The Broken Window Fallacy- The Real Cost of Destruction

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All too often you hear about the economic benefits of going to war. This misnomer is so ingrained in American culture that conventional wisdom suggests that armed conflict is good for business. Few are willing to question this enduring presupposition. Some are even so bold to claim that World War II ended the Great Depression. Over the years, experts have started to refute such claims. That does not mean that many are still not exalting the economic virtues of war.

 

Economists such as Noble Laurette Joseph Stiglitz point to the technological advances of the War on Terrorism as being one of the advantages. Even if so, there are a myriad of other costs that most likely outweigh such developments. Overall, war is costly. Morally, financially, and diplomatically.  War is far from the only category of calamitous events that are seen to be profitable. Natural disasters are also seen as an unfortunate but lucrative means of stimulating the economy. However, are any of these widely held assumptions true? The 18th-century political/economic/legal theorist Frederic Bastiat would ardently disagree.

 

In Bastiat’s essay That Which is Seen, That Which is Not Seen introduces a concept that undermines arguments for the economic benefits of war. This is the conceptualization of the Broken Window Parable, colloquially known as the Broken Window Fallacy. The general assertion of this postulation is that the efforts to recover from destruction do not benefit society.

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation — “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?” …..

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade — that it encourages that trade to the amount of six francs — I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Let us take a view of industry in general, as affected by this circumstance. The window being broken, the glazier’s trade is encouraged to the amount of six francs; this is that which is seen. If the window had not been broken, the shoemaker’s trade (or some other) would have been encouraged to the amount of six francs; this is that which is not seen.

And if that which is not seen is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry in general, nor the sum total of national labour, is affected, whether windows are broken or not.

Now let us consider James B. himself. In the former supposition, that of the window being broken, he spends six francs, and has neither more nor less than he had before, the enjoyment of a window.

In the second, where we suppose the window not to have been broken, he would have spent six francs on shoes, and would have had at the same time the enjoyment of a pair of shoes and of a window.

Now, as James B. forms a part of society, we must come to the conclusion, that, taking it altogether, and making an estimate of its enjoyments and its labours, it has lost the value of the broken window.

When we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end — To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”

The hypothetical shopkeeper did not obtain any benefit from restoring the broken window. The labor and money expended to replace the window that was already initially purchased. Operating as a financial redundancy.  The shopkeeper did not get full utility of the window nor did he plan to replace it. Rather he had to allocate time and money repurchase an item he already had. All because the glazer may benefit from this turn in vicissitudes, that does not mean everyone does because the shopkeeper is at a loss. The benefit is at the expense of the shopkeeper. This unexpected and unnecessary expense prevents him from spending money on productive goods and services. In contrast to merely replacing what he already had, only serving as a detriment. It is analogous to intentionally burning down a town to revitalize the construction industry in the county. The lost time, man-hours,  and money makes such an endeavor a waste of resources.

An excellent modern-day application of this concept was demonstrated by Art Carden, a fellow of the American Institue for Economic Research (AIER). Carden details how while at the gym he accidentally shattered the screen on his iPhone. Superficially, this appears to be an overall net benefit for the economy as a whole. After all, the iPhone vendor and Apple just gained another sale. No one actors in the economic benefit. Art merely squandered the time and money to replace an item he already had. The provincial view that Art’s misfortunate is an economic benefit does not take into account what else he could have done with that very same money. He mentions in the article how he could have put the money towards a family vacation rather than a redundant financial obligation. Mirroring the scenario contrived by  Bastiat back in the 19th century.

Arguably one of the best interpreters of Bastiat’s Broken Window Parable was the economic writer Henry Hazlitt. Hazlitt applied the idea of the Seen and Unseen to government spending. Similar to expecting economic stimulus from destruction, perceiving the benefits of government spending only takes into account the most conspicuous consequences. As detailed in Hazlitt’s benchmark book Economics in One Lesson government spending operates as a form of destruction. It redirects resources (time and tax dollars) to efforts, not within the needs or wants of the taxpayer. For every government job created there is a job in the private sector lost. Tax dollars levied from a business could have been utilized to hire more staff (which is the unseen consequence). Hazlitt succinctly demonstrates this in his description of public works:

Here again, the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars, and radios, the unmade dresses and coats, perhaps the unsold and ungrown foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is mere that one thing has been created instead of others. (Page 20)

At its core, it is a natural fallacy to assume that job creation is always a net positive benefit. Unfortunately, it is not that simple. Applying Occum’s Razor would lead us to a very shallow understanding of economic impact. The public sector operates differently than the private sector. So how is it possible for the government institutions to determine the optimal number of plumbers in the economy? Again we fall back to the economic knowledge problem, fundamentally that golden mean cannot be ascertained. Sure research can be conducted. The possibility of data not being applicable to actual economic behavior is always lurking in the background. Sampling error, perhaps?! A business owner may not know the precise ratio for ideal production. Considering the purveyor of a business is the one actually producing goods and services they would have a better estimate of market demand.

At this point is most likely clear that destruction does not lead to more wealth. Rather you are wasting resources. That is the fatal flaw in the assumption of assuming a war will jump-start the economy. First off, the tax dollars allocated for armaments could be better spent by the private sector. We don’t see the businesses that are not started due to the taxes levied to fund a war. The second point is the cost of restoration. Money allocated to repair damaged infrastructure and civilian homes. If you want to take a morbid turn you can also calculate the expense of unexpected funerals.

 

Pascal’s Wager- Gambling For God?

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Gambling has long been perceived as an imprudent activity. Outside of being seen as unwise, it has also been labeled as sinful. Casinos ranking among opium dens, brothels, and saloons as notable dens of iniquity. Gambling parlors have long retained the reputation for attracting a “seedy” clientele. Ironically, one man believed that, despite the unrighteous nature of gambling, we should be hedging our bets for salvation. That individual was a mathematician and theologian Blaise Pascal. This notion of wagering in favor of salvation is best explained in what has become known as Pascal’s Wager.

 

Pascal’s flagship postulation is really quite simple. A rational individual does not need proof of God to believe that God exists. Rather the consequences alone of disbelieve are so severe that it would be absurd to not wager on the side of religiosity. I suppose that the prospect of eternal firey damnation is a persuasive factor in motivating religious belief. The eminent risks of uncertainty and atheism are quite vividly depicted in the Abrahamic religions. However, despite the potential of devasting repercussions, there are several objections to Pascal’s Wager. One of the more notable counter-arguments being the Many Gods Objection. First posited by philosopher Denis Diderot, it contended that with all of the religious traditions in existence who is the correct god to venerate. This is certainly a fair consideration. Every religion proclaims that their deity or deities are the only true higher forces in the universe. Making the contingency for eternal salvation much more intricate. Clearly, a lot of these other theological traditions must be wrong if there is only one true faith. How is the correct god that will ensure salvation determined? That is a cosmic mystery and a firm point of refutation for atheists.

While the other arguments against Pascal’s Wager may be compelling, the moral considerations are most important. Personally, I am an agnostic. Meaning I do not have a horse in the race. I am not incentivized to defend theology or atheism, but rather honestly engage with the question of faith. I would question the insincerity of faith fostered by the potential of abhorrent outcomes. Is it really genuinely having faith in God if you are incentivized by the fear of being tortured next to Hitler in a fiery chasm for the rest of eternity? Especially when many fervent Christians speak of having an actual relationship with God. Rather than opportunistically treating their deity as a spiritual insurance plan. It does appear as if I have some company in being incredulous of individuals who hold faith motived by outcomes.  The philosopher and staunch atheist Voltaire suggested that acceptance of the Wager merely supports self-interest and would not lend itself to proper worship of a holy deity. Personally, this is the firmest moral objection to Pascal’s Wager.

 

Granted, we could embark upon a length semantical debate about what actually constitutes faith. However, it does seem at least from the Judeo-Christian point there is a firm difference between faith and belief. The below excerpt from a Christian apologist website clearly makes this distinction:

However, the unstated assumption in the wager is that belief in God guarantees one a place in heaven. With regard to Christianity, the assumption is false. Belief in God, in and of itself, is not sufficient to ensure entry into heaven, since the demons also believe, but are condemned:

You believe that God is one. You do well; the demons also believe, and shudder. (James 2:19)

The reasons that the demons shudder at the thought of God is that they know that they are destined for hell.1 Why don’t they repent and come back to God? God has set different criteria for salvation for angels (including the demons, who are fallen angels2). Whereas those who have never seen God directly can come to sincere faith at any time in their lives,3 those who have direct evidence of God’s existence are condemned by any act of disobedience.4

 

 

 

Believe in itself is clearly not enough to guarantee salvation.  Clearly believing in the existence of God isn’t enough. Rather you must also act in accordance with the prescribed tenants of the religion. A theological satanist (there are forms that are atheistic) does believe in the Christian God, but will never see the gates of heaven. I would also apply this logic to a lot of “paper Christians”. Individuals who attend church and provide lip service to Christian values. In action, they are textbook hypocrites. Often sanctimonious and the first individuals to project their transgression upon others. Empty accusations always make for useful distractions. It should be overwhelmingly obvious that belief alone without taking faith in the heart is a recipe for self-deception. Could potentially land you in a fireside torture chamber until the end of time.

 

I suppose that the counterargument could be that a blatant disregard for Christian values isn’t true faith. Also, if one is to come to god out of fear for spiritual salvation and then end up coming to know him then it is true faith. Both are fair refutations. However, if an individual behaves in accordance with contingencies their motives are suspect. It one thing to undergo a spiritual metamorphosis even if it is spurred initially by frivolous self-interest. When there isn’t any further or spiritual or moral development within a person that is when their belief in God becomes inconsequential. Protesting moral virtue and living moral virtue should never be transposed or conflated. A righteous person does not need to advertise their good deeds. Anyone who has taken to heart the moral teachings of a specific theology already understands this on a personal level. Do you volunteer at the soup kitchen to help the homeless or for your own self-image? Even to secure your own position heaven?

 

The best answer to Pascal’s Wager pre-dated the life of Pascal. That was the wise words of Stoic philosopher and Roman emperor Marcus Aurelius.

Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

 

In all honesty, it is the best advice you can give to anyone. Regardless of what god/gods you pray to it is never a substitute for doing the right thing. If someone is using religiosity as a cloak for their true nature such subterfuge will be foiled. Sincerity goes a long way. Sincerity cannot be fabricated for one’s one callous gain. Hence why humans are quite adroit at picking up on someone putting on pretensions in a social situation. Eventually, those pretending to be moral will lapse back to old habits and those who are will continue to be virtuous. Which why we should focus more on being than believing.

Universal Healthcare- Not All That it is Cracked Up to Be

*** A reblog from our sister site***

 

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Dear Editor,

As it is now 2020, an election year, it is increasingly important that we examine the empty promises of aspiring politicians. The drive to socialize medicine under the friendly veneer of “free healthcare”. To witness the glories of government healthcare all you need to do is step foot in a VA hospital. The inefficiencies and low quality of care are painfully apparent.

However, our neighbors to the north in Canada have socialized medicine. Surely Canadian patients are receiving better care than we are in the United States!  Not so. Per the Fraser Institue, the median wait time to receive treatment from a specialist was 21.2 weeks in 2017. A 113 percent increase in the wait time for treatment in 1993. While there are many things that are admirably about Canada, their healthcare system isn’t one of them.

The increased interval of the wait times to receive treatment is one consideration that is largely ignored by the advocates of Universal healthcare. It looks great on paper but ultimately fails in implementation. I am only addressing the allocation of services, I am not even venturing into the challenges of funding such a massive program. A policy based upon good intentions, but that doesn’t mean it will work.

 

*** Published in the Casa Grande Dispatch***

 

 

 

Starve The Beast- Does this Method Really Cut Spending?

 

 

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What it means to be a political conservative has drastically changed throughout the course of American history. The meaning in a political context has even shifted from the defining proclamations of Barry Goldwater in The Conscience of a Conservative. Arguably a seminal pamphlet in defining conservative values in the 20th Century. I personally feel that conservatism much like any other body of ideas has its advantages and drawbacks. One value of conservatism that has been slowly eaten away by political opportunism has been fiscal responsibility. While not personally a conservative, this is a conservative value I am fully on board with.

 

The irony is that in the modern era of the 21st century even purported conservative politicians are not fiscally conservative. Making this virtue a relic of a bygone era. Profligate spending was a  policy fixture of both Bush administrations and even prevalent in the Regan administration. It appears as if President Trump will also follow suit with veering away from budgetary constraints.

 

Interestingly enough Libertarian/ Conservative icon the economist, Milton Friedman, felt as if he had found the solution. This remedy is referred to as a Starve the Beast policy. Which is based upon a rather linear concept, simply cut taxes as this will discourage spending. Certainly, a novel postulation that appears to have been underneath our noses this entire time. Does this theory hold water upon the scrutiny of empirical analysis? This question has been highly debated among scholars of all stripes. Not to mention fiercely defended by Friedman-fanboys. As brilliant as Friedman was it does make him infallible. There is sufficient evidence to suggest that Friedman was dead wrong about the overall impact of the Starve the Beast method of cutting spending.

 

One fact that should be noted is that while many conservative Republicans have anointed Regan with the status of a demigod, this is to some extent a shallow perception. The beloved cherub of the conservative shrine was not the most fiscally responsible president. It turns out while Regan may have cut taxes, he actually increased spending. These findings represented in a 2009 study published by the Cato Institue.  The study found overall that cutting government tax revenue created the illusion of decreased spending. A firm nod to my previous blog entry addressing Fiscal Illusion. Overall, based on the result of the cited research it does not appear as if the data backs up Friedman’s claims.

 

From the standpoint of science, replication of results is the validation of the data obtained. It veers away from the potential of findings being an anomaly caused by sampling error. Thankful for our friends over at the Cato Institue have conducted further studies pertaining to Starve the Beast policies. Researcher Michael J. New conducted a regression study of the relationship between expenditures and taxation from 1981-2005. It was found that even when adjusted for wartime spending, limiting tax revenue did not effectively curtail discretionary spending. Substantiating the previous research of William Niskanen.

 

It is excellent that these studies have exposed the numerical shortcomings of simply cutting taxes. However, what is causing the profligate spending to continue even when tax revenue is decreased? Now it is time to applaud the advocates of the Austrian School of Economics and Public Choice Theory for acknowledging the role of inflation. If the printing presses are running the possibility of funding without direct tax dollars is on the table. This is a massive blindspot in Milton Friedman’s thinking, but an understandable one. Utilizing inflation for financing expenditures is circuitous means of procuring funding. Not an obvious means of generating revenue. Also, it is important to remember he was a proponent of monetarism making him less apt to question the government’s role in controlling the currency supply. However, considering the disastrous economic effects inflation can bring it is something that should always be questioned.

Fiscal Illusion- Sneaky Taxes

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Taxation and public expenditures are enduring sources of frustration for the voting public. Contention stemming from a perceived lack of transparency and frivolous pork-barrel spending. These grievances are completely justifiable. Whether or not revitalizing infrastructure is a worthwhile expenditure is debatable. However, utilizing tax money to provide salary raises for administrators of an ineffective government program is clearly wastefully negligent. Calls for increased transparency of government spending is only the natural consequence of continual misallocation of tax dollars. Unfortunately, such measures are more wishful thinking than a political reality. The inefficient allocation of public funds is one of many factors eroding the public’s trust in government institutions. Invariably the question becomes, what is the government doing with my money?

The dynamics of transparent government spending is an area that has been thoroughly studied by Public Choice economists. From my own personal study of the literature, I haven’t seen any concrete solutions. Public Choice theory does, in contrast, provide us with a wealth of insight into how expenditures and taxes are obscured. How the waters are muddied is known as Fiscal Illusion. A concept first purposed by Italian economist Amilcare Puviani back in 1903 [1]. Fiscal Illusion went into relative obscurity until the theory was revived by Nobel Laureate James M. Buchanan in the 1960s. Over the years economists ranging from Richard Wagner to Tyler Cowen have addressed the mechanisms behind Fiscal Illusion. It has gone on to become one of the steadfast fixtures of Public Choice theory.

In a broad sense what is Fiscal Illusion and how does it operate within the context of taxation and government spending? Fiscal Illusion can be concisely defined as:

 

“ …. the concept that governments find it easy to raise tax revenues because of consumer ignorance about the way the tax system works” [2].

 

Once confronted with this premise it is easy to surmise that the complexities of the American tax code may be intentional. If you bury tax burdens in more deceiving means of appropriation the taxpayers are less apt to question why additional taxes are being imposed. As previously mentioned nothing irks voters more than needless government spending and tax hikes. Maybe other than cutting entitlement programs, but then again that is a different topic altogether. Being able to utilize a mechanism such as an inflationary monetary policy to operate as an implicit form of taxation. The government gets its funding and most taxpayers aren’t the wiser.

Thankfully for us, Dr. Buchanan detailed the various ways that governments implement policies that keep us in the dark about taxation. Per the noteworthy Nobel Laureate, there are seven broad categories of Fiscal Illusion:

 

  1. “ The connection between the total amount of resources actually utilized in producing or supplying public services and any individualized share in this total may be obscured to the taxpayer. In other words, the individual shares in the opportunity cost of public spending may be hidden” [3] (Page 130)

 

This is achieved through utilizing government-owned property to produce revenue, “Specific excise taxes”, utilization of public debt, inflation (printing of more money, mentioned above), false promises (labeling a long-term obligation as temporary).

 

  1. “…. institutions of payment that are designed so to tie the obligation to a time period or an event which the taxpayer seems likely to consider “favorable.” Puviani’s ingenious idea here is based on the recognition that isolated individual decisions can be influenced by temporary circumstances, and that the attitude of the individual may vary significantly with such circumstances” [4] (Page 132)

 

  1. “A third means of introducing a fiscal illusion, and one that is closely related to the one previously discussed, is found in the charging of explicit fees for nominal services rendered upon the occasion of memorable or pleasurable events. Puviani brought in marriage license fees, hunting licenses, entertainment licenses, fees for diplomas, etc.” (Page 133) [5].

 

Occupational licensing not only can serve as an unnecessary impediment to commerce, but it can also operate as an underhanded means of generating revenue.

 

  1. “ If a particular attitude is pervasive in the community, an opportunity is provided to levy a tax that will capitalize on such sentiment, making the burden appear less than might otherwise be the case” (Page 134 ) [6]

 

Essentially, manipulate social issues as a means of justifying spending. Just think about anytime the government declares war on something. War on Drugs, War on Poverty, etc.

 

  1. “ Puviani was on somewhat more firm ground when he argued that the governing class will, in order to secure the general acceptance of a tax, threaten the body politic with the direst of consequences if, in fact, the tax levy is not approved. (Page 134)” [7].

 

In other words, state officials will oversell the danger of not having a policy or program in place. Yet again to justify the budgetary earmark.

  1. “ To the extent that the total tax load on an individual can be fragmented so that he confronts numerous small levies rather than a few significant ones, illusory effects may be created (Page 134)” [8].

 

Providing some validation to my point pertaining to the complexities of tax codes. The more convoluted you can make the taxes the more difficult it becomes to track.

 

  1. The seventh way per Buchanan that Fiscal Illusion is implemented is through policies that generate ambiguity of who is ultimately responsible for the expenditure. (Page 135). [9].

 

 

There was a study published back in 2011 by the Independent Institute that did elucidate the seventh form of implementation of the illusionary policy. The study was conducted in Sweden back in 2003, the first year that “taxes constituted 55 percent” of the national income. It was found that Swedes often were aware of a specific tax and even the financial burden attached to it. However, where oftentimes confused about when it was applicable and who it was applicable to [10] (Page 9).

 

In an age of precipitous erosion of trust in institutions, the utilization of Fiscal Illusion to obtain extra funding appears to be a double-edged sword. Once the ploy to deceitfully apply more taxes is exposed then the respect for governing institutions will sink even lower. However, the trust may have not been compromised in the first place if the location of tax dollars was done so efficiently, honestly, and frugally. While this may not still appease an anarchist but would have mass appeal to most voting constituencies. The facts of reality seem to conflict with the idealization of an honest, efficient, and dollar conscious government. Either by size or by institutional corruption government programs not only are ineffective but often inefficiently funded. Creating the context for a system of state consumption that would incentivize politicians and bureaucratic administrators to favor illusory tax policies. Especially when departmentalization and staff reductions are on the table for government agencies. When you examine the role of incentivizes, if a government clerk is facing a potential layoff, it is understandable they would have circuitous taxes that would fund their department. That does not make such policies Pareto-optimal or in accordance with sound economic practices.

 

The issue of inefficient and misbranded government programs and associated allocations, in the long run, they generally end up failing. Many who purportedly oriented towards reason feel as if government programs are the most efficient means of allocating resources and services. If this were so, these same institutions would not resemble a pack insatiable jackals. A bottomless pit. These programs would be able to make do with a moderate amount of public support. Instead, we hear the countless claims of underfunding reinforced by many of the tactics described by James M. Buchanan. If a tax hike would be political suicide the government can always print more money to fund wars and other misadventures. This is why it was so prudent of Buchanan as well as Puviani to consider inflation as a form of Fiscal Illusion. The irony is that we have consumer protection laws allegedly to protect us from the deception of vendors. No such measures are in place to protect us from the same sort of dishonesty of government institutions. After all, the government is merely a socialized service provider. Since when has anyone in the private sector ever overtly paid to be robbed? Unless it constitutes some sort of perverse sexual fetish the odds are extremely low anyone has. However, the employees over at the U.S. mint are essentially publicly funded bank robbers. Providing more cash flow to the state and diminishing the purchasing power of the currency. Operating as an implied tax on the citizenry. Not with anyone’s consent, no one voting in favor of such methods of funding. However, this all reflects the haunting words of economist John Maynard Keynes:

 

“ By this means the government may secretly and unobserved, confiscate the wealth of the people, not one man in a million will detect the theft” [11]

The Man of System- The Folly of Planning

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Planning on an intuitive level always appears to be the most logical course of action. If we could only harness the same methodical rigor of a physics experiment, we could all live in the blessed light of “reason”. Few of a scientific disposition stop to question if there are certain aspects of life we shouldn’t attempt to control. In their haughty hubris, the proponents of planning bumptiously trudge forward. In full faith that they can implement the next pivotal stage of progress in the history of man. For those who pray at the altar of pure reason, such oversights are a consequence of believing that they possess more knowledge than it is possible to know. A point clearly elaborated on by Nobel Laureate F.A. Hayek decades prior to 2019. Most notably in his seminal book The Road to Serfdom published at the tail end of World War II, an era when the debate about economic planning was raging.

 

Even when we are armed a plethora of empirically verified statistics and data planners are still merely guessing. Often guessing with information collected under idyllic experimental conditions. Conditions that are meticulously controlled and don’t account for the invariability of a natural environment. An environment that is more constrained by natural law than by experimental controls. While science has brought forth the advantages of modern medicine and technological advances, there are specific areas where its breadth of knowledge is insufficient or inappropriate. Social engineering and economic matters being sublime examples.

 

If such measures could bring about a utopian society it would have already been implemented. Attempting to subvert the effects of the law of Supply and Demand through price-fixing and subsidizes will invariably fall flat. Regardless of their intentions, the central planners will always fail. Venezuela’s financial woes spiraled out of control after a subsequent chain of ill-fated interventions initiated by artificially manipulating oil prices. However, Venezuela is merely a drop in the bucket, such measures have backfired on just about every country that has entertained similar policies. It starts to become quite salient that when immutable laws are violated the ramifications can be disastrous. This premise isn’t merely regulated to economic law, but all forms of natural law. The intellectuals, bureaucrats, technocrats, and other authority figures rank among men foolish enough to attempt to undermine static and enduring.

 

The sin of such arrogance is far from a new pathology of the human condition and has proven to be quite a pervasive vice. From the dawn of civilization to the Middle ages gout-ridden men reeking of entitlement and excess felt their privileged station was anointed by the will of God. Making them immune to the conventions and morals that bound common men. While monogamy was imperative for the butcher, baker, and the brewer; the king had his court filled with concubines. The king not only felt he was above moral convention, but that of natural law. After all, he is literally a step away from being a deity in his own right. Many medieval rulers in an attempt to keep wealth within their own national boundaries implemented highly protectionist policies. Composited policies that reflect the economic system known as Mercantilism. Which erroneously disregarded just about every basic economic law we hold in high regard.

 

At the apogee of the Scottish Enlightenment, there was one man who saw the folly in the lofty assumption of central planners. He was also an outspoken critic of Mercantilism, that man was the moral philosopher Adam Smith. He expounds upon this phenomena in his 1759 book  The Theory of Moral Sentiments in the personified construct dubbed “The Man of System”:

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. (Page 212, para 2)

 

The king believes he can circumvent the will of his subjects and impose import tariffs that will encourage them to buy domestic goods. By virtue of natural law, purchasing cheaper imported goods does not constitute theft or assault, but rather a byproduct of free will. Due to the tariffs being legitimate in the eyes of the royal subjects an expansive smuggling ring is formulated. Illegally importing untaxed goods into the kingdom. People are not chess pieces, nor are they objects. They possess free will (or the illusion of such), an individual set of morals, and the capacity for subjective attributions. It is faulty to surmise that people can be treated as pawns when social law and their own volition will most likely hamper any attempts at planning.

 

It becomes truly horrifying when individuals believe they can legislate morality. The abject failures of alcohol and drug prohibition provide sufficient insight into the shortcomings of such endeavors. Utopia does not exist on planet Earth. The nature of man is imperfect and is incapable of mimicking the pristine deportment of cherubs. We are not saints, no amount of legislation or penalities can correct for this deficit. This not intended to provide immunity for the murder, rapist, or thief. However, they have transgressed against a higher moral code making their actions universally reviled. While the moral indiscretions of the prostitute, the drug addict, and the bookie are not universally seen as wrong.  In the sense that they are victimless crimes. More of a passive acquiescence than an endorsement.

It isn’t natural law that decrees the need for punitive measures for such conduct, but government fiat. This is where we cross the line into legal positivism. An action is either moral or immoral purely on the basis of legislative command. A Pentagon directed bombing campaign that kills innocent civilians was justifiable. A convenience store owner shooting a burglar that is attempting to rob his establishment at gunpoint is a civil infraction. Considering the gross insensitivity to property rights and higher moral values can we truly trust  ” The Man of System” (bureaucrat, legislator, etc.) to codify morality in a self-serving legal system? The prison unions have a storied history of lobbying against the legalization of Marijuana. Who is to say that many of our petty laws exist purely for justifying the existence of a task force or bureaucratic department?

 

It isn’t merely just the conservative Christian or the “law-and-order” types that can assume the proverbial role as “The Man of System”.  The progressive left-wingers have also utilized the government apparatus to legally impose their own brand of  “morality”. Any form of government funded safety-net or subsistence program is a legal attempt at evening the odds for the economically disadvantaged. While it is fair to disagree or agree with such policies, the real line of demarcation is when initiatives to criminalize intolerance are suggested. Most of these policy suggestions amount to compelled speech laws. If certain speech is deemed as hateful it must not be tolerated. To such an extent that there are legal repercussions for using “hate speech”.  As outlandish as it may sound you need to look no further than Bill C-16 passed in Canada to see the ultimate outcome of such ill-advised policies. Implement such sanctions against our speech is purely an assault on the principle of free speech. Even criminalizing the right to be a member of a hate group tramples upon the relished right to free association. If either right is nullified by legislative constraints you are an inch away from living in a dictatorship.

 

These legislative crusaders may be well-intentioned they are willfully ignorant of human nature. Much how you cannot legislate Judeo-Christain values into the psyche of an individual the same holds true for the virtues of social justice. Despite what you do, intolerance will never be completely relinquished as long as humans walk the Earth. The human mind is glutted with biases that push many to favor individuals that are similar to themselves. Similar to themselves in a shared language, values, religion, political identity, ethnic identity, national identity, sexual identity, etc. Considering these proclivities for tribal behavior it becomes quite conspicuous that tolerance is merely another incurably ill of mankind. Sure you may be able to enlighten individuals of the errors in their thinking, but not on any kind of grand level.  Intolerance dies on the same day that man longer yearns for a pint of beer, a dose of opium, and no longer lusts for a voluptuous misteress. Anyone convinced otherwise is profoundly mistaken.

 

I am still perplexed by people who unquestionably trust the judgment and authority of those who insist upon controlling the lives of others. Politicians, bureaucrats, intellectuals, judges among others. All of these individuals are human and none are infallible. All are cable of sin, all are subject to psychological biases, and other influences that would make them biased.Why is the law contrived and fabricated by these purported experts superior to the “golden rule”? Holding the authority of mortal men in such a high degree operates as a perverse form of deification.  Their credentials and education are what separate them from ordinary people. That is it. There aren’t any further qualifying factors that make these individuals morally superior to common folks. In most cases, laws don’t even make us any safer or product our property rights. Most laws if anything is hostile to our property rights. Leaving it reasonable to question, why are lawmakers incentivized to legislate such grotesque sanctions against some of our most basic rights?

 

 

Praise Needs To Be Earned (Wisdom From Adam Smith)

three people standing on stage holding trophies
Photo by Ojo Toluwashe on Pexels.com

A few months ago, I was sitting among my co-workers in a meeting reviewing the previous quarter’s sales numbers. My manager just recently completed our quarterly performance reviews. Unbeknownst to me, my well-meaning superior would give me an unwarranted shout out. I had completed an optional industry-related training course and happen to mention this fact to my boss during my quarterly review. My motives being demonstrating my willingness to be a self-directed learner. Surprise, surprise!  My boss decides to articulate my achievement publicly to my team during our team meeting. All 30 of my co-workers, a nice composite of salespeople and pre-sales staff.

 

The natural consequence being applause, most likely a byproduct of social convention. Right, in-synch with all of the social cues that it is almost a semi-automatic response. However,  I did not feel good about this moment of unsolicited praise. As I looked around the room I see slow clapping that mirrored all the signs of a conditioned response. There was something insincere about as gazed at the blase demeanor of my coworkers.  A fitting demeanor coupled with irritated looks skepticism. For some, clear unspoken opprobrium was being expressed by their frustrated glares.  A silent censure. Unarticulated disapproval, not the kind of response I  was intending to invoke. Especially considering I am a very reserved person at work who avoids the spotlight at all costs.

 

Where my coworkers being unreasonable? That is a debatable question, however, their frustration was understandable. At the time I hadn’t even been with my current employer for a year and my workload was lighter than that of my coworkers. The new guy getting praise when everyone else is working circles around him is a recipe for contempt. While I  have many disagreements with my coworkers this was one point we all had some common ground, I didn’t deserve praise. Hence why my stomach sank when it was announced that I had completed the previous referenced training course. I only mentioned it to my boss for any potential exculpatory benefit for my lighter workload. In the end, this ploy only ended up backfiring.

 

My grief and the annoyance of my teammates is far from a new behavior phenomenon.  Rather is an enduring fixture of the human condition and how guilt weighs on our psyche. No other than the great moral philosopher Adam Smith expounded this in his initial book The Theory of Moral Sentiments. Yes, Smith did write a book prior to his classic 1776 The Wealth of  Nations. While The Wealth of Nations focused on behavior patterns on more of a macro level,  The Theory of Moral Sentiments concentrated on human interrelations on the individual level. Smith through the book analyzes the dichotomy between self-interest and the common good. The “impartial spectator” often clashing with the “that passion arises in our breast”.

 

Smith in his first treatise does address the human need for praise and admiration. However, praise is the only gratifying and comforting if it is justifiable. In other words, praise must be obtained under conditions in which we do something that is praiseworthy.

 

As ignorant and groundless praise can give no solid joy, no satisfaction that will bear any serious examination, so, on the contrary, it often gives real comfort to reflect, that though no praise should actually be bestowed upon us, our conduct, however, has been such as to deserve it, and has been in every respect suitable to those measures and rules by which praise and approbation are naturally and commonly bestowed. We are pleased, not only with praise, but with having done what is praise-worthy. We are pleased to think that we have rendered ourselves the natural objects of approbation, though no approbation should ever actually be bestowed upon us: and we are mortified to reflect that we have justly merited the blame of those we live with, though that sentiment should never actually be exerted against us. The man who is conscious to himself that he has exactly observed those measures of conduct which experience informs him are generally agreeable, reflects with satisfaction on the propriety of his own behaviour. When he views it in the light in which the impartial spectator would view it, he thoroughly enters into all the motives which influenced it. He looks back upon every part of it with pleasure and approbation, and though mankind should never be acquainted with what he has done, he regards himself, not so much according to the light in which they actually regard him, as according to that in which they would regard him if they were better informed. He anticipates the applause and admiration which in this case would be bestowed upon him, and he applauds and admires himself by sympathy with sentiments, which do not indeed actually take place, but which the ignorance of the public alone hinders from taking place, which he knows are the natural and ordinary effects of such conduct, which his imagination strongly connects with it, and which he has acquired a habit of conceiving as something that naturally and in propriety ought to follow from it. Men have voluntarily thrown away life to acquire after death a renown which they could no longer enjoy. Their imagination, in the mean time, anticipated that fame which was in future times to be bestowed upon them. Those applauses which they were never to hear rung in their ears; the thoughts of that admiration, whose effects they were never to feel, played about their hearts, banished from their breasts the strongest of all natural fears, and transported them to perform actions which seem almost beyond the reach of human nature. But in point of reality there is surely no great difference between that approbation which is not to be bestowed till we can no longer enjoy it, and that which, indeed, is never to be bestowed, but which would be bestowed, if the world was ever made to understand properly the real circumstances of our behaviour. If the one often produces such violent effects, we cannot wonder that the other should always be highly regarded. (Page 104, Para 2, The Theory of Moral Sentiments )

 

As it is clearly demonstrated from the excerpt above, by the convention of our conscience we know when we have earned praise. Our peers can ascertain when our actions align with proper virtue are in-turn worthy of admiration. Undeserved praise for most people is an empty gesture devoid of any true satisfaction. By virtue of our norms,  our unwritten but universally understood societal rules, displeasure is experienced by both parties. The individual who receives undue praise is overwhelmed with guilt.  In contrast, the observing peers are frustrated by this minor but notable injustice. There are two principles at play eliciting both responses. The party who receives unearned accolades feels guilty as they know they didn’t rightfully earn them. It mirrors the concept that you appreciate more what you work for than what is given to you. Deep down in your subconscious, you know you are cheating someone who is deserving out of their time in the spotlight. Your disgruntled peers know that they got cheated out of justifiable recognition for their hard work. Unjust violation of norms constitutes cheating. Even if the  “cheating” wasn’t intentionally perpetrated. Cross-culturally humans in general adversion to cheating.