Sunday, August 24, 2014

George Will's Cognitive Dissonance

George Will has repeatedly used the phrase 'cognitive dissonance' to describe what appears to be a conflict in the typical American's simultaneous belief in both freedom, and a need for a very invasive government.

Quoted below, for example, are a couple of paragraphs from a column by Will, published in August of 2013, entitled 'Taming the Tax Code Beast' --

http://www.washingtonpost.com/opinions/george-will-taming-the-tax-code-beast.html
...
At the 2004 Republican convention, George W. Bush vowed to “simplify” the tax code’s “complicated mess.” The convention roared approval. Next, he promised new complexities — tax benefits for “opportunity zones” in depressed areas, a tax credit to encourage businesses to offer health savings accounts. Another roar of approval.

Since the 1986 simplification, the code has been re-complicated more than 15,000 times at the behest of Americans who simultaneously praise the principle of simplification. All other taxes could be abolished if we could tax the nation’s cognitive dissonance.
...


And here are a couple of quotes from Will, from an interview with Reasons's Nick Gillespie and Matt Welch, published in September of 2013, entitled 'George Will's Libertarian Evolution: Q&A on Obama, Syria, & the Power of Choice' --

https://www.youtube.com/watch?v=POphmn25gVs
http://reason.com/reasontv/2013/09/13/george-will-on-syria-obama-why-hes-becom
...
(at 11:45)  "I wrote the other day that if we could tax American's cognitive dissonance we could balance the budget.  The American people want all kinds of incompatible things, they're human beings.  They want a high services, low tax, omnipresent, omniprovident, cheap welfare state.  "
...
(at 45:00)  "The conservatives who are in elective office are looking over their shoulder at a deeply conflicted electorate, and again it's the cognitive dissonance.  The American people rhetorically are Jeffersonians, operationally they're Hamiltonians."
...



But there is an important problem with using the phrase 'cognitive dissonance' in this way.  Cognitive dissonance is roughly defined as, the psychological conflict that results from incongruous beliefs and attitudes held simultaneously.

So without some mental conflict or anxiety, there can't be said to be cognitive dissonance.

But notice that an overwhelming majority of Americans are in solid agreement about the bulk of what the government does, and express no reservations in supporting it — there's certainly no evidence of widespread psychological conflict.

What is the largest government activity?  Transfer payments.   Compare the numbers in these two tables, to see that over 60% of federal expenditures in 2011 were payments to individuals for various reasons --

   http://www2.census.gov/library/publications/2011/compendia/statab/131ed/tables/12s0469.pdf
   http://www2.census.gov/library/publications/2011/compendia/statab/131ed/tables/12s0474.pdf
U.S. Federal Budget - Receipts and Outlays: 1960 to 2011
U.S. Federal Budget - Outlays for Payments for Individuals: 1990 to 2011


This 'Death and Taxes' poster also provides a good overview of government spending --

http://www.timeplots.com
Death & Taxes 2014


So what's the essential point of agreement among Americans, for which they advocate without reservation?  It's obvious, since it's repeated in some form over and over again in the press most days — Americans want the cost of government to be paid by others, and they've created a comforting system of rationalization to justify their desire as moral.

From the establishment of Social Security in 1935, to the protests over highly taxed engineers riding in taxed buses which use public infrastructure those taxes helped pay for, to a multimillionaire writer receiving acclaim for claiming that success is mostly luck, the same petty dishonest drumbeat has been sounding for decades:  there are others who are better off than me, and it is moral to force them to subsidize me.

To describe the American people as 'rhetorically Jeffersonian' as Will did in the Reason interview is pretty absurd, given the dominant social trend of the last 90 years or so — apart from a small numerically insignificant minority, no one is arguing for more freedom.  The current size and function of the Federal government stands as eloquent testimony to that statement.

Cognitive dissonance?

Cognitive dissonance in the electorate regarding the conflict between liberty and an ever expanding government, would imply that Americans have at least some recognition of the damage caused by sacrificing liberty to greater government control.

Where is there any evidence at all, that Americans in any significant number have that recognition?

It is correct to say that Americans are largely hypocritical for pretending to be freedom loving, while at the same time sacrificing all the freedoms they claim to love — but there is no evidence that Americans experience any conflict or ambivalence regarding the government's principle activity, which is to manage a large group of entitlement programs, and make transfer payments from groups seen as 'stronger' to those seen as 'weaker'.

Social Security, for example, is referred to as 'the third rail of American politics' for precisely this reason — not only do Americans feel no conflict about giving this important area of responsibility for their lives over to government (and forcing everyone else to do the same), they're so without conflict about it, it is impossible to even discuss its problems, because it is seen as hateful and immoral to do so. Raising the issue of Social Security reform typically provokes some version of this reaction: 'Why do you want to throw grandma under the bus?'

Consider this demonstration of the same attitude.  Walter Williams gave a talk in February of 2012, entitled "The Legitimate Role of Government in a Free Society."  In his talk, Williams repeatedly emphasized the moral aspect of being free from coercion, and the immorality of forcibly using another person to serve your purposes, and yet the first question from the audience was to question the morality of freedom, as if Williams didn't discuss it.  Here's the question from the audience member --

  " ... the very foundation of liberty rests in a central idea.  It has to do with interests, it involves self-interest, if you will, but that self-interest is always defined with a moral foundation.
    [supposedly the questioner is quoting James Madison here] Interest doesn't have any bearing, unless you qualify interest with every necessary moral ingredient.
... and that moral ingredient has to do with the idea of recognize other human beings as human beings and treating them as such, so there's a real positive moral component I think that's the basis of liberty in America, and I'm wondering if you would speak to that ..."



Note that the first question from the audience member wasn't for some clarification or specific application from Williams of the principles he was describing — she asked that he readdress the main point of his talk.  Her question implied a concern for the moral justification of liberty, but Williams repeatedly stressed the moral justification for liberty in his talk, so the act of posing the question treated that moral justification as unimportant and even meaningless.  Clearly, using one person to serve the purposes of another, as Williams put it, didn't resonate with her as a critical issue in defining liberty.

The important point to notice here is that the audience member expressed a cultural norm — a dominant belief that is shared not only by the vast majority of Americans, but by most people around the world — which is the belief that liberty is inherently immoral, and so the loss of liberty caused by government is not a problem, it's a moral imperative.

This is what makes the use of the phrase 'cognitive dissonance' so inappropriate in describing the average person's view of freedom and government — the average person feels no conflict in their belief in a large government that restricts freedom — in the dominant view, that's precisely the point.

The average person feels cognitive dissonance when they do not support government restrictions of liberty, since, with very few exceptions among individuals, an altruist ethic is universally viewed as the only valid morality — as long as there is some vague notion of serving some supposed 'common good' to justify any particular government coercion, the average person has the feeling that they're being immoral if they oppose it, when it's their support for coercion that makes them immoral.

If Americans felt cognitive dissonance at 'wanting incompatible things', government would not have grown into a monster, attempting to provide the 'omnipresent, omniprovident, cheap welfare state', that George Will describes.  To Americans, these things are not incompatible — they're moral.

That the welfare state is 'cheap' is completely irrelevant to a majority of middle class Americans, because that majority has convinced themselves that there is always a class of people that is better off than them, and that it's moral for that class to be forced to pay any government costs that the classes beneath them cannot easily afford.

Hence the widely held belief that there is such a thing as a right to health care — and no one adds the qualification, 'but only if it's cheap'.

This is what makes this system of rationalization so firmly entrenched — Americans have found a way to make the desire for a free lunch seem moral, and so the vast majority are perfectly comfortable in a belief in the acceptability of irresponsibility, since under the altruist ethic that has been accepted as morality, need is the only critical factor.

Those who can see this problem shouldn't expect this dominant belief to change anytime soon (if ever). It would take a couple of exceptional generations to even put a dent in it, and given the state monopolized educational system, both in America and around the world, there are huge impediments an individual has to overcome to even have the chance of discovering a rational view of ethics, never mind actually understanding such a view.

See Chapter 10 - 'Collectivized Ethics', in Ayn Rand's 'The Virtue of Selfishness', for a brilliant discussion of this issue —
   https://www.youtube.com/watch?v=2OvL1_89QDs

Sunday, August 17, 2014

He Just Loves the Straw Man

In a previous post I criticized a writer for completely missing the point of Frédéric Bastiat's parable of 'The Broken Window', while trying to claim that "Keynesian and monetarist thinkers" appreciate its point.

It was a nice bit of irony to read someone denigrating Bastiat's little parable, while at the same time completely getting the point of it wrong.

In my previous post I pointed out that the writer's criticisms of 'The Broken Windowwere straw man and red herring fallacies, since the issues he raised (the supply of money, and paying people with printed money) had nothing to do with the opportunity cost of production described in 'The Broken Window'.

Well, here's more fun irony from the same author.   It's no surprise that he doesn't like Bastiat's writings, given that Bastiat didn't argue in support of the popular fallacies he keeps repeating --

http://www.slate.com/blogs/moneybox/2012/08/18/why_i_don_t_love_frederic_bastiat.html

Why I Don't Love Frederic Bastiat
Brian Caplan made a great observation last week, namely that right-wing economic thinkers tend to really love Frederick Bastiat while those more on the left don't. Then in a second and much worse post, he kind of posits a broad conspiracy theory as the reason. To me the second post is emblematic of exactly what I think is unimpressive about Bastiat namely that, much like Caplan, at key points Bastiat seems to me to be assuming what he's trying to argue for. At the same time, he's a great writer with a flair for a great turn of phrase. So if you already agree with what he's saying, you're likely to find quoting or referencing him amusing. But if the goal is to actually persuade someone of something, his writing is pretty unimpressive. 
The best example of this is probably "The Candlemaker's Petition" which is a pretty hilarious satire of rent-seeking. And obviously rent-seeking is a real thing, worthy of being satirized. But there are no political controversies for or against pure rent-seeking. The candlemakers' petition is a devastating satire of pharmaceutical companies' endless lust for patent rents, unless you happen to think that pharmaceutical patents and the monopoly rents they generate are a crucial engine of R&D funding and life-saving research. Are the pharmaceutical companies right? I think it's questionable, but I also don't think you'll find the answer in Bastiat.
Similarly, Bastiat's alleged broken windows fallacy involves simply assuming that there's no such thing as genuinely idle resources or an "output gap." In that context, yes, it's a vibrant intuitive depiction of crowding out. But this doesn't counter any Keynesian or monetarist points about the viability of stimulus during a recession induced by nominal shocks, it involves assuming that no such recessions can occur even though they plainly do. In defense of Bastiat, at the time he was writing the modern industrial business cycle was a very new thing and the vast majority of economic ups and downs were caused by things like bad weather which—as you can see in the corn futures market today—is indeed a decisive consideration in an agricultural economy. But that's no excuse for people sitting around in 2012 to be pounding the table with an old book that's non-responsive to modern issues professing to be baffled why people don't find it more persuasive.


I found it fascinating that he is able to pack so many false statements into a few paragraphs.  And I found it disappointing that when I search on 'Bastiat' at google.com, his poorly written piece (quoted above in its entirety) comes up on the first page of results, giving it credence as an important piece of writing.

Here's a list of some of the false statements contained in the quote above.  Basically, what he wrote is pure fallacy from beginning to end --
  1. His description of Bryan Caplan's intial observation in the first sentence is false: '... namely that right-wing economic thinkers tend to really love Bastiat while those more on the left don't'.
    • If you read Bryan Caplan's post, you'll see that he stated that "free-market economists almost always love Bastiat's classic essay 'What Is Seen and What Is Not Seen'",  but he did not state that economic thinkers on the left don't like Bastiat -- indeed, he was asking for reactions to Bastiat's essay 'What Is Seen and What Is Not Seen'.  Bryan Caplan got to the ideological divide on Bastiat in his second post, after he got responses to his question.
  2. His description of Bryan Caplan's second post, regarding who and who does not love Bastiat, is also false: '... he kind of posits a broad conspiracy theory as the reason.'
    • Caplan gave a very simple explanation for Bastiat's 'differential ideological appeal', as he called it: the public finds the straw man arguments used to support popular welfare state policies as pleasantly convincing, and Bastiat destroys these inane arguments, making it harder to support popular welfare state policies.  This has nothing to do with a conspiracy theory, but rather the obvious point that Bastiat made a career of debunking popular myths.
  3. His comment in the third sentence is especially interesting in its irony: '... what I think is unimpressive about Bastiat namely that, much like Caplan, at key points Bastiat seems to be assuming what he's trying to argue for.'
  4. His second paragraph regarding Bastiat's satirical piece on protectionism, 'The Candlemaker's Petition', massively confuses the issue (again), by equating the attempt to use patent law to protect creative property, with rent seeking.
    • Notice that 'rent seeking' describes attempts to profit from the political process without adding wealth -- study the recent Supreme Court Decision, Harris v. Quinn, for a real example (a union using the political process to force dues collection).  Describing pharmaceutical companies as having an 'endless lust for patent rents' equates the attempt to prevent others from profiting from one's own work (i.e. one's product development), as an attempt to seek payment from government without having produced a product, and also as an attempt to prevent others from selling their own products.  Patent law doesn't do this.  And Bastiat's satire, 'The Candlemaker's Petition', has nothing to do with it, since it deals with protectionism, rather than protecting creative property.
  5. His last paragraph is a perfect illustration of the criticism he stated in his first paragraph: 'assuming what he's trying to argue for' .
    • Nothing he wrote in the last paragraph applies to what Bastiat wrote in 'The Broken Window'.  Bastiat made no assumption about a supposed "output gap" as he stated -- that has nothing to do with the opportunity cost of production, as Bastiat described it in 'The Broken Window' -- the existence (or non-existence) of a supposed "output gap" doesn't address the obvious fact that the work and resources consumed to replace something that was lost, are not adding wealth.  Whether a government stimulus can be effective, is a separate issue -- even if true, it doesn't magically eliminate the opportunity cost of production.
    • His last paragraph is really pure comedy, given his previous criticism regarding 'assumptions'.  He raises more straw men for 'The Broken Window' (it assumes no "output gap", it assumes no recessions), and then he gives no support for his weak assumption of 'the viability of stimulus'.  Even more than this assumption having absolutely nothing to do with the 'The Broken Window', it's easy to find data challenging its validity.
So in closing, here's some information challenging the validity of that assumption.

Consider the usefulness of one of the programs that was part of the 'American Recovery and Reinvestment Act of 2009': the subsidization of rural broadband.  In three of the areas that received stimulus funds to expand broadband access, $349,234 was spent per unserved household to get them broadband access.

Now consider this absurd quote from the 'great' economist John Maynard Keynes from his 'General Theory of Employment, Interest, and Money' (see Chapter 10, part VI) --

http://www.forbes.com/sites/nickschulz/2011/07/05/how-effective-was-the-2009-stimulus-program/

If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.


This is what gets passed around as wisdom.  Notice that it would be much more effective to simply give people money to spend on themselves -- then at least we'd know that someone got something useful from the spending.

Of course, these nonsensical arguments will never stop coming, given how many people are supported by them -- it's concentrated benefits, and dispersed costs, again.  Certainly, the individuals that received the $349,234 per household for expanding broadband access don't want them to stop.

If you believe the government can correct an economic downturn, then you can't rightfully complain about this kind of lunacy -- you asked for it.

Saturday, August 16, 2014

Pretending Money is Wealth


... There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. ...
  — Frédéric Bastiat, 'What Is Seen and What Is Not Seen', 1850


In 1850, the French economist Frédéric Bastiat wrote an essay entitled 'That Which Is Seen, and That Which Is Not Seen', which included a little parable called 'The Broken Window'
      http://www.econlib.org/library/Bastiat/basEss1.html
      http://bastiat.org/en/twisatwins.html
      https://mises.org/library/broken-window

In 'The Broken Window' Bastiat explains the fallacy of the popular view that there is economic benefit to society from destruction.  Whenever there is some natural disaster, for example, it is not hard to find claims in the press that large-scale destruction results in some economic gain.  Here is one example, published in October 2012, after hurricane Sandy --

http://finance.yahoo.com/blogs/the-exchange/economic-impact-hurricane-sandy-not-bad-news-150458002.html
https://archive.is/ntrpl

The Economic Impact of Hurricane Sandy … Not All Bad News
By Peter Morici
Hurricane Sandy will have a devastating impact on life and property. However, gauging its ultimate impact on an economy -- still struggling to overcome the Great Recession but with substantial resources to overcome adversity -- is far more complex than merely adding up insurance payouts and uninsured losses.

The Upside
Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact. Ultimately, Americans, as they always seem to do, will emerge stronger in the wake of disaster and rebuild better-making a brighter future in the face of tragedy.
...


The quote above is obviously absurd on its face — it simply begs the painfully obvious question: 'Can't smart investments be made without wide spread destruction first, and didn't things that did not need to be replaced also get destroyed in the disaster?'

And notice this estimate from the State of New Jersey, cited by the U.S. Department of Commerce, of $29.5 billion in construction costs just 'to repair and replace the damage caused by the storm'.  And even while acknowledging the enormous amount of lost wealth, they pretend that the work to restore conditions prior to the storm creates new jobs, even though no new wealth is being created — ignoring that the $29.5 billion could have been spent on projects to actually raise living standards, had it not been for the damage caused by the storm.  Yet again, we see Bastiat's Broken Window Fallacy --

http://www.esa.doc.gov/Reports/economic-impact-hurricane-sandy
https://archive.is/Du2vx
• The New Jersey state government estimated construction costs of $29.5 billion to repair and replace the damage caused by the storm.  If this money is spent over the next four years, the state should realize a gain of $44 billion in total output and about 281,000 new jobs (full- and part-time).


Here is Lawrence Reed of FEE addressing the same kind of nonsensical thinking regarding a devastating earthquake in Kobe, Japan, back in 1995 —
    http://www.fee.org/the_freeman/detail/destruction-is-no-blessing

Bastiat was addressing the same kind of absurdity back in his day, when it was suggested that rebuilding Paris would somehow make French society better off --

http://bastiat.org/en/twisatwins.html
http://www.econlib.org/library/Bastiat/basEss1.html
...
When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end - To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."

What will you say, Monsieur Industriel -- what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account that which is not seen, and placing it alongside of that which is seen. The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention. One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two. Another under the title of the glazier, shows us the producer, whose trade is encouraged by the accident. The third is the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause. It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favour, all you will find will be the paraphrase of this vulgar saying — What would become of the glaziers, if nobody ever broke windows?
...


But here is a writer trying to argue that the 'Broken Window Fallacy' is not a fallacy --

http://thinkprogress.org/yglesias/2011/08/16/296903/the-denial-of-money
https://archive.is/gB1ct

'The Denial of Money'
Few myths are as persistent as the idea that Keynesian and monetarist thinkers fail to appreciate Frédéric Bastiat point about broken windows. As even a cursory examination of efforts to apply Bastiat’s ideas to the conditions of a depressed economy will show, the so-called “broken windows fallacy” is not a fallacy at all, just a special case. Here’s Daniel Mitchell:
[Krugman] committed the “broken-window” fallacy, explained more than 150 years ago by a famous French economist, Frederic Bastiat.
Breaking a window at the local bakery, Bastiat explained, might generate business for the town glazier, but only at the expense of some other merchant, like a tailor, who would have benefited if the baker didn’t have to spend money on a new window.
In other words, the destruction of wealth is not good for an economy. At best, it makes us poorer and then shifts how current income is allocated.
When Bastiat wrote that, “money” meant, in France, a commodity of which there was limited supply. Specifically, the so-called “Germinal Franc” contained 290.32 mg of gold. The modern economy isn’t like that. The quantity of money and credit are policy variables. If the country were afflicted with unemployed glaziers, Ben Bernanke could run around smashing bakery windows and leaving checks behind. The checks don’t need to be backed by anything, and the bakers will use the checks to hire glaziers to replace the lost windows without reducing their spending on tailors. Problem solved. This would be, admittedly, a silly way to resolve the problem. A more reasonable approach would be to cut the checks and pay the glaziers to do something useful. But it would work. Everyone understands that we don’t have a barter economy operating or a gold standard operating purely with cash-in-advance, but people often fail to see that this is important. But it makes a ton of difference. Among other things it means that if your argument about why something can’t be done turns at some key point on an alleged scarcity of money that something has gone awry.


Well, there is nothing new here, given that people have been trying to pretend that money printing is helpful since long before Bastiat.

But notice that the statements quoted above regarding 'The Broken Window' are both a straw man and red herring fallacy.

Bastiat described costs in francs in 'The Broken Window' as a way of illustration, but his argument has nothing to do with the supply of money as the writer stated in the quote above, but rather the opportunity cost of production — Bastiat was simply making the obvious point that the economic activity that results from replacing something that was destroyed does not add wealth'an alleged scarcity of money', to quote the writer above again, has nothing to do with Bastiat's argument (straw man).

Even if, as this writer described, a Federal Reserve chairman paid for the broken window with printed money, so that the shopkeeper's spending were not reduced as a result of replacing the broken window, the actual labor and resource cost of the replaced window are still lost — printing money does not replace the lost wealth, which is the utility of the window that was destroyed, and the labor and resources consumed to produce it in the first place.

And arguing that it is helpful to pay individuals to do things that have no market demand — given that they are not already being purchased — as the writer described above, is simply a distraction from Bastiat's point, and is not relevant — even if it were true that it is useful (red herring).

It is especially ironic that a writer would begin by stating it is a myth that Keynesian and monetarist thinkers do not appreciate the point of 'The Broken Window', but then go on to completely miss the point.

The writer helps to prove the claim that he is supposedly attempting to debunk.

Money, in any form (whether it is cigarettes or gold coins), is only a tool — a medium of exchange to facilitate trade, and a store of value.  The only legitimate spending is the result of production, or loaned production — a person trading the thing they have made or grown (or borrowed (debt)) with others.

Wealth is produced goods and services — not money. Trade based solely on money printing is no different than counterfeiting — it makes everyone poorer, because it supports consumption without the prerequisite production.  It just makes the medium of exchange worth less.  This is the only possible outcome of simply distributing money, since the supply of available goods is not magically increased as money is printed — as that additional money is spent, prices must rise.

Counterfeiting (printing money on your own) is illegal for good reason — in essence, it is theft.  Why?  Because it allows the counterfeiter to receive and consume goods and services without offering anything of value in exchange.  The only difference between counterfeiting and governments printing money, is the hope that governments will be responsible and will not steal too much, in debasing the value of their currency.

And note that the writer does not give any indication that he is aware of the obvious inefficiencies, in paying someone with printed money to perform work not required by normal market demand — not only has the medium of exchange been debased, but any resources that were consumed were more than likely put to a less effective use, potentially forever (it does not get more costly than that).

Of course, a government can always print its currency, and distribute funds to everyone, thereby giving them as much money as they want to spend.  But what would happen then?

Is not this, in essence, what happened during the U.S. mortgage crisis from 2007 to 2009?  Most people who applied for a loan, were given that loan, at very low cost, and this fueled wild speculation on assets that were worth much less than people were paying for them.

Many would be quick to respond here that a loan is different than simply printing money for people to spend, since the borrower is obligated to pay the money back — well, of course — that makes the mortgage crisis more useful as an example for demonstrating the folly of money printing, not less.

The mortgage crisis functions as a more illustrative example, and demonstrates the folly of money printing even more clearly, since even the obligation to pay the money back, could not prevent wild speculation and a massive waste of resources.

In short, printing money in an attempt to recover from recessions marked by a large misallocation of resources, is an attempt to use a disease as a cure.

The essential point is that legitimate trade is the result of production — not the possession of money.

Simply giving everyone more money does nothing to increase the available goods or services that have been produced (or that even can be produced) — it can only increase scarcity by giving people the ability to purchase goods and services when they have not produced anything valuable to exchange for those goods or services — in essence, it is manufacturing counterfeiters.

Here is a nice short video explanation of the nature of money, and the inevitable result of money printing --

http://www.learnliberty.org/videos/why-not-print-more-money/
...
Printing more money will simply spread the value of the existing goods and services around a larger number of dollars. This is inflation. Ultimately, doubling the number of dollars doubles prices. If everyone has twice as much money but everything costs twice as much as before, people aren’t better off. Having the government print money will not increase wealth.




Here is another article that explains the obvious point that the only way money printing will not cause inflation is if the money is not spent (i.e. it creates no new demand) —
    http://economics.about.com/cs/money/a/print_money.htm
    https://archive.is/5enBd

There is a long list of countries that created inflation catastrophes by taking this absurd logic regarding eliminating a supposed 'scarcity of money' to its extreme —
    http://en.wikipedia.org/wiki/Hyperinflation
    http://en.wikipedia.org/wiki/File:German_Hyperinflation.jpg

Supposedly, this is not what Keynes had in mind, but he helped legitimize the idea that government spending can create economic growth, even though it is often wasteful and ultimately results in taxation, so he paved the way for asinine arguments like the one the writer made above in 'The Denial of Money'.

People just love trying to pretend there is a free lunch.  If it were possible to create prosperity by printing money, there would not be any poverty in the world.

Monday, August 11, 2014

Justice Samuel Alito, Becomes Captain Obvious!

During the oral arguments of Harris v. Quinn, Justice Alito made the obvious point that vote buying is what brought about the facts of this case.

That is, the executive order authorizing the State of Illinois to recognize a union for home-care providers was issued by the former Democratic Governor of Illinois, Rod Blagojevich, as payback to unions for their campaign contributions — for example, the SEIU contributed about $1.8 million to Blagojevich's two campaigns for governor in 2002 and 2006 —
    http://online.wsj.com/news/articles/SB122973200003022963
    http://www.illinoispolicy.org/policy-points/process-for-unionizing-non-state-workers-raises-red-flags/

It is comical how the Solicitor General of the United States, Donald Verrilli, dodges this painfully obvious question.  Verrilli had repeatedly mentioned non-constitutional issues, like collective bargaining, in reference to the government having an interest in 'efficient and sound operations', but when Justice Scalia questioned these issues as not being the actual motive, and then Justice Alito questioned Verrilli on the campaign contributions that Blagojevich received from the union, suddenly Verrilli did not want to talk about the state's motives anymore.

After Alito mentioned that the union received $3.6 million dollars as a result of Blagojevich's executive order forcing more people to pay agency fees, Verrilli made the comment: 'I don't think it would be appropriate to look behind the legislature's action to consider and try to evaluate its motives.'

Of course, evaluating motives was exactly what Verrilli was trying to do with his earlier testimony — the whole point of what he was saying about what the State of Illinois had done regarding the union, was to make it look like the motive was sound, and only based on valid, practical considerations.

The U.S. Constitution certainly does not give the government permission to force people to support a private organization, so what else could Verrilli talk about?

And in this case, the motive is critical, because the actual motive, unlike the convoluted rationalizations Verilli was presenting to the court, gets to exactly what the bureaucrats were trying to accomplish — reward the union for its support, and help ensure future campaign contributions.

It is fascinating how ponderous the oral arguments on this case were, in that this key point only came up briefly and was quickly dismissed, even though it completely explains all the facts of this case.

As much as the term 'free rider' has been thrown around in regard to individuals who do not want to pay to support an organization like the SEIU, this case, and others like it, was never about free riders — Harris v. Quinn is about rent-seeking by the union and the corrupt politicians that collaborate with them at the public's expense.

The bulk of what has been said and written about this case is rationalization and propaganda to avoid this obvious fact.

Nothing about Harris v. Quinn was ever aimed at preventing people from joining a union, if they wished — and nothing about this ruling prevents individuals from doing so.  The Harris v. Quinn ruling just makes it a little harder for the unions to get contributions, since now they cannot use the state to force home-care workers to pay agency fees.

Now unions have to do it the 'hard' way — the moral way — they have to convince people to pay.

The obvious question here is not: 'Why shouldn't those who may benefit be forced to pay for what the union is doing?', but rather, 'Why should anyone be forced to pay for what the union is doing?'

The critical statements from an excerpt of the oral argument transcript are highlighted in italics below —

http://www.oyez.org/cases/2010-2019/2013/2013_11_681
...
Donald B. Verrilli Jr: It hasn't, but the key point for us, the point of vital importance for the United States here, is that the Court continue to recognize the context, the First Amendment context of the government as manager of its own operations.

And whatever choice the United States has made, many States have made different choices in their role as manager of their own operations.

And under this Court's established case law, which Abood, I think, is a quite good example of, the principle that when the government is acting to further its operations as manager they get substantial latitude.

Now, there's a limit on that, of course.
They can't use that authority to -- they can't leverage that authority to affect the way citizens interact as citizens--

Justice Antonin Scalia: Of course, one can be skeptical about whether, when States do this they are doing it because it's more -- more efficient as an employer, because some States have tried to force private employers to have a closed shop, haven't they?

Donald B. Verrilli Jr: --Well, I think--

Justice Antonin Scalia: And there's no, you know, no State government interest in it.

There's just State interest in unions.

Donald B. Verrilli Jr: --Yes, but here we argue--

Justice Antonin Scalia: And unions getting a lot of money from people who don't belong in the unions.

So one can be skeptical about whether this is really what's going on, that the State really thinks it's going to be a lot easier if it has a closed shop.

Donald B. Verrilli Jr: --I guess what I would say about that, Justice Scalia, is that one could speculate about motives of States like Illinois, one could speculate about motives of the right to work States, but I would suggest that under our Federal system that States get to make those kinds of policy choices.

And Illinois has made a policy choice, as many private employers have, that using collective bargaining -- and it is, I want to stress here, very narrowly tailored collective bargaining.

By law, it can only be over wages, hours, and conditions of employment, by law.

Justice Samuel Alito: Do you think that the specific factual background of what occurred here provides a basis for skepticism about Illinois's reason for adopting this?

Donald B. Verrilli Jr: I don't think so.

When the legislation was enacted, it was enacted with a very large bipartisan margin, and I just don't think it would be appropriate in the context of the government as manager of its own operations to look behind and try to consider motive.

This is a choice that many--

Justice Samuel Alito: I thought the situation was that Government Blagojevich got a huge campaign contribution from the union and virtually as soon as he got into office he took out his pen and signed an executive order that had the effect of putting, what was it, $3.6 million into the union coffers?

Donald B. Verrilli Jr: --Whatever happened--

Justice Samuel Alito: That's the sequence; isn't that correct?

Donald B. Verrilli Jr: --Well, I think the issue before the Court is the constitutionality of the statute that was enacted subsequent to that by a large bipartisan majority, and I don't think it would be appropriate to look behind the legislature's action to consider and try to evaluate its motives.

And I think under our Federal system States get to make choices.
It's true not every State does it this way, but many do.

They do so for reasons of efficient management of their internal operations and that's the principle that we think is of critical importance here.

Justice Antonin Scalia: They may do so because of that reason.

You don't know what their reason is any more than I do.
All you can say is that that might be their reason.

Donald B. Verrilli Jr: And they ought to have the discretion to make that choice under this Court's case law.

That's our position with respect to that.
If I could make a point that I think is an important point about the free rider rationale under Abood.

There's been some suggestion that the point of the free rider rationale is to -- is to force the dissenters, the nonunion members to pay up.

I don't think that's the right way to understand the free rider point.

That once the State has imposed a duty of fair representation, then everybody's got an incentive to free ride, whether you're a union supporter or not, because by operation of law, you're going to get the benefit.

It's just a classic logic of collective action problem.
...


This case, and especially the oral arguments and statements, act as a litmus test of one's intellectual honesty.

Contemplate the implications of this bizarre statement from Verilli: 'They ought to have the discretion to make that choice under the Court's case law.'

Verilli did not make that comment in reference to a group of bureaucrats choosing what color to paint an office building, or where to locate a military base — or any other operational decision that does not by necessity violate individual rights — his claim is that bureaucrats should be free to force individuals to pay fees to an organization they don't want to support — an organization which is a massive contributor to political candidates — under the absurd pretext that the coercion is required to protect the people being forced to pay the fees.

How on earth is it justified that the state has the free choice to use the lives of its citizens in this way.

Verilli has turned the proper definition of government on its head.  As stated in the Declaration of Independence, just government power requires the consent of the governed

https://en.wikipedia.org/wiki/United_States_Declaration_of_Independence
https://www.archives.gov/founding-docs
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.


What can you say about the character of an individual who casually advocates before the highest court, for initiating force against individuals in this way?

What can you say about the character of an individual who advocates for government bureaucrats to have the choice to force someone to pay fees to an organization, knowing that organization pays support to the bureaucrats making that decision?

And how did unions get this reputation for being critical to 'efficient management', using Verilli's phrase, when unions have been notorious for inefficiency for decades?

Even the most famous Democrat, Franklin D. Roosevelt, wrote that collective bargaining is not appropriate for government employees.   http://www.presidency.ucsb.edu/ws/?pid=15445

The reason should be obvious, since it is an obvious conflict of interest, given that the purpose of unions has always been to extract as much of the profit from an employer as they can, but in this case, the employer is elected by workers, and the cost of any contract is borne by the taxpayer.

So it is not even appropriate for employees on the state payroll to participate in collective bargaining, never mind individuals who are caring for family members in their own homes.

Here is a portion of Roosevelt's letter on this, written in 1937 —

http://www.presidency.ucsb.edu/ws/?pid=15445

112 - Letter on the Resolution of Federation of Federal Employees Against Strikes in Federal Service
August 16, 1937

My dear Mr. Steward:
As I am unable to accept your kind invitation to be present on the occasion of the Twentieth Jubilee Convention of the National Federation of Federal Employees, I am taking this method of sending greetings and a message.
...
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that "under no circumstances shall this Federation engage in or support strikes against the United States Government.
...


Saturday, August 9, 2014

Helps Prove His Point ...

On April 2, 2014, Charles Koch wrote an article in the 'Wall Street Journal' describing some of his goals, and what should be considered common sense points on the value of a free society.

He also criticized the obvious dishonest and propagandist nature of the many attacks against him, in that they are normally personal, rather than an attempt to present positive alternatives, or even identify what he is advocating --

https://www.google.com/#q=Koch+fighting+to+restore+free+society
http://online.wsj.com/news/articles/SB10001424052702303978304579475860515021286
I have devoted most of my life to understanding the principles that enable people to improve their lives. It is those principles—the principles of a free society—that have shaped my life, my family, our company and America itself.

Unfortunately, the fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack by the nation's own government. That's why, if we want to restore a free society and create greater well-being and opportunity for all Americans, we have no choice but to fight for those principles. I have been doing so for more than 50 years, primarily through educational efforts. It was only in the past decade that I realized the need to also engage in the political process.

A truly free society is based on a vision of respect for people and what they value. In a truly free society, any business that disrespects its customers will fail, and deserves to do so. The same should be true of any government that disrespects its citizens. The central belief and fatal conceit of the current administration is that you are incapable of running your own life, but those in power are capable of running it for you. This is the essence of big government and collectivism.

More than 200 years ago, Thomas Jefferson warned that this could happen. "The natural progress of things," Jefferson wrote, "is for liberty to yield and government to gain ground." He knew that no government could possibly run citizens' lives for the better. The more government tries to control, the greater the disaster, as shown by the current health-care debacle. Collectivists (those who stand for government control of the means of production and how people live their lives) promise heaven but deliver hell. For them, the promised end justifies the means.

Instead of encouraging free and open debate, collectivists strive to discredit and intimidate opponents. They engage in character assassination. (I should know, as the almost daily target of their attacks.) This is the approach that Arthur Schopenhauer described in the 19th century, that Saul Alinsky famously advocated in the 20th, and that so many despots have infamously practiced. Such tactics are the antithesis of what is required for a free society—and a telltale sign that the collectivists do not have good answers.
...


On April 3, 2014, Michael Memoli, writing for the Los Angeles Times in response, helps prove Koch's complaint is valid (more fun irony from the main stream media).

Memoli propagates the myth that Republicans belong to the party of the wealthy, when Democratic political contributors typically give as much, if not more, than Republican contributors --

https://www.google.com/#q=Memoli+democrats+target+republican+ties
http://www.latimes.com/nation/la-na-democrats-koch-20140404,0,6877752.story#axzz2xxYwvll2
Democrats struggling to combat a flood of outside money pouring in to defeat their candidates have found at least a temporary solution: If you can't beat them, brand them.
...
With no elected Republican holding the same notoriety as Pelosi, the Kochs —
ranked No. 6 and No. 7 on the Forbes list of the world's billionaires —
offer a convenient target, particularly because of their prolific spending on races across the U.S."
...


This is obvious red-herring fallacy kind of bating, in that references to wealth and spending (even if true) reveal nothing about the quality of one's actions.    http://www.nizkor.org/features/fallacies/

Koch complained about this kind of useless dishonest reporting in his piece --

https://www.google.com/#q=Koch+fighting+to+restore+free+society
http://online.wsj.com/news/articles/SB10001424052702303978304579475860515021286
...
Rather than try to understand my vision for a free society or accurately report the facts about Koch Industries, our critics would have you believe we're "un-American" and trying to "rig the system," that we're against "environmental protection" or eager to "end workplace safety standards." These falsehoods remind me of the late Sen. Daniel Patrick Moynihan's observation, "Everyone is entitled to his own opinion, but not to his own facts."  Here are some facts about my philosophy and our company:

Koch companies employ 60,000 Americans, who make many thousands of products that Americans want and need. According to government figures, our employees and the 143,000 additional American jobs they support generate nearly $11.7 billion in compensation and benefits. About one-third of our U.S.-based employees are union members.

Koch employees have earned well over 700 awards for environmental, health and safety excellence since 2009, many of them from the Environmental Protection Agency and Occupational Safety and Health Administration. EPA officials have commended us for our "commitment to a cleaner environment" and called us "a model for other companies."

Our refineries have consistently ranked among the best in the nation for low per-barrel emissions. In 2012, our Total Case Incident Rate (an important safety measure) was 67% better than a Bureau of Labor Statistics average for peer industries. Even so, we have never rested on our laurels. We believe there is always room for innovation and improvement.

Far from trying to rig the system, I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs—even when we benefit from them. I believe that cronyism is nothing more than welfare for the rich and powerful, and should be abolished.

Koch Industries was the only major producer in the ethanol industry to argue for the demise of the ethanol tax credit in 2011. That government handout (which cost taxpayers billions) needlessly drove up food and fuel prices as well as other costs for consumers—many of whom were poor or otherwise disadvantaged. Now the mandate needs to go, so that consumers and the marketplace are the ones who decide the future of ethanol.

Instead of fostering a system that enables people to help themselves, America is now saddled with a system that destroys value, raises costs, hinders innovation and relegates millions of citizens to a life of poverty, dependency and hopelessness. This is what happens when elected officials believe that people's lives are better run by politicians and regulators than by the people themselves. Those in power fail to see that more government means less liberty, and liberty is the essence of what it means to be American. Love of liberty is the American ideal.

If more businesses (and elected officials) were to embrace a vision of creating real value for people in a principled way, our nation would be far better off—not just today, but for generations to come. I'm dedicated to fighting for that vision. I'm convinced most Americans believe it's worth fighting for, too.


The 'Center for Responsive Politics' shows political contribution totals at the links below, for the 2012 election cycle, and for the years 1989 to 2014 (as of August 2014, when this was written).  Note that 'Koch Industries' contributed a much smaller amount than many Democratic contributors.

And the top political contributors from 1989 to 2014 are either Democratic or moderate, directly contradicting Memoli's description.

   http://www.opensecrets.org/bigpicture/topcontribs.php    (Koch Industries #32, as of August 2014)
   http://www.opensecrets.org/orgs/list.php    (Koch Industries #58, as of August 2014)

In the 2012 election cycle, the Democratic organization 'ActBlue' was by far the largest contributor, with total contributions over 10 times as large as the total shown for 'Koch Industries' --

Some of the top campaign  contributors, 2012 Election Cycle


It's also interesting that Google, a Democratic supporter, contributed slightly more than Koch Industries in that election cycle — I wonder if journalists like Memoli will ever describe Google as 'agressively seeking a more influential role in American politics', as Memoli described Koch Industries.

Too bad the media won't report on this accurately, but the public loves this 'the man is keeping me down' kind of talk.

Notice the absurdity of the opening sentence of Memoli's piece in the Los Angeles Times, regarding 'Democrats struggling to combat a flood of outside money pouring in to defeat their candidates', given the numbers shown at opensecrets.org.

The Democratic organization 'ActBlue' is far and away the largest contributor, both overall and for the 2012 election cycle, so if Democrats are 'struggling to combat a flood of outside money', as Memoli put it, they can start by refusing contributions from their own supporters.

Saturday, August 2, 2014

The War on Honesty

The opinion piece, 'The War on Workers', published in the New York Times on July 2, 2014, has the usual fallacies regarding the recent Supreme Court decision, Harris v. Quinn.

Here are a few of the main premises from the piece --
  1. The plaintiffs in the case are employees of the state -- the authors refer to them as 'public employees' and  'co-workers' and describe them as receiving meager benefits, implying the plaintiffs have exactly the same status as others who voted for union representation.
  2. Majority rule is a valid basis for forcing people to pay to support a union -- the authors claim that if a majority of workers vote for a union, it's appropriate to force everyone in the field to pay that union.
  3. Unions are unconditionally good -- the authors give no consideration to the harm that union participation can cause, and claim that non-members are free riding if they are not forced to pay fees to the union.  The authors also state that 'everyone suffers, if the union cannot afford to represent workers.'

Premise 1 is obviously false -- a number of the plaintiffs are caring for family members in their own homes, and are not in any way in what constitutes an 'employer-employee' relationship.   They certainly don't have benefits packages, or have any interaction with so-called co-workers, as stated by the authors.

And premise 1 is especially absurd, given that the majority opinion gave emphasis to the pains the legislature of the State of Illinois went to, to distinguish the personal assistants from state employees -- precisely so the state would not have to give them the benefits received by full-fledged employees (see page 23 of the decision, for example).

Premise 2 is also obviously false  -- this isn't even true for employees of a single company with a standard employment contract.  There's nothing that justifies forcing dissenters to pay for union activities, even if the ridiculous assumption were true that unions always help every member.

An organization has no right to exist, if any of its members did not join it voluntarily.

Nothing gives an organization the moral right to force payment for services from individuals, for services those individuals specifically stated that they do not want, regardless of how valuable those services may be.

Premise 3 is laughably absurd.  It's fascinating that people will attempt to use such a blatantly false assumption as justification for initiating force against others.  Even if it could be proven without any doubt that union membership would benefit a particular individual, that individual has every right to refuse the cost, on the sole basis that it isn't worth it to them.


http://www.nytimes.com/2014/07/03/opinion/ruling-on-harris-v-quinn-is-a-blow-for-unions.html
...
Though its decision in Harris v. Quinn was narrow, saying that, in some cases, unions could not collect fees from one particular class of public employees who did not want to join, its language suggests that this may be the court’s first step toward nationalizing the “right to work” gospel by embedding it in constitutional law.

The petitioners in Harris were several home-care workers who did not want to join a union, though a majority of their co-workers had voted in favor of joining one. Under Illinois law, they were still required to contribute their “fair share” to the costs of representation — a provision, known as an “agency fee,” that is prohibited in “right to work” states.

The ability of unions to collect an agency fee reflects a constitutional balance that has governed American labor for some 40 years: Workers can’t be forced to join a union or contribute to its political and ideological activities, but they can be required to pay for the cost of the union’s collective bargaining and contract-administration activities.

The majority in Harris saw things differently. Making workers pay anything to a union they oppose is in tension with their First Amendment rights — “something of an anomaly,” in the words of the majority. But the real anomaly lies in according dissenters a right to refuse to pay for the union’s services — services that cost money to deliver, and that put money in the pockets of all employees.
...


'"Right to work" gospel'?   How about the right to be free from coercion.

Notice this denigrating language implies that the conviction that one has a right to accept employment, without being forced to join an organization, never mind being forced to pay fees to that organization, is some kind of faith based viewed that isn't grounded in the fundamental individual right to be left alone.

And the last sentence in the paragraph quoted above is absolutely bizarre --
'But the real anomaly lies in according dissenters a right to refuse to pay for the union's services -- services that cost money to deliver, and that put money in the pockets of all employees.'
How on earth did unions acquire this exalted and totally anomalous status, that they alone can charge individuals for services, even when those individuals specifically asked to be excluded, and it is just assumed that benefits flow without question?  Think of all the other corporations that would love to be treated this way -- they could go around rendering services without requests, or, in this case, after having been specifically asked not to, and the government would force payments from the affected individuals.  No more trying to be competitive, or even to do anything useful, since the government will force individuals to be customers.

This quote from the article states the ultimate motivation of the authors -- it's surprising that they state their contempt for workers so clearly --

http://www.nytimes.com/2014/07/03/opinion/ruling-on-harris-v-quinn-is-a-blow-for-unions.html
...
Once selected by a majority of workers in a bargaining unit, a union becomes the exclusive representative, with a duty to fairly represent all of them. That is the bedrock of our public and private sector labor laws.

Unless everyone is required to pay for those services, individual workers can easily become “free riders,” taking the benefits of collective representation without paying their fair share of the costs. Not only dissenters but any employee who wants to save a buck can “free ride.” The net result may be that the union cannot afford to represent workers effectively, and everyone suffers.

Consider the home-care providers at issue in Harris. These workers, who are in one of the fastest-growing and lowest-paid occupations in America, are generally employed solely by individual customers, even when their wages came from public funds like Medicaid. Alone, they were stuck with low pay and meager benefits, and states faced labor shortages and high turnover.
...


Notice that if the services that unions are providing are so valuable, most workers would pay voluntarily, and the unions would not have to use force to get them to do so -- people would be fighting to get in a union, rather than fighting for their right to stay out.

The ultimate contempt for workers is expressed in the quote above, in that the essential meaning is that workers are too stupid to see what's in their best interest, in that they will suffer, if they are not forced to pay union dues.

So there you have it.  They have to control you -- it's for your own good.

But this is an obvious self-contradiction, since the union is controlled by it's members (at least that's the premise).  It begs the obvious question, 'So how are a group of workers, that are too stupid to join an organization that serves their best interests and is obviously so valuable, going to run that organization with any effectiveness once they join?'

But more importantly, the issue of 'free riding' that has been raised repeatedly in cases like Harris v. Quinn is just a red herring fallacy in this context.  The only critical point is whether the right of individuals to be free from coercion is being protected -- not whether individuals are supporting some organization that may be providing a valuable service, since individuals certainly have every right not to do that.

Organizations do not fail because of too many 'free riders' -- they fail because too few people are convinced it is in their interests to pay to support them.

Even using the term 'free riding' in this context begs the obvious question: 'How is it even possible that there are no dissenters that are not worse off as a result of union activities.'

Using the term 'free riding' with regard to dissenters treats union activities as if their value is beyond question.

There's also another glaring fallacy in all of these hyperbolic claims about union services, and their supposed unquestionable value -- a union can just as easily represent a small group of individuals as a large one in 'collective representation'.

There's nothing magical about 'collective representation' that requires the participation of every single individual in a particular field to make a union viable.  Indeed, when union representatives are engaged in collective bargaining, the number of employees they're bargaining for is not relevant, and has no bearing on the things the union should be doing to represent the membership, however large or small.

The union isn't spending on a per employee basis to negotiate an agreement that covers a group, and the dissenters that don't want union services can just as easily be excluded from the negotiation and left to come to their own agreement with an employer.  Negotiating an agreement for a group is the same, whether the group contains one hundred, or one million members -- the whole point is that all the individuals in the group will be subject to the same terms (treated as a single unit) -- collective bargaining would be impossible if this were not the case.  That is, this 'all or none' claim that keeps getting repeated regarding union participation is absurd on it face.

The obvious problem for unions, that no one is willing to name, is that unions lose influence when the membership drops, because they can't do as much damage to an employer -- not that unions lose money to so-called 'free riders'.

All of these fallacious arguments that are being thrown out in an attempt to make it look unfair not to force dissenters to pay unions, are rationalizations to disguise the desire to give unions more power.

To that point, notice this perversely fascinating closing statement from the authors of 'The War on Workers' --

http://www.nytimes.com/2014/07/03/opinion/ruling-on-harris-v-quinn-is-a-blow-for-unions.html
...
Unions are already reeling. At a time when workers are losing economic ground, we should be looking for ways to strengthen their ability to join with co-workers and bargain collectively to improve their lot. Instead, the court in Harris sided with those who seek to weaken it further.


This is a total non sequitur.  Nothing about Harris v. Quinn weakens the ability of workers to unionize.

The decision to prevent forced payments to unions from workers, in no way prevents workers from joining a union, if they wish.  What a comically asinine comment to make, regarding a case that was brought by individuals in order to get a union organization to leave them alone.

The Harris v. Quinn decision gives workers more freedom and control -- not less.