Labor Day? Why Should Labor Take The Credit?

 by Joe Siano

Who works hard?  Bees and beavers work hard.

Busy bees.

Busy beavers.

Who is a more tireless worker than the mighty ant?  Hour after hour these little guys lug heavy loads into their labyrinth colonies without stop.

But what do bees, beavers and ants have to show for millennia of unceasing effort?  Nothing.  Their kind has made zero progress in millions of years. Their lives have not changed a bit.  The Galapagos Tortoise is as well off but does absolutely nothing.

Humans themselves labor unceasingly in slave and command economies for little more than the bare necessities needed to work another day.

Why dedicate a major holiday to “Labor” when it appears to be ineffective in improving the lives of laborers?

Labor is but one of the four economic factors in the production of “goods”.  Goods are those products, tangible or intangible, that make human life more enjoyable.  The factors are Land, Labor, Capital and Entrepreneurship.

Land is what God or nature has bequeathed us.  It was once the most important source of wealth.  That is why the warrior class – kings and nobility – held the land and became wealthy while their workers – slaves, serfs, peasants – labored for little material gain.     As technology and industry surpassed land as key economic engines, the power, prestige and wealth of the landed aristocracy diminished.

Labor, Capital and Entrepreneurship are the human factors of production.

Undoubtedly Labor combined with Land produced the most rudimentary consumption items – basic foodstuffs, shelter from the elements and clothing.

“Capital” represents the tools that save labor and make labor more productive.   Capital is created by sacrifice and savings, refraining from immediate consumption.  These savings are invested to create new tools which further multiply the fruits of labor.  Early examples include the wheel, oxcarts, plows, fishing nets, millstones and wine presses.   

Capital accumulation, that is more sacrifice, savings and investment make for better tools and technologies which make for a materially richer society. 

Capital creation also involves risk.  What if the new technology does not work as hoped?  What if someone builds a better mousetrap while you are building yours?  What if the market moves on – consumer tastes change – and you are stuck with a device that efficiently produces something that no one wants?

This element of risk opens the door for entrepreneurs and capitalists.

Entrepreneurs are the visionaries who see a societal or human need that is not adequately met and envision a profitable solution to meet that need.

Capitalists assume the risk of underwriting entrepreneurial visions by investing their savings (deferred consumption) to transform dreams into real goods and viable businesses.  Sometimes they succeed.  More often, they fail.    To compensate for the many failures that he may endure, the professional capitalist looks to win big with his successes.

The material progress of society is not so much driven by Labor as it is by:

·        Sacrifice – deferred consumption – to accumulate resources for investment

·        Capital accumulation – a sufficient pool of “surplus” wealth to invest in risky but potentially useful new ideas

·        Entrepreneurs – people with the insight, imagination and inventiveness to propose new tools to improve lives

·        Capitalists – risk-takers with the resources and stomach to make big bets on speculative endeavors

These entrepreneurs and capitalists create the companies, build the plants and the infrastructure to employ legions of workers ranging from highly paid executives and techno-wizards all the way through to clerks, janitors and laborers.  Each of these people contribute value to the enterprise and are rewarded accordingly.  However, the enterprise in which they work would never exist without Capital Accumulation, Entrepreneurial visionaries, and Capitalist investors.

The idea of Labor Day is a socialist contrivance, based upon the erroneous Labor Theory of Value.  The Labor Theory of Value holds that the value of a product is determined by the time and energy invested to make a product. This is absurd.  If I were to invest a year of my life building a house that falls down or a car that does not run – they are worthless despite my earnest efforts.

Value exists only in the buyer's eyes.  Value creation consists of solving consumer problems or meeting their needs.  A successful business is one that can do so profitably.

Socialism has nothing to say about how goods are produced or consumer needs met.  Its sole concern is with the distribution of proceeds.  Thus, it is unsustainable.   Without an eye on producing consumer value, there will soon be no proceeds to distribute.

Only a decentralized and free market society can create the conditions that have produced near-universal access to automobiles, air-travel, cell phones, indoor plumbing, TVs, computers, refrigerators, washers, dryers – you name it.  Only under the regime of private property and privatized reward and loss will humanity thrive.

The condition of having decentralized governance and free markets is called Liberty.

It is Liberty, not Labor that that is the kernel of human advancement.

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Wasted Labor Day

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"Half the people are stoned and the other half are waiting for the next election.
Half the people are drowned and the other half are swimming in the wrong direction." 
- Paul Simon

Afghanistan - A Fool's Errand Comes to an End

 by Joe Siano

Four years ago, Scott Horton of Antiwar.com published Fool’s Errand, a scathing and meticulously documented indictment of America’s tragic misadventure in Afghanistan.

Following 911, the United States learned that the attack’s mastermind, Osama Bin Laden, was hiding in Afghanistan.  Bin Laden was a non-state actor, responsible for nearly 3,000 deaths and almost twice as many injured in the events of that day.

Representative Ron Paul proposed a limited response to this aggression by introducing a bill of Marque and Reprisal in the House of Representatives on October 10, 2001.  Letters of Marque and Reprisal are the Constitutionally prescribed remedy to address acts of individuals, living beyond our borders, who perpetrate acts of violence on the U.S. or its citizens.

This approach did not suit the tastes of Vice President Dick Cheney and his band of warmongers.  They pushed President and George W. Bush to demand that Afghan authorities hand Bin Laden over to the U.S. or suffer the consequence of a full-scale invasion and occupation of their country. 

This was a cynical and disingenuous request made for propaganda purposes only.  Cheney’s crew knew that it was impermissible under Islamic law and custom for the Afghan government to surrender a brother Moslem to infidels (non-Moslems).  Thus, they fabricated a rationale for a  second war in the Middle East alongside the foray in Iraq.

Horton recounts how the Afghan government wanted no parts of Bin Laden in their country. They made multiple offers to turn him over to the Americans discretely, thus sidestepping religious scandal.  America’s Neo-conservative foreign policy establishment ignored these overtures so as to continue its mission of nation-building to transform this ancient culture into a Western-style liberal democracy.

If the capture or assassination of Bin Laden was America’s true goal, our mission in Afghanistan should have ended in May 2011 when he was killed by Navy Seals.  Yet the war continued for another ten years until the recent announcement of U.S. withdrawal earlier this month and the immediate collapse of the Afghan government.

Despite his death, Bin Laden won.  Once again Horton describes the brilliant rope-a-dope that Bin Laden

drew us into.  Afghanistan is the "graveyard of empires".   The Soviets wasted ten tragic years warring in Afghanistan ultimately fleeing with their tails between their legs.  Many contend that this costly war contributed heavily to the collapse of the Soviet Union

Bin Laden correctly foresaw that the United States would sink into the same quagmire as our Russian rivals upon commencement of hostilities in said country.  Being a much wealthier and more powerful nation than the U.S.S.R., The United States was able to spend twice the time banging its head against the wall before our humiliating exit.  Ironically, the same Taliban that just KOed the U.S. is the same Taliban that we helped to organize, arm and finance during their war with the Soviets.  Back then they were the good guys.  We called them freedom fighters.

What motivated the United States to enter, stay and sacrifice so much in this “fool’s errand”.  Was it simply quixotic idealism? Or stupidity? Or greed? 

On the heels of the recent and swift collapse of the Afghan government, the Inspector General’s office issued a report, What We Need To Learn: Lessons From Twenty Years of Afghanistan Reconstruction.  According to The Federalist this report, “found that many of the failures had to do with a complete lack of understanding in regards to Afghan culture and the ‘social landscapes’ of the region”.

Per the report: “Rarely did U.S. officials have even a mediocre understanding of the environment, much less how it was responding to U.S. interventions.”  “U.S. programs empowered malign actors and exacerbated preexisting inequities, undermining the legitimacy of the Afghan government they were intended to bolster”.

Again, per the Federalist story: “Ambassador Ryan Crocker affirmed this, telling SIGAR, ‘The ultimate point of failure for our efforts wasn’t an insurgency. It was the weight of endemic corruption.’”

Down to the bitter end, it appears that America’s leadership class had no clue.  General Mark Milley, Chairman of the Joint Chiefs of Staff, confessed surprise admitting that the collapse “did unfold more quickly than we had anticipated.”

Stupidity, incompetence and naivety played a big part in this disaster.  

These are the people we depend upon to protect us from “all enemies, foreign and domestic” .  Think about that.

Greed coupled with gullibility are even more prominent factors.

Wikileaks founder, Julian Assange, pointed out years ago that the goal in Afghanistan "is to have an endless war not a successful war," in order to "wash money out of the tax bases of the United States...into the hands of the transnational security elite."

Dwight Eisenhower, America’s last war-hero President warned in his farewell address of the corrupting power of the military-industrial complex.

“Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every Statehouse, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes.”

A Newsweek Op-ed declares that the, “Taliban Didn't Win in Afghanistan, the Defense Contractors Did”.  This piece references the aforementioned Special Inspector General for Afghanistan Reconstruction report to document massive financial investment of $145 billion – largely to civilian contractors  - to rebuild Afghanistan as well as $837 billion to actually fight the war.  The outcome:

·        1,114 allied troops dead

·        20,666 of America’s finest young men and women injured

·        At least 66,000 Afghan troops killed

·        48,000 Afghan civilians killed and another 75,000 injured

·        Untold billions of dollars in U.S. arms and military equipment left in the hands of our enemy. 

Following World War I, a war of unprecedented bloodshed and misery,  H. C. Englebrecht and F.C. Hannigan, published Merchants of Death, their groundbreaking expose of the International armament industry.  The Mises Institute points out that this study “was co-authored by the founder of Human Events, the conservative weekly. So this is no left-wing screed against profiteering. It is a careful and subtle, but still passionate, attack on those who would use government to profit themselves at the expense of other people's lives and property.”

The synopsis continues,” This book is a wonderful example of what Rothbard called the ‘Old Right’ in its best form. The book not only makes the case against the war machine; it provides a scintillating history of war profiteering, one authoritative enough for citation and academic study. One can see how this book had such a powerful effect.”

And what role does naivety play in all of this?  Americans are good-hearted people who, for the most part, want to make the world a better place.  They trust their leaders to be just and moral actors, doing what they believe to be for the greater good of America in particular and humanity in general.  This is their fatal blind spot,

The democratic model that we have tried to graft onto Afghanistan, Iraq and Viet Nam does not typically produce those types of leaders.

Hans Herman Hoppe demonstrates that in mass democracies, demagogues rise to the top of the political pyramid.  When selecting candidates for high office, the kingmakers of both American political parties ask themselves: “Who is the smartest bad guy?  Who has the most demagogic talent?  Who is a magnificent briber, liar, cheater and all the rest of it.”  He concludes: “Under democratic conditions, especially on the central level, it is almost impossible that a decent person will ever be elected to a higher rank.”
(PDF p 145)

It's one thing when corrupt local politicians swindle money and award bogus no-bid contracts to friends.  It is quite another when supposed statesmen  prevail upon the good-will of the people to enrich the death merchants while killing and maiming thousands.

This is murder plain and simple.  For this, they should be called to account.

During the heady Tea Party uprising of 2010 and 2011, many Partiers told me that they liked Ron Paul’s domestic agenda but objected to his foreign policy.  Too bad.  If America had gotten on board with his gospel of non-interventionism and moderation in response to offenses, think about how many lives would be saved, pain and injuries averted, and money saved to invest in productive uses.  America and the entire world would be safer, healthier and more prosperous

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"Half the people are stoned and the other half are waiting for the next election.
Half the people are drowned and the other half are swimming in the wrong direction." 
- Paul Simon

“Pay Them More” & Then Charge More

 by Joe Siano

For a half century, the United States federal government, which never lacks for cash, has provided Joe Biden with a solid professional salary, a comfortable pension, world class healthcare as well as sundry housing, entertainment, travel and dining benefits.

 

This President, God bless him, has never worried about how to meet a payroll, afford capital improvements, fund marketing campaigns or just keep the lights on in a business.

 

But now he is dispensing business advice.  Expect to see him on Shark Tank.

 

When asked how American businesses are to contend with staffing shortages his answer was simple: “Pay them more”. For maximum effect he delivered his response in a sarcastic stage whisper to suggest that anyone who would even broach this question is an ignoramus.

 

This may be the most tone-deaf malaprop since Marie Antionette dropped, “Let them eat cake!”

 

Biden, the taxpayer tycoon, continued by saying that businesses will “have to compete and pay people a decent wage”. 

 

Compete with who?  Compete with what?

 

Businesses always compete with each other for the best employees.  In this instance, America’s employers are competing with forces bigger and more ominous than other companies:

            The Couch

            The Lazy Boy

            The Price is Right

            Grand Theft Auto

            Porn Hub

            Weed
            Mom and Dad

Uncle Sam    

 

The Apostle Paul nailed it, “if any would not work, neither should he eat” (KJV)  He was talking about the lazy laggards who mooched off the generosity of early Christian communities who shared all things in common.  You would think that a President, who makes such a big deal of weekly Church attendance, might know this.

 

But let’s not move on from the “pay them more” part so quickly.  Businesses that are cash-strapped due to enforced government shutdowns are already paying more.  Years of Fed money pumping are causing:

·        Grocers and restauranteurs to pay more for the food they the put on their shelves and tables

·        Builders to pay more for plywood and building supplies

·        Truckers and farmers to pay more to run their vehicles and operate their implements

 

If businesses must pay more for essential supplies and the President wants them to raise wages, the proprietors have little choice but to:

 

(Say this in a loud stage whisper)

CHARGE CUSTOMERS MORE!

 

Yes, a bipartisan coalition of DC non-producers did pass a $1.9 trillion stimulus bill.  The net effect will be to:

 

·        Continue rewarding lay-abouts for sitting home and producing nothing and serving no one

·        Pump more money into the economy to chase a dwindling supply of goods and services

·        Drive the cost of all consumer and producer goods higher

·        Make life more difficult for people who are trying to do the right thing by actively engaging in productive economic activity

·        Create a moral hazard by teaching people to expect more for doing nothing instead of less for doing something

 

Austrian economics holds that consumers, you and I, are the ultimate employers.  Our purchase decisions decide what is produced, the quantity and the market price. So what Joes Biden is really telling Joe and Jane Consumer is:

 

(Say this in a loud stage whisper once again)

YOU PAY MORE
to get these bums off the couch.

Incentives matter.

 

Washington DC is sending the message that there is no dignity in work.  Only a fool would work for lower wages that may be garnered by slacking.  That is hard to argue with.

 

The old joke in the Soviet Union was, “We pretend to work while they pretend to pay us”.  In America 2021, we no longer need to pretend.

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Wasted Labor Day

 

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"Half the people are stoned and the other half are waiting for the next election.
Half the people are drowned and the other half are swimming in the wrong direction." 
- Paul Simon

 

Is Being Wealthy A Crime?

 by Joe Siano

In a recent Gizmodo article, Matt Novak observes that, “It’s obviously a crime that billionaires even exist in a civilized society”.  His rationale is that “there simply aren’t enough hours in a day to justify the accumulation of so much wealth.”

 

Mr, Novak muses whether billionaires should even be “allowed to exist”. 

 

There is plenty to unpack here.

 

The Scale Has Changed

Since the inception of the Federal Reserve in 1913, the passage of legal tender laws and the abolition of hard currency, the U.S. dollar has lost over 96% of its purchasing power.  Being a millionaire just isn’t what it used to be.  If you had one million dollars in 1913, you would need about $100 million to be just as rich today. A magnate holding a fortune of $10 million in 1913 would need a billion to be as wealthy in 2021.    At the height of his earning power, the great Babe Ruth made $80,000 per season.  Today the average Major Leaguer earns over $4 million per year.  The Major League minimum is $570,000 per year – more than 7x what the Babe made.

 

John D. Rockefeller was America’s richest man at his death in 1937.  He parlayed a $4,000 investment in a Cleveland oil refinery to amass a fortune of $1.4 billion.  Adjusted for inflation, this projects to $340 billion making Bezos, Musk, Gates, Buffet and the like look like second-raters.

 

The point is do not get freaked by the word “billionaire”. 

 

What is Wealth?

The word “wealth” is derived from the old English word, “weal”.  An etymology of wealth reveals that:

 

‘Wealth’ comes from the old English ‘weal’, which means ‘wealth, welfare, and wellbeing’. Weal is in turn related to the older word ‘wel’, meaning ‘in a state of good fortune, welfare, or happiness’.

‘Wel’ gives birth to ‘welth’ around 1250 AD, and ‘welthi’ a century or so later.

 

What kind of person resents another person’s well-being?  Why would you wish ill-fortune on another of God’s creatures just because, at this moment in time, they may be a bit better off than you?

 

This is just plain old “envy”, one of the seven deadly sins.  Or perhaps “greed” or covetousness. It is nothing short of malicious to wish ill-will on a person simply because their achievements outstripped yours.

 

As previously noted in the Gizmodo story, the author ponders whether billionaires should be allowed to exist.  The implication is that he believes not. 

 

Then the question becomes how would he dispose of these supposed parasites?  Would he chop off their heads as the Jacobins did with the aristocrats?   Or ship them off to gulags as Stalin did with the bourgeoisie and reactionaries?  Or to concentration camps as the Nazi’s did with the Jews?  Or to “re-education” camps as the Maoists do with their dissidents?

 

Maybe he has something new in mind.  Freedom’s opponents are always inventive when it comes to genocide, torture and oppression.

 

Wealth, Utility and Well-Being

A more technical economic word for well-being might be utility.

 

Austrian economics is rooted in the a priori observation that human beings take purposeful action to move from a state of discomfort to a state of less discomfort.  Acting human beings seek utility, an improvement in their well-being.

 

A corollary statement to that is that human beings prefer a state of rest to a state of activity.  However to feed, clothe and shelter themselves,  people will engage in activity necessary to procure these ends, 

 

In the primitive state – a state of scarcity – the hunter/gatherer economy, people need to forage all day long to survive.  Even in traditional agrarian economies, life for most folks was unending toil to make ends meet.  The old saying goes, “A man may work from sun to sun, but a woman’s work is never done”.

 

The Democrat Party imagines that it created the 40-hour work week.  The reality is this.   The growth of worker productivity grew exponentially due to mechanization, capital accumulation, technical innovation and competitive pressure starting with the Industrial Revolution.  It has only accelerated as digital tools enabled industry to discover and apply new consumer and production technologies at lightning speed.

 

Due to advances in labor productivity, workers can satisfy their needs for food, clothing, shelter and even some luxuries in much less time.  Thus Austrian economics also posits that leisure time is a luxury good which a great many workers wish to purchase at the cost of working for 40 hours or less and making less money.  To this point, the modern world now boasts a vast leisure industry to fill the empty hours of workers including TV and movies, video games, resorts, casinos, pro sports, concerts, theater, amusement parks, bars and restaurants not to mention adult entertainment.

 

Creative geniuses, entrepreneurs, inventors and visionaries stand apart from the 9-5 crowd.  A handful of highly driven people such as Thomas Edison, Henry Ford, Steve Jobs, Jeff Bezos, Bill Gates and many more have created products, services and processes that untold millions of people believe have made their lives better and easier.    By delivering utility, by enhancing the well-being of millions of everyday people – by adding to their weal – the world’s best innovators have, in the process, amassed fortunes for themselves.  Is that a crime?  Mr Novak believes so,

 

Mr. Novak totally misfires when he asserts that, “there simply aren’t enough hours in a day to justify the accumulation of so much wealth.”  Consider this.  If an entrepreneur provided just $10 of utility to 100 million people (less than one-third the U.S. population), presto, he or she is a billionaire.  About 1.5 billion people use iPhones, another 1.5 billion Android devices and another 1.5 billion Windows computers.    That’s a lot of people who feel their lives are made better by just these three products. 

 

Shouldn’t the developers and stakeholders be paid?  Are they stealing?  If Mr. Novak were such a compelling writer that everyone in America paid $10 to receive his missives, he would be a billionaire three times over.  Do you think he would refuse payment or give it away?

 

If I were a Rich Man

 Not only do the capitalist top dogs enrich themselves, they create investment opportunities and good jobs that elevate the material condition of society as a whole.

 

If I were rich, I'd have the time that I lack
To sit in the synagogue and pray.
And maybe have a seat by the Eastern wall.
And I'd discuss the holy books with the learned men, several hours every day.
That would be the sweetest thing of all.

-From Fiddler on the Roof

 

Tevye the milkman pines to be rich so that he can make life better for his family but most of all so that he can attend to higher, spiritual matters.

 

Maslow's hierarchy of needs holds that once humans have secured their material needs their focus moves to the transcendent.  To  truth, beauty, poetry, philosophy and God.

 

By making us better off, our billionaire brothers and sisters liberate us to be truly human and to contemplate the deeper mysteries of life and its meaning.

 

Great art, philosophy and theology are produced in affluent societies with the backing of wealthy patrons.  It is consumed by people with cultivated minds and tastes. In his treatise, Wealth, Andrew Carnegie, mused that the highest calling of those blessed with riches was through public endowments in the arts, sciences and other civilizing institutions.  Private philanthropy makes a nation great, not government programs.

 

For all of their faults, the billionaire class has done more to make like better than any government ever could.  In fact, I would argue that the government only makes life worse.

 

So, I have no problem with the very rich legally avoiding Income Tax.  We understand that the wealthy have the best security to protect their homes, persons and businesses from assault theft and pillaging.  It stands to reason that they would also command the finest resources to protect themselves from the marauding taxman,

 

Our world is better off when they invest, spend and give away their resources as they see best. After all, they are smarter and more productive than any Beltway bureaucrat or legislator.

 

 

 

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Capitalism for B Students

 

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"Half the people are stoned and the other half are waiting for the next election.
Half the people are drowned and the other half are swimming in the wrong direction." 
- Paul Simon