Some Ground Rules for the Minimum Wage debate

My latest article for Turning Point USA. I suggest some aspects of the debate that just need to go away. Your thoughts?

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Reading notes on Hobbes’s Leviathan – Pt. 1

Throughout my schooling, I have encountered numerous times Thomas Hobbes’s claim that life in the state of nature would be “solitary, poor, nasty, brutish, and short.” This has been casually thrown around both by

– teachers giving a cursory justification for the existence of government

– students offhandedly waving away libertarianism by remarking wryly that they, too, want to live in the Hobbesian Jungle (maybe it’s not as bad as we thought?).

Given that I am fairly outspoken in my arguments on economics and political theory, I decided I should pay due respect to Hobbes and his work, so I’m reading Leviathan.

Leviathan

The book is organized into four sections. If I understand correctly, the last two sections are exclusively on religion and the church, so I will not be reading them – plus, my Missner edition doesn’t have them.

The first section explains Hobbes’s views on the nature of human experience – including what is sense, imagination, science, reasoning, understanding, etc. The second is more specifically focused on government.

I’ve made notes to myself in the margin, which I will share here if they are of interest. They will be as coherent as possible without spending too much time making sure they flow perfectly. I will then combine them all into one post to give my response to Hobbes.

Quotes and analysis that are actually related to economics or political theory will be navy blue.

Notes and Thoughts

So far, I find Hobbes to be much more agreeable than expected – perhaps because I have not yet gotten very far into his discussion of government.

Introduction

“great ‘Leviathan’ called a ‘Commonwealth’ or ‘State,’ in Latin civitas, […] is but an artificial man”

I am unsure whether Hobbes is only making a grand introduction or really believes it, but he sets the stage by equating the state to an artificial man. To say that the state is a being of its own is not only frightening, but also misleading – since only individuals can act, and the actions of the state are determined endogenously by the sum of the actions of the individuals over whom it rules.

“To describe the nature of this artificial man, I will consider: First, the ‘matter’ thereof, and the ‘artificer,’ both which is ‘man.’”

Hobbes appears to redeem himself by noting that the state is both made up of people and is created by people.

“there is [a] saying that is not lately understood, […] nosce teipsum – ‘read thyself’ [… it serves to] teach us that for the similarity of the thoughts and passions of one man to the thoughts and passions of another, whoever looks into himself and considers what he does, when he ‘thinks,’ ‘opines,’ ‘reasons,’ ‘hopes,’ ‘fears,’ etc., and upon what grounds, he shall thereby read and know what are the thoughts and passions of all other men upon like occasions.”

It appears that this is a call for introspection – an argument made by many economists in justifying their theoretical foundations. We’ll see whether Hobbes consistently employs introspection when discussing the ruled and the rulers.

“Individually, every thought is a representation or appearance of some quality or other accident of a body outside of us, which is commonly called an object.”

Just a bit of background for Hobbes’s understanding of how people work. Thoughts are representations of outside objects. The origin of thoughts is sense, which is caused by outside objects pressing on sensory organs, which propagate the pressure inwards and cause various motions inside the body. Hobbes often talks of motions in the body causing much of human experience.

“No man doubts that it is a truth that when a thing lies still, unless somewhat else stirs it, it will lie still forever. But when a thing is in motion it will eternally be in motion, unless somewhat else stays it.”

This sounds a lot like Newton’s first law of motion! – and it essentially is (if we add “with constant velocity” to the second sentence). But wasn’t Leviathan published in 1951, when Newton was just about 9 years old and hadn’t come up with his laws of motion? It turns out that Galileo had also described the law of inertia before Newton, and Wikipedia says that “[p]hilosophical ideas relating to inertia had been proposed by John Philoponus centuries earlier, as had Jean Buridan, and according to Joseph Needham, Mo Tzu had proposed it centuries before either of them.” And now we know!

“Imagination […] is decaying sense.”

Just a quote.

“When I am awake I often observe the absurdity of dreams, but never dream of the absurdity of my waking thoughts. Thus, I am well satisfied, that being awake, I know I do not dream, even though when I dream I think myself awake.”

This made me laugh. The logic isn’t necessarily sound, but it certainly is intuitive!

“Some say the senses receive the species of things and deliver them to the common sense, and the common sense delivers them to the fancy, and the fancy to the memory, and the memory to the judgment, like handing of things from one to another, and with many words they make nothing understood.”

Hobbes misses no chance to poke fun at other thinkers. It keeps Leviathan a nice and pleasant read.

“In a discourse about our present civil war, what could seem more unrelated than to ask, as one did, what was the value of a Roman penny? Yet the coherence was manifest enough to me. For the thought of the war introduced the thought of delivering up the king to his enemies; the thought of that brought in the thought of delivering up of Christ; and that again brought the thought of the thirty pence, which was the price of that treason.”

This is interesting. It appears in the section where Hobbes discusses trains of unguided thought and uses this as an example to point out that even in the wild world of the wandering mind explanation for a train of thought could be found. The other type of trains of thoughts is regulated ones.

“in all of your actions consider what you are aiming at as the thing that directs all of your thoughts in the way to attain it.”

This is the essence of human action and using means to achieve ends.

“Sometimes a man desires to know the [effect] of an action. He thinks of some similar past action and the effects that followed it, supposing that like effects will follow like actions. […] Because of the difficulty of observing all of the circumstances, this kind of thinking can be very fallacious. […] The future is but a fiction of the mind, which applies the sequels of past actions to the actions that are present.”

I think this is a good description of empiricism and the scientific method. In predicting the future, we look at the past when the conditions of the object in question were the same as the current ones (controlling variables – ceteris paribus) and we say that the same consequences will follow. Of course, as Hobbes notes, not making sure to look at past circumstances that were the same as the current ones in all regards can lead one to make false conclusions (since there could be other, unobserved factors causing the result we saw in the past).

“Sometimes a man desires to know the [effect] of an action. […] This train of thoughts is called […] prudence.”

“it is not prudence that distinguishes man from beast”

“imagining any thing whatever, we seek all the possible effects that it can produce. […] This second only seems to occur in man”

Hobbes appears to contradict himself. He claims that it is not imagining the consequences of an action that separates man from animal. Yet earlier, he had said that precisely this is what is the difference between the two. Is the difference that his earlier claim included “all possible effects?” I doubt that the “all” is what makes the difference – or what should make the difference. It appears Hobbes is merely contradicting himself.

“Without speech among men there would be no more commonwealth, society, contract or peace than there is among lions, bears, and wolves.”

I’m happy that Hobbes agrees with part of my assessment in my first post on the possibility of cooperation in the Hobbesian Jungle. I note that

“Going back to the importance of a shared language, we can see why cooperation among 1) animals and other animals, and 2) humans and animals is difficult. They have no way to make the case to each other for why they shouldn’t kill each other. Animals cannot make pacts for mutual protection unless it is genetically instilled in them. Humans also cannot face a bear reared on its hind legs and argue for why no, Mr. Bear, you shouldn’t kill me because then you will lose the benefits I can offer you.”

In the post, I propose that cooperation can arise even without the division of labor when there is uncertainty about the future structure of society and when people can mitigate such uncertainty by discussing the future and making the case for cooperative defense. However, without the capacity for discussion, there is no way for people to establish cooperative agreements.

Sloppy Economics and Part-Time Austrians

The economy must have been hit harder than expected, given that so many Austrian Economists have switched to being only part-time Austrians, and otherwise thoughtful economists (whether Austrian or not) have shirked their duties.

What am I talking about? I’m talking about two recent waves of libertarian appeals to poor minimum wage empiricism that would not pass the sniff test in an introductory econometrics class.

The first round:

Kevin Erdmann blog post on the effects of minimum wage on teen employment. Erdmann originally regressed teen employment over time before and after the minimum wage was increased at different times in US history, concluding that there is strong evidence that the minimum wage caused the decrease in the employment trend.

This article was shared by (at least) Steve Horwitz, Peter Boettke, Don Boudreaux, and Mark Perry.

Horwitz introduces the article with

Evidence about the minimum wage harming teen employment you say? Evidence you shall have.

Boudreaux says

These data and these estimates combine with the compelling nature of – and with the central role in economic science of – the law of demand to make an empirically persuasive case that, as employers’ costs of employing low-skilled workers rises, fewer such workers will be hired than otherwise. [emphasis in original]

And Perry tosses in some snarky strikethrough formatting to note that

Marginal RevolutionCafe Hayek and the Coyote Blog are all featuring the chart above and the blog post about the minimum wage law government-mandated wage that guarantees reduced employment opportunities for teenagers by Kevin Erdmann on his Idiosyncratic Whisk blog.

The problem with all of these authors sharing the blog post and praising its conclusion is that the evidence provided is simply useless. One of the most fundamental aspects of science is the idea of controlling for external variables. The original post by Erdmann simply regressed teen employment over time – before and after the minimum wage was increased – without including any controls. However, it is notable that at least some of the periods with minimum wage increases overlap with recessions. And when the two competing theories about why employment has fallen are a minimum wage increase and a recession, my bet is always with the recession.

This is not to say, of course, that I believe minimum wages do not have teen disemployment effects. Rather, my point is that the evidence presented provides no backing for the claim, given the naive data processing performed. Not only can recessions help to explain the trends in employment, but they can also help to explain minimum wage hikes (or at the very least there is a plausible pathway): the economy goes south, so politicians argue for a higher minimum wage to help out struggling families (and win the left-liberal vote). As such, recessions are a classic example of a confounding variable in the analysis.

Yet even if the analysis somehow included the effects of recessions, there would still be too many variables uncontrolled that could be causing the observable effect (Dube also mentions that state-level variation in minimum wages could have an important effect). This is fairly standard Austrian Economics 101 mantra – you can’t control the necessary variables to claim causation (at least in most situations – I believe Imbens et al (1999) to be a tantalizing attempt at empiricism Austrians wouldn’t dislike).  I do not use the word “mantra” disparagingly, as I am strongly influenced by the Austrian position on empiricism and I approach all econometric studies with extreme caution. This case is no different – especially when so little work was done to rule out confounding factors.

The second round:

A Steve Hanke blog post at the Cato blog arguing that data from across European countries shows that minimum wages increase unemployment. Hanke shows a graph of unemployment for countries with and countries without minimum wages. Those without minimum wages have lower unemployment:

This is another piece of fairly useless empiricism. Once again, there are no controls for confounding factors. Is it so strange to think that countries that are more likely to enact minimum wages are also more likely to enact other labor market regulations that weaken the job market? If this is the case, then what we are seeing in the graph could very well be the effect of those other regulations – and we learn absolutely nothing new about the effect of minimum wages. I am not sure whether Dr. Hanke considers himself to be an Austrian, but in either case, the argument is unworthy of being published.

Sadly, the post has been propagated across at least a few websites already (including Boudreaux’s Cafe Hayek).

What could have been said

Once again, I am not disagreeing with the ultimate conclusions of the two posts discussed above. I believe that, if not in the unemployment rate, minimum wage hikes would have impacts in other variables, some seen, some unseen – perhaps job training, perhaps the intensity of the work environment, and so on.

Here’s what the articles could have said, which I would have found not only acceptable but a fantastic argument for their side:

Suppose the correlations in the two analyses ran in the completely opposite direction. That is, minimum wages tended to correspond with higher teen employment in the US over time, and minimum wage countries in Europe tended to correlate with a lower unemployment rate. What would the left-liberals do? They would parade this fact around in victory. Yet the facts are not like that, but the complete opposite. We do not see a corresponding pensiveness and pause on their side as to why the facts might not be so.

In this case, this argument wouldn’t be a critique of the minimum wage policy, but of the opposition itself. This doesn’t make it bad – it points out the dishonesty of loudly parading when the data superficially supports their side, but crickets when it doesn’t.

Conclusion

Austrians should be consistent Austrians: Do not reject empiricism when it disagrees with your policy stances and accept it when it agrees. If an analysis cannot possibly control all relevant variables, the analysis cannot be used to make a causal claim. If an analysis doesn’t even begin to attempt to control variables, then this is not science but toying with numbers.

And if you don’t want to be an Austrian, then at least don’t be a sloppy economist.

Update (2/1/2014): Jonathan Catalán takes on the same study, though he appears more mild-mannered than I am here: http://www.economicthought.net/blog/?p=5633

Origins of cooperation and de-facto natural rights in the Hobbesian jungle – Part 1

I love the microfoundations of economics. I love seeing emergent, productive orders arise among individuals who are self-interested and maybe not even fundamentally “good.” That’s one of the reasons why I enjoyed reading David Friedman’s “A Positive Account of Property Rights” [1], which puts forth a theory on how property rights can arise out of the interactions of individuals. I intend to read more of the literature as I have more time.

For now, I’m interested in doing some basic exploration of how it could be possible for cooperation to arise in what I will call the “simple Hobbesian Jungle” – after Hobbes’s understanding of human life as short, brutish, and warlike without the existence of a government.

I wrote most of this post as I was traveling by bus to New York last summer. It began as an attempt to provide microfoundations to fight back against the general belief that humans, left to themselves, could not establish some semblance of peace and stability. As is suggested by the name, the model is very much simplified – meaning it doesn’t encompass the totality of human choices made in the Hobbesian jungle. However, I made the model very harsh to the individual on purpose, so that there would be as little reason to cooperate as possible without outright having everyone destroy everyone else.

As I continued to write, I realized that in its harshness, the world I had created could very well result in stability. Not only this, but this mental experiment led to a realization that it’s possible to explain not only why cooperation arises, but also possibly how the ideas behind morality (don’t kill, don’t steal) get created in the first place. The model also held out some explanatory power for why war could possibly exist and why cooperation fails to arise sometimes. Surprisingly, there are even implications for the question of whether animals have rights.

Let’s dive in.

The simple Hobbesian jungle

Let’s attempt to see how human cooperation could emerge under certain restrictive assumptions that would make it even more difficult than normal for it to emerge. Specifically, why doesn’t everyone suddenly go kill everyone else?

I will model the emergent order through iterated games.

The setup

Imagine a state of existence comprised of atomic, separate, primitive, rational, self-interested men. That is, imagine that we go back in time 20,000 years, and let’s assume away tribes and family relations.

We have a “society” of 50 individuals in a large, closed-off geographical area. These individuals have similar mental capacities, though their physical powers differ in magnitude. At time t=0 they begin by being separated from each other, each owning a certain good or tool that is useful to each of them in varying degrees of magnitude. The items are randomly distributed across the various individuals.

The individuals, by assumption, cannot settle down to create agriculture or establish a division of labor except for in the field of protection services (that’s later). These people, each by himself, roam the countryside at t=0.

There is another assumption – the individuals have omniscience on a limited time horizon. That is, when two people encounter each other, each knows what the outcome of a battle between them would be with 100% certainty. When a battle is concluded, the winner is immediately fully healed and takes the property of the loser. Each possession on the map is valued by all individuals.

At t=0, the individuals may be given an ordinal rank of their fighting capabilities from 1 to 50, with 1 being the weakest, and 50 being the strongest. Each individual is aware that there are 49 other people on the map, and each individual is aware of his ordinal ranking and that of everyone else. The individuals know the rules of the scenario, and go through the following thought process ahead of time: Each person considers every other person and thinks about what would happen in an encounter between them. Let each individual be named as his ordinal rank. In that situation, if 12 were to encounter 17, 12 knows that he would lose in a fight and 17 would win. 17 knows the same information.

Assume away any feelings of morality in these people or any feelings of kinhood. Each individual desires to obtain as many of the goods as possible and also desires to stay alive so that he may make use of the goods. The goods are infinitely durable, and provide a constant level of satisfaction when used in each time step.

Assume that when individuals wander the map they cannot see beyond a limited space around them, and hence may not avoid their peers. People also cannot scout out opponents and cannot escape a battle (although it is theoretically possible that a battle never begins because both parties decide not to fight for whatever reason). In essence, there is a fog of war.

Ready, set, go! First guess

A shallow, first-level analysis of the situation would suggest the following thought process: 50 knows that he can beat any other individual and take his property. 49 knows that he can beat all individuals besides 50. 48 knows he can beat all but two individuals – 50 and 49. This continues until the analysis reaches 1, who knows that he cannot beat any other person on the map and will lose all battles with other people.

Say that 25 meets with 33. What should each actor do in his self-interest? The first instinct might be for 33 to kill 25. After all, it is 100% certain that 33 will gain in the short term without permanent bodily injuries. 25 doesn’t have an option to run, and cannot win a fight in this scenario. It appears that this map is doomed for players to successively kill each other until only 50 is left with all the goods and the highest utility level achievable. Remember that after a given battle is over, the winner is healed immediately by assumption, and hence has no temporary weakness after the battle is over.

Is this what will happen on this map? Remember that individuals by assumption had their omniscience limited to a short time horizon. What is meant is that a person knows the outcome of the coming fight, but does not have perfect information about future social conditions – individuals work under the limited information that we have today in that regard. We may only guess what will happen in the future and support it with evidence. Same goes for them.

A second look

With that in mind, return to the scenario at t=0 between 25 and 33. One obvious outcome is for 33 to win and take 25’s possessions. Are there any alternatives, however? There are. 25 knows that he will lose to 33 in a battle, yet he also knows that 33 would lose to anyone above him. Therefore, it is beneficial for 25 to remind 33 of this fact and to propose an agreement – that they form an alliance for protection. Thus, 25 and 33 agree to not kill each other and to fight together in battle. Why is this beneficial? It is beneficial for 33 because with the help of 25 he can likely take on individuals with a much higher fighting power – say, 37, 42 or even possibly 50. Say that the highest level person they can take on together in battle is 39. Hence, their combined rank is above person 39, but below person 40.

Assume, furthermore, that no person can beat a combination of all of the people below his rank – except for 2, of course (who can always beat 1 in a one-on-one fight).

What social patterns can we predict to emerge?

Let’s look at the lower end of the scale. Individuals below, say, 18, if they encounter each other, know that they stand to gain in the short term by fighting and killing each other off. However, they also know that they might very well be killed soon thereafter by upper-level players. Hence, they have an incentive to band together. If they happen to meet, 12 and 5 might group together, and so would 17 and 16, for example. Players in the middle range, say 18-34, know that they could easily (and with certainty) take on the weaker players and steal their property. However, they also know that people above their rank could kill them and take their property. Hence, it is useful for those players to band together as well. Players in the upper strata of fighting abilities, 35-50, know that at t=0 they are the strongest on the map and that they could take on any individual below them. The lower section of the 35-50 range might fear the upper section, however, so it might decide to group together to protect itself from the very best fighters.

Whenever a person allies himself with someone else, it is less useful for him to ally himself with a weaker person than with a stronger one. However, note that if every player has a personal rule where he decides to only ally himself with a stronger person, then there would be no alliances ever made. In every encounter there is necessarily a stronger player and a weaker player. Hence, while the weaker player may want to ally himself with the stronger one, the stronger one would never want the weaker one under this rule.

We see that for some sort of alliance to come into existence, stronger individuals must ally themselves with weaker ones at some point.

Multiple levels of logic and strategy

Now, two points:

1) It is also clear a person in the 1-17 range, for example, is better off allying himself with a person above his range than a person within the range.

2) A person in the 18-34 range is better off being allied with a person in the 35-50 range than a person in the 18-34 range. Yet even the 18-34 range is better for him than the 1-17 range.

While it might initially appear that people in the 1-17 range will have little use for each other (because they are all relatively weak), these players may also realize that the 18-34 range people have even less use for them. Therefore, 1-17 have a higher chance of an opponent in the 1-17 range allying himself with them than in the 18-34 range. Therefore, it would be useful for people in the 1-17 range to offer each other alliances if they happen to meet. The same goes for 18-34.

Yet what if the initial meetings are from people vastly different in strength from different ranges? For example, what if 12 meets 36? It appears that 36 would not gain very much from allying with 12. However, as was said before, future societal structure is uncertain. 12 might very well employ the following reasoning:

“Sure, 36, you could kill me, because I do not contribute all that much to our joint defense. Yet consider this: Some number of pairs of people, each below 25, have met or are meeting at this very moment. Say that number is X. These people are likely to ally with each other [by the analysis presented previously for people in the same range.] The expected meeting of people in this group is a meeting of players 12.5 and 12.5 (using statistical expectation). Once these people join up, they might be able to take on a player who is ranked 13, 17, or even 20. Therefore, this meeting of the lower ranks increases their power, which shortens the range of variability of power. At time t=1, then, we will have people in lower ranks allying together and bullying people at the lower end of the upper ranks. This lower end, if it meets the growing group of underdogs at t=1, has a chance of joining them, and making an even more powerful group at t=2. As this process slowly wears on, the stronger and stronger players are recruited, and it’s very possible that at t=3 you, 36, will be meeting strong groups of underdogs. Not only this, but you could be meeting people above your rank as well. Therefore, even though I only improve your ranking so that you can beat maybe person ranked 39 or 40, if you do not ally with me, you stand a much higher chance of dying at t=3. We should ally with each other and with any other players that we might happen to meet.” Let this be named argument *.

If 36 buys this reasoning, he will join in. If not, he will kill 12 and take his good. I propose that it is likely for 36 to ally himself with 12.

The tough case

But what if 50 encounters 1 at t=0? The chances of an alliance are much lower. It may even be that 1 offers very little of value to 50, and that 50 decides to kill 1. Remember that fighting has no costs for the group that is predestined to win a given fight (besides the lack of a future alliance).

Hence, the worst-case scenario that we can imagine is that at t=0, 50 meets 1, 49 meets 2, 48 meets 3, and so on with 26 meeting 25. Suppose the cutoff for argument * working is 36 meeting 14. Hence, when players above 37 meet players below 14, * doesn’t work.

What could 1 say to 50 to not have him kill him? Well, note that if 50 kills 1 and 37-49 kill their respective weaklings, that means that in the next round the players left will be 14-50. Furthermore, 14-36 will all have allies (by argument *). Hence, 38-50 are in a very much weakened position at t=1 relative to t=0. Hence, it might be advantageous for 50 to get any help it can at t=0 to protect itself at t=1. [2][3]

Throughout this whole explanation, we must remember that although there are a lot of factors that are constant by assumption (such as knowledge about who would win a battle), the exact social outcome will vary according to the explanatory power of the individuals who bargain with the superiors for inclusion in the “tribes.”

I do not purport to prove that one social arrangement will in fact turn out – it all depends on the powers of the players to convince each other. What I am merely pointing out is various plausible tendencies in the situation. Of course, all of this relies on the individuals realizing that they can call future uncertainty to help them in the first place.

Conclusions for Part 1

In this conclusion section, I will cheat a little bit and point out some of the ideas on which I stumbled after the end of the simple Hobbesian jungle.

The first thing to note is that even in a winner-takes-all, no division of labor or trade, amoral world with no attachments or regret you can have cooperation arise. I have not by any means proved that it will result in sunshine and utopia for everyone. Yet I have shown that uncertainty about future social order could be a driver of social cooperation for the provision of protection.

In future posts, when we strip away some of the assumptions, we will see that different complications introduced in the model will decrease and increase incentives for cooperation – what the net direction will be, we will see (though I expect it will be in the positive direction).

An important note to make is that cooperation was allowed to arise in the model because the players shared a language. If they had no capability to convince each other, they would not have been able to develop this system of mutual protection, but instead would have most likely ended up killing each other, and 50 indeed would have won (although, perhaps, slavery might have arisen instead… That’s another interesting dynamic for another time).

This puts forth a possible explanation for early warring tribes. Without communications, even if they had good intentions, they might not have been able to get them across. Assuming away good intentions and focusing only on self-interest, they still might have been able to develop some mutual protection relationship, yet the language barrier prevented this from happening.

So we see that defense is one of the possible drivers of cooperation. Looking ahead, another driver is tasks that can be completed together more easily than separately (separate from the division of labor). I’m thinking of things like, say, rolling large logs. A man might not be able to do it by himself, yet can achieve the goal with 3 other men. Upon further consideration, defense is in fact a subset of this “cooperative strength.”

The other possible driver of cooperation, we see, will be the division of labor. In our Hobbesian jungle, this was assumed away to simplify the model. Yet upon a first glance, there appears to be a strong case for why the division of labor would be conductive to peace instead of war. Varying levels of talent mean that people have comparative advantages in the production of different goods. Not only this, but specialization allows for an increase in productivity of the laborer. As such, if they can communicate, Hobbesian strangers might prefer to trade instead of to fight.

Taking cooperative strength and the division of labor together, we begin seeing how property rights, at least the concept of self-ownership, might have emerged.

Going back to the importance of a shared language, we can see why cooperation among 1) animals and other animals, and 2) humans and animals is difficult. They have no way to make the case to each other for why they shouldn’t kill each other. Animals cannot make pacts for mutual protection unless it is genetically instilled in them. Humans also cannot face a bear reared on its hind legs and argue for why no, Mr. Bear, you shouldn’t kill me because then you will lose the benefits I can offer you.

The language barrier hinders both the possibilities for cooperative strength and the division of labor. If animals were to wake up tomorrow and be able to communicate completely fluently with each other, we would see more cooperation. If they could also engage in the division of labor, they would start off on the path to creating human-like societies. However, they do not possess these capabilities (beyond their simple abilities to communicate). As such, avoiding conflict and protecting one’s self from animals make having a meaningful society with them impossible. The stronger has always dominated the weaker. Yes, we can keep pets, and even live peacefully and happily with them, but this is only after having “enslaved” them and forced them to fit into our society after extensive “brainwashing” (training) – to put the affair in human terms. The question of animals’ rights extends beyond understanding “don’t hit or kill,” but also to recognizing property boundaries (which will be discussed in future posts). As such, until animals can properly understand these concepts, they remain subordinate to humans and their property (I suppose some select animals, such as some primates, could be excepted).

In future posts, I look forward to making the Hobbesian jungle a little more realistic.

Notes and References:

[1] http://www.daviddfriedman.com/Academic/Property/Property.html

[2] Another reason 50 might choose to team up with a very weak player is to serve as signaling. While players might choose to team up, they could in theory, at any time, turn on each other. 50 choosing to ally himself with 1 sends a signal that he will restrain himself from killing weaker players and will cooperate well with others. Not a perfect signal – true – but 50 could find a way to make it appear legitimate.

[3] At some point in the discussion, someone might bring up the possibility of everyone teaming up into the same team and being one big happy group. But then, the hypothetical continues, why wouldn’t the best 49 players decide that 1 is useless and take him out? (Another version is that they decide 50 is too powerful by himself and decide to off him). This certainly may happen, yet it’s also possible that 2 will realize that if 1 is killed off, 2 is the remaining weakest player – and the next person on the chopping board. And so he might be agreeing to a slippery slope. So might 49 in the case of killing 50. By backwards induction, more and more players might get killed over time. This would create a disincentive to implement such a “kill the worst (or best) player” policy as long as the players have enough foresight to realize the consequences of their actions.

Things that Make Us Cry

Steve Horwitz had an interesting post over at the Bleeding Heart Libertarians back in October that I just noticed now, where he addresses once again research that came up some time ago that purported to show that libertarians tend to be focused on logic at the expense of emotion.

Horwitz challenges this conclusion, pointing to a video male libertarian friends of his have told him drives them to tears. I watched it and I had the same reaction. I suggest you check it out:

To Horwitz’s observation, I will add my own about media that drives me to tears: Google’s yearly “zeitgeist” videos (“spirit of the times” – see 2013, 2012, 2011, for example), the “I, Pencil” video (explanation of spontaneous order), images of Christians joining hands to protect praying Muslims in Egypt, and Niemöller’s “First they came …” poem, off the top of my head.

For the zeitgeist videos, the moments that set me off most were the shots of the artificial hand, artificial leg, kid with cerebral palsy walking to greet his father returning from the war, various brief shots of amputees achieving their goals, the Red Bull space jump landing with the man holding up his fists, the US soldier coming home early to his mother, Steve Jobs’s advice to stay hungry, stay foolish, the 29-year-old hearing for first time, and the solider high-fiving a local kid.

From these experiences I can extract what I believe are the moments which affect me most:

Overcoming conflict with other humans – rejecting war and accepting cooperation

Spontaneous, unplanned order – voluntary cooperation that builds magnificent things we do not expect but we’re all part of

Overcoming conflicts with nature – fighting back the scarcity constraints of the world, fighting against the cold, uncaring universe and carving out a place for ourselves

and, maybe most importantly,

Unchaining of the individual to achieve his or her potential

I say that the last one is perhaps the most important one specifically because of my reaction to the 29-year-old hearing for the first time in her life. I felt that the moment represented the opening of an entire new door for an individual that she thought would be closed forever. The sheer intensity of the feeling of overcoming what you thought would be a handicap for your entire life – and the overwhelming emotions when tasting this entirely new sense – hearing- for the first time in your life is simply astonishing.

Can the bolded points above somehow be connected to libertarianism?

– Overcoming conflict with other humans – replacing coercion with voluntary cooperation (see self-ownership)

– Spontaneous, unplanned order – emergent properties of market systems – in the tradition of Hayek

– Overcoming conflicts with nature – pushing back the limits of scarcity – see the libertarian emphasis on capital accumulation and innovation

– Unchaining of the individual to achieve his or her potential – libertarianism places a strong emphasis on the individual as the centerpiece of society. This point is also a little strange, since libertarianism doesn’t specifically say that individuals must be required to achieve their potential, but could very well choose to do nothing with their life if they so wish. However, it’s possible that people tend to be drawn to libertarianism because they value the individual so much already, and also happen to understand that all rights are individual rights.

I would even argue that the above points can be folded up into two main points. The overcoming of conflict with other humans and nature are both an unshackling of the individual – free from both human coercion and the limits of nature. We are then left with a free individual and the result of this free individual – the spontaneous order of social cooperation through the market.

If I may make the unfounded assumption that I am a decent representative of libertarians, I can see that the elements that set us off most are indeed ones libertarian emphasize – on the moral side, emphasis on the voluntary and on the individual. On the pragmatic side, emphasis on innovation, capital buildup, and emergent order. If we examine the condensed case I made in the previous paragraph, then we have the moral side, the free individual, and the pragmatic side, the result of the free individual.

Perhaps it’s not the case that libertarians aren’t very empathetic, but instead that they can openly make emotional connections when they are presented with situations aligned with the spirit of libertarianism. It is then that the libertarian can place himself in the shoes of the character in the story and appreciate the beauty of the situation as if it were his own. If, on the other hand, we see situations that emerge out of coercive action, we do not emote as easily, because there is something at the back of our minds that reminds us that there’s a zero sum game being played, with hidden losers in the background we’re not being shown.

I also want to point out what I consider to be a fantastic quote from Horwitz’s article – one that I believe is strong competitor for being one of the best that combine practical and moral arguments:

Critics of markets sometimes say “you can’t eat GDP.” What they miss is that you can’t eat, or learn to read, or go to school, or leave a bad marriage, or do pretty much any of the basics that we might see as required for a flourishing life without the wealth and time created by the market economy.

This relates to the washing machine, as the invention and its adoption opened up time for women to both gain more education and educate their children more easily, and education unchains people and allows them to do anything up to… well, we don’t know the limits of our imagination and our creativity yet. Hopefully, we won’t ever know them.

Good job to the BHL for a solid post. Now I need to get some water – I’ve somehow gotten very dehydrated after those videos.

A Note on Russell’s Fascinating Renegade History of the US

I recently watched a video of historian Thaddeus Russell giving a lecture based on his book A Renegade History of the United States. The historical aspects of the lecture were quite fascinating – history that I had never been taught in school.

A few main takeaways:

– Many aspects of our culture we take for granted today in fact originated from the “lowlife” of society – prostitutes, slackers, drunkards, and criminals.

– These cultural phenomena were wrested from a society committed to the Puritanical work ethic.

– The way to change law is to change culture – and that’s what the shameless of the past have done.

I recommend watching it if you have 45 minutes (1h 25 mins total with the questions at the end) – they will be minutes well spent:

Besides making a pitch for watching the speech (note: I do not necessarily support the normative suggestions he has for society), I wanted to share an email that I wrote to him (mainly) on his point about labor regulations and hours of labor supplied by workers in Europe:

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Hi,

My name is Michael (I’m an Econ and Comp Sci undergraduate) and I just finished watching the lecture that you gave to NHLF based on your book. I found the lecture to be quite fascinating (and did shed a tear or two at a point), but I wanted to make a quick note of disagreement (about which I could be wrong, of course). You mention in the lecture that one of the reasons why people work less in Europe might be due to labor regulation, but you wave off that reasoning. From what I understand, however, government policy can have a significant effect on labor supplied by workers. A quick overview of the ideas can be seen here:

Glossing over the details, changes in the relative tax rates between the US and European nations over the last decades can do a good job of explaining changes in labor supplied (that is, both the theory predicts the outcome we see and the empirics fit well in the theory).

So I wouldn’t brush aside government policy and labor regulation so easily. (More on this later).

There is another point that I wanted to make on the same topic: I’m European, though I was in elementary school when I left to come to the US. My parents, however, have told me much about their experiences, and I generally believe their observations, which are that Europe has a much more rigid social structure that does allow for as much class mobility. To get ahead, you have to know someone or cheat in some way. As such, the work workers put in simply wouldn’t be worth it, and so they work less. They have no “American Dream” to keep them going (so to speak). They’ve settled into a crappy state of affairs.

Moreover, this might have weird interaction with the tax policy effects mentioned earlier. That is, it might be that Europe has long had a history of lack of social mobility, which has given them fewer incentives to work. But also, it could be that their labor policy has been so bad for so long that their previous Puritanical morals could have been worn down, since they saw that work didn’t yield anything. So it’s not that they’re enlightened – just worn down by a long history of bad policy.

What are your thoughts?

Another question: The way I explain things to myself, morality and the Puritanical work ethic might have been necessary in pre-industrial society in order to have your children survive, no? Life was grueling work at a farm with uncertain crop yields due to unpredictable weather – if your children slacked off, they (and you in your old age) could die. Hence, when society was agrarian and with no capital structure (that is, stuck in the world of Malthus), they needed to teach kids that work was an end in itself – because that’s the only way they could survive.

And lastly: Are the thoughts presented in your lecture consistent with the evolution of the same social phenomena in places outside the US? That is, did the weekend, acceptance of bright clothes, etc. arise in places that are not in the US in the same way – by being introduced by “lowlifes?” Or were these ideas exported from the US?

In any case – I found the historical content of your lecture quite good (even if I haven’t had enough time to ponder over your normative suggestions for society).

Cheers,
-Michael

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The speech/lecture has a lot of other gold nuggets and is well worth a watch.

P.S. Teaching material along these lines got him kicked out of the profession: Why I Got Fired From Teaching American History