Quote of the Day: David Harsanyi

David Harsanyi published today at The Federalist:

Like many progressives, Piketty doesn’t really believe most people deserve their wealth anyway, so confiscating it presents no real moral dilemma. He also argues that we can measure a person’s productivity and the value of a worker (namely, low-skilled laborers), while at the same time he argues that other groups of workers (namely, the kind of people he doesn’t admire) are bequeathed undeserved “arbitrary” salaries. What tangible benefit does a stockbroker or a Kulak or an explanatory journalist offer society, after all?

Thomas Picketty’s book Capital in the Twenty-First Century is #1 on Amazon. It’s become a big hit among progressives, who, in Harsanyi’s words, see it as an intellectual validation for their preconceived notions about the evils of capitalism.

Quote of the Day: Sandy Ikeda

Sandy Ikeda writing in The Freeman on April 17:

“A planner can’t build an entire city (or neighborhood eve) because she can’t begin to design and construct the necessary diversity and social intricacy that happens spontaneously in a living city. And I don’t think she should even try because it can irreparably damage, even kill, the living flesh of a city. What can government do? In the ordinary course of its activities a government can perhaps at best refrain from doing the things that would thwart the emergence of the invisible social infrastructure that gives rise to diversity, development and genuine liveliness.”

I recommend the entire article. For me, it brought to mind childhood memories of playing computer games like SimCity, Civilization and Age of Empires. What games like this have in common is they allow the player to play dictator–view cities from the top-down, manage their economies, identify problems and create solutions by drawing upon knowledge of how the cities’ inhabitants (modeled to act like real human beings) respond to various stimuli. It’s great fun, and can make managing an economy seem relatively easy once the game’s rules and parameters are understood.

But of course, no model can account for the awe-inspiring intricacy that is the human mind, no matter how advanced. While it might be possible to centrally plan a city in the virtual world, it’s impossible in real world, where rules and parameters are always changing.

Quote of the Day: Arthur Brooks

Arthur Brooks, president of the American Enterprise Institute, has a great column in today’s New York Times.

Tibetan Buddhists actually count wealth among the four factors in a happy life, along with worldly satisfaction, spirituality and enlightenment. Money per se is not evil. For the Dalai Lama, the key question is whether “we utilize our favorable circumstances, such as our good health or wealth, in positive ways, in helping others.” There is much for Americans to absorb here. Advocates of free enterprise must remember that the system’s moral core is neither profits nor efficiency. It is creating opportunity for individuals who need it the most.

Manufacturing industry’s health ≠ number of manufacturing jobs

We often hear that the American manufacturing industry is in major decline. In fact, the point often goes without saying these days, or at least without good data to back it up. That’s not to say that the number of manufacturing jobs in America hasn’t dropped off–that much is certain. But is the number of people employed in the manufacturing industry a good indication of that industry’s health?

The answer is no, and here’s why.

First: Consider the chart below from the Mercatus Center’s Veronique de Rugy:

As you can see, even though the number of manufacturing jobs has consistently fallen since around 1980, US manufacturing output is much higher these days than ever before (except for just prior to the 2008 financial crisis). As de Rugy explains, this means the average American manufacturer is more than three times more productive today than they were in 1975. This reveals true economic progress–producing more with less.

Second: In a recent paper, Clemson University’s Bruce Yandle (also affiliated with the Mercatus Center) explains a fact about manufacturing in America I hadn’t considered before. He writes,

“Information technology that drives the cost of contracting and managing is the big unknown in all this. As I have pointed out before, the US economy, especially the manufacturing economy, is disintegrating. Picture a large paper producer, for example. In decades past, that producer would have its own fleet of trucks, timber operation, steam-generated electricity, internal shop for major repairs, large engineering department, finance department, human resources, and distribution and warehousing operations, all as part of one paper-producing firm. Today, that same paper producer contracts out for transportation, logistics, engineering, energy, heavy maintenance, and for some finance and personnel services.

As contracting costs have fallen, the firm has disintegrated. Dramatic improvement in information technology has been the driver. The result? A smaller share of the workforce is employed in paper manufacturing, but more paper is being produced.”

He doesn’t cite data to back up this story (I’m not even sure if any relevant metrics exist), but it makes sense to me and jives with my own tangential experience with the manufacturing industry.

I work at a sales agency that sells for small manufacturers throughout Pennsylvania. Often, we will facilitate everything from product conceptualization to market research and advertising to shipping to final sale for our manufacturer client, leaving them to do only what they do best–manufacture product (don’t you just love the division of labor?). The result is that the number of people working for the manufacturing firm is trimmed down until only those people working on the assembly line, plus a few supervisors, remain employed at that firm. The few dozen employees at my workplace–accountants, marketers and salespeople who, decades ago, might have been employed directly by the manufacturer–are categorized under “business services.” This grows the “professional business services” labor force and a shrinks the “manufacturing” labor force despite no decrease in manufacturing output. If anything, outsourcing business services like shipping and sales–the cost of which is falls with advancements in information technology–only increases manufacturers’ efficiency.

I could say more about the state of manufacturing in the US. Suffice it to say, though, that the number of jobs in a particular industry is no indication of that industry’s overall health. Jobs are important, but that’s an entirely different discussion.

Quote of the Day: Frank Hollenbeck

From Frank Hollenbeck in today’s Mises Daily article:

“We live on a planet with a constraint called gravity. We can adapt to the law of gravity by creating innovations such as airplanes, but we cannot defy the law of gravity by jumping off a building without a parachute. The same is true in economics and of the law of scarcity. We falsely believe that somehow if government legally counterfeits intrinsically worthless paper or spends someone else’s money we will be able to upend the law of scarcity.”

Quote of the Day: Mises

From the introduction of Ludwig von Mises’ Human Action.

“It is true that economics is a theoretical science and as such abstains from any judgment of value. It is not its task to tell people what ends they should aim at. It is a science of the means to be applied for the attainment of ends chosen, not, to be sure, a science of the choosing of ends. Ultimate decisions, the valuations and the choosing of ends, are beyond the scope of any science. Science never tells a man how he should act; it merely shows how a man must act if he wants to attain definite ends.”

I often read online Austrian economic commentary. A common theme I note in these threads is the erroneous conflation of Austrian economics with libertarian political theory or some other philosophy about the good with regard to political organization. While many Austrian economists are indeed political libertarians, Austrian economics and libertarianism are not synonymous. As Dr. Steve Horwitz defines, Austrian economics is “a set of analytical propositions about the world and how to study it,” not “a set of policy conclusions or settled interpretations of history.” Unfortunately, this mistake is as common among proponents of Austrian economics as it is among the Austrian school’s critics.

In that vein, I recommend this video by Prof. Steve Horwitz about what Austrian economics is and what Austrian economics is not.

A New Vision

I first created this website intending it to become my online writing portfolio. I wanted to keep all my published articles in one place in order to show prospective employers, find more freelance work and keep my pieces organized.

I’ve since learned this is a pretty sorry way to promote my stuff. Not only were my grandparents the only people who ever visited the site, but I shouldn’t really be re-posting entire articles here anyways–submitting them for publication almost always means giving up rights over the article to the publisher.

That said, I’m going to start blogging here. I’ll keep my professional writing portfolio on the “Articles” page for future reference, but this site will primarily be for my blog. By doing this, I hope to write more often and explore subjects I’m interested in but not necessarily qualified to write about for a magazine or journal.

I’ll also be working on the format of the blog over the next few days. I like simple blogs, but I want to link most of my online professional and social media accounts to this page.

I got published: The Key to Achieving “Lift-Off” for the Poor

I got published at ValuesandCapitalism.com. This time, I respond to an article by New York Times columnist Nicholas Kristof about poverty, children and so-called “safety nets.”

“Sounds nice, but safety nets aren’t for lifting off. They are for catching falls. Lift-off requires a firmer foundation—one that can withstand the ebbs and flows of recession, unemployment and other extraneous dampers on economic success. That firm foundation is a moral culture.”

Read the article at Valuesandcapitalism.com, originally published on March 21, 2014.

I got published: President Obama Doesn’t Know His History

I got published at ValuesandCapitalism.com. I write about President Obama’s stilted view of history as displayed during his State of the Union Address last Tuesday.

In essence, President Obama claimed that technological advances that undermined old-fashioned ways of doing things inhibit middle-class growth. They pull the rug out from underneath Americans who depend on hard work and responsibility to make ends meet. No longer do people’s financial futures depend on their own effort, but rather, technology and competition has introduced extraneous factors into the economic equation that undermine the norm of hard work being the key to financial success.

Technology, he says, makes life harder.

Read the article at ValuesandCapitalism.com, first published on January 30, 2014.

I got published: Securing Economic Progress: A Lesson from Robinson Crusoe

I got published at ValuesandCapitalism.com. I wrote about the prerequisites of economic progress.

Property rights are an essential ingredient for economic progress. If human beings doubt that the fruits of their labor will remain theirs to use as they wish, they will be less likely to work so hard gathering resources and more likely to consume their resources as soon as possible.

Read this article at ValuesandCapitalism.com, first published on Wednesday, January 15.