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The Difference Between Florence Alabama and Florence Italy

Jeff Jacoby climate denier

Inequality in American Life is not as easy to measure as you would think and probably even more difficult to make relevant. The common solutions from the left point more to reducing the wealthy than raising the poor, as if the results will be the same.

While there is a point where inequality can affect social stability it is less relevant than economic growth and income mobility. I contend that the current obsession with inequality is a by product of lousy growth and ineffective growth policies

The big flaw in studying inequality is that it measures  groups, not individuals: individuals rise and fall and display more mobility than groups. America more than any other country celebrates the individuals. How it is measured is also critically important. What years you start and end, what is included in income, whether it is measured pre or after tax, whether transfer payments are included, whether it is adjusted for hours worked, and whether it measures individual or household income can greatly affect the measure of inequality. Not surprising many sources chose a measurement that exaggerates it.

Jeff  Jacoby addresses inequality in   Up and down — but mostly up — the income ladder

The 25th great-grandsons of medieval Florentine shoemakers and wool merchants may still be riding high, but things don’t work that way in America. Here, riches-to-rags stories are not uncommon. When Bhashkar Mazumder, an economist at the Federal Reserve Bank of Chicago, examined the earnings of thousands of men born between 1963 and 1968, he discovered that 17 percent of those whose fathers were in the top tenth of the income scale had dropped to the bottom third by the time they were in their late 20s or early 30s. Movement between income groups over the course of a lifetime is the norm for most Americans. The rich often get richer, but plenty of them get poorer, too. Though the top 1 percent makes a popular target, it’s actually a group no one stays in for very long. On the other hand, it’s a group that 11 percent of Americans will reach at some point during their working lives.

Affluence in America is dynamic, and our economic system is biased toward success. But bias isn’t a guarantee. Mobility — up and down — depends to a great degree on the choices that people make for themselves. Individuals who finish high school, marry before having children, don’t engage in criminal activity, and work diligently have a very high likelihood of achieving success. Those who don’t, don’t.

Of course, there are impediments to mobility that are beyond the control of any individual, and that are most likely to hurt those who start out in America’s poorest precincts. Broken public schools, for example. The normalization of single-parent households. Too-easy access to welfare benefits. Counterproductive mandates, like minimum-wage laws and stifling licensing rules. Would that our political demagogues and professional populists put as much effort into dismantling those barriers as they do into demonizing the rich and yapping about inequality.

Yappers notwithstanding, the American Dream is far from dead. This isn’t Florence. No one is locked out of economic success today because of their ancestors’ status long ago. America remains the land of opportunity. Make the most of it.

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A Flurry of Good Articles

hkoisrael

I think I am focused or fairly discriminating on what I post from other writers, but over the years I have gravitated toward only a few.  Kevin Williamson and Charles Cooke of National Review are two of the most used. National Review has a large stable with creative and original writer including Jonah Goldberg, David French and many others.

Jonah Goldberg wrote Liberal Fascism in 2008 and I recently reread it as I have focused most of my reading on the history and evolution of Progressivism.  I keep a copy of this book in a prominent spot in my library since the cover is so offensive to my liberal friends.

liberalfascism

Worthy articles that fit my filter seem spotty. I may not find anything for weeks and then there is a flurry of great pieces.

Deirdre McCloskey had a great piece in the weekend WSJ How the West Got Rich – It is excerpted and commented on a few posts away. It is  is adapted from her new book, “Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World,” on my reading queue.

Kevin Williamson has been on a roll his his recent piece Engineering Better Voters shows an independent writing style that takes conservative and progressive views to task.  Note: National Review changes or uses titles after initial postings –  something much easier to do online.

And Charles Cooke raised an issue with Trump that I have considered, but not in the articulate manner Cooke has- that Trump’s supreme irony may be that he may make the Progressives question the premise of a strong central government. Maybe the liberal may come to learn that the right’s concern with Obama’s use of power was not his race. Read Is Trump’s Rise Giving Progressives Second Thoughts? 

Some great reading recently with excerpts posted nearby.  Some of these articles are quite rich in content and difficult for me to cull into a short post. I encourage you to read the links in full

 

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When Ideas Start Having Sex

mccloskey

The internet gave rise to Google and Facebook. The iPhone gave rise to Uber. The ideologies are important only to the extent that they facilitated ideas. Our current development is less dependent on assets and physical capital than ideas. We grow in spite of institutions, not because of them. In fact many of the new ideas render our institutions increasingly irrelevant.

This is one of those articles rich with analysis and thus hard to excerpt- so please link to the whole article.

from the Wall Street Journal, Deirdre McCloskey writes How the West (and the Rest ) Got Rich-This essay is adapted from her new book, “Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World,” published by the University of Chicago Press.

What caused it? The usual explanations follow ideology. On the left, from Marx onward, the key is said to be exploitation. Capitalists after 1800 seized surplus value from their workers and invested it in dark, satanic mills. On the right, from the blessed Adam Smith onward, the trick was thought to be savings. The wild Highlanders could become as rich as the Dutch—“the highest degree of opulence,” as Smith put it in 1776—if they would merely save enough to accumulate capital (and stop stealing cattle from one another).

A recent extension of Smith’s claim, put forward by the late economics Nobelist Douglass North (and now embraced as orthodoxy by the World Bank) is that the real elixir is institutions. On this view, if you give a nation’s lawyers fine robes and white wigs, you will get something like English common law. Legislation will follow, corruption will vanish, and the nation will be carried by the accumulation of capital to the highest degree of opulence.

The capital became productive because of ideas for betterment—ideas enacted by a country carpenter or a boy telegrapher or a teenage Seattle computer whiz. As Matt Ridley put it in his book “The Rational Optimist” (2010), what happened over the past two centuries is that “ideas started having sex.” The idea of a railroad was a coupling of high-pressure steam engines with cars running on coal-mining rails. The idea for a lawn mower coupled a miniature gasoline engine with a miniature mechanical reaper. And so on, through every imaginable sort of invention. The coupling of ideas in the heads of the common people yielded an explosion of betterments.

Why did ideas so suddenly start having sex, there and then? Why did it all start at first in Holland about 1600 and then England about 1700 and then the North American colonies and England’s impoverished neighbor, Scotland, and then Belgium and northern France and the Rhineland?

The answer, in a word, is “liberty.” Liberated people, it turns out, are ingenious. Slaves, serfs, subordinated women, people frozen in a hierarchy of lords or bureaucrats are not. By certain accidents of European politics, having nothing to do with deep European virtue, more and more Europeans were liberated. From Luther’s reformation through the Dutch revolt against Spain after 1568 and England’s turmoil in the Civil War of the 1640s, down to the American and French revolutions, Europeans came to believe that common people should be liberated to have a go. You might call it: life, liberty and the pursuit of happiness.

To use another big concept, what came—slowly, imperfectly—was equality. It was not an equality of outcome, which might be labeled “French” in honor of Jean-Jacques Rousseau and Thomas Piketty. It was, so to speak, “Scottish,” in honor of David Hume and Adam Smith: equality before the law and equality of social dignity. It made people bold to pursue betterments on their own account. It was, as Smith put it, “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice.”

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A Totalitarian Impulse

Why has the left become so intolerant of dissent? The quality and the rationality of any position can be discerned by its tolerance for dissent. In a world of absolute truth there is no safe space, in a world of relative truth there is no room for dissent.- HO

from the Wall Street Journal, Progressivism’s Macroagressions by Michael Warren

Perhaps the fundamental difference between yesterday’s liberals and today’s postmodern progressives is each side’s conception of truth. Liberals believe truth is external and can be determined through reason. A good liberal uses his reason to achieve justice and equality for all. But postmodern progressives are moral relativists. For them, truth is internal, discerned by and specific to particular individuals. Today a good progressive defends the individual’s internal truth—particularly if the person is an “oppressed minority”—against all foes, including reason. Small wonder that the postmodern left has turned on its own.

The competition between individualized truths—“an unending conflict between identity tribes trying to capture the state for their own narrow group interests”—is what Mr. Holmes believes makes postmodern progressivism a cousin of radical libertarianism. But while radical libertarianism tends toward anarchy, postmodern leftism has a totalitarian impulse. The goal of a postmodern progressive isn’t universal truth, which supposedly doesn’t exist, but power, which is presented in the guise of equality and social justice. The left’s quest for power isn’t of the goose-stepping, arsenal-building kind employed by 20th-century dictators, Mr. Holmes takes great pains to insist. But, he allows, progressive liberals are “willing to dip into the totalitarians’ illiberal tool box.”

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Good Enough

from Martin Conrad at Barron’s; Finding the Path to Enrichment

Smith argued that man was an economic animal who, by his bargaining and exchanging in the marketplace, could benefit from the diverse talents and genius of all his fellow men. This led to his seminal theory that the most important source of wealth of a nation is not gold, silver, money currency, or even its land or natural resources, but “the skill, dexterity, and judgment” of its labor force.

We see this illustrated today by wealthy nations, such as Switzerland and Singapore, that possess modest amounts of land or natural resources but have grown rich by having educated, trained, productive labor forces.

Smith’s theories and observations also began the destruction of slavery, a universal institution throughout all of history. He destroyed the self-interest that motivated slavery by showing that economies based on it could not profitably compete with those based on a free, motivated, trained labor force.

These principles that enabled much of the world to escape its traditional Malthusian trap still show their power. In 1950 oil-rich Venezuela was more than three times as rich per capita as South Korea. Yet by 2011 this relation was nearly reversed as capitalist South Korea’s per capita GDP was nearly three times that of Hugo Chavez’s Venezuela, despite several years of $100-a-barrel oil.

This most practical, effective utopian philosopher has been so successful because his system works well with people — not as they morally should be, nor as he wanted them to be, but for people just as they are, which was good enough. Adam Smith described the way to harness intellectual capacity and instinctual ambition for the common good. We live and thrive today in mostly his world.