Sheldon Richman

TGIF: Games Politicians Play

by Sheldon Richman | Feb 10, 2023 | Featured Articles, Politics, Sheldon Richman, TGIF

Except for the civic religion on ostentatious display at the annual presidential state of the union address, one can hardly think of a reason for the tradition at all. It’s not as though we learn something substantive or even hear a truthful material claim. (Yes, it could be useful in launching a president’s reelection campaign.)

I’m sure someone somewhere has pointed out that democracy is not only a religion but also the opiate of the masses. When too few people could swallow the silly claim that the head of state represented the applicable deity, a new way was needed to assure the people’s enduring acquiescence in their own subjugation. What better way than by having them believe that the power rested in their own hands? They had only to use it wisely (that is, by choosing those whom history if not Yahweh had ordained to rule). If they didn’t, the fault was theirs alone. Thus no need for revolution or regicide. They needed only to traipse to the polls when called and participate more conscientiously in the collective exercise of their sovereignty. Helping to articulate and then loyally abiding by the General Will was the essence of freedom, after all. So stop complaining and participate civically!

The rest follows. The rites and holidays serve to remind us of our purported awesome power. Each year, then, the president goes before a joint session of Congress to report on the state of our union, with the cabinet (minus one) and the august justices of the Supreme Court duly assembled. The presidential box is graced by people who, for some very poor reason, allow themselves to be politically exploited by the occupant of the White House.

From there, it’s all pretty routine, and Joe Biden stuck to the script. Take his boast about creating a record number of jobs, shrinking the deficit, controlling inflation, and the like. We’ve heard it countless times before. If something has gotten worse, say, crime, vow to make it better but accept no responsibility.

Never mind that the job growth (attributable to enterprise) was predictable with the waning of the Covid-19 pandemic and other factors beyond the power even of the Oval Office. Never mind that huge budget deficits loom as far as the eye can see — Washington is addicted to spending our money — and that the debt limit has again been reached and will soon be raised. The sky’s the limit, you know. That justifies forecasts of more Fed inflation and malinvestment, then recession and involuntary joblessness.

Never mind that the federal budget line labeled “interest on the debt” continues to increase and will tower over ever more spending categories. Never mind that Biden’s Buy American policy means that the government will intentionally spend more of our money than necessary in procuring materials for infrastructure projects it should have nothing to do with anyway. (And leave foreigners with fewer dollars with which to buy what politically unfavored Americans make.)

Never mind that newly proposed price controls and regulations will lower the living standard of everyone, lower-income people included. And never mind that “illegal” immigrants aren’t the problem with the welfare state or the source of fentanyl. (That would be the misnamed war on drugs.)

Mind none of that. Just jump to your feet multiple times and applaud. That goes even for you good folks at home — just in case your smart TV is watching you back. (I’m just sayin’.)

I did enjoy the lively give-and-take that went on when Biden said that “some Republicans want Social Security and Medicare to sunset.” Republicans were heard to shout back, “No!” and “Liar.”

That’s another game they all play: pretending that Social Security and Medicare won’t crash — sunset is too gentle a verb — on their own without any help from Congress. Both programs will be insolvent in the short term. The implicit crash provision was built into the original legislation in the 1930s and 1960s.

But before the people had a chance even to wonder if the chief executive was indeed lying, he engaged in classic misdirection by saying, “Let’s all agree — and we apparently are — let’s stand up for seniors.”

Everyone — yes, everyone — got to their feet and applauded. He might as well have said, “Let’s all agree that the law of gravity has been suspended!”

The Republicans of course have their own overlapping game. They brand themselves as the party of limited government (but not of limited military or surveillance) and fiscal responsibility and expect us to pay no attention to the small men behind the curtain who spend oodles of our money just like their opponents do. They are bad wizards and bad men. Since raising taxes would go against the brand, they are, despite their incessant squawking, secret agents of deficit spending, which means inflation and recession. Of course, many Republicans — MAGA and the other denominations — thrill to the words Buy American and to any industrial policy as long as the prefix strategic is attached. That’s music to their ears. And they don’t want immigrants polluting the culture or labor market. The populists of left and right are substantially of one mind.

How reassuring that it’s business as usual in old D.C. Thank goodness the adults are back in charge. The civic religion can proceed with its rituals mostly intact.

TGIF: The Tyre Nichols Atrocity

by Sheldon Richman | Feb 3, 2023 | Criminal Justice, Featured Articles, Justice, Politics, Sheldon Richman, TGIF

The brutal killing of Tyre Nichols literally at the hands (and feet) of several Memphis police officers might be a source of cognitive dissonance for some people. But before we get to that, let’s begin at the beginning.

To start with the moral basics, the officers who initiated force against Nichols, a 29-year-old father, and the others who joined in once the assault was in progress, had no apparent reason to believe Nichols posed any danger to them or the public. Judging by the body-cam video, the first officers to stop and approach Nichols’s car were exceedingly hostile from the start. It would be wrong to say they escalated the situation — rather, they appear to be in high confrontational mode from the get-go.

Some might say that Nichols failed to comply with the officers’ angry orders to get out and on the ground as they pulled him from his car. From the video, it looks more like Nichols was shocked and disoriented by what was happening. “What did I do?” he asked. He didn’t strike the officers; he asked a question. I suspect that police culture doesn’t cotton to such impertinence even when a suspect appears unthreatening. Yes, he ran away when he got the chance (and was soon caught and brutally punched and kicked again), but that was after being assaulted, tased, and pepper-sprayed. Watch the videos from the police body cams and pole-mounted surveillance camera for yourself. They’re not easy to view.

Simply put, this has all the looks of an atrocity by members of the now-“permanently deactivated” SCORPION (Street Crimes Operation to Restore Peace in Our Neighborhoods) unit, who knew they were being videoed.

The sheer brutality will confirm many people’s beliefs about the police. But there are problems with what many people think they know. As the saying goes, we often know things “that ain’t so.” Here’s where the dissonance sets in.

Five officers have been fired and charged with second-degree murder and other serious offenses. Others, including three onlooking fire department paramedics, are being investigated and have been dismissed. The street demonstrators who are demanding accountability may have missed the reports. Or they can’t take yes for an answer. Never let the facts get in the way of a good slogan: “Accountability now!” Should the cops be lynched? (Other cops who killed citizens in recent years have been convicted and imprisoned.)

This accountability is good, but prevention is needed too. Police departments must examine their hiring and training procedures in order to exclude bullies and bullying tactics as much as humanly possible. Police should not be taught that they are an occupying army. It would help if they were not furnished military gear by the national government and if they did not think of themselves as paramilitary rather than civilians. Moreover, offending police officers must not be able to take refuge in things like qualified immunity. You and I are liable for the damage we do, even unintentionally. So should the cops be.

As noted, the SCORPION unit, set up to focus on “high-crime spots,” is now history. Such things exist in other American cities. Forming the unit presumably was well-intended because, throughout the United States, most violent crime occurs in a relatively small number of areas, largely lower-income black and Latino communities. As Rafael Mangual, author of Criminal (In)justice: What the Push for Decarceration and Depolicing Gets Wrong and Who It Hurts Most, points out, if you were dropped into a random location in America, chances are you would land in a low-crime area. Note who would suffer from a reduction in policing in high-crime areas: the poorest, most vulnerable Americans; they would be black and Latino. That’s probably why, when polled, black Americans overwhelmingly oppose shrinking the police presence.

It thus seems reasonable for the police to focus on where the crime is: resources are not unlimited. But that shouldn’t be a carte blanche for cops or — and this needs more attention — national and state legislators, who tell the cops what to treat as crimes. The police problem would be far smaller if governments did not prohibit drug use, manufacturing, and sales. That’s because a “war on drugs” is necessarily a war on consensual transactions, which have no complaining witness. That fact prompts the police to use tactics — undercover operations, reliance on dodgy informants, no-knock raids — that create sure-fire conditions for violent confrontations and lethal errors involving innocents. (See the Breonna Taylor killing for an example.) In sum, terminating the drug war (and other wars on vice) would reduce the number of potentially dangerous contacts between the police and lower-income people, as well as improve the quality of the remaining contact. It would also rid the drug trade of the thuggish gangs that run black markets. Prohibition kills. (Much else must be done: for example, end occupational licensing and barriers to small-business formation, and let lower-income kids escape the government’s schools.)

Here’s another possible source of cognitive dissonance: the Nichols case shows us what we already should know. Police brutality is not about race — it’s about police brutality. Nichols was black, but so are the five dismissed and indicted officers. Two of the three fired EMTs are black. One white officer is being investigated, and another cop under investigation has yet to be identified. The Memphis chief of police is a black woman. It is hard to see how this is a racial atrocity. Logic will be twisted to make it appear so, but it will not wash. To attribute the black cops’ conduct to white supremacy is to deny them agency — which strikes me as patronizing — not to mention racist.

To the extent we have a police problem, it’s everyone’s problem — but especially lower-income people no matter their skin tone. They have more contact with the police than higher-income people. Lighter-skinned lower-income people are also beaten, shot, and killed by police, but they apparently aren’t newsworthy in our race-distracted era.

To see how wrong the Black Lives Matter narrative is, read this paper by Zac Kriegman, the top Reuters data analyst who was fired simply for showing his bosses that their crime coverage was wrongly premised on BLM’s narrative, which is unsupported by the data. (Kriegman wasn’t refuted; he was summarily dismissed.) The historian Barbara Fields, coauthor of Racecraft: The Soul of Inequality in American Life, asks if you really cared about police brutality, why would you lead white people to falsely believe that only black people need to fear the cops?

Next, as bad as police aggression is, its frequency should not be exaggerated. Dishonesty is a bad policy; it discredits efforts to reduce that aggression as much as we can. In 2022, says Mapping Police Violence, about 1,100 Americans (of all colors) were killed by police, most of them by firearms. That’s down not up over the last several decades. (The Washington Post says the shootings alone numbered 1,096.) That’s all killings, including justifiable ones. The number of killings of unarmed Americans is in double digits (about 40 in 2020), although unarmed people can be dangerous too, especially when they reach for a policeman’s gun. The 1,100 figure is nothing to be complacent about, but perspective is necessary.

Police make 10 million arrests every year in a country of over 330 million. So let’s not exaggerate the problem. What we cannot truthfully say is that it’s police open season on a certain group of Americans. Are black men killed disproportionately? Black people make up 13 percent of the American population and by that benchmark are overrepresented among victims of police killings. But is that the right benchmark? Kriegman writes,

The correct benchmark for measuring bias in police use of lethal force is the number of high risk encounters for each group, and not the population of each group…. [O]n average, violent crime rates are dramatically higher in predominantly black communities than they are in predominantly white communities…. Therefore we should expect there to be more encounters in those communities for the purpose of achieving entirely legitimate and laudable policing objectives.

When we use the appropriate benchmark, Kriegman writes, “the supposed anti-black bias disappears completely, and possibly, even reverses.” (By analogy, men make up almost 50 percent of the general population, but over 90 percent of the prison population. Does that prove the criminal justice system guilty of misandry? Not if you use the proper benchmark: the population of people who commit violent crimes.)

As I’ve suggested, policing could be improved in various ways through better screening and training, and full transparency and accountability. It’s got to happen — and soon. Poor policing harms the most vulnerable in two ways. It directly victimizes people through police brutality, and it indirectly victimizes people by leaving them at the mercy of street criminals. Both ways are intolerable.

Yet we should understand that no matter how much better policing could be, it won’t be good enough. The reasons are simple: policing today is a monopoly of governments, and it is politicians who define the crimes that the police are mandated to combat. We all know what coercive monopolies produce: shoddy products and services at unnecessarily high prices. We certainly need policing because some people will be inclined to have their way by force. To get better policing, then, we must insist that the politicians and bureaucrats step aside and let competitive free enterprise — with full transparency and accountability — deliver high-quality and affordable services, just as it has done with the other services it delivers.

TGIF: Don’t Blame Wokeism on the Unfinished Liberal Revolution

by Sheldon Richman | Jan 27, 2023 | Economics, Featured Articles, Justice, Libertarianism, Politics, Sheldon Richman, TGIF

The National Conservatives are not only wrong about genuine liberalism — that is, libertarianism — they also apparently haven’t bothered to read up on what they think they’re attacking. Take Yoram Hazony, author of Conservatism: A Rediscovery, who recently appeared on the YouTube show Triggernometry. As Hazony makes clear, for him it’s straw men all the way down.

Throughout the interview he uses the word liberalism for the philosophy he blames for saddling the West with wokeism. That’s unfortunate because people use that term in many ways. What definition does he have in mind? I think we can infer that he means something like libertarianism (and not, say, Nancy Pelosi’s “liberalism”) since he faults the philosophy for its powerful commitment to free markets. Although he’s not thoroughly opposed to free enterprise, he favors a government strong enough to step in when the “national interest” (ascertained by whom?) requires it. National conservatism without a commitment to government power to override the free market would be like a square circle.

Like other right-wing critics of libertarianism, Hazony believes that Western societies are in the woke soup because Enlightenment liberalism is intrinsically prostrate before its leftist adversaries. Why would that be? In his eyes, it’s because liberalism’s only message is this: do your own thing. He told Frances Foster and Konstantin Kisin:

If you [liberals, presumably] raise children and you tell them, “Look, do whatever you want. Do whatever feels good. Use your own reason, exercise your own thinking, and come to your own conclusions, and you don’t give them anything else, a great many people, maybe the majority, end up stuck and unable to make the decisions among, you know, what exactly is it I’m supposed to do and what is it I’m supposed to believe.

I have no idea why Hazony thinks that liberalism teaches people to do whatever feels good, or that, as he says elsewhere, that freedom is “all they need.” One of the first things liberal parents would teach their children is to respect other people’s rights: specifically, don’t hit other kids and don’t take their stuff without asking.

By the way, “do whatever feels good” is hardly the same as “use your own reason, exercise your own thinking, and come to your own conclusions.” How does Hazony not see that?

Further, using your own reason does not mean: don’t read history, don’t learn from others’ experiences, don’t absorb the moral and political lessons of those who came before. Liberalism is not about the individual’s starting from scratch and reinventing the wheel. Rather, it means that you shouldn’t blindly accept what others tell you. Use your head. We have much to learn from other people and other ages. So what’s Hazony’s real beef with liberalism?

As this makes clear, he clearly doesn’t know what liberalism is, but he’s certain he knows what it has wrought:

Liberalism is what brought woke neo-Marxism. Every single institution that the woke neo-Marxists are running now was a liberal institution 15 years ago. So if liberalism had the antibodies, if it was enough to say let’s just be free, if that was strong enough to be able to defeat woke neo-Marxism we wouldn’t be where we are today….

Liberalism brought Marxism.

Have you noticed how everything the woke left favors these days — to be sure, genuinely abhorrent stuff — is reflexively condemned by the right as “neo-Marxist” — even when the idea in question has nothing to do with the material forces of history and economic classes? You’d think Marxism was the only evil in the world. Actually, It’s not.

Sometimes, when Hazony thinks he’s scored points on liberalism, he sounds a bit like a liberal, such as when he reminds us that each individual is born into a culture, which ought not to be automatically rejected. The reason he doesn’t realize that liberals can agree with this is that he thinks — wrongly — that liberals are Jacobins, who aspire to wipe the social slate clean and start over. Some liberals have occasionally sounded like they’re saying something like that, but to suggest that Jacobinism or utopianism is intrinsic to liberalism is to do a disservice to an honorable and valuable — yes — heritage.

While Hazony concedes that it might be okay to reject some inherited traditions, he seems uncomfortable with that prospect. As he puts it, your forebears “hand[ed] down things [and] you have a responsibility to fight for those things.” Why? Because they were handed down?

I prefer Thomas Sowell’s take: another culture may well have features that are better than one’s own — superior at dealing with an aspect of life.

The entire history of the human race, the rise of man from the caves, has been marked by transfers of cultural advances from one group to another and from one civilization to another….

Cultures exist to serve the vital practical requirements of human life — to structure a society so as to perpetuate the species, to pass on the hard-earned knowledge and experience of generations past and centuries past to the young and inexperienced, in order to spare the next generation the costly and dangerous process of learning everything all over again from scratch through trial and error — including fatal errors.

Cultures exist so that people can know how to get food and put a roof over their head, how to cure the sick, how to cope with the death of loved ones, and how to get along with the living. Cultures are not bumper stickers. They are living, changing ways of doing all the things that have to be done in life. [Emphasis added.]

Every culture discards over time the things which no longer do the job or which don’t do the job as well as things borrowed from other cultures. Each individual does this, consciously or not, on a day-to-day basis. [Watch the video; read the text.]

Problems with change occur not when people are free to adopt “the stranger’s ways” (the supposedly scary phrase is from Fiddler on the Roof); they occur when those who favor change have access to state power — especially when government controls or strongly influences education, the media, and other commanding heights. Then some people, however well-meaning, can potentially impose their preferences on the rest.

Without access to power, people are free to adopt changes for themselves and try to persuade others, but then they would have to wait to see if the new ways catch on. Change, under those circumstances, tends to happen at the margin, although exceptions can’t be ruled out. (Social contagion is possible.) But even then, free people would have peaceful consensual ways to protect themselves and their children from unwanted change. This is where freedom of association kicks in.

In general it seems reasonable for individuals to provisionally defer to tried-and-true ways because they have apparently passed the cultural natural selection test. Yet one also ought to remain open to demonstrations of better alternatives. Liberalism delivers the best of both: stability without stagnation and dynamism without chaos. But individual rights must be respected.

As a national conservative, Hazony of course favors nationalism. If all he means is that a world of many nation-states is preferable to a global empire, then libertarians stand with him. If we can’t get rid of power, at least let’s disperse it among small competitive jurisdictions. But he means much more than that since he and his fellow National Conservatives favor trade restrictions and other forms of welfare-state industrial policy. And I presume he would oppose secession, at least from nation-states he approves of. (He is an Israeli.)

Hazony commits a major blunder when he says that liberalism is inherently imperialist and that nationalism is inherently anti-imperialist. How does he figure that? Since liberals believe they have identified universal principles, he says, it is committed to imposing those principles on everyone. If you fail to see his logic, I imagine you’re not alone.

Contrary to Hazony, liberalism doesn’t says it has the one true way for everyone to live. Rather, it says all people ought to be free to decide how to live. Liberalism, which seeks to limit state power, doesn’t entail imperialism because that would expand state aggression both domestically and abroad. Thus “liberal imperialism” is a contradiction in terms. Nationalist imperialism, however, is not.

While I wouldn’t expect Hazony to be persuaded by what I’m about to say, I will point out that the alarming and long-standing decline of liberalism can be plausibly explained by its initial incompleteness politically, economically, legally, and even morally. Twentieth-century liberal writers, scholarly and popular, pointed this out repeatedly and tried to do something about it. That’s why they wrote so much. These included Ludwig von Mises, F. A. Hayek, Murray Rothbard, Leonard Read, Henry Hazlitt, Milton Friedman, and most fundamentally, Ayn Rand, who argued persuasively (to me at least) that as long as a secular or religious ethics of self-sacrifice predominated in a culture, the political-economic-legal system rooted in individualism and private property would never be whole-heartedly embraced because it would be tainted by the alleged sin of “selfishness.”

Even the doctrine of limited government kept liberalism from fully blossoming because, as we’ve learned so often the hard way, limited governments don’t stay limited. (See my article “Anthony de Jasay on Limiting Power.”)

Thus liberalism didn’t yield because it was inherently weak. It yielded because it was fatally compromised from the start. That’s my answer to Hazony’s question of why wokeism has succeeded. We don’t need illiberal national conservatism to win back our freedom.

TGIF: The Economic Way of Thinking Can Save Lives

by Sheldon Richman | Jan 20, 2023 | Economics, Featured Articles, Libertarianism, Politics, Sheldon Richman, TGIF

The Cambridge economist Joan Robinson (1903-1983) wisely said, “The purpose of studying economics is not to acquire a set of readymade answers to economic questions, but to learn how to avoid being deceived by economists.”

Excellent point, though I would both broaden and narrow her category of suspects. I would include most politicians, bureaucrats, pundits, and social-science and humanities professors in the suspect group. And I would exclude the economists — spoiler alert: primarily those of the Austrian school, although others stand out — who paint a much more realistic picture of the world than the others do.

For the record, Robinson was sympathetic to John Maynard Keynes and, later in life, communist China’s Mao Zedong, and North Korea’s Kim Il Sung. Obviously, her study of economics did not teach her how to avoid being deceived by all who represented themselves as economists. (I heard once that Che Guevera became head of Cuba’s national bank in 1959 because when Fidel Castro asked his cadre, “Who here is a good economist?” Guevara, thinking he heard, “Who here is a good communist?” raised his hand. But that’s apparently apocryphal.)

At any rate, mankind would have been spared a good deal of misery had people learned at an early age to engage in the economic way of thinking. If I were to sum it up in a short phrase, I would say: in a world in which the law of identity, causality, and scarcity rule, you can’t do just one thing. Human action has consequences. This apparently is also the first law of ecology, but oddly, environmentalists (as opposed to humanists) seem ignorant of it.

The point is that all human action has rippling consequences across society and across time. The economist who called his textbook The Economic Way of Thinking, the late Paul Heyne, wrote, “All social phenomena emerge from the choices of individuals in response to expected benefits and costs to themselves.” (Happily, Peter J. Boettke and David L. Prychitko keep updating the book. It’s in its 10th edition.)

Heyne’s maxim applies to the choices of politicians and bureaucrats also. So before proposing or endorsing a government policy, one ought to wonder about the social phenomena that are likely to emerge from it. Economics is an indispensable tool in this respect.

Henry Hazlitt’s classic, Economics in One Less, is a great way to get started. Hazlitt wrote, “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Hazlitt’s book elaborated an important message of his intellectual ancestor, Frédéric Bastiat, the 19th-century French laissez-faire liberal, in the classic essay “That Which Is Seen and That Which Is Unseen.”

Individuals who adopt this way of thinking are better equipped to judge the promises of politicians, etc. who support taxes, minimum-wage laws, rent control, general wage-and-price controls, and the rest of the program of political authority over contractual freedom and other peaceful conduct. Even well-intended regulations will have unintended bad secondary consequences. Good intentions are never enough.

Any good introduction to the economic way of thinking will introduce readers to concepts like opportunity cost, the unseen, sunk costs, the margin, and tradeoffs. Most people seem to intuit some of these in their own lives. But they fail to do so when it comes to society as a whole. They are encouraged by politicians and pundits to think that common sense in private life does not apply to the big picture.

Opportunity cost refers to the fact when you choose a course of action, you necessarily foreclose another course of action. The true cost, then, is the (subjectively judged) next-best choice forgone. If you buy something for two dollars, your cost isn’t really two dollars. It’s what you regard as the next best use of those two dollars — the future not chosen. You might decide afterward that you made a mistake: “I could’ve had a V-8!” Good economists do not regard people as omniscient robots.

Opportunity cost is another way of looking at trade-offs. If you do or choose A you can’t do or choose B. Thus you trade B for A. Trade-offs are inescapable. Thomas Sowell, for whom the word genius is woefully inadequate, dramatically drew attention to this feature of life when he wrote, “There are no solutions. There are only trade-offs.” Today’s problems, he adds, may well be the result of yesterday’s solutions. We’d do well to bear this in mind, especially in deciding what the government should be doing (if anything).

Opportunity costs and trade-offs are examples of the “unseen,” another important concept in good economics. Bastiat’s fable of the broken window (see link above) debunked the myth that destruction stimulates the economy by prompting spending and thus makes communities or nations as a whole richer. Bastiat showed that a town does not get richer when a store owner has to buy a new window. Sure, he spends money, benefiting some people in town, but wouldn’t he have spent the money on something else? What else? No one knows. It’s unseen. But we know that he and others are now worse off. The owner has the window, but he would have had a window plus whatever he wishes he could have spent the money on. No general enrichment occurs.

Remember that next time a pundit rhapsodizes about the silver lining in earthquakes and hurricanes (“Think of the jobs that will be created!”) or a politician proposes to spend your money. Ask yourself, “What sort of things won’t happen?”

Although many other concepts are entailed by the economic way of thinking, I will mention only one more variation on the unseen. This one has incited ugly bigotry and cost many lives: it’s the concept middleman.

No one has documented this as well as Thomas Sowell, not only its economic dimensions but more broadly as well. As Sowell shows in many works (see, for example, Black Rednecks and White Liberals), middlemen — peddlers, storefront and chain-store retailers, importers, and money lenders — perform an important service in the market by matching up people who would gain from trade but might otherwise have a hard time finding each other. Retailers specialize in matching manufacturers with consumers, sometimes extending credit, while wholesalers match manufacturers with retailers. Money lenders specialize in matching lenders with borrowers. (Estimating the creditworthiness of borrowers is no piece of cake.)

In short, middlemen save us a lot of inconvenience. Free exchange is win-win or it does not take place. If they do their jobs well, middlemen make us richer, which is why they earn profit. If their function were inherently superfluous, they would be driven out of business by better business forms.

Alas, the value produced by middlemen is unseen by the economically ignorant, but it is real. Historically, successful middlemen, even if they were only slightly richer than the people around them, have been despised for their success, especially (but not exclusively) if they had started out poor and were immigrants who noticeably differed racially or ethnically from the majority population. Why? Because the ignorant believed the middlemen were exploiters. They made good incomes seemingly without creating anything. They “merely” moved goods or money around or made them available sooner rather than later — as if place and time were irrelevant. Where’s the value in that?

Sowell’s work shows that this animosity born of economic ignorance and envy is at the bottom of a great deal of the world’s racial, ethnic, and religious bigotry and violence, including mass murder, even when such ignorance is obscured by added rationalizations. (Demagogues often fanned that bigotry for political gain.)

“Middleman minorities” have in fact been the most persecuted groups in history all over the world, Sowell writes. That description might bring the Jews to mind, but Sowell shows that the Jews were far from unique in that respect. His list of chronically persecuted and even slaughtered middleman minorities includes the Chinese in Southeast Asia, Lebanese in west Africa, Indians and Pakistanis in east Africa, Armenians in the Ottoman Empire, Ibos in Nigeria, Parsees in India, and Tamils in Sri Lanka.

The magnitude of that violence, Sowell says, dwarfs that of other violence. Middleman minorities were hated not only for their higher incomes but also for the distinctive cultural traits that made that success possible, among them thrift, willingness to work long hours, strong families, and so on. The majority population often was at an economic disadvantage because of its cultural disadvantage; it wouldn’t or couldn’t compete against the minority, fanning the hatred.

The story is tragically common. Sowell says that while the overseas Chinese and other groups have been called the “Jews of [insert pertinent location],” that could easily be turned around: the Ashkenazi Jews were the Chinese, Lebanese, etc. of Europe.

While emphasizing these beleaguered groups’ commonalities, Sowell does not deny the uniqueness of each group’s story. The Nazi’s unprecedentedly bureaucratized and mechanized elimination of Europe’s Jews, of course, comes to mind. Nevertheless, Sowell writes in Black Rednecks and White Liberals (PDF), “In view of what was actually done to some of these other groups [the Chinese and Armenians, for example], there is little reason to doubt that their persecutors would have used such technological and organizational capabilities [as the Nazis used] if they had them.” Sowell is no ivory-tower, library-bound intellectual. He’s traveled the world more than once for an international perspective on this and related issues.

As I said, mankind would have been spared a great deal of grief — and would have been much richer — had people early on learned the economic way of thinking.

TGIF: Where Socialists Go Wrong

by Sheldon Richman | Jan 13, 2023 | Featured Articles, History, Libertarianism, Sheldon Richman, TGIF

Since socialism is “in” today — even though many people who say they favor it have no idea what it is — F. A. Hayek’s last book, The Fatal Conceit: The Errors of Socialism (1988), is worth checking out. Hayek, the late great Nobel-laureate economist of the Austrian school, begins this way:

This book argues that our civilisation depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleadingly, known as capitalism. To understand our civilisation, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection — the comparative increase of population and wealth — of those groups that happened to follow them. The unwitting, reluctant, even painful adoption of these practices kept these groups together, increased their access to valuable information of all sorts, and enabled them to be ‘fruitful, and multiply…’ This process is perhaps the least appreciated facet of human evolution.

Socialists take a different view of these matters.

Well, that last sentence is quite an understatement. By socialism Hayek didn’t mean the welfare state or continuing government efforts to manipulate market outcomes according to some notion of equity. That would be interventionism or the mixed economy. No, socialism is the abolition of the market order and its necessary condition, private property: the replacement of free private enterprise with centralized bureaucracy. Let’s cut to the chase:

The main point of my argument is, then, that the conflict between, on one hand, advocates of the spontaneous extended human order created by a competitive market, and on the other hand those who demand a deliberate arrangement of human interaction by central authority based on collective command over available resources is due to a factual error by the latter about how knowledge of these resources is and can be generated and utilised. As a question of fact, this conflict must be settled by scientific study. Such study shows that, by following the spontaneously generated moral traditions underlying the competitive market order (traditions which do not satisfy the canons or norms of rationality embraced by most socialists), we generate and garner greater knowledge and wealth than could ever be obtained or utilised in a centrally-directed economy whose adherents claim to proceed strictly in accordance with ‘reason’. Thus socialist aims and programmes are factually impossible to achieve or execute; and they also happen, into the bargain as it were, to be logically impossible.

Hayek is saying that once we understand how information about resources is produced and transmitted, we realize that central planners can’t deliver the goods. Socialism can’t keep its (earlier) promises of plenty. (Nor of justice, but that’s for another time.)

Here Hayek extended Ludwig von Mises’s fatal critique of socialism; namely, that

without tradeable private property in the means of production, markets for resources and producers’ goods don’t exist;
without such markets, true prices can’t exist; and
without prices, rational economic calculation is impossible;
therefore, socialism is impossible; it’s “planned chaos.”

By impossible Mises meant that without genuine money prices resulting from free exchanges, the millions of disparate resources and goods could not be accorded a common unit of account, and therefore rational decision-making about what ought to be produced, how much should be produced, and the best methods of production is foreclosed. In a world of scarcity with a growing population, that is bad news indeed.

When the socialists responded to Mises that planners could simulate market prices with computers and bureaucratic trial and error, Hayek said, No, they can’t because what makes true and informative prices happen — producer and consumer free choice in an environment with widely dispersed and ever-changing local and often tacit knowledge about resources and preferences — is beyond any central planner’s reach. In what Hayek called “the great society” — which is marked by extended cooperation with countless strangers rather than the earlier, primitive face-to-face tribal relations — spontaneous coordination via the price system is the name of the game, literally a matter of life and death.

Thus Mises identified the “calculation problem,” and Hayek the complementary “knowledge problem.” The Mises-Hayek tag team was triumphant. When the Soviet Union dismantled itself, the American socialist economist Robert Heilbroner declared, “Mises was right.”

As a result, newer generations of socialists gave up their goal of outproducing the market in favor of the “era of limits.” In effect they said: “It’s good that socialism can’t outproduce the market. Affluence is bad for the planet, so the last thing we should want is for the people of the developing world to achieve our sinfully high living standards. Better that we should produce far less according to the instructions of trusted, saintly, and omniscient bureaucrats, who will distribute the output more caringly than profit-driven impersonal and spontaneous market forces could ever do.”

And would you like to buy a bridge cheap? Back to Hayek.

The demands of socialism are not moral conclusions derived from the traditions that formed the extended order that made civilisation possible. Rather, they endeavour to overthrow these traditions by a rationally designed moral system whose appeal depends on the instinctual appeal of its promised consequences. They assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system. But if humankind owes its very existence to one particular rule-guided form of conduct of proven effectiveness, it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects. The dispute between the market order and socialism is no less than a matter of survival. To follow socialist morality would destroy much of present humankind and impoverish much of the rest.

Many people with whom I share a deep loathing of war and surveillance apparently get a warm cozy feeling from the word socialism. I suspect it’s because they’ve never encountered Hayek’s point, much less examined it. That’s a shame. They have nothing to lose but their self-forged chains.