First, Happy Cinco de Mayo.
Now to the content.
Backpage: A Blueprint for Squelching Speech
by Elizabeth Nolan Brown, Reason, April 29, 2024.
Excerpt:
From the beginning, this prosecution has been premised on a bogus rationale (authorities yammer on about sex trafficking though none of the defendants are charged with sex trafficking), overreaching in its scope (attempting to hold a web platform accountable for user-generated speech, in contradiction to Section 230), offensive to the First Amendment, and relentless in its attempts to handicap the defense. So it’s a treat to see a judge slap prosecutors down a notch, even if it comes very late in the game (after two trials and after one defendant taking his own life) and even though it may not make much of a practical difference for Lacey, Brunst, and Spear (who face imprisonment for the rest of their lives even with the acquittals).
And:
In this case, Backpage banned explicit offers of sex for money (which is illegal in most of the U.S.) but allowed adults ads more generally, since plenty of forms of sex work are legal. Providing a platform for protected speech should itself be protected, of course. But in a truly Orwellian fashion, the government argues that the very act of forbidding explicit prostitution ads was a way of encouraging prostitution ads, thereby facilitating prostitution in violation of the federal Travel Act.
Biden Administration Again Delays Decision on Banning Menthol Tobacco
by Jeffrey A. Singer, Cato at Liberty, April 29, 2024.
Excerpt:
Aside from criminal justice concerns, singling out menthol tobacco for a ban lacks a basis in scientific evidence. A 2022 research paper in the Journal of the National Cancer Institute found menthol smokers had no greater difficulty quitting smoking than non‐menthol smokers. Furthermore, according to FDA research reported in the Journal of Nicotine and Tobacco Research, there is “evidence of lower lung cancer mortality risk among menthol smokers compared with non‐menthol smokers among smokers at ages 50 and over in the U.S. population.” Perhaps that’s because menthol smokers tend to smoke fewer cigarettes per day, according to a Vanderbilt University study that also found “menthol cigarettes are no more, and perhaps less harmful than non‐menthol cigarettes.”
A disproportionately high percent of black smokers smoke menthols. My guess is that Biden is getting increasingly nervous about losing a significant portion of the black vote.
I posted about this in November 2022.
Income Inequality Matters
by Roger Koppl, ThinkMarkets, March 26, 2013.
Excerpt:
Income inequality matters. Let me say that again so you know I meant it: Income inequality matters. This statement may be surprising coming from a self-described “Austrian” economist and a “liberal” in the good old-fashioned pro-market sense. It shouldn’t be. It should be one of our issues. The surprise should be that we pro-market types have not spoken up more on this central issue, thereby letting it become associated almost exclusively with more or less “progressive” opinion.
This indifference to income distribution is all the more mysterious because pro-market thinkers generally support a theory of politics that tells us to watch out for ways the state can be used to create unjust privileges for some at the expense of others. We should expect the distribution of income to be skewed toward the politically powerful and away from the poor and politically weak. In a representative democracy “special interests” engage in “rent seeking” to get special favors. Those special favors enrich some at the expense of others. That’s what they are meant to do!
Roger makes a good point but overstates. The excerpt above makes it sound as if he thinks most of the inequality in the United States is due to government. I think that’s unlikely, although much of it is: think about the middle-class homeowners in California who are millionaires because the severe government restrictions on building housing have made their houses worth ore than $1 million.
But also a huge amount of inequality is due to people having very good ideas and cashing in on them. Think Jeff Bezos and Amazon, for example. That inequality matters too, but not in the way that Roger focuses on.
Now, if Roger were discussing world inequality, he would be absolutely right. The biggest source of worldwide inequality is restrictions on immigration.
Marx and the Continuing Influence of Socialism
Speech by Ben Powell, Hillsdale College, November 6, 2023.
In the next few days, I’ll post about this speech on my Substack, “I Blog to Differ,” along with some highlights. It’s very good.
READER COMMENTS
Roger Koppl
May 5 2024 at 3:21pm
David,
I thought I was saying only that many state actions increase inequality, not that the income distribution would be almost flat in some imagined “pure” or “true” free market. But it seems I gave at least some readers a different impression. Oops.
Apart from this flaw in my exposition, I stand by everything I said in the old blog post you link to. According to the Fed, median wealth for black families in the US was about $285,000 in 2023, but only about $45,000 for black families. And according to the Census Bureau, median household income in 2022 was about $53,000 for black Americans and $81,000 for white Americans. Those are big differences. I don’t think those differences reflects the outcome of some largely unconstrained market competition. I think they reflect the greater frequency with which black Americans when compared to white Americans are excluded from freely entering the market and competing as well as the greater average severity of exclusionary measures. I would include in such exclusionary measures, if I may, the disproportionate impact of the criminal justice system, which may seize your property without due process, assess court fees upon conviction, and charge inmates for their room and board while in prison.
Why my fellow pro-market types so often neglect these oppressions is beyond me.
David Henderson
May 5 2024 at 4:30pm
You write:
As I hope you saw, I didn’t neglect these oppressions. Notice that I posted the link and an excerpt.
You write:
I didn’t take you to be saying that the income distribution would be almost flat in a pure free market. My point is that you talked about inequality without even mentioning the sources of inequality that have nothing to do with oppression.
Roger Koppl
May 6 2024 at 7:11am
Indeed, David, *you* do not neglect such oppressions. I appreciated your mention of immigration restrictions.
David Henderson
May 6 2024 at 9:46am
Thanks, Roger.
Roger Koppl
May 5 2024 at 3:28pm
The links didn’t come through on my comment. Here they are:
Fed data on wealth: https://www.federalreserve.gov/econres/notes/feds-notes/greater-wealth-greater-uncertainty-changes-in-racial-inequality-in-the-survey-of-consumer-finances-accessible-20231018.htm#fig1
Census Bureau on income: https://www.census.gov/content/dam/Census/library/visualizations/2023/demo/p60-279/figure2.pdf
Asset forfeiture: https://reason.com/2024/04/05/kansas-police-seized-her-truck-it-took-her-8-months-to-get-it-back-despite-never-being-charged-with-a-crime
Court fees: https://www.brennancenter.org/our-work/research-reports/steep-costs-criminal-justice-fees-and-fines
Pay to stay: https://www.brennancenter.org/our-work/analysis-opinion/americas-dystopian-incarceration-system-pay-stay-behind-bars
Richard W Fulmer
May 6 2024 at 10:03am
Every society is “afflicted” with inequality. Societies don’t create inequality, nature does. People are naturally born with different strengths and weaknesses.
Different socioeconomic systems do amplify different natural inequalities by the incentives they create. Capitalism rewards people who possess, or who learn to develop, the so-called “bourgeois virtues” of self-reliance, persistence, reliability, thrift, diligence, honesty, creativity, tolerance, and civility and employ them to provide goods and services that others want.
Material inequality is the inescapable result of material progress. If a new product is created, it cannot possibly be simultaneously distributed to every person on earth. So, the first time someone invented something – the stone hammer, perhaps – inequality instantly appeared in the world. To demand complete material equality is to demand an end to material progress.
Inequality isn’t a problem that must be fixed, much less a problem that must be fixed by government. At the same time, government should not create wealth inequality by granting special privileges to individuals, organizations, or companies.
People generally don’t resent the rewards that come with real achievement. Wealth earned by a Lebron James, a Bill Gates, or an Oprah Winfrey doesn’t send mobs into the streets armed with pitchforks.
What people do resent is wealth amassed by swindlers. What they resent even more is a political system that institutionalizes wealth transfers to swindlers. Unfortunately, many of the regulations at all levels of government in the United States do just that. For example, licensing laws limit the number of people allowed to do various jobs, zoning restrictions benefit current land and building owners, regulations limit competition in government-favored industries, and tariffs benefit favored domestic producers at the expense of consumers and other producers.
Roger Koppl
May 6 2024 at 4:28pm
I’m not sure what’s natural. Hayek says the market is mixed game of skill and chance. Our caveman ancestors had a status hierarchy, just like any other social animal. But the best guess seems to be that everybody lived at nearly the same level. High status males got more sex, I gather, but the “egalitarian ethos” that Chrsitopher Boehm talked about kept the alphas from rising too far above the betas. But such considerations don’t tell what will happen if governments take on the job of planning the income distribution. Economic theory and history agree that it will come to no good! But we can nevertheless have the sort of “welfare” Hayek advocated for in The Road to Serfdom. He said, “the case for the state’s helping to organize a comprehensive system of social insurance is very strong.” And he said, “there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody.” Hayek is describing income redistribution schemes. And if the “minimum” standard of living Hayek spoke of rises when the general wealth of society rises, then it is a relative thing and the provision of such a minimum reflects a concern for the *distribution* of income. A steeply progressive income tax is a bad idea in part because it will discourage saving and investment. Planning the income distribution in detail is both impossible a recipe for disaster. But if you want something like a negative income tax, as I do, then you are evincing a concern for the *distribution* of income.
Richard W Fulmer
May 6 2024 at 5:47pm
Marvin Olasky’s book, The Tragedy of American Compassion, details the thousands of lodges, private charities, mutual aid societies, missions, civic associations, and fraternal organizations that blanketed the United States in the 19th and early 20th centuries and that have largely been displaced by government.
Private charitable organizations were much more effective than government agencies at getting people out of poverty – not only because they could deal with individuals and individual problems, but also because they made a distinction between deserving and undeserving poor.
Journalist and crusader, Horace Greely, thought that such distinctions were immoral. Under his influence, New York instituted statewide welfare in the 1850s. The results were so horrific, that Greely reversed his position.
In 1879, the New York State Board of Charities reported that the state’s relief program was “injurious and hurtful to the unfortunate and worthy poor, demoralizing in its tendencies, a prolific source of pauperism, and official corruption, and an unjust burden upon the public.” Five years later, the Board reported that the program was “not only useless as a means to relieving actual existing suffering, but an active means of increasing present and future want and vice.”
Theodore Dalrymple’s book, Life at the Bottom: The Worldview That Makes the Underclass, provides a vivid, if horrifying, look at the world created by Britain’s welfare state. Dalrymple, whose real name is Anthony Daniels, is a, now retired, medical doctor and psychiatrist from England. In his book he talks about his experiences over some 15 years of working in a poor area of Birmingham, England and seeing some 50,000 patients.
Before coming to Birmingham, he’d worked for years among the poor in Africa, so he knew what real poverty looked like. And compared to those people – in fact, compared to most of the people in the world – Birmingham’s “poor” were fabulously wealthy. They had roofs over their heads. Their homes had electricity. They had clean running water and didn’t have to watch their children die of cholera, typhoid, or dysentery. There was food on the table, and they didn’t have to watch their children go hungry day after day. They had heat in the winter, free education, free medical care. Most had television, microwaves, and computers.
Daniels’s patients weren’t suffering from material poverty. Instead, they lived in hells of their own making. Daniels spoke of setting the bones and sewing up the lacerations of women who’d been beaten by their boyfriends. He would beg them not to go back, but they usually did. He warned people to get off the couch and get some exercise. To start eating right so they wouldn’t die of heart disease. To stop living their lives in front of their TV sets. To get treatment for their addictions. But most didn’t listen. After 15 years of trying, Daniels had given up. He’d treated people’s symptoms, but he couldn’t cure the spiritual disease that caused those symptoms – the disease of dependency created by Britain’s dole.
Roger Koppl
May 7 2024 at 3:38pm
I think the British underclass is evidence on my side of the ledger, Richard. You have in the UK, as in the US, Canada, and elsewhere a “benefits cliff.” If you earn some extra money, the gain you get from your earnings may be more than offset by a loss of governmental benefits. Apparently, the more common term in UK is “cliff edges.” We used to call it the “welfare trap.” Today, something like 20% of the UK workforce requires occupational licenses, which makes it harder to get work. The UK has notorious restrictions and controls in the housing market, which may make it hard to live close to where the jobs are. And so on. The British underclass is systematically excluded from markets. Daniels/Dalrymple errs in blaming a culture of poverty. To the extent that such a culture exists, it is effect of an oppressive system and not the root cause of poverty.
The sorts of problems I am talking about exist in many countries, most decidedly incuding the US. To help convey the nature of the problem we’re talking about, I like to quote p. 48 of NYC’s 1994 Mollen Commission Report
Q: Did you beat people up who you arrested?
A: No. We’d just beat people in general. If they’re on the street, hanging around drug locations. It was a show of force.
Q: Why were these beatings done?
A: To show who was in charge. We were in charge, the police.
Sadly, I could go on. But I’ll break off here.
Richard W Fulmer
May 7 2024 at 4:15pm
Agreed. The following is my list of suggestions for addressing poverty. Note that most of them are getting the government to end counterproductive policies.
Education
• Stop forcing children to go to bad schools.
• Stop preventing parents from sending their children to the schools of their choice.
• Stop letting teachers’ unions prevent schools from firing bad teachers.
• Require that teachers have degrees in the subjects they teach.
• Stop promoting students to the next grade even if they haven’t learned the material.
• Stop emphasizing self-esteem above accomplishment.
• Stop adding fad courses to the K-12 curricula that leave less time for students to learn the basics.
• Stop teaching children that they are either oppressors or oppressed by virtue of their skin color.
• Stop teaching minority children that the deck is stacked against them and that they have no hope of bettering their lives or those of their loved ones through their own efforts.
Employment
• Eliminate minimum wage laws, which make it difficult for the least employable (that is, the least educated, least skilled, least experienced, least physically and mentally able, and most discriminated against) to find jobs.
• Reduce job licensing restrictions.
• Reduce business startup regulations.
Welfare Programs
• Stop paying people to be unemployed.
• Stop paying women to have children out of wedlock.
• Stop penalizing welfare recipients who get a job.
• Stop penalizing welfare recipients who are married or who get married.
Housing
• Stop imposing rent controls, which create shortages of low-cost housing.
• End or reduce zoning restrictions, which also create shortages of low-cost housing.
• End housing policies that encourage people to take out mortgages they can’t afford.
Economy
• End the Fed’s loose monetary policies.
• Reduce regulation.
• Reduce (or, better, eliminate) the capital gains tax.
• Reduce tariffs. Eliminate tariffs on goods from allied nations.
• End public unions.
• Eliminate farm subsidies.
• Eliminate corporate subsidies.
• Stop bailing out financial institutions and thereby creating moral hazard and with it increased financial risk.
• Stop increasing investment risk with complex laws and regulations whose meaning can be determined only after the fact in a courtroom.
Law Enforcement
• End civil asset forfeiture, which encourages cities to use their police forces as revenue collectors and are especially hard on the poor who cannot afford to hire the legal talent needed to recover their property.
• Stop letting police unions prevent bad police officers from being fired.
• Limit qualified immunity.
Healthcare
• Require all healthcare providers to post their prices.
• Eliminate “certificates of need” that allow entrenched healthcare providers to decide whether they’re willing to compete with newcomers.
• Reform intellectual property rules that allow drug companies to game the system (e.g., extend patents by making meaningless changes to a drug’s molecule, recommended dosage, or delivery system).
Andrew_FL
May 6 2024 at 3:42pm
I think Vincent Geloso and Steve Horwitz said what Roger is trying to articulate better already
Roger Koppl
May 6 2024 at 4:45pm
It’s a nice piece! Steve was a bleeding heart libertarian, and my heart bleeds as well. I wrote the piece David was responding to in 2013; Steve and Vincent posted that working paper in 2016.
steve
May 7 2024 at 6:12pm
I would push back hard on the claim that private and religious charities were adequate for the needs of poor people and people in temporary need or disabled. First, they were almost exclusively for men, mostly of working age. Second, they largely existed in cities. Third, they only covered about 30% of men at that and the care they provided was largely considered substandard. Well beyond that they relied heavily upon the availability of women who were excluded from the work force. We would not have that many unemployed women available now.
Importantly, they didnt really need to supply very much. They could provide some food and help with funeral costs but medical care at that time was only moderately better than voodoo and mostly consisted of keeping people warm and comfortable until they recovered on their own, if they were able. A baby born with only moderate prematurity then would have close to a 100% death rate and almost 100% survival now, but at significant cost.
Last, whenever those charities faced a stress test ie the economy got bad that was the time when they were least able to help so that is when people did not receive aid. Anyway, there is extensive documentation on all of this. Konczal has a nice review. You can also read Kuo’s book Tempting Faith. He was Deputy Director of Bush’s Office of Faith based Community Initiatives. Bush, among others had helped to spread the belief that faith based groups could provide better, more efficient care than govt programs. When Kuo and his boss started working the found that there was very little literature upon which to base that belief and the idea was not supportable so it mostly turned into a re-election effort for Bush.
On a personal note have been involved with several charities and helped with starting one. For narrow areas of need private charities and faith based ones can be way more efficient. However, they just arent good on volume and having watched donations dry up when the economy is bad and people needed help the most have seen the weaknesses in them too.
https://www.theatlantic.com/politics/archive/2014/03/the-conservative-myth-of-a-social-safety-net-built-on-charity/284552/
Steve