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Homeschooled Weirdoes and the Culture of Conformity – Article by B.K. Marcus

Homeschooled Weirdoes and the Culture of Conformity – Article by B.K. Marcus

The New Renaissance HatB.K. Marcus

“Not seeming weird” carries its own cost

Remember that weird kid in school? I don’t mean the really scary one. I mean the borderline oddball. The one you had to talk to a bit to spot the weirdness. The boy who never knew what TV show everyone was talking about. The girl who, when you asked her what her favorite music group was, answered some long name that ended in “quartet.” The kid who thought you meant soccer when you said football.

How did you treat that kid? (Or were you that kid?)

In “Homeschooling, Socialization, and the New Groupthink,” I suggested that the most useful definition of socialization is “ensuring that a child becomes sociable, that he or she develops the intelligence and social reflexes that promote peaceful and pleasurable interactions.” I also suggested that some of homeschooling’s critics might mean something more sinister: indoctrination into a particular vision of society.

But after reading my article, third-grade schoolteacher Heather Lakemacher, commenting on Facebook, pointed out yet a different meaning of socialization: not seeming weird.

This is the real reason, she said, “why this stereotype of the poorly socialized homeschooler exists.” Whereas I had only addressed adult perceptions of homeschooled children, the true culprit, she said, is other kids:

Many of us who were educated in a traditional school have vivid memories of meeting other kids our age who were homeschooled and thinking, “Oh my god! This kid is so WEIRD!” It’s entirely possible that the child in question grew up to be a happy, well-adjusted, productive member of society. …

However, I think the stereotype exists because of the power of those childhood interactions with a peer who just didn’t behave in the way we were expecting them to behave. That’s not an argument against homeschooling, but data will always have a hard time dispelling emotionally charged memories.

She’s right. Odd kids can make a lasting impression.

Grownups regularly note how polite my homeschooled son is, or how he’ll talk to them at all when so many other kids clam up and fail to make eye contact. Adults find his lack of awkwardness with them charming. But what do schooled kids see?

Diane Flynn Keith, a veteran homeschooling mom and author of the book Carschooling, writes that homeschooled kids are, in fact, “not well-socialized in the traditional school sense.”

I hate to be the one to break it to you, but there’s nothing “normal” about our kids. Your homeschooled child is odd compared to the schooled population because they have not experienced ongoing school-based socialization and standardization. …

They haven’t been indoctrinated in the same way. They have not been steeped in the popular consumer culture to the degree that most schooled kids have been. They are not adult-phobic and peer-dependent. (“Yes, My Grown Homeschooled Children Are Odd — And Yours Will Be Too!“)

And most of the time, homeschooling parents love that about our kids — and about homeschooling in general. We don’t want them to be standard. Whether we admit it or not, we tend to think they’re better than the standard. But it’s true that our socially flexible and resilient children can be puzzling to their traditionally schooled peers, and vice versa.

So why does the assessment of weirdness flow only in one direction? Why don’t homeschooled kids think the mainstream schoolchildren are weird?

One answer is that our kids know the mainstream experience through television, movies, and books. They may not always track the finer distinctions between Degrassi High and Hogwarts, but they certainly know a lot more about schools and schooling than mainstream kids know about education outside a classroom.

But I think that even without the pop-cultural lens on the schooling experience, homeschooled kids are just less likely to see anyone as weird. It’s just not a part of their semantic reflexes. Instead they think, “I don’t get him,” or “I’m not into the same stuff she is.”

As a result, homeschooled kids aren’t just more tolerant of diversity; they’re probably also more diverse. And that’s a lot of what gets labeled weird by those who are better assimilated into the mainstream culture.

What’s probably obvious to anyone familiar with homeschooling is that it’s good for the emotional health of kids who don’t easily fit in. What is less obvious is the damage that a culture of conformity does not just to the oddballs in that culture but also to the kids who conform with ease — and to the liberty of the larger society.

For over half a century, studies have shown that the need for social acceptance not only changes our behavior but can even make us perceive the world differently — and incorrectly.

In the early 1950s, psychologist Solomon Asch conducted a series of experiments on the dangers of group influence. When presented with simple problems that 95 percent of individuals could answer correctly when free of group influence, 75 percent of Asch’s test subjects would get the answer wrong when it meant concurring with the group.

In 2005, neuroscientist Gregory Berns conducted an updated version of Asch’s experiments, complete with brain scans to determine if the wrong answers were a conscious acquiescence to social pressure or if, instead, test subjects believed that their group-influenced wrong answers were in fact correct. Not only did the subjects report that they thought their wrong answers were right; the brain scans seemed to confirm it: they showed greater activity in the problem-solving regions of the brain than in those areas associated with conscious decision-making. And the nonconformists who went against the group and gave correct answers showed heightened activity in the part of the brain associated with fear and anxiety.

Commenting on the implications of these experiments, author Susan Cain writes,

Many of our most important civic institutions, from elections to jury trials to the very idea of majority rule, depend on dissenting voices. But when the group is literally capable of changing our perceptions, and when to stand alone is to activate primitive, powerful, and unconscious feelings of rejection, then the health of these institutions seems far more vulnerable than we think. (Quiet: The Power of Introverts in a World That Can’t Stop Talking)

Groupthink, in other words, is dangerous to a free society. And we don’t always realize when we’re not thinking for ourselves.

This kind of cognitive conformity, however, isn’t fixed or universal. Not only does it vary, for example, between East and West; it has also declined in the West since the 1950s, according to a 1996 review of 133 Asch-type studies from 17 countries. That review assessed the cultures in which the studies took place to see if their results “related cross-culturally to individualism [versus] collectivism.” Unsurprisingly, test subjects were least susceptible to the reality-distorting effects of the group in the more individualistic national cultures.

We should expect the same to be true of more and less individualistic subcultures. I bet homeschoolers, for example, are less likely to show the Asch effect. I suspect the same thing of the oddballs at school.

That doesn’t mean everyone should homeschool, or that only weirdoes can be independent thinkers, but it does suggest that the more a culture values independence and diversity, the less vulnerable it will be to the distortions of conformity. And if socialization means helping kids fit in more easily with the culture of their peers, then parents of homeschoolers and schooled kids alike may want to reconsider the value of socializing our children.

B.K. Marcus is editor of The Freeman.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Capitalism Promotes Equality – Article by Barry Brownstein

Capitalism Promotes Equality – Article by Barry Brownstein

The New Renaissance HatBarry Brownstein

Equality in Consumption Is Now the Norm

Highway traffic began to slow outside of Boston as we made our way to the airport. My wife was driving, so I took out my $100 Android phone and opened Google Maps. Google Traffic instantly showed me, in real time, the best route to avoid delays and estimated the number of minutes we’d save by altering our route. Thanks to Google, there was no threat of missing our flight.

It was not too long ago that we relied on traffic reporters in helicopters, and their advice was often useless by the time we heard their updates.

Have you wondered how Google Traffic does it? The answer is crowdsourcing. If you are among the two-thirds of American adults who own a smartphone, and if the GPS locator on your phone is enabled, you are generating real-time traffic information. Google Traffic measures how fast cars are moving compared to normal speeds and generates location-specific reports.

Rich or poor, most of the drivers on the highway that day had access to the same miraculous traffic report and the same opportunity to make better driving decisions. This is just one example of how the marketplace generates equality in consumption.

The cars we drive are another indicator of consumption equality. We were driving an inexpensive Subaru Outback. There are more expensive, comfortable, and bigger cars on the market, but the Insurance Institute for Highway Safety says that there are none safer than the Outback.

Would a rich individual, on this same drive to the airport, have any noticeable advantages over me? He or she could hire a driver and use the drive time for something more productive, but even that advantage will dwindle as driverless cars become the norm.

In his Wall Street Journal commentary “The Rise of Consumption Equality,” former hedge fund manager Andy Kessler writes:

Just about every product or service that makes our lives better requires a mass market or it’s not economic to bother offering. Those who invent and produce for the mass market get rich. And the more these innovators better the rest of our lives, the richer they get but the less they can differentiate themselves from the masses whose wants they serve.

“What does Google founder Larry Page have that you don’t have?” Kessler asks pointedly.

Page’s income is unimaginably larger than most of ours. But in terms of consumption, the differences are negligible — which is remarkable, given how much Page and Google have improved our lives.

All-time football great Tom Brady earns roughly $10 million a year. His diet made the news recently. Does Brady enjoy health advantages not available to Americans with a fraction of his income? Brady hires a cook. Our family doesn’t do that, but we eat much like Brady — organic vegetables, fruits, whole grains, beans, and fish make up the bulk of our diet. From May to October, a local organic farmer provides an abundance of vegetables that are picked fresh for us based on an order we place the day before. In the summertime, our produce may be fresher than Brady’s. Compared to any of us, what real dietary advantage does Tom Brady’s income afford him? It is his commitment to a healthy lifestyle, not his income, that makes the difference.

In 1900, Americans spent approximately 50 percent of their household income on food and clothing; today, we spend closer to 20 percent. Today, fresh produce from all over the world, not even available to a king a century ago, awaits common consumers when they enter the supermarket.

In 1900, only 25 percent of households had running water; fewer still had flush toilets. It would be decades before such wonders as electricity, automobiles, and indoor plumbing were ubiquitous. The faucets in the famed Hearst Castle in California may have been gold plated, but was the water any better than what the average household received? The water running in my home comes from an artesian well over 400 feet deep. More evidence of consumption equality: my water is every bit as good, if not better, than a billionaire’s in a big city penthouse.

Wealth is not a good predictor of a rich life. Psychology professor Sonja Lyubomirsky found that only 10 percent of the variance in Americans’ happiness is due to income and other circumstances. “Happiness more than anything,” she writes in her book The How of Happiness, ”is a state-of-mind, a way of perceiving and approaching ourselves and the world in which we reside.”

And what of the elements of emotional intelligence that make life richer? In the book Big Magic, best-selling author Elizabeth Gilbert observes:

If money were the only thing people needed to live rich creative lives, then the mega-rich would be the most imaginative, generative, and original thinkers among us, and they simply are not. The essential ingredients for creativity remain exactly the same for everybody: courage, enchantment, permission, persistence, trust — and those elements are universally accessible. Which does not mean that creative living is always easy; it merely means that creative living is always possible.

The same universally accessible elements are essential ingredients for entrepreneurship. Entrepreneurs persist, driven by their vision and by the equality of opportunity that capitalism affords. The entrepreneur’s choice to be persistent and courageous is the not-so-secret engine that drives success.

The essential consumption goods we couldn’t even imagine a hundred years ago are almost universally available in the United States today. The marketplace, aided by many creative, pioneering entrepreneurs and every person who strives to put in a good day’s work, is generating consumption equality.

Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. He is the author of The Inner-Work of Leadership. He blogs at, Giving up Control, and America’s Highest Purpose.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Safe Spaces Can’t Be Diverse – And Vice Versa – Article by Kevin Currie-Knight

Safe Spaces Can’t Be Diverse – And Vice Versa – Article by Kevin Currie-Knight

The New Renaissance Hat
Kevin Currie-Knight

I’m a fan of the LGBT center on the campus where I teach. It offers a space where gay, lesbian, bisexual, and transgender students can be among students, faculty, and staff without fear of harassment, bullying, or negative judgment. There, they do not have to worry about passing (pretending to be straight) or covering (having to signal to others that they are still “normal” despite who they are).

But do you know what spaces like this are not? Diverse.

Or rather, they are not diverse in the types of attitudes permitted to exist there. One cannot, say, believe that homosexuality is a sin and feel welcome at an LGBT center. One cannot believe that transgender people are mentally ill and find LGBT centers to be congenial.

This lack of diversity is not wrong; it is by design and has a good purpose. A safe space is one where people with certain identities that don’t fit in elsewhere can find safety through homogeneity and solidarity.

We don’t need to dismiss either ideal to recognize that a space’s safety and its diversity will be inversely related. The more you have of one, the less you must have of the other.

But you can have spaces and contexts that allow for either ideal, or varying degrees of compromise between them — unless activists succeed in their current quest to convert entire universities into safe spaces.

The Yale case is well known by now. Erika Christakis, a lecturer in early child development, voiced concern in an email to Yale students and residence-life folks urging them to rethink the university’s heavy-handed approach to advising students on which Halloween costumes to avoid. Her note ignited controversy and protest on campus — with some even calling for Christakis’s resignation — because the possibility of students wearing offensive Halloween costumes makes the campus a potentially unsafe space.

In another recent example, the University of Missouri has been experiencing protests regarding alleged racist speech and treatment of minority students. During one of these protests, a journalist trying to cover the event was evidently shouted down and intimidated because his (journalistic) presence at the protest allegedly threatened the protesters’ safe space. (Think about how odd it is to describe the site of a vigorous protest as a safe space).

One journalist described a video of the events as follows:

In the video of Tim Tai trying to carry out his ESPN assignment, I see the most vivid example yet of activists twisting the concept of “safe space” in a most confounding way. They have one lone student surrounded. They’re forcibly preventing him from exercising a civil right. At various points, they intimidate him. Ultimately, they physically push him. But all the while, they are operating on the premise, or carrying on the pretense, that he is making them unsafe.

If people who regularly find their campuses (or other places) to be inhospitable, it may do them good to have social spaces where they are assured some level of relief, probably with people they are comfortable with. But think about what that means for diversity.

Increasing diversity is another aspiration at universities and other organizations, but safe spaces demand that the people in the space have a certain degree of homogeneity. For Yale to be a safe space, the university must disallow a diversity of Halloween costumes.

Why did the Missouri protesters suggest that Tai’s presence threatened to turn their protest into an unsafe space? Because there was a possibility that the narrative this journalist would construct might not be one the homogeneous protesters would approve of. Tai threatened the homogeneity and solidarity of the protest.

Let’s go back to the example of LGBT centers. That these students have somewhere they can go where they do not feel pressures to hide or “tone down” their identities is important, and any society that promotes freedom of association will have many such centers, whether official or not. But the only way for an entire university to become a safe space for LGBT students is to sacrifice diversity by, for example, demanding that religious students not believe (at least openly) that homosexuality is sinful. The converse is also true: LGBT centers could no longer function as safe spaces for LGBT students if they became sites of more diversity, where those religious students could regularly voice their beliefs.

Diversity cannot thrive in a world that is one big safe space.

Why? Because diversity means difference. Difference means that people will invariably see things in different ways, and we will sometimes anger each other. It’s not a bug, but a feature. To eliminate the possibility that some of us could deeply offend others of us would be to require everyone to live only in ways acceptable to all.

Diversity means a world where black-power advocates can live openly and in ways that anger white people — and where white-power advocates can live openly and thus anger black people. A world of diversity is one where people with different tastes, comfort levels, and senses of humor can wear Halloween costumes that may offend others.

The best resolution is to allow people on college campuses and elsewhere to create safe spaces. If we believe others’ Halloween costumes may deeply offend us, or that people may say derogatory and racist things to us, we can go to one of those spaces. But leave the university as a diverse space — don’t force it to become a safe space.

Diversity and emotional safety are values at odds with each other. They can coexist in tension, but the expansion of one can only come at the expense of the other.

Kevin Currie-Knight teaches in East Carolina University’s Department of Special Education, Foundations, and Research. He is a member of the FEE Faculty Network.

This article was originally published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Comparative Advantage: An Idea Whose Time Has Passed – Article by Michael Munger

Comparative Advantage: An Idea Whose Time Has Passed – Article by Michael Munger

The New Renaissance HatMichael Munger

The Division of Labor Is the Engine That Drives Prosperity

Many economists will tell you that the most important principle in economics is comparative advantage — the idea that it is expensive to grow oranges in Alaska or to flood rice paddies in Saudi Arabia, so Alaska and Saudi Arabia should import oranges and rice, respectively, and base local production on the advantages of local conditions. We got this idea from classical economist David Ricardo, who famously observed in 1821 that England and Portugal would both be wealthier if Portugal exported its wine and imported England’s textiles, and vice versa.

Ricardo’s principle even demonstrated the advantages of trading with those who are less productive at everything. For example, my wife is an attorney. She is also a fast and accurate typist. Yet she hires a secretary who is considerably slower at typing. Secretaries get paid less than attorneys, so if my wife specializes in law and the secretary specializes in typing, my wife can earn more for her firm and a secretary gets a job. Both end up better off. That’s true even though my wife is better at both jobs: comparative advantage means trade helps everyone.

Division of Labor Trumps Comparative Advantage

The problem is that fixed comparative advantage — derived from weather, culture, and location — is vanishing in the modern world. Ricardo’s classical formulation leaves no space for human creativity, no role for division of labor, and no room for innovation to affect the dynamics of cost.

So economists have it wrong, as my friend Russ Roberts argued in 2010. The most important principle in economics is opportunity cost. Here’s proof: you can define opportunity cost without resorting to comparative advantage. But you can’t possibly define comparative advantage without invoking opportunity cost.

The notion of comparative advantage is empirically misleading, because it sounds deterministic. There are few situations where fixed factors make the relative opportunity costs of different actions immutable. Instead, cost and productivity differences are endogenous, the consequence of human ingenuity and the division of labor. Today’s cost advantage for one country may disappear if another country finds a better, cheaper way to produce the product. And the way to specialize is to exploit the division of labor.

Sock City

What nation lost the most manufacturing jobs from 1990 to 2000? China. That may seem surprising, given the media stereotype of how we “ship US jobs overseas,” but it’s true (PDF). In 1990, Chinese manufacturing meant large sheds filled with hundreds of people working with sewing machines and other small tools. The scale was huge, with at least 100 million manufacturing workers. But productivity was terrible.

In the late 1990s, China began to automate, taking advantage of division of labor. A thousand women with sewing machines in a barn turned into 25 women running enormous machines in a factory, with a gigantic increase in productivity. A fraction of the workers produced 10 times as much output, increasing productivity a hundredfold and forcing 97.5 percent of the workers out. But those workers found new jobs, as China used the division of labor more and more effectively. The country’s advantage was not climate, not soil quality, but human action consciously designing production processes that were cheaper and faster.

Nowhere did productivity rise faster than in the city of Datang in Guangdong Province. Part of Datang is actually called “Sock City,” because more than a third of all socks sold in the entire world (yes, the world) are manufactured there. Datang boasts more than 8,000 hosiery makers ringing the city center, and they produced more than 11 billion pairs of socks in 2012. The socks you’ll find at Walmart — or even at Neiman Marcus or another more upscale store — were likely made in or around Datang.

The concentration of manufacturing at Sock City means this: there is a well-developed labor market for exotic sock-making specialties. The occupations that are well known in Datang don’t exist elsewhere, because no other location has been able to take such full advantage of the division of labor. What limits the division of labor in Datang? Only the extent of the market, just as Adam Smith said in The Wealth of Nations. And remember that Datang is producing at a rate of nearly two pairs of socks per year, for every human on the planet. Datang’s market is Earth.

It wasn’t always that way. Datang does not have any comparative advantage, at least not in the way Ricardo meant. The climate is not especially favorable, the city is not near an essential natural-resource base, and sock making is not part of traditional culture. Datang’s dominance is new and is overtaking historical frontrunners like Fort Payne, Alabama, the self-proclaimed Sock Capital of the World.

Fort Payne “began making stockings in 1907 and once boasted of producing 1 of every 8 pairs worn on the planet,” writes Don Lee in “The New Foreign Aid,” published April 10, 2005, in the Los Angeles Times. However, he explains,

China’s advantages in the global marketplace are moving well beyond cheap equipment, material and labor. The country also exploits something called clustering in a way that the United States just can’t match.… Industrial clusters are like one-stop production centers, achieving economies of scale and driving innovation by geographically bunching suppliers, manufacturers and contractors.…

Meanwhile, American producers, pummeled by imports from China and elsewhere, saw their share of the US hosiery market fall from 69% in 2000 to 44% in 2003, according to the latest industry data.

Comparative advantage is fixed and exogenous. Opportunity cost is mutable, the product of innovation. Datang’s Sock City itself may soon lose its dominance.

Who “should” produce socks? Comparative advantage here is no guide; the situation is more like comparing two street porters who appear to be quite similar. One of the street porters figures out ways to make socks much more cheaply. Over time, the advantage in opportunity cost grows because of the improvements in dexterity, tool use, and design of new production processes. Human ingenuity created an opportunity for nations to specialize in activities where their opportunity costs were lower. Specialization and trade are what produce prosperity, and opportunity costs guide the choice of what each country should specialize in. My comparative advantage today may be your comparative advantage next year. But all the street porters started out the same.

Focus on Opportunity Cost

Economists routinely act as if three related key concepts — division of labor, comparative advantage, and opportunity cost — are distinct.

They are not. Comparative advantage is not a separate concept at all. It is simply an explanation of the implications of the division of labor (the engine that drives prosperity) and opportunity cost (the concept that guides the choice of which activities a person, or a nation, should specialize in).

Admittedly, it was a significant intellectual achievement to show that the weaker trading partner benefits from trade, even if the stronger partner is better at everything. But those fixed differences have largely disappeared in many markets. The question of what should be produced, and where, is now answered by dynamic processes of market signals and price movements, driven by human ingenuity and creativity. The cost savings resulting from successfully dividing labor and automating production processes dwarf the considerations that made comparative advantage a useful concept in economics.

Let’s downgrade comparative advantage from our list of key concepts in economics, and recognize that the human mind is the mainspring of a market economy.

Michael Munger is the director of the philosophy, politics, and economics program at Duke University. He is a past president of the Public Choice Society.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Why Is the Middle Class Shrinking? – Article by Steven Horwitz

Why Is the Middle Class Shrinking? – Article by Steven Horwitz

The New Renaissance HatSteven Horwitz

Two Arguments in Favor of Economic Inequality

Economic inequality continues to be a major political issue even as the headlines scream about terrorism and climate change. Bernie Sanders has made it a centerpiece of his presidential campaign, and other candidates have addressed it along the way. And a recent study by the Pew Research Center has added new, though misplaced, fuel to the fire of those concerned about inequality.

The Pew study has been discussed in the media, and one key point has been grossly misunderstood. Among other things, the study found that the American middle class is shrinking and is now just under half of the population. Commentators quickly began to refer to the “hollowing out” of the middle class and to tie this study to the concerns about growing inequality.

However, a close look at the data shows that the middle class has shrunk since 1971 because more members of the middle class have moved up the income ladder than down it.

Don’t believe me? Look for yourself at the terrific graphic that the Financial Times created to illustrate the data:

ft2015inequalitygraphYou can watch as the folks on the left slowly slide to the right over 44 years. When you compare the 1971 distribution with the 2015 one, what do you see? A growth in households earning around $80,000 or above, adjusted for inflation, since 1971 and a significant decline in those making less than that amount (with the exception of the folks right around $0). It’s true that there’s not a fat middle class anymore, but why should that trouble us if there are more high-income households and fewer low-income households overall?

The funny part of this is that if you read the story in the Financial Times that accompanies this graphic, it’s as if they never actually looked at the graphic they produced. Their narrative is at odds with it, as the narrative proclaims the doom-and-gloom story that the graphic actually refutes. As they say, never let the facts get in the way of a good story.

This growth in household income may, to some extent, be a by-product of the same economic processes that have produced the concerns about inequality, illustrated in this graphic by the significant growth of the ultra-rich.

There are far more very rich people today than there were 44 years ago, but the growth of the upper class has gone hand in hand with the enrichment of a large number of less-well-off households. Are there ways in which economic inequality is good, then? I think the answer to that question is yes. If so, then, what are they? Here are two defenses of economic inequality that proponents of the free market could make.

First is the more obvious one: growing inequality is good because it might be a consequence of economic institutions that produce all kinds of results that we think are desirable. For example, if competitive markets lead to peace and rising prosperity for all but also create inequality along the way by allowing some folks to get very rich, then we should at least tolerate that inequality because the things that produce it also produce other things we like.

This is the usual defense libertarians invoke, and it’s a good argument. The critic, however, might say that even if the defense is true, it doesn’t prove that inequality is necessary for that result. There’s a difference between saying, “Good economic institutions will produce inequality while creating good economic outcomes for all,” and saying, “Good economic outcomes for all can’t be produced without inequality.” The critic would likely ask how reducing the inequality that markets produce will harm their ability to produce those good results.

And here is where we come back to the Pew study and get a second defense of inequality. One way the middle class (and all of us) has become richer in the last generation is that the cost of so many goods and services has dropped in terms of the number of hours we have to work at the average wage in order to purchase them. The lower price of basic goods has enabled more and more people to afford things like large TVs, smartphones, and new, cheaper medications.

One thing that has made this process happen is inequality. In The Constitution of Liberty, F.A. Hayek argued,

A large part of the expenditure of the rich, though not intended for that end, thus serves to defray the cost of the experimentation with the new things that, as a result, can later be made available to the poor.… Even the poorest today owe their relative material well-being to the results of past inequality.

Having a group of very rich people is what enables yesterday’s luxuries to become today’s basics.

There are two parts to this process: cost bearing and discovery. The very rich are able to afford the high prices of new technologies, thereby providing an incentive for firms to market new and expensive products. Once the rich pay the high initial price and cover the fixed costs of research and development, sellers can begin to price closer to the much lower marginal cost of producing additional units, making the good much more affordable to more people.

But the rich are also an economic canary in the coal mine that informs producers whether they are getting it right.

For example, a critic of inequality might complain that no one “really needs” a $100,000 luxury car with all kinds of new high-tech gadgets on it. But the fact that some can afford it and want to buy it helps the car companies figure out which new features might be popular. Rear-view cameras were once only available on top-end cars, but they have slowly become a standard feature. The same may soon be true of collision warning systems now available on high-end models of some cars.

In fact, everything we think of as basics today was once the province of only the well-off. The first microwaves were expensive and bought mostly by the rich. I can remember my parents paying about $900 for a VCR in the late 1970s. VCRs, of course, fetch a price close to zero these days. The rich who bought the early LCD TVs helped manufacturers defray the fixed production costs and figure out what people wanted, and now these TVs are in the vast majority of houses at a more affordable price.

The inequality at any point in time is a key part of the process that creates wealth for the rest of society over the years to follow. The very rich enable producers to experiment and cover their costs, and that makes more goods more affordable for the rest of us, from fun toys to life-saving necessities.

The inequality produced by the market is a key part of how the market moves forward, enriching all of us in the process. And that’s why the middle class is shrinking: the rich, through the competitive market, have helped make the middle class richer.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

The Islamic State by Any Other Name – Article by Sarah Skwire

The Islamic State by Any Other Name – Article by Sarah Skwire

The New Renaissance HatSarah Skwire
Terrorists Don’t Deserve to Choose What They’re Called

ISIS does not want to be called Daesh. The group considers the acronym insulting and dismissive. An increasing number of its opponents do not want it to be called the “Islamic State.” They fear that this shorthand reifies the terrorist group’s claims to be a legitimate government.

The debate reminds us that names have power.

Avid readers of fairy tales have always known this. Calling Rumpelstiltskin by his real name banishes him and foils his baby-stealing plans. Speaking your name to a witch or wizard can give them power over you. Patrick Rothfuss’s wildly popular Kingkiller Chronicles contains a magic system where learning the name of an element — like the wind — gives a person magical control over it. And everyone knows what happens when you say Beetlejuice’s name three times.

Converts to new religions often take new names to honor the transformation. We mark significant passages in our lives — birth, marriage, death — with new names. Miss Smith becomes Mrs. Jones. Junior becomes Senior when Senior dies. There’s even an old Jewish tradition that says that, in times of serious illness, one should take a new name in order to fool the Angel of Death.

Whether we believe in magic or religion or not, we feel the power of names throughout our lives. Who didn’t go through a childhood phase of wanting a different name? I was wildly jealous of Catholic friends who got to choose confirmation names. A college friend declared that her first day in college was “time to get a nickname” and had us all brainstorm until she found one she liked. It stuck for the whole four years, and long after. Other college friends made legal name changes to more accurately reflect their cultures or their lives. As an adult, I declined to change my name when I got married because I wanted to hold onto myself. I thought for months about choosing my daughters’ names.

I’m a strong advocate of calling people what they like to be called. My kids try on nicknames like I try on jewelry — experimenting with their identities from day to day and solemnly explaining that from now on, they shall answer to nothing other than “Pumpernickel,” or that “Abby” is now verboten and “Abigail” is in favor. I happily acquiesce in all the changes as they figure out who they are. And I love the new nicknames they create for me. (The latest is “Bob,” because that’s what it sounds like when you say “Mom” with a head cold.)

I think, too, that it is important to use the names that transgendered individuals have chosen for themselves, and the pronouns that reflect their gender — even if it’s an awkward or hard-to-remember change for me. The same goes for other communities based on culture, race, religion, or other common identity. At a bare minimum, as we go through the world, we should have the liberty to say peacefully who we are. And it is a small thing for us to do, generally, to give the respect and the acknowledgement that comes with using someone’s requested name.

But ISIS, or Daesh, is another matter entirely.

It is too late to treat Daesh as Yoko Ono requested that John Lennon’s assassin be treated — by denying it the dignity of a name we deign to speak aloud. We have done nothing but name it and talk about it and publicize its actions. It is probably inappropriate for a family publication to suggest that we might take the Wonderella approach to express our contempt. But we certainly can use an accurate translation of the name they have chosen and turn it into a mildly insulting acronym.

Apparently, it bugs them.


Sarah Skwire is the poetry editor of the Freeman and a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis. She is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Meaningful and Vacuous “Privilege” – Article by G. Stolyarov II

Meaningful and Vacuous “Privilege” – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
December 3, 2013

Sanford Ikeda’s concise and insightful lists of 14 common fallacies about the free market (available in two installments from The Freeman here and here) motivate careful thought about the commonly used and misused term “privilege” and the conflations in which it can result. In discussing the second fallacy regarding the free market, that it is identical to a system where the government grants special privileges to businesses, Dr. Ikeda writes that “People sometimes define ‘privilege’ as any advantage a person or group may have over others. Certainly such advantages exist today and would exist in a free market—you may be born into a wealthy family or have superior drive and resourcefulness—but these advantages are consistent with the absence of privilege in the libertarian sense, as long as you acquired such advantages without fraud or the initiation of physical violence against the person or property of others.”

Indeed, the increasingly common usage of the term “privilege” to mean any advantage whatsoever eviscerates it of any genuine meaning it once had. This problem in today’s discourse spreads far beyond discussions of connections between businesses and governments.

Certainly, the very fact that one individual is different from another – with a different set of experiences, different physique, different knowledge, and even different standing room at any particular time – provides that individual with opportunities that the other lacks, while rendering him or her limited in ways that the other is not. Unfortunately, this trivial fact is increasingly being misconstrued in some circles to suggest vile inequities arising out of innocuous human differences. People who have not aggressed against, or even demeaned or ridiculed, anyone are increasingly being identified as “privileged” simply for belonging to broadly and crudely defined groups – be it all people of European descent, all males, or even all non-overweight people (witness the pseudo-concept of “thin privilege”) or people who are not disabled. (“Ableism” is apparently an emerging sin in the vocabulary of the increasingly militant and vitriolic collectivistic “social justice” movement – which is about neither true individual-oriented justice nor the preservation of a civilized and tolerant society.)  Such a vacuously expansive view of privilege is a tremendous insult to the true victims of coercive privilege throughout history – from slaves in all eras, to women who in prior eras were denied suffrage and property rights, to the freethinkers and forbears of liberty and reason, whose voices were too often snuffed out by the arbitrary power of absolute monarchs and theocrats in the pre-Enlightenment world.

Thomas Jefferson, an opponent of privilege in its meaningful sense, put it best when he expressed in his 1826 letter to Roger C. Weightman “the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride legitimately, by the grace of god.” Jefferson was a staunch opponent of the coercive privilege that enabled some to gain artificial advantages by restricting others from pursuing life-improving courses of action. Accidents of birth, or special lobbying skills, should not, in a just system, enable a person to acquire prerogatives which could not be earned through the free, peaceful exercise of that person’s abilities. Jefferson saw the future and strength of the American republic in the hoped-for emergence of a “natural aristocracy of talent and virtue” – people who, when allowed the liberty to flourish through honest work and competition, would become role models for others solely through their examples. This natural aristocracy would not need force to maintain its prominence, because the traits of the most knowledgeable, most industrious, and most virtuous people will be emulated by any who earnestly seek to improve their own lives and who have the freedom to acquire knowledge and make their own decisions.

Yet Jefferson’s natural aristocracy would be denounced as an example of horrid “privilege” by the “social justice” types – simply due to the necessarily unequal distribution of outcomes on a free market of open and honest production, competition, and cooperation. After all, not everyone can originate the same ideas at the same time. Not everyone can take advantage of the same opportunity for entrepreneurial profit, whose attainment, as economist Israel Kirzner demonstrated in Competition and Entrepreneurship, arises out of alertness to opportunities that others have missed. Kirzner writes thatBecause the participants in [a] market are less than omniscient, there are likely to exist, at any given time, a multitude of opportunities that have not yet been taken advantage of. Sellers may have sold for prices lower than the prices which were in fact obtainable… Buyers may have bought for prices higher than the lowest prices needed to secure what they are buying…” (43). Would it be an example of unacceptable “privilege” for an alert entrepreneur to remedy such an arbitrage opportunity and thereby bring otherwise-unrealized value to consumers?

Yes, the free exercise of human abilities will produce outcomes where some people will have some advantages over some others (while, of course, leaving fully open the possibility that those very others will have their own distinct advantages, obtained through hard work, knowledge, or sheer luck). But, as long as coercion is not involved in securing and maintaining those advantages, the people endowed with them are not “booted and spurred” to ride the rest of us. As Dr. Ikeda points out, the differences among people are a source of strength harnessed by the free market: “The free market gives you an incentive to profit from associating with and learning from others who might be very different from you, who operate outside your normal social networks.” By incentivizing and facilitating these interactions, the free market encourages greater tolerance, understanding, and visible societal heterogeneity of the sort that constitutes the best safeguard against truly heinous oppressions based on collectivistic stereotypes. Instead of condemning others as being too “privileged” simply on account of innocuous differences, it is far more productive to think about how those differences can help one achieve one’s own values through honest, peaceful, and productive interaction, cooperation, and exchange.