Inequality

Obama has described this as the defining issue of our age. I thought the chattering classes believed it was anthropogenic global warming.

Suppose you were to inform me about some major problem in the world, say Malaria. You give me statistics about incidence of the disease, about mortality rates, about the nastiness of Malaria and I shrug and smirk, “I don’t care”. You would have reason to think that you were dealing with a pretty unpleasant person. You would be right. Likewise, if you were telling me about suicide bombings or beheadings or about people whose diet was life-threateningly bad. Your contempt for me would be entirely justified.

This isn’t going to happen – because I do care about these things.

OK, start again. Suppose you had written a best-selling book about the iniquity of inequality or even won a Nobel Prize for researching the pernicious effects of income inequality. I shrug and smirk and say, “I don’t care.” You tell me that some bosses earn more than 100 times as much as people they employ. “Don’t care.”

If you tell me that A does not earn enough to keep body and soul together, I will want to know if he is to blame, if he is too indolent to look after himself. If not, I will care. I will want a state safety net or private charity to provide for him or to help him get on his feet.

Another example: walking down Deansgate, I encounter a stunningly beautiful young woman. A few yards later I encounter another young woman; she is decidedly plain. Do I start hyperventilating about the injustice? Do I throw battery acid in the face of the beauty? Of course not. I wouldn’t do anything. I might approve of the plain girl losing some weight or being given some tips about skincare.

In other words, provided B has not robbed C, it is never right to disadvantage B simply to reduce the inequality between him and C.

Joseph Stiglitz has written a book about inequality and has won a Nobel Prize for his ‘thinking’. Wilkinson and Pickett have written a really nasty book, The Spirit Level purporting to show that more ‘equal’ societies are ‘better’ in every way than less ‘equal’ societies. And there is Thomas Picketty who also obsesses on this theme.

X and Y are unequal in some way. X is better, luckier, prettier, richer, brighter, happier, more talented than Y. It is almost always more difficult to bring Y up to X’s level than to bring X down: battery acid, a bang on the head, progressive taxation, which is always what the ‘equalists’ choose.

I am ugly and you are handsome. I am poor and you are rich. Let’s tax and mutilate you. Voila!

Leftists bang on incessantly about fairness. They have a definition of fairness which I do not understand.

In most democracies we have ‘progressive’ income tax. For me all taxes are iffy. But a tax which takes proportionately more from one group than from another is, by definition, unfair. 10% from everyone might be justified (it has scriptural support); but 10% from poor people and 40% from rich people is self-evidently wicked. Even more wicked was the ancient regime whereby the poor paid all the tax.

Income tax is bad enough but many leftists want ‘wealth’ taxes, which simply siphon money from those who have.

These nasty equalists base their political economy upon flouting the commandment against covetousness. If I have sufficient (and let’s face it, most English people have more than a sufficiency) why should it matter that my neighbour has more, even much more?

  

Executive Pay – And Then What Will Happen?

The news is full of the differential between CEOs’ remuneration and average salaries. Apparently, the best paid bosses of the biggest companies earn in the region of 180 times the average salaries of workers in these companies. It is a big difference. Perhaps Charles Murray would regard it as unseemly.

However, wages, salaries and, for that matter, all prices are simply a signal of what the market will bear. Shareholders cheerfully award what you might think are excessively generous packages to executives who, in their opinion, massively increase the value of their holdings. And who is to say that they are wrong to do so? Not you! In fact there is no defensible principle on which you can say that they are wrong. None!

Presumably, these shareholders (like all purchasers) would like to pay less than the £4.9M which the top bosses get. But they reckon that without these fabulous salaries they would not get the top bosses. They reckon that for a lower salary they would only get executives of the second, third, or fourth rank – someone who could increase the bottom line by only millions, rather than billions.

They are acting in what they perceive to be their own best interests. We all expect to be allowed to do that. They actually believe that by paying less they would be worse off. Who can say they should be forced to do so?

Suppose you took it into your head to build a house. One consideration would be the market value of the completed edifice. Your resources make it possible for you to choose between hundreds of architects. A quotes you a fee of £X pounds. His reputation and track record suggest that the value of your house would be very substantial. His nearest competitor (B) quotes you a lesser figure of £Y but his reputation and track record suggest that the value of your house would be much less substantial. By what principle should you be compelled to prefer B over A? The question answers itself.

What will guide you is not a moral principle but your subjective (perhaps educated) estimated reading of the market. Every price is based on subjective estimates. Sometimes we agree to a price and subsequently regret having done so. Sometimes we rejoice in the purchase and even make a killing. The future is notoriously hard to predict.

To drag in the wages of bricklayers, carpenters and labourers is clearly an irrelevance when considering the architects fee. They have nothing to do with it. What you agree with the architect is not a moral question, provided that you do not rob or defraud third parties to acquire the means to pay him.

This brings us to a fundamental question: is Economics about morality? No. Economics is about consequences. The question can be framed thus: And then what will happen?

Sickeningly, governments are all too eager to get involved with citizens’ economic decisions. Governmental interference distorts markets. Tax something and you will get less of it; subsidise something and you will get more of it. That is the sort of lesson that Economics teaches. Incidentally, taxing and subsidising both involve government interference, sometimes simultaneously – tax work and people will work less (axiomatic); subsidise bastardy and you will get more of it (axiomatic).

Why are the BBC and Co making such a song and dance about Executive pay? Because they find the differentials distasteful. In their pusillanimous view, something should be done. We have shown (definitively) that their distaste is an irrelevance. Shareholders must be allowed to agree whatever packages seem best to them. They must be allowed to act in what they perceive to be their own interests. The salary of a secretary or the wage of a cleaner is not the benchmark for the remuneration of a CEO. On the contrary, a hugely successful CEO, who grows the company, may well thereby increase the provision of jobs for secretaries and cleaners.

Lest you should think that I am not interested in moral questions, let me remind you that the 10 commandments are very clear about covetousness: do not do it!

In the 60s or 70s there was a character known as ‘super hod’. He was a hod carrier who went to work in a Rolls Royce. Though unskilled, but very energetic, he could supply a more than usually large number of bricklayers with the bricks and mortar they needed to do their job. Imagine the outcry if his employers had been forced to pay him no more than ordinary hod carriers.

Been Thinking about Global Warming Hysteria – Again

The Earth is about 4 billion years old. A lot has happened. Continents have slid around. Mountain ranges have emerged. Sheets of ice miles thick have periodically covered vast areas and then retreated. The atmosphere has fluctuated: sometimes more carbon dioxide, sometimes less. Whole phyla of animals have emerged. Many species of plants and animals have appeared and disappeared. It has been a turbulent 4 billion years. Every change has had a cause. Some causes can be guessed at. When it comes to long past events, we can speculate. We do have evidence of cyclical variations of temperature and atmosphere. Sometimes high concentrations of CO₂ have coincided with high temperatures, sometimes with ice ages. The rest of the solar system affects our earth. The moon drags the oceans around and gives us tides. The activity of the sun (in the form of sun spots) correlates with weather, crop yields and stock market prices. Lots of things change. One change affects other phenomenon.

A series of causes (about which we can speculate) rendered the Earth in the seventeenth and eighteenth centuries relatively colder than it had been. This was BAD news for people at the time. Food was harder to grow and fuel to maintain life became more expensive. History tells us that during the ‘Roman Warm Period’ and the ‘Medieval Warm Period’ European civilisation flourished. Food was relatively plentiful. Winters were lethal to relatively few.

A few decades ago some scientists speculated that we were due for another cold period. This was, indeed, a cause for some alarm. The prospect of ice fairs on the Thames did not compensate for the prospect of rising food prices. Fears of another ice age were credible – ice ages had happened before.

All of a sudden two things happened. We observed that the average temperature of the Earth had risen since the eighteenth century by a fraction of a degree Centigrade – what a relief. We also remembered that scientists had told us that certain elements of the atmosphere (most notably water vapour) had the effect of trapping heat. One of these elements was CO₂, a tiny proportion of our atmosphere (0.04%). It was/is true that human beings contribute to the carbon dioxide in the atmosphere, perhaps as much as 3% – the rest comes from volcanoes and other natural causes.

A third thing happened. Governments around the world took it into their heads that because human beings contribute some carbon dioxide to the atmosphere and that there had been some warming since the Little Ice Age of the eighteenth century, we were frying the Earth. This conclusion is unwarranted. The Earth would eventually resemble Venus, whose atmospheric temperature is more than 100^o C. In the meantime oceans would rise and engulf low lying regions.

Al Gore’s absurd movie, An Inconvenient Truth, contained a graphic demonstrating a correlation between CO₂ and temperature. It exists but the graphic also demonstrated that increases in temperature characteristically preceded rises in CO₂.

In view of the fact that weather is so fantastically complex that forecasts about winds and rain and sunshine and temperature more than a few days in the future are impossible, the policy recommendations of these politicians were reckless in the extreme. We were to cut back on the exploitation of hydrocarbons, whose cheapness and abundance had enabled the western world to achieve unprecedented levels of prosperity and wellbeing, and to deny these benefits to the underdeveloped nations.

We may compare the alarmist ‘scientists’ with an astronomer whose preferred tool is a microscope.

If it were the case that temperatures were rising dramatically and that the effects in terms of sea levels were causing havoc and loss of life, we would have serious reasons for investigating the causes and for contemplating policies (if any were available) to mitigate the problem. The fact is that the increase has been on the order of 0.6^o C over the past century or so – an increase which would have been regarded as benign (if niggardly) by those alive in the eighteenth century. In the real world, climate changes as a result of the sun’s behaviour, about which we can do nothing. When, as is virtually certain, the global average temperature takes another dip, we want our economies to be as robust as possible, to facilitate adaptation. Shutting down industrial civilisation is the very last thing we should be doing – suicidal, in fact.

Fracking in Lancashire

15 councillors in Preston have kyboshed fracking in one of the proposed sites on the grounds that the local roads cannot handle the traffic that would be involved. Not a triumph, I think, for the bedwetters, but evidence of the pusillanimity of the council.

No one has ever been killed by fracking, unlike all other forms of energy production. We have perfectly serviceable laws to protect the public against adverse effects of hydraulic fracturing. Does anyone doubt that there would be massive (that is to say, colossal, immense, enormous) resources available to any citizen of Lancashire who could make a half-way decent case that they or their property had been harmed by the process.

On the plus side, fracking will reduce energy costs and the cost of living of those in Lancashire. Lowered energy costs will increase employment. Indigenous supplies of energy will reduce our dependence on overseas suppliers, not (characteristically) good guys.

On the minus side, it is conceivable that aquifers will be marginally contaminated. Any one adversely affected will have the law to forbid continued fracking or to award compensation. As for seismic effects, tremors caused by fracking have been compared to dropping a bag of sugar on the floor or to a bus passing your house.

Given the chance to vote, I would abolish valve and bypass surgery before prohibiting fracking. Presumably, this is because I hate Mother Earth. Actually, no. The earth is God’s creation and we have a duty to protect the environment. The anti-fracking activists are, to a person, leftist in their thinking. They hate industry and markets, the source of our astonishing material wellbeing. They claim to care about the poor. They lie. If this technology were allowed to spread and develop, the benefits to third world countries would be spectacular. Women and children who die of respiratory diseases caused by burning wood and dung would enjoy the benefits of electricity which we enjoy and which are too numerous to mention. Clean air and water are far more plentiful in ‘capitalist’ countries.

If you hate humanity (and many 'environmentalists' do; humanity is a cancer, they say), vote against fracking. If you are in favour of ‘human flourishing’, support it with every fibre of your being.

Have you ever heard of Neodymium? It is crucial to wind farms. Most of it comes from China. Its extraction and processing is literally deadly. Wind farms kill birds and bats in huge numbers. I could live with this if the f**king things actually produced cheap, ‘sustainable’ energy. Every wind farm (because the wind either blows too hard or not hard enough) requires back-up power stations: gas or coal.

My rage against the greens leaves me gasping: is it because they are so stupid or so evil? They are both.

Capitalism

Karl Marx Was Right

This is one of many Intelligence Squared debates on YouTube. There were some interesting points made – by those opposing the above motion. To stand up and declare that ‘Marx was Right’ is exactly analogous to declaring that Paul Ehrlich was right. PE is the word champion of being wrong about everything. The UK, according to him would have ceased to exist some thirty years ago. Industrialised societies should have perished from starvation. He continues to publish and to be lionised by the bedwetters.

The debaters were agreed on one thing: Marx admired Capitalism. He thought that it was but one step on the road to Communism. Communism is, to all intents and purposes, dead. Marxism, regrettably, survives.

Interestingly, Marxism defines itself with respect to Capitalism. This is a big mistake. Capitalism is not an ideology – it cannot have internal contradictions. Free market apologists did not invent Capitalism. We simply wish to see the state cease to intervene in normal, natural interactions between human beings. Marx was wrong about everything. At the time he was writing, predicting that wages would fall, wages were rising.

When leftist progressives attack what they call capitalism, they always get it wrong. They allege that bail-outs to banks are in some way capitalistic. Bankruptcy is capitalistic. RBS and Lloyds were bailed out by the f**king government. Our government took money (looted from us) to cushion gamblers who had made bad bets. Free market thinkers may have sympathised with those who made mistakes. Speaking for myself, sympathy is as far as we go. In every business (and I speak from experience), you make good decisions (which are and deserve to be rewarded) or you make bad decisions (which are and deserve to be punished). RBS and Lloyds should have been allowed to take the bankruptcy route – particularly in view of the fact that our banking system allows banks to create money out of thin air.

Let’s hear it for bankruptcy! A business fails; someone else buys the assets and (maybe) makes it work.

This is not an economic ideology. Leftists simply do not understand free markets.

The big division is between those who see the world as it is and those who have a conception of the world as they would like it to be.

Families of Ideas

This is one of my themes. I think it is fairly uncontroversial. An atheist, a socialist or a warmist would, I think, agree that, for example, if you take a position on subject A, it is (to some extent) predictive of your position on subject B. I hope you think that this is interesting – and a bit baffling. You tell me that, in your opinion, inequality is the major issue facing our society. Ladbrooks would give me lousy odds on correctly guessing your view on global warming. What on earth have the two to do with each other? Not a lot – superficially. If I were a confrontational sort of bloke, I might argue that stupid people have stupid opinions. Actually, this is what I think. I don’t think, though, that that would be worth blogging about. Atheists and socialists think the same.

I have been listening this afternoon to Phillip Johnson arguing against Richard Dawkins. He believes that RD takes the position he does on ‘Darwinism’ because of his world view. Dawkins gives support to this belief: he claims that Darwinism makes it possible to be ‘an intellectually fulfilled atheist’ – and that is what he wants to be. He is grateful to Darwin. Good luck to him.

Suppose I were in his camp. I would believe that space, time, matter and energy were all that exist. The surprising existence of ‘complicated beings that give the appearance of having been designed for a purpose’ have to be explained in terms of space, time, matter and energy and nothing else. The Neo-Darwinists give this their best shot. Purpose is ruled out from the beginning. Any ‘apparent’ evidence of purpose or design is (by definition) illusory. QED! Having thus defined the rules of the game, I cannot lose.

I am not in his camp. There have been two camps in European intellectual history. One camp maintains that ultimate reality is matter; the other that ultimate reality is mind. The former is the tyro. For much more than two thousand years everyone believed the latter. Did I just happen to be born into camp two?

The use of the word ‘liberal’ is interesting and perhaps instructive. One meaning is ‘generous’. We like generosity; we like to be thought liberal. How comes it that in the USA political opinions are broadly categorised as liberal or conservative? It drives conservatives and (particularly) libertarians crazy that someone like Obama is called liberal. What is liberal, they ask, about compelling people to take out health insurance? What is liberal about prosecuting people for refusing to bake a cake for a same-sex marriage? What is liberal about progressive taxation, whereby the wealthy pay not just more but a higher proportion of their income? What is liberal about politically correct so-called speech codes in universities? ‘Oppressive’ would seem a more appropriate word. Leftism, statism and ‘progressivism’ have been violently oppressive in the last hundred years. Pol Pot, the Cambodian dictator, achieved the remarkable feat of murdering one third of the people in his country, sometimes for the crime of wearing spectacles – I am committing a capital crime at this very moment. Of course, Mao, Stalin and Hitler each killed more in absolute terms than PP; but proportionately he wins the gold medal.

Multiculturalism is a ‘liberal’ agenda, as is feminism. Feminists and multiculturalists find it difficult to be critical of FGM and ‘honour’ killings. To my mind, it is hard to identify practices more illiberal than these.

The issue of AGM divides people. Alarmists are frequently to be found on the ‘liberal’ left. Some have called for the imprisonment of ‘deniers’. Prison for finding the alarmist case unconvincing?

For sure, there have been cases of people who have rejected one set of beliefs and embraced another. I am comforted by the apparent fact that progressives are more likely to become libertarians or conservatives than vice versa. David Horowitz is a dramatic example. Brought up by card-carrying Marxists to be a hard-core leftist, he now espouses conservative views and campaigns for free speech on US campuses.

I have seen dozens of videos in which so-called liberals have attempted silence him (and other conservatives) by noisy demonstrations.

Why is it that conservatives and libertarians are much more likely to support Israel and that ‘liberals’ are likely to accuse Israel of genocide? Why do so-called progressives energetically campaign for the right to abort a baby for the crime of being inconvenient to the mother? Protecting the weak is surely as clear cut a moral obligation as exists.

For the record (and to nobody’s surprise), I am a libertarian conservative. I strongly support free markets and free speech. I strongly support Israelis in their resistance those who would destroy their country. I think that AGM is a crock and that policies designed to de-industrialise the west and to deny industrialisation to the developing world are wrong-headed at best and wicked at worst.

Personal Stuff (continued)

I am informed by Manchester Royal Infirmary that they want me in to a pre-admission clinic on 24^th of June. Surgery is scheduled for 29^th or 30^th.

A man is coming tomorrow to rip out the bath and install a walk-in shower. My ablutions will then be much easier.

Wish me well!

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By tomorrow I hope to have a functioning shower cubicle. I will just walk into it, instead of climbing! They will restore the ‘grab rails’. TBTG.