Recently, my friend James Gill and I began experimenting with video. We bought a high-quality DSLR camera (Canon Rebel T3i) and  have begun to learn its intricacies. We are starting out simply. We are making videos where he asks me tough questions (often channeling liberal-progressive clichés) and I (without any prep) answer as best I can, flying by the seat of my pants. You can find these videos on my LocoFoco channel on Vimeo, or the LocoFoco channel on YouTube. The motion picture quality is much higher on Vimeo, but YouTube is the more popular site, and that appears to be where the action is.

I have been gratified by the comments, for the most part. I would, if honest, generally be more negative than most others have been. I am not a skilled talker. Years ago I forsook the arena of the education biz, and devoted myself almost entirely to the hermetic world of reading and writing. I now work as an editor (including video editor), but have never developed my oratorical skills. Two decades ago I mentioned to my erstwhile boss, the late Bill Bradford, that I was planning to challenge myself to improve my speaking ability. He thought it a waste of time. “Why not devote yourself to becoming a better writer?”

The best answer to that would have been: “Better speaking skills would likely lead to better writing skills.” In fact, I knew it at then, but under his scowling eyebrows, I did abandon my project.

Now, so late in life, I’m making up for lost time.

What I notice in the course of debate — and as I field Jim’s questions, it becomes quickly apparent that we are not playing softball — is how many important concepts get lost, never even get raised. In the video, above, discussing Peter Schiff’s recent stunt outside a WalMart (asking customers for a 15 percent tip to allow WalMart employees to cover the difference between employees’ current, near-minimum wage salaries and the proposed $15/hour being advocated on their behalf by union activists and the usual hectoring progressives), I tried to get across the idea of scarcity, and what capitalists, entrepreneurs and managers would attempt to do were the costs of their business processes raised  precipitously. As would be the case if the government (or mass boycott?) raised the wages of their employees. matrix-pod

It is interesting to listen to progressives (whom James Gill knows like the back of his hand) simply treat rich folks as mere podded batteries, as in The Matrix. The rich have “more power,” so more can be sucked out of them. Simple as that!

But the more complex truth, I tried to explain, is that investors and entrepreneurs will react to artificially raised costs of doing business. They may accept losses (or eroded profits) for a short time, while they figure out how best to react, but they are going to react, and their reactions are not apt to be univocally “to the good” as imagined by progressives. Or anyone else. Alas, that initial reaction of wariness (where no hasty action is taken) allows progressives to think they have succeeded. As in the case of minimum wage rate hikes, rarely do businesspeople fire their least-skilled employees right away. Sometimes they allow attrition to cut the ranks of too-expensive employees. Sometimes they begin replacing laborers with machinery, as explained by F. A. Hayek in his famous “Ricardo Effect.” Sometimes they will dream up new productive processes that will increase the marginal product of their existing employees. It’s only in the latter case (rare), that the induced extra costs don’t do much harm.

One of the things I saw in the comments to the video, as I’ve seen so often elsewhere, is the idea that rich people are despicable, and that we shouldn’t “take their side.” This comment, for instance, strikes me as pure, unadulterated modish progressivism:

Why does this guy give a fk about Walmart executives. They do not give a fk about you. Brainwashed by Wall Street.

I of course care about Walmart execs and investors and managers for the same reason I care about Walmart workers and customers: because all contribute to progress in American life. This idea that I should not care about somebody because they don’t express similar concern in some narrowly conceived venue, is an amazingly harsh doctrine. I guess it’s based on the communitarian impulse in modern progressivism, in which one cares about someone because one knows them and loves them, etc etc. But in an extended order of civilization,  when trying to analyze what’s going on as well as while working to improve the political and economic order, one must think outside the in-groupy clannishness of one’s natural tribe.

We are all individuals who belong to various groups. And we need to abide by the same general principles no matter what group we are in . . . and then work for our separate, particular goals as best we can.

When I hear someone express derision of a rich person because that person is rich, what I hear is: Jew bastard! Anti-semitism was the classic expression of the same kind of tribal hatred.

How does this work?

  1. The hated other is, by definition, “not one of us”;
  2. The hated other “doesn’t care about us” at least in same manner or intensity as “we care about us”;
  3. The hated other is very different;
  4. The hated other is (thus) of another tribe;
  5. The hated other is (often) more successful than we are;
  6. The hated other must be malign (since, in this logic, “caring” is binary: if you are not with us you are against us);
  7. The hated other can therefore be treated badly, as in robbed or killed or taxed higher, or . . .

What applied to “the Jews” applies, now, to “the rich” . . . according to liberal-progressives.

The attitude is anything but “liberal” of course; it is the very acme of vindictive tribalism. But then, no surprise: Progressivism was never about liberality, much less liberty. It was always about applying the militant mindset to everyday society.

What progressives seem unable to understand is the difference between market transactions, where both parties aim to gain, through voluntary trade, and government policy, which is always and everywhere backed by the gun, the coercive power of the state — and thus can only hope that one party gains, while another loses. Commerce is made up of a multitude of positive-sum transactions; government is made up of zero-sum and negative-sum transactions.)

The problem at the heart of all this is socialism. The romance of socialism spread wildly in Europe and then America in the 19th century. Because the bulk of this romanticism was mere unthinking hatred for private property and trade, and because the ideal form of coöperation for socialism’s original dreamers was straightforward, society-wide coöperation — where all worked “together” to produce a joint product which was then distributed by principles not based on productivity — the movement devolved to its worst core idea-set very quickly: state socialism, with political and bureaucratic governance of all production markets, and the outlawing of money and trade.

Whenever such socialism extends beyond family and club, it yields disaster. It is too cumbersome. Its knowledge problems are insurmountable. Its incentive problems tragic. It becomes a horror show.

I mentioned the “s-word” in my Walmart conversation because the socialistic mindset heavily influences the demands that lie behind “living wage” doctrines. “Everybody should be paid a living wage” sounds so rational — if you think of people as children. But once you realize that productivity is key to economic survival as well as any possibility of thriving, then things look very different. (Remember that socialists tend to despise distribution on the basis of productivity: “to each according to his needs,” not contributions. Socialists flip this when they engage in exploitation critiques, but consistency isn’t their strong suit.)

But mention the term “marginal product” to a “living wage” advocate, and you will get blank stares.

I didn’t use that term in my little talk. Perhaps I should have. For, if you want to spout off about wages you must understand the marginal productivity theory of wages. Fanciful theories of “bargaining,” understood as “power analysis” and not in terms of supply and demand, don’t cut it.

Lacking an understanding of marginal product, you lack standing to criticize anyone’s wages, that of a Walmart worker or executive. It’s that crucial.

I may some day try to explain this concept, and many others, in some future video. But I’ll hold off, for now. I try to keep it simple. And keep my eyes on a nearer prize: I will try to stop stammering, for one. Or incessantly blinking. Or  dropping the F Bomb (I managed it this time by catching myself two letters into the four-letter word).

I will, nevertheless,  continue to bring up issues associated with

  • the consequences of scarcity,
  • the inherent bilateral productivity of trade,
  • the subtle, “invisible hand” effects of competition in markets, and
  • of transactional clarity in general,

in ways that normal folks —  who have, after all, been ill-served by America’s horrid education system, and low standards for education in general and around the world — might possibly understand.

LocoFoco enlightenment ahead!