Nightcap

  1. Keep unions out of grad school Tyler Cowen, Bloomberg
  2. Universal Basic Income, in perspective David Henderson, Defining Ideas
  3. Is America is a violent country? Kieran Healy, Monkey Cage
  4. Who have Americans hated most, historically? RealClearHistory

Nightcap

  1. Male Violence Throughout History William Buckner, Quillette
  2. The Police Have No Obligation to Protect You Tho Bishop, Power & Market (Mises)
  3. Life in Syria Continues to Get Worse Krishnadev Calamur, the Atlantic
  4. The Architectural Sacking of Paris Claire Berlinski, City Journal

Is Free-Riding for Union Negotiations a Myth?

As the US Supreme Court is considering the case of Janus v. AFSCME on mandatory deductions for the purposes of union negotiations, I think it is time to truly question the argument underlying mandatory deductions: free-riding. Normally, the argument is that union members fight hard to get advantageous conditions. After taking the risks associated with striking and expending resources to this end, non-members could simply get the job and the benefits associated with prior negotiations and not contribute to the “public good” of negotiation. This is an often-used argument.  I come from Quebec in Canada where closed shop unionism (i.e. you are forced to join the union to get the job) still exists and mandatory dues are more stringently enforced than in the United States. There, one of the most repeated defense of the closed shop system and of the mandatory dues is the free-riding argument. As such, the free-riding argument is an often-used communication line.

That is, in essence, the free-riding argument. While it appears axiomatically true, I do not believe that it is actually a relevant problem. However, before I proceed, let me state that I have a prior in favor of consent and I only sign off on “forcing” people when the case is clear and clean-cut (I am what you could call a radical “contractarian”).

So, is free-riding a problem? The answer is in the negative (in my opinion) as the free-riding argument entails that unionism provides a public good. One of the main feature of a public good is an inability to exclude non-payers.  Think about the often-used example of lighthouses in public economics: the lighthouse provides a light that everyone can see and yet the owner of the lighthouse would have a very hard time to collect dues (although Ronald Coase in 1974 and Rosolino Candela and myself more recently have emitted doubts about the example).  However, why would a union be unable to exclude? After all, it is very easy to contractually “pre-exclude” non-payers. A non-member could obtain only 50% or 75% or 80% of the benefits negotiated of the union. Only upon joining would he be able to acquire the full benefits of the union.

As such, “excludability” is feasible. In fact, there are precedents that could serve as a framework for using this exclusion mechanism. Consider the example of “orphan clauses” which were very popular in my neck of the wood in the 1990s and early 2000s. Basically, these clauses “create differences in treatment, based solely on the hiring date, in some of the employment conditions of workers who perform the same tasks“. These existed for police forces, firefighters and other public sector workers.  Now, this was a political tool for placating older union members while controlling public spending. As such, it is not an example of exclusion for negotiation purposes. Nevertheless, such contracts could switch the “date of employment” for the “union status” in determining differences in treatment.

Another mechanism for exclusion is social ostracism. This may seem callous, but social ostracism is actually well rooted in evolutionary psychology. It also works really well in contexts of continuous dealings (see also this example by Avner Greif which has been the object of debates with Sheilagh Ogilvie and Jessica Goldberg)  Workplace relations between workers are continuous relations and shirkers can be ostracized easily.  The best example is the “water dispenser gossip” where co-workers will spread rumors about other workers and their behavior. All that is needed is an individual marginally inclined towards the union (who could even get special treatment from the union for being the ostracism-producer) who will generate the ostracism. As such, the free-riding argument has a solution in that second channel.

In fact, ostracism and contractual exclusion can be combined as they are in no way mutually exclusive. These two channels are the reason why I do not adhere to the “free-riding” argument as valid justification of compulsory payment for financing unions.

Fourteen-Year Old Girl in Bikini Threatens Armed Cop

For those of you, my conservative friends, who believe police brutality is just a collection of deliberate made up tales, there is a video on the major cable networks today I hope you see.

It shows a normal size adult in a blue or black uniform putting his knee in the back of a fourteen-year old girl in a bikini to force her down. The girl is crying out for her Mamma. The same cop then draws his gun on a couple of teenage boys in swim shorts who are trying to help the girl. There are other teenagers around, all in swimming attire where one couldn’t hide a weapon. Does the cop think they are going to gang up on him and beat him to death? It’s difficult to see how his life is threatened. In fact, it’s impossible.

A private person gave a pool party on a hot day. Although I understand it took place in a semi-public pool, it was by invitation only. Predictably, some teenagers tried to crash the party. Someone called the police. At that point no blows had been struck; there may have been no violence. I say “may” because, according to some reports but not all, some girls had been pulling one another’s hair. The horror! Cat fights used to be considered free entertainment. The cops who first arrived felt out of their depth and apparently lost their cool and quickly became the worst threat to citizens‘ safety anywhere around.

This is the point where the media and everyone should ask the obvious question:

Suppose the cop had retreated and done nothing? What would be the worst case scenario. Answer 1: Uninvited teenagers swimming in a public pool that had been reserved. Answer 2: Possibly some hair pulled off. (When was the last time a teenage girl did serious damage to another with her bare hands? The stereotype is right: Girls don’t know how to fight.)

Is there an alternative universe where avoiding these calamities is worth brutalizing a young girl and pulling a gun on boys in bathing suits?

Is it even likely that the use of pepper spray was justified? Yes, I am double-guessing the cops on the scene. It’s becoming easier thanks to amateur video. If the cop who pulled his gun is unable to restrain himself or if he does not have the good judgment to do it, he shouldn’t be in charge of protecting us. Yes, that simple!

Was what I saw on the video a racial incident? I don’t think so although the main cop was white and the teenagers black. Likewise, when I see a white man sell a used tool to a black man at the flea market, I don’t think of it as a “racial transaction.” The assertion that white cops kill black men because white cops (and society in general) are racist is a simplistic idea invented and sustained by the scum sliver fringe of the dying civil rights movement to prolong its unearned privileges (including not paying millions of dollars in owed taxes).

I won’t believe that racial animus presides over the shooting of black men or any other kind of brutalization of black people by police until I see appropriate comparative figures: How many whites shot by white cops, how many blacks killed by black cops, etc. This would have to take into account the superior propensity of black to commit crimes. The number exists; the study is not difficult to do; any sociologist, any statistician could do it. The fact that it has either not been done or not publicized speaks to me of massive censorship, or self-censorship, of paralyzing political correctness.

The cop who put his knee in the middle of the back of a fourteen-year old girl may not be a racist; as I said; I think he is probably not. He just should not be a police officer. Given that he is a veteran, it’s not his training that’s defective, it’s him. Perhaps he should not have ever been on any force to begin with. Perhaps he has been on the job too long. If it’s the latter, I am guessing union rules prevent his superiors from doing anything about it or even from noticing that something is awry with that guy. Whatever is the case, the man is not a protector, he is a public danger.

He does not belong on the street with a gun but working in a church basement at something innocuous. His working buddies could be, for example, young women who think a smile is sexual harassment and a tap on the shoulder, rape. They deserve one another.

And, I can already hear it from my conservative friends: Peace officers have a tough job, blah, blah! You have to understand, blah, blah! Not so; the market tells the truth. There is is no shortage of police recruits nationwide. People are flocking to the job. The California Highway Patrol is currently recruiting young interns. Candidates must have no drug conviction (which does not make much sense if you think about it). They must have at least a 2.00 GPA in high school. Let me think, with grade inflation that would be a D- or an F+?

In the meantime, the Santa Cruz Sheriff is offering $5,200 a month for trainees with an immediate raise following graduation from the police academy. High school diploma required, or an associate degree. (There are also tests but…) Good time to weed out the inept and the used up. Or, the selection standards could be changed: You might go easier on the brawn and become more demanding on self-control and on ordinary common sense.

And, by the way, I hate affirmative action but…. (I hate it because it gave us among other things, the current Fascist-leaning administration that is also inept.) Yet, I don’t have trouble imagining that female cops may possess a superior ability to defuse potentially explosive situations. I believe that, in daily police practice, there are many cases where small physical size and low testosterone are assets.

There is no – I repeat – no reason to tolerate police brutality. Conservatives are morally bound to distrust the government there too. It’s our constitutional tradition.

PS I have no animus against police officers. My father was one, a good one. In my whole life, I have only had two moving violations; one was for driving too slowly.

Creeping illiteracy in the media: I heard with my own auditory ears and saw with my own visualizing eyes an MSNBC commentator refer to a “canine dog.” It makes me hunker for a “feline dog,” or even for an “avian dog.” That would be cool. Fortunately, it was on MSNBC, not on Fox.

Unemployment: What Is It?

Unemployment has regained center stage now that the debt crisis has receded from that position, at least for a time. Unless things change dramatically over the next year unemployment will be the number one issue in the forthcoming presidential election. Hardly any proposal will escape being labeled “job-killing” or “job-creating” or both.

To begin with some basics, what is work and what is a job? For economists, work is any activity that we would not perform without tangible compensation, usually money. In our work lives almost all of us are also motivated by nonmonetary considerations, and to the extent we diverge from the most remunerative activity available to us, we are blending work and leisure. A retired person who takes up college lecturing may do the work primarily for the satisfaction it brings. If his salary were withdrawn and he continued to teach, he would be enjoying leisure.

The goal of all economic activity is consumption, which to economists means not just mundane goods like faster cars but also “noble” ends like cathedrals. Jobs are therefore not ends in themselves, as much as public discussion would suggest otherwise. They are means to acquire income to be used for consumption and saving, in addition to personal satisfaction, learning opportunities, or socializing.

A person who lacks a job is unemployed if he or she wants work, has suitable skills, and has realistic expectations about compensation. These are vague terms; they make unemployment a murky concept. That goes double for underemployment, though both remain very real phenomena. Continue reading

Karl Marx Was Right (Pretty Much)

Karl Marx spent a lifetime arguing that the motor of history, what caused social change, was the “class struggle.” (Marx said other, more complicated things in relation to the class struggle. I don’t care to talk about them right now because they are obscure and there is little agreement among Marxists about what they mean.) Marx also did not assign enough importance to technological progress, it’s true. That would happen largely as a result of ever greater densities of population, irrespective of any political system. Many people in close contact in cities are more likely to come up with better ways to get things done than few people who barely ever meet anyone outside their small group. Literacy also helped of course by helping preserve accumulated knowledge. With these major lacunas, I think Marx was mostly right.

Marx had an elaborated conceptualization of social class that he never really completed. First, what “class” is not, according to Marx (also according to Delacroix). Class explicitly does not refer to “the rich and the poor” as many think. That would have been of limited usefulness when Marx was writing and it would be utterly useless now. The fact is that the distribution of wealth in modern, capitalist societies (the ones Marx had in mind) is continuous, that is, there is not break-up point. Next to the person, or family who owns $1,000, 000 there is one that owns $999,000, and next to that one, there is another that owns $998,999. Likewise, next to the person or family who owns $50, there is one that has $51 in wealth. And so forth. Moreover, who owns what is not fixed except at the lowest end. I was poor when I was thirty, I am not anymore. People who own vast wealth are liable to lose large portions of it in a day or two, thanks to the normal operation of the stock market, for example. Thus, there is frequent re-shuffling and rich and poor are pseudo-categories and therefore, useless.

Marx explained at length that what social class one belongs to is determined by one’s “relation to the means of production.” This is a bad translation of the bad German that prevailed at the time Marx was writing. Generations of Marxists everywhere have striven to conserve this opaque language because it made them sound profound, not least in their own eyes, and because it made them look like possessors of higher, “scientific” knowledge. Let me dispose of the scientific claim right away. It’s pure propaganda, deliberate bullshit, one of Marx’s public relations achievements. He made his claims seem more serious than they otherwise would have seemed by calling them “scientific” at a time when the word conveyed much intellectual prestige. Again, it’s bullshit. What makes anything scientific is that it can be refuted by comparison with reality. Another way to say nearly the same thing is to say that scientific claims can be tested. (Don’t worry about the “nearly” in the previous sentence; the statement is good enough for our purpose.) Marx’s claims cannot be tested in a rigorous, logical manner. All Marxists can do is to cry, “See, Marx said so,” after the fact, whenever something develops more or less according to one of Marx’s many unclear predictions. One issue about which Marx was clear was the class struggle. More on this below.

The world in which Marx lived was different from ours in important respects two of which are crucial for understanding the idea of social class in the 21st century.

1 When Marx was observing and writing, in the second half of the 19th century, land was losing much of its age-old importance as a source of income, in comparison with manufacturing and mining, and later, railroads. While agricultural productivity was making steady gains in the richest countries, manufacturing and, in its wake, mining, were growing explosively thanks to the Industrial Revolution. (Note what I am not saying: Income from agriculture was not shrinking in absolute terms, it was expanding.) It was clear to most observers then that the quick way to riches was to capture the fast rising income generated by those industries. The best spigot was thus the material industries of manufacturing, mining and later, railroads.

The claimants to this income were uncommonly well-defined. On the one side were a small number of mostly family-based companies like the Krupp in Germany, the Schneider in France, the Rockefeller in America, and so on. These highly visible companies owned the manufacturing plants, the mines, and later the railroads. Here is a useful digression: Marx seemed not to have understood the importance of publicly owned companies in which small people and other groups could invest their small savings. He probably thought big corporations would remain in a tiny number of hands forever. Correspondingly, he did not understand well the role of stock exchanges either. He was wrong on this, wrong by large omission.

The other claimants to manufacturing, mining and railroad income were also highly visible. They were the masses of workers flocking to the cities and mining centers from the countryside. Those people were visible because of where they lived, near the centers of cities. Originally, they were also poorly paid and overworked. Marx observed that they were in a favorable situation to organize along labor union lines and also politically to an extend unimaginable by their peasant forebears. This, because of their geographic concentration and because of their ability to realize that they shared a certain type of misery.

From these accurate observations, it was fairly natural to predict that there would eventually be a clash between the super-rich owners of the means of production, manufacturing plants, mines and railroads, and those who toiled for them. It looked like there was at any time, a zero-plus sum game being played: Whatever the owner took, the workers did not get, and vice-versa: capitalists (owners) vs proletariat (industrial workers, broadly defined).

But everyone who was not a worker was not a capitalist in that sense, and everyone who was not a capitalist was not necessarily an industrial worker. The lawyers who serviced the capitalists could be expected to join with them. The tavern owners whose own income came from workers’ drinking would side with the workers, and so forth. This scheme makes it clear that a starving lawyer could be in the capitalist camp and a prosperous pub owner in that of the workers. Hence the idea that people would line up politically according to their “relationship to the mean of production.” This is a more sophisticated idea and also one much more applicable than the “rich vs poor” of the popular imagery of social class.

2. The second big difference between Marx’s time and ours is the size of government. Throughout the 19th century, governments everywhere were small and poor. There was no income tax; they derived revenue largely from customs (border taxes) and from excise taxes. Governments then were a fiscal burden on everyone if not equally, then commonly, but a fairly light burden most of the time.

Today, governments in the developed world are large to huge. They consume anywhere between 40% approximately and 70% of Gross Domestic Product. They are also everywhere by far the largest accessible source of income.

Superficially, the amorphous, ill-defined “service sector” seems even larger since it accounts regularly for more than 70% of GDP (in rich countries including the US). However, it’s fragmented, heterogeneous, controlled (to the extent that is is controlled) by a myriad of owners. Much of it is not very profitable, as opposed to 19th century manufacturing, for example. The services workforce is also extremely fragmented and it tends to be transient. It would be difficult for that workforce, or for anyone else to get together to capture anything of value. There is not much to take from the service sector and it would be hard to get.

By contrast, the large to very large chunk of money that is in governments’ hands at any one time is easy to capture. It does not take much more than a well-engineered vote to get one’s own hands on it. Furthermore, unlike the private sector’s funds that depend on the vagaries of the market and on management’s competence, government grants in various forms tend to have a long shelf life. The WWII subsidy to chinchilla farmers was only repealed about ten years ago, fifty years late! Civil service pension funds are another case in point. Obtaining money from government entities is well worth the effort. The government is both a big spigot and an easy one to turn on.

I know I promised to tell you that Marx was almost right. Well, what we see in America today is a classical Marxian class struggle. The classes in conflict are not those Marx described because he was writing almost 150 years ago and he had not foreseen the monstrous growth of government. (No one else had.) The Obamanian/Obamist faction of the Democratic Party has engineered and is engineering an alliance between the main social class of today, government workers, on the one hand and a few other, opportunistically selected groups, on the other hand.

First among the government workers class allies are the small minority of workers in labor unions (maybe 7 or 8% of all employed and unemployed people). Labor unions have always used government to grab what their own muscle failed to achieve. Second, are the majorities of racial minorities. Many – but not most – are poor for reasons that ceased a long time ago to be related to racism. The largest racial minority, so-called “Latinos,” is heterogeneous and many of its members are immigrants or one generation removed from immigration. The Obamists are trying to grab them before they meld into the traditional American dream.

The second largest minority is “blacks.” Only about half of so-called “African-Americans” are descendants of slaves with a historical grievance that is supposed to be addressed by affirmative action. Many in that half, of southern church background, are addicted to resounding speeches about injustice and to the idea that the remedy to their ills can only come from government. They will vote for the best “injustice speech” giver irrespective of what they gain afterwards. (Usually nothing. The Democratic Party had been using and abusing blacks for thirty years.) The other half of Americans with African blood are immigrants and their children. Like Obama himself, in my book, they have no historical claim on the nation. That second half of the second minority might surprise us soon, politically. They are experiencing normal American social mobility, like general Colin Powell for example, the son of Jamaican immigrants. They are at best temporary members of the Obamian recruits, I think. He, and his Left-Democrat conspirators cannot count on them for the long haul.

A flat and slow-growing economy is always especially hard on immigrants. That’s the main reason western Europe has always – until now – had worse immigrant problems than we have. Immigrants in America open a small business and their kids go to college and they become the doctors and lawyers and engineers our normally expanding economy requires. Immigrants in France, for example, go to college and then remain underemployed forever because the French escalator is hardly moving at all.

There are no other racial minorities in America today that want to be considered minorities. They are all doing well without recourse to government favor. Many may have voted for Obama without understanding what they were doing. If I were an American communist trying to take over by legal means, I would not count on them further. In the same breath, I would refer to the scarce but disproportionately influential American Jews. I think more than 75% voted for Obama. That was a downright perverse and obstinate vote. I don’t think many are communists. I suspect many more are coming to their senses right now. (I may be placing too much confidence in an unsystematic sample here. All the Jews I know are conservatives. Ten years ago, I did not even know of Jewish conservatives.)

Finally, the Obamists exercise control over a large under-class that they are trying to enlarge yet: All those who are not working but who exist temporarily or permanently thanks to government payments. Marx had described something like this when he spoke of the politically unstable lumpenproletariat, the sub-working class “dressed in rags.”

So, here we are: On the one side, the large and growing class of government employees and the small allied class of union members. Both classes earn considerably more in wages and benefits than the employed in the private sector, nearly twice as much on the average. One bus driver in my small town belongs to both classes, as a government employee and as a union member. Last year, he earned $160,000 (that’s with overtime, let’s be frank). The job requires a high-school education. (I hope he is the one bus driver in this town who is not habitually gruff.) This is the same town where coffee shop baristas with a college degree earn $9/ hour if they are lucky, with no benefits. (I am speaking of Liberal Arts and Environmental Studies majors. Again, let’s be frank!)

To summarize: Government employees and union members owe their superior earnings to their relationship to the means of re-distributing income forcibly, government. They seek to extend and consolidate their hold on government with the help of precariously allied ethnic minorities and of unstable recipients of welfare under various names. On the other side is everyone else, everyone who does not work for government and who pays the taxes that feed the others. They too are defined by their relationship not to the “mode of production,” (see above) but to the spigot of government.

Here is a key figure: Almost 50% of Americans paid no federal income tax last year. That’s a lot of people who are not against the government confiscating legitimate income though legal means.

Once you start looking at the events and policies of the past 18 months as elements of a normal class-struggle, you gain much clarity. And, incidentally, this thesis does not contradict my repeated statements that the Obama administration and the President himself, are not very bright. They are relying on an old play-book that tells them pretty much what to do and that does not require much inventiveness.

I am astounded – if I say so myself – by the predictive power of my historical explanation. We even have the third highest elected official in the land ( third in order of succession to the President) engaging overtly in fascist intimidation: Speaker Pelosi threatened around August 16th “to investigate” those who oppose a mosque near Ground Zero! (See my column on this: “The ‘Ground Zero’ Mosque Issue Clarified”)

And, by the way, for those of you who got Cs in public school, or Bs in private school because the school needed the tuition, no, I am not confused. The Obamians are a species of communists and, communism is just one brand of fascism. See my two essays on the topic on this blog:“Fascism Explained,” and “How About Communism?