Read posts carefully

People tend to misread my posts.  The recent post on poverty is a good example.  Here’s what I believe.

1.  On average, the poor tend to be less talented and hard working that the rich.

2.  There is nothing “wrong” with poor people.  They are just as good as rich people.  Being more talented doesn’t make you a better person than being less talented.  Being hard working doesn’t make you a better person than being less hard working.  The government should not encourage people to become more educated and harder working.  But they should stop discouraging people from working hard.

3.  Culture is not carved into stone.  China and Singapore circa 1976 were both largely “Chinese” cultures, but one was hard working and increasingly affluent and one was less hard working and extremely poor.  That doesn’t mean that Singaporeans were better people than the Mainland Chinese.

4.  I am not “fatalistic” about the poor, about drug addicts, etc.  My blog is full of public policy proposals to ameliorate these problems.  I’m optimistic that these problems will become less severe over time.

5.  But I’m also not a dreamy-eyed utopian.  Even with perfect public policies, there would be all sorts of “gaps” between different ethnic groups, and between men and women.  That’s because culture changes slowly, and human capital takes time to accumulate.  Perhaps American Christians will eventually catch up to American Jews in terms of average income, but it’s not likely to happen in the 21st century.  Sorry Christians, but your going to just have to accept that cultural change occurs slowly.  (That’s one area where I agree with conservatives.)

6.  Some of the gaps between groups may be partly genetic, but that’s never been my working assumption.  All groups have good enough genes to be at least middle class by American standards.  Good enough genes to be a truck driver or mailman or plumber or the vast majority of other jobs.  So we might as well focus on public polices, not genes.  (That’s one area where I agree with liberals.)

In general, my views lie completely outside the standard “victims and villains” debate between liberals and conservatives.  I don’t blame blacks and Hispanics and Native Americans for their lower (average) income, nor do I blame “white privilege.”

Again, there is nothing wrong with having a low income.  If you are reading this blog then you probably make more money than Mother Theresa did.  That doesn’t make you a better person.  Nor are you a better person than the desperately poor Indians she helped.  I prefer lots of the low income people I know to lots of the higher income people I know.

Tom Cruise didn’t choose to be born Tom Cruise, nor did I choose to be born me, nor did the homeless guy down the street choose to be born homeless.  Stop thinking in terms of “deserve” and start thinking like a utilitarian.

PS.  NR has a very good post on Trump by Jonah Goldberg, and a great one by Kevin Williamson.

 


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39 Responses to “Read posts carefully”

  1. Gravatar of H_WASSHOI H_WASSHOI
    17. September 2017 at 10:57

    (memorial comment)

  2. Gravatar of Russ Abbott Russ Abbott
    17. September 2017 at 11:46

    Now I’m confused about your position. Here are two points.

    1. You say “On average, the poor tend to be less talented and hard working that the rich.” Isn’t that essentially tautological, especially given the society we live in. What is it about that observation that makes it worth making?

    2. The first point seems to say that things are the way they are. That doesn’t seem to say much. But you also say, “My blog is full of public policy proposals to ameliorate these problems.” In other words, things are the way they are but (a) things could be what you would consider better and (b) it’s possible for public policy to move things in toward better state.

    So my request is for you to say something about what that better state would look like and what public policies would move us in that direction.

  3. Gravatar of Luis Enrique Luis Enrique
    17. September 2017 at 13:46

    you don’t think white privilege (a corollary of racism) takes some blame for minorities’ lower average incomes?

  4. Gravatar of Christian List Christian List
    17. September 2017 at 14:06

    @Russ

    What is it about that observation that makes it worth making?

    Well you are correct, it’s a simple (maybe even tautological) observation, nevertheless many people don’t get this simple point. Quite often they get very upset by this simple observation and attack you personally for making the observation, so it’s actually quite bold of Scott to make a statement like this. Yes, he is stating the obvious but stating the obvious in an Orwellian PC world can be extremely dangerous. Kudos to Scott.

    @Luis
    Minorities you say? I would believe this theory more if Jewish and certain Asian immigrants wouldn’t do better than the so-called privileged class.

  5. Gravatar of Matthew Waters Matthew Waters
    17. September 2017 at 14:21

    There’s a lot of confusion here. You’re extremely literal in terms of “poor” and “better person.” I meant it in terms of how those terms are usually used in American political arguments.

    Typical conservative arguments do say that some poor people are worse than some rich people, due to the poor people supposedly not working as hard. Also they argue that drug addicts have made poor choices.

    You’re using poor vs rich in their literal sense. These conservatives of course wouldn’t blame missionaries or charity workers for being poorer. They wouldn’t blame third world people for their poverty. I assumed these caveats could be unsaid.

    I guess true and pure utilitarianism is so removed from political discourse that I saw the post mainly in “deserve” terms.

  6. Gravatar of Matthew Waters Matthew Waters
    17. September 2017 at 14:24

    To clarify, I’m not saying you are a “typical conservative.” I meant many other conservatives/Republicans. I could give many examples of harsh “deserve” language for rich vs poor. Of course, there’s also harsh language on the left about different things.

  7. Gravatar of Matthew Waters Matthew Waters
    17. September 2017 at 14:25

    To clarify the clarification, I’m not putting you in the group of “conservatives/Republicans” either. By “other,” I meant other people.

  8. Gravatar of ssumner ssumner
    17. September 2017 at 15:15

    Russ, 1. If it’s tautological, how does it just refer to our society? Under feudalism, were the rich harder working than the poor? Obviously not.

    2. I’ve done many posts on things like low wage subsidies, legalizing drugs, ending zoning, ending occupational licensing, school vouchers, more immigration, etc.

    Luis, Some blame, but only 1% or 2% of the gap is white privilege (in the sense of political power), the rest is other factors. Similarly, roughly zero percent of the wage advantage of Jews and Asians over white Christians is due to privilege.

    Matthew, I don’t agree with conservatives who say that people who work hard and don’t use drugs are better people. I simply don’t agree.

  9. Gravatar of XVO XVO
    17. September 2017 at 17:04

    I think, according to the proper opinions anyone with any influence must hold, just admitting the fact that people have different abilities and preferences based on the genetics they were gifted at birth is -ist. Being -ist is wrong and you should be fired, never be employed again. Any ideas you had about monetary policy or anything else is obviously -ist as well and influenced by your disgusting beliefs, therefore no respectable person should espouse those ideas.

    Scott you need to accept that poor people are only poor because they are oppressed by people like you, and it has nothing to do with their inherited abilities or preferences.

  10. Gravatar of XVO XVO
    17. September 2017 at 17:17

    “Matthew, I don’t agree with conservatives who say that people who work hard and don’t use drugs are better people. I simply don’t agree.”

    This is funny. But the poor are not capable of escaping poverty because of the family they come from? Rich people are rich because of the family they come from?

    You’re already a total sellout to honesty. Just say it dog, the poor are poor because of oppression. There is no other possible explanation for their state.

  11. Gravatar of ssumner ssumner
    17. September 2017 at 20:19

    XVO, Nothing sadder than someone trying to appear sarcastic and not being smart enough to pull it off.

  12. Gravatar of Mike Mike
    17. September 2017 at 20:50

    Re: #3

    Don’t you think the difference between China’s and Singapore’s economic systems was the difference, not culture?

  13. Gravatar of ssumner ssumner
    17. September 2017 at 22:00

    Mike, Yes, I agree, but the economic system influenced the culture. Even today, corruption is a much bigger China in Singapore than in Singapore.

  14. Gravatar of Matthias Goergens Matthias Goergens
    18. September 2017 at 00:06

    Scott, not to distract from your argument, but you should probably remove Mother Theresa from your list of examples: she made a lot of noney from her activities, and didn’t help the poor all that much. (In fact, someone who’s sitting on his sofa and not doing anything might have a better net impact at roughly zero..) Perhaps replace with Norman Borlaug or so?

  15. Gravatar of mbka mbka
    18. September 2017 at 03:43

    Scott,

    “There is nothing “wrong” with poor people. They are just as good as rich people. Being more talented doesn’t make you a better person than being less talented. Being hard working doesn’t make you a better person than being less hard working. The government should not encourage people to become more educated and harder working. But they should stop discouraging people from working hard.”

    That alone is worth inscribing on a plaque. May I add: There is no particular moral duty to – or merit in – maximizing production.

    “Tom Cruise didn’t choose to be born Tom Cruise, nor did I choose to be born me, nor did the homeless guy down the street choose to be born homeless”

    Another nugget. Though I would see its value less in the light of “just deserts” and more in the very anglo idea that somehow we’re all these rational creatures walking through life making perfectly conscious “choices”.

    “I prefer lots of the low income people I know to lots of the higher income people I know.”

    Amen. Same logic applies to IQ, by analogy, in all three examples above. And this is where the HBD crowd went wrong. Not that HBD does not exist. It’s that HBD is immediately taken as a value judgment. The descriptive is taken for a normative. This is one of the biggest problems in these kinds of discussions, and it is perpetrated equally by left and right.

  16. Gravatar of ssumner ssumner
    18. September 2017 at 07:38

    Matthias. OK.

    MBKA, Great comment.

  17. Gravatar of Adam Adam
    18. September 2017 at 07:47

    I realize that you’re talking in the abstract, but in reality excluding black people and preserving Jim Crow were conditions on enacting the New Deal and the GI Bill. One-two generations ago, white Americans were given a substantial leg-up that simply was not available to black Americans.

  18. Gravatar of Christian List Christian List
    18. September 2017 at 10:54

    About 90% of mbka’s comments consist of sucking up to Scott. And 9 out of 10 times Scott replies with something like “great comment, mbka”.

    :roll:

  19. Gravatar of Randomize Randomize
    18. September 2017 at 11:09

    Dr. Sumnner,

    I mostly agree but have a couple thoughts:

    1. It would be great to have a measurement of “hard working.” Something easy to measure like work hours per week would be a lousy measurement given the effects of unemployment, salary vs. hourly, self-employment, etc. Maybe leisure hours per week would be a decent inverse measurement?

    2. White Privilege has always felt like the wrong term for what’s really the ongoing effects of racism, past and present. I believe that the success of children can be mapped as a bell curve centered on the success of their parents and that, when slavery ended, former slaves’ total lack of education and wealth centered the bell curves for their children at the very lowest end of the X axis. That effect then passed on to their grandchildren, great grandchildren and so on.

    The number one indicator of success in standardized tests like the SATs (I’m told) is whether or not the students’ parents read to them. It’s not hard to imagine that the decedents of slaves, who were kept deliberately illiterate, are far more likely to be illiterate themselves than the rest of the population.

    My wife is a teacher at a very low income, inner city school. Last year, she gave the students a number of her surplus books from her classroom library. A shockingly high percentage of her 5th graders told her that their new books would be the first books they’d ever owned. I don’t doubt that, on average, more successful people tend to be more talented and harder working but it seems like so many people (not you) have completely lost perspective on why there’s such a gap in talent.

  20. Gravatar of Jesse C Jesse C
    18. September 2017 at 12:31

    Scott, when you characterize conservatives, I find some of it to be slightly off target. Could you name a handful of conservatives whose opinions you believe could be taken as a representative sample of conservatives as a whole, vis a vis the root causes of economic inequality?

    The best summary I could come up with for a stereotypical conservative view of inequality would be to blame it on some combination of

    1. The “nanny state”
    2. People have a tendency to latch on to an alibi for why they haven’t succeeded when one is offered to them. (Thomas Sowell logic, if I recall)
    3. Individual choices (hard worker, not hard-worker)

    The idea that conservatives “blame blacks and Hispanics and Native Americans” for their collective lot(s) just feels like an unfair attribution. This was implied, at least least to me. People who hold that view would more likely label themselves conservatives, but that’s different.

    I’m much more libertarian than conservative, but I often find that people who want to be labeled neither liberal nor conservative can go too far to demonstrate how both groups “get it wrong.” I do this myself a lot. :(

  21. Gravatar of Carl Carl
    18. September 2017 at 12:37

    “Being more talented doesn’t make you a better person than being less talented. Being hard working doesn’t make you a better person than being less hard working.”

    Airline A has hard-working talented mechanics and Airline B has laid-back, unskilled mechanics. Airline A’s planes crash once every 1 million flights. Airline B’s planes crash every 1 thousand flights. To say that Airline A’s mechanics are not better people, you either have to say that saving 300 thousand lives every million flights doesn’t matter or that the virtue of saving three hundred thousand lives does not adhere to the saviors.

    (I am assuming that all other virtues are equal among the mechanics of the two airlines.)

  22. Gravatar of Potato Potato
    18. September 2017 at 13:29

    If this was partly directed at my poorly written comment, I apologize. But I am still not sure I explained my point eloquently enough that our host understood my overall point.

    Fault always lies with the writer, so here goes attempt #2:

    We are entering a world in which tribal affiliation will matter more in terms of validity than actual truth. This doesn’t matter for most things. If Cletus think the world is flat, it means nothing.

    Social liberals have “owned” the culturally dominant megaphone for years. Scott is a persuasive and brilliant utilitarian arguing for something that will quite literally create a Pareto improvement in the well being of American lives.

    By writing persuasive truths, such as the implication that the pure blank slate model of humanity is untrue, present and future purveyors of information and knowledge will be exponentially less likely to side with his ideas. Every time he says something controversial to humanities academics the less likely the Federal Reserve will change its regime.

    Our host is nothing if not humble, but the truth is he has reached the point where his political views will affect how his economics is interpreted. Challenging blank slate humanity can someday be used against his unrelated monetary theories. I assure you, in the history books it will mention any deviation from orthodox thought about blank slatism. And a brilliant mind could be denounced for nothing.

    As a utilitarian, think of the future. You owe it to humanity to adopt Vox style SJW-ism.

  23. Gravatar of Jerry Brown Jerry Brown
    18. September 2017 at 16:26

    I have enjoyed your posts for years now and it is true that I have misread a few of them initially. But part of “people tend to misread my posts” can sound like an excuse for writing that people end up misunderstanding. You are a very good writer and I am sure you realize that much written (or spoken) language can be interpreted in multiple ways- even the complete opposite of the literal words if the writer is being sarcastic.

    In any event, I sympathize with you- an astonishing number of my comments start off meaning to be intelligent, appropriate commentary but end up getting misread as moronic drivel by various readers who seem quite willing to point that out. When you find the solution to being misunderstood, please, please post about it. Chances are good that it will be misread though…

    Better put a smiley on this one too just to be a little safer.
    :)

  24. Gravatar of mbka mbka
    18. September 2017 at 18:30

    Christian List,

    “About 90% of mbka’s comments consist of sucking up to Scott.”

    Chuckle. I admit I felt guilty on this one because it was mostly quotes and fairly little value added by myself.

    Truth is, I genuinely sync with Scott’s outlook on life. I’m often not competent to comment in the monetary arena but I share his take on how the world works. In many areas Scott formulates things that I felt for a long time but never expressed in a structured way. Plus a few where I never thought of it at all but now I can’t “unsee” it. So yea I admit it. Most of the time, I’m a fan. I mean, I’ve been reading this site since 2008 and I still find more novelty in it than in the “news”.

    BTW, be honest: once you came off your anti Merkel rage and ephemeral sympathy towards Trump, pre-election, your comments got suspiciously more agreeable with Scott’s opinions too. So I’ll wait til I can return the favor next time you really like a post 😉

    Let me add on some content then. I thought again about my throwaway line on IQ at the end of my comment. I really mean it. There is nothing “wrong” with lower IQ people. They are just as good as high IQ people. Being higher IQ doesn’t make you a better person. Being higher IQ doesn’t make you a more agreeable person. Teams for example tend to get better results with better cooperation, with no particular advantage from having all high IQ people in your team. Higher IQ people aren’t going through life making perfectly conscious or rational “choices” either. And among the people I like or socialize with, I can’t find any relation between suspected formal IQ and either social success, personal happiness, agreeableness, personal ethics, or smarts when facing everyday problems. They’re just less likely to solve complicated formulas correctly. For all other matters, IQ seems to be orthogonal to the problem. This just to stick it to the HBD crowd.

  25. Gravatar of Major.Freedom Major.Freedom
    18. September 2017 at 18:40

    Read news more carefully:

    http://www.cnn.com/2017/09/18/politics/paul-manafort-government-wiretapped-fisa-russians/index.html

    ‘Member when Sumner said Trump was Hitler for lying about the Obama admin spying on the Trump campaign? I ‘member.

  26. Gravatar of Major.Freedom Major.Freedom
    18. September 2017 at 18:42

    Assange’s tweet is apropos

    https://twitter.com/JulianAssange/status/909932273902014464

  27. Gravatar of Major.Freedom Major.Freedom
    18. September 2017 at 18:52

    Hillary Clinton financed terrorist group AntiFA

    http://www.thegatewaypundit.com/2017/09/exposed-hillary-clinton-moved-800k-campaign-help-fund-antifa/

  28. Gravatar of Major.Freedom Major.Freedom
    18. September 2017 at 19:21

    A sitting president spies on his political opponent, using deep state power

  29. Gravatar of mbka mbka
    18. September 2017 at 22:20

    “A sitting president spies on his political opponent, using deep state power”

    A nation’s law enforcement surveils communications suspected of passing domestic political information to a foreign power. Unheard of? Yawn. Move along.

  30. Gravatar of Benjamin Cole Benjamin Cole
    18. September 2017 at 22:56

    OT for Matthew Waters:

    NBER WORKING PAPER SERIES
    CAPITAL DEPRECIATION AND LABOR SHARES AROUND THE WORLD:
    MEASUREMENT AND IMPLICATIONS

    Loukas Karabarbounis
    Brent Neiman

    Working Paper 20606

    http://www.nber.org/papers/w20606
    NATIONAL BUREAU OF ECONOMIC RESEARCH
    1050 Massachusetts Avenue
    Cambridge, MA 02138
    October 2014

    This paper appears to wrestle with the capital depreciation question, but concludes labor share of income is falling, not just in the US but globally.

    They use lots of complicated calculus and reference many other arcane studies to prove their point. The last time I pondered calculus was in 1977. I did pass the class.

    The above study was published by NBER so I guess it has some street cred.

    My guess is that labor share of income has been falling globally, probably as a result of globalism. The situational leverage falls large multi-nationals.

    What do I mean by situational leverage?

    Suppose you are on a yacht with Don Trump, and no one else. He falls off (maybe with a nudge), and is floundering. You say to Trump, “Hey, I will throw you this life raft for $5 million.”

    He pays (his smartphone works, and he pays through Paypal), and both parties benefit from the transaction and have their situations improved. Niether party would have agreed to the transaction if it did not benefit them.

    Back in the real world, Kevin Erdmann suspects the decline in labor share of income is related to tight property markets.

    In any event, I do not think discussion on this topic is closed.

    http://www.nber.org/papers/w20606.pdf

  31. Gravatar of Dan W. Dan W.
    19. September 2017 at 06:37

    Scott, good post with two quibbles.

    (1) While a person cannot choose to be a global celebrity a person can choose to not be homeless. Poverty, at least in the US is a choice – it is a consequence of poor choices that are often promoted by a culture of dependency.

    (2) Utilitarianism is useless without additional moral philosophy. Consider a sinking ship that has 1 seat remaining in the lifeboat. Who gets that seat? Hoping for that seat is a heart surgeon who will in subsequent years save many lives. There is a young child who only has potential. There is a woman who may or may not have children.

    Culture says woman and children first. But is that the answer that provides the greatest social utility? How would a Utilitarian decide whose life is spared?

  32. Gravatar of Matthew Waters Matthew Waters
    19. September 2017 at 11:11

    Benjamin,

    First of all, I’m not sure how globalization translates to an EXCESS return to capital. Chinese apparel could be a lot cheaper, but then stores still have to compete. If the lowest prices flow through to customers, how is there an excess return?

    Based on skimming it, the paper you linked to says mainly two things:

    1. Decline in investment goods prices lead to decline in net and gross labor shares.
    2. Decline in real interest rates lead to decline in gross labor share but an increase in net labor share.

    Neither phenomenon is opposed to a perfectly competitive market.

    Now, I *do* think there is a lot of ways the market is not competitive, or has become less competitive. Some of that lack of competition goes to wage inequality and some to company owners.

  33. Gravatar of Matthew Waters Matthew Waters
    19. September 2017 at 11:57

    Also, the points about lack of allowed density and imputed rents are interesting. There is some evidence that all of the increase in the capital share is to owners of housing. Much of that is with imputed rent. Somebody owning a house in Silicon Valley has seen their “capital income” go up substantially, even if they bought it 30 years ago and don’t get any actual rent.

    Imputed rent makes sense, but it’s also kind of bizarre. That guy who made a well-timed purchase probably doesn’t feel like they’re rolling in capital income. They could rent it out to get that capital income, but then they have to rent somewhere else in the area if they have a job there.

    I’ve considered the labor vs. capital issue with their more mainstream meanings. As in, have shareholders gotten more monopolistic rents? There is reason to think that as well, especially if you include monopolistic rents captured by corporate officers. For example, Comcast has a ton of monopolistic rent but some of that’s captured some by the officers from other shareholders. The officer income leads to wage inequality rather than return to capital.

    There are also other above-market wages making things worse for the “median” earner. Some public-sector employees come to mind, especially if the pension actuaries used realistic assumptions. Then there are the drags on productivity, hurting both capital and labor income.

    So, certainly, the general angst leading to Trump and Sanders have a lot of merit. Neither fixes the underlying issue though.

  34. Gravatar of Floccina Floccina
    19. September 2017 at 12:33

    The government should not encourage people to become more educated and harder working.

    Maybe it’s not the slacker who wants to work just enough to live at the US poverty level is thinking right and the workaholic who works even though all his needs are who is crazy. Who is to say?

  35. Gravatar of ssumner ssumner
    19. September 2017 at 16:34

    Christian, If you gave great comments I’d say so, even if I didn’t agree with you.

    Unfortunately . . .

    Jesse, It’s not so much the root causes (where I may agree with them to some extent) but rather the tendency to blame the victim. The sense that there is something shameful about being a single mom, or high school dropout, or drug user.

    Carl, If there are “externalities” that may make a difference. I was considering low productivity people whose compensation reflects their productivity.

    Potato, Where did I talk about “blank slate”?

    Ben, That NBER paper does not conflict with my claim that labor’s share is the same as in 1965, does it?

  36. Gravatar of Massimo Heitor Massimo Heitor
    20. September 2017 at 10:55

    “Good enough genes to be a truck driver or mailman or plumber or the vast majority of other jobs.”

    This is wrong. Many people in the US underclass can’t, won’t, and don’t do those kind of jobs that offer a path to the middle class, not because they lack cognitive ability or that they can’t do enough math problems, but because they can’t get along with coworkers/customers/managers, they resent the low social status or tedium of those jobs, they don’t want show up on time or put in effort, or some combination of the above factors. And all of these probably have various genetic components.

    “In general, my views lie completely outside the standard “victims and villains” debate between liberals and conservatives. I don’t blame blacks and Hispanics and Native Americans for their lower (average) income, nor do I blame “white privilege.””

    That isn’t even your own viewpoint. You do blame the poor, you just said so in item #1 of this post. You said, “On average, the poor tend to be less talented and hard working that the rich.” It’s safe to interpret that being less talented and hard working is a cause of people being poor.

  37. Gravatar of ssumner ssumner
    22. September 2017 at 10:38

    Massimo, People who look “lazy” will suddenly appear much harder working if their culture changes, or they face a different set of incentives. What if people needed to work in order to eat?

    I suppose there may be genes affecting laziness, but I doubt that has much impact. Matt Yglesias just linked to a paper purporting to show that southern Italians are lazier than northern Italians. Funny how those southern Italians immediately become hard working the moment they move to America.

  38. Gravatar of Murali Vajapeyam Murali Vajapeyam
    25. September 2017 at 19:04

    “On average, the poor tend to be less talented and hard working that the rich.”

    English is not my first language, but I thought you intended to say “thaN” instead of “thaT” in that sentence?

  39. Gravatar of MURALI VAJAPEYAM MURALI VAJAPEYAM
    26. September 2017 at 18:59

    “but your going”

    but you ARE going? (grammar and vocabulary Nazi writing here).

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