Help Businesses Prepare for the Delivery Economy

Smarter people than I have observed that delivery and direct-to-consumer companies are going to thrive in the aftermath of this pandemic. It’s the platforms and at-scale logistics companies that are going to really own it: Walmart, Amazon, etc, as well as Instacart, Doordash, and Uber Eats.

But what about all of the businesses (and business types) not served by today’s delivery platforms?

There’s a big opportunity for enterprising logistics entrepreneurs to help non-served businesses adjust to a delivery-type economy.

Who will help replace farmer’s markets with direct farm-to-table deliveries (loved a suggestion for “fruit and vegetable truck” counterpart to ice cream truck)? Who will help boutique clothing or arts stores deliver their wares? Flower stores? Smoothie shops?

Instead of you going to the business, it will be the business coming to you. But unless small local businesses make the transition well, it’s going to be a much smaller set of much bigger businesses who come knocking. If there was a cheap, simple platform for businesses to engage to “mobilize” their product or service and connect it to locked-down buyers, a lot more of these boutique businesses could survive.

Originally published at JamesWalpole.com.

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Who’s in Charge Here?

Nobody asked but …

… I’d like to know.  The first stage of panic (and second and third) is to scramble around looking for someone to follow.  Many of us followed others into bars, but clearly most followed hoarders of toilet paper and hand sanitizer into all the dollar stores, the drugstores, and the supermarkets.  But the thing that is now most scarce is information.  Human beings continue to query “whadya know?”, but the answer is still “not much, you?”

Some say that in times of war, the first casualty is the truth.  But the “truth” is that the human race is at war with itself.  Will we win, and what will a win look like?

At any rate, here are some questions I’d like to be answered (and I’ll bet you would too):

  • Who’s in charge?  Every scheme cooked up throughout history has been a kicking of the can down the road.  If the buck really stops somewhere, why hasn’t the buck stopped?
  • What is “the buck?”
  • WTF?  Did POTUS really offer help to North Korea?  Who’s the dunderhead who decided that we are fine, so NK needs our help?  Is NK the model of collective that we seek to preserve?
  • Is there anyone with a microphone and teevee camera who will stand up and say “I am just a narcissistic glutton who will make up bullshit just to keep the red light glowing?”
  • Does one have a duty to others?  Yes, if you know them personally and have accepted responsibility for their care.  I have Kilgorette with whom I have exchanged vows.  We have 2 daughters, 8 grandchildren, 3 great grandchildren.  We have neighbors.  We have friends.  We have 2 horses, 3 dogs, and 7 cats.  We do not triage among the members of this list.  After that, triage.  North Korea is vanishingly small on that list.
  • How do I get tested?  Where?  When?
  • If I am looking for a manager for my life, whom should I turn to?  The only possible answer is ME.

Stay tuned.  More questions are forming.

— Kilgore Forelle

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Reflections on the Leiter-Caplan Debate

It was a pleasure debating Brian Leiter last week.  The resolution, to repeat:

“Social democracy is preferable to market capitalism, but ultimately America will need to move towards a socialist system.”

Here are some thoughts I failed to fully articulate at the live event.  As always, I’m happy to publish any reply my opponent wishes to compose.

1. To his credit, Leiter expressed zero sympathy for any actual socialist regime.  He even condemned Cuba; good for him.  But Leiter still insisted that the totality of these awful experiences show next to nothing about the desirability of socialism, which frankly seems crazy.  As far as I could tell, Leiter hews to the classic Marxist position that we should transition to socialism only after capitalism creates incredible abundance.  Unlike most historical Marxists, however, he doesn’t think that even the richest countries are ready yet.  My question: If we finally got rich enough for socialism, why think that a socialist regime would be able to maintain the prior level of prosperity, much less provide continued progress?

2. When I discussed the actual performance of social democracy, Leiter was surprisingly apologetic.  He conceded that we have wasteful universal redistribution, instead of well-targeted means-tested redistribution.  His only defense was to repeat the flimsy argument that it’s too hard to sustain popular support for means-tested programs.

3. On regulation, Leiter appeared to endorse open borders; good for him.  He also professed agnosticism on housing regulation.  Since these are by far the two biggest forms of regulation in modern social democracies (measured by how much regulation changes the likely market outcome), it’s hard to see why he would believe that increased regulation has, on balance, been good for humanity or the poor.

4. According to Leiter, “ultimately America will need to move towards a socialist system” because automation will one day cause mass unemployment.  This position baffled me on multiple levels.  Most obviously, why not respond to automation with redistribution rather than nationalization, and thereby avoid killing the capitalist goose that has hitherto laid a mountain of golden eggs?

My fundamental objection, however, is that history teaches us that technological unemployment is only a morbid fantasy.  When firms figure out ways to get more output out of fewer workers, this may cause unemployment in the short-run.  Soon enough, however, business has repeatedly figured out new jobs for workers to perform.  Business has already accomplished the miraculous task of creating new roles for the enormous number of workers disemployed by the mechanization of agriculture.  Every future economic transformation pales by comparison.  Remember: Almost everyone was a farmer for almost all of recorded human history.  Then industrialization eliminated almost all farm jobs.  Yet today, we don’t miss these jobs.  Instead, we get fat on all the cheap food, and do jobs our agrarian ancestors would have struggled to understand.

Leiter had two responses to my reaction.  One was “maybe this time it will be different”; Leiter even appealed to David Hume’s problem of induction to downplay all prior economic history!  If you take this line, however, it would only entitle you to say “it is logically possible that America will need to move towards a socialist system” – a vacuous claim indeed.  Frankly, if you take Hume seriously, even the best empirical evidence shows nothing about the future, so why bother debating at all?

Leiter’s better argument was that capitalists are perennially trying to cut costs – and that in the long-run capitalism works.  So eventually capitalists will figure out a way to run the economy without workers – an outcome that is individually rational for a capitalist, but socially disastrous for capitalism.  My response: Yes, capitalists want to figure out how to produce a given level of output with fewer workers.  Their deeper goal, however, is to figure out the most profitable way to employ all available inputs.  As long as there are able-bodied people who want to work, there will be a capitalist brainstorming how to make money off the situation.  And to echo Leiter, in the long-run this works.

5. Leiter bizarrely insisted that “the” goal of socialism was to allow human freedom – legions of vocally authoritarian self-identified socialists notwithstanding.  He followed up with the classic socialist argument that saying “If you don’t do what I say, I won’t give you the job you need to avoid starvation” is just as much an abridgment of freedom as “If you don’t do what I say, I will shoot you.”

The standard reply, of course, is that there is a vast moral difference between getting you to do what I want by threatening to take away something to which you are morally entitled (e.g., your life) and getting you to do what I want by threatening to take away something to which you are not morally entitled (e.g. my assistance).  Thus, imagine you will be suicidally depressed unless I marry you.  Is my refusal to marry you morally equivalent to making you suicidally depressed by threatening to shoot you unless you break off your engagement to your willing fiance?  Of course not.  You aren’t entitled to marry me if I don’t approve, but you and your fiance are entitled to marry each other even if I don’t approve.

6. Moral entitlement aside, “If you don’t do what I say, I won’t give you the job you need to avoid starvation” is rarely relevant in modern labor markets.  Why not?  First, there are competing employers, so if you don’t like an offer, you can shop around for another.  (Smarter yet, take what you can get, but keep searching for a better offer).  Second, if you live frugally, even a relatively low-wage worker can save up a nest egg, making it easy to turn down unappealing offers in the future.  Naturally, you can object, “I still face the choice to either live frugally, work for some employer, or starve.”  If so, we’re back to my original reply: Complaining about being “free to starve” is the flip side of demanding that strangers support you whether they like it or not.

7. Leither took umbrage at my authoritarian interpretation of Marx.  I freely grant that Leiter’s invested more time reading Marx than I have.  However, I too have devoted long hours to Marx’s oeuvre (though I’ve spent far more reading about the actual history of socialist regimes), and I stand by my bleak assessment.

Did Marx explicitly say, “We should round up priests and execute them”?  To the best of my knowledge, no.  Yet that is the most reasonable interpretation of what Marx had planned.  What are we supposed to think when Marx makes Orwellian statements like,  “[B]ourgeois ‘freedom of conscience’ is nothing but the toleration of all possible kinds of religious freedom of conscience, and that for its part [socialism] endeavors rather to liberate the conscience from the witchery of religion” (Critique of the Gotha Program)?  It doesn’t sound like Marx plans to respect the rights of people who don’t wish to be so “liberated.”  If Leiter is right, why did so few Marxists protest Lenin’s religious persecution?  I say it’s because Marx provided the Orwellian language they needed to insist that Freedom is Slavery.  As I wrote two decades ago:

Innumerable social thinkers disagree with much of Marx’s thought, but praise his reflections upon human freedom, the depth of his insight in contrast to the shallowness of liberalism. Yet it is difficult to understand how Marx’s concept of freedom is anything more than a defense of tyranny and oppression. No dissident or non-conformist can see society as the “realization of his own liberty.” And what can the attack on “the right to do everything which does not harm others” amount to in practice, except a justification for coercing people who are not harming others? The problem with “broad” notions of freedom is that they necessarily wind up condoning the violation of “narrow” notions of freedom. Under “bourgeois” notions of religious liberty, people may practice any religion they wish (“a private whim or caprice” as Marx calls it); how could this liberty be broadened, without sanctioning the persecution of some religious views?

Listening to Leiter, a law professor at the University of Chicago, I couldn’t help but think, “Leiter is talking like Marx’s lawyer.”  When a Mafia enforcer says, “Sweet kids you got there; be a shame if anything happened to them,” a Mafia lawyer will vigorously deny that his client threatened to murder children.  Any neutral adult, however, knows that the Mafioso did exactly that.  I say the same about Marx’s writings.  “I’m going to bring you real freedom” is a classic Offer You Can’t Refuse – as Marxist revolutionaries have shown us time and again.  A skilled lawyer can obfuscate this scary truth, but a learned philosopher should not.

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The Leiter-Caplan Socialism Debate

Last night, I debated the University of Chicago’s Brian Leiter on “Capitalism, Social Democracy, and Socialism” at the University of Wisconsin. Leiter wrote the precise resolution:

“Social democracy is preferable to market capitalism, but ultimately America will need to move towards a socialist system.”

Here’s my opening statement; I’ve debated Elizabeth Bruenig and John Marsh this general topic before.


All First World countries are already social democracies.  Their governments continue to allow markets to provide most goods and services, but they heavily regulate these markets, heavily subsidize favored sectors like education and health, and heavily redistribute income.  The U.S. is moderately less social democratic than France or Sweden, but the idea that we have “market capitalism” while they have “social democracy” is hyperbole.  If you favor social democracy, you should be happy because your side won long ago: free-market rhetoric notwithstanding, the U.S. has Social Security, Medicare, Medicare, and public education, and strict regulation of labor markets, construction, and other major industry.  My view, however, is that social democracy is a awful mistake.  Despite its bad press, market capitalism would be much better than what we have now.

Advocates of social democracy typically claim credit for three major improvements over market capitalism.  First, they’ve used redistribution to greatly reduce poverty.  Second, they’ve used regulation to make markets work better.  Third, they’ve used government funding to provide wonderful services that markets neglect.  I say they’ve greatly overstated their success on all three counts – while conveniently neglecting heavy collateral damage.

Let’s start with redistribution.  The rhetoric of redistribution revolves around “helping the poor.”  When you look at redistribution in the real world, however, this is grossly misleading.  The U.S. government spends far more on the elderly – most of whom aren’t poor – than it spends on actual poverty programs.  Programs like Social Security and Medicare are popular because they “help everyone.”  But “helping everyone” is extremely wasteful because most of the people government helps would have been quite able to take care of themselves.  Instead, we absurdly tax everyone to help everyone.

This humanitarian rhetoric rings even more hollow when you examine the most important forms of government regulation.  Domestically, nothing does more harm than our draconian regulation of the construction industry.  This regulation, primarily state and local, makes it very hard to build new housing, especially in high-wage places like New York City and the Bay Area.  It’s hard to build tall buildings.  It’s hard to build multi-family housing.  You have to waste a lot of valuable land; builders put houses on an acre of land because zoning laws force them to do so.  The connection between this regulation and exorbitant housing prices is almost undeniable.  In lightly-regulated areas of the country like Texas, business supplies ample cheap housing.  Anytime someone tells you regulation makes markets work better, just look at San Francisco’s housing market for a reality check.  And this hardly one tiny failure of regulation; housing absorbs about 40% of the average Americans’ budget.

Immigration regulation is an even more egregious failure.  The single best way for people around the world to escape poverty is to move to high-productivity countries like the U.S. and get a job.  This benefits not only immigrants, but us, because we’re their customers; the more they sell us, the better-off we are.  A hundred years ago, immigration to the U.S. was almost unregulated, giving people all over the world a viable way to work their way out of poverty.  Now, in contrast, immigration is very tightly regulated – especially for those most in need.  Economists’ estimates of the global harm of these regulations sum to tens of trillions of dollars a year, because each immigrant worker vastly enriches the world, and hundreds of millions of workers wish to come.  Again, this is the opposite of one tiny failure of regulation.

Finally, what about education, health care, and other sectors that government subsidizes?  I say these policies are crowd-pleasing but terribly wasteful.  Yes, more educated workers make more money, but the main reason is not that you’re learning useful skills.  Most of what you study in school is irrelevant in the real world.  Degrees mostly pay by convincing employers that you’re smarter, harder-working, and more conformist than the competition.  That’s why there’s been severe credential inflation since World War II: the more degrees workers have, the more degrees you need to convince employers not to throw your application in the trash.  Pouring money on education is an exercise in futility.

The same goes for health care.  Almost every researcher who measures the effect of health care on health agrees that this effect is much smaller than the public imagines.  Diet, exercise, substance abuse, and other lifestyle choices are much more important for health than access to medicine.  But these facts notwithstanding, the government lavishes funding on health care that barely improves our health.  If this seems implausible, just compare American life expectancy to Mexico’s.  Medicare plus Medicaid cost well over a trillion dollars a year, let we only live a year-and-a-half longer.

A reasonable social democrat could object: Fine, actual social democracies cause great harm and waste insane amounts of money.  But we can imagine a social democracy that limits itself to helping hungry kids and refugees, fighting infectious disease, and other well-targeted programs for the betterment of humanity.  Frankly, abolishing everything except these few programs sounds really close to market capitalism to me… and it also sounds like wishful thinking.  In the real world, governments with lots of power and a vague mandate to “help people” reliably do great harm.  This is true in the U.S., and it’s true in Sweden.  Yes, the Swedes strangle their housing industry too.

Given all this, I predictably deny that “ultimately America will need to move towards a socialist system.”  Full-blown socialist systems make social democracy look great by comparison.  Indeed, once you draw the distinction between social democracy and socialism, it’s very hard to find to find any socialist regime that isn’t a tragic, despotic disaster.  If Sweden is the jewel of social democracy, what’s the jewel of socialism?  Cuba?  Nor is there any sign that socialism somehow becomes “more necessary” as countries progress.  The main reason governments have gotten bigger over the last thirty years is just the aging of the population.

Finally, let me underscore what I’m not saying.  I’m not saying that life in the U.S. or Sweden is terrible.  In fact, human beings in both countries enjoy close to the highest quality of life than human beings have ever achieved.  My claim, rather, is that even the most successful countries in history could do far better.  I know that social democratic policies are emotionally appealing.  That’s why they’ve won.  Yet objectively speaking, market capitalism should have won because market capitalism offers much better results.

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A Good Response to Coronavirus Fears? Read More History

The new coronavirus (N-COV 2019) has already caused terrible suffering in China, and it looks set to wreak havoc on life abroad and in the United States, as well (see this piece in The Atlantic on why infection is likely) It’s likely to overwhelm hospitals, contribute to shortages, and disrupt the financial markets.

I’ve been spending a lot of time in the past few days thinking about how I might prepare and respond.

I can prep by buying food and water (already partly done). I can plan to relocate to a safer place to ride out the storm. I can buy protective gear. I can let my friends and family know to prepare.

These are all measures I’m taking to look into a (darker) future. But it’s also been good just to read about the past.

I’m currently listening to an audiobook version of All the Light We Cannot See, and while it isn’t history, this historical fiction work does a fine job of painting the desperation of the people of France in the lead-up to the German invasion of 1940 and in the years of occupation to follow. Millions of people had to experience the terror of being uprooted from their homes, losing their possessions, or dying by the sword.

This was only 80 years ago. Many disasters came before. Many disasters have come since. And somehow humans have lived through them all, found meaning in them all, and risen to the challenges of their time.

Read about the survivors of World War 2, the experience of life during the Black Plague, the lives of people under the Taliban. There’s something to learn from them – and it’s not just how to survive. They show us that we aren’t alone. They show us that crisis is normal, and important for human life.

Every generation has its crisis: coronavirus may just be ours.

Originally published at JamesWalpole.com.

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Mexico: One Failed US War Doesn’t Justify Another

On November 4, ten dual US-Mexican citizens  — members of an offshoot sect of the Church of Jesus Christ of Latter-Day Saints — died in a highway ambush, apparently the latest casualties of rampant and violent drug cartel activity in northern Mexico.

US president Donald Trump promptly called upon “Mexico, with the help of the United States, to wage WAR on the drug cartels and wipe them off the face of the earth.  We merely await a call from your great new president!”

Mexican president Andres Manuel Lopez Obrador just as promptly rejected Trump’s proposal.  That’s not surprising. He ran for president on a platform that includes ending, not escalating, Mexico’s status as a battlefield in the decades-long US “war on drugs,” a war that created, and continues to empower, the cartels.

AMLO’s right.  Inviting direct US military intervention into Mexico’s internal affairs is not the solution.

The solution is for the US to re-situate American demand for recreational drugs from violent and corrupt “black markets” to peaceful legal markets.

After several decades of US regulatory, law enforcement, and military war on drugs, the “winners” of the war remain the cartels (who rake in billions serving customers forbidden to buy what they want legally) and US government agents (who dispose of huge budgets and earn comfortable salaries while boasting little impact on drug use at either the demand or supply ends).

Many (probably most) Americans like to get high.

Everything else being equal, they’d probably prefer to buy their marijuana, cocaine, heroin, and so forth from their local pharmacies, at reasonable prices and in known quantity, purity, and potency.

But if they can’t do that, they’re not going to stop getting high just because the US government tells them they must not. They’ll buy their drugs wherever they can find those drugs, even at the risk of being killed by the product or by the product’s sellers.

“Black market” sellers make bank on drugs because “white market” sellers don’t exist. The more money they make, the more they have to spend bribing government officials,  buying weapons with which to protect their drugs and their profits, and battling their competitors for market share with bullets rather than with lower prices or higher quality.

In the “war on drugs,” there was never any chance that the drugs would lose. Who does lose? All of us who continue to tolerate our rulers’ deadly and expensive folly.

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