Tag: wealth

Dan Moller’s Governing Least

Bryan Caplan

Michael Huemer’s The Problem of Political Authority is definitely my favorite work of libertarian political philosophy.  Dan Moller’s new Governing Least, however, is definitely now my second-favorite work of libertarian political philosophy.  The two books have much in common: Both use common-sense ethics to argue for libertarian politics.  Both are calm, logical, and ever-mindful of potential criticisms.  Both strive to persuade reasonable people who don’t already agree with them.  Both are packed with broader insights.  And despite these parallels, both are deeply original.

So what’s most original about Moller’s position?  Instead of focusing on the rights of the victims of coercion, Moller emphasizes the effrontery of the advocates of coercion:

[I]n my account libertarianism emerges from everyday moral beliefs we have about when we are permitted to shift our burdens onto others. In fact, my account intentionally downplays the role of rights, and is motivated by doubts about what we may demand of others, rather than outrage about what others demand of us.

The effrontery is most blatant when you speak in the first person:

Imagine calling a town hall meeting and delivering the following speech:

My dear assembled citizens: I know most of us are strangers, but of late I have fallen on hard times through no fault of my own, by sheer bad luck. My savings are low, and I don’t have friends or family to help. Now as you know, I’ve previously asked for help from you as private citizens, as a matter of charity. But unfortunately that hasn’t been sufficient. Thus, I’m here now to insist that you (yes you, Emma, and you, John) owe me assistance as a matter of justice. It is a deep violation if you don’t work additional hours, take fewer vacations if need be, live in a smaller house, or send your kids to a worse school, in order to help me. Failing to do so is no less an injustice than failing to pay your debts.

Moreover, calling this an injustice means that it’s not enough that you comply with your obligations by working on my behalf. No, I insist that you help me to force your fellow citizens to assist me. It doesn’t matter if these others say to you that they need the money for their own purposes, that they prefer worthier causes, or if they’re just hard-hearted and don’t care. To the extent you care about justice, you must help me to force these others to assist me whether they wish to or not, since that is what is owed me in light of my recent bad luck.

Could you bring yourself to make this speech?

The fundamental objection to Moller’s position, he thinks, is to claim that governments have “emergent moral powers.”  But Moller firmly denies this.  Governments are just groups of people, so they are morally obliged to follow the same moral principles as everyone else.  While this may seem like libertarian question-begging, there’s nothing uniquely libertarian about it:

It is notable that many who wish to block rights-based objections to state action are nevertheless eager to enter their own moral objections to what the state does. Many of those unsympathetic to attacks on taxation rooted in individual rights also portray the absence of welfare provisions or various immigration policies as “unconscionable.” There is nothing inconsistent about this; the one set of moral claims may be right and the other confused. But the objection then cannot be based on the emergent moral powers of the state. We cannot both reject appeals to individuals rights on the general grounds that morality has nothing to tell us about what may emerge from government institutions, and then do just that, substituting our own preferred brand of interpersonal morality. Once we notice this, support for emergence should shrink drastically, since it will only come from those who think there are no policies of the state that can be rejected on fundamental
moral grounds. The non- emergence assumption per se has no particular ideological leanings.

But doesn’t common-sense morality admit that rights to person and property are not absolute?  Of course; exceptions abound.  Moller sternly emphasizes, however, that these exceptions come with supplemental moral burdens attached.  In his “Emergency” hypothetical, for example, you steal $1000 under duress.  What then?

I propose the following non-exhaustive list of residual obligations for cases like Emergency:

Restitution: although I didn’t do wrong, I must repay the $1,000 if possible, perhaps in reasonable installments.

Compensation: to the extent you are otherwise harmed by my actions, I should attempt to compensate you. For instance, if I smashed your windows getting in or forced you to incur some loss because you had to come home at short notice, I must compensate you at some reasonable rate.

Sympathy: it is incumbent on me to convey, if not an apology for my (permissible) actions, at least sympathy for the harm I have caused you. (“I’m very sorry I had to do that” would be the natural if slightly misleading phrase.) I cannot offer a Gallic shrug at your distress and announce, “I did nothing wrong— it’s your problem” as you survey the wreckage of your home. To do so would exhibit a serious character flaw.

Responsibility: my obligations are not just backward looking, but forward looking. If I can reasonably foresee that some action of mine will put me in the position of facing an emergency that will then render it permissible to harm you, I must take responsibility to avoid such actions if possible. I should not think that I have less reason to take responsibility because I can avoid harms by transferring them to you instead. And failing to take responsibility weakens my claim to impose costs on others when the time comes.

A related principle is worth mentioning as well:

Need: my warrant for harming you depends on how bad my situation is. I cannot harm you if I am doing fine already merely in order to improve my position still further. I may be permitted to take your $1,000 to avert a physical threat, but not in order to make a lucrative investment in order to get even richer.

The political implications are expansive, starting with:

A welfare state justified in virtue of overriding reasons to promote the good of the beneficiaries incurs these residual obligations. Flouting them amounts to unfair burden- shifting. What would it look like actually to satisfy them? For starters, if I were the beneficiary of some emergency medical procedure that a third party compelled others to contribute to— say a state agency— I would be obligated to
repay those charged for my benefit, possibly with some compensatory surcharge. If unable to pay, I would be required to pay in installments, with the agency keeping track of my income and tax records to ensure that my repayment were in line with my means…

Moreover, in repaying, my attitude toward my fellow citizens ought to be one of gratitude for coming to my assistance, as opposed to viewing these services as entitlements due to me as a matter of citizenship. This may seem curious: by hypothesis, the services I received made it past the threshold, meaning that the wealth transfers involved were permissible, and since I am repaying, they won’t
even be net transfers in the long run, barring misfortune. Depending on how badly I needed aid, aiding may even have been obligatory on a third party. Why should I express gratitude for others fulfilling their duties? Consider the Gallic shrug— that supreme expression of indifference at someone else’s misfortunes, while disclaiming all responsibility for rectifying them, frequently encountered
in Parisian cafés. Why shouldn’t I shrug my Gallic shrug at the rich complaining about their tax bill, and point out I merely got what I was entitled to, as would they in a similar situation?

This complaint would be apt if appropriate moral responses were a function solely of whether our acts are required or permissible. But there are all kinds of inappropriate moral responses even when what we have done is permissible or when what the other has done was required. If we are to meet for lunch and an urgent business affair obtrudes itself, I may be permitted to skip our lunch, but
I shouldn’t treat putting you out lightly. What makes a Gallic shrug a vice here is that beneath the outer layer of permissibility there remains an inner structure whereby you have been harmed for my sake, which ought to be a source of concern, leading to some appropriate expression of regret if I am a decent person.  And the same is true in the case of welfare services. This is easy to ignore because
of the opaque veils of state bureaucracy. But behind the faceless agency lie people who are harmed for the sake of benefiting me.

Governing Least manages to be at once readable and dense.  And though you can’t tell from the passages I just quoted, Moller also repeatedly appeals to and grapples with cutting-edge social science.  What, for example, should philosophers think about Greg Clark’s work on the long-run heritability of social status?  Moller’s take will surprise many of you.

Last question: Why do I still prefer Huemer to Moller?  Intellectually, because Huemer’s appeal to individual rights is just more clear-cut than Moller’s objection to “burden-shifting.”  Furthermore, Huemer focuses on the broader case for libertarianism, while Moller self-consciously focuses on opposition to the welfare state.*  And while Moller’s book is beautifully written and well-organized, Huemer’s is stellar on both counts.

Thus, if you’re only going to read one book of libertarian political philosophy, I still say you should read The Problem of Political Authority.  If you’re willing to read two such books, however, read Governing Least.  I loved it.

* Moller: “I also ignore the many noneconomic causes that libertarians have sometimes taken up, like free speech, gay marriage, and drug legalization. This is the fun part of libertarianism and requires little heroism to defend. Many disagree with such policies, but few think their sponsors cruel or ungenerous, while resistance to the welfare state and programs intended to foster economic equality evoke precisely that response.”

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I’m Shocked — Shocked! — that Wealthy Parents Love Their Kids Too

Thomas L. Knapp

In the film version of Forrest Gump (but not, if memory serves, in the novel), Forrest’s mother tries to convince the local elementary school principal that her son belongs at  his local elementary school rather than at an institution for what we would now call “special needs” students. The two reach an understanding on Mrs. Gump’s remarkably squeaky bed while Forrest waits on the front porch.

That scene popped to mind uninvited in early March when fifty parents, test administrators, and college sports coaches were indicted in a nationwide college admissions bribery scandal.

Coaches allegedly took bribes to accept students as fake athletic recruits to get around academic standards. Test prep services supposedly taught students how to cheat on tests and bribed proctors to smooth the way for the cheating. An “admissions consultant,” William Singer, is accused of orchestrating the scheme to the tune of $25 million.

None of which, obviously, is According to Hoyle.

I’m surprised, though, at the vitriol directed at the parents in particular.

I suspect most movie viewers empathized with the fictional Mrs. Gump, who did whatever she felt she had to do to secure the best education possible for her child.

Real-life parents like actors Lori Loughlin and Felicity Huffman — the two most famous of the indicted parents — did whatever they felt they had to do to secure the best educations possible for their children as well.

The difference, of course, is that the fictional Mrs. Gump was poor, while Loughlin and Huffman are wealthy.

The public heartburn over Loughlin and Huffman seems less about them bribing their kids into good schools than about them being able to AFFORD to bribe their kids into good schools.

Suppose the scandal had unfolded in a different way. What if, instead of rich people writing checks they could afford,  it was working class parents scraping together money they really couldn’t afford, or trading menial work or even sexual favors a la Mrs. Gump, for illicit “admissions assistance?”

In that alternative scenario, I suspect most would regard the parents as victims, not as evil-doers.

In that alternative scenario, I expect that most parents could see themselves doing exactly the same things in the same circumstances.

“Let me tell you about the very rich,” wrote F. Scott Fitzgerald. “They are different from you and me.” True. But not when it comes to loving their children. I won’t condemn them for that.

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Develop a Rich Mind

T.K. Coleman

Abundance doesn’t just mean “having a lot of things.”

It means “having a lot of ways to think about things.”

It’s possible to have a lot of talents, connections, advantages, and opportunities, but still feel like “it’s not enough” or “I’m not enough” if you only have 1-2 ways to think about what you have.

There’s no form of wealth that can’t easily be undermined by an impoverished imagination.

Become rich in thought by expanding your definition of abundance to include more things than obvious stereotypical examples of wealth.

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The First Rungs on the Success Ladder

Isaac Morehouse

We live in abundant times. This presents an interesting conundrum when it comes to succeeding.

Success is not the result of pure luck or genetics. Success is a discipline that can be learned. You can deliberately build your ability to succeed. Pick a challenge. One that’s hard but not too hard. Persist until you figure out how to overcome that challenge. It builds confidence that you take with you to the next, slightly bigger challenge. That’s how you learn success.

But what if you begin with a challenge that’s too big?

You can just as easily learn failure. I don’t mean learn from failure, which is what happens while you’re persisting at a challenge that’s big enough but not too big. I mean learn failure as a habit or mindset. If you take on a challenge outside your current capabilities, you will in all likelihood get disheartened, internalize your insufficiency, and extrapolate it broadly.

Thus the conundrum of an age of abundance.

If we accept some form of Maslow’s hierarchy, the most basic human challenges of food, shelter, and safety are taken care of. We’re born into the middle of the pyramid. This is not a bad thing. I don’t want my kids to have to scavenge for food and clothing. But because success compounds, those born into abundance can miss out on the first, most basic forms of success, and then find the rest out of reach.

The extreme example of the kid born into great wealth and status is familiar to us from books and movies. The first challenge that kid is faced with is self-actualization. All the smaller battles have been won on her behalf. That is a really massive challenge. No wonder there are so many dysfunctional trust fund babies.

But it’s not just the uber-elite. A lot of young people feel like failures and struggle to succeed at anything. In the world of careers, with which I am very familiar, you have people in their twenties taking on their first job and experiencing existential trauma because they feel the need to find work that speaks to their deepest calling. They’re starting with self-actualization, which is too big a challenge.

They never had to fight the small battle of just learning to finish a task without praise. They never had to fight the slightly bigger battle of earning their first five dollars. They never overcame the challenge of learning to show up on time and not get fired. They never learned to overcome escalating social challenges like being ignored or misunderstood.

Well-intentioned parents save their kids from all the small, early challenges and point the kid to big ones. The kid who never learned how to cope with not being chosen first in basketball is told “Get into an elite university”, or, “Become a doctor”, or, “Make me proud.”

So a lot of people are wandering around feeling lost because they don’t know how to “make a dent in the universe”. It’s not because they are failures. It’s because they skipped too many steps. Figure out how to walk before you try to run.

Imagine if we tried to help babies out by building mechanical legs and hooking them up to IVs. “Poor kid was crawling on the floor, barely mobile, and totally reliant upon his mother for food. We’ve solved that, now he can move around and tackle bigger, more creative problems!”

It would destroy the development process. The kid would never walk, never bond, and probably have digestive health and psychological issues forever.

When we remove grunt work, low pay jobs, skinned knees, hurt feelings on the playground, and all the small challenges that kids confront first, we remove the first rungs on the success ladder. When we place big epic battles for meaning as the first our kids ever face, we make failure easier to learn than success.

Fight smaller battles. Win them. Then fight slightly bigger battles.

Don’t worry about slaying dragons until you learn to swat flies.

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Killing the American Meritocracy

Parrish Miller

The American Dream is under attack like never before—not just the ability to fulfill the dream—but its very concept and history. At the core of the American Dream is the idea of meritocracy. There is no royalty in America, no titles of nobility, no entrenched caste system. You could be born anywhere, to anyone, and still achieve success. It was not just a story. Many real-world examples show exactly this trajectory. Poor children, and sometimes even penniless immigrants, grew up to achieve great success. Some even become titans of industry.

Why then is there such an effort underway to denigrate the idea of meritocracy? It is my belief that those who prefer a centrally planned society to one based on freedom, liberty, and personal achievement are intentionally rewriting history so as to make people believe that so-called “privilege” rather than merit has been the primary factor in achieving success throughout American history. This lie is then combined with the fallacies of communism (such as the labor theory of value and the fixed pie fallacy) in order to bolster the argument for central planning and massive government.

In order to understand the nature of the attacks on our meritocracy, we should start by understanding what a meritocracy is—and what it is not. Some definitions of the word smuggle in the concept of central planning: Merriam-Webster defines it as “a system in which the talented are chosen and moved ahead on the basis of their achievement.” Others try to divorce the concepts of wealth from success: The Cambridge Dictionary defines it as “a social system, society, or organization in which people get success or power because of their abilities, not because of their money or social position.” Neither of these definitions fully explains what meritocracy is as it relates to the American Dream, however, so perhaps a new term is required. I propose we call this the American Meritocracy.

Unlike what some of these other definitions imply, no one is necessarily being selected or moved ahead nor are wealth or social position irrelevant to success. In the American Meritocracy, a free market allows individuals to leverage all of their intelligence, talents, knowledge, wealth, connections, and even luck to get ahead. Those who are successful are correctly regarded as having earned their success, while those who are not successful are rightly considered less ambitious… or worse.

One of the most pernicious fallacies in public discourse today is that someone having wealth represents “inequality” in some meaningful manner. This idea ties in directly with the myth of “privilege” which expands the possible sources of “inequality” to include race, sex, religion, education, and any number of other things depending on who is defining it. The purveyors of the “privilege” doctrine conspicuously fail to explain the myriad success stories involving un-privileged members of society, however; it is as if these achievers do not merit their consideration. They will happily prattle on with anecdotes of the single mother working three jobs while accumulating more credit card debt each month, yet fail to mention the single mothers who save money, start businesses, win awards, and send their kids on to college. If confronted with these inconvenient tales of success, they will hand-wave them away as irrelevant outliers, falling back on statistics that prove little more than that people who are successful tend to be exceptional in many ways.

Behind the fallacy of “privilege” are two fundamental communist doctrines. The first is the labor theory of value, which posits a direct correlation between the value of a good or service and the labor required to produce it. The irrationality of this concept is easily seen in comparing two works of art. Both could be the same size, use the same materials, and take the same amount of time to complete, yet one could be worth millions while the other might be worth little or indeed be judged as truly worthless. The only difference between them is the perceived talent of the artist.

I say “perceived talent” because value is not actually an inherent quality of a good or service. Utility and scarcity may be inherent qualities in some cases, but value is always externally ascribed. Both pieces of art may be one-of-a-kind creations, so they would theoretically have equal scarcity, and both would fill an empty wall with equal aplomb, so again, their utility should be equal. Why then is one worth a million dollars and the other unsold? Because their value (like their beauty) is in the eye of the beholder. Be it because of the identity of the artist or certain ineffable qualities in his work, prospective buyers will ascribe far more value to one piece than to another with little or no regard to the quantity of labor involved in its production.

One could labor for a great many hours digging an unwanted ditch and then labor for hours more refilling it without ever having created any value for anyone. Likewise, one can spend their life in a dead-end job asking if folks “want fries with that?” without ever producing $15 worth of value in an hour. Indeed, with the proliferation of self-serve kiosks with flawless knowledge of ingredients and prices combined with perfect memories and increasing speeds, we may soon see a day when the ability to mumble about the availability of supplemental fries has no marketable value at all.

The second fundamental communist canard that underpins the delusion of “privilege” is the fixed-pie fallacy. Economist Milton Friedman summed up this pervasive error well when we said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” We hear this daily rhetoric expressed as concerns about “income inequality” and the supposedly unfair achievements of the “top 1% wealthy” who are nearly universally regarded with suspicion and envy thanks to the prevalence of this particular fallacy.

Skewed statistics suggest that these “Monopoly Man” caricatures have achieved their wealth by plundering the poor, yet these one-sided figures conveniently ignore that “the poor” are richer than ever before, enjoying far more luxuries and longer lives than their historical counterparts. Yes, the “rich” may enjoy a larger percentage of the pie today, but the pie itself is many times larger—and here’s the kicker—it has grown so much larger primarily because of the investments and contributions of those supposedly “evil” rich folks.

Look at it using simple math. If there is a 10-inch pie and you have two slices, how much pie would you have? Now imagine a 10-foot pie of which you have only one slice. To some people, this would be a tragedy, an unconscionable increase in “pie inequality” because you have just one-eighth of a total pie rather than the one-fourth you had before. But is this a reasonable way to measure things? (For the record, if you had 2 of 8 slices of a 10-inch pie, you would have approximately 19.6 square inches of pie. If you had 1 of 8 slices of a 10-foot pie, you would have 1,413.7 square inches of pie, an increase of 721%.)

While it is certainly true that state intervention has made the free market far less free than it could be, the American Meritocracy is still alive and well. Yes, due to taxes, regulations, and occupational licenses, it is more difficult to achieve success than it would be in a fully free market, but there are still virtually limitless opportunities for anyone who is willing to put in the necessary effort and to make the necessary sacrifices.

It is okay to be poor. Some people do not prioritize wealth creation, and that is their right. The problem is when they start blaming their poverty on other people or on “the rich” or “privilege” or some other external force that they claim is keeping them down. If you are poor in America, it is because you have not put in the effort necessary to become wealthy. This may seem harsh and judgmental, but that does not make it untrue. You can achieve success in the American Meritocracy, and if you do not, it is almost certainly your own fault.

Those whose ultimate goal is the eradication of the free market point to the existence of poverty as evidence that the free market has “failed.” They suggest replacing it with “universal” handouts in the form of fully subsidized education, healthcare, family leave, and even income itself. They imagine that these subsidies can be funded indefinitely by plundering the rich—ignoring that even at its current size, the government would blow through the net worth of the rich in a matter of months. In short, they want to kill the American Meritocracy and replace it with a one-size-fits-all communist utopia where the state controls everything and all the little people live in perfect equality.

Quite the fairy tale, is it not? Without “the rich” to keep growing the pie, the pie will naturally begin to shrink and each person’s “equal share” will shrink too. Add in an ever-expanding population, and the predictable economic contractions will guarantee worse outcomes across the board. Instead of some people living in poverty, everyone will live in poverty, and there will be no system in place to facilitate escaping it.

The American Meritocracy is not perfect due to government intervention, but it is still far superior to the abject failure of central planning that is on full display in Venezuela right now. After all, no one is eating zoo animals to stay alive in America.

The American Dream has always been that anyone could achieve success with enough effort and perseverance. This is still true for almost everyone who lives here. The fact that other people may achieve even more success than you does not diminish your success. Despite the fabricated doctrine of “privilege,” there is no ceiling through which you must break or systemic inequality you must overcome. If you can provide quality goods and services to which buyers ascribe value, you too can achieve success in the American Meritocracy. If you fail, you can blame your parents’ wealth (or lack thereof) your race, your sex, your religion, your education, or your astrological sign, and many people will accept your excuses—I will not.

Success in America is not a lottery, it is earned; and if you do not make the effort necessary to earn it, you do not deserve it. I am sure that holding these views makes me a heretic to the church of statism and a disbeliever in the gospel of privilege, but I make no apologies. Your life is of your own making—now go make it better!

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Career Leverage and the Structure of Production

Isaac Morehouse

One way to think about careers is leverage.

It’s not something that gets talked about much, but it’s sneaky powerful. Most people think in terms of titles and salary when they think about success. This leads many to pursue jobs as doctors, lawyers, and managers at large firms.

Others think more in terms of control over schedule and more creative autonomy, so they might become freelancers, consultants, etc.

As different as those career paths are, they share a key constraint. Neither is highly leveraged.

Lawyers and freelance designers both charge by the hour. Doctors and corporate consultants both make money only when they’re working directly with customers.

There is nothing wrong with that. It’s probably preferable for most people, as there’s something clean and simple about earning directly for your work. These jobs are highly specialized and relatively high value, but it’s just as much a direct labor for pay model as pumping gas or digging ditches.

All those roles hit a ceiling: the amount of work you can put in. It caps out pretty fast.

But a highly leveraged career doesn’t have a cap. A leveraged career is more about what activity is being done, not how long and hard and how many times you’re doing it. The activity itself does not directly generate income. The activity generates something else that generates many times more of something else that generates many multiples of yet another thing that generates income from tons of people at once.

It’s not give a man a fish. It’s not teach a man to fish. Giving and teaching aren’t leveraged. It’s raise the money to buy the land to build the factory to make the rope that goes into the nets that help millions of people catch billions of fish. Leverage.

Most of us have to begin our careers in an unleveraged role. Maybe you bag groceries. Or maybe you become a lawyer. You can transition into a leveraged career if you train your brain to see it. The leverage-seeking lawyer might think, “OK, I’ve mastered creating this kind of legal document for this kind of client. Now can I build a franchise or a software product that does this repeatedly at scale?” Then you get stuff like LegalZoom. Leveraged activity springing out of mastery of a non-leveraged activity and some insight and investment.

I’m a big fan of the Austrian School of Economics, which focuses a lot on the structure of production, which is a fancy way of saying the long process of how stuff gets made. It’s the process of going from products (Here’s an apple), to tools (Here’s a ladder to reach more apples), to tools for making tools (Here’s a saw to cut wood for ladders), and on and on.  The deepening of the structure of production requires insight and foresight, since it adds ’roundaboutness’ to a straightforward task like apple picking. But it also adds massive leverage.

This is how you become massively wealthy and have a massive impact on the world. The best manager in the world can only manage so many people. Maybe a few hundred. But the person who builds the best tools for helping more managers do their jobs better can touch millions.

That’s leverage. If it appeals to you, chase it. Focus on tools, products, and processes that are very far back in the production process. So far back most people can’t see how they connect to the final act of consumption.

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