasingly, our great American cities, from New York and Chicago to Los Angeles and Seattle, are evolving into playgrounds for the rich, traps for the poor, and way stations for the ambitious young en route eventually to less congested places. The middle-class family has been pushed to the margins, breaking dramatically with urban history. The development raises at least two important questions: Are cities without children sustainable? And are they desirable?

Best-selling urban booster Richard Florida, a pied piper for today’s city developers and planners, barely mentions families in his books, which focus instead on younger, primarily single populations. Eric Klinenberg, a New York University professor and author of the widely touted Going Solo, celebrates the fact that “cities create the conditions that make living alone a more social experience.” But perhaps the most cogent formulation of the post-family city comes from the sociologists Richard Lloyd and Terry Nichols Clark, who see the city, and particularly the urban core, as an “entertainment machine.” In their view, city residents “can experience their own urban location as if tourists, emphasizing aesthetic concerns.” Schools, churches, and neighborhood associations no longer form the city’s foundation. Instead, the city revolves around recreation, arts, culture, and restaurants—a system built for the newly liberated individual.

The Financial System Doesn't Just Enable Theft, It Is Theft

The first panacea for a mismanaged nation is inflation of the currency; the second is war.

by Charles Hugh-Smith

It's not just inflation that is theft.

It is painfully self-evident that our financial system doesn't just enable theft, it is theft by nature and design. If you doubt this, please follow along.

Inflation is theft, but we accept inflation because we've been persuaded it benefits us. Here's the basic story: our financial system creates new credit money (i.e. debt) in quantities that are only limited by the appetites of borrowers and the value of assets they buy with freshly borrowed money.

If this expansion of credit money exceeds the actual growth rate of the real economy, inflation results.

Since our economy is ultimately based on expanding debt in every sector (government, corporations, households), inflation is a good thing because it enables borrowers to pay back old debt with cheaper money.

For example, if J.Q. Citizen makes $50,000 a year and owes $50,000 on his fixed-rate mortgage, what happens if inflation jumps 100%? Assuming J.Q.'s wages rise along with prices, his earnings jump to $100,000 while mortgage remains at $50,000. Though prices of everything else have also doubled, the debt remains fixed, making it much easier for J.Q. to service the mortgage. Before inflation, it might have taken ten days of earnings to make enough money to pay the mortgage payment; after inflation, it only takes five days' wages to make the payment.

This apparent benefit evaporates if wages do not rise along with the price of goods and services. If earned income stagnates during inflation, the purchasing power of wages declines. If it took two days' earning to pay for groceries and gasoline before inflation, now it takes three days' wages. The wage earner is measurably poorer thanks to inflation. How much poorer? Take a look: (chart by Doug Short) 

Eulogy for the Castro revolution

Let Cuba be Cuban, again

By Roger Noriega 

Today in Havana, the Castro regime will stage a commemoration of the 60th anniversary of the 1953 attack on the Moncada Barracks in Santiago, Cuba. As the revolutionary tale goes, the attack was a tactical defeat but set the stage for Fidel Castro’s victory a mere six years later. Six decades later, we can conclude that the attack was a tragedy, quite literally because it gave impetus to Castro’s tropical totalitarianism.

Last week, Fidel’s 82 year old little brother, Raul, delivered a speech that was an unwitting eulogy for the revolution. Before the powerless “National Assembly of People’s Power,” the aging dictator groused about uncouth youth who curse and urinate in public, saying, “They ignore the most basic standards of gentility and respect.” Never mind that Raul is the triggerman for a thuggish dictatorship that has destroyed the lives of young and old alike formore than 50 terrible years.

When Fidel turned over the presidency to his brother five years ago, I predicted that Raul had neither the capacity nor desire to bring about meaningful change in Cuba. I am sad to say that he has proven me right.

On repeated occasions, I have cited empirical data that expose the breathtaking destruction wrought by communism against Cubans:

· Castro apologists have painted pre-revolutionary Cuba as a repressive backwater, a picture that is not supported by the evidence. In fact, the Cuba Castro took over in 1959 was one of the most prosperous and egalitarian societies of the Americas, near the top according to most sociodemographic indicators, behind only Argentina and Uruguay and on par with lesser-developed European countries of the day, such as Spain and Portugal.

Although, to be sure, the country suffered from the inequalities of wealth that plagued all countries in Latin America at that time (and still do), Cuba had the largest middle class of its peers in the Western Hemisphere.

· Before the revolution, Cuba had the third highest daily caloric intake in Latin America, the fourth highest literacy rate, the second highest number of passenger cars per capita, and ranked fourth in the production of rice. While the revolution touts Cuba’s low infant mortality rate today, they fail to mention that before Castro the island had the best such rate in Latin America, or that, today, regime hospitals coerce poor and uneducated women into having abortions.

· The country was also culturally advanced before Castro seized power, with the third highest newspaper circulation per capita and second highest cinema attendance per capita in Latin America.

· In the 1940s and 1950s, the island had progressive labor, land tenure, education, and health laws that rivaled those of many of its neighbors in the region.

What are the achievements of the Castro revolution? Decimation of Cuba’s social fabric and economic productivity. Destruction of its democratic institutions. Concentration of all power and coercive means in the hands of unelected leaders and unaccountable apparatchiki. Conspiracy to sow violence and death in the form of armed revolutions. A never-ending exile of the country’s most creative people. Corruption. Desperation.

This is what the Cuban regime is celebrating today? At long last, have they no shame? Of course not. That is why Raul Castro can wag his finger at unruly Cubans for behaving like – to borrow a word bandied about by Josef Stalin – “hooligans.” The desiccated Castro regime is so bereft of new ideas that its leaders can do little more than blame the victims of its old ideas. Its plan for economic survival is to find a new victim, conspiring with a puppet regime in Venezuela to bleed away what is left of that country’s oil revenue.

Depressing, huh?  Not if you figure that despicable old men cannot live forever.  Know what I know about Cuba its people, my formula for recovering that nation is a verysimple one:  Let Cuba be Cuban, again. 

Without A Proper Plan!

Freedom is a superior value even if acting freely can be morally odious

By Tibor R. Machan

A vital difference between champions of the fully free society (or libertarianism) and others who are concerned with political economic matters is that the former really do not approve of imposing any kind of agenda on the lives of others no matter how desirable it would be. Not even universal education, let alone universal health care, is deemed important enough for libertarians to assume power over other people — e.g., the parents of children, those with ailing elderly in their homes, etc. Unless there really is negligence involved, such that someone is failing to fulfill a legal obligation to feed his or her children, the government simply has no role. Furthermore, those who really accept the imperative to respect the rights of everyone to live as they choose provided no one’s rights are being violated, may not force others to do the right thing in, say, abstaining from racial or gender discrimination at the workplace, just as this is something one may not impose on others in their personal lives.

This full commitment to human liberty is really quite an unusual and often difficult stance to uphold. Yet it is at the heart of the difference between what a free and what an authoritarian or totalitarian society is about. Just as no one may force others to go to a certain church, regardless of how sincerely and devoutly one holds to one’s religious faith, neither may these other practices that to many appear to be elementary decency be imposed on other persons. Just as no one may impose on others what they must read, so others must not be forced to do all kinds of things that are deemed to be just and proper. Just as in one’s personal life one must be free to choose with whom one will or will not associate, the same holds for one’s professional associations. (There are some intricacies here that can make it appear that one isn’t free to avoid others with whom one doesn’t want to fraternize — as when one joins a club that has a non-discriminatory policy — but those are complications that would need to be discussed elsewhere.)

Many decent people recoil in disgust from these elements of a free society while they accept others which are very similar. They do not mind that freedom implies that people can read or write whatever they please, however immoral it may be; yet they refuse to accept that one has a basic — and should have a legal — right to adopt highly objectionable policies at the factory or office that one owns. They see nothing odd about people refusing to accept someone into their family who does not share their religious or even political convictions while they consider it impermissible that they may refuse to hire such people even if this is a fully disclosed condition for employment.

On Appeasing Envy

A government that pays social blackmail will precipitate the very consequences that it fears

by Henry Hazlitt

Any attempt to equalize wealth or income by forced redistribution must only tend to destroy wealth and income. Historically the best the would-be equalizers have ever succeeded in doing is to equalize downward. This has even been caustically described as their intention. “Your levellers,” said Samuel Johnson in the mid-eighteenth century, “wish to level down as far as themselves; but they cannot bear levelling up to themselves.”

And in our own day we find even an eminent liberal like the late Mr. Justice Holmes writing: “I have no respect for the passion for equality, which seems to me merely idealizing envy.”[1]

At least a handful of writers have begun to recognize explicitly the all-pervasive role played by envy or the fear of envy in life and in contemporary political thought. In 1966, Helmut Schoeck, professor of sociology at the University of Mainz, devoted a scholarly and penetrating book to the subject, to which most future discussion is likely to be indebted.[2]

There can be little doubt that many egalitarians are motivated at least partly by envy, while still others are motivated, not so much by any envy of their own, as by the fear of it in others, and the wish to appease or satisfy it. But the latter effort is bound to be futile. Almost no one is completely satisfied with his status in relation to his fellows.

In the envious the thirst for social advancement is insatiable. As soon as they have risen one rung in the social or economic ladder, their eyes are fixed upon the next. They envy those who are higher up, no matter by how little. In fact, they are more likely to envy their immediate friends or neighbors, who are just a little bit better off, than celebrities or millionaires who are incomparably better off. The position of the latter seems unattainable, but of the neighbor who has just a minimal advantage they are tempted to think: “I might almost be in his place.”

Moreover, the envious are more likely to be mollified by seeing others deprived of some advantage than by gaining it for themselves. It is not what they lack that chiefly troubles them, but what others have. The envious are not satisfied with equality; they secretly yearn for superiority and revenge. In the French Revolution of 1848, a woman coal-heaver is said to have remarked to a richly dressed lady: “Yes, madam, everything’s going to be equal now; I shall go in silks and you’ll carry coal.”

Envy is implacable. Concessions merely whet its appetite for more concessions. As Schoeck writes: “Man's envy is at its most intense where all are almost equal; his calls for redistribution are loudest when there is virtually nothing to redistribute.”[3]

(We should, of course, always distinguish that merely negative envy which begrudges others their advantage from the positive ambition that leads men to active emulation, competition, and creative effort of their own.)

But the accusation of envy, or even of the fear of others’ envy, as the dominant motive for any redistribution proposal is a serious one to make and a difficult if not impossible one to prove. Moreover, the motives for making a proposal, even if ascertainable, are irrelevant to its inherent merits.

We can, nonetheless, apply certain objective tests. Sometimes the motive of appeasing other people's envy is openly avowed. Socialists will often talk as if some form of superbly equalized destitution were preferable to “maldistributed” plenty. A national income that is rapidly growing in absolute terms for practically everyone will be deplored because it is making the rich richer. An implied and sometimes avowed principle of the British Labour Party leaders after World War II was that “Nobody should have what everybody can't have.”

America’s Detroit Future

Obama’s politics and policies promise nothing less

By Peter Ferrara 

In the 1950s, Detroit was the fourth largest city in America, with a population of nearly 2 million. It was also a middle class paradise, with the highest median family income of all major cities in the entire country. The last Republican mayor of Detroit was elected in the 1950s.

Then the 1960s happened, and Detroit became a socialist one party state. And you know what that one party was. Over the next half century, city politics in Detroit was a battle between Left and Lefter, or socialism versus communism. Let’s face reality and speak the truth. We see there the heart and soul of the Democratic Party, what comes out when the party is left undisturbed, and is free to be what it wants to be.

As a result, taxes, government spending, and disabling regulation of evil profit-making activity (business) boomed. Detroit residents came to pay the highest income and property taxes in the state, and Michigan is not known as a low tax state. Businesses within the state became a target for tax plunder. Last year, financially desperate Detroit doubled its business tax, administering one last lash to the golden goose before going down, as that counterproductively only made the problem worse rather than better.

Government employee unions and their self-interested political activism took over the city, with the support of the city’s population thinking that whatever the unions wanted had to be good for working people and the middle class. Taxes, of course, are mother’s milk for government employee unions, who literally eat and live off of taxes.

The city took on massive effective government debt in the form of unfunded liabilities for government employee pension and health care promises. Detroit came to be the cutting edge for overpaid government employees, with excessive benefits and promises of ever more. That cutting edge has blossomed today into state and local government workers nationally paid on average 45% more than the private sector workers who must pay the taxes to support them. Government pay and benefits for state and local workers nationally now totals $80,000 per year on average.

Those government bureaucrats, after a career of back breaking work in their offices driving businesses out of the city, if not out of business altogether, generally feel they have to retire at age 55. Studies show that, realistically evaluated, unfunded liabilities for state and local public employee pension and promised retirement health benefits total $5.2 trillion, effectively adding about a third to the national debt burden on taxpayers. In Detroit, retirement benefits and debt eat up about 40% of revenue, effectively consuming nearly every dollar of city property taxes, which so heavily burden private sector retirees.

Moreover, Detroit’s bloated, overstaffed bureaucracy today employs one worker for every 50 city residents remaining. Indianapolis provides much better services, with one worker for every 223 residents. But Indianapolis has remained a Republican town.

For all of Detroit’s runaway government spending, government services in the city became pitiful. The high school drop out rate in Detroit reached as high as 76 percent in recent years. Yet per pupil spending in Detroit public schools is higher than in rich and prosperous Marin County, California, where the high school graduation rate is 97%. Maybe that is because in return for the non-education of the young in Detroit, public school teachers there enjoy the highest pay in the country among major metropolitan areas, at nearly $50 an hour.

For all the taxes and spending in Detroit, the city slashed its police force by 40% over the past decade. (Cops are not the foot soldiers of socialism.) Maybe that is why the average wait for police response to an emergency phone call is 58 minutes in Detroit, five times the national average. Maybe that has something to do with Detroit suffering one of the highest violent crime rates in the country as well.

That crime is effectively yet another tax driving businesses out of the city, or out of business altogether. Who is going to invest in Detroit to create jobs and increase wages when that investment is subject to plunder by criminals, and whatever survives is subject to plunder by taxes and hostile bureaucrats? No wonder one-third of Detroit residents live in poverty.

The Blip

Is U.S. Economic Growth Over?

What if everything we've come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course?

By Benjamin Wallace-Wells

Picture this, arranged along a time line.

For all of measurable human history up until the year 1750, nothing happened that mattered. This isn't to say history was stagnant, or that life was only grim and blank, but the well-being of average people did not perceptibly improve. All of the wars, literature, love affairs, and religious schisms, the schemes for empire-making and ocean-crossing and simple profit and freedom, the entire human theater of ambition and deceit and redemption took place on a scale too small to register, too minor to much improve the lot of ordinary human beings. In England before the middle of the eighteenth century, where industrialization first began, the pace of progress was so slow that it took 350 years for a family to double its standard of living. In Sweden, during a similar 200-year period, there was essentially no improvement at all. By the middle of the eighteenth century, the state of technology and the luxury and quality of life afforded the average individual were litt le better than they had been two millennia earlier, in ancient Rome.

Then two things happened that did matter, and they were so grand that they dwarfed everything that had come before and encompassed most everything that has come since: the first industrial revolution, beginning in 1750 or so in the north of England, and the second industrial revolution, beginning around 1870 and created mostly in this country. That the second industrial revolution happened just as the first had begun to dissipate was an incredible stroke of good luck. It meant that during the whole modern era from 1750 onward – which contains, not coincidentally, the full life span of the United States – human well-being accelerated at a rate that could barely have been contemplated before. Instead of permanent stagnation, growth became so rapid and so seemingly automatic that by the fifties and sixties the average American would roughly double his or her parents' standard of living. In the space of a single generation, for most everybody, life was ge tting twice as good.

At some point in the late sixties or early seventies, this great acceleration began to taper off. The shift was modest at first, and it was concealed in the hectic up-and-down of yearly data. But if you examine the growth data since the early seventies, and if you are mathematically astute enough to fit a curve to it, you can see a clear trend: The rate at which life is improving here, on the frontier of human well-being, has slowed.

Egypt: The Hypocrisy of Human Rights Industry

Westerners who love to be outraged by foreign tyranny are blasé about Egypt's

By BRENDAN O’NEILL

Imagine if, in 1973, with elected Chilean leader Salvador Allende being swept from power in a bloody military coup by the unelected General Augusto Pinochet, a group like Amnesty International chose to focus its attentions almost exclusively on the plight of a poet being banged up in, say, Belarus. Even if you believed the imprisonment of poets to be a very bad thing, you would think that was weird, right?

A case of twisted priorities.

Well, the equivalent is happening right now. In Egypt, a military dictatorship has deposed and imprisoned an elected president, massacred hundreds of his supporters, and created government departments to oversee the interrogation and torture of ‘terrorists’ (otherwise known as Muslim Brotherhood voters). And yet the big issue on Amnesty’s online activism page is, as it has been for months, the continuing legal fights of imprisoned Russian punk band Pussy Riot. It seems if you want to win the attention of the West’s best-known human-rights outfit, it helps to be pretty white women with guitars rather than gruff brown men with beards.

There are many striking things about the political situation in Egypt. But perhaps the most striking thing is the silence of those who pose as human-rights cheerleaders, of the West’s head-shakers over tyranny in far-off lands, who have gone strangely mute, or at least uncharacteristically coy, in the face of the Egyptian military’s seizure of power and repression of dissent.

When Character is Lost

Government power is destroying the character of a people before our very eyes

A recent New York Times piece provides a living example of exactly the kind of unfortunate path that can result when socialism and a lack of person responsibility combine--this time in Cuba. 

There was a time, Alexi remembers, when life in Cuba was simpler. People dressed properly. Children respected their elders. Stealing was stealing.

“My father brought me up with a strict set of values,” said Alexi, 46, an unemployed chauffeur from a gritty quarter of the capital. "But that has been lost."

In Socialism the State's robbing people of their initiative, their dignity, their sense of accomplishment. But none perhaps is as stark as what is going on in Cuba right now. 

The article details how the people of that unfortunate island are reduced to breaking the law just to survive or to feel like human beings. As a result, order breaks down. At the same people, personal initiative and a sense of responsibility are stolen from the people, and so they search for someone (anyone!) to blame. Meanwhile, why should they take care of their cities, neighborhoods, children? It's not their fault and they have no power over their own lives. 

It's an example of government power destroying the character of a people before our very eyes.

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Harsh Self-Assessment as Cuba Looks Within

By VICTORIA BURNETT

There was a time, Alexi remembers, when life in Cuba was simpler. People dressed properly. Children respected their elders. Stealing was stealing.

“My father brought me up with a strict set of values,” said Alexi, 46, an unemployed chauffeur from a gritty quarter of the capital. “But that has been lost.”