Ford paid his workers the equivalent of $15 an hour in 1914. Should that be the minimum wage?


The following is a comment I wrote on a post published by The Intercept about raising the minimum wage in New York, which argued that since Ford paid his workers the inflation adjusted equivalent of $15 per hour in 1914, a $15 minimum wage would be appropriate today.

I appreciate Mr. Schwarz’s concern for low-skilled workers. We all want everyone to be able to afford a decent living. However, in economics, it is important to separately consider positive and normative questions (though, of course, the former can inform the latter). So part of the positive question in this instance is, what factors determine prices? As Mr. Schwarz alludes to (though expressing contempt for such an idea), and what most economists would say is, price is a function of supply and demand. Employers provide the demand for labor. However, if the price of labor is higher than the marginal productivity of that labor engaged in a certain purpose, employers will generally not hire labor for that purpose because it will result in a loss. Thus, any jobs at which people are employed in which they create less than $15 per hour in productivity will not be profitable with a $15 per hour minimum wage. Perhaps one could make an argument that employers have a certain level of bargaining power (for reasons such as occupational licensure, costs of starting a business, etc.) such that they are able to pay employees less than their marginal productivity, but regardless of this, employers will not pay their employees above their marginal productivity without incurring losses.

Thus, there are some limitations in Mr. Schwarz’s analysis. One is that he has not established that the marginal productivity of Ford employees in 1914 is directly comparable to the marginal productivity of all workers currently making less than $15 per hour. If the marginal productivity of Ford workers then was higher than the marginal productivity of low-skilled workers today, then we are comparing apples to oranges. For similar reasons, there are limitations in comparing a 1914 Model T to a 2015 Ford Fiesta, which are obviously quite different products in terms of technology, comfort, performance, etc. Although value is subjective, there is a good case to be made that, other than for collector purposes, the latter car is much more valuable than the first in terms of actual function (in other words, if Ford made the Model T today with the same physical properties that it had in 1914, it would likely fetch a much lower price than the Fiesta. Therefore, in terms of actual purchasing power, being able to buy a Ford Fiesta is evidence of much greater purchasing power).

The fact that GDP per capita is several times higher now than in 1914 does not mean that a $15 minimum wage will increase the incomes of those with a marginal productivity below $15 an hour, for the reasons mentioned above. No matter how rich an employer is, they will not willingly pay a wage that is greater than a worker’s marginal productivity because they will incur a loss by hiring that worker. The empirical question is whether those workers making less than $15 an hour are being paid significantly less than their marginal productivity. For those whom the answer is no, a minimum wage will not increase their wages if their productivity remains below $15 per hour.


But is justice being served?


Families Against Mandatory Minimums (FAMM) is an advocacy organization that pushes for criminal sentencing reform. They have had successes:

Twice since 2011, FAMM and its members have successfully campaigned for the U.S. Sentencing Commission to reduce guideline sentences for drugs—and to make those guideline changes retroactive. In 2011, the Commission voted to make its FSA-conforming amendment retroactive, a policy change that affected 12,000 federal crack-cocaine prisoners. In 2014, after receiving more than 60,000 letters, the Commission voted to make All Drugs Minus Two apply retroactively, allowing more than 40,000 prisoners to petition for resentencing.

I think the very fact that the U.S. Sentencing Commission can even consider retroactively changing sentences implies that the sentences themselves were most likely unjust. Furthermore, this problem seems to be inherent in crimes which have no identifiable victim. Since there is no identifiable victim, there is no basis for which to calculate damages. And since there is no basis to calculate damages, what foundation is there for deciding a sentence?

It is thus absurd to designate punishing victimless criminals under the rubric of “justice.” Really, justice has nothing to do with it; rather, punishment in this case is a tool that the state uses for social engineering purposes. Incarceration is not about giving the offender what is due to him, it is about bending the individual to the will of the state. Once this is generally realized, we can begin the move towards victim justice, rather than this confused notion of criminal justice.

No, Jon Stewart


I don’t usually watch The Daily Show. The following is one reason why.

Jon Stewart (at about 2 minutes and 10 seconds into the following clip) refers to the “Hyde Amendment,” which prohibits the use of federal funds for abortion, unless the pregnancy is the result of incest or rape.

Stewart says that it’s called the “Hyde Amendment” because Republicans have to sneak it into bills and facetiously remarks that “just because the procedure is legal doesn’t mean it has to be treated that way.” I take issue with this second statement, which seems to imply that because something is legal, it should be federally funded.

But obviously this is false on its face, and I’m sure if Stewart took just a minute to think about it, he could come up with things that are legal that he would not want to be federally funded. The free practice of religion is legal, but should it be federally subsidized? I imagine that most of those who support the federal funding of abortions would respond in the negative and consider being forced to fund something they don’t agree with (if that happens to be the case regarding religion) to be morally abominable.


Regardless of what one thinks about the efficacy of abortion, there are those who very much dislike it and want to have nothing to do with it. Some oppose it to such an extent that their opposition is literally part of their identity. For the sake of argument, let’s say these individuals are completely wrong in their views and demonstrably so (whatever that may mean). Even if that is the case, should they be forced to fund something they ardently oppose?

Should Christians Support Capital Punishment?


A while back, I was given a pamphlet entitled, “Capital Punishment: The Case for Justice” by J. Budziszewski, Professor of Government and Philosophy at the University of Texas at Austin. Professor Budziszewski argues that capital punishment is just, and that the Bible demands it, citing Romans 13:3-5:

For rulers are not a terror to good conduct, but to bad. Would you have no fear of him who is in authority? Then do what is good, and you will receive his approval, for he is God’s servant for your good. But if you do wrong, be afraid, for he does not bear the sword in vain; he is a servant of God to execute His wrath on the wrongdoer. Therefore one must be subject, not only to avoid God’s wrath but also for the sake of conscience.

However, Budziszewski’s argument is devastated if he is wrong in his interpretation of Romans 13, which he believes is talking about the State. But why should he think such a thing? Though this is a common interpretation, it makes no sense. Here we have St. Paul, a man who was beaten by the State, imprisoned by the State, and eventually killed by the State, and somehow he can write that the State is “not a terror to good conduct”? I figure that Paul must be talking about some other entity. (Gerard Casey offers an interesting and plausible alternative.)

But let us grant Budziszewski this premise and see how the rest of his argument fairs.

He defends retribution as the justification for punishment, particularly in terms of the benefits it has for society: “Society is justly ordered when each person receives what is due to him…In retribution the spur is the virtue of indignation, which answers injury with injury for public good.” Furthermore, “Retribution is the primary purpose of just punishment as such.” This is for three reasons:

  • Just punishment is not something which might or might not requite evil; requital is simply what it is.
  • Without just punishment evil cannot be requited.
  • Just punishment requires no warrant beyond requiting evil, for the restoration of justice is good in itself.

Any other purpose of punishment, such as deterrence or incapacitation, is secondary and cannot override considerations of retribution. In fact, Budziszewski argues, all of these purposes are better (or at least not worse served) by capital punishment.

Next, he addresses some objections to the death penalty by Cardinal Dulles:

  1. Sometimes innocent people are sentenced to death.
  2. Capital punishment whets the lust for revenge rather than satisfying the zeal for true justice.
  3. It cheapens the value of life.
  4. And it contradicts Christ’s teaching to forgive.

Budziszewski’s argument against point (1) seems rather like a strawman. Most of it is a hypothetical where a suspect’s factual guilt is unquestionable, but he is acquitted by a juror who read Descartes and is unsure if he can trust his senses. Yeah, I’m pretty sure what people have in mind when they think of innocent people being convicted is when actually innocent people are convicted. The National Registry of Exonerations has cataloged over 1,500 of them, and who knows how many factually innocent people are still in prison or took a plea deal in order to avoid jail time? Budziszewski utterly fails to address this issue.

His argument against the idea that capital punishment feeds the lust for revenge is better, yet the fact remains that in terms of its criminal justice system, the US is an extremely vengeful society, considering that it has the highest incarceration rate in the world by far. Even if every non-violent drug offender were released from prison, it would still be the highest. And why is this? There are many reasons, but not the least of them is that there are special interests who benefit from this state of affairs, particularly the prison-industrial complex. If there is one thing the prison-industrial complex is not in pursuit of, it is justice. As well, American police forces can hardly be referred to as “peace officers,” as their increasing militarization attests. Not only that, but the US government horrendously tortures people to death with no accountability. The idea that this is what Budziszewski argues throughout his essay is the servant of God is downright disturbing and terrifying. Apparently there is no atrocity so egregious that would lead those who believe the State is God’s march upon earth to think that perhaps they are interpreting Romans 13 incorrectly.

Lastly, and this is not intended as a cheapshot (though it may look like one), why have I never observed Christians who argue for the death penalty address the fact that Jesus Christ was brutally executed by the State (as have many martyrs throughout history)? Clearly, execution has been a tool of despotic governments against those who they dislike or want to silence, and it is still used today. It seems that Christians who enjoy the relative freedoms in Western democracies take it for granted that their governments usually don’t round up dissenters and imprison (or execute) them. But it is entirely irresponsible for them to forget the fact that, worldwide, governments aren’t always friendly to Christianity.

Thom Hartmann Proves Any Idiot Can Get Their Own TV News Show


Recently, I decided to tune in to Russia Today, testing the hypothesis that a news channel funded and run by a foreign government might be more critical, and therefore present a more interesting view, of the US government. That might be the case with RT (they did have Adam Kokesh as an anchor, after all) but within the first 24 hours of watching RT I was introduced to Thom Hartmann, who is billed as “America’s #1 progressive radio host,” and has a show called “The Big Picture.” Almost immediately after I turned on Hartmann’s show, I was pleasantly surprised to see the Libertarian Party’s emblem displayed, and though I have no particular affinity for the LP, I thought there was a possibility that a political view outside of the mainstream might actually be presented. However, Hartmann proclaimed that “libertarian economics” has screwed millennials. This made no sense to me, but I’m open to hearing criticisms of libertarianism and patiently waited for the relevant segment. Here it is, should you care to watch it:

"The deregulation, the privatization, the Iraq"

“The deregulation, the privatization, the Iraq”

What struck me at first was how many times Hartmann says “libertarian economics” (12 times in less than 5 minutes) and other phrases he thinks are synonymous (“Reaganomics” he says 3 times and “libertarianism” twice). The reason he does this, of course, is that he really has no idea what “libertarian economics” is; otherwise, he would mention specific policies instead of vague ideas. The most specific he gets is with “the massive tax cuts, the deregulation, the privatization” of Harding, Coolidge, and Hoover (his excessive use of “the” reminds me of Miss South Carolina of 2007). He also mentions “the free trade mantra” which is apparently why millennials don’t have jobs and “deregulation of the stock market” which somehow caused a housing boom and bust. But how has “libertarian economics” screwed millennials the most? Through student loan debt.

That’s right. An industry that was massively subsidized and now effectually monopolized by the federal government is an institution of “libertarian economics.” Upon watching this, the audience feels the urge to check the calendar to make sure it’s not April 1st, to pinch themselves to make sure they aren’t in some Newspeak nightmare, to do anything to gain their own assurance that something so unbelievably stupid could not be said by a serious TV news anchor with the approval of his producers and whomever else helps make this content. And yet Thom Hartmann is completely serious. He puts two and two together: George W. Bush (who bailed out megabanks, created the greatest expansion of the federal government’s role in medical care since the passage of Medicare, and under whose presidency the national debt grew more than all previous presidencies combined) pursued “libertarian economic policies,” and the US has never had student loan debt problems like it does today. Ergo, libertarian economic policies caused the student loan crisis.

Hartmann apparently finds the effort to even do a Google search to check basic historical facts too taxing. Apparently, “the free trade mantra” is part of “libertarian economics,” and yet a cited practitioner, Herbert Hoover, signed what is probably the best known trade barrier (the Smoot-Hawley Tariff Act) into federal law, which caused FDR to later pledge to reduce the tariff rates as part of his election campaign. Might FDR be a shill for “libertarian economics” as well?

Ultimately, one must come to the conclusion that Thom Hartmann has an inchoate conception of whatever he thinks he’s referring to with “libertarian economics” (and I doubt he even has a coherent conception of what his own progressivism is, either). By leaving his bogeyman of “libertarian economics” undefined, he can blame for everything. Even ISIS. What a world we live in.

Tenth Amendment Center Has Some B.A. New Videos


Out of all political organizations and think tanks, the Tenth Amendment Center is one of my absolute favorites. One of the biggest reasons why is its effectiveness, especially considering its humble origins in Michael Boldin’s apartment. And today, it remains largely an operation run out of Boldin’s apartment, though with a wide network of volunteers all across the country. I know not what the TAC’s annual budget is, but it is far less than those DC organizations that have been with us for decades and haven’t really made much of an impact on Washington’s growth in power. Meanwhile, the TAC has had a direct hand in getting state law and local ordinances passed that counteract federal overreach on a range of issues, like hemp laws, NSA spying, firearms restrictions, medical care, etc. They have done so much with so little and, frankly, it’s exciting.

What I also love about TAC is its uncompromising dedication to principle. It goes beyond their motto, “The Constitution. Every issue, every time. No exceptions, no excuses.” They have declined to register with the IRS as a non-profit, as they refuse to accept the vulnerability such a move would entail (e.g., take a look at Campaign for Liberty’s battle with the IRS for refusing to share their donor list).

They have also done an outstanding job of creating coalitions of individuals and groups with widely varying political ideologies (take a look at their OffNow Coalition, for example). Individuals of all political stripes (except for totalitarians) should be able to find an issue that they agree with TAC upon and use their combined resources to effect change. I think TAC’s being issue-oriented, rather than party- or ideology-oriented, has contributed a lot to its success.

And instead of telling you about all the problems of the federal government and leaving you feeling hopeless and dejected, TAC offers real options to apply one’s efforts to change things. They have a bill tracking that helps one know the state of proposed legislation in their state and what to do if he or she wants to support it. If you want to volunteer, Michael Boldin will find something for you to do. It’s wonderful.

I promise the Tenth Amendment Center is not paying me anything at all to write this. As gushing and seemingly sycophantic today’s post may seem, it’s how I feel. TAC is a great organization and I would encourage all who value individual liberty to check it out.

Is Josh Tolley a Totalitarian?


A person in the Idaho liberty movement encouraged me to check out radio host Josh Tolley, saying that he ought to be promoted as a media personality who supports liberty. I subscribed to his YouTube channel and watched a video every so often (or rather listened to his videos, which are mostly excerpts from his radio show that rotate still images instead of actually being video). However, the one to which I listened today was rather disturbing. It is entitled “Bible Vs Constitution: Only One Supports Freedom (it’s not the one you think).” You can see it below:

Josh Tolley interviews Ted R. Weiland, the pastor of Christian Covenant Fellowship in Scottsbluff, Nebraska and who wrote a book called Bible Law vs. The United States Constitution: A Biblical Perspective. Mr. Weiland argues that the US Constitution is not inspired by Judeo-Christian values or Biblical law, but not for the reasons one might think. Rather, the reason that the US Constitution is anti-Christian is because it fails to establish a nation-state theocracy that enforces the Mosaic Law.

In the above-mentioned book, there is a chapter dedicated to each of the articles in the US Constitution, as well as one for each of the amendments. In this interview, Weiland mentions the arguments he makes against the First Amendment, particularly freedom of religion. If it weren’t for this anti-Christian provision, he says, we wouldn’t see the rise of Islam or polytheism in the United States. “But wouldn’t this mean forced conversions?” a caller asks. Forced conversions are not real conversions, Weiland replies, but we are talking about the government and not individuals and there is a big difference. So here we have the obvious indication that Weiland is a statist totalitarian: he believes something that would be absolutely morally reprehensible for an individual to do is a duty of the state. And yet Tolley does not bother to challenge this point.

Weiland also claims that under what he believes to be a Biblical government, there would be almost no need for prisons. Before you think,” Wow, this guy must really be progressive,” please note that the reason why is the immediate execution of those convicted of capital crimes and the payment of restitution to victims of non-capital crimes (who are summarily executed if they fail to pay restitution). When a caller asks about whether it is just for offenders who fail to pay restitution to be executed, Weiland replies that such a penalty would rarely, if ever, be enforced. Why, whoever would choose not to pay restitution must have a death wish, he claims. But if we are to accept that reasoning, we would have to say that people would rarely, if ever, do anything that incurred the death penalty, which is 1) not true in practice and 2) sounds like a basis for totalitarianism: just have the death penalty for all undesirable behaviors and they will go away!

Weiland also seems very confident in his Biblical interpretation skills, as he says most Christians are wrong in how they believe Jesus freed us from the requirements of the Mosaic Law. Not so, says he, we still need to stone adulterers and homosexuals. If we only followed God’s perfect law (strictly enforced by the state), we wouldn’t have any of the social problems we have today. Weiland shows the tendencies common among totalitarians: he believes in an earthly utopia brought about by state power and he is clearly willing to execute people to reach his objectives.

And even through all this, interviewing someone who is obviously not a libertarian and shows many of the signs of being a totalitarian, Josh Tolley expresses no disagreement with anything Weiland says. In fact, he wants to have him on his show again. What are we to think of Josh Tolley?

Is Police Brutality Systemic or Anecdotal?


I came across an interesting piece on The American Conservative arguing the proposition that police brutality is not just anecdotal, but systemic. If we think of the incentives facing police officers, this shouldn’t be too surprising. If you’re in a job where there is an above-average likelihood where you will be required to engage in the use of force and the certainty of punishment should you use excessive force is rather low, there is a greater chance, all else equal, that you will use excessive force. Add into the mix that police officers are self-selected from people who find the ability to use physical force on the job an attractive proposition. Furthermore, there are institutional incentives for police officers to disregard misconduct by their fellow officers, as they face retaliation in the forms of ostracism among other police officers, a smaller chance of promotion, and even the threat of physical force should they report this misconduct.

Thus, to say police brutality is systemic is not to say that all or even the majority of police officers are bad. It is talking about the system (thus, “systemic). And, again, these are the kinds of things we should expect from monopolies, which police departments are: you cannot fire them and you have no choice but to pay them unless you skip town.

Ultimately, I would encourage everyone to treat the institution of government policing with a bit more scrutiny than it typically receives. It may be the case that you live in a place that has a relatively well-functioning police department, and if that’s the case, be grateful. But realize that not all departments have the same good institutional culture and if it does not, it is incredibly hard to fix, due to its monopoly status.

H/T to

Making Arguments for Liberty


I’ve been thinking a lot lately how best to appeal to people regarding the ideas of liberty. For liberty flourish, I believe it’s best for as many people as possible to embrace its ideals. At the very least, I don’t want my conduct or arguments or behavior to turn people off to these ideas; it would probably be better for a millstone to be tied around my neck and I be thrown into the sea.

I find myself coming to the conclusion that there is no one definitive argument for liberty that will be appealing to all people. This should be expected; people are individuals with their own tastes and desires. Thus, the wonderful book that led the scales to drop from our eyes might not have the same effect for others. This is why it’s so important that we have a conversation when we communicate with others about ideas we might like them to consider. We need to empathize with them and understand what appeals to them.

The video below made me think about this, and I would like to get some feedback on the following thought. Regarding the third absurd reason to ban drugs, Professor Davies says the assumption behind it is that the government owns you and ought to have the ability to make you be productive. Almost instinctively, I reject such ideas. But I wonder how many people also might instinctively reject the idea of the government owning them and being able to tell them what to do.

Do people not usually think of these things? Or is it just the case that when they support government coercion they don’t see it as such because they obviously wouldn’t advocate the government prohibiting something they themselves would otherwise do, but only others who are morally infirm or intolerant or whatever? What keeps them from seeing the coercive nature of government? And if they do see it, do they care enough to change it?

Lynn Parramore Has No Idea How an Economy Works


I have a professor who likes to send me a lot of opinion pieces from outlets such as Huffington Post, Salon, Upworthy, and MoveOn. A recent one was from Bill Moyers’ website, originally published at Alternet, called, “How Piketty’s Bombshell Book Blows Up Libertarian Fantasies.

The author, Lynn Parramore, really doesn’t have much to say about Picketty’s arguments, but seems to have a lot to say about how mistaken Milton Friedman (whom she calls “Uncle Milty”) and libertarians are about inequality. I’ll try to be as civil as possible when describing it, but I hope you can appreciate the difficulty considering how incredibly arrogant Ms. Parramore is, being essentially an economic illiterate and having the gall to belittle someone who won the Nobel Prize in economics. To be clear, I’m not saying that Nobel Prize winning economists are beyond question, but do we really have to treat our intellectual opponents as if we are ten years old?

I’m not sure why “fantasies” is used in the plural, as Parramore focuses exclusively on inequality, which she says libertarians either deny as a problem or pretend that the market will wave an invisible wand and cure it. Milton Friedman, she says, claims that free markets will lead to less inequality. However, all of this has been proven wrong by experience and Picketty’s book.

How did libertarians get it all so backwards? Well, as Piketty points out, people like Milton Friedman were writing at a time when inequality was indeed less pronounced in the US than it had been in previous eras. But they mistook this happy state of affairs as the magic of capitalism. Actually, it wasn’t the magic of capitalism that reduced inequality during a brief, halcyon period after the New Deal and World War II. It was the forces of various economic shocks plus policies our government put in place to respond to them that changed America from a top-heavy society in the Gilded Age to something more egalitarian in the post-war years.

One of the most frustrating things about having conversations regarding “capitalism” and “socialism” is how different people define them differently and then how they will label countries such as Denmark as socialist and the US as capitalist, even though Denmark rates higher on the Index of Economic Freedom. As Roderick Long has pointed out, these terms obfuscate understanding rather than facilitate it. Indeed, when left-libertarians claim that in a “freed market” inequality would be less, they are contrasting it to the present state of affairs where gigantic banks get bailed out, corporations are given legal privileges, saving money is discouraged through inflation, occupational licensure makes entrepreneurship for many illegal, etc.. When Parramore said that libertarians think free markets would lead to less inequality, what did she think they were comparing it to?

As Piketty notes, people like Milton Friedman, an academic economist, were doing rather well in the economy, likely sitting in the top 10 percent income level, and to them, the economy appeared to be doing just fine and rewarding talents and merits very nicely. But the Friedmans weren’t paying enough attention to how the folks on the rungs above them, particularly the 1 percent and even more so the .01 percent, were beginning to climb into the stratosphere. The people doing that climbing were mostly not academic economists or lawyers or doctors. They were managers of large firms who had begun to award themselves very prodigious salaries.

I have my doubts that Parramore has even bothered to read Friedman before criticizing him. Why, obviously, he was in good shape so he thought everyone must have been! And I’ve always been suspicious that most people who support measures such as the minimum wage have absolutely no idea how wages are determined, that they think employers simply have a pile of money from which they decide how much to pay themselves and how much to pay their employees, and thus a minimum wage will increase the proportion that goes to employees. Parramore’s last sentence seems to confirm this suspicion. Does she really think that managers simply award themselves salaries, and, if so, they just all of a sudden got greedy and decided to give themselves more? It’s reminiscent of the people who blame oil companies for being greedy when gas prices rise. Newsflash: oil companies are always greedy and always trying to charge the profit-maximizing price. Price is independent of their greed.

Wealth gathering at the top creates all sorts of problems. Some of these elites will hoard their wealth and fail to do anything productive with it. Others channel it into harmful activities like speculation, which can throw the economy out of whack. Some increase their wealth by preying on the less well-off. As inequality grows, regular people lose their purchasing power. They go into debt. The economy gets destabilized. (Piketty, and many other economists, count the increase in inequality as one of the reasons the economy blew up in 2007-’08.)

Where to begin? Maybe if Parramore had read Friedman, she would realize that he addressed this very problem of the wealthy hording their wealth and failing to do anything productive with it in Capitalism and Freedom. Part of the reason is the tax code, which encourages the wealthy to treat their wealth more conservatively than they otherwise would. As well, it’s a pretty good chance you’re talking to an economic illiterate when they regard speculation as a necessarily harmful activity “which can throw the economy out of whack.” They have no idea of the actual, useful role that speculation can play. For example, a speculator in agricultural futures can purchase wheat futures from a wheat farmer, guaranteeing the wheat farmer a certain price, no matter what the price of wheat is at harvest time. If the farmer finds this arrangement agreeable, he is benefited in that he shoulders less risk. The speculator shoulders this risk in exchange for the possibility that the price of wheat might be greater at harvest time than what he paid the farmer for it, thus giving him a gain. Of course, he might lose money, but the farmer is still benefited from the decreased risk. Parramore probably doesn’t see this as beneficial because she doesn’t understand what speculation is. Again, it’s pretty similar to when gas prices rise and news pundits blame speculators; they have no idea what they’re talking about. As for “throwing the economy out of whack,” speculation alone doesn’t do this unless fueled by artificial expansions of credit. But Parramore would have no idea about that, since she thinks Alan Greenspan unleashed the era of the free market (!).

Parramore also commits what is possibly the most basic fallacy in economics: the zero-sum fallacy. Just because someone becomes more wealthy does not cause someone else to become less wealthy. As a corollary, it is not the case that increasing inequality causes people to lose purchasing power. Furthermore, decreased purchasing power does not cause people to go into debt. It’s not as if all the people who went into large amounts of debt to buy houses prior to the crash did so because they couldn’t afford another dwelling.

Lastly, I would love to hear the theory by which inequality caused the economy to blow up (according to Don Boudreax, Picketty also thinks trade deficits contributed to the crash. My goodness, what didn’t contribute to the crash?). Extreme wealth inequality has existed throughout all of history, but the business cycle is a rather modern phenomenon. Claims like these seem to suggest that “Pickety and many other economists” have really no idea what caused the crash.

The ironic twist is this: The reason a person like the fictional John Galt would be able to rise from humble beginnings in the 1950s is because the Gilded Age rentiers lost large chunks of their wealth through the shocks of the Great Depression and the deliberate government policies that came in its wake, thus loosening their stranglehold on the economy and society. Galt is able to make his fortune precisely because he lives in a society that isn’t dominated by extreme concentrated wealth and dynasties. Yet the logical outcome of an economy in which there is no attempt made to limit the size of fortunes and promote greater equality is a place in which the most likely way John Galt can make a fortune is to marry an heiress. So it was in the Gilded Age. So it may be very soon in America.

Here again, Parramore demonstrates that she hasn’t the foggiest on how an economy works or how wealth is created. She seems to sincerely believe that one person’s gain is another person’s loss, and so there is no way for anyone to become wealthy without others becoming less wealthy.

I’m about finished, but before I let you go, I want to simply address the matter of inequality itself. As pointed out by Rothbard in Egalitarianism as a Revolt Against Nature, in current public discourse, equality is so highly touted without most people ever feeling a need to justify it in and of itself. I will give Ms. Parramore credit in that she did actually come up with a justification for desiring more wealth equality, even though it was based on a fundamental misunderstanding of economics. I would like to challenge readers of AlterNet and Bill Moyers and other progressive websites to think critically about what they are reading and also learn some economics. Don’t be like Ms. Parramore and think, “Oh, some economist wrote a book confirming my views about the world and now I’m qualified to say how dumb Milton Friedman was.”