by Don Boudreaux on April 11, 2011

in Cleaned by Capitalism, Everyday Life, Growth, History, Myths and Fallacies, Standard of Living

Here’s a letter to the Chronicle of Higher Education:

Terry Eagleton writes that “There is a sense in which the whole of Marx’s writing boils down to several embarrassing questions: Why is it that the capitalist West has accumulated more resources than human history has ever witnessed, yet appears powerless to overcome poverty, starvation, exploitation, and inequality?” (“In Praise of Marx,” April 11).

Where is this “capitalist West” of which Prof. Eagleton speaks?  In the U.S. – surely one of history’s premier capitalist western nations – poverty, starvation, exploitation, and inequality as these were suffered for millennia upon millennia until the 18th century, are today nearly totally eliminated.  The poverty that does exist in the U.S. in 2011 is relative – in the sense that I, on my college-professor’s salary, am poverty-stricken relative, say, to Alec Baldwin or Barbra Streisand.

Only the tiniest fraction of Americans today lives without solid roofs over their heads and solid floors beneath their feet, and even they don’t starve to death. The poorest Americans have life expectancies at least double those of crested and landed nobles before the industrial revolution.  These same poor Americans are immensely better fed, clothed, housed, entertained, medicated, educated, and hygienated than were the vast majority of their (or anyone’s) ancestors.  These facts – along with the additional one that capitalists must continually innovate (typically for mass markets!) in order to continue earning their riches – make claims of widespread “exploitation” in capitalist countries ludicrous.

Prof. Eagleton is like the lawyer who, upon seeing a gifted physician restore to complete health a patient who had been machine gunned, beaten, burned, and thrown from the roof of a skyscraper, accuses the physician of malpractice because the patient has a mild case of acne.

Donald J. Boudreaux

After I post this letter, I’m going to the supermarket to be exploited, and to be served by the supermarket’s exploited workers.

Be Sociable, Share!



288 comments    Share Share    Print    Email


Ken April 11, 2011 at 4:55 pm


Do you ever keep track of whether or not your letters are posted on the sites to which you send them? If you do and they are published with comments enabled, will you supply an “Upate” link? I’d love to see people’s responses, from whom are not regular Cafe Hayek readers, to your letters.


vikingvista April 11, 2011 at 5:09 pm

Marxists must define poverty as a relative phenomenon. Otherwise, they couldn’t in good conscience be marxists.

kyle8 April 11, 2011 at 5:53 pm

I am struck by the fact that Marxism/socialism is really just the same thing as Keynesianism. They really differ only in degree. Both are interested in centralization, power, control, nationalization, redistribution, and confiscatory taxation.

Keynes is just a justification for socialism. certainly this current administration has used it in that way.

Ken April 11, 2011 at 6:25 pm


Degree is often as important as kind. After all forcing a kiss and forcing sex are treated differently for reason. While both are wrong, one is definitely worse than the other.


vidyohs April 11, 2011 at 8:15 pm

Willy Shakesguy said, “A rose, a rose, by any other name should smell so sweet.”

Marxism/communism/socialism/keynsism/liberalism/democrat/regressivism, don’t try to split hairs where the splitting only takes you back to the basic hair. “By any name it should smell so foul!”

Ken April 11, 2011 at 11:25 pm


Am I splitting hairs? Communism and socialism, while similar, are clearly not the same thing. Communism is responsible for slaughter of at least 165,000,000. Is socialism? I condemn both and recognize that they both spawn from the idea of central planning, but as far as I know socialism merely slows development, making our lives worse off than it otherwise would be. Communism on the other hand does that and more; it impoverishes and kills. Where one slows or might even stop innovation, the other destroys existing innovation and kills people.

Surely contrast, in the second half of the twentieth century, between socialist West Germany and communist East Germany means something.

Lumping the two together without qualification as if they are equivalent is narrow minded. Not being able to, or unwilling to, distinguish the bad from the evil leads to concentrating on the wrong things. Trying to fix the bad while evil rules makes things worse. It’s like worrying about the cut on your arm, while your femoral artery has been cut.


vidyohs April 12, 2011 at 6:13 am

Yes Ken, in my opinion you’re splitting hairs. The difference between socialism and communism is just a matter of degree. They are roads that share a common substructure (central planning, nanny state oversight, and collectivism) and both roads take you to the same place. Yes soviet style communism takes you there more brutally and quickly, but the misery at the end of the road is the same. You might say that communism is in reality socialism on steroids.

Socialism/communism/American democrats/regressives/liberals are lumped under one label, The Looney Left. No matter what label the collectivist chooses to pin on his lapel, he is a Looney Lefty.

When faced by a mugger on the streets, I figure it is a silly waste of my time to wonder what underlying basic acceptance and justification of the act of theft the mugger subscribes to. My whole being is focused on surviving the encounter with all my fruits of labor intact, still in my pocket, and the mugger lying dead for the police to pick up.

Methinks1776 April 12, 2011 at 11:59 am


Communism is responsible for slaughter of at least 165,000,000. Is socialism?

Yes. Where has Communism ever existed except on a Kibbutz (where it was not “responsible” for any deaths)? Certainly not in the Union of Soviet SOCIALIST Republics. We knew were were not Communist – we in Russia were always struggling, striving and starving for that elusive Utopia of Communism. Socialism is merely the stop right before Communism – when human beings will all live without want or division of labour (Karl fantasized that we can be a film critic in the morning, a sheep herder midday and something else at night).

The fact is, Ken, true Marxian Communism on a large scale existed for about two weeks in 1917 and it so destroyed the economy in this short period of time (requiring the first round of conscription of labour), that Lenin abandoned it right away.

It was Socialism – and the inevitable outcomes of Socialism – that was responsible for the bloodshed you lay at the feet of non-existent Communism.

SheetWise April 12, 2011 at 2:02 am

I agree that there is, for the psychopath, a subtle distinction between seduction and rape — most people see it differently.

muirgeo April 12, 2011 at 2:18 am

” I condemn both and recognize that they both spawn from the idea of central planning…”

Ken where does Marx talk of central planning? You read that in something he wrote?

Methinks1776 April 12, 2011 at 7:57 am

I love it when you pretend you read.

John V April 12, 2011 at 11:23 am

Just stop posting. You reveal what a fool you are the more you share your opinions.

BTW, I am stating here and now that I never really believed and still don’t believe that you are a doctor or hold any job requiring anything beyond an associates degree. Your tone, inability to reason properly and childish view of the world is simply too at odds with a professional of any kind…other than a professional idiot.

muirgeo April 12, 2011 at 2:00 pm

“I am stating here and now that I never really believed and still don’t believe that you are a doctor…..”

Well you must be right John because what you believe is a fact…like your belief free markets are the best way to organize society… that too is a fact….of course the way you believe bears no relation to reality but you don’t care about that. Oops gotta go another patient just walked in.

John V April 12, 2011 at 4:58 pm


Talk all you want in your childish, trollish ways. You simply don’t strike me at all as holding the kind of job that you claim. You talk more like a depressed college kid with nothing better to do than make as ass out of yourself.

SheetWise April 12, 2011 at 9:52 pm

With the limited reply, like, format options and such, here’s what we have –

Methinks1776, April 12, 2011, at 7:57 am

Posts …

“I love it when you pretend you read.”

That has to be worth at least 5 likes.

Daniel Kuehn April 12, 2011 at 5:59 am

Marxism is the mutilated, inbred culmination of Classical economics. In what possibly way could it ever be described as “just the same thing as Keynesianism”?!?!?!

There is some centralization of certain very specific decision making, which simply makes it non-libertarian – it hardly exclusive or Marxist in that. None of the other things you list have anything to do with Keynesianism. You have no concept of what you’re discussing here, and while I can’t speak for Marxists I’m guessing you have a twisted understanding of them too.

kyle8 April 12, 2011 at 6:36 am

Sorry if I gored your sacred cow, but no, You are wrong, Keynesianism is just an enforcement mechanism for socialism. And like all forms of socialism it doesn’t work, At all, period.

I understand that in pure theory they are quite different, however in practise that is how it works out.

You seem like a bight and well read fellow, but so many of your posts reveal that you are obsessed with trying to prop up stupid, failed ideas of the past.

muirgeo April 12, 2011 at 2:34 pm

“And like all forms of socialism it doesn’t work, At all, period.”

Well except for all the successful social democracies of the world… what we call the develope world. .. except for them socialism doesn’t work. Especially when compared to all the Free Market Libertarian Societies. Now those have been just a huge success and thus the reason for their rampent spread across the globe. I am really looking forward to visiting one in the near future.

JohnK April 12, 2011 at 2:44 pm

Show me a “successful social democracy” that isn’t broke.

JohnK April 12, 2011 at 8:15 am

“Keynes is just a justification for socialism.”

I’ve said it before and I’ll say it again.
Keynesianism is a perversion of economics for the benefit of the political class.
Nobody benefits from Keynesian policy except dirty politicians and crony capitalists.
Well, that’s not totally true. Economists turned propagandists can make fat stacks at the Old Gray Lady.

vidyohs April 11, 2011 at 8:12 pm

Marxists simply do not think. If they did, they could not remain Marxists.

muirgeo April 12, 2011 at 1:29 am

And you’ve never thought enough about “Marxism” and what Marx actually wrote and thought to have any idea of what the hell you are talking about.

SheetWise April 12, 2011 at 2:19 am

This is where I really love AC as an opt-out position.

Build whateverthehell you want muirgeo — just don’t require me to be a member. I’m sure you’ll do fine.

vidyohs April 12, 2011 at 6:15 am

Marx did not spawn idiots like you, muirhuahua. Marx merely gave you a label to share with the rest of nature’s idiots.

brotio April 12, 2011 at 4:37 pm

It’s funny. The guy who wrote, And you’ve never thought enough about “Marxism” and what Marx actually wrote and thought to have any idea of what the hell you are talking about. also wrote, Suffice it to say individualism where ever it surfaces is ultimately self-destructive. – (Posted by: muirgeo | Mar 15, 2008 11:29:41 AM).

Yet he claims he’s not a socialist, Marxian or otherwise.

Martin Brock April 12, 2011 at 7:51 am

Like you’ve never thought enough about the ideas of Hayek or Mises or Menger or Locke, Smith and Ricardo for that matter. Marx did think a lot about these ideas, but you clearly haven’t. If I had a nickel for every shattered glass houses around here, I’d have been rich in 1913.

Methinks1776 April 12, 2011 at 8:00 am

He thought about them just long enough to misunderstand them. Just like Muirdiot – except, Muirdiot hasn’t the grey matter to engage in thinking.

JohnK April 12, 2011 at 8:16 am

They sure know how to emote.

Ken April 12, 2011 at 11:04 am

Vikingvista is right. Relative immiserization is about the only card the Marxists have left to play, and that only because they haven’t played it in a while.

nailheadtom April 11, 2011 at 5:26 pm

The comments seem to indicate the political/economic orientation of the “Chronicle” readers. To the surprise of no one.

kyle8 April 11, 2011 at 5:49 pm

I would go farther. I don’t think we would have much noticeable* poverty in the USA if we did not import millions of third world people. Don’t get me wrong, I am pro-immigrant, and beleive that immigrants do not usually stay poor, but they are poor for a while, and during that time they swell the rolls of the “impoverished” .

* Of course, there is an endemic amount of poverty that afflicts all societies which springs from those with substance abuse or mental derangement’s. I am not talking about that “background” poverty.

vidyohs April 11, 2011 at 8:30 pm

Buddy, I have walked the streets of major African Capital Cities, and some Asian cities, not to mention some South American cities, and I have seen poverty in its rawest form. I never got to India or Bangladesh, but I can see the pictures and read the reports and connect them intellectually to what I saw in the places where I have been.

Illegal immigrant or lazy democrat, in the USA you simply can not find the kind of poverty seen in the places I have put my own eyes on. Any one who tries to say it exists is full of crap…….and I am not pointing that crappy finger at you. I have you down as one of the “good guys”, bless your heart.

I recommend the book, “Rain of Gold” by Victor Villasenor for a perspective on immigration from Mexico to the USA. His account of the experiences of his father(s) family enroute to the USA (early 20th century) echos what I saw in Africa in 1961/62, and still exists today. You look at even the illegals coming into this country via the desert routes and you see well dressed, well provisioned, men and women who only rarely run into trouble, and when they arrive, at worse they are accorded 14th amendment rights by the SCOTUS, and even if deported they aren’t starved or mistreated.

The third world people that manage to get here are blessed beyond their comprehension when they view it against what they left behind. Just saying. The looney lefties that talk about poverty in this country are either stoopid beyond belief or are exercising their looney left agenda.

kyle8 April 12, 2011 at 6:38 am

I understand the difference between what we call poverty and real poverty. I am only going by the official records of what we call impovershed.

vidyohs April 12, 2011 at 10:13 am

I was just pointing out that because the looney left found it essential and convenient to their agenda, redistribution of the wealth, to label people as living in poverty, there is no reason you, me, or anyone else must cooperate by using the word poverty instead of a more accurate description, poor.

I can find poor people in America, but I can’t find people who are compelled to live in poverty.

SheetWise April 12, 2011 at 11:16 am

When nearly half of the world would make great sacrifices for the opportunity to experience US poverty, there is something wrong with our definition.

Methinks1776 April 12, 2011 at 11:31 am


JohnK April 12, 2011 at 11:54 am


Eric Hammer April 14, 2011 at 2:32 pm

You win this thread. Well done :)

Joe Concordia April 14, 2011 at 10:41 am


Have you ever walked the back streets of black neighborhoods in any large American city? Have you ever been on the back roads of rural Mississippi, Alabama, and Georgia? Have you ever been to Apalachia? Do you understand that there really are kids going to school hungry in this country, and their first glass of milk in the morning is what they get at their school?

Yes, poor people in the USA have a roof over the heads, but the roof leaks and they don’t have the money to fix it. They have food, but sometimes the soup is pretty thin. They have clothes, the ones they got for free at the church basement.

You are right that they are not as bad off as the Indian kids that scavage the dumps in the outskirts of Mumbai, but do not characterize them as “not poor”. You can use fancy arguments about relativism as a justification for closing one’s eyes to the needs of those people, but I do not.

That is the difference between the philosophy of Keynes vs Hayek. It is not a difference in economic theory it is a difference in what the definition is for social justice and what economists should do about it. The Libertarian solution is do nothing, let them die or somehow go to work (where there are no jobs for them). The Progressive solution is give them a hand so they can make it through the night.

All this talk of Marx vs Adam Smith vs Keynes; all the talk of socialism vs free market is hogwash. It is an endless faux intellectual argument carried on while Rome burns. All the talk about lazy, good for nothing poor people is blindness personified and organized to justify that “if I close my eyes, when I open them the bad thing will not be there any more”. These posts are starting to give me a headache.

Dan April 14, 2011 at 11:35 am

Through the night? The night? You mean thru 21900 nights, or the equivalent of 60yrs. And there are jobs available. You might have to leave the house and work for a little less, to start. Or you might have to start at a lowered wage since you have no work experience, in the first place. And, yes I have lived on $6-$10 an hour. And, yes, that means you don’t have 300 channels of cable tv, a blackberry, beer, name brand products, etc.,..
You might have to leave the community you live in. For able adults thru 60yrs of age (somewhat arbitrary) there is little excuse beyond handicaps.
It’s a silly argument to assert that govt should steal from those who are remaining productive to give, without condition, to those who choose to not be productive, endlessly. To also com-pulse individuals into association or mandate entering into contract with another so that the very same unproductive can obtain ‘wants’ for free and without condition.

Joe Concordia April 14, 2011 at 4:45 pm


Do you regard accepting a Social Security income as stealing?

Have you applied for any job openings lately, being more than 60 years old as I believe you may be. Try it when you are 79. All you get is a laugh.

JohnK April 14, 2011 at 12:01 pm

“The Libertarian solution is do nothing”


Not wanting the government to do something, not wanting to force people into doing something against their will, not wanting to force people to pay for things that they don’t want, is not the same as doing nothing.


“The Progressive solution is give them a hand so they can make it through the night. ”

No it’s not. To give a hand is to help of your own free will with your own resources. That is honorable and charitable.
But Progressives do not do that.

Progressives use force to make people pay for things that they don’t want or need.
Progressives use force to stop people from working at a low wage while they gain experience.
Progressives delegate decision making to people with no interest or stake in the outcome.

There is nothing honorable or charitable about Progressives.

All they know is force.

Joe Concordia April 14, 2011 at 4:34 pm

I’m sorry for you JohnK. You have such a warped view of the world it is not possible for you to see the illogical and extraordinary concepts you describe. Progressives do not force people to do anything, any more than any other political persuasion forces them. In this country all individuals are open to choose their options for themselves. The only limitation is their own economic or physical disability situation. The choice however must be within the boundaries of written law and acceptable social practices that have the weight of unwritten law. If they break the written law they will be incarcerated. If they break from accepted social practice they will be ostracised by the community.

Government, whether it is a majority on the right or a majority on the left, establishes the conditions for participating legally, and they influence what are acceptable standards for social activities that have a public consequence. Some of those things may even have the force of law as local ordinances. These “rules” impose costs. If the costs are acceptable, the rules stand. If they are not they will be overturned. In our democratic society functioning under a representative form of government the system for this is the Congress and the President. It is not wrong that this is the way it is.

Would you rather have had Alexander Hamilton’s proposal, which was for the United States to be set up as its own monarchy to replace the English Crown? I don’t know if he was campaigning for that position for himself, but it does reveal a certain mind-set of someone who is a revered “founding father”.

Dan April 14, 2011 at 7:45 pm

The Obamacare program is exactly that of a progressive dream to force individuals into something. It is coercion and then compulsion less you lose your liberty. The end result for disobeying govt in regards to obamcare is imprisonment. Can’t get any more clear on ‘ forcing ‘ an individual to do something.

As Obama said several years ago (paraphrase ), ‘ mandating healthcare puchase to solve the lack of coverage for others is akin to mandating house purchase to solve the lack of shelter for some of the population’ .

John V April 11, 2011 at 5:53 pm

The real embarrassing question is why Terry Eagleton, a literary critic according to wikipedia, and many other scholarly types…particularly in the humanities…think in such foolishly flawed Marxian frames of mind about the world in spite of their oodles of education and exceptional ability to acquire knowledge.

For all his knowledge, he has no wisdom.

vikingvista April 11, 2011 at 9:12 pm

Idiots do not lack the ability to parrot volumes of nonsense, and to do so with polish.

Seth April 12, 2011 at 12:58 pm

It’s a feedback problem.

People who have been told by others all their lives that they are smart (as if that really means anything – how do they really know?) rarely consider the idea that they may be wrong because it would be too damaging to their self-esteem. Being right, after all, is what they are known for in their circles. They especially can’t handle being proven wrong by common folks.

Wisdom derives from folks who accept the idea that they might be wrong and do the hard work of finding out why.

vikingvista April 12, 2011 at 2:24 pm

It is pathetic how many people think they are never wrong. How humbling it would be for them to discover just how few of us there really are.

JohnK April 12, 2011 at 2:42 pm

The wise person learns from the mistakes of others as well as their own, the smart person learns from their own mistakes, and the stupid person never ever makes any mistakes at all.

Eric Hammer April 14, 2011 at 2:37 pm

To quote myself:
Smart people have no issue considering that they might be wrong; they can be pretty confident they will do something smart again and so make up for the mistake. Stupid people defend every statement as being perfectly correct, for who knows when they will manage to be right again?

Seemed to me at the time to be a very strong rule of thumb, and still does.

Joe Concordia April 11, 2011 at 6:10 pm

Dear Dr. Boudreaux:

While your presentation on the economic condition of persons in the USA at this time paints a picture of general comfort and ease, the reality is that a very large segment of the population is very far from being so. The operative word is “relative” in this case. When compared to the dire circumstances of primitive people of long ago, or the worst of the populations in the most undeveloped countries countries of the world, certainly almost everyone here is materially better off. But comparing the present population with those hourly workers that benefited from the prosperous 60′s and 70′s in this country the current hourly labor force is much, much worse off. And that is a cohort of millions, not just a few people.

Wages have been stagnant for more than 30 years in real terms, thanks to Reaganomics policies. From that same action of deregulation and defunding of critical governmental initiatives; working conditions, in terms of hourly demands and a variety of abuses of employees, have deteriorated to the “sweatshop” levels of pre-WWII days or even pre-New Deal days. Economic stresses have imposed dire social stresses on families by forcing the requirement for two wage earners per family to make ends meet. That leaves young school age children to the attendance of hired nursemaids or simply unattended instead of gaining from mother’s good nurturing. Most importantly in this particular crisis time with millions of people facing foreclosure on homes, unemployment, and drowning in personal debt it is unrealistic of you to characterize the state of citizenry as “not poor” even in absolute terms. Most of the lower class is functionally bankrupt.

These economic disasters for the middle and low incomme population are the result of systematic destruction of the countervailing forces that would normally control exploitation by the moneyed classes. Namely a democraticaly oriented government supportive of labor and a well organized labor with sufficient leverage to effectively strike if necessary to gain negotiation objectives. That balancing force has all but disappeared. This is simplistic economics, not clouded by complex theory. It is supported by a wealth of statistics that are irrefutable.

Your comfort level, which I do not in any way impune as undeserved or not merited, is your personal reward for the efforts you made to achieve it. The realities of the human condition are that there are others who are not able to accomplish that. That is not a “fault” in their make-up it is just the statistical distribution of the human characteristic. For those on that lower section of the economic scale government must be in place and must provide assistance. There is no other way. Private industry has no goals to enhance social welfare, although it should and actually would gain from it. Owner’s self interest demands inherently the dimunition of labor since in their view labor is a cost contributor in the business equation, not a revenue contributor. (actually a fallacy) Laissez-faire does not promote real growth over the broad economy since it benefits the large and powerful industries to a greater degree than the smaller ones. Trickle down economics is a fantasy, at least in the fraction of distribution down to the lower levels. The despicable degree to which economic disparity has increased in this country over the past thirty years is clear evidence. Our GINI ratio is now approaching the levels of the worst dictatorships and underdeveloped countries of the world.

I respect your credentials as an accomplished economist, but I disagree completely with your position. I am not an economist, just a concerned citizen. I believe that the publication of philosophies such as you espouse here, with the certification of being a distinguished economist, is really a disservice to the public.

John V April 11, 2011 at 6:40 pm

“Economic stresses have imposed dire social stresses on families by forcing the requirement for two wage earners per family to make ends meet. ”

Herein lies the root of what you are trying to say and it simply isn’t true. People acquire more and spend more and want more. THIS is why two people work.

This idea that you present here is always rooted in some misguided idea of what life was life in those times and the myth that a income family lived as well in absolute terms as a one-income family can live today if it so chooses.

The data that shed light on this mater are not as simple as satisfying as the ones you may be thinking of to make the argument that you are making.

Take the budget and lifestyle of your 70s or 60s one-income family that you are dreaming of and put them and their income and budget in today’s world and you’ll see that a one income family can live every bit as well and better.

Dan April 12, 2011 at 12:06 pm

Bingo! But, there are far more luxury expenditures. There is no necessity for a cellular subscription along with Internet access And unlimited texting. Home Internet access, cable tv with hundreds of channels, portable listening devices, digital reading devices, etc.,.. Are expensive and were not available in the time era u wish to compare. The people living worse off from earlier eras are doing so due to their own choices. Even then, I would assert that the poorest among us are living better than the poorest of your chimerical era og greatness.

Joe Concordia April 12, 2011 at 5:24 pm

Your argument does not hold water. Bu of Labor data verifies real wages for hourly workers have been flat to negative over the past 25 to 30 years. With prices increasing, that means a worker must work more hours now to buy a loaf of bread than he had to previously. Ergo, two income families are a necessity, not an option for people in that income bracket. Of course there are those today who’s earnings increases have beat the statistical mean, but there are the rest who did not. Another way to put this is that “the rich get richer and the poor get poorer”. Income disparity in the USA today is worsening at an alarming rate. It is the real economic crisis, more damaging than high deficits and high national debt.

As far as my “chimerical era” it is not chemerical. I lived those years and know first hand the economic situation of a working young family (my wife did not have to work). I see now that my children must have two working partners in the family to maintain a quality of life, which is actually less than what I was able to provide for them when they were children. What were you doing in the 1960′s?

John V April 12, 2011 at 6:30 pm


Think about your argument for a moment. You say wages have been flat for hourly workers for 25-30 years. There’s a couple things here:

1. These are not the same workers over the span of time.
2. You get to the heart of the problem with your analysis when you break down that mass (ignoring changes for individuals over time like in point #1) in categories and you then you can start to get a better picture of what you are looking at.
3. You ignore benefits which don’t count in wage data but are figured in compensation.
4. You ignore immigration and the low wage jobs that are dominated by them to get the averages looking flatter than they really are.
5. You ignore the real reasons for flatness in low wage workers ranging from youth to immigrant unskilled labor to skills gaps over time in different groups of people along with how technological progress suppresses the value of low-paying jobs.

6. Reiteration: skills gaps explain a lot. A LOT…both in flatness for low value work and income disparity.

Saying “reaganomics” as a reason is a substitute for thinking.

BTW, prices in goods as a percentage of earnings has dropped drastically in most areas of consumer goods. Looking at temporary spikes doesn’t tell the tale.

Dan April 14, 2011 at 11:55 am

People in food lines are holding blackberry cellular phones. As the ‘poor’ enter into the 7/11 and purchase beer and cigs with cash, then pull out their welfare debit card to buy chips, soda, candy, etc.,…..
I grew up ‘poor’. My ‘new’ shirts, pants, etc.,.. Were hand me downs from from someone who outgrew them 5yrs before I received them.
No vacations….. Neighbor built me a bike to ride(think banana seat schwinn, while other kids rode more ‘boyish’ bikes)…. Go on classroom field trip to an apple orchard and no money to pick apples, bag, and take home.
Most kids from my neighborhood are living better than their parents did financially. And, we were mostly a neighbor hood of single parents and very meager means.
What children need most in our less affluent regions are role models and the big brother (friend), not someone informing them to not worry because govt will take care of them should they choose to have no ambitions.

persiflage April 12, 2011 at 1:06 pm

“Economic stresses have imposed dire social stresses…” Nonsense. I grew up in a one-income household under lower- to mid-middleclass conditions. Our household’s effective taxation rate, from ALL sources, was about 8 percent. Today, my household’s effective taxation rate exceeds 48 percent and is constantly climbing. It is the huge cost of Leviathan government and its taxation that makes it necessary to have two incomes to maintain the same no-frills middle-class life we enjoyed fifty years ago on one income.

Joe Concordia April 14, 2011 at 11:21 am

People from the start of time have always wanted more, tended to spend more and there have always been new hot items to spend money on. Yes; blah..blah..blah. Fifty years ago they did not “have” to send their wives out to work to afford it. Now they do. I challenge your last sentence that a one income family (at the middle demographic national average wage and mean family size) can now live the same lifestyle that it had in the 1950′s to 1980′s. Not in my family experience.

It is not relevant that the actual family in each case is not the same individuals. Maybe the old ones moved up, but there are the new ones filling that slot. It is not relevant that there are more luxury goods available now. In the 50′s a TV set (a very small screen one) was real evidence of having “made it”. A color TV was only something for the rich. Many so-called “middle income” people aspired to those things, and stretched budgets to have them. In the 40′s a telephone was a sign of getting out of the poor class. If you lived in the country, it was running water in the house instead of a hand cranked pump in the back yard.

There are the equivalent luxuries today in cell phones, home entertainment centers, hot tubs, and a host of other things. The difference is that they are relatively much more expensive. The reason for that is wages have not risen proportionately. That something is “expensive” is related to how much money you have to pay for it. To a millionaire a Jaguar is not expensive. To a poor janitor it would be unthinkably expensive.

So the wife goes to work to raise the “family” income. In the 50′s 60′s, etc. the family income was the head of household’s paycheck. Today that would not go very far if a middle income wage earner wanted the equivalent 1960′s American Dream home and family.

robert_o April 11, 2011 at 6:42 pm


Your criticisms have been addressed many times over the years, both by our hosts and by the commenters on this blog. So I can only encourage you to stay a while and listen.

Needless to say, facts do not back up the economic claims in your first few paragraphs.

The penultimate one, is, sadly, a non-sequitur: Because there is poverty (even assuming that this is the case) does not necessarily imply that “government” is the mechanism by which poverty is reduced. This is a logical error.

Instead, you must show that government is the best (however defined) means of reducing poverty. Your work is definitely cut out for you.

Joe Concordia April 14, 2011 at 11:26 am

I never claimed that government is the sole means to eliminate poverty. I believe strongly it has a role to play in it and when properly administered has a positive effect.

I completely renounce the theory that government is useless in the problem of minimizing poverty.

yet another Dave April 14, 2011 at 1:19 pm

I completely renounce the theory that government is useless in the problem of minimizing poverty.

I agree – government is definitely not useless in this case. Government has proven to be very effective at making the problem worse.

Dan April 14, 2011 at 1:33 pm

Can’t remember source, but I believe the numbers given contrasting the entitlement expenditures to recipients in total was equivalent to $60,000 per person. Wouldn’t it just be cheaper to give all those recipients $30,000 and let the card fall where they may? Should they find themselves out panhandling by mid-year, wouldn’t that be their problem?

Assuming these numbers have some validity, how is govt
faring so well?

Dan April 14, 2011 at 7:50 pm

And we see more as reports are Rollin about the wastes and fraud associated with progressive spending on weatherizing low income housing. New Jersey alone will have to cough up over $7.5 million to repair or replace for fraud. Waste, waste, waste….. Think of how many people could have their lives turned around on that money and there is wasted. Then think about how many people had to have their hard earned money confiscated for more govt malfeasance. Over and over again.

hayseed April 11, 2011 at 6:48 pm

“Owner’s self interest demands inherently the dimunition of labor since in their view labor is a cost contributor in the business equation, not a revenue contributor. (actually a fallacy)”

I always get a laugh when I see statements like this from non business owners. For this point to have any credibility, ALL owners would have subscribe to the fallacy. Otherwise, exploiters that they are, the business owners that were as smart as Joe would run the fallacy believing competition out of business.

vikingvista April 11, 2011 at 9:10 pm

Labor is a cost of production. But obviously the owner can’t just not pay for labor. If he could, sure he would. Who doesn’t want free stuff? But since he can’t, he focuses on productivity. And productivity increases are the essence of wealth creation, not a cause of poverty.

Dan April 12, 2011 at 12:14 pm

Incentivized productivity increases was a contributive factor of less slavery. The morality factor hastened it.

Firms want and need increased productivity and will pay for the level needed.

Joe Concordia April 14, 2011 at 11:49 am

Where would a poll of business owners and managers in corporations rate their cost of direct labor within their operating statement?
a.) Too High?
b.) High?
c.) Low?
d,) Too Low?
I do not put in the option of “just right” since in my experience in management that is hardly ever the answer that might be given.

Now, what would be the manager’s answer to the situation at each of those levels? Maybe one of the following? If you have other likely solutions I would be interested to hear them.

a.) Fire 15% of the roster, freeze wages, freeze hiring.
b.) Fire 10% of the roster, limit wage increases.
c.) Hold the wage scale policy, give increases to selected high performers. (The alternative one to this is do nothing new)
d.) Do a wage survey of the industry, see how we compare and consider the possibility of upgrading our wage scale policy.

In light of your comment indicating my assessment of Corporate America’s attitude on labor is dead wrong, I really would be very interested to see what you think would be the distribution of answers on both these items.

If the same group was asked about the management executive incentive program was funded satisfactorily, I would venture to say there would be only one answer. It is too low. What would be the solution. Next years budget would be higher.

Dan April 14, 2011 at 12:03 pm

Has there ever been in, your recollection, an employee or an acquaintance, below management who stated they are being payed ‘too much’? How about ones who , when asked if they would like to see higher wages, say ‘no’?

Joe Concordia April 14, 2011 at 5:01 pm


So what is the best solution? How about negotiation? Management says they are too high, labor says they are too low. What is the rationale for management to unilaterally say what is appropriate, especially when the number is “take it or leave it”?

If the rationale is that owners need to set the price of labor to assure their profit, then labor has the right to strike to ensure their economic survival. Its a two way street. The problem is that labor has lost the leverage of the strike. Government should help restore the balance. No one should have the whole street to themselves.

Dan April 14, 2011 at 7:35 pm

No govt should not. Employees that were essential or good leave and that business suffers. If it does not suffer then those employees were not that essential and easily replaceable. Itt is not govt business. It is between employee and business. If u don’t like your working conditions or pay, either unionize or leave. Private businesses and their employees can do what they want, I don’t care. I will make my choice based on the quality uf product and price. Govt has no role. Public unions wok are hired by govt must have limitations placed on them. Businesses are kept in check by the market but te govt has few limitations, as they can just tax more. As we have seen across the US, govt employees are, on avg. Over compensated compared to the market.
I understand you are troubled by profits, but an individual is not limited in job opportunities except by that of his/ her own doing.

vidyohs April 11, 2011 at 9:45 pm

Joe Joe Joe, man you’re just being plain silly and repeating the looney left talking points here.

But comparing the present population with those hourly workers that benefited from the prosperous 60′s and 70′s in this country the current hourly labor force is much, much worse off.”
I am 69 years old and I lived through this time. I was born into a dirt poor family that became lower middle class by 1955, and like every one else in my family I am much better off today than I was in 1955. So is everyone else I bump elbows with on a daily basis, better off in every category, except I can’t jump as high or stay up there as long anymore. I can drive through the poorest part of Houston and not see one family living in the shitty conditions my family did in 1946/7 when my dad was discharged from the Navy and was struggling to learn a trade. He didn’t beg for a government handout, he didn’t look to a union, he got off his ass and learned a paying trade, worked hard and moved us out of poverty. Was he exceptional, no. Was he a damn socialist thumb sucker, no.

“Wages have been stagnant for more than 30 years in real terms, thanks to Reaganomics policies.
Isn’t it peculiar that in this time you claim wage stagnation, my personal income has done nothing but grow? Not because I am union or receive government handouts, but because I can not sit my butt down and let others put bread in my mouth. I got news for you buddy, an independent window washer who is willing to sell and back that up with performance can make much more than the highest skilled construction superintendent out there, granted he will likely work harder for a year or two, but then he can sit on his butt while he has paid employees doing the work. Great how capitalism works, eh, Joe?…….or he could sit on his ass, suck his thumb, and ask the government to put bread on his table.

“Most importantly in this particular crisis time with millions of people facing foreclosure on homes, unemployment, and drowning in personal debt it is unrealistic of you to characterize the state of citizenry as “not poor” even in absolute terms. Most of the lower class is functionally bankrupt.”
Joe, how do people get into debt? No one forces them to, but the fools ask for credit, consumer goods, cars, houses, etc. et. al. How to fix the problem……don’t ask for f.cking credit…….how much mo simple do it gotta be, Joe? If you want more then you earn more and pay for it, you don’t ask for credit. It is called delayed gratification……something unheard of in your looney left world.

“Your comfort level, which I do not in any way impune as undeserved or not merited, is your personal reward for the efforts you made to achieve it. The realities of the human condition are that there are others who are not able to accomplish that. That is not a “fault” in their make-up it is just the statistical distribution of the human characteristic.”
Joe, make up your mind please. Either it is a “fault” in their make-up or it is the “fault” in the statistical distribution of the human characteristic, which is it. Either way, the problem lies with the individual, not his mate, co-worker, his neighbors, or society. But, by-the-by on that, are you saying that there are people just not genetically disposed to work? And, if so, your answer is for Don and I to support them? Sheesh, what a concept. Actually what it comes down to, Joe, is that each of us has a choice, never easy choices…oh no, they are all hard choices, and that choice is whether to be honorable men and women or to be looney left thumbsucking shits that only see taking as the answer.

“Owner’s self interest demands inherently the dimunition of labor since in their view labor is a cost contributor in the business equation, not a revenue contributor.”
Joe, what an absolutely ignorant thing to say. Jesus, how did you get so wrong? As a business owner the first thing I recognized was that as each employee of mine made more, I made more. My fondest dream was to see each of my employees grow rich beyond their wildest dreams. Why Joe? Because I am not a thumbsucking socialist/communist, and I knew that if they became rich, I would become rich as well, probably much richer than any of my employees because of the multiplier effect. That is how capitalism works, Joe. I put you in a position to become wealthy because your efforts will make me wealthy. You call it exploitation because you’re ignorant, and I call it opportunity because I am educated.

“Trickle down economics is a fantasy, at least in the fraction of distribution down to the lower levels.”
Joe, you just get worse the farther one gets into your delusions.
If you think Ronald Reagan invented “trickle down” economics, then again, sir, you are ignorant beyond belief and you are embarrassing to read. If “trickle down” economics doesn’t work, then how the hell has this nation developed from a rural land based economy with pockets of deep poverty to its present day position where even our poorest have luxury and amenities beyond belief by the rest of the world’s poor?

vidyohs April 11, 2011 at 9:48 pm

Darn, somehow I missed shutting the bold down. I miss the edit capabilities to correct this sort of thing.

Methinks1776 April 11, 2011 at 10:14 pm

How much do you think it would take to bribe Cord to bring Disqus back?

Dan April 12, 2011 at 12:18 pm

Aside from the vulgarities and name calling, I support and second Post 41.

Dan April 12, 2011 at 12:22 pm

By the way, I grew up ‘ poor ‘ . Had I ignorantly chose to continue the process of blaming others and demanding entitlements, I would most likely be living as many other self destructive individuals from Detroit.

Joe Concordia April 12, 2011 at 6:36 pm

Thanks for putting all your ideas down point by point. I accept the criticism, but do not agree. You are talking microeconomics, your personal accomplishments. I am talking macro data. Check the census wage data and it is clear that the “poor are getting poorer and the rich are getting richer”. That is irrefutable.

For your information I am about 10 years older than you and have seen the income trends first hand. The hourly wage earner today is much, much worse off, and the low salaried guys are not a whole lot better. Think the thousands of employess at WalMart and the other big box retailers, McDonalds and the other fast food places, Day Workers in every major city, and clerical staffing from organizations like Kelly Girl and the like. Thats a lot of people. They are working for peanuts and being treated like expendable supplies. Even building trades guys, and factory workers in right to work locations are way below what they would be getting if organized labor was half as well organized today as it was 30 years ago. That includes pay, benefits, and job security.

I enjoyed a very successful career as an engineer, working executive, then private business owner. It is a shame that salary offers to graduate engineers today (not the new grads, they always start fairly high) are almost the same as I was hiring them for in 1980. They are still hiring good engineers for $50K to $60K today, the same as what I was doning at my old company in 1980.

Sure I started working for 50 cents an hour in 1948, and no one today works for that wage, but the fact remains the hourly worker today must put in more hours to buy a loaf of bread than he had to 30 years ago. All his fringe benefits are deducted from his paycheck, and his job is constantly up for being outsourced to China without so much as a word of consideration for their service.

As to the point about calling anyone who is on the low end of the pay scale a lazy, good for nothing that is idiotic. Sure there are lazy people, and there are people that do not place work as the highest priority in their life. My experience as a manager was that only about 20% of the roster really humps, the rest do the job that they are asked to do and little more. That’s why some make more money than others. But if the only “good” people by your definition are the ones who are pushers and the others are all worthless then you’re discounting 80% of the labor force. Not to mention a whole lot of people that are good people, but victims of circumstances that put them in a lousy place in life. Say, like amputee GI’s or Section 8′s from Korea and other places and single mothers who are just abused by some guy then abandoned.

I applaude you for sharing your financial success with your workers so generously. I suspect there are more employers that do not do that than there are those that do. I suggest you read a book called “The Big Squeeze” to read some stories about how the other half is forced to live. I still hold that my statements are true. Corporate America has lost its view of labor from being a useful asset to be valued to being one where labor is a cost item to be minimized or totaly eliminated wherever possible. Even that is in the best of companies, in the worst labor is regarded as a commodity to be bought at the lowest bid price then discarded as soon as they did the job they were asked to do.

As to your comment on trickle down economics, and the Reagan myths just look at the current GINI ratio for this country now compared to pre-Reagan era. Where has the money gone? Try the top 3% of the country.

Dan April 12, 2011 at 9:23 pm

Would do u a bit of good to read Thomas Sowell and Walter Williams.

vidyohs April 12, 2011 at 11:40 pm

Joe, Joe, Joe, if you thought I responded to you believing I would make a dent in your looney left devout support of all things collective, you are seriously mistaken. I responded with my truths just for the fun of the exercise…..kinda sorta like making sure you heard it at least once before you die.

Joe Concordia April 14, 2011 at 11:53 am

Thanks for that consideration. Actually I have heard the looney right devout support for many years and have always tried to help them get it right. It does not bother me to engage in the debate. It is sort of fun.

Dan April 14, 2011 at 7:53 pm

As always, progressives ideas are abysmal failures should they not have all society forced into participation. Even, when they get govt to use the full force and mandate participation, the idea begins to falter and eventually fails, always.

Ken April 13, 2011 at 1:11 am


“Check the census wage data and it is clear that the “poor are getting poorer and the rich are getting richer”. That is irrefutable.”

I worked at the Census Bureau and know the data pretty well. As I’ve posted numerous times here, what you’re saying is wrong and is refuted in the Census Bureau data. Take a look at Table 695 in the Statistical Abstract.

It shows clearly that EVERYONE is getting richer. It clearly shows that as a percentage of the population, all divisions of income making less than $75K has shrunk. The percentage of the population making more than $100K doubled from 13% in 1980 to 26% in 2008.

Inflation has been accounted for in this table, so the $100K in 1980 is equivalent to that in 2008.

So much for your statement being “irrefutable”.

Perhaps you should be more familiar with the Census Bureau data before commenting on it. It’s freely available to anyone willing to type “Census Bureau” or “Statistical Abstract” into google.


Ken April 13, 2011 at 10:33 am

Well, it takes sand to try to peddle absolute immiserization in this day and age, I’ll say that much.

kyle8 April 12, 2011 at 6:44 am

God you are full of left wing myths and cliche’s aren’t you.

In the first place, What critical government programs have been defunded? Huh? I really want to know. Can you name one?

Real wages have not been stagnant for thirty years, can you read a statistical abstract? They have been flat for about ten years, but before that they were growing.

I feel sorry for you that your are so churned up with envy that you call differences in income “despicable” That is a personal character flaw. There is no economic system ever which does not have huge disparities in the haves and the have-nots. (that includes communism).

Whether some billionaires have a lot more money than me is immaterial as long as the economy is good, and I have personal opportunities to improve my situation.

Doofor Smith April 12, 2011 at 12:16 pm

Click: Like. Like Hayek said, A claim for equality of material position can be met only by a government with totalitarian powers. In related news, I see that Wikileaks is mostly inactive now that Manning & Assange have been neutralized and Appelbaum is being watched. The DOJ has subpoena’d Twitter and is monitoring all the tweets there now. It won’t be long before everything in english-language cyberspace is levelled out again to their liking. Hayek also said Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.

Joe Concordia April 14, 2011 at 12:11 pm

Have you considered that as the number of billionaires increases the number of the destitute increases, unless they share some of their wealth. Overall economies on a total input-output basis is a zero sum game. Multipliers change the supply for the next cycle, but within one exchange the purchase price must equal the selling price. No one will get more than one dollar by spending one dollar unless he is able to buy below inherent value or conversely sell above inherent value.

Billionaires have the capacity to buy below real value and thereby increase their wealth. But the sellers who sell below real value loose the margin. Consider the OPEC countries. When they sold their oil for $3 per barrel they gave away the store. Then they got smart, organized OPEC so now they sell the crude at $110 per barrel, well above the real value. We as a nation loose billions of dollars in the process. The Saudi’s and Kuwaiti’s laugh all the way to the bank. American’s in some cases limit the miles they drive their cars because they can’t afford the gas.

JohnK April 14, 2011 at 12:20 pm

“Overall economies on a total input-output basis is a zero sum game.”

Any argument based upon a false premise is a fallacy.

Any argument based upon that premise is a fallacy.

Dan April 14, 2011 at 12:33 pm

So the billionaires receive billions in cold hard cash every year? Wow! Or are the billionaires just paper tigers? Should they sell all of their assets in one day, would they have a billion dollars? Or is their worth a perceived wealth based on what some of their assets COULD sell at? Is that billions in a vault or under their mattress?

I understand this statement is not in context of what you are trying to accomplish, buuuuttt……. OPEC is easily neutered by drilling and extracting oil from the good ole U S of A. Far more supply, far less prices. OPEC has to sell oil, and will fight amongst themselves should any few members attempt some dictate of not selling enuf to meet their own financial needs. We can easily neutralize most of that issue within 10-15 yrs .

Joe Concordia April 14, 2011 at 5:30 pm


We do not have enough oil to do what you say.

There are other resources available. Unfortunately the Exxon’s, Koch and other major oil businesses have blocked those developments for years. But progress is being made and there may be a day when we will be independent of imported oil.

Naturally billionaires accumulated their wealth over long time periods. Those time periods encompassed many transaction cycles. The billionaires are the ones who bought low and sold high. The paupers (or bankrupted businesses) are the ones who bought high and sold low. The anticipated value, either hidden i.e. not recognized by the seller or potential future value recognized by the buyer, in the transaction was in each decision at the time. If the transaction was a fair one, it was zero sum. The buyer and seller both got the inherent value. The overall transaction had a total amount of money in the transaction that was fixed, both parties exchanged assets without a change in their combined wealth prior to the transaction.

This is not a fallacious principle. It is how business operates every day. In the aggregate if a company buys low and sells high continually over time it will grow. Vice versa, it will go out of business.

Dan April 12, 2011 at 10:21 am

A disservice to the public is to support more ideas from democrats that gave us detroit. Detroit is the poster child for democrat leadership. No thank you.

Joe Concordia April 12, 2011 at 8:20 pm

The poster child for democratic leadership is FDR. Re-read his second innaugural, compare that with the current conservative agenda then tell me who is espousing the best service to the public.

Dan April 12, 2011 at 8:35 pm

Certainly not FDR. Talk is cheap. FDR continually espoused policies that contributed to the prolonging of 30′s era problems. The NRA, AAA, etc.,… Made thing worse. These were successful policies for an individual whose ambitions for power exceeded that of American exceptionalism and free market principles.

Dan April 12, 2011 at 8:36 pm

Detroit today is an FDR dream. People dependent on the state for their sustence.

Dan April 12, 2011 at 8:54 pm

The best service to the public is not collectivism. My neighbors consequences of his/her choices is not my responsibility. Nor is their successes for me to lay claim.
The NRA put people in jail for not abiding by industry mandated pricing, which was set by the largest firms, making competitive pricing for the business who set up shop outside of a saturated neighborhood, illegal. And, that policy made it illegal to pay an employee below industry mandated wages. The results of these policies was more unemployment and more mechanization.
The AAA had farmers kicking blacks off of their farms. The black population who were still living on the least productive acreage of farms were kicked off as farmers were paid to keep acreage from being used. Naturally, one would just claim to not using property that they wouldn’t have used anyway.
Then the corruption under the FDR admin was rampant, nationally. What a nightmare!!!!!

Joe Concordia April 14, 2011 at 5:36 pm

FDR must have done something right. The country re-hired him three times after his first term.

My recollection is all very positive about him. Of course I was only a kid at the time and not that knowledgeable about anything in politics or government. My impressions are from what I saw on the faces of many people who cared deeply for him and were very thankful that through his efforts their life was made a little easier.

Dan April 14, 2011 at 7:57 pm

We do have enough oil. There are estimate of more than saudi a arabias wells in N.D , Alaska, and the shale rock alone. It’s enough to push the oil prices far down. He’ll, just the announcement of opening up of these wells will shoot the price down by over 30%.

Joe Concordia April 16, 2011 at 9:40 am

Not true. US has ony about 2%-3% of world resources. Our best resource is coal, 2nd is gas. We should convert to a coal based fossil fuel energy economy, then later turn to solar. All other approaches are not optimal.

JohnK April 12, 2011 at 11:01 am

According to the GINI ratio Nigeria would be preferable to the USA, as would Mongolia and Ethiopia.

Apparently you would prefer to live in a place where everyone is equally poor than have a higher standard of living knowing there are people with more than you.

That’s pretty pathetic.

Especially when many people in those countries would give their left testicle to live in the despicable place you call home.

Joe Concordia April 12, 2011 at 9:16 pm

John K;
Would you please give me your opinion.
Is an increasingly higher GINI figure a good or bad indicator for the direction quality of life is headed in an economy? Do you feel there are no adverse consequences to extreme economic disparity over large segments of a population?

Methinks1776 April 13, 2011 at 7:42 am

You didn’t ask for my opinion, but I’ll give it to you anyway.

The GINI coefficient is one of the most useless metrics you could ever come across. All it really tells you is how little or how much you will be allowed to achieve.

A low GINI simply means that people aren’t allowed to succeed – the difference between brackets is small. A high GINI means little. It is more than four times more expensive to live in NYC than in almost any other part of the country. Yet, costs are not taken into account in the GINI calculation. So, when you compare someone just scraping by in NYC to someone living in Mississippi, the GINI will be high, but the person living in NYC will not be richer.

In the Soviet Union, the average person lived in abject poverty and the average member of the nomenclature lived way above that – that is, at a material level comparable to a blue collar worker in the 1970′s. The social consequences of equalizing income were enormously negative.

They are also enormously negative in countries with lower GINI scores today. France, for instance, has near constant riots which stem from a lack of economic opportunity.

There is far more social stability here because people don’t feel stuck. If you’re unhappy with where you are in life here, you have relatively very few barriers to improving your life in this country. This – not relative wealth – is what people really care about and why poor immigrants flood in. Finally, what constitutes “poverty” in this country is a level of material wealth that the middle class aspires to in the rest of the world.

JohnK April 13, 2011 at 8:08 am

“Is an increasingly higher GINI figure a good or bad indicator for the direction quality of life is headed in an economy?”

When someone like Bill Gates gets fabulously wealthy that indicates that society has become wealthier as well. How so? To become that wealthy Mr Gates has provided Microsoft products to the masses and those products have made everyone richer. When someone becomes wealthy through trade it indicates that everyone else is a little wealthier as well.
So I would say that a society that allows people to attain great wealth (absent force and/or fraud) is one that allows everyone to become richer.
Third World dictatorships are not a valid comparison because in those places wealth is amassed through plunder, not trade. In that scenario everyone becomes poorer, including the rich.
For that reason the GINI ratio, in my opinion, is bull-plop.

“Do you feel there are no adverse consequences to extreme economic disparity over large segments of a population?”

As I said, when someone gets rich (absent force and/or fraud), that indicates that society has become richer as well.
Those “on the bottom” have access to the goods and services that those “on the top” provide. Both are richer as a result.

Think of it this way. For every fortune amassed through trade there is an equal amount of wealth spread out through society. The more fortunes that exist the more wealth is spread out through society.

Allowing people to get rich is a good thing. Everyone benefits. Even the emotional losers who envy the rich benefit. They just refuse to see it.

vikingvista April 13, 2011 at 4:45 pm

My personal GINI coefficient over my lifetime is close to 1, but my life has been a pretty good one. No complaints. If everyone in this country had a life as good as mine, and few do, the nation’s aggregate GINI would be close to 1. Egalitarians would consider such an unprecedented level of success, happiness, and material well-being as an evil that the government must stomp out. And government does try. Government tries to tax away the positive incentives (products) of my good decisions, and use those funds to subsidize away the negative incentives that led to those decisions.

Joe Concordia April 14, 2011 at 12:38 pm

I’ll respond here, at post #84, but it really applies to the three or four others who commented on my posts regarding GINI.

My understanding is the GINI coefficient depends on ratioing some groups of income levels, actually a continuous integration is used in the calculation so it is not actually calculated with discrete intervals. As such the statement that “I had a GINI of 1″ is ambigous at best when applied to a single person.

A GINI of 1 occcurs when one person in a population has all the wealth and everyone else in the population has zero. I don’t know how you had a GINI of 1. Where are the others who had the zero?

As you progress down the curve the size of the population at the top decreases and the size at the bottom increases. That means as there are fewer holding billions of the money, more are holding some share of the money. Sounds to me like that is a desirable condition for a country.

If you believe in the significance of large sample sizes versus small sample sizes then it must be clear that a larger segment of a population sharing the wealth of a nation would be a more reliable indication that more people have money. Presumably having more money does make for a better standard of living, then more people should have an improved standard of living.

If one compares living standards of cohorts somewhere. Then they should be compared within the region your are using as the reference location for the GINI. It is ridiculous to compare living conditions in Bangladesh with living conditions in Birmingham, Alabama on their relative GINI. But within Bangladesh or within Birmingham, Alabama would the populations of those particular jurisdictions be better off or worse off as the GINI soares to higher values? Expand that to whole countries, and what would your comment be about the situation in the USA relative to this question?

JohnK April 14, 2011 at 1:07 pm

Two problems.
First – money is not wealth.
Second – the GINI coefficient is a fallacy because it is based on the false premise that the economy is a zero sum game.

I don’t know about you, but I’ve never worked for a poor person or for someone with the same wealth as myself. I’ve always worked for someone wealthier than me.

Notice I use the term wealth, not money.

That multi-million dollar production facility can’t be converted into money to be shared with the poor. The millionaire or billionaire who owns it can’t just convert that wealth into money. Nor would it be good if they did, because the production facility would no longer employ people or produce anything.

I’d say society is better off with those millionaires and billionaires (with millions and billions tied up in wealth, not money) employing people and producing things, than trying to lower the GINI coefficient by converting that wealth into money and spreading it about.
A low GINI coefficient to me means that people are, for the most part, self sufficient. They must be if there are no rich employers to work for.

There is a word for being self sufficient: poverty.

vikingvista April 14, 2011 at 3:42 pm


I said I had a GINI “close to 1″. If you partition my life over time, and treat each interval (however small you choose to make them) as a separate person, then you will see that that population of intervals produces a GINI close to 1, because now, at the peak of my career, I am making approximately 10 times the income I made for most of my life, and that I plan to make for most of my retirement.

The actual GINI calculations don’t partition a person’s life. But that is my entire point. That is why it is misleading. By comparing one person with very high income to another person with very low income, you are in many cases comparing very similar people who happen to be in different stages of life.

In such cases, it is not a measure of inequality or oppression or class conflict or of any problem at all. Instead, a high GINI in those cases is a measure of a wonderfully prosperous society with the opportunity to work toward a short highly productive career that will pay for a long period of deferred gratification and allow an accumulation of savings that permits a long leisurely retirement. That is a wonderful thing.

A very high GINI might also reflect an aristrocratic society with almost no income mobility–a completely different scenario than the above.

So when you see a very high GINI, you don’t know if it is reflecting a very desirable state of affairs or a very undesirable state of affairs, or what combination of the two. That is why GINI as a measure of inequality is TOTALLY WORTHLESS.

But, when you see a very low GINI, you KNOW there is bad state of affairs. A very low GINI means people never have a long period in their lives when they can live off of their savings. That means, they never had the opportunity to be so productive to finance such leisure.

A very low GINI is very undesirable. And, it frequently is achieved only with substantial oppression. In socialist countries that strive for a low GINI, they confiscate the earnings of a person during his productive years, denying him the ability to save, and use that money to subsidize another person in his less productive years. This has the effect on young people of squashing ambition. Why be ambitious if you are subsidized comfortably now, and you know your rewards will be confiscated? Why take action to change your income, when the state makes such actions futile? Socialist countries strive to take away people’s choice for deferred gratification, because such a strategy increases income disparity within that person’s life, and therefore also within the population statistics.

SheetWise April 12, 2011 at 11:24 am

“Trickle down economics is a fantasy …”

Have any good examples of trickle-up economics?

Joe Concordia April 12, 2011 at 9:08 pm

Yes, minimum wages, regulated overtime pay for hours worked over 40, NIH funding to develop protease inhibitors for HIV, the federal highway program that allowed the trucking industry to flourish, need I go on?

Dan April 12, 2011 at 9:20 pm

Minimum wages which contribute to unemployment
Federal highway system which allocated dollars are used to extort states to abide by any federal ‘wants’.
The regulated overtime pay which contributes to me not being able to work more hours when extra dollars could be used in my household.
Don’t know NIH history to comment.
Although, the few times I am permitted to work more hours, I am ecstatic about the pay. If only, I could work more, but alas, overtime pay incentivized the employer to not offer more hours.

Joe Concordia April 14, 2011 at 1:04 pm

Dan: (re #90)

It is always possible to comment on something from one perspective or another. To be objective I like to, where I can, give a comment from both sides.

Minimum wages may have produced job losses, but it also gave millions of people improved income, which I think is a good thing. My feeling is that it is a net positive.

Regulated pay for overtime may have caused some limitations on overtime work and pay, but it also produced pay for overtime work that would have been extracted from labor without pay, i.e. freebie time. I strongly believe this is a net positive, especially when compared over the longer time horizon of what working life was like pre-New Deal compared to later times, i.e. 10-hr work shifts, 1$/day pay scales for unlimited work schedules, etc.

The protease inhibitor I mentioned for NIH is just an example. I assume you do know and believe that the National Institutes of Health produces countless reports, research, data, and actual samples of discovery drugs that the pharmaceutical industry uses to develop their medicines. Many of these cure diseases that the commercial pharmaceutical industry would not develop because they are evaluated as not profitable research candidates.

I really do not understand your comments regarding the Eisenhower’s federal highway program. If this is a value statement as to whether road construction should be left to states rather than federal programs, then my personal feeling would be that for a major interstate roadway program it is unquestionable carried out better under federal govenment administration rather than a state by state undertaking. The larger point of this is that the program to build the highways has contributed wealth to the country that is almost unmeasurable.

By the way in response to a question in one of your other posts, I am not a union guy. I have had a lot of exposure to unions, especially in the building trades. There’s good and bad to say about them. The problem today is the balance is tipped too far in favor of business owners and Washington has reneged on too many committments to labor.

vikingvista April 13, 2011 at 4:46 pm

Typical oblivion to costs.

Dan April 12, 2011 at 11:55 am

Sweatshops? Hahaha a hahaha ……… Your first paragraph allowed for the reader to believe a valid concern or worthy opinion may follow in the next paragraph. How unfortunate to then read nonsense and supposed ‘wealth of stats’ and opined on them being ‘irrefutable’. What nonsense!
Would this be the same stats liberal democrats used to propagandize discrimination accusations against lenders in order to push them into lending to more LMI (low to moderate income) applicants without regards for the risk?
“there are lies, damn lies, and then there are stats.”- Mark Twain

Joe Concordia April 12, 2011 at 8:22 pm

Its difficult to have a serious discussion with people who would deny validity of statistical data published by the US Census Bureau.

Dan April 13, 2011 at 2:48 am

See post 61 and climb down from thy tower, sir.

Methinks1776 April 11, 2011 at 6:58 pm

Is he kidding? How much more blood needs to spill before these academics finally end their love affair with Marx?

No philosophy on earth has lead to more poverty, starvation, exploitation and inequality.

What an idiot.

vidyohs April 11, 2011 at 8:34 pm

As we said in the Navy……A-F…ing-men!

Richard Stands April 11, 2011 at 10:32 pm

(Clicks repeatedly at where the Like button used to be)

gregw April 12, 2011 at 12:10 am

“No philosophy on earth has lead to more poverty, starvation, exploitation and inequality.”

You left out death. Although I admit it’s implied.

Gil April 12, 2011 at 1:38 am

What of the author pointing out that Marx is no more responsible for the deaths from Communism than Jesus is responsible for the deaths from Christianity?

kyle8 April 12, 2011 at 6:47 am

Also a bogus piece of garbage. Jesus said love your enemy. So if any of his followers killed people they were going directly against his directives. Marx said “Let’s have a Revolution” So if his followers did have a revolution then he is directly responsible.

STATISTICULOUS April 12, 2011 at 11:07 am

Not a marxist. But this isn’t exactly right, kyle8. Communism was a bad idea and if people had been free to choose it and abandon it as they pleased, its damage would have had a limited scope.
The reason I can tell very few people, if any, commenting on this site (including those in “support” of Marx) haven’t read him is that they conflate his philosophy with the tyrannical government which attempted to enforce it. Marx was a “smash-the-stater”; he didn’t want a big government he wanted no government – he saw it as an oppresive institution as well. He thought, wrongly, that he collective ownership of capital would be superior to private ownership. What he didn’t know and those who followed him later realized, is that people will not willingly organize this way. Especially once the results emerge. So coercion became necessary. My only point kyle8, is that you’re confusing the outcome with his intent- which is why the comparison between he and Jesus isn’t as bogus as you stated.

Methinks1776 April 12, 2011 at 11:28 am

Of course he knew it. Why else would he predict bloody revolution? It was Marx who called for the murder of anyone who resisted. The goal of the communist manifesto was tyranny of the majority – otherwise known as “democracy”. He had no problem with tyranny, no issue with coercion.

Meanwhile, his “theories” didn’t even work in theory, much less in reality. Marx’s “intent” was to transform humanity into something which it isn’t. Anyone who didn’t agree to this new structure would simply have to be eliminated. There is precious little Marx didn’t misunderstand and there is little that he favoured (the feudal system, for instance) that is worth favouring. I think you’re intentionally misreading his intentions.

Methinks1776 April 12, 2011 at 11:50 am

BTW…I find very little more irrelevant than what Karl Marx may have intended. No other outcome could have been possible.

kyle8 April 12, 2011 at 5:43 pm

He called for violent revolution, that is a fact,

“You have nothing to lose but your chains”

vikingvista April 12, 2011 at 5:47 pm

Methinks is right. You see it in the rhetoric of so-called anarchocommunists today. They claim to oppose statism, but their program depends upon coercive democracy. And when they take to the streets, it isn’t state-owned shops that they vandalize, or growing state power that brings them out. Marx and marxists try to have it both ways.

Gil April 12, 2011 at 10:07 pm

Gee, Methinks what wrong with a bloody revolution smashing the State? Thomas Jefferson says it should be a regular event.

Wulfstan April 11, 2011 at 7:00 pm

Dang, Joe – even when trying to put the worst spin on things, that’s the best you can do?

The average person has a car, a TV, a microwave, a washing machine, a dishwasher, a roof over the head, food on the table, a computer, a cell phone, a job, a long life-expectancy, a negligible chance of losing any children to complications or disease, and enough education to at least read newspapers and blogs and do basic math – but, alas, work sucks, bosses suck, debt sucks, having women who make income like men sucks, and all of the social safety net you seem to not be aware of sucks. It’s like a living hell!

I think you rather made Donald’s point.

P.S. – You seem to care a lot about the “irrefutable” GINI coefficient. Let me put it in a way “not clouded by complex theory,” so that even a concerned citizen can understand:

You are a typical poor person in America;
You are a typical poor person in “the worst dictatorships and underdeveloped countries in the world.”


Dan April 12, 2011 at 12:41 pm

Instant gratification.

Progressives often cite the lack of a material object as being the proof of disparity and inequity. No individual has a rite, as in a particular object must be provided to him/her should it exist, but freely choose to acquire an object thru compensating the owner of that object.
Dr Sowell points out the acquisition of many, once out of financial reach, objects as years pass and the objects are more widely available and at pricing affordable to most. He cites the air conditioning unit as an example. Large expensive units in the thousands of dollars to used units well under fifty dollars.

Joe Concordia April 12, 2011 at 9:37 pm

Somehow you (and a few others) are confusing my comments with Soviet Union Communism. I don’t know where that came from, certainly not from me. Your other comment re. GINI is rather naive. It indicates that you believe there is no functional relationship between GINI and personal freedoms and opportunities. If that were true no totalitarian country that experiences improved economic equality would ever have to worry about revolution. Revolutions against political totalitarians take place when masses achieve enough economic strength to fight. Revolutions against economic exploiters take place when the difference between haves and have-nots becomes unbearable for the poor. Read the French and Russian revolutions to see the difference. Observe the de-facto political environment transition taking place in China, as I have personaly seen it, as more and more people are rising out of poverty. It is not a bloody revolution, but it is a dramatic change, driven by among other things an improving GINI. It will not be long before our GINI ratio will be worse than their current one. We are headed in diametrically opposite directions in that metric.

Dan April 13, 2011 at 2:52 am

Thanks to govt interventionism in the market place, should ur theory ring true. Govt interventionism gave us the recent recession.

Joe Concordia April 14, 2011 at 1:09 pm

I believe that government intervention was deregulation of the banking system initiated by Ronald Reagan and executed to extinction of Glass Steagal by his cronies.

Dan April 14, 2011 at 1:18 pm

Then another intervention on behalf of LMI borrowers to push lending for folk who were very likely to Default on their loans , which is why they were being told to try again when they have shored up their finances. And, they did default.

Joe Concordia April 16, 2011 at 9:58 am

The money for the housing bubble would not have been there if the synthetic collaterized investments were not inveted and traded on Wall St.

I agree borrowers who over-reached their ability to repay are not without blame, but the professionals in the banking world are much more culpable.

Government facilitation of home ownership is a good thing, not a bad thing. The housing bubble and meltdown was an unintended consequence driven much more by financial instituion’s motives for profit and personal wealth much more than bad government policy.

vikingvista April 16, 2011 at 10:35 am

“driven much more by financial instituion’s motives for profit”

If only financial institutions had not been motivated by profit, as was the case before the bubble. There must’ve been some new virus in the air last couple of decades creating this widespread coordinated change in human nature.

tdp April 11, 2011 at 7:07 pm

Dear Joe Concordia,
Wages have been stagnant among hourly workers in real terms because
The economy is not driven by manufacturing of basic goods as it was in the prosperous 50s and 60s (I would not call the Stagflation 70s “prosperous”), but by manufacturing of high-maintenance, expensive goods such as airplanes, missiles, pharmaceuticals, and nanotechnology, all of which require a smaller, highly skilled labor force and heavy mechanization, as well as high tech and service industry professions.

These factors, as well as the liberalization of America’s immigration policies and the large scale entry of women into the work force, led to increasing competition for work among low-skilled and unskilled workers without a college education, and broke the power of unions, who no longer had the market cornered, or even had much of a market. Meanwhile, lowering of top tax brackets as well as the technology and internet boom of the last quarter century led to an increase in demand for highly skilled workers, leading to competition and higher salaries, and the profits that could be reaped from innovative new technologies that tapped markets that previously never existed- witness the slew of internet and computer billionaires such as Bill Gates and Steve Jobs- allowed ordinary individuals, provided with more capital for investment because of lower taxes and a greater incentive to innovate, to reap huge profits. Note that many of today’s tech tycoons came from modest or middle class backgrounds.

This urge to innovate contrasts sharply from the 40s and 50s, when America faced monolithic threats to its existence in the form of Japan, Nazi Germany, and later the USSR. These tough times required a sense of cultural solidarity and conformity, so people didn’t switch companies for better salary, didn’t try to change established procedures, and discriminated against blacks, foreigners, and women for violating cultural standards, keeping them from entering the workforce and resulting in better wages for remaining hourly workers.

Also, development in other countries has led to the rise of their manufacturing sectors, lowering our comparative advantage in manufacturing, or even eliminating it, resulting in cheaper and better quality goods but fewer manufacturing jobs.

Despite the stagnation of the wages of hourly workers and the growing inequality in pre-tax income between rich and poor, globalization and free markets have drastically reduced the cost of goods and services and led to rapid innovation, resulting in cheaper, better quality goods. The result? Your dollar goes farther and your standard of living rises.

100 years ago the difference between rich and poor was the difference between having a car and walking, of having refrigeration and indoor plumbing and abundant food and going to the outhouse after a skimpy, unrefrigerated meal. The rich had a far higher standard of living and were far happier as a result. Now, lower income people, while they may not have a fancy 2,000 dollar refrigerator or a gold-plated bidet, have refrigerators, TVs, indoor plumbing, microwaves, food, and cars or readily available public transportation, and the gap in material well-being (standard of living) has declined, as has, according to surveys, the gap in happiness between rich and poor.

Keep in mind that labor unions, redistribution, and large scale government intervention in the economy result in higher prices for the poor, higher unemployment, and slow to stagnant technological advance, as well as a lower per capita income and lower purchasing power for rich and poor alike.

The foreclosures you fret so much about are the result of 1) Fannie Mae and Freddie Mac, government owned companies, pushing subprime mortgages at the urging of the HUD in order to put poorer people in their own homes. This practice was then copied and expanded by private firms, who were shielded from big losses because of government interference (see “too big to fail” and protecting big banks from incurring major losses as a result of risk taking), also known as crony capitalism, leading to a crisis in the most heavily regulated sector of the American economy. Also contributing to the crisis was an unwise extension of credit to those with poor credit, again in a heavily regulated industry.

The “exploitation” you detest so much is not capitalism but State Capitalism or Crony Capitalism, in which the government intervenes in the markets, allowing powerful, established firms to earn record profits without facing competition because restrictions on the market made entry costs high for entrepreneurs with less stored up capital. Pro-Market policies are antithetical to Pro-Business policies, as businesses like monopolies, which abrogate all the advantages of the free market. Any time the government intervenes in the market with costly new regulations, keep in mind that the big businesses have more lobbying power to be granted special treatment, more means of exploiting loopholes, and more capital to absorb the losses such regulations force them to incur than small businesses, killing off the competition.


Matt April 12, 2011 at 11:34 am

tdp, nice & concise post.

I hope you read the above by tdp. I know that some have reacted viciously to your post, but continue to look through this website and the links to various blogs on front page of CafeHayek. I know you mentioned you aren’t an economist, but it will be worth challenging yourself to understand the impacts of policies, as well as challenging the bias that you and many American’s are fed by mainstream media and politicians.


Dan April 12, 2011 at 12:47 pm

I want your statements copied and posted anywhere and everywhere.

I wish to inform u now that I will be copying and posting your comments, with credits to ‘tdp’.

tdp April 12, 2011 at 3:19 pm

I got a lot of my information from a Cato institute study called “Paul Krugman’s Nostalgianomics” that came out shortly after he excreted “Conscience of a Liberal

dan April 12, 2011 at 6:09 pm

I am a fan of CATO and have not yet read that piece but did see it posted on CATO. Thank you.

Joe Concordia April 12, 2011 at 8:52 pm


Thank you for a thoughtful and astute response. I understand it is your honest philosophy being expressed. It happens to be different than mine. If there were one perfect answer to optimum economic growth, stability, and justice for all there would only be one or two economists in the world, and they would completely agree. The real world is that there are multiple schools as there are multiple kinds of people, governments, religions, and working economies. Your school is the philosophy of Mises, his students and his forebears back to Smith and Ricardo.

I balked in economics class many years ago when I heard a quote attributed to Ricardo that ” A farmer should not feed his cows more grass than it needs to give it the amount of milk he wants to have”.

I much prefer the words of FDR. Not an economist, but an intelligent and gracious person while a person of great wealth.
“Government in a democratic nation does not exist for the sole, or even primary, purpose of fostering prosperity. Its deeper purpose is to assist as many of its citizens as possible, especially those who need it most, to improve their conditions of life, to retain all personal liberty that does not adversely affect their neighbors, and to pursue the happiness that comes with security and an opportunity for recreation and culture.”
FDR Annual message to Congress, January 6, 1937

Without that philosophy there never would have been a middle class in the USA. There never would have been the upward progress of the millions of immigrants of the 20′s. With the conservative philosophies being espoused today our current crop of immigrants will not be raised from their station, they are more likely to be sent home to the poor countries they left looking for opportunity here in the so-called land of opportunity.

Dan April 12, 2011 at 9:04 pm

I don’t know where u live, but Arizona is a battlefront. Not so much from people looking for a better life. But, many contribute to some of the problems. As millions of capable Americans sit on their butts collecting a govt paycheck for breathing, mexicans are filling the needed labor that the market demands. The situation of having jobs available for immigrants is due to the welfare checks or 99 weeks of unemployment allowing for individuals to stay idle.
The MSM conveniently omits the daily stories of car chases, killings, border shootouts, coyote smugglers, drug cartel smuggling, etc.,… But we hear it, see it, and some citizens .

Joe Concordia April 12, 2011 at 9:49 pm

I understand there are about 30 million Hispanics in the country now. Are they all drug dealers and criminals? Stereotyping is never reasonable. I understand that in the southwest and west millions of illegal Mexicans and others work the farms and small businesses. Do the owners of those firms prefer that cheap labor or would they rather hire Americans?

I appreciate that there are serious border problems, but don’t put all the worst attrocities on the whole population. Stop the bad guys, let the good guys help our economy. This nation was built on immigrants, not because they were documented, but because they were immigrants with the needs and contributions that immigrants can make.

dan April 12, 2011 at 11:26 pm

30 million? total? 30 million what………30 million american of hispanic decent? 30 million illegals? 30 million people of Mexican decent who are citizens and here illegally?
How is John Stewart these days? And the show after….Colbert? They doing good?
Race baitor……Al Sharpton would be proud ….The racist that he is………

Your statements are of the ‘politician nature’. Did you not read my drabble? Try again.
As usual, an individual who wishes to ‘sound’ reasonable and compassionate will assume a bigotted motive.
‘Not so much from people looking for a better life. But, many contribute to some of the problems.’
Key words here: ‘many’, ‘some’
Key phrase here: ‘not so much’

read it again.
Most were documented…….. signed off as they left port in Europe…. later in 19th centure they signed in as they were issued a soldiers uniform and shipped off to the army to fight the south.
Few have problems with immigration. I am one of the many who do not have a problem. Illegal immigration followed by special privileges, such as not being deported following a crime or even misdemeanor if the LAW states that it should be the case.
I thought I was pretty clear that there are jobs for illegals becuase our govt keeps incentivizing individuals to not seek work.
And, you are not privy to the constant, daily updates of the crime and unstable situation at our border, because the MSM is not reporting.
All taxes are not being collected in the same fashion as they are on legal citizenry.
Cut welfare and unemployement to measly amounts and incentivize individuals who are fully capable to seek employment, even that of farm hands.
The lowered amount of unfilled jobs will make the journey less worthwhile. Many will still come. But, an open border is not an option.

Dan April 12, 2011 at 9:08 pm

Continued illegal immigration and free entitlements abound contribute to American loss of property. The illegal immigration contributes to unemployment. But, it is not the fault of an illegal immigrant that American citizenry are patronized by politicians with offerings and incentives to remain unemployed and unproductive.

Dan April 12, 2011 at 9:12 pm

FDR lived during a time when communism in Russia was showcased by russian officials. Economists and politicians alike were given the grand tour, but never allowed to see behind the cuurtains. And, we all know now of the misery, despair, and death that was prevalent, except for the favored.

Joe Concordia April 12, 2011 at 9:53 pm

I did not quote FDR commenting on Russia, his quote was in reference to the USA. The context was the great depression here. It had nothing to with Russia. Please drop references to Russia. We are talking about a declining middle class in the USA now.

dan April 12, 2011 at 11:08 pm

The Great Depression of the 30′s. FDR was making a politicians speech about ‘greatness’, ‘opportunity for recreation’, yadda yadda………yadda…..yadda…… About as impressed with his speeches as I am with Obama and his ambiguous speeches……
Policies and ideas of individuals are absolutely influenced by others and perceptions of other societies, whether fantastical or based on reality.
I refer to Russia because many economists of that time thought Russian society to be the future and so grand. These economists influenced FDR, greatly.

tdp April 12, 2011 at 9:27 pm

I was explaining that the diversion in incomes has been primarily due to global changes in the economy and historical events in recent decades, not due to any economic policy. And middle classes have existed in Europe since the revival of trade in the middle ages, when merchants and bankers in cities became wealthy through trade. In the US there has always been a middle class, as the first people to settle it from Europe were venture capitalists at Jamestown and Pilgrims and Puritans (renowned for business ownership and commercial success) in Massachusetts. The founding fathers came largely from the gentry and urban middle classes, and the early American economy had a robust trading and shipping sector. The middle class grew substantially during the Gilded Age and again during the postwar years, due to pent up demand and the unique economic conditions of a postwar economy.

Today’s immigrants will do just fine in another generation. Thomas Sowell has pointed out that immigrants in the 19th century, showed a gradual but consistent pattern of improving socioeconomic circumstances despite greater prejudice and legal discrimination than many immigrants face today, and were able to assimilate, learn English, and become successful citizens within a couple of generations. The immigration system needs to be reformed, but government programs are not responsible for the rise in living standards for immigrants, hard work, strong family structures, and a focus on education are. Look at the so called “model minority” groups- Chinese, Koreans, Indians, Nigerians, etc. All of them became successful because of these traits. “Model minority” groups also have high savings rates and higher rates of small business ownership than the general population.

As for the Ricardo quote: his theories were very early on in the study of economics, when it was just beginning to be studied and understood. He pessimistically saw the high fertility rates of the poor and noted how this contributed to poverty by stretching income farther, and when combined with the common attitude at the time (still prevalent today, but with more pity) that the poor were too stupid to look after themselves, decided that they should only be given subsistence wages because they were so stupid they would worsen their situation through wanton reproduction if given more money. Just as the theories of Aristotle were disproved by later scientists, so were many early economic theories, including Ricardo’s.

As for what the poor need from the government, they need information, not handouts. Rather than massive redistribution and the provision of all their necessities for them, the poor need help looking for jobs, writing resumes, preparing for job interviews, catching up on subjects at night school, financial literacy classes, English lessons if they don’t speak English, etc.- Things that will make them more serviceable and allow them to command higher wages in the free market. Private and government programs provide these services, but if they are not used there is not much to be done.

Joe Concordia April 12, 2011 at 10:35 pm

I understand and appreciate your explanation, but look at it this way.

If one defines “middle class” as one standard deviation around the mean national wage rate then there has always been a middle class. The problem is that at one time 30 or so years ago a family of middle class children could certainly go to college. Today a great many, who are children in the “middle class”, cannot afford the tuition. Middle class is not just a statistical demographic it is an economic condition under which certain things are affordable or not affordable. Today fewer things are affordable than they were in prior times for middle class families. i.e. standard of living is being lowered.

Please do not discount the tuition thing as a problem simply of higher expenses to run colleges. Granted there are higher expenses, but why aren’t there higher wages for the prospective students parents so that they can afford to send their children to college?

On the broader scale of affordability across the economy overall why is it appropriate that business can adjust its factors of production,i.e. withhold income from workers, to preserve profit and status, while individuals must accept a lower discretionary income but continue to contribute to the success of his employer.
Business has no incentive or agenda to promote income equality or social justice. Its only motivation is to make profit, and preferably large and increasing profits. The only countervailing forces on the side of individual workers is the government, when it has democratic philosophies, plus organized labor when it has the leverage to successfully negotiate.

Government policies do not hold down wages, businesses do in the interest of higher profits. Governments do not lay off workers, businesses do in the interest of higher profits. Read the philosophy of Jack (Neutron) Welch or Al (Chainsaw) Dunlap to consider whether layoffs and wage restrictions are driven completely by competition or simply various internal drives to higher profit for managmement and business benefit.

dan April 13, 2011 at 12:10 am

What is making College tuition rise quickly and what made if rise so quickly? Take the case of Universtiy of Colorado Law school. You can find this in Dr. Sowell’s book, ‘facts and fallacies’.
They were a great school. over 92% of grads passed the bar on first attempt. Better than Yale, Harvard, etc.,…… and they were a fraction of the cost to attend. The bar association, full of Harvard grads, Ivy league elites, etc.,…. could not have a school from Colorado out performing them and allowing for the ‘poor’ to become law students at $8,000 to $16,000 tuition per year. So they threatened the School’s accreditation. The bar cited ridiculous needs. A new Law school building at tens of millions ofdollars, full time professors as opposed to adjunct professors who could teach the students what is going on in the courtroom today instead of years ago, more minorities (sounds good to help and promote diversity, but are we promoting diversity in the NBA and NFL)……. A bunch of hogwash rules…… the end result was tens of millions of dollars in new costs that would have to be put onto the students. This effectively eliminated law school for the less affluent, unless they were to get ordained by a govt lending service. Govt was not needed and things were working out great……along came special interest and govt……..and it all went to hell…….

dan April 13, 2011 at 11:09 am

Employees can leave and find other work should they not feel as though they are being compensated enough. Employers will get what they paid for, lowered productivity and lowered efficiencies from lower tier pay.

Joe Concordia April 13, 2011 at 11:45 am

Dan: (re. your post #111) Thanks for your comment, very interesting history.

Harvard and Yale beating up on U of CO to cut out the competition. Sounds exactly what big businesses do to Mom & Pop businesses all over the place.

And not just the big ones eating the small ones, even the big ones get eaten. Think Wal-Mart vs Sears. That way they can pay people 15% less than everyone else in town, sell cheaper, beat out the other retailers so that they have to lower their wage scales too. That they do, of course because of “competition”, not to just maintain their profit at target levels. Would not think of taking a little hit on profit and giving some of that revenue to the clerks and floor-sweepers who hardly get enough in a pay-check to cover groceries today.

I’m not fundamentaly a union man, but I really feel it is too bad that organized labor is at such a disadvantage today that it has no leverage to stop that treatment. But of course we can thank Reagan for that too. His playbook is being replayed today, and it is scary.

If the inspection staffs at OSHA, Justice, and Dept of Labor is not neutered by underfunding their staffing needs maybe some of that stuff could be stopped. But I think that might make waves in the House when the lobby crowd chews out the GOP Reps for not delivering results after they filled their campaign war chests.

Joe Concordia April 13, 2011 at 11:12 am


By your definition, FDR was a “fellow traveler”, WoW! Really?

Joe Concordia April 13, 2011 at 12:43 pm

Dan: re: post #112

Do you really support that comment? Why should the worker go and find another job while the company continues to make good profits, maybe even a little more profit if enough quit?

He has put in time to help his employer be successful. If there was a labor organization to countervail the employer’s actions and a government there to support them the playing field would be more level. The quality workers would stay and everyone would benefit. Sounds like a better answer to me.

Where is the valuation of labor’s contribution? Where is the loyalty to the worker? Where is the action in keeping with the words of these big companies that say “Our employees are our greatest asset”? The system stinks and the individual worker is getting the short end.

dan April 13, 2011 at 1:04 pm

I will stand by my position of leaving a job and finding the greener pastures. I have done so, myself, several times over. The relationship between an employer and an employee is one of mutual contract.
Employer: I have a job that pays X-dollars. Take it or leave it.
potential employee: circle yes or no YES: take job and abide by job outline NO: find another job that suits your wants or pay needs or ability
Dont’ like it….leave and find another job…if you were an employee worth keeping they will pay more. If they let you go anyway, then the company will suffer the consequences of losing a valuable employee.
If enough quit, they are not likely to make more profit. Assuming the business was operating a business and not a charity that hired for the hell of hiring people.
Joe, you work at a union shop or belong to a union?
I once worked for one. Worse experience of my life. People standing around, not being productive. Why pay me to waste gas in transit and space at a shop, just pay me to stay at home and do a few chores. I would be more productive if I would have washed the dishes at home then at that union shop for the day.
Where is the employees loyalty to the business to remain as productive as possible to contribute to its success? Where is the employees loyalty to point out wastes and needless hiring to save money and contribute to profits which lead to expansion?
While an employee and employer benefits from incentivized, merit, hourly wage increases and gold stars on their paychecks for a job well-done, it is a disservice to the other employees to not fire unproductive or disruptive employees. Should the unproductive or disruptive employee be allowed to continue employment regardless of their incompetence and carelessness other employees will likely work to the level of that employee.

Joe Concordia April 14, 2011 at 1:13 pm

I beg to differ, wages are stagnant because Corporate America has set a higher priority on rewarding ownership than labor and that means increasing profits. Reducing the cost of labor is the easiest way for a company to increase its profits. I do not object to rewarding ownership, but I believe there should be concomitant reward to labor. Things have gotten out of whack.

Dan April 14, 2011 at 1:25 pm

When govt has mandated huge costs of doing business thru costly regulations, high taxes, costly tax codes to maneuver, politically motivated tariffs which are punitive, restricting freer trade, mandated and increasing labor compensation, all of which a firm can do little to nothing about, they will attemp to control costs where they can. And, wages and employment is where they can, aside from the costly relocation, control costs.

JohnK April 14, 2011 at 1:36 pm

But all those regulations, taxes, tax codes, tariffs, mandates and such were imposed with the purest of intentions.
If you criticize the results then you must disagree with those intentions.
Those policies were not intended to raise costs to business and force them to compensate by saving money on labor. That was not the intent. They should have cut profits instead. So those policies could not possibly have causes stagnant wages because that was not the intent.


‘Scuze me but I need to get back to paving the Road to Hell.

Dan April 14, 2011 at 1:49 pm

Aaaahhhh LOL!!!!!!

If thy inent is pure and benevolent, then any negative unintended consequences are irrelevant and blame should be cast elsewhere.

Like on tax cuts for the murderous ‘riiiiich’.

Dan April 14, 2011 at 1:52 pm

Get out the torches and pitchforks….. After the greedy ‘ rich ‘.

Joe Concordia April 16, 2011 at 10:04 am

Corporate profits have skyrocketed in the wake of high unemployment numbers due to the layoffs. All those “other” costs of doing business apparently have not restricted their profit.

tdp April 21, 2011 at 10:00 pm

There’s this thing called financial aid that is given to any low-income person who applies for it. The problem is that people don’t apply to these colleges. Ask for a student loan by filling out the FAFSA and you will get one if you make below six figures. In fact, abuse of student loans is one reason tuition is rising so quickly. Colleges raise tuition when they know the federal government is providing more student loans to people. Only 56% of people in college graduate within six years, so the government effectively wastes a lot of those student loans. Also, according to William and Mary economists Archibald and Feldman, costs for tuition have risen at the same rate as costs for dental care. You can even see the graph showing their lockstep rise here: http://opinionator.blogs.nytimes.com/2010/11/22/college-costs-the-sequel/?ref=global

Methinks1776 April 11, 2011 at 7:11 pm

Behold! The joys that Marx wrought:


This is how the average person lucky enough to even live in the city (where you had running water and electricity!! In the 1970′s!) lived.

jjoxman April 11, 2011 at 7:54 pm

Uh… no wonder my friends from Ukraine & Russia always wear slippers – and thought that the studios we lived in as grad students were frickin’ enormous. (400 sq. ft. all for me? Yippee!)

Way to be a Captain Bringdown, Methinks.

Methinks1776 April 11, 2011 at 8:24 pm

Yeah… they were filthy, also the floor was cold.

This guy just gets worse:

Without the self-sacrifice of the Soviet Union, among other nations, the Nazi regime might still be in place.

What “self-sacrifice”? Russians were prevented by Stalin from evacuating during the Nazi invasion.

Marxists were warning of the perils of fascism while the politicians of the so-called free world were still wondering aloud whether Hitler was quite such a nasty guy as he was painted.

Oh, how clever. Marxists hate diseased competition to their diseased ideas.

Almost all followers of Marx today reject the villainies of Stalin and Mao…

Only because they, like this guy, never read Marx or have very selective memories. It was Marx who advocated bloody revolution – a blood soaked change to human nature.

I can’t finish reading this crap.

vikingvista April 11, 2011 at 8:34 pm

“Marxists were warning of the perils of fascism while the politicians of the so-called free world were still wondering aloud whether Hitler was quite such a nasty guy as he was painted.”

Oooh. Is that what the Molotov-Ribbentrop Pact was? A warning?

Or maybe it was the keen insight that the problem with national socialism was nationalism, not socialism. If only Hitler hadn’t been such a racist, a worker’s paradise would’ve been his.

Truly marxists today are among the most pathetic buffoons on the planet.

Methinks1776 April 11, 2011 at 8:42 pm

I think Eagletown has never met a person before.

tdp April 12, 2011 at 9:29 pm

Terry Eagleton is a theologian, not a historian or an economist. He has not studied either subject and knows nothing about either subject, so his comments on the subject are no more valid than Paris Hilton opining on astrophysics.

Methinks1776 April 13, 2011 at 7:44 am


Gil April 12, 2011 at 1:43 am

Thomas Jefferson recommends regurlar bloody revlutions to keep freedom alive.

tdp April 12, 2011 at 9:31 pm

Thomas Jefferson also recommends not boning one’s slaves and did exactly that.

vidyohs April 11, 2011 at 8:43 pm

M’lady, did you perchance look below the link you sent and see the one to the SlaveMarket in Russia today? Looks just like many of the streets in Houston (the sanctuary city) for illegal immigrants.

The wonders of Marxism on display for all to behold, in our case it is illegal immigrants on the slavemarket streets, in Russia it is their own people.

Methinks1776 April 11, 2011 at 8:52 pm

Ugh…..No, I didn’t see that. I tend to ignore the stuff at the bottom of the page at English Russia. I always find it annoying that before you get to the thumbnail photos of other posts about Russia, you have to scroll through the thumbnails of animals and whores.

vikingvista April 11, 2011 at 9:14 pm

All of the Russian websites my mother-in-law goes to are framed in porn. This one is pretty clean.

Methinks1776 April 11, 2011 at 9:42 pm

Da. Tochno.

Ron H April 11, 2011 at 11:56 pm

Thanks for the pictures, Methinks. I’m always aware that I much prefer to live in a relatively free society, but if the constant drone of the statists should ever cause my thinking to grow fuzzy, those pictures can be a cold slap in the face to return me to sanity instantly.

JohnK April 12, 2011 at 12:56 pm

Ain’t poverty romantic?

Ken April 13, 2011 at 10:38 am

James Howard Kunstler’s wet dream made flesh: The New Urbanism, coming soon to a neighborhood near you.

nailheadtom April 11, 2011 at 7:36 pm

Eagleton says: Marx’s goal is leisure, not labor. The best reason for being a socialist, apart from annoying people you happen to dislike, is that you detest having to work. Marx thought that capitalism had developed the forces of production to the point at which, under different social relations, they could be used to emancipate the majority of men and women from the most degrading forms of labor. What did he think we would do then? Whatever we wanted. If, like the great Irish socialist Oscar Wilde, we chose simply to lie around all day in loose crimson garments, sipping absinthe and reading the odd page of Homer to each other, then so be it. The point, however, was that this kind of free activity had to be available to all. We would no longer tolerate a situation in which the minority had leisure because the majority had labor.”

Hey, I like that idea. Kind of like Pinocchio Pelosi advocating for universal health care so artists can do their thing without worrying about paying for tetanus shots. The problem is: Who’s going to make the absinthe, print the Homer and weave the crimson garments?

Dan April 12, 2011 at 12:51 pm

The Chinese and unions, of course.

tdp April 12, 2011 at 9:32 pm

Nancy Pelosi is married to a millionaire businessman. World Stone-Throwing Champion 2011.

John Galt April 11, 2011 at 8:02 pm

I gladly give the outdoorsmen-entrepreneurs and others seeking a hand-up a $5 bill or better if they demonstrate their potential societal value or make me admire their noble struggle, but I don’t give a nickel to one who seeks a hand-out and demands it as his right or as a duty that I owe him.

To Muirgeo among others, I ask, why is it moral to serve others, but not yourself? If enjoyment is a value, why is it moral when experienced by others, but not by you? Why is it immoral to produce something of value and keep it for yourself, when it is moral for others who haven’t earned it to accept it? If it’s virtuous to give, isn’t it then selfish to take?
I pity your acceptance of the code of selflessness which has made you fear the man who has a dollar less than you because it makes you feel your dollar is rightfully his. You hate the man with a dollar more than you because the dollar he’s keeping is rightfully yours. Your code has made it impossible to know when to give and when to grab.
You know that you can’t give away everything and starve yourself. You’ve forced yourselves to live with undeserved, irrational guilt. In the same way it isn’t always proper to feed another animal in any old way you like, neither is it blindly proper to help all other men, all of the time.
If a man demands your property as his right or as a duty that you owe him, you should resist him.
If of your own free choice based on your judgment of the value of a person who has requested some of your wealth, you wish to give some, that is a positive human action, and will contribute to a more just society.
This country wasn’t built by men who sought handouts. In its brilliant youth, this country showed the rest of the world what greatness was possible to Man and what happiness is possible on Earth.
The first part of my story will be playing in over 270 theaters this Friday, I know you will benefit from taking your time to view this movie, and then finding your own spontaneous unique way of living on this earth, and seeking your own brand of happiness, I really mean it.

Gil April 12, 2011 at 1:46 am

Did Jesus lose the plot when he said:

“You have heard that it was said, ‘An eye for an eye, and a tooth for a tooth.’ But I tell you, do not resist an evil person. If someone strikes you on the right cheek, turn to him the other also. And if someone wants to sue you and take your tunic, let him have your cloak as well. If someone forces you to go one mile, go with him two miles. Give to the one who asks you, and do not turn away from the one who wants to borrow from you.”


John Galt April 12, 2011 at 11:11 am

Those things that Jesus “told us” were never meant to be authoritarian commands and all the coercion that has taken place in his name is already referred to in various scriptures as “false prophecy.”

Like Thomas Paine, I see a lot of good in scripture but fully reject as irrelevant and irrational all the mysticism and superpower its protagonists allegedly possess. Odds are this was added and planted in there to set up priests as a privileged parasite class.

Gil April 12, 2011 at 10:11 pm

So you’re saying that passage is false and shouldn’t be in the Bible? Jesus is indeed giving commands – don’t do the right thing (or do the wrong things) and face eternal punishment.

muirgeo April 12, 2011 at 2:46 am

You goofy Randian Cultist. Walk me through your day and I will point out minute by minute as you feed off the commons thinking all the time your a self made individualist… Walk me through your life and your fathers and I’ll show you just what a product of society you are.


kyle8 April 12, 2011 at 6:54 am

I admit that the Randians over state things, but you are just the other side of the same coin. Sure we all benefit from society. That does not mean that we owe anything in particular to society. other than a modicum of taxes to keep it going and to obey reasonable laws.

When society becomes overwhelming, and the laws restrictive, and the cost prohibitive, then the individual is constrained, and so is human happiness and well being.

Craig April 12, 2011 at 10:41 am

I wish I had a Like button Kyle8. Well said.

tdp April 12, 2011 at 3:25 pm

“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”
— Frédéric Bastiat (The Law)

vikingvista April 12, 2011 at 5:53 pm

It is factually incorrect, and collectivist in nature, to say we even owe that much. You need to stop speaking for “we”. You have no idea what obligations I personally have consented to.

Ken April 12, 2011 at 11:14 am

Feh, the autarky straw man again. Ever hear of I, Pencil?

John Galt April 12, 2011 at 11:41 am

I will read this pdf if you go & see A.S. part I this weekend. If it weren’t for the Social Democracy’s path towards Authoritarian Police Planet, I wouldn’t have such a problem with you fasciphiliacs. There are only so many productive men you can sacrifice on your Altars of Forced Brotherly Love, then what?
You’re right, I am not going to go live in the woods Henry David Thoreau style and give up modern societal comforts. Like the one million Romany(Gypsy) living in America, I remain underground and strive not to be enslaved by The Man.
It would be easier for me if I would just ride the rails of the Clinton/Bush/Obama express, but it would be sacrificing what I consider the essence of what makes me a man and not a child of the nanny state.

Sam Grove April 12, 2011 at 3:47 pm

We can as easily point out how the commons feed off the common man.

That something has been organized by the state does not mean it would not be organized otherwise.

Most roads in the early U.S. were of private construction.

The one thing that does require state organization is the raising of armies and the construction of armament to kill people all around the world.

I notice you never tout that ‘benefit’ of the state.

vikingvista April 12, 2011 at 5:59 pm

States are not required even for that, but they may be more adept at it. The only thing a state is required for, is to organize large numbers of people against their will. Nothing voluntary requires a state.

Mesa Econoguy April 11, 2011 at 8:55 pm

Who is this Terry Eagleton clown?

“Terry Eagleton is a visiting professor at Lancaster University, in England; the National University of Ireland; and the University of Notre Dame. His latest book, Why Marx Was Right, was just published by Yale University Press.”

Aha. I enjoy satire.

tdp April 12, 2011 at 9:35 pm

Why Marx Was (Far) Left would be a better title

W.E. Heasley April 11, 2011 at 8:57 pm

“Again and again, he speaks [Marx] of the just society as one in which men and women will be able to realize their distinctive powers and capacities in their own distinctive ways.” – Terry Eagleton

Distinctive ways within a collective to create a “just” society. Hmmm. Terry’s Homeric hymn to forest nymphs with pockets of pixie dust? Well of course!

We know distinctive is straight out in a collective. “Just society” means social justice of which there is no definition ever been put forward hence non-existent (see Hayek). Distinctive powers would be the power of the purveyors within a collective.

Hence we have a non-distinctive member of a collective, toiling toward an undefined non-existent goal, all the while being managed by power purveyors. Who might enrich themselves in this formula?

Very nice! Very, very nice Mr. Eagleton!

Suppose if one was out to prove the Malthusian Population Trap, Eagleton’s your man!

Joseph K April 11, 2011 at 9:09 pm

Another embarrassing part of Eagleton’s article is when he says, “Marx would have scorned the idea that socialism could take root in desperately impoverished, chronically backward societies like Russia and China.” Actually, Marx didn’t just scorn it; his theory outright necessitates the opposite. According to his theory, socialist revolutions *will* take place in the most developed countries first. It’s in fact integral to his theory of exploitation, which essentially said that capitalists will extract ever increasing productivity from their workers while only paying them subsistence wages. Thus, as an economy becomes more developed, exploitation *increases*, bringing it closer and closer to revolution. Marx was a very systematic thinker, and both the idea that socialist revolutions should take place first in the most developed countries and that capitalism is exploitative derive from the same assumptions. Thus, to show that one conclusion doesn’t follow, brings all other conclusions into question. In fact, one could refute this idea of exploitation directly, by just showing that wages have in fact risen in all capitalist countries since the onset of capitalism, despite that Marx’s theories says wages should remain flat.

These are the reasons why defenders of marxism usually invoke the idea of exploitation from Marx’s earlier writings, namely that a worker is “alienated” from their labor in capitalism. The idea here is basically that your labor is this thing you carry around and you dole out to all things you produce or help produce. So, if have a car, hidden in that car are all the bits of labor from all the people who worked on it, trapped within its innards, and the people are alienated from it because they’re not driving it around. The problem with this theory is not only does it dubiously reify an activity (it requires one to assume that labor is a thing not an activity), it also fails to show how this is essential to capitalism. How exactly is a person less alienated from their labor working on an assembly line in communist Russia than a person working an assembly line in capitalist US?

Most people generally just assume there’s exploitation because they think people are paid less than they deserve. But this isn’t an argument, this is just as assumption. Marx at least tried to come up with an argument to rationalize his assumption that capitalism exploits.

Methinks1776 April 11, 2011 at 9:16 pm

In fact, one could refute this idea of exploitation directly, by just showing that wages have in fact risen in all capitalist countries since the onset of capitalism, despite that Marx’s theories says wages should remain flat.

In fact, as Marx was writing that wages will fall, they were rising.

Marx at least tried to come up with an argument to rationalize his assumption that capitalism exploits.

And the best he could do was to ignore the contribution of the capitalist and to assume that all of the value of the produced item was created by the proletariat, yet this sad proletariat was only paid a fraction of the value of the item. Fabulous economist, that Marx.

Gil April 12, 2011 at 1:54 am

Maybe Marx was referring to Crony Capitalism and then made the assumption that all Capitalism is Crony Capitalism (especially as there was a lot of it going around then)? If so it would explain why wages would fall – some people were getting artificially high wages because they were restricting competition.

On the other hand, of course a worker has to produce more to the business than he takes home in pay otherwise the business is engaging in charity.

kyle8 April 12, 2011 at 6:57 am

In other words Marx was wrong in pretty much every single thing that he predicted. Yet still there are people who are enamored of his teachings.

Doofor Smith April 11, 2011 at 9:52 pm

What would be the consequences if we escalate our war against obesity? Will there be drive-bys of the chocolate-chip gang against the M & M Mafia? Why shouldn’t we restrict possession of sugar & lard to licensed food manufacturers who can sell approved approved healthy fare at a 94% tax rate only? Isn’t an orderly top down society like Saudi Arabia to be admired? Their streets and airwaves are brimming with chastity & temperance. It is high time America rid herself of the violent thugs who prey on our children with unhealthy snacks. Build more prisons and let these sinners rot in jail if they don’t follow the new laws!

Methinks1776 April 11, 2011 at 9:55 pm

I love dreams of chastity maintained by the virtue and vice police as much as the next person, but I think you posted on the wrong thread :)

W.E. Heasley April 11, 2011 at 10:08 pm

Now,now Methinks. Your extensive service, years on the Vice Squad, disqualify your comment. ;-)

Methinks1776 April 11, 2011 at 10:08 pm


Doofor Smith April 12, 2011 at 10:48 am

True that. My Opera browser is locked on authoritarian mode and insists on posting to whichever thread will yield the greatest amount of social justice.

Chris O'Leary April 11, 2011 at 9:54 pm

I have loved the exploitation meme since I heard John Edwards throw it out there in the illegal immigration debate. Who in their right mind travels thousands of miles from their homelands in order to be exploited? Perhaps illegal immigrants know something that John Edwards and his ilk do not.

Methinks1776 April 11, 2011 at 10:01 pm

Oh, you’re totally wrong about that, O’Leary. John Edwards is the expert on the topic of exploitation. He became a millionaire by exploiting juries’ emotions to rip off Obstetricians. He can’t imagine a world without it.

tdp April 12, 2011 at 3:27 pm

And had the decency to have an affair with that tramp Rielle Hunter while his wife was dying of cancer. Swell guy.

Methinks1776 April 12, 2011 at 3:42 pm

Hey! She was in remission. That makes humping another chick while publicly screeching “character matters” A-okay.

muirgeo April 11, 2011 at 9:56 pm

“After I post this letter, I’m going to the supermarket to be exploited, and to be served by the supermarket’s exploited workers.”

WOW! The blinders of metro DC area must be very nice. You live in an area that maximally exploits rent from the government and diffuses it to the elite class while massive poverty surrounds you but you see it not. Come down from your Ivory Tower and walk among the homeless, the 50 million with no insurance, those with upside downed mortagages, those living pay check to pay check, those passing on college because they must work.

You are apparently content with $1.5 trilllion for 400 while the lower 90% don’t have that much combined makes you nothing but one of their modern day Vassals. You see nothing wrong with that picture?

I dislike living in a society where so much human capital is left to rot while nicompoops make up all sorts of excuses for the results of capitalist exploitation which rewards the most wicked and most greedy people and sidelines the truly well intended and truly productive people while leaving a much larger number to an even lesser circumstance.
Your comfort with not opening your eyes and dropping bombs from altitude really is sad IMO. So many of those that have something what little it may be has to do with the social safety nets we’ve pushed for and nothing to do with shear raw unbridled capitalism that you promote.

In YOUR world old people WOULD starve and children would die from the lack of health care. YOU DO NOT get to claim what success we do have for unbridled capitalism. You don’t live in that world and all the evidnece suggest it would be much more brutish for many more people than the current catastrophe. Things are much better than they would be if your society of privledge were allowed to prevail.

You really are a shrewed and uniformed person. Your world… the world of DC suburbia and GMU is NOT the world of 50% or more of our population.

WE have 800,000 black people incarcerated…. almost as many as were in salvery at the time of the civil war and you are singing “Zip-a-Dee-Doo-Dah..Zip-a-Dee-Doo-day… MY OH MY its a wonderful day to be a tenured professor.

John V April 11, 2011 at 10:07 pm


pure nonsense. inflammatory and idiotic.

Ken April 11, 2011 at 11:40 pm


“You live in an area that maximally exploits rent from the government…”

And yet you want to increase the power of the government, which will only lead to more rent seeking.

“…the 50 million with no insurance…”

This is quite a bit higher than the 30 million thrown around to scare people into passing Obamacare. Even that number proved to be fraudulent, as it lumped in illegal immigrants and people who could afford insurance, but chose not to buy it, leaving the number of people uninsured and couldn’t afford insurance between 3 and 5 million.

“You are apparently content with $1.5 trilllion for 400 while the lower 90% don’t have that much combined”

Since the total combined wealth in the US is something on the order of 65 trillion, you clearly have no idea what you are talking about.

“I dislike living in a society where so much human capital is left to rot…”

What human captial is left to rot?

“…the results of capitalist exploitation which rewards the most wicked and most greedy people…”

False. It rewards the most valuable.

“So many of those that have something what little it may be has to do with the social safety nets…”

Being dependent on the government is good for people?

The rest of your post is even more incoherent, saying the productivity causes starvation of the old and young; confusing what shrewd and informed means; and somehow shifting to slavery. Ah yes, the good old race card. Care to guess which political party fought to keep slavery and which fought to end it? I’ll give you a hint, Abraham Lincoln was a republican. Somehow the left never mentions that. Funny.


muirgeo April 12, 2011 at 2:31 am

“False. It rewards the most valuable.”

Yeah those Hedge Fund Managers, the Ken Lays, the Rupert Murdochs, the Goldman Sachs people ect ect… are sooo valuable…. your foolish believing wealth and value are the same. I’ll take a good public school teacher or a good government researcher or a good NPR journalist over all of them any day.

Ken April 12, 2011 at 1:18 pm


Hedge funds are the greatest instrument created by man that allows the average person to build wealth. Ken Lay built a company that provided energy services pretty well (the company went under due to a LOT of failed experiments it ran under shell companies, which it hid through “aggressive” accounting). Rupert Murdoch provides a news channel with the highest ratings in the business. Goldman Sachs provides wonderful financial services to the world at large.

You can have your public school teacher, gov researcher, and NPR journalist. The problem is that I don’t want to pay them, but people like you make me. In the examples you gave, you aren’t forced to pay any of them. You can do business with whomever you want.

And before you go all crazy saying that some took tax payer money, maybe you should be asking who gave it to them and why you support the people that give it to them (Obama). The people you support believe very deeply in crony capitalism, whereas I believe in free market capitalism.


muirgeo April 12, 2011 at 4:29 pm

It’s funny… no make that sad that you don’t think Hedge fund managers, Ken Lay , Murdoch and Goldman don’t cost you anything via government rent seeking. You really are a true believer… the perfect drone… a great pitch man. You could probably get a job at the Objective Cato Institute.

Ken April 12, 2011 at 5:13 pm


I didn’t say they don’t cost me anything in rent seeking. In fact I explicitly mention that in my last paragraph. The way to stop rent seeking is to reduce government power. Companies seek rents because they know that politicians will give them money.

But I guess reading comprehension isn’t your greatest strength.


tdp April 12, 2011 at 3:33 pm

Try living in an area where $200,000 dollars a year is enough to live a solidly middle class existence before taxes because of the high cost of living, then see 33-35% of your money taken by the federal government, 6% by the state (VA or MD), and in MD more by your city, plus payroll and FICA, and staggering property tax rates, and you have well under half of your income as take home pay.

Also, there are no good NPR journalists. If they were good, they wouldn’t be working at NPR.

Mao_Dung April 12, 2011 at 12:40 am

This crooked economic system where most of the rewards are being funneled to a small percentage of the population must be defeated one way or another. I suspect there well be much more misery created before anything happens to upend the evil being perpetrated on the hapless masses, the natural world, and the environment. The Koch libertarian/fascist propaganda machine is in full swing to enslave us.

There is a modicum of truth in the idea that extinct and extant communist regimes were/are bad in general. West Germany was economically superior to East Germany. The conclusion I reach is that both communist and capitalist systems are failures in their own ways. The U.S. economic system is becoming a total joke with bailouts for greedy, crooked, well-connected rich people and the poor and middle class getting the shaft. The people on this blog who cheer unbridled capitalist pigs are total cretins in my opinions.

Mao_Dung April 12, 2011 at 12:51 am

Ken Doll,

Before you troll and give me one of your unwanted, unwarranted idiotic comments, I must say, you are a total cretin. Go away.

HaywoodU April 12, 2011 at 7:16 am

Excellent satire that.

Ken April 12, 2011 at 1:11 pm


If I kept getting spanked and having my stupidity pointed out constantly by someone, I’d want that someone to go away too. Sadly for you, I will continue to point out your idiocy.


kyle8 April 12, 2011 at 7:02 am

You don’t like to live in such a society? Then you are free to immigrate. Why not go to China? China has a communist system which takes taxes from the wealthy and channels it to the poor. Surely that would suit you.

Oh! They are not pure enough! Well, there is always Cuba, or North Korea. Maybe those are too backwards for you? Why not try one of the Scandinavian countries. They are nice socialists. But you will have to hurry, they all seem to be slashing their top tax rates. Before long they will all have a flat tax system.

tdp April 12, 2011 at 3:35 pm

China has almost no taxes, actually, but no services either. All their money is invested in infrastructure or economic development. The biggest secret to their success is the “Special Economic Zones” that have no corporate taxes, which are more important than labor costs in choosing where one puts the factories.

Dan April 13, 2011 at 3:04 am

Go figure. Corp taxes would have bigger impact than that of labor. I surmise the same is often true in America. Caterpillar is prime example. They remain in Illinois. They remain out of loyalty. But, that loyalty cannot overcome crushing taxations. They recently penned a letter to the governor stating their position on increasing taxes. Should Illinois continue their march to redistributive wealth, Illinois will lose caterpillar. This is often the case for many American businesses.

Dan April 12, 2011 at 1:05 pm

Muirgeo is Nancy Pelosi in disguise. What trash. Running for office in S.F, are ya?

Methinks1776 April 11, 2011 at 10:08 pm

WE have 800,000 black people incarcerated…. almost as many as were in salvery at the time of the civil war and you are singing

I don’t mind letting them out directly into your neighbourhood. Deal?

W.E. Heasley April 11, 2011 at 10:09 pm


You are on a roll tonight!

Methinks1776 April 11, 2011 at 10:11 pm

dedushka Markc has that effect on me..

W.E. Heasley April 11, 2011 at 10:14 pm

I see, I see!

Mao_Dung April 12, 2011 at 1:48 am

You should be in jail with them.

Ken April 12, 2011 at 1:20 pm

Ah… you do your namesake proud. Jail all who disagree with you!

tdp April 12, 2011 at 3:37 pm

Kill 60 million people with famine and crusades against all those with triple digit IQs and you’ll be the spitting image of the Chairman himself.

muirgeo April 12, 2011 at 2:33 am

Absolutely and then I’ll march them all to to your neighborhood. Deal?

muirgeo April 12, 2011 at 3:06 am

It’s such a racist pathetic comment for a supposed libertarian to be making. Most of those in jail are in their for smoking pot, selling drugs or other minor crimes.

kyle8 April 12, 2011 at 7:03 am

True, and what have YOU done to end the war on drugs? Pitting yourself against libertarians who are fighting against the war on drugs does not count.

Methinks1776 April 12, 2011 at 8:09 am

Really? What percentage are in prison for smoking or selling drugs and what percentage are in for violent crimes? Also, why the objection only to blacks? What about Latinos and whites?

John V April 12, 2011 at 11:39 am

Gotta love the irony.

You sit there arguing with libertarians about issues that have been largely worsened by bad policies that ONLY LIBERTARIANS wholly oppose as a group.

Dan April 12, 2011 at 1:10 pm

Aim sure that they were only incarcerated for theft of an apple or two to cure their appetite. The white that have been incarcerated, surely were deserving.
It is amazing how quickly liberals/progressives resort to race baiting.

jjoxman April 11, 2011 at 10:35 pm

Dear Mr. Eagleton and all those who agree with you:

Please, at this moment, move either to Cuba or Venezuela. Not as a member of Castro’s or Chavez’s inner circle, or as any other person with privilege. No. Move there as an ordinary citizen.

Are you reluctant to do so? I wonder why? Could it be that you are living in one of the (if not the) richest country in the world in the period of greatest development in the history of the world, and you don’t want to leave that cushy chair behind while you wax eloquently about the greatest destroyer of the 20th century?

Capitalism has allowed you a privileged position in the world, and you mock it. Honor thy father and mother. Do not spit in their faces when they have given you so much. Spoiled children you are.

muirgeo April 12, 2011 at 2:37 am

Sure and you move to Haiti or the Ivory Coast. You are not living in a free market capitalist society… you are living in a social democracy and THAT is why things are as good as they are.

Why do people like you support a society of privilege, inheritance and elitism where 1-2 % hold so much of the means of production and most of the private property?

kyle8 April 12, 2011 at 7:04 am

Because that is what works idiot.

muirgeo April 12, 2011 at 4:25 pm

LOL! At least you are honest…

jjoxman April 12, 2011 at 8:04 am

No. No it isn’t. The more the government interferes in the social order, the worse things get.

Freedom is what works. To think otherwise is to delude yourself.

John V April 12, 2011 at 11:40 am

For the millionth time:

These places you mention are not free market societies in any meaningful way. But don’t let that stop you from repeating this garbage again and again.

muirgeo April 12, 2011 at 4:24 pm

Good point but then again no where is… except for Libertopia. Maybe you should move there.

JohnK April 12, 2011 at 11:51 am

reduction ad somalium

JohnK April 12, 2011 at 11:51 am


Dan April 12, 2011 at 1:12 pm

Most of the problems we have are from the socialist aspects engrained into our society.

tdp April 12, 2011 at 3:54 pm

The per-capita purchasing power parity (PPP) which measures how much wealth an individual has after taking into account cost of living differences, is higher in the US than in any true social democracy in Europe except for Luxembourg, a nation of 400,000 rich bankers that has been a nation of rich bankers for centuries.

Though we are more redistributionist than France, Sweden, the Netherlands, or Japan. In the U.S., the top 1% of income earners earn 20% of the wealth. Logically, it would be fair for them to pay 20% of the country’s total income tax burden. In Sweden, though the percentages are different, this is the case- there is a 1 to 1 ratio at all income levels and percentiles. In the U.S., those top 1% pay not 20%, but 38% of all taxes. The top 5% in America- 33% of income and 59% of taxes (the top 5% includes the top 1%- I know you lefties are a bit slow), etc. etc. until the bottom 53% of Americans, who earn 13% of the income and pay 3% of the taxes, partially because almost half of all Americans pay no income tax, something unheard of in Europe. Europe has more extensive social programs, but everyone, even the rich, uses them, and the poor (and enormous deficit spending) pay for them too. In total, the federal government spent more than $1.45 trillion fighting poverty- $60,000 per household for the bottom quintile of households by income. Keep in mind many of these households are single income because of out of wedlock births, single parenthood, violent crime, etc. that are rampant in poorer communities, while most wealthy households have two white collar income earners. Given all this, there is no good reason why the poverty rate has gone from about 14% to 12% since the 1970s.

I hardly think that throwing more money at the poor will do any good, based on these facts and the stunningly consistent track record the US has concerning money spent vs. results. One example: schools. The US spends more on schools than almost anywhere else in the world, both per student and as a percentage of GDP, but our test scores are mediocre because our inner city schools are so bad they drag down the average by 10 to 15 places out of about 50 countries. Finland has the best scores in the world and spends $3300 less per student than the US.

Within the US, DC spends more per pupil on public schools that any other jurisdiction in the country. It is surrounded with examples of superbly run schools systems in Fairfax, Arlington, and Montgomery counties, as well as in the city of Falls Church. The public schools are so bad there that everyone above the poverty line pays to go to private school, and the schools are shockingly run-down, under supplied, and unsafe.

Yes, muirgeo, the wealthy elite not giving enough money is why there is poverty here and why our schools suck. Perhaps you should leave your drugs for your patients instead of taking them all yourself.

tdp April 12, 2011 at 9:05 pm

I mean the DC schools are bad, not the Falls Church schools

Sam Grove April 12, 2011 at 1:31 am

Why is it that the capitalist West has accumulated more resources than human history has ever witnessed, yet appears powerless to overcome poverty, starvation, exploitation, and inequality?”

I’ll answer his question, even though it is misdirected, in fact, I’ll address his question with an appropriate rewording:

Why is it that, even with all the resources created in the capitalist West, political endeavors to eliminate poverty, starvation, exploitation, inequality, etc. have failed to achieve the stated goals?

The answer is that political endeavors cannot achieve these goals because political power will always be turned to the aims of those who see others as means to their own ends.

WhiskeyJim April 12, 2011 at 5:17 am

Exactly. It is a straw man argument, just as Marxism is a straw man philosophy.

tdp April 12, 2011 at 3:56 pm

Read PJ O’Rourke in “Don’t Vote It Just Encourages the Bastards”, especially the parts about committee brain and the political process.

vikingvista April 12, 2011 at 6:07 pm

Using the government, for whatever purpose, is seen as demand for government.

muirgeo April 12, 2011 at 3:03 am

Does it ever give you guys pause to think that creationist, right wing religious extremist, climate change deniers, anti-choice, Army of God cultist, Glenn Beck, Sarah Palin, Michelle Bachmann, Anne Coulter, Rush Limbaugh and many others similar “thinkers” tend to take the up the same side of the economic debate as you?

kyle8 April 12, 2011 at 7:06 am

No, does it ever bother you that nit wit celebrities, third world dictators, Islamic extremists, and union thugs take up the same side you do?

HaywoodU April 12, 2011 at 7:18 am


Methinks1776 April 12, 2011 at 7:44 am


indianajim April 12, 2011 at 10:25 am


Anotherphil April 12, 2011 at 10:52 am

DItto and isn’t odd that anybody on the left (but especially muirbot) calls other people “cultists” and puts the word thinkers in derisive airquotes.

Dan April 12, 2011 at 1:15 pm

Ahahaha aha aha……… Sean Penn……… Jacka@!……

JohnK April 12, 2011 at 8:05 am

Of course it doesn’t bother him.

Those people are his role models.

Slappy McPhee April 12, 2011 at 10:14 am

Army of God?? —-

Somebody was watching Rachel Maddow last night I see. I might have to go back to some of your other postings to see if there is correlation. I am betting on the “Yes”.

Slappy McPhee April 12, 2011 at 10:16 am

dammit — that was a reply to Muirgeo

muirgeo April 12, 2011 at 4:14 pm

Oh heck yeah I watch Rachel all the time. I also watch CNBC, Blomberg , FOX…
abd I even participate in libertarian blogs.

maximus April 12, 2011 at 10:06 pm

@muirgeo April 12, 2011 at 4:14 pm

“Oh heck yeah I watch Rachel all the time. I also watch CNBC, Blomberg , FOX…
abd I even participate in libertarian blogs”

And therein lies your problem. It’s one thing to gather a bunch of opinions and information, it’s quite another to actually have understanding of those opinions and information. If you really care to be relevant to the conversation then you need to learn the difference between the two. (Hint: watching the 24/7 blather “news” shows as some sort of intellectual endeavor will not bring you enlightenment.)

Ken April 12, 2011 at 11:17 am

kyle8 wins the Internets.

Craig April 12, 2011 at 10:48 am

I wasn’t aware that they did take up the same side of the economic debate as libertarians.

John V April 12, 2011 at 11:36 am

Broken clocks are right twice per day.

OTOH, morons like you make common cause with libertarians on a wide host of issues. Like I said, even a broken clock is right twice per day.

I could also ask you if it ever bothers you that Hitler and Benito came to power largely on the back of a socialist economic agenda that you would wholeheartedly support coming from someone else.

For my part, I can say that libertarianism shares practically NOTHING in common with the agenda that brought those two to power. You would have surly supported their rise to power in the 20s and into the 30s. I and most here would surly not have.

indianajim April 12, 2011 at 12:36 pm

You may have been too kind: Broken electronic digital clocks are never right!

Richard W. Fulmer April 12, 2011 at 11:34 am

Back in the 1960s, the Soviet government started televising images of the lives of poor African Americans to show how racist and backward the United States was. They stopped when they realized that the impoverished African Americans were wealthier than average Soviet citizens.

W.E. Heasley April 12, 2011 at 11:58 am

R.W. Fulmer:

You are correct. They later tried televising footage of american children playing at a landfill. The Soviet citizens has the same reaction: children all had shoes, dressed well, looked healthy, etc..

Dan April 12, 2011 at 1:16 pm

Give Dr. Sowell his credit……

tdp April 12, 2011 at 3:59 pm

And there was the time Stalin letting “The Grapes of Wrath” show in Soviet theaters backfired because the audience was stunned to see that people as poor as the Joads had their own car.

nailheadtom April 12, 2011 at 12:38 pm

Marx’s personal life is a demonstration of the invalidity of his own theories. Rather than working to feed and house his family, he spent his time at the British Library in self -indulgent philosophical and economic speculation. Just as he valued the opportunity to expound on class struggle more than he valued a position that would pay enough to maintain his brood, so too do millions value their time spent in idleness more than that in productive activity. No imposed economic regimentation will change that.

tdp April 12, 2011 at 3:59 pm

He also leeched money off his rich factory-owning friend and coauthor Friedrich Engels.

Jeffrey Jean April 12, 2011 at 2:53 pm

My question for Professor Eagleton is whether he feels the other places who have not adapted Capitalism has had any success at overcoming poverty, starvation, exploitation, and inequality. Where would he rather be if he was poor?

Curt Doolittle April 12, 2011 at 8:24 pm

RE: “Marxists must define poverty as a relative phenomenon. Otherwise, they couldn’t in good conscience be marxists.”

Or perhaps, better said, they wouldn’t have a semi-rational reason to justify class envy, and therefore attempt to obtain unearned social status.

The left’s desire is not to end poverty, it is instead, the desire to alter one’s natural, biologically and environmentally determined social status either by gaining access to unearned income or by gaining status through access to political power, or lastly, just because there is a large, single predominantly female population the biologically inherited sensibilities necessary for life in the cave and village to the extended order of mankind where such sensibilities are wrong, dangerous, destructive and do not apply.

Social status is important. It’s a cognitive necessity. It tells us who to imitate.

Joe Concordia April 16, 2011 at 10:11 am


Your philosophy of materialistic motivations as the entire drive for human experience is appaling. Can’t you understand that there are such things as real human sympathy for others who have needs and are motivated to help?

Dan April 13, 2011 at 3:11 am

Won’t be long before the federal govt declares lack of ownership of a high def, flat panel tv as a hallmark of poverty.

vikingvista April 13, 2011 at 6:43 am

No, they’ll just wait until everybody has one, then pass a law making it an entitlement. Then forever more the Muirdes of the world will gush about how government is to be thanked for bringing HDTV to the masses, and that if the entitlement is ever repealed, Americans will all be forced to go back to listening to radio.

dan April 13, 2011 at 11:38 am

Dont’ forget that denial of HDTV will result in women, children, and the elderly will be dying in the streets should HDTV entitlements be cut.

Joe Concordia April 14, 2011 at 9:48 pm


If you were President of the USA, and you had a Libertarian majority in the House and the Senate that you had great confidence would support you, what would be your address to Congress and the citizens of this country include as your proposed legislative agenda for passage during your term in office? I know it is a pretty big question to ask, but could you list a few bullet items that you think would be the essence of it.

Dan April 14, 2011 at 11:59 pm

Libertarian? I would be pushing for almost all issues to be put back on the states…… And, tell people to vote with their feet. It’s not my job to tell you how or where to live. Not my job to determine your fotunes or lack thereof. More free market principles will and should be applied. Certainly, thousands with the federal govt would be let go. Get congress to reduce all depts 10%, in first year. Then, all but defense and home security by another 10% in yr 2. By yr 4, another 10%

Joe Concordia April 15, 2011 at 8:12 am

Dan: re:4/14/11, 11:59PM
Thanks for the post. I go to bed earlier than that so I had to wait till this morning to read it.

Joe Concordia April 16, 2011 at 11:37 am

There is unquestionably a very significant economic problem in the USA. The cost of government is growing faster than the capacity to generate revenue. To reverse this, if a change in only one of those factors is implemented a larger change would be needed than making changes in both, i.e. decrease spending, increase taxes.

As a practical matter the cost of government will always increase. An expanding population, greater utilization of national resources, inflation, and the like doom us to higher costs. The best to hope for is that revenue increase will offset cost increase and there will be an equilibrium at some higher level of GDP. Increased revenue can be realized from higher rate of taxation, or increased base in personal and corporate taxable income, or both. For the base personal taxable income side, that is determined by wages and by the rate of employment. For the corporate side business turnover and profit rate.

It seems that these elements work against each other. As business lays off people and restricts income, the country loses tax base. The companies make more profit by restricting labor, but they lobby for reduced corporate taxes that do not offset that lost tax base from reduced labor.

If Corporate America does not take a meaningful interest in national public needs and continues to always work in their own self interest, we are destined to collide with national bankruptcy or a decline in living standard for Americans, or both.

I believe this fundamentally refutes the Adam Smith principles of self interest as the guiding “invisible hand”. Since that is a key precept on which the Austrian School builds much of its economic theory, I think that theory must be faulty.

Regarding your suggestions on the “legislative agenda”, I agree in much of it, but question some. A redirection back to government based principly on state government would bring up all the issues solved by the Federal Constituion’s over the Articles of Confederation. The second point would be in your relative priorities regarding defense spending. I would make much larger cuts in defense, very big cuts. Bring all the GI’s home, close the bases around the world, cancel all advanced weapons systems contracts. Why do we still need a 2.3 million person military in this country?

The price of only a few new super bombers would neary reduce the budget deficits to near balance, or repair most of the bridges and roads in this country that are deteriorating. I visited Moscow in the early 90′s as part of a USA trade effort. The only decent vehicles, buildings, and plant equipment were in the military. It would be terrible if we were reduced to that in this country.

tdp April 21, 2011 at 10:07 pm

Corporations will always find ways to make money. They have the cash reserves and legal/lobbying clout to evade regulations. Small businesses, which hire lots of workers and stimulate the economy, don’t, and excessive regulations encourage corporations to seek profits by either relocating or cutting workers/not hiring new ones.

Of course corporations act in their own self-interest, if they acted for others’ interests they would be called charities. The state acts in its own self-interest all the time by increasing its regulatory power regardless of the consequences. Every time the bureaucracy expands they get 1) more funding 2) more job security as these new offices quickly become completely necessary to keep senior citizens from starving in the streets, and 3) they get more power. People drawn to politics are not altruists. Altruists mind their own damn business. Politicians like to run things and/or get paid with taxpayer money for not doing anything productive. How else to explain all the political scandals and hypocritical politicians (see Edwards, John)?

tdp April 21, 2011 at 10:09 pm

You also naively and incorrectly assume that all beneficial advances are generated by the government, not private enterprise. What ridiculous garbage. The car was invented by private individuals, as were the airplane, penicillin (and anything else developed in a lab at a university or research institute that sets its own budget), the personal computer, the ipod, etc. Not to mention the great scientific discoveries made by people like Newton, Ben Franklin, and Galileo without any government funding.

Mister Classical Liberal April 15, 2011 at 2:30 pm

Denying the existence of poverty in America does not strengthen a case against Professor Eagleton. Look at the marginal rates for wage labor. The counter-point to Eagleton’s case is the role of constant inflation on income; supply-side barriers that make new job opportunities nearly impossible; and the constant effort on the part of policy-makers to stimulate consumption rather than long-term investment in technology and other projects.

Poverty exists, I have lived it. Where I once lived, the poor were better for for having sold drugs. The problem with Eagleton’s analysis is that he assumes that capitalism has free rein, when in fact market institutions are hampered by the overbearing State. But poverty has worsened since the Great Society, and since the jobless recovery of 2001. Denial is not beneficial, proper argumentation is.

Previous post:

Next post: