Tag Archive for: poverty

UN Deletes Article Titled ‘The Benefits of World Hunger.’ Was It Real or Satire?

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The author of the article in question told FEE it was not a parody.

UN Chronicle, the official magazine of the United Nations, recently deleted a 2008 article titled “The Benefits of World Hunger.”

The article, which now leads to an “error page,” was written by George Kent, a now retired University of Hawaii political science professor. In the article, Kent argued that hunger is “fundamental to the working of the world’s economy.”

“Much of the hunger literature talks about how it is important to assure that people are well fed so that they can be more productive,” Kent wrote. “That is nonsense. No one works harder than hungry people. Yes, people who are well nourished have greater capacity for productive physical activity, but well-nourished people are far less willing to do that work.”

UN Chronicle deleted the article after it began to cause a stir on social media. The magazine said Kent’s article should not be taken literally, contending that it was a work of parody.

“This article appeared in the UN Chronicle 14 years ago as an attempt at satire and was never meant to be taken literally. We have been made aware of its failures, even as satire, and have removed it from our site.”

At first glance, there seems to be little reason to doubt the United Nations. As some writers have noted, previous works written by Kent include Ending World Hunger, The Political Economy of Hunger: The Silent Holocaust, and Freedom from Want: The Human Right to Adequate Food.

These titles hardly suggest that Kent sees global hunger as a good thing. In light of this, some contended that he was taking an approach not unlike Jonathan Swift, whose famous essay “A Modest Proposal” cheekily argued that Irish families should alleviate their mean condition by selling excess children to the wealthy for food.

After reading the UN’s tweet, Yahoo’s report, and several other pieces of commentary on the subject, I initially agreed that Kent’s article likely was written as satire. However, closer examination and a brief conversation with Kent revealed that is not the case.

First, it’s important to note that Kent himself denies the article was intended as a form of satire.

“I don’t think the UN would have published it if they thought it was satire or advocacy,” Kent told Climate Depot in a recent phone interview.

In the interview, Kent explains he was not advocating global hunger but was intending to be “provocative” by saying certain individuals and institutions benefit from global hunger.

“No, it is not satire,” Kent told Marc Morano, founder and editor of Climate Depot. “I don’t see anything funny about it. It is not about advocacy of hunger.”

I reached out to Kent and asked if the quotes were accurate, and he told me they were, adding that he intends to publish a paper this fall that will further detail his views.

“Marc understood me very well,” Kent told me in an email. “I hope my current paper on who benefits from hunger helps to make my position clear to everyone involved in this discussion.”

Additionally, the article’s concluding paragraph supports Kent’s claim that the work was not designed as either satire or advocacy. A careful reading of the text suggests Kent is being quite literal when he writes that some people benefit from global hunger.

“For those of us at the high end of the social ladder, ending hunger globally would be a disaster. If there were no hunger in the world, who would plow the fields?” Kent wrote. “Who would harvest our vegetables? Who would work in the rendering plants? Who would clean our toilets? We would have to produce our own food and clean our own toilets. No wonder people at the high end are not rushing to solve the hunger problem. For many of us, hunger is not a problem, but an asset.”

One senses in these words disapproval. The global poor exist because the wealthy require them to exist. Global hunger exists because humans are simply not doing the moral and necessary things to eradicate it.

But what are those things? A glimpse at Kent’s 2011 Ending Hunger Worldwide offers a clue. In the summary of the book, readers are told the keys to tackling global hunger are “building stronger communities” and challenging “dominant market-led solutions.”

In Kent’s view, one gathers, global hunger is not a complex problem that is being addressed by free market capitalism; it’s a moral one that requires empowering intellectuals like Kent to solve it.

It’s also worth noting that reviews of Kent on Rate My Professor—which gives him a rating of 1.9 out of 5—suggest he’s, well, perhaps a bit of an ideologue.

“Avoid this man with your life. Very opinionated and if your opinion differs, you will fail. He’s the worst professor i’ve had,” one reviewer wrote.

“Horrible professor if you are not politically aligned with his values you WILL FAIL,” another contended.

“Very opinionated and unhelpful,” opined another. “Very critical and extremely boring. Unsupportive and irritating.”

Whether Kent is a good professor or not, or whether his article was satire or literal, are questions that ultimately do not matter a whole lot in the larger scheme of things. What does matter are the policies that cause global hunger and the policies that alleviate global hunger.

And on this front, there has been stunning progress in recent decades. As Our World in Data shows, the percentage of undernourished people in developing countries has plummeted in recent years, falling from 35 percent in 1970 to 13 percent in 2015.

How this happened is not a mystery. As economist Bob Murphy noted in FEE.org, the proliferation of free market capitalism has “gone hand-in-hand with rapid and unprecedented increases in human welfare.”

“As the World Bank reports, the global rate of ‘extreme poverty’ (defined as people living on less than $1.90 per day) was cut in half from 1990 to 2010. Back in 1990, 1.85 billion people lived in extreme poverty, but by 2013, the figure had dropped to 767 million—meaning the number of those living on less than $1.90 per day had fallen by more than a billion people.’”

Ironically, no better example of this can be found in recent decades than China, which has achieved nothing short of an economic miracle in recent decades. China saw its percentage of underweight children fall from 19 percent in 1987 to 2.4 percent in 2013. As recently as 1990, 66 percent of Chinese people lived in extreme poverty. By 2015, that figure was less than one percent.

How did China achieve this economic miracle? By pivoting to privatization following the death of Party Chairman Mao Zedong (1893-1976), as I pointed out in 2019.

In 1979, China adopted its “household responsibility system,” giving many farmers ownership of their crop for the first time. This was followed by Communist Party leaders opening China to foreign investment, curbing price controls and protectionism, and implementing mass privatization of its economy.

The “market-led solutions” that Kent has disparaged have worked wonders for hunger alleviation. The same cannot be said for initiatives hatched by the central planners at the United Nations, the organization that published Kent’s controversial article on hunger.

Sri Lanka’s current food crisis stems directly from an effort to shift the country’s agriculture sector to organic farming, which saw the import of fertilizers banned and led the country to become an importer of rice instead of an exporter virtually overnight.

Many writers and thinkers are blaming Sri Lanka’s crisis on the global rise of ESG (Environmental, Social, and Governance), which was started in 2004 under the auspices of—you guessed it—the United Nations to encourage “sustainable development.”

And people are right to blame ESG. Writing for the World Economic Forum in 2016, economist Joseph Stiglitz said “Sri Lanka may be able to move directly into… high-productivity organic farming…”

Sri Lanka did. By doing so, the nation earned an ESG score of 98/100—and caused a food crisis that resulted in one president’s resignation and food insecurity for millions of people.

This is a tragedy. And while George Kent is clearly wrong—there are no benefits to world hunger—one begins to understand why his 15-year-old article published by the United Nations is suddenly sparking so much interest

It’s not just Sri Lanka, after all. The Netherlands, Canada, and other countries are all making headlines with food schemes that are likely to goose their ESG score—but cause serious problems at a time when global hunger is on the rise for the first time in decades.

In light of current global policies, anti-population rhetoric, and the track record of twentieth century collectivist food schemes—Holodomor, Cambodia, and Mao’s Great Leap Forward, which saw tens of millions starve to death because of government policies—George Kent’s “The Benefits of World Hunger” article hit too close to home.

(Editor’s Note: We’ve posted George Kent’s 2008 entire article below since the United Nations removed the article from their site so readers can determine for themselves Kent’s purpose in writing the article.)

We sometimes talk about hunger in the world as if it were a scourge that all of us want to see abolished, viewing it as comparable with the plague or aids. But that naïve view prevents us from coming to grips with what causes and sustains hunger. Hunger has great positive value to many people. Indeed, it is fundamental to the working of the world’s economy. Hungry people are the most productive people, especially where there is a need for manual labour.

We in developed countries sometimes see poor people by the roadside holding up signs saying “Will Work for Food.” Actually, most people work for food. It is mainly because people need food to survive that they work so hard either in producing food for themselves in subsistence-level production, or by selling their services to others in exchange for money. How many of us would sell our services if it were not for the threat of hunger?

More importantly, how many of us would sell our services so cheaply if it were not for the threat of hunger? When we sell our services cheaply, we enrich others, those who own the factories, the machines and the lands, and ultimately own the people who work for them. For those who depend on the availability of cheap labour, hunger is the foundation of their wealth.

The conventional thinking is that hunger is caused by low-paying jobs. For example, an article reports on “Brazil’s ethanol slaves: 200,000 migrant sugar cutters who prop up renewable energy boom”. While it is true that hunger is caused by low-paying jobs, we need to understand that hunger at the same time causes low-paying jobs to be created. Who would have established massive biofuel production operations in Brazil if they did not know there were thousands of hungry people desperate enough to take the awful jobs they would offer? Who would build any sort of factory if they did not know that many people would be available to take the jobs at low-pay rates?

Much of the hunger literature talks about how it is important to assure that people are well fed so that they can be more productive. That is nonsense. No one works harder than hungry people. Yes, people who are well nourished have greater capacity for productive physical activity, but well-nourished people are far less willing to do that work.

The non-governmental organization Free the Slaves defines slaves as people who are not allowed to walk away from their jobs. It estimates that there are about 27 million slaves in the world, including those who are literally locked into workrooms and held as bonded labourers in South Asia. However, they do not include people who might be described as slaves to hunger, that is, those who are free to walk away from their jobs but have nothing better to go to. Maybe most people who work are slaves to hunger?

For those of us at the high end of the social ladder, ending hunger globally would be a disaster. If there were no hunger in the world, who would plow the fields? Who would harvest our vegetables? Who would work in the rendering plants? Who would clean our toilets? We would have to produce our own food and clean our own toilets. No wonder people at the high end are not rushing to solve the hunger problem. For many of us, hunger is not a problem, but an asset.

AUTHOR

Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

Capitalism Is Good for the Poor

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Markets Beat Back Poverty.

Critics frequently accuse markets and capitalism of making life worse for the poor. This refrain is certainly common in the halls of left-leaning academia as well as in broader intellectual circles. But like so many other criticisms of capitalism, this one ignores the very real, and very available, facts of history.

Nothing has done more to lift humanity out of poverty than the market economy. This claim is true whether we are looking at a time span of decades or of centuries. The number of people worldwide living on less than about two dollars per day today is less than half of what it was in 1990. The biggest gains in the fight against poverty have occurred in countries that have opened up their markets, such as China and India.

If we look over the longer historical period, we can see that the trends today are just the continuation of capitalism’s victories in beating back poverty. For most of human history, we lived in a world of a few haves and lots of have-nots. That slowly began to change with the advent of capitalism and the Industrial Revolution. As economic growth took off and spread throughout the population, it created our own world in the West in which there are a whole bunch of haves and a few have-more-and-betters.

For example, the percentage of American households below the poverty line who have basic appliances has grown steadily over the last few decades, with poor families in 2005 being more likely to own things like a clothes dryer, dishwasher, refrigerator, or air conditioner than the average household was in 1971. And consumer items that didn’t even exist back then, such as cell phones, were owned by half of poor households in 2005 and are owned by a substantial majority of them today.

Capitalism has also made poor people’s lives far better by reducing infant and child mortality rates, not to mention maternal death rates during childbirth, and by extending life expectancies by decades.

Consider, too, the way capitalism’s engine of growth has enabled the planet to sustain almost 7 billion people, compared to 1 billion in 1800. As Deirdre McCloskey has noted, if you multiply the gains in consumption to the average human by the gain in life expectancy worldwide by 7 (for 7 billion as compared to 1 billion people), humanity as a whole is better off by a factor of around 120. That’s not 120 percent better off, but 120 timesbetter off since 1800.

The competitive market process has also made education, art, and culture available to more and more people. Even the poorest of Americans, not to mention many of the global poor, have access through the Internet and TV to concerts, books, and works of art that were exclusively the province of the wealthy for centuries.

And in the wealthiest countries, the dynamics of capitalism have begun to change the very nature of work. Where once humans toiled for 14 hours per day at backbreaking outdoor labor, now an increasing number of us work inside in climate-controlled comfort. Our workday and workweek have shrunk thanks to the much higher value of labor that comes from working with productive capital. We spend a much smaller percentage of our lives working for pay, whether we’re rich or poor. And even with economic change, the incomes of the poor are much less variable, as they are not linked to the unpredictable changes in weather that are part and parcel of a predominantly agricultural economy long since disappeared.

Think of it this way: the fabulously wealthy kings of old had servants attending to their every need, but an impacted tooth would likely kill them. The poor in largely capitalist countries have access to a quality of medical care and a variety and quality of food that the ancient kings could only dream of.

Consider, too, that the working poor of London 100 years ago were, at best, able to split a pound of meat per week among all of their children, which were greater in number than the two or three of today. In addition, the whole family ate meat once a week on Sunday, the one day the man of the household was home for dinner. That was meat for a week.

Compare that to today, when we worry that poor Americans are too easily able to afford a meal with a quarter pound of meat in it every single day for less than an hour’s labor. Even if you think that capitalism has made poor people overweight, that’s a major accomplishment compared to the precapitalist norm of constant malnutrition and the struggle even 100 years ago for the working poor to get enough calories.

The reality is that the rich have always lived well historically, as for centuries they could commandeer human labor to attend to their every need. In a precapitalist world, the poor had no hope of upward mobility or of relief from the endless physical drudgery that barely kept them alive.

Today, the poor in capitalist countries live like kings, thanks mostly to the freeing of labor and the ability to accumulate capital that makes that labor more productive and enriches even the poorest. The falling cost of what were once luxuries and are now necessities, driven by the competitive market and its profit and loss signals, has brought labor-saving machines to the masses. When profit-seeking and innovation became acceptable behavior for the bourgeoisie, the horn of plenty brought forth its bounty, and even the poorest shared in that wealth.

Once people no longer needed permission to innovate, and once the value of new inventions was judged by the improvements they made to the lives of the masses in the form of profit and loss, the poor began to live lives of comfort and dignity.

These changes are not, as some would say, about technology. After all, the Soviets had great scientists but could not channel that knowledge into material comfort for their poor. And it’s not about natural resources, which is obvious today as resource-poor Hong Kong is among the richest countries in the world thanks to capitalism, while Venezuelan socialism has destroyed that resource-rich country.

Inventions only become innovations when the right institutions exist to make them improve the lives of the masses. That is what capitalism did and continues to do every single day. And that’s why capitalism has been so good for the poor.

Consider, finally, what happened when the Soviets decided to show the film version of The Grapes of Wrath as anticapitalist propaganda. In the novel and film, a poor American family is driven from their Depression-era home by the Dust Bowl. They get in their old car and make a horrifying journey in search of a better life in California. The Soviets had to stop showing the film after a short period because the Russian audiences were astonished that poor Americans were able to own a car.

Even anticapitalist propaganda can’t help but provide evidence that contradicts its own argument. The historical truth is clear: nothing has done more for the poor than capitalism.
AUTHOR

Steven Horwitz

Steven Horwitz is the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he also is Director of the Institute for the Study of Political Economy. He is the author of Austrian Economics: An Introduction.

EDITORS NOTE: This FEE column is republished with permission. ©All rights reserved.

TRUMP EFFECT: Incomes Hit Record High and Poverty Reached Record Low in 2019

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There is no one on G-d’s green earth better equipped to get us right back than the great man who delivered these momentous gains.

NEW: Incomes hit record high and poverty reached record low in 2019

American households saw their best economic gains in half a century last year under President Trump, according to a report this week from the Census Bureau.And with the President’s pro-growth, pro-worker policies in action, this standard can be achieved again as America safely reopens from the Coronavirus pandemic.

Median household income grew by a stunning $4,400 in 2019, resulting in an all-time record of $68,700. This 6.8 percent one-year increase is the largest gain on record for median income growth.

The poverty rate plunged to an all-time low of 10.5 percent, as well. Between 2018 and 2019 alone, over 4 million Americans were lifted out of poverty, and the child poverty

Minority groups including African Americans, Hispanic Americans, and Asian Americans saw the largest gains in income, while poverty rates fell to a record low for every race and ethnic group in 2019.

Black Americans, for example, saw a 7.9 percent median income increase and a poverty rate that fell below 20 percent for the first time in history.

The COVID-19 pandemic disrupted this historic progress in 2020. Nevertheless, America today is witnessing the fastest recovery from any economic crisis in history. Thanks to the strong fundamentals of the Trump Economy, the monthly jobs report has met or exceeded economist expectations for four months in a row.

The new Census report confirms what we know to be true: With the right agenda for blue-collar and middle-class workers, there’s no limit to America’s economic greatness!

HAVE A TIP WE SHOULD KNOW? YOUR ANONYMITY IS NEVER COMPROMISED. EMAIL TIPS@THEGELLERREPORT.COM

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Overpopulation is an Environmental Red Herring

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It is not too much of a stretch to suggest that 2020 has been an interesting year (in the sense of “May you live in interesting times”). Fires, plagues, floods, Presidential impeachment, global economic meltdown, lockdowns: this year has seen them all. And we’re only in September. Thank goodness there isn’t a major election coming up where some are predicting social breakdown in nearly every conceivable scenario or anything…

It’s not quite dogs and cats living together in peace and harmony, but another sign that the end is nigh is that I find myself nodding along to an article of George Monbiot (greenie extraordinaire) in the Guardian. In it, Monbiot argues that blaming overpopulation for environmental concerns is a cop out, particularly for rich people in first world nations who get to lecture the third world on the need to have fewer children while they enjoy a lifestyle with a carbon footprint bigger than that of small central African nations.

As he states, the current population growth is overwhelmingly concentrated among the world’s poorest people. This means that a rising human population is only producing a tiny fraction of the extra resource use and greenhouse gas emissions due to consumption growth. Instead, we in the West should be turning our attention on our own behaviours (that latest iPhone, the plane trip to Davos to discuss climate change) rather than fretting about more Indian or African babies.

The example Monbiot gives of Dame Jane Goodall is a good one. She told the World Economic Forum in Davos that if only we had the same population as we did 500 years ago (500 million) then the current environmental issues would not be with us. The audience of course consisted of those with ecological footprints many thousand times greater than the global average. But the greater irony is that Goodall has previously appeared in British Airways advertising. If the world’s population was 500 million, and it was entirely composed of the average UK plane passenger, then our environmental impact would probably be greater than the 7.8 billion people alive today. When it comes to the environment, population size does not matter nearly as much as lifestyle.

Indeed, wishing that the world’s population was one-sixteenth its current size is the same as wishing for the moon and just as useless. Tut-tutting about more people being born over there saves us from having to worry about anything we are doing over here. It is environmental virtue-signalling.

Except when it leads to policy outcomes that are far worse than virtue-signalling. Population panic has led to barbaric, coercive population control measures in many countries throughout the world. And this is not an historical problem: UK foreign aid was helping to fund crude, dangerous and coercive sterilisation in India as recently as 2011, it was justified on the grounds that it was helping to “fight climate change”. (At the same time the UK aid was also pouring money into developing coal, gas and oil plants around the world…)

Of course, Monbiot could have been reading Pope Francis’ encyclical Laudato Si in which the Holy Father said that:

“To blame population growth instead of extreme and selective consumerism on the part of some, is one way of refusing to face the issues. It is an attempt to legitimize the present model of distribution, where a minority believes that it has the right to consume in a way which can never be universalized, since the planet could not even contain the waste products of such consumption.”

And both Monbiot and Pope Francis had perhaps been reading this very blog, since nearly a decade ago I wrote of the thinly-veiled condescending bigotry underlying much of the West’s panic about overpopulation. Perhaps now that the more people are coming around to the view that the world’s population will stop growing in a few decades, we will see less insistence on the kinds of arguments Monbiot is railing against.

This content is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International license.

COLUMN BY

Marcus Roberts

Marcus Roberts was two years out of law school when he decided that practising law was no longer for him. He therefore went back to university and did his LLM while tutoring. He now teaches contract and… .

RELATED ARTICLE: Grandma took her life yesterday. Her doctors helped her

EDITORS NOTE: This Mercator Net column is republished with permission. ©All rights reserved.

Capitalism Is Good for the Poor by Steven Horwitz

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Critics frequently accuse markets and capitalism of making life worse for the poor. This refrain is certainly common in the halls of left-leaning academia as well as in broader intellectual circles. But like so many other criticisms of capitalism, this one ignores the very real, and very available, facts of history.

Nothing has done more to lift humanity out of poverty than the market economy. This claim is true whether we are looking at a time span of decades or of centuries. The number of people worldwide living on less than about two dollars per day today is less than half of what it was in 1990. The biggest gains in the fight against poverty have occurred in countries that have opened up their markets, such as China and India.

If we look over the longer historical period, we can see that the trends today are just the continuation of capitalism’s victories in beating back poverty. For most of human history, we lived in a world of a few haves and lots of have-nots. That slowly began to change with the advent of capitalism and the Industrial Revolution. As economic growth took off and spread throughout the population, it created our own world in the West in which there are a whole bunch of haves and a few have-more-and-betters.

For example, the percentage of American households below the poverty line who have basic appliances has grown steadily over the last few decades, with poor families in 2005 being more likely to own things like a clothes dryer, dishwasher, refrigerator, or air conditioner than the average household was in 1971. And consumer items that didn’t even exist back then, such as cell phones, were owned by half of poor households in 2005 and are owned by a substantial majority of them today.

Capitalism has also made poor people’s lives far better by reducing infant and child mortality rates, not to mention maternal death rates during childbirth, and by extending life expectancies by decades.

Consider, too, the way capitalism’s engine of growth has enabled the planet to sustain almost 7 billion people, compared to 1 billion in 1800. As Deirdre McCloskey has noted, if you multiply the gains in consumption to the average human by the gain in life expectancy worldwide by 7 (for 7 billion as compared to 1 billion people), humanity as a whole is better off by a factor of around 120. That’s not 120 percent better off, but 120 times better off since 1800.

The competitive market process has also made education, art, and culture available to more and more people. Even the poorest of Americans, not to mention many of the global poor, have access through the Internet and TV to concerts, books, and works of art that were exclusively the province of the wealthy for centuries.

And in the wealthiest countries, the dynamics of capitalism have begun to change the very nature of work. Where once humans toiled for 14 hours per day at backbreaking outdoor labor, now an increasing number of us work inside in climate-controlled comfort. Our workday and workweek have shrunk thanks to the much higher value of labor that comes from working with productive capital. We spend a much smaller percentage of our lives working for pay, whether we’re rich or poor. And even with economic change, the incomes of the poor are much less variable, as they are not linked to the unpredictable changes in weather that are part and parcel of a predominantly agricultural economy long since disappeared.

Think of it this way: the fabulously wealthy kings of old had servants attending to their every need, but an impacted tooth would likely kill them. The poor in largely capitalist countries have access to a quality of medical care and a variety and quality of food that the ancient kings could only dream of.

Consider, too, that the working poor of London 100 years ago were, at best, able to split a pound of meat per week among all of their children, which were greater in number than the two or three of today. In addition, the whole family ate meat once a week on Sunday, the one day the man of the household was home for dinner. That was meat for a week.

Compare that to today, when we worry that poor Americans are too easily able to afford a meal with a quarter pound of meat in it every single day for less than an hour’s labor. Even if you think that capitalism has made poor people overweight, that’s a major accomplishment compared to the precapitalist norm of constant malnutrition and the struggle even 100 years ago for the working poor to get enough calories.

The reality is that the rich have always lived well historically, as for centuries they could commandeer human labor to attend to their every need. In a precapitalist world, the poor had no hope of upward mobility or of relief from the endless physical drudgery that barely kept them alive.

Today, the poor in capitalist countries live like kings, thanks mostly to the freeing of labor and the ability to accumulate capital that makes that labor more productive and enriches even the poorest. The falling cost of what were once luxuries and are now necessities, driven by the competitive market and its profit and loss signals, has brought labor-saving machines to the masses. When profit-seeking and innovation became acceptable behavior for the bourgeoisie, the horn of plenty brought forth its bounty, and even the poorest shared in that wealth.

Once people no longer needed permission to innovate, and once the value of new inventions was judged by the improvements they made to the lives of the masses in the form of profit and loss, the poor began to live lives of comfort and dignity.

These changes are not, as some would say, about technology. After all, the Soviets had great scientists but could not channel that knowledge into material comfort for their poor. And it’s not about natural resources, which is obvious today as resource-poor Hong Kong is among the richest countries in the world thanks to capitalism, while Venezuelan socialism has destroyed that resource-rich country.

Inventions only become innovations when the right institutions exist to make them improve the lives of the masses. That is what capitalism did and continues to do every single day. And that’s why capitalism has been so good for the poor.

Consider, finally, what happened when the Soviets decided to show the film version of The Grapes of Wrath as anticapitalist propaganda. In the novel and film, a poor American family is driven from their Depression-era home by the Dust Bowl. They get in their old car and make a horrifying journey in search of a better life in California. The Soviets had to stop showing the film after a short period because the Russian audiences were astonished that poor Americans were able to own a car.

Even anticapitalist propaganda can’t help but provide evidence that contradicts its own argument. The historical truth is clear: nothing has done more for the poor than capitalism.

Steven HorwitzSteven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions.

He is a member of the FEE Faculty Network.

2016 Is the Year of Inequality – And Prosperity by Chelsea German

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This past weekend, the Economist uploaded a short video to its Facebook page called, “The year of the 1 percent.” The video shows a graph superimposed over the Earth seen from space, while a voice narrates, “2016 is set to be a more unequal world than ever before. For the first time, the richest 1 percent of the population will enjoy a greater share of global wealth than the other 99 percent.”

The Economist’s graph reminded me of another graph, which also shows two lines that eventually cross but tells a very different story. Despite population growth, there are fewer people living in extreme poverty today than ever before:

How can both graphs be accurate? Poverty can decline even as inequality rises, as long as the total amount of wealth in the world is growing.

To ignore this is to fall prey to the “fixed pie fallacy.” Throughout most of human history, global wealth hardly changed. But thanks to trade and industrialization, wealth has skyrocketed, especially since the 1900s, and continues to climb.

At the same time, technological advances have also increased human wellbeing in ways not captured by looking at GDP alone.

Because the pie is growing, focusing solely on inequality, like the Economist’s video does, makes little sense. Most of us would rather have a relatively small slice of a gigantic pie than the biggest slice of a microscopic pie.

In other words, most of us would rather be wealthier in absolute terms, regardless of our relative position. This is why many of us, if given the choice, would choose to be an ordinary person today, instead of a member of the upper crust a century ago or a 17th century king.

Cross-posted from HumanProgress.org.

Chelsea GermanChelsea German

Chelsea German works at the Cato Institute as a Researcher and Managing Editor of HumanProgress.org.

‘Could this be the year Europe dies’ as economic conditions drive a billion Africans North?

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Klaus Schwab the founder of the World Economic Forum convening in Davos, Switzerland this week has a very scary prediction for the future of Europe.

Learn more here at American Resistance 2016!

See our complete ‘Invasion of Europe’ archive by clicking here.

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What Can the Rich Afford that Average Americans Can’t? by Donald J. Boudreaux

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Raffi Melkonian asks — as relayed by my colleague Tyler Cowen — “When can median income consumers afford the very best?”

Tyler offers a list of some of the items in the modern, market-oriented world that are as high-quality as such items get and yet are easily affordable to ordinary people. This list includes iPhones, books, and rutabagas. Indeed, this list includes nearly all foods for use in preparing home snacks and meals. I doubt very much that Bill Gates and Larry Ellison munch at home on foods — such as carrots, blueberries, peanuts, and scrambled eggs — that an ordinary American cannot easily afford to enjoy at home.

This list includes also non-prescription pain relievers, most other first-aid medicines and devices such as Band-Aids, and personal-hygiene products such as toothpaste, dental floss, and toilet paper. (I once saw a billionaire take two Bayer aspirin — the identical pain reliever that I use.) This list includes also gasoline and diesel. Probably also contact lenses.

A slightly different list can be drawn up in response to this question: When can median-income consumers afford products that, while not as high-quality as those versions that are bought by the super-rich, are nevertheless virtually indistinguishable — because they are quite close in quality — to the naked eye from those versions bought by the super-rich?

On this list would be most clothing. For example, an ordinary American man can today afford a suit that, while it’s neither tailor-made nor of a fabric as fine as are suits that I suspect are worn by most billionaires, is nevertheless close enough in fit and fabric quality to be indistinguishable by the naked eye from expensive suits worn by billionaires. (I suspect that the same is true for women’s clothing, but I’m less expert on that topic.)

Ditto for shoes, underwear, haircuts, corrective eye-wear, collars for dogs and cats, pet food, household bath towels and “linens,” tableware and cutlery, automobile tires, hand tools, most household furniture, and wristwatches.

(You’d have to get physically very close to someone wearing a Patek Philippe — and you’d have to know what a Patek Philippe is — in order to determine that that person’s wristwatch is one that you, an ordinary American, can’t afford. And you could stare at that Patek Philippe for months without detecting any superiority that it might have over your quartz-powered Timex at keeping time.)

Coffee. Tea. Beer. Wine. (There is available today a large selection of very good wines at affordable prices. These wines almost never rise to the quality of Chateau Petrus, d’yquem, or the best Montrachets, but the differences are often quite small and barely distinguishable save by true connoisseurs.)

Indeed, the more one ponders this question relayed by Tyler, the more one suspects that the shorter list would be one drawn up in response to this question: When can high-income consumers afford what median-income consumers cannot?

Such a list, of course, would be far from empty. It would include private air travel, beachfront homes, regular vacations in Tahiti and Davos, private suites at sports arenas, luxury automobiles, rooms at the Ritz, original Picassos and Warhols. (It would, by the way, include also invitations to White House dinners and private lunches with rent-creating senators, governors, and mayors.)

But I’ll bet that this latter list would be shorter than one made up in response to the question relayed by Tyler combined with one drawn up in response to the question that I pose above in the third paragraph (call this list “the combined list”).

And whether shorter or not, what other germane characteristics might distinguish the items on this last list from the combined list?

A version of this post first appeared at Cafe Hayek.

Donald J. BoudreauxDonald J. Boudreaux

Donald Boudreaux is asenior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University and, a former FEE president.

Social Science and the Nuclear Family by Steven Horwitz

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The question of the importance of family structure, specifically marriage, is back in the limelight. Conservatives are promoting three papers that provide some strong evidence that children raised by married parents do better along a number of dimensions than those raised in other household forms.

For many commentators, this makes for a strong case against those who appear to claim that family structure has either a minimal effect or doesn’t matter at all. As someone who might well fall into that group, or at least appear to, I think there are several responses to these new studies, all of which can acknowledge the empirical evidence that being raised by two loving parents is better for kids than alternative family structures.

One side note: conservatives might wish to not use the term “family structure denialists” as Wilcox does in the link above.

Comparing a legitimate disagreement over empirical evidence and public policy to those who would deny the overwhelming evidence of the Holocaust is an unacceptable rhetorical move whether it comes from leftists speaking of “climate change deniers” or conservatives speaking of “family structure deniers.” The disagreements in both case are legitimate objects of intellectual discussion and the language of “denier” indicates a refusal to engage in good faith debate.

On the substance of this issue, the conservatives cheering these recent studies don’t always note that there are differences among single-parent households formed through: 1) the choice to have and raise a child by oneself; 2) death of a spouse; and 3) divorce. Each of these presents a different set of circumstances and tradeoffs that we might wish to consider when we think about the role of family structure.

The conservative defenders of the superiority of the two-parent family (and it’s presumably not just “two parents” but two parents of the opposite sex, which raises a whole other set of questions), might wish to disentangle the multiple reasons such a family structure might not be present. For example, the children of widows do better than those of women who choose not to marry the fathers of their children, and the children of widows have outcomes that look more like those of kids from two-parent families.

The empirical evidence under discussion has to be understood with an “all else equal” condition. A healthy marriage will indeed produce better outcomes than, say, single motherhood. But there is equally strong social scientific evidence about the harm done to children who are raised in high-conflict households. Those children may well be better off if their parents get divorced and they are raised in two single-parent households with less conflict.

When parents in high-conflict marriages split up, the reduction in their stress levels, especially for women, leads to improved relationships with their children and better outcomes for the kids. In general, comparisons of different types of family structures must avoid the “Nirvana Fallacy” by not comparing an idealized vision of married parenthood with a more realistic perspective on single parenthood. The choices facing couples in the real world are always about comparing imperfect alternatives.

In addition, to say that married parents create “better” outcomes for kids does not mean that other family forms don’t produce “acceptable” outcomes for kids. It’s not as if every child raised by a single mother, whether through divorce, widowhood, or simply not marrying the father, is condemned to poverty or a life of crime.

Averages are averages. Though these three recent studies do continue to confirm the existing literature’s consensus that marriage is “better” for kids, there is still much debate over how much better those outcomes are, and especially whether other family structures are or are not sufficient to raise functional adults.

And this leads to the next point, which is that parents matter too.

The focus of the “family structure matters” crowd is almost exclusively on the outcomes for kids. That parents matter too is most obvious with divorce, where leaving a bad marriage may be extremely valuable for mom and/or dad, even if it leads to worse outcomes for the kids. The evidence from Stevenson and Wolfers that no-fault divorce has led to a decline in intimate partner violence, as well as suicides of married women, makes the importance of this point clear.

We can acknowledge that higher divorce rates have not been good for kids, but we can’t do single-entry moral bookkeeping. We have to include the effects of divorce on the married couple, because adults matter too. When we add this to the idea that conflict in marriage is bad for kids, the increased ease with which adults can get out of marriages, and the resulting single parenthood, is not so clearly a net problem when we consider the well-being of both children and adults.

These calculations are complicated and idiosyncratic, which seems to suggest that they should be left to those with the best knowledge of the situation and not artificially encouraged or discouraged by public policy.

This last point raises the final question, which is what do these studies mean for public policy?

If two-parent families are better than the alternatives, what does this imply? Are conservatives suggesting that we subsidize couples who have kids? Should that apply to only biological parents and not adoptive ones? Isn’t this a case for same-sex marriage? Should we make divorce more difficult, and if so, what about the probable result that doing so would reduce the number of marriages by increasing the cost of exit?

I would certainly agree that we should stop subsidizing single-parenthood through various government programs, but I’d make the same argument about two-parent families as well. In any case, what’s not clear is what the conservatives trumpeting these studies think they mean for public policy.

Perhaps, though, they think the solutions are cultural. If conservatives wish to argue that these studies mean that we should use moral suasion and intermediary institutions such as houses of worship to encourage people to marry and stay married if they wish to have kids, or that we should encourage young people to use contraception and think more carefully about when and with whom they have sex, that’s fine. And in fact, teen pregnancies are down.

But if intermediary institutions can do all of that, then they can also play a key role in helping single parents who make the difficult decision to divorce or continue a pregnancy in the complicated circumstances of their lives. Such institutions will also likely do that more effectively than can the state.

So if we are genuinely concerned about single parenthood, we should be asking what are the best ways to deal with it. Libertarians like me might well agree with such conservatives if they think the solutions are cultural or should rest in the hands of such intermediate institutions. But if they think there are public policy solutions, particularly ones that limit or penalize the choices facing couples, I wish they would spell them out explicitly in the context of their discussions of these studies.

One last thought: It ill-serves libertarians to deny the results of good science and social science, whether it’s climate change from the left or family structure from the right. We should, of course, critically interrogate that work to make sure that it is, in fact, good. But if it is good, we should welcome it as we should first be concerned with the truth and not our ideological priors.

The next questions we should ask, however, are about the implications. In the case of these recent studies on family structure, it is incumbent upon us to assess both the quality of the work and its implications, and we should pay particular attention to what is not being seen and what questions are not being asked.

Just because one family structure is better for children all else equal means neither that other family structures aren’t good enough for kids, nor that all else is always equal, nor that we shouldn’t consider the well-being of adults when we discuss the consequences of alternative family structures.

This post first appeared at the excellent philosophy blog Bleeding Heart Libertarians.

Steven Horwitz
Steven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Microfoundations and Macroeconomics: An Austrian Perspective, now in paperback.

Bernie Sanders and the Fixed Pie Fallacy by Chelsea German

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“The rich are getting richer and the poor are getting poorer.” Senator Bernie Sanders first said those words in 1974 and has been repeating them ever since.

Senator Sanders is not alone in his belief. Three out of four Americans agree with the statement, “Today it’s really true that the rich just get richer while the poor get poorer.”

Senator Sanders is half right: the rich are getting richer. However, his assertion that the poor are becoming poorer is incorrect. The poor are becoming richer as well.

Economist Gary Burtless of the Brookings Institute showed that between 1979 and 2010, the real (inflation-adjusted) after-tax income of the top 1% of U.S. income-earners grew by an impressive 202%.

He also showed that the real after-tax income of the bottom fifth of income-earners grew by 49%. All groups made real income gains. While the rich are making gains at a faster pace, both the rich and the poor are in fact becoming richer.

label

In addition to these measurable real income gains, decreases in prices have given the poor increased purchasing power, helping to raise living standards for the worst off in society. As a result of falling prices such as for groceries and material goods, along with gains in real income, Americans have more income left after basic expenses.

Technology has also become cheaper, improving our lives in unexpected ways. For example, consider the spread of cell phones. There was a time when only the wealthiest Americans could afford one. Today, over 98% of Americans have a cellular subscription, and the rise of smart phones has made these devices more useful than ever.

Unfortunately, progress has been uneven. In those areas of the economy where competition is hobbled, such as education, housing, and healthcare, prices continue to increase.

Still, the percentage of the population classified as living in relative poverty has decreased over time. Why then do three quarters of Americans, including Senator Sanders, believe that the poor are “getting poorer?”

A simple logical error underlies Sanders’ belief. If we assume that wealth is a fixed pie, then the more slices the rich get, the fewer are left over for the poor. In other words, people can only better themselves at the expense of others. In the world of the fixed pie, if we observe the rich becoming richer, then it must be because other people are becoming poorer.

Fortunately, in the real world, the pie is not fixed. US GDP is growing, and it’s growing faster than the population.

Poverty remains a pressing issue, but Senator Sanders is incorrect when he says that the poor are becoming poorer. In the words of HumanProgress.org advisory board member Professor Deirdre McCloskey,

The rich got richer, true. But millions more have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, lower child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university, and respect.

This post first appeared at HumanProgress.org.

Chelsea German

Chelsea German

Chelsea German works at the Cato Institute as a Researcher and Managing Editor of HumanProgress.org.

Pope Francis’s Graph of the Day by Ian Vásquez

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As the Argentine Pope, ever critical of capitalism, visits the United States, my colleagues at HumanProgress.org have posted this graph.

pope graph

It shows that in 1896, income per person in the United States and Argentina, two of the richest countries in the world, was about identical. Argentina subsequently eschewed the free market, replacing it with trade protectionism and other corporatist policies intended to help the poor by redistributing wealth. By 2010, Argentine income was a third of that of the United States.

Perhaps Pope Francis doesn’t endorse Argentine economic policies, but having just arrived from Cuba, he missed an opportunity to denounce the lack of freedoms that have kept that island and other Latin American countries poor and repressed. He met with none of the many admirable Cuban dissidents, in or out of prison, who have been peacefully advocating basic rights. Nor did he mention the plight of the Cuban people they represent, even as authorities arrested or detained 250 Cuban activists during his visit.

The Cuban Forum for Rights and Liberties (Foro por los Derechos y Libertades), an independent group of dissidents in Cuba, summed up how it felt about, and experienced, the Pope’s visit. It read, in part:

We human rights activists, regime opponents and independent journalists have experienced days full of threats, harassment, telephone connections being cut off, homes besieged by the authorities, and violent, arbitrary arrests.

The behavior of the regime was expected. However, the position of the church has been surprising.

The exaggerated and repeated shows of approval of the dictatorship, the silence toward its excesses, and the refusal to hear dissident voices have created broad discontent among Cuban believers and non-believers both within and outside of the island.

The group might have added that the disappointment has spread more widely in the Americas.

This post first appeared at Cato.org.

Ian Vásquez

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VIDEO: Why Wouldn’t You Save a Drowning Child? by Matt Zwolinski

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Would you lose $500 to save a drowning child? We explore a thought experiment that just may save someone’s life.

Imagine you’re walking to work in the morning down a quiet rural road to the side of the road there’s a pond and pass by every day. Only today, something is different. Today you see a small child in that pond.

He is alone, he’s flailing his arms, and if you don’t act quickly it looks like he is going to drown. Luckily, the pond is shallow. You can wade in, grab the child, and bring him to safety without putting yourself in any danger at all.

Unluckily, you’re wearing a very expensive set of clothes, and there just isn’t enough time to take them off. So even though saving the child is perfectly safe, it is going to cost you at least $500 to replace your suit and shoes. There’s no one else around, so the decision is yours alone to make.

Do you wade in, save the child, and ruin your expensive clothes? Or do you decide that $500 just too high a price to pay for the life of someone you don’t even know and walk on by.

If you’re like most people, the answer is obvious. Of course you save the child. Anyone that would would let us small child die just to keep their nice clothes from getting wet would be a moral monster. As peter singer, the philosopher who originated this drowning child thought experiment argued, if you had the power to prevent something really bad from happening to someone else just by suffering something merely slightly bad yourself, then “taking the hit” is the right thing to do.

Now of course most of us will never come across a drowning child on her way to work but all of us do find ourselves living in a world where over six million children die each year from preventable causes. And while none of us have the power to help all of those children, almost all of us have the power to help some of them. By donating a small amount of money much less than $500 to an effective charity through a site like GiveWell.org, you could literally save someone’s life. But that brings up another question.

How do we make sure aid efforts do the most good and the least harm?

Matt Zwolinski
Matt Zwolinski

Matt Zwolinski is an Associate Professor of Philosophy at the University of San Diego. He is also a co-director of USD’s Institute for Law and Philosophy, a member of the editorial board of Business Ethics Quarterly, and a blogger for Bleeding Heart Libertarians.

The Pope’s Misplaced Focus

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Pope John Francis’ upcoming visit to the U.S. is generating quite a bit of excitement here, especially among his Catholic faithful.  But for me and many others, his visit is generating consternation, not excitement.

Usually, most people tend to have great respect and affection for the Pope.  He is usually viewed by the public as a beacon of moral guidance, even for those who are non-Catholics.  This is definitely a view I once had of previous Popes.

But I must admit that my respect for this current Pope, John Francis is somewhat diminished.

I am totally confused by his constant advocating for policies that goes against the Catholic Church’s own teachings.  On the issue of homosexuality his position is, “Who are we to judge?”  Though church doctrine is very clear on this issue.

He is a fanatical supporter of open borders; in his view people have an inherent right to enter illegally into any country they choose as long as the ends justify the means.

He rabidly promotes theories in support of global warming, despite the fact that he is one of the biggest contributors to it.  When the Pope travels, he normally charters an Alitalia A320 jet.  It is estimated that the pope travels about 100,000 miles per year.  So this means based on the type of plane the Pope flies, he emits 20 pounds of CO2 for every mile of flight which is 2,000,000 pounds a year.

Every denomination has their own precepts that their members must abide by.  Likewise, nations have laws that their citizens or visitors must abide by.

Poverty or wanting a better life is not sufficient reason for people to break our laws to enter into our country.  The Pope expects Catholics to abide by the rules of Catholicism; so why should America expect anything less from those who seek entry into our country?

So, by the Pope’s standard I, as a Baptist, should still be able to participate in all things Catholic; even though I don’t adhere to Catholicism.

The Pope, in many ways, is operating just like Obama is in the U.S.  They both are picking and choosing which rules and laws they want to abide by.

Forgive me for not being able to get beyond the fact that the Pope has spent very little time dealing with the child abuse that has taken place in his church; but yet he seems to have plenty of time to meet with illegals, homosexuals and promote global warming

Am I the only one who finds it offensive that the Pope will be meeting with some of those in the U.S. illegally, but will not be meeting with families that have had family members killed, raped, or maimed by illegals?

Am I the only one who finds it offensive that the Pope will not be meeting with any of the victims of sexual abuse from within the Catholic Church?

Am I the only one who finds it offensive that the Pope constantly talks about income inequality and the need for employers to pay their employees more money; but he has never discussed what is the obligation of employees to their employers (more productivity and more efficiency, etc.)?

The Pope should not be aligned to a political agenda, but rather what is right or wrong.

America has no moral obligation to allow those who enter our country illegally to stay in our country no more so than the Pope allowing someone who refuses to abide by the rules of Catholicism should be allowed to say they are a member of the Catholic Church.

Furthermore, the Bible is very clear, a man’s first responsibility is for the well being of his family, not his neighbor’s family.

The Pope seems to be on a global tour to promote an entitlement agenda as opposed to being a beacon for right and wrong.  Even if you are poor and downtrodden, you still are responsible for being responsible.

Many of the illegals coming to the U.S. are having children that they can’t afford to provide for.  How many speeches has the Pope given on individual responsibility?

How many speeches has the Pope given on the need to fire and prosecute every priest that has molested or covered up sexual abuse of kids in the Catholic Church?

How many speeches has the Pope given about what are an employee’s obligations to his employer?

I really believe the Pope’s heart is in the right place, but the issues he is focusing on should be subservient to the more critical issues listed above.

I definitely think the church can and should play a constructive role in our society, especially to those who are in need.  In many respects, I think the faith community is better equipped to deal with a lot of the social ills of our society than our government is.

But the Pope cannot shine the light on my darkness until he is first willing to shine the light on his on darkness.  Until then, the Pope’s moral compass is pointing in the wrong direction.

Environmental Doom-mongering and the Myth of Vanishing Resources by Chelsea German

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Media outlets ranging from Newsweek and Time, to National Geographic and even the Weather Channel, all recently ran articles on the so-called “Overshoot Day,” which is defined by its official website as the day of the year

When humanity’s annual demand for the goods and services that our land and seas can provide — fruits and vegetables, meat, fish, wood, cotton for clothing, and carbon dioxide absorption — exceeds what Earth’s ecosystems can renew in a year.

This year, the world allegedly reached the Overshoot Day on August 13th. Overshoot Day’s proponents claim that, having used up our ecological “budget” for the year and entered into “deficit spending,” all consumption after August 13th is unsustainable.

Let’s look at the data concerning resources that, according to Overshoot Day’s definition, we are consuming unsustainably. (We’ll leave aside carbon dioxide absorption — as that issue is more complex — and focus on all the other resources).

Fruits and vegetables

Since millions of people rose from extreme poverty and starvation over the past few decades, the world is consuming more fruits and vegetables than before. We are also producing more fruits and vegetables per person than before. That is, partly, because of increasing yields, which allow us to extract more food from less land. Consider vegetable yields:

Meat and fish

As people in developing countries grow richer, they consume more protein (i.e., meat). The supply of meat and fish per person is rising to meet the increased demand, just as with fruits and vegetables. Overall dietary supply adequacy is, therefore, increasing.

Wood

It is true that the world is losing forest area, but there is cause for optimism. The United States has more forest area today than it did in 1990.

As Ronald Bailey says in his new book The End of Doom, “In fact, except in the cases of India and Brazil, globally the forests of the world have increased by about 2 percent since 1990.”

As the people of India and Brazil grow wealthier and as new forest-sparing technologies spread, those countries will likely follow suit. To quote Jesse H. Ausubel:

Fortunately, the twentieth century witnessed the start of a “Great Restoration” of the world’s forests. Efficient farmers and foresters are learning to spare forestland by growing more food and fiber in ever-smaller areas. Meanwhile, increased use of metals, plastics, and electricity has eased the need for timber. And recycling has cut the amount of virgin wood pulped into paper.

Although the size and wealth of the human population has shot up, the area of farm and forestland that must be dedicated to feed, heat, and house this population is shrinking. Slowly, trees can return to the liberated land.

Cotton

Cotton yields are also increasing — as is the case with so many other crops. Not only does this mean that we will not “run out” of cotton (as the Overshoot Day proponents might have you believe), but it also means consumers can buy cheaper clothing.

Please consider the graph below, showing U.S. cotton yields rising and cotton prices falling.

While it is true that humankind is consuming more, innovations such as GMOs and synthetic fertilizers are also allowing us to produce more. Predictions of natural resource depletion are not new.

Consider the famous bet between the environmentalist Paul Ehrlich and economist Julian Simon: Ehrlich bet that the prices of five essential metals would rise as the metals became scarcer, exhausted by the needs of a growing population. Simon bet that human ingenuity would rise to the challenge of growing demand, and that the metals would decrease in price over time. Simon and human ingenuity won in the end. (Later, the prices of many metals and minerals did increase, as rapidly developing countries drove up demand, but those prices are starting to come back down again).

To date, humankind has never exhausted a single natural resource. To learn more about why predictions of doom are often exaggerated, consider watching Cato’s recent book forum, The End of Doom.

A version of this post first appeared at Cato.org.

Chelsea German

Chelsea German

Chelsea German works at the Cato Institute as a Researcher and Managing Editor of HumanProgress.org.

RELATED ARTICLE: EPA’s Hightest Paid Employee, “Climate Change Expert,” Sentenced to 32 Months for Fraud, Says Lying Was a ‘Rush’

How Minimum Wages Discourage Entrepreneurship by Donald J. Boudreaux

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In a letter to the Wall Street Journal, Brian Collins asks, “Do you truly believe that absent any increase in the minimum wage that Wendy’s or any other business will suspend efforts to develop and implement new forms of automation that promise to reduce staff levels?”

The answer is “no.” Contrary to Mr. Collins’s implication, however, this fact does nothing to excuse raising the minimum wage.

Even in a world in which market forces naturally promote automation, raising the minimum wage has two pernicious effects.

First, it causes the rate of automation to be faster than it would be if the minimum wage were not raised. That is, raising the minimum wage results in automation being introduced at a rate that is too fast given the size of the low-skilled labor force.

Second, raising the minimum wage destroys incentives for entrepreneurs and businesses to find ways to profitably employ workers whose limited skills prevent them from producing hourly outputs valued at least as high as the minimum wage.

The first effect throws some low-skilled workers out of jobs that they would otherwise retain, while the second effect ensures that no one has incentives to find ways to profitably employ these and other low-skilled workers.

If it is inhumane to outlaw the profitable employment of those workers whose skills are the least valuable, then the minimum wage is deeply inhumane.

If the government instituted a minimum wage of $100 per hour and, therefore, made unlawful the profitable employment of all those people whose skills are too meager to enable them to produce at least $100 worth of output per hour, there would be a national uproar — and rightly so.

Yet when the government implements such a policy but in a way that outlaws the profitable employment only of people whose skill-sets are among thelowest, relatively few people object and many people — especially “Progressives” — applaud the policy as humane.

How sad. And how especially sad that many economists today, who above all should know better, lend their authority to such an inhumane policy.

A version of this letter first appeared at Café Hayek.

Donald J. Boudreaux
Donald J. Boudreaux

Donald Boudreaux is a professor of economics at George Mason University, a former FEE president, and the author of Hypocrites and Half-Wits.