Saturday, August 31, 2019

This Labor Day, Celebrate Intellectual Labor

The United States Department of Labor, speaking on The History of Labor Day, had this to say on its website:

Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a cofounder of the American Federation of Labor, was first in suggesting a day to honor those “who from rude nature have delved and carved all the grandeur we behold.”

Really? There is no doubt about what is meant here. McGuire was referring to people who “work with their hands”. Is that what built America? Physical labor has existed since time immemorial. What changed in the last two hundred + years that suddenly endowed the American worker with the means to produce “all the grandeur we behold” out of raw, “rude” nature? (Note the word “all”).

The American worker has, indeed, contributed significantly to the American Economic juggernaut. But, it was not because of his labor, as such. It was because of his intellectual mastery of the theoretical and material tools of production provided to him, that vastly increased the value of his labor.

Physical labor, as such, has very little value. Slaves can perform it. So can mules pulling hand plows.

Consider my trade, plumbing. If my job is fundamentally physical labor, then any able-bodied person off of the street can wander onto any construction job site and robotically perform the task of installing plumbing systems. He can simply be told: “Run this pipe from here to there”, and it will get done. He has the same muscles and bones, nerves and guts that I have, after all.

That, of course, could never be the case. Performing my task (or any construction trade) requires reliance on previously acquired theoretical knowledge, on-the-job apprenticeship training, the mastery of the tools, materials, and procedures of the trade, and years of learning experience. This is to say nothing of the continuing education that new materials and technologies require of me.

My job is knowledge-based. All modern jobs are, to varying extent. How did that knowledge become imbued in my brain? - by my choice to expend the intellectual effort to acquire it. Even the muscular physical motions my job requires had to be learned by a conscious mental effort that led to the appropriate neurological connections.

Do you still think mere labor built this country?

The idea that a laborer “works with his hands” is only superficially true. What directs the motions of his hands? It is his focussed, reasoning mind – if he is a motivated worker who strives to be the best that he can be at his chosen occupation. If not, then that worker is a mere drone.

And that gets directly to the point. The celebration of “labor” as a holiday implies that mindless worker. Labor Day ignores the intellectual root of modern, productive labor. It ignores the intellectual labor of the inventor and entrepreneur that created the worker’s job to begin with, and the intellectual labor that the competent worker must expend to learn to perform his job.

Human knowledge is fleeting, but for the grace of those who came before us and chose to acquire it and pass it on. Knowledge can not be passed on from person to person or generation to generation innately. No one is born with previously discovered knowledge, but rather with a mind that is tabula rasa – a blank slate. To celebrate “all the grandeur we behold”, it is to the discoverer and the acquirers of knowledge that we must pay initial gratitude to. The worker, by learning the skills he needs to perform his job, plays his role in keeping that knowledge train going.

This does not, however, mean that labor is inconsequential. Theoretical knowledge in and of itself has little value, unless and until it is placed into the service of man’s living requirements. The process of turning knowledge into the material values humans need to live and to flourish is dependent upon the contributions of many economic players. The value of each player’s contribution to this productive process varies and is dependent upon many factors. But all through that process – from the discoverer of new knowledge to the final material product put together by the worker – the value added represents, at root, the application of the mind.

“[W]hen you live in a rational society, where men are free to trade, you receive an incalculable bonus: the material value of your work is determined not only by your effort, but by the effort of the best productive minds who exist in the world around you.

“When you work in a modern factory, you are paid, not only for your labor, but for all the productive genius which has made that factory possible: for the work of the industrialist who built it, for the work of the investor who saved the money to risk on the untried and the new, for the work of the engineer who designed the machines of which you are pushing the levers, for the work of the inventor who created the product which you spend your time on making, for the work of the scientist who discovered the laws that went into the making of that product, for the work of the philosopher who taught men how to think…” (Page 1064)

Labor Day, according to the DOL, was created in 1882. That was the heyday of Karl Marx’s rise to prominence among the American intellectual elite. Marx was the theoretician of “Dialectical Materialism”, the idea that man’s consciousness – his spirit, his intellect, ability, and logic – plays at best a minimal role in the production process. Human beings, according to Marx, are conditioned by the physical world around them, including the means of production like tools and factories, which just happened into existence. Our modern, complex, and advanced industrial society is the product of mindless, conditioned muscular movements, according to Marx (and others). It is owing to the Marxist theory of the mind – i.e., spiritual values - as of little consequence that gave rise to the myth that labor and those that perform it are the primary engines of economic progress.

Labor Day, whether one knows or wants to admit it or not, is an outgrowth of Marxism and the “labor theory of economic value” that so enamored late 19th century American intellectuals.

The DOL concludes its Labor Day salute as follows:

"It is appropriate … that the nation pay tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership — the American worker."

Not quite. Instead, we should pay tribute to the creator of the American worker.

This Labor Day, we should celebrate not workers, but those who made our jobs and prosperity possible. This country was not built by physical labor. It was built by intellectual labor applied to physical labor under a system of individual rights that allowed everyone the freedom to think and, above all, to act on his thinking. Instead of patting ourselves on the back for our labor, we “workers” should reflect on the mental efforts that we had to expend in order to acquire the previously discovered knowledge that makes it possible to perform our jobs. We should stop selling ourselves short. Labor Day is an insult to the American Worker.

More importantly, we should give silent thanks to all of those intellectual “laborers” who came before us – the discoverers, the inventors, the investors, the businessmen - who made our well-paying jobs possible.

Instead of Labor Day, we should celebrate Intellectual Labor Day.

Or, better yet, we should celebrate political and economic freedom—i.e., Capitalism – the social system of the United States of America. Capitalism unleashed the individual human mind. It is Capitalism that liberated the inventor, entrepreneur, businessman, and industrialist, who in turn made it possible for the American worker to have acquired the means to rise to middle class status and prosper. The labor movement fought for better working condiditions, shorter work weeks, and the like. But those victories couldn't have been possible without the tools of increased worker productivity and consumer products created by the inventor/entrepreneur/businessman/industrialist, who wouldn't have been possible without capitalism. The labor movement could not have been possible in any other era in human history. Capitalism made the labor movement possible.

It is Capitalism’s liberated human mind that from rude nature has delved and carved all the grandeur we behold.

Capitalism is what I will be quietly rejoicing as I enjoy my long weekend.

Happy Labor Day!!

Related Reading:

Atlas Shrugged—Ayn Rand

Did Unions Create the Middle Class?

QUORA: 'How is becoming a billionaire even possible, chronologically?'

Wednesday, August 28, 2019

The Anti-human Tyrade of an Ungrateful 16-Year-old

The recent United Nations gathering focused, among other things, on climate. And look who it put up as the face of the climate crusade, a 16-year-old “climate activist.” In World leaders promise to do more at the U.N. climate summit after Greta Thunberg’s appeal, Seth Borenstein reported for the Associated Press:

Leader after leader told the United Nations on Monday that they will do more to prevent a warming world from reaching even more dangerous levels. But as they made their pledges at the Climate Action Summit after an emotional appeal from 16-year-old climate activist Greta Thunberg, they and others conceded it was not enough.

“This is all wrong. I shouldn’t be up here,” said Greta, who began a lone protest outside the Swedish parliament more than a year ago that culminated in Friday’s global climate strikes. “I should be back in school on the other side of the ocean. Yet you have come to us young people for hope. How dare you. You have stolen my dreams and my childhood with your empty words.”

“People are suffering, people are dying,” Greta said as she sat on the dais with panelists who included a young clean-energy entrepreneur from India and a Brazilian lawyer representing youth climate activists. “Entire ecosystem are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth. How dare you?” 

“For more than 30 years, the science has been crystal clear,” Greta added. “How dare you continue to look away and come here and say you’re doing enough when the politics and solutions needed are still nowhere in sight?” [sic]

In the last 30 years, life expectancies have risen, world poverty has plummeted, and by 2018 the middle class has soared to encompass more than half the world’s population. People’s lives are getting better around the globe. This is no fairy tale. That is called economic growth. Money is the miracle lubricant that enables that growth. Money makes possible the division of labor by facilitating the ability of people to get better together through the shared prosperity of trade, thus enhancing the liberty of the individual to use his reason to advance his own life.

That economic growth means people are suffering less. Fewer and fewer people are dying prematurely from climate-related danger as steady economic growth dramatically improves climate and environmental safety. Still, many of the world’s people are still living in deprivation, lacking even electricity. There’s much more to do. “Eternal economic growth” is a vital necessity; vital, that is, if improving human well-being is your goal. 

Yet, Greta Thunberg wants to roll back the clock to a time when the climate really was a crisis for humans--a chronic crisis, a constant battle for bare survival against famine and disease and pestilence and weather. For what? She wants to save the ecosystems from “collapsing”—which means, to save the planet from human alteration. Life without technology and industry, the energy and freedom that powers it, and the economic growth that results, is wholesale suffering and shorter lives. She damns money and economic growth outright, thus regressing mankind back to the hellhole of life in raw nature, in the process stealing the dreams and destroying the futures of the very young people she arrogantly claims to speak for. 

And what kind of life do today’s young people have to look forward to? 300 years ago, at the dawn of the Enlightenment, the odds were that a youngster like Thunberg wouldn’t have lived to 16 years old. And if she did, she could count on a brutish life of extreme poverty and drudgery
in a hostile natural environment--the same stagnant life of her parents, grandparents, and generations past. Instead, a young person today faces a long, prosperous, much safer life full of opportunity. What brought that magnificent progress? Freedom, money, and economic growth. That’s the future that her elders bequeathed to today’s young people. And for that gift, all she has to say to her elders is, “how dare you?” What an ungrateful little snot.

But that’s not the worst of it. What of her claim that “the politics and solutions needed are still nowhere in sight?” Nonsense. We’ve had decades full of hundreds of $billions in subsidies and regulations to encourage “clean energy” imposed by governments. It hasn’t worked. People want their reliable fossil fuels because economic growth needs reliable, cheap, plentiful energy, and economic growth is the only means of improving human life. But political power grows out of the barrel of a gun. To date, not enough political power has been brought to bear. The limited political solutions of subsidies and regulations have not made the impossible possible. Some controls have been tried, and have failed. So Thunberg demands what every utopian who thinks she has a right to force her values on everyone else. Though she doesn’t come right out and say it, she demands the total politics of socialist totalitarianism, plainly laid out by Leftists politicians. She’s addressing a government body. She demands that they force aside economic well-being. That means freedom must go.

How dare her! Hers is the voice of a monstrous evil. Thunberg’s message goes beyond the fairy tale of some prosperous “clean energy” future. It goes beyond windmills and solar panels. She proclaims the true heart and soul of Environmentalism, the moral supremacy of nature over human life. Give her credit for honesty. She doesn’t cloak her agenda in promises of jobs and economic growth, the way climate fear mongers do in pushing to outlaw fossil fuels and nuclear in the name of renewable energy. She flat out attacks freedom, money, and economic growth. “Entire ecosystems are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth, ” Thunberg bellows. We need “politics” (force) to impose “solutions” (“rapid, far-reaching and unprecedented changes in all aspects of society,” as the UN puts it) that only totalitarian powers can bring about, as every utopian thug who ever sought to shape society to his liking has shown

I don’t know how much of the 16 year old Thunberg’s vision is indoctrinated ignorance and how much is her actual conviction. I do know one thing. Her utopian vision would be disastrous for human life on Earth. Such utopian disasters are never innocent. Whatever the case with Thunberg, that is the vision that the United Nations, the institution whose members claim to represent all the people of the planet, gave its platform to. How dare they!

Related Reading:

The sustainability myth—Alex Epstein

Tuesday, August 27, 2019

On the Question of When to Begin Taking Social Security Retirement Benefits

People become eligible to collect Social Security retirement payments at 62 years old. But each year until age 70, monthly benefits rise. So the longer you wait to collect, the higher your payments. The question is should you wait? In her New Jersey Star-Ledger financial advice column, the “Biz Brain”, Mueller answered the following question:

Q. What are the advantages and disadvantages to retiring, taking Social Security and leaving my 401(k) intact?

Mueller, citing one expert, advises:

[F]or many people, taking Social Security early is a mistake.

One of the most important things to retirees is consistent, stable and predictable cash flow, said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.

“If I have a product that would guarantee you an 8 percent annual increase up to age 70, was indexed for inflation and guaranteed for life, would you move all your money into that? That is Social Security,” he said.

Lynch said Social Security is one of the most underestimated benefits out there, noting the more guaranteed income you have in retirement, the less stress you will have when the market is volatile like now.

For that reason, it could be smarter to tap your 401(k) and let your Social Security benefits grow, but you should sit down with a financial planner who can assess your assets and cash flow and see exactly where your personal situation stands.

But would it really be “smarter to tap your 401(k)” early? 

Lynch’s advice seems to be typical of most advisers. At a glance, it seems like a no-brainer. But there’s more to the issue than Lynch and these other advisers lead us to believe. Lynch’s 8% growth argument is misleading, since it ignores other factors, such as the growth of the 401(k) that you would be forgo.

Suppose you retire at 62. You have a significant IRA nest egg. Let’s say you are entitled to $2000 per month at that time, which rises to $3300 by age 70, if you wait. If you wait, you must start draining your IRA. Rather than start taking IRA withdrawals, you take the $2000 per month, and let your IRA grow without touching it. At age 70, you will have collected about $178,000, along with having a much larger IRA. If you wait until until 70, you would collect $3300 per month, but with a depleted IRA. Furthermore, waiting until 70 would require 11+ more years to “break even” with the $178,000 in SS benefits you wouldn’t have already collected had you waited until 70. 

Waiting until age 70 to collect would leave you with no financial savings cushion--or a much reduced one--and the hope that you will live long enough to get back the $178,000 you left on the table for those 8 years. You’d have your higher monthly payments, but not the security and peace-of-mind that a hefty nest egg could provide.

Of course, if you have a big enough savings cushion to make withdrawals while still getting growth, it might make sense to wait until age 70 for that $3300 per month (although I don’t think so). And if you’re really healthy, you could be a big winner by living well past 81. 

But keep in mind that “guaranteed income” is not by any means guaranteed. It depends entirely on the whims of politicians. You have no property right to that money you pay “into the system”—and never have. You are not legally entitled to the promised benefits—and never have been. The politicians can lower or rescind the benefit at any time. As CATO reports, “One of the most enduring myths of Social Security is that a worker has a legal right to his Social Security benefits. Many workers assume that, if they pay Social Security taxes into the system, they have some sort of legal guarantee to the system’s benefits. The truth is exactly the opposite. It has long been law that there is no legal right to Social Security.”

I would think very carefully before taking the advice of waiting until age 70 to collect your Social Security benefits. 

Related Reading:

Conflicting opinions about Social Security: 

According to Brenton Smith, the temptation of collecting early could cause you decades of hardship. Mark Hulbert presents arguments in favor and against taking Social Security payments early.

Saturday, August 24, 2019

A Reply to a QUORA Comment About a Private Safety Net

A Reply to a QUORA Comment About a Private Safety Net 

In response to my answer on the QUORA question ‘If we cut out welfare and allowed capitalism to take its course, would people's basic needs eventually be fully met by the free market?’, correspondent Miguel Valdespino commented: “Why do you think a private safety net will work now when it didn’t work in the past? How do you keep people from falling through the cracks?”

My reply to Miguel:

“Didn’t work”? By what standard? To some, what works is getting as many people hooked on dependence as possible. To others, what works is getting as many people off of dependence and back on their own feet as quickly as possible. To still others, what works is based on the individual giver’s judgement as to the worthiness of the receiver. To still others, what works is what one can afford to give. The term “work” in this context is too highly indeterminate to be of any use. No one can have the knowledge of the millions upon millions of individual welfare cases to know what’s working in each case. If you can’t do that, you can’t possibly make overall judgements. That’s why, as a practical matter, charity should be private, local, individual, and voluntary.

What’s true is that, though life was hard by today’s standards, no one ever “starved in the streets” in America. Private anti-poverty efforts grew steadily as prosperity spread and the general standard of living surged under free market capitalism. The creation of the welfare state was driven by ideology, not practicality. Before the welfare state, free Americans found many inventive ways to help people out. For example, before Government intervened in health care, doctors regularly charged wealthy patients more to subsidize lower prices for workers and free care for the indigent. Historian Walter I. Trattner, himself heavily biased toward welfare statism, nonetheless documents how private charity and mutual aid or fraternal societies dominated anti-poverty efforts and were widely available before the welfare state. "In fact,” Trattner reports, "so rapidly did private agencies multiply [after the Civil War] that before long America's larger cities had what to many people was an embarrassing number of them. Charity directories took as many as 100 pages to list and describe the numerous voluntary agencies that sought to alleviate misery, and combat every imaginable emergency." The state had a small role. But “the vast majority looked first” to private help--and generally found it. In fact, “many charity workers . . . were horrified by this ‘excess’ of relief,” leading to the rise of private agencies specifically designed to promote cooperation and efficiency among the private charities. (page 90-93)

As far as people “falling through the cracks,” no “safety net” will “catch” everyone in need. Such people exist today, despite the gargantuan government welfare state--e.g., California’s “homeless crises”. It’s up to each of us to decide what, if anything, to do for people needing help, if and when we encounter them. 

Regardless of how you feel about our current government-enforced system, Miguel, I believe it is simply wrong to say that a private safety net didn’t “work” in the past. Whatever is meant by “work”--a highly subjective and debatable concept--a private safety net did exist, was substantial and widely available, and can be again. By the judgement of the people directly involved, it did work. Otherwise, why participate? Fundamentally, however, the issue is moral. Should politicians be forcing private citizens to fund and/or perform charity and welfare, according to the politicians’ standards? No. Government and law should never be an instrument for anyone to force their values and agenda on unwilling others. Every individual has a moral right to act on their own judgement, including to judge for themselves when, how, whom, and in what capacity to help others out. Need doesn’t give anyone an automatic moral or legitimate legal claim on the lives, liberties, or property of others. Society needs a safety net, but only one that is private and voluntary can legitimately be said to work. 


For the record, Miguel reacted to my reply. Note that Miguel fails to address the moral aspect, which I highlighted as the main point. If private charity has the problems he claims, why are the solutions not to be addressed by private rights-respecting means? What right does he have to use the government’s legal coercion to force his solutions on everyone else? Miguel doesn’t answer. He also falls back on the classic statist line that freedom is “inefficient” so the efforts of private individuals must be consolidated or streamlined by government force. I gave him the last word, as my reply would be mainly repeating myself.


America Before the Entitlement State—Yaron Brook and Don Watkins

Wednesday, August 21, 2019

2018 SCOTUS ‘Agency Fee’ Ruling a Victory for the Rights of Working People

Last year, the U.S. Supreme Court ruled in Janus vs. AFSCME (the public sector union the American Federation of State, County, and Municipal Employees) that public employee unions may not collect dues, or “agency fees”, from employees who choose not to join the union. The ruling was narrow, restricted to free speech issues. Subscript Law reports:

Mark Janus works for the state of Illinois. He had been paying $45/month to a labor union, despite that he was not a member of the union. In fact, he is politically opposed to labor unions, and he did not want to pay.

Janus brought this suit arguing that the state cannot impose union fees on him. He said the First Amendment protects him from supporting a view he does not agree with. Money is support, and he does not want to support the union.

Analysis has been slanted. For example, Vox “reports”:

Pro-union advocates have argued that under “right-to-work” laws, nonunion members are reaping the benefits of progress that unions achieve without paying anything in return, resulting in lower membership rates and less influence, Vox’s Dylan Matthews wrote. Meanwhile, anti-union advocates argued that required agency fees violate First Amendment rights by forcing workers to support a political organization regardless of whether they support the cause. Agency fees are fees nonunion members have to pay to unions to cover the cost of collective bargaining.

Supporters of the ruling are not necessarily anti-union. I’m a private sector union member. And I don’t support so-called “right-to-work” laws. And no one can reasonably argue that unions, especially monopolistic public sector unions, are not political organizations, not just economic.

Charles Wowkanech, President of the New Jersey State AFL-CIO, argued in a New Jersey Star-Ledger guest column prior to the ruling: 

At its core, this case is a direct attack on collective bargaining rights and undermines the ability of all workers to join together and negotiate with their employer for better wages, benefits and working conditions.

No, this is not a blow to collective bargaining rights. Such rights do not exist. As I argued in my Objective Standard article on the subject, there is no “‘right’ of the state to force employers to negotiate with unions,” which is what the Wagner Act does in the name of “collective bargaining rights.” In Illinois, the state with the law that Janus challenged, 

Illinois law permits public employees to unionize. If a majority of the employees in a bargaining unit vote to be represented by a union, that union is designated as the exclusive representative of all the employees, even those who do not join. Only the union may engage in collective bargaining; individual employees may not be represented by another agent or negotiate directly with their employer. Nonmembers are required to pay what is generally called an “agency fee,” i.e., a percentage of the full union dues. 

That’s from the ruling, and the emphasis is mine. So the coercion goes beyond dues-paying, and includes effectively forcing individuals into the union, even if she technically chooses not to join. The ruling eliminates the dues requirement, but still bars individuals from negotiating on her own behalf, i.e., she must abide by the union-employer contract.

Keep that in mind when you consider Wowkanech’s call for “unity” in the labor movement:

No matter the outcome of this case, working people have the power to set the course for the future. The formula is simple: When workers unite and come together in common purpose, we can achieve an economy that works for all.

Well, not working people forced into a union of “bargaining unit.”

Unity serves the common purpose only when everyone agrees voluntarily on that purpose. Unity enforced on “working people” by law is not “workers unite and come together in common purpose.” A group is made up of individuals. When some of those individuals are forced into “unity” they don’t agree with, it is not a “common purpose” that binds. It is not united we stand. It is unite and control by union elites. It is a chain gang.

Wowkanech concludes with a call “for working people to stand up for their rights.” That’s exactly what Janus did--and won. Yes, this issue is a matter of rights--the rights of employees and employers alike to voluntary contract, or not. Individual rights is the core principle of America.

Related Reading: