Archive for the 'Books' Category

Page 2 of 3

In Praise Of Hernando De Soto

Published on 10/6/2005 in Books, Economics, General, Hispanics (Minority Issues) and LatinAmerica. 0 Comments

El Más Chingón, a blogger friend I met up with in Austin recently, posted a summary of the life and career of Ruben Salazar, a Mexican-American journalist I had not heard of before.

In that same spirit, I thought I would give recognition to a man that few people outside of the economics community have heard of, but a person who has probably done more good for Latin America than any other modern day person, that man is Hernando De Soto.

This is how Dartmouth economics professor Andrew Samwick introduced him at the public lecture he gave for the Rockefeller Center:

In remarks delivered at the Rockefeller Center’s dedication in September 1983, Rodman Rockefeller noted that his father was interested in the “conversion of intellectual excellence to the realities of public life,” and he charged the center to promote this same vision to Dartmouth students. This is a challenge that we take seriously at the Center, and we rise to that challenge today as we open our fall term public programming by welcoming Hernando de Soto as the Class of 1930 Fellow.

In 1980, Mr. de Soto returned to his native Peru after a successful career in Europe, armed with a question: What makes some countries rich and other countries poor? And it was the research that he and his think tank (the Institute for Liberty and Democracy) conducted to answer this question that has ultimately transformed the developing world.

In Peru, de Soto observed an energetic and industrious people relegated to poverty by a legal system that marginalized and excluded them from his nation’s formal economy. “They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation.” It was not the lack of entrepreneurial energy, or even the lack of assets, that made them poor. It was their confinement to an extralegal status. Overhaul that legal system, and you will provide an opportunity for a whole nation to lift itself out of poverty.

This revolutionary concept—that the lack of formal property rights was a key source of poverty in poor countries—has become Hernando de Soto’s life’s work. His writings and his advocacy embody a liberal and expansive view of humanity—that the capacity to meaningfully improve one’s lot in life is widely and broadly distributed. He has traveled the globe to help governments take the steps necessary to permit economic freedom to flourish.

His work has not gone unnoticed. As just a few of his accolades, in 1999, Time magazine chose de Soto as one of the five leading Latin American innovators of the century. Forbes magazine highlighted him as one of 15 innovators “who will re-invent your future.” The Economist magazine identified his Institute for Liberty and Democracy as one of the top two think tanks in the world. His two books, The Other Path,and The Mystery of Capital,are becoming the guidebooks to legal reform in pursuit of economic development around the world.

Hernando de Soto should be an inspiration to us all. He shows that someone who researches carefully, who writes clearly, who speaks thoughtfully, who advocates passionately, who works tirelessly—such a person can make a difference. There is no one more concretely engaged in the “realities of public life” than he. For a man whose time is so precious, we are delighted to have him with us this evening.

He concludes with, “He is quite simply one of the most remarkable people that I have ever met”.

More on De Soto can be found here.

Good Economic Articles

Published on 10/5/2005 in Books, Economics, FreeTrade and General. 6 Comments

What are some of your favorite economic articles? As a non-economist, as someone who has not officially trained in the field, I would highly recommend the below articles to other non-economists who would like to sharpen up their economics skill set.

Roofs or Ceilings? The Current Housing Problem by Milton Friedman and George Stigler. This is Friedman’s classic argument against rent controls, it was originally published in 1946 by the Foundation for Economic Education.

The Social Responsibility of Business is to Increase its Profits by Milton Friedman. This article was published in The New York Times Magazine, September 13, 1970.

Selected Essays on Political Economy by Frédéric Bastiat. The difference between a good and a bad economist is a good economist is someone who sees both, the seen and the unseen, of everything. Bastiat was definitely a good economist.

Economic Growth by Paul M. Romer. Few goals are as important to the well being of society as economic growth.

The Use of Knowledge in Society by F.A. Hayek. Few people explain how a market economy functions as well as Hayek.

I, Pencil My Family Tree as told to Leonard E. Read. This article demonstrates ‘the invisible hand of capitalism’ better than any other article I have read.

A Marvel of Cooperation: How Order Emerges without a Conscious Planner by Russell Roberts. This is a great article that ties alot of the above articles into one.

Free Trade by Alan S. Blinder. In a time where 93% of Democrats vote against free trade, it is important to be reminded why all economists, whether liberal or conservative, are for free trade, and liberal economist Alan Blinder is here to set the record straight.

Protectionism by Jagdish Bhagwati. Along the same lines, it is important to be reminded about the dangers of protectionism, in whatever form it may manifest itself.

In Praise of Cheap Labor
Bad jobs at bad wages are better than no jobs at all By Paul Krugman. ‘Sweatshops’ often get a bad wrap, and there is nobody more qualified to put them in their rightful perspective than the liberal icon Paul Krugman himself.

Enjoy!!!

More Free Books Online

Published on 9/23/2005 in Books, Economics and General. 0 Comments

Human ActionThe first one is, “Human Action: A Treatise on Economics“, by Ludwig Von Mises. This book is one of the, if not the, most important work of economic or social theory written in the twentieth century, it is written by a world-respected economist with Human Action being his masterpiece. A must read for anybody even remotely interested in economics.

The book can be found here, along with other free books on the right hand side.

The second one is, “I, Pencil” by Leonard E. Read. Milton Friedman describes the book this way,

Leonard Read’s delightful story, “I, Pencil,” has become a classic, and deservedly so. I know of no other piece of literature that so succinctly, persuasively, and effectively illustrates the meaning of both Adam Smith’s invisible hand—the possibility of cooperation without coercion—and Friedrich Hayek’s emphasis on the importance of dispersed knowledge and the role of the price system in communicating information that “will make the individuals do the desirable things without anyone having to tell them what to do.”

It is a very small and light read, if you have time during lunch or something, it is a perfect time to read it. It can be found here.

The third one is, “The Theory of Moral Sentiments“, by Adam Smith. The Adam Smith Institute describes it this way, ” It was not the famous Wealth of Nations, but a work on ethics and human nature called The Theory of Moral Sentiments, which made Adam Smith’s career. It was the sensation of its age, sold out in weeks. … In The Theory of Moral Sentiments, Smith asks that most fundamental question: Why do we regard certain actions or intentions with approval and condemn others? At the time, opinion was divided: some held that the only standard of right and wrong was the law and the sovereign who made it; others, that moral principles could be worked out rationally, like the theorems of mathematics. Smith took a completely new direction, holding that people are born with a moral sense, just as they have inborn ideas of beauty or harmony. Our conscience tells us what is right and wrong: and that is something innate, not something given us by lawmakers or by rational analysis. And to bolster it we also have a natural fellow-feeling, which Smith calls “sympathy”. Between them, these natural senses of conscience and sympathy ensure that human beings can and do live together in orderly and beneficial social organizations”.

The book can be found here.

The fourth one is, “The General Theory” by John Maynard Keynes. This is book should be read more for historical significance than modern economic education, as economist Tyler Cowen explains, “Keynes’s great contribution was to create an economics in which a persistent Great Depression was possible. But on policy recommendations, I would stick with Milton Friedman, or for that matter Keynes’s earlier Tract on Monetary Reform. We can recognize the dangers of deflation without embracing Keynes’s seductive yet unworkably byzantine analytical framework”.

The book can be found here.

Enjoy!!!

Update: Several other books here.

A New Direction For Conservatives?

Published on 9/19/2005 in Books and General. 4 Comments

Rick Santorum, the devout Catholic Republican senator that liberals love to hate, may be defining a new direction for the conservative movement, Reason writes:

Rick Santorum, a second-term Republican senator from Pennsylvania, has written a new book called It Takes a Family: Conservatism and the Common Good . The book is worth taking seriously for several reasons, not least of which is that it is a serious book. The writing and thinking are consistently competent, often better than that. The lapses into right-wing talk-radioese (“liberals practically despise the common man”) are rare. Santorum wrestles intelligently, often impressively, with the biggest of big ideas: freedom, virtue, civil society, the Founders’ intentions. Although he is a Catholic who is often characterized as a religious conservative, he has written a book whose ambitions are secular. As its subtitle promises, it is about conservatism, not Christianity.

Above all, it is worth noticing because, like Goldwater’s Conscience, it lays down a marker. As Goldwater repudiated Dwight Eisenhower and Richard Nixon, so Santorum repudiates Goldwater and Ronald Reagan. It’s now official: Philosophically, the conservative movement has split. Post-Santorum, tax-cutting and court-bashing can hold the Republican coalition together for only so much longer.

As a policy book, It Takes a Family is temperate. It serves up a healthy reminder that society needs not just good government but strong civil and social institutions, and that the traditional family serves all kinds of essential social functions. Government policies, therefore, should respect and support family and civil society instead of undermining or supplanting them. Parents should make quality time at home a high priority. Popular culture should comport itself with some sense of responsibility and taste.

Goldwater and Reagan, and Madison and Jefferson, were saying that if you restrain government, you will strengthen society and foster virtue. Santorum is saying something more like the reverse: If you shore up the family, you will strengthen the social fabric and ultimately reduce dependence on government.

Where Goldwater denounced collectivism as the enemy of the individual, Santorum denounces individualism as the enemy of family.

ATSRTWT

I haven’t read his book yet, but it is on my Amazon Wish List. For those who would like to know more about Santorum, read this New York Times Profile of him. There is also this interview he gave on NPR.

Great Free Audio Books Online

Published on 9/16/2005 in Books, Economics and General. 4 Comments

First is “The Law” by Frederic Bastiat. The description states, Walter Williams an economics professor at George Mason University put it thusly:

I must have been forty years old before reading Frederic Bastiat’s classic The Law. An anonymous person, to whom I shall eternally be in debt, mailed me an unsolicited copy. After reading the book, I was convinced that a liberal-arts education without an encounter with Bastiat is incomplete. Reading Bastiat made me keenly aware of all the time wasted, along with the frustrations of going down one blind alley after another, organizing my philosophy of life. The Law did not produce a philosophical conversion for me as much as it created order in my thinking about liberty and just human conduct.

He goes on to say:

Many philosophers have made important contributions to the discourse on liberty, Bastiat among them. But Bastiat’s greatest contribution is that he took the discourse out of the ivory tower and made ideas on liberty so clear that even the unlettered can understand them and statists cannot obfuscate them. Clarity is crucial to persuading our fellowman of the moral superiority of personal liberty.

In short, a must read/listen.

It can be found here.

Second is, “Narrative of the Life of Frederick Douglass, An American Slave” By Frederick Douglass. The description states, First published in 1845, the Narrative of the life of Frederick Douglass became Frederick Douglass’s most well known work. It is as the name implies his autobiography.

It can be found here.

Third is, ” Common Sense” By Thomas Paine. The description states, Common Sense is perhaps the work single most responsible for the American Revolution. It brought the idea of freedom and liberty down from the intellectuals to the common American colonist. Written by Thomas Paine and published January 10th, 1776, it was the first publication to openly ask for independence from Britain.

It can be found here.

Enjoy!!!

Gary Becker On Affirmative Action

Published on 8/30/2005 in affirmative action, Books, Economics, Education, General and Hispanics (Minority Issues). 13 Comments

One of my favorite economists, Gary Becker, who in 1992 won the Nobel Prize in Economics for his pioneering work in topics such as discrimination, and the author of the groundbreaking book “The Economics of Discrimination“, writes with regard to affirmative action:

My belief is that affirmative action is bad for any country that aspires to be a meritocracy, as the United States does, despite past slavery and discrimination that are terrible violations of this aspiration. The case for a meritocracy is that achievements based on merit produces the most dynamic, innovative, and flexible economy and social structure. Encouraging promotion or admission of less qualified applicants because of their race, gender, or other characteristics, clearly violates this principle, and produces a less progressive economy, and a distorted social structure….

more subtle way that affirmative action harms many members of the very groups they are trying to promote is illustrated by admissions to college. If lower admission standards are used to admit African Americans or other groups, then good colleges would accept average minority students, good minority students would be accepted by very good colleges, and quite good students would be accepted by the most outstanding universities, like Harvard or Stanford. This means that at all these types of schools, the qualifications of minority students would on average be below those of other students. As a result, they tend to rank at the lower end of their classes, even when they are good students, because affirmative action makes them compete against even better students. Studies have shown that this simple implication of affirmative action applies to students at good law schools, where the average African American student ranks toward the lower end of their law school cohort. My observation of many colleges and universities is that this conclusion has general applicability well beyond law schools.

It hardly helps self-esteem if one is a member of a group that typically ranks toward the bottom in performance at a university or on a job. When discrimination dominated affirmative action, an African American or female medical doctor would be better than average since they had to overcome artificial hurdles to get where they were. That was not a desirable situation because discrimination made it harder for these groups to get ahead, so fewer of them than was warranted by their abilities and skills managed to make it to medical school. However, now, minority doctors and other professionals are greeted suspiciously by many patients and customers who fear they got where they are only because they were subject to lower standards. That can hardly make someone feel good, and helps explain some of the segregation and defensiveness of minorities receiving affirmative action help at schools or on jobs.

But that is not all he says, he follows up with:

While opposing affirmative action, I do not advocate just letting the status quo operate without attempting to help groups that have suffered greatly in the past from discrimination. Employers, universities, and other organizations should make special efforts to find qualified members of minority groups, persons who might have been overlooked because of their poor family backgrounds or the bad schools they attended. By using this approach, one can spot some diamonds in the rough that would get overlooked. I know that the economics department at Chicago in recent years has been able to discover and help train some excellent economists from disadvantaged backgrounds by searching harder for them.

Another attractive policy is to help disadvantaged children at early ages rather than using affirmative action when they apply for jobs or colleges. There is still controversy over how much and how durable is the gain from head start programs, although I believe that extra effort spent on these children at very young ages tends to yield a decent return in terms of later achievements. But it has been conclusively shown that efforts to educate and help in other ways when children are in their teens generally fail since by that time the children have fallen too far behind others of their age to be able to catch up. Put more technically, current human capital investments builds on past investments, so if past investments are inadequate, the current investments have low returns.

Read the whole thing here, his response to comments can be found here.

Quote Of The Day

Published on 8/22/2005 in Books, Economics, Europe and General. 0 Comments

“When you come to understand retailing, [you realize] that the industry of retailing has gone through its own evolution. 50 years ago or so, retailing was much more similar in the rich countries to each other than it is today in that it was primarily dominated by general stores of relatively small scale and mom and pop small shop operations. And what has happened over the last 60 years is that innovations have occurred in retailing and new formats of much higher productivity then these former formats have developed. The most obvious being the so called big box epitomized by Wal-Mart, which has productivity something like five times the productivity of a normal general store of the 1950′s. And so the story in retailing is how many of these high productivity formats are part of the mix of stores in retailing and how much of retailing is still like it was in 1950. In other words, the evolution in retailing has progressed at far different rates in these countries around the world.

So in the US, the fraction of mom and pop general store-like operations that are left is under 20 percent of all employment. In Japan it’s over 50 percent still. Even in France, it is down to about 30 percent. So when you put the mix together, you of course get a much lower productivity. So that’s at the operational level. Why is productivity different? It’s different because the nature of the retailing operations in the different activities of retailing is fundamentally different on a mix basis”. –William Lewis, the director emeritus of the McKinsey Global Institute, discussing his recent book, “The Power of Productivity: Wealth, Poverty and the Threat to Global Stability”, which is based on extensive economic, political and sociological study of thirteen countries over a dozen years examining some of the conditions that have led to the disparity between rich and poor countries. He is discussing here one of the reasons why the USA is more productive than other countries, reason being that we allow movements from less efficent means (mom and pop shops, for example) to more efficient means (Wal-Mart’s), more easily than other countries.

Quote Of The Day

Published on 7/26/2005 in (modern day) Liberalism, Books, Communism, Economics and General. 0 Comments

“It is tempting to believe that social evils arise from the activities of evil men and that if only good men (like ourselves, naturally) wielded power, all would be well. That view requires only emotion and self-praise – easy to come by and satisfying as well. To understand why it is that ‘good’ men in positions of power will produce evil, while the ordinary man without power but able to engage in voluntary cooperation with his neighbors will produce good, requires analysis and thought, subordinating the emotions to the rational faculty. Surely that is one answer to the perennial mystery of why collectivism, with its demonstrated record of producing tyranny and misery, is so widely regarded as superior to individualism, with its demonstrated record of producing freedom and plenty. The argument for collectivism is simple if false; it is an immediate emotional argument. The argument for individualism is subtle and sophisticated; it is an indirect rational argument. And the emotional facilities are more highly developed in most men than the rational, paradoxically or especially even in those who regard themselves as intellectuals”. –Milton Friedman in the introduction to the Fiftieth Anniversary Edition of “The Road To Serfdom“

Free To Choose – By Milton Friedman

Published on 6/10/2005 in Books, Education, General and Vouchers. 1 Comment

NOTE: Tomorrow I am heading out to visit some family in Mexico, I will be gone until June 26th, so blogging will be limited, to none at all, from now until than.

In the meantime, I leave you with this commentary by one of my favorite economists, and one of the greatest economists of the 20th century, Milton Friedman.

Free to Choose

By MILTON FRIEDMAN
June 9, 2005; Page A16

Little did I know when I published an article in 1955 on “The Role of Government in Education” that it would lead to my becoming an activist for a major reform in the organization of schooling, and indeed that my wife and I would be led to establish a foundation to promote parental choice. The original article was not a reaction to a perceived deficiency in schooling. The quality of schooling in the United States then was far better than it is now, and both my wife and I were satisfied with the public schools we had attended. My interest was in the philosophy of a free society. Education was the area that I happened to write on early. I then went on to consider other areas as well. The end result was “Capitalism and Freedom,” published seven years later with the education article as one chapter.

With respect to education, I pointed out that government was playing three major roles: (1) legislating compulsory schooling, (2) financing schooling, (3) administering schools. I concluded that there was some justification for compulsory schooling and the financing of schooling, but “the actual administration of educational institutions by the government, the ‘nationalization,’ as it were, of the bulk of the ‘education industry’ is much more difficult to justify on [free market] or, so far as I can see, on any other grounds.” Yet finance and administration “could readily be separated. Governments could require a minimum of schooling financed by giving the parents vouchers redeemable for a given sum per child per year to be spent on purely educational services. . . . Denationalizing schooling,” I went on, “would widen the range of choice available to parents. . . . If present public expenditure were made available to parents regardless of where they send their children, a wide variety of schools would spring up to meet the demand. . . . Here, as in other fields, competitive enterprise is likely to be far more efficient in meeting consumer demand than either nationalized enterprises or enterprises run to serve other purposes.”

Though the article, and then “Capitalism and Freedom,” generated some academic and popular attention at the time, so far as we know no attempts were made to introduce a system of educational vouchers until the Nixon administration, when the Office of Economic Opportunity took up the idea and offered to finance the actual experiments. One result of that initiative was an ambitious attempt to introduce vouchers in the large cities of New Hampshire, which appeared to be headed for success until it was aborted by the opposition of the teachers unions and the educational administrators — one of the first instances of the oppositional role they were destined to play in subsequent decades. Another result was an experiment in California’s Alum Rock school system involving a choice of schools within a public system.

What really led to increased interest in vouchers was the deterioration of schooling, dating in particular from 1965 when the National Education Association converted itself from a professional association to a trade union. Concern about the quality of education led to the establishment of the National Commission of Excellence in Education, whose final report, “A Nation at Risk,” was published in 1983. It used the following quote from Paul Copperman to dramatize its own conclusion:

“Each generation of Americans has outstripped its parents in education, in literacy, and in economic attainment. For the first time in the history of our country, the educational skills of one generation will not surpass, will not equal, will not even approach, those of their parents.”

“A Nation at Risk” stimulated much soul-searching and a whole series of major attempts to reform the government educational system. These reforms, however extensive or bold, have, it is widely agreed, had negligible effect on the quality of the public school system. Though spending per pupil has more than doubled since 1970 after allowing for inflation, students continue to rank low in international comparisons; dropout rates are high; scores on SATs and the like have fallen and remain flat. Simple literacy, let alone functional literacy, in the United States is almost surely lower at the beginning of the 21st century than it was a century earlier. And all this is despite a major increase in real spending per student since “A Nation at Risk” was published.

One result has been experimentation with such alternatives as vouchers, tax credits, and charter schools. Government voucher programs are in effect in a few places (Wisconsin, Ohio, Florida, the District of Columbia); private voucher programs are widespread; tax credits for educational expenses have been adopted in at least three states and tax credit vouchers (tax credits for gifts to scholarship-granting organizations) in three states. In addition, a major legal obstacle to the adoption of vouchers was removed when the Supreme Court affirmed the legality of the Cleveland voucher in 2002. However, all of these programs are limited; taken together they cover only a small fraction of all children in the country.

Throughout this long period, we have been repeatedly frustrated by the gulf between the clear and present need, the burning desire of parents to have more control over the schooling of their children, on the one hand, and the adamant and effective opposition of trade union leaders and educational administrators to any change that would in any way reduce their control of the educational system.

We have been involved in two initiatives in California to enact a statewide voucher system (in 1993 and 2000). In both cases, the initiatives were carefully drawn up, and the voucher sums moderate. In both cases, nine months or so before the election, public opinion polls recorded a sizable majority in favor of the initiative. In addition, of course, there was a sizable group of fervent supporters, whose hopes ran high of finally getting control of their children’s schooling. In each case, about six months before the election, the voucher opponents launched a well-financed and thoroughly unscrupulous campaign against the initiative. Television ads blared that vouchers would break the budget, whereas in fact they would reduce spending since the proposed voucher was to be only a fraction of what government was spending per student. Teachers were induced to send home with their students misleading propaganda against the initiative. Dirty tricks of every variety were financed from a very deep purse. The result was to convert the initial majority into a landslide defeat. This has also occurred in Washington state, Colorado and Michigan. Opposition like this explains why progress has been so slow in such a good cause.

The good news is that, despite these setbacks, public interest in and support for vouchers and tax credits continues to grow. Legislative proposals to channel government funds directly to students rather than to schools are under consideration in something like 20 states. Sooner or later there will be a breakthrough; we shall get a universal voucher plan in one or more states. When we do, a competitive private educational market serving parents who are free to choose the school they believe best for each child will demonstrate how it can revolutionize schooling.

Mr. Friedman, chairman of the Milton and Rose D. Friedman Foundation, is a senior research fellow at the Hoover Institution and a Nobel laureate in economics.

For more on the Friedman Foundation, go here.

Hispanic Pundit BookShelf: Set I

Published on 5/23/2005 in Books and General. 6 Comments

Hispanic Pundit Recommended Books Set I

I’ve posted a smaller version of one of my book shelfs before, but I post it again with a couple more books added. I will post my second book shelf some time in the near future.

All of the books come highly recommended, from left to right,

Communism: A History by Harvard University professor Richard Pipes

Modern Times Revised Edition : World from the Twenties to the Nineties by Oxford historian Paul Johnson

A Conflict of Visions: Ideological Origins of Political Struggles by my hero, Thomas Sowell

The True Believer : Thoughts on the Nature of Mass Movements by Eric Hoffer – more on the importance of reading Hoffer here and here

Witness by Whittaker Chambers

Crisis of the House Divided : An Interpretation of the Issues in the Lincoln-Douglas Debates by Harry V. Jaffa

Free to Choose: A Personal Statement by Nobel Prize In Economics Milton Friedman, described as some as the economist of the century

The Road to Serfdom by Nobel Prize In Economics F. A. Hayek, also described by some as the economist of the century; he was right when everybody else was wrong. If you are only going to read one book out of this set, this is certainly the one to choose.

Capitalism and Freedom : Fortieth Anniversary Edition also by Milton and Rose Friedman

Learning Economics by Arnold Kling, Actually, while I’d still recommend getting the book, this one can be found free here, or by clicking on the link in the upper right hand that says, “Learning Economics”

Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt, also, while I still recommend the book, this book too can be found free online, here.

Economics for Real People by Gene Callahan

Toward Liberty: The Idea That Is Changing the World by David Boaz

The Public Interest – the last edition

Hard Heads, Soft Hearts: Tough-Minded Economics for a Just Society by Alan S. Blinder, yes I know, this is a liberal book, but it is a fair liberal book, so I still recommend it, but read at your own risk

How the Mind Works by Harvard University Professor of Psychology Steven Pinker

No Excuses: Closing the Racial Gap in Learning by Harvard University Abigail Thernstrom, Stephan Thernstrom

Human Accomplishment: The Pursuit of Excellence in the Arts and Sciences, 800 B.C. to 1950
by Charles Murray

Enjoy!!!

“Black Rednecks and White Liberals”

Published on 4/28/2005 in (modern day) Liberalism, Books and General. 6 Comments

So goes the title of Thomas Sowell’s new book. It is published this week by Encounter Books, and is already pre-ordered by yours truly. :) Sowell, in promotion for his new book, recently was on the editorial section of the Wall Street Journal.

He writes:

For most of the history of this country, differences between the black and the white population–whether in income, IQ, crime rates, or whatever–have been attributed to either race or racism. For much of the first half of the 20th century, these differences were attributed to race–that is, to an assumption that blacks just did not have it in their genes to do as well as white people. The tide began to turn in the second half of the 20th century, when the assumption developed that black-white differences were due to racism on the part of whites.

Three decades of my own research lead me to believe that neither of those explanations will stand up under scrutiny of the facts. As one small example, a study published last year indicated that most of the black alumni of Harvard were from either the West Indies or Africa, or were the children of West Indian or African immigrants. These people are the same race as American blacks, who greatly outnumber either or both.

If this disparity is not due to race, it is equally hard to explain by racism. To a racist, one black is pretty much the same as another. But, even if a racist somehow let his racism stop at the water’s edge, how could he tell which student was the son or daughter of someone born in the West Indies or in Africa, especially since their American-born offspring probably do not even have a foreign accent?

What then could explain such large disparities in demographic “representation” among these three groups of blacks? Perhaps they have different patterns of behavior and different cultures and values behind their behavior.

He goes on to give some historical facts and writes:

Slavery also cannot explain the difference between American blacks and West Indian blacks living in the United States because the ancestors of both were enslaved. When race, racism, and slavery all fail the empirical test, what is left?

Culture is left.

The culture of the people who were called “rednecks” and “crackers” before they ever got on the boats to cross the Atlantic was a culture that produced far lower levels of intellectual and economic achievement, as well as far higher levels of violence and sexual promiscuity. That culture had its own way of talking, not only in the pronunciation of particular words but also in a loud, dramatic style of oratory with vivid imagery, repetitive phrases and repetitive cadences.

Although that style originated on the other side of the Atlantic in centuries past, it became for generations the style of both religious oratory and political oratory among Southern whites and among Southern blacks–not only in the South but in the Northern ghettos in which Southern blacks settled. It was a style used by Southern white politicians in the era of Jim Crow and later by black civil rights leaders fighting Jim Crow. Martin Luther King’s famous speech at the Lincoln Memorial in 1963 was a classic example of that style.

While a third of the white population of the U.S. lived within the redneck culture, more than 90% of the black population did. Although that culture eroded away over the generations, it did so at different rates in different places and among different people. It eroded away much faster in Britain than in the U.S. and somewhat faster among Southern whites than among Southern blacks, who had fewer opportunities for education or for the rewards that came with escape from that counterproductive culture.

Nevertheless the process took a long time. As late as the First World War, white soldiers from Georgia, Arkansas, Kentucky and Mississippi scored lower on mental tests than black soldiers from Ohio, Illinois, New York and Pennsylvania. Again, neither race nor racism can explain that–and neither can slavery.

The redneck culture proved to be a major handicap for both whites and blacks who absorbed it. Today, the last remnants of that culture can still be found in the worst of the black ghettos, whether in the North or the South, for the ghettos of the North were settled by blacks from the South. The counterproductive and self-destructive culture of black rednecks in today’s ghettos is regarded by many as the only “authentic” black culture–and, for that reason, something not to be tampered with. Their talk, their attitudes, and their behavior are regarded as sacrosanct.

The people who take this view may think of themselves as friends of blacks. But they are the kinds of friends who can do more harm than enemies.

The whole article is worth your time, and for those who haven’t read much of Sowell, I strongly recommend you do, here are several of his articles.

Update: Thomas Sowell has more.

What Are Unions Good For?

Published on 4/27/2005 in Books, Economics, General and Unions. 13 Comments

This question isn’t asked enough. Here is my take on workers’ unions.

Leaving the economic jargon aside for the moment, my dad (and uncle) happens to work for one of the biggest unions in the country. He is a mechanic that works off the port of Long Beach, California, and has been in the union for more than twenty years. He and my uncle are the hardest workers I know, and they both happen to dislike the unions. My dad ran into problems with the union when upper management recognized all his hard work and wanted to offer him the opportunity for more training. The training would increase his pay by a significant amount – a matter of great importance for someone who is the sole provider to a family of five. The problem was that the union wouldn’t allow it. They said that if the company was going to do that for him, then they would first have to do it for everybody else who has more seniority than my dad. So after a few months of arguing, my dad decided to leave the union. This was a very big thing back then because everybody was part of the union. But my dad struck a deal with the company where he would only work off site, not on the port, thereby not technically violating union rules (union rules stipulate that every non-manager worker on the port be a union member). Since my dad had so many years with the company and was really liked by all of the workers, this caused a huge ripple throughout the union.

To make a long story short, the company ended up paying for my dad’s training and he was able to get the promotion he wanted. But a few years later, he lost the lower half of his leg in an accident at one of the junk yards he was working at. After the settlement (which, my dad says, was bigger than it would have been had he still been in the union), he went back to work, but was not able to work off the port anymore since the driving would be too hard on him. He had to rejoin the union in order to comply with union rules, but he still stands firm that if you are a hard worker, you don’t need the union to protect you.

My dad is in his mid-fifties, a minority, continues to have a difficult time speaking English and works in a somewhat dangerous work environment, all factors that should increase his need for a union. Yet he still tells me that it is primarily lazy people that benefit from unions and that the hard workers are given less opportunity to grow because seniority rules protect those who have been there longer. In short, you don’t really need a union to protect you if you are a hard worker because the company has an incentive to keep you and please you.

Now, I’m not saying that unions don’t come in handy sometimes, there certainly are instances where unions stand up for the little guy. But I would be willing to bet that most of those cases could have been handled by other means. For example, if your complaint is about basic safety environments, those can be handled through legislation. If your complaint is about child labor, that too could be handled by legislation. In other words, the true benefit of the union is becoming less and less prominent, while the negatives are still very much there. Some of those very real negatives are things like how unions reduce the competitive edge of companies to compete with others (just look at the Wal-Mart versus Ralphs debates). They also force companies to artificially raise prices on goods (an act that primarily hurts poor people), they increase unemployment (another act that hurts the poor), they push down wages in other fields (yet again, bad for the poor), they create incentives for companies to go overseas, and increase the barriers for new businesses to come in and compete (which limits competition thereby helping keep prices of goods high, again, primarily hurting the poor), all in all, it becomes less and less economically prudent to have unions.

That is not to say that unions have absolutely no purpose at all. I would find my support for unions rising in areas that serve an inherently dangerous work environment for workers. Unions are notorious for raising the cost of labor so much that it pushes companies to invest in machinery to do the same thing. For example, my dad was telling me that a few job openings (I think it was around 500) had opened up for longshoremen, and my dad says that they received more than 500,000 applications. Why so many? The reason is simple, the unions have forced the companies to pay these longshoremen so much over the market price that they were essentially creating a surplus of people who wanted the job (It’s interesting that liberals are often the champions of income equality, but when it comes to unions they turn a blind eye – union wages benefit the few select people that work in unions at the expense of the overwhelming amount of people that don’t – a perfect case of severe income inequality). When you push wages above their market levels, you give companies extra incentives to find other ways to accomplish the same thing (think of the coal mining industry and its decline). In areas where it is inherently life threatening to work, this is a good thing. Therefore, unions serve a good purpose in getting us closer to that than would be the case had unions not been involved.

I’d like to end with just a little bit of economic talk. The great economist of the twentieth century, Milton Friedman, explained it this way in his book on economics, Capitalism And Freedom,

“If unions raise wage rates in a particular occupation or industry, they necessarily make the amount of employment available in that occupation or industry less than it otherwise would be — just as any higher price cuts down the amount purchased. The effect is an increased number of persons seeking other jobs, which forces down wages in other occupations. Since unions have generally been strongest among groups that would have been high-paid anyway, their effect has been to make high-paid workers higher paid at the expense of lower-paid workers. Unions have therefore not only harmed the public at large and workers as a whole by distorting the use of labor; they have also made the incomes of the working class more unequal by reducing the opportunities available to the most disadvantaged workers”. — Milton Friedman in “Capitalism And Freedom“

The Relationship Between Economic And Political Freedom

Published on 4/13/2005 in Books, Capitalism, Communism, Discrimination, Economics, General, Hispanics (Minority Issues) and LatinAmerica. 0 Comments

One of the greatest economists of the 20th century, Milton Friedman, wrote this in the beginning of the first chapter of his book Capitalism And Freedom:

“It is widely believed that politics and economics are seperate and largely unconnected; that individual freedom is a political problem and material welfare an economic problem; and that any kind of political arrangements can be combined with any kind of economic arrangements. The chief contemporary manifestation of this idea is the advocacy of “democratic socialism” by many who condemn out of hand the restrictions on individual freedom imposed by “totalitarian socialism” in Russia and who are persuaded that it is possible for a country to adopt the essential features of Russian economic arrangements and yet to ensure individual freedom through political arrangements”.

He than went on to show that “such a view is a delusion, that there is an intimate connection between economics and politics, that only certain combinations of political and economic arrangements are possible, and that in particular, a society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom”.

I was reminded of this when I read the Becker-Posner blog discussing the relationship between economic and political freedom.

Gary Becker, Nobel Prize in Economic Sciences, writes:

Since both economic and political freedoms are highly valued, it is essential to understand how they interact as nations evolve. The history of different countries during the past century strongly indicates that economic freedoms over time typically push societies toward political freedoms. To take a few examples, South Korea, Taiwan, and Chile all started their economic development under military regimes. Korea and Taiwan both began freeing their economies around 1960 after centralized direction of their economies failed to produce economic growth. Chile began opening its economy under General Pinochet in 1981, also after his centralized approach to the Chilean economy failed. Within two decades, all three nations had achieved, or were moving rapidly toward, political democracies, with vibrant competition for elections among competing parties, and a mainly free press.

The path from political to economic freedom, by contrast, is slower and more uncertain. It took India over four decades to begin to loosen its extensive controls over private companies, labor markets, start-ups, imports from abroad, and numerous other activities. It still has a long way to go. Mexico has had a free press and considerable political freedom for a century or so, but economic freedoms did not begin to evolve until the latter part of the 1980’s. Israel has fierce competition among political parties, but continues to have an overly controlled economy.

Read it in full here. Becker responds to comments here.

Posner and The Right Coast have more.

Economics In One Lesson – Free Online

Published on 4/8/2005 in Books, Economics and General. 0 Comments

Henry Hazlitt’s 1946 classic, “Economics In One Lesson”, is now available free online in pdf form.

I can’t say enough about how great this book is, I know it was one of the first economic books I’ve read and has had an enormous influence on my life since. Henry Hazlitt has a unique way of presenting the often complicated concepts of economics to levels that everyone could understand. This is a must read for anybody interested in learning basic economics and with it now available free online, you have no excuses not to read it.

For more information on the book, go here.

As a bonus, via Brad Delong, I found an original copy of “Roofs or Ceilings? The Current Housing Problem” by Milton Friedman and George Stigler. This classic essay argues against the use of rent control:

Rent ceilings, therefore, cause haphazard and arbitrary allocation of space, inefficient use of space, retardation of new construction and indefinite continuance of rent ceilings, or subsidization of new construction and a future depression in residential building. Formal rationing by public authority would probably make matters still worse.

Enjoy.

Update: Via Liberalismo blog, I found “The Concise Guide To Economics” by Jim Cox online as well.

Quote Of The Day

Published on 3/28/2005 in Books, Capitalism, Economics and General. 0 Comments

“The great achievement of capitalism has not been the accumulation of property, it has been the opportunities it has offered to men and women to extend and develop and improve their capacities.” — Milton Friedman in “Capitalism And Freedom”

A Case Against Teacher Certification

Published on 3/25/2005 in Books, Education and General. 0 Comments

One of the greatest economist of our time, Milton Friedman, in his book Capitalism And Freedom wrote, “If one were to seek deliberately to devise a system of recruiting and paying teachers calculated to repel the imaginative and daring and self-confident and to attract the dull and mediocre and uninspiring, he could hardly do better than imitate the system of requiring teaching certificates and enforcing standard salary structures that has developed in the larger city and state-wide systems. It is perhaps surprising that the level of ability in elementary and secondary school teaching is as high as it is under these circumstances”.

I was reminded of that when I saw this article on A Constrained Vision blog.

In it, Robert Maranto, professor of political science at Villanova University, writes:

The actual research on teacher certification finds no evidence that students learn more from certified teachers than from uncertified teachers. As Andrew Wayne and Peter Youngs report in their recent review of the research in the prestigious Review of Educational Research, students learn more from teachers who studied at prestigious colleges, and from more intellectually able teachers. Yet “in the case of degrees, coursework, and certification, findings have been inconclusive except in mathematics, where high school students clearly learn more from teachers with certification in mathematics, degrees related to mathematics, and coursework related to mathematics.” In other words, except for high school math, certification does not make better teachers….

As former U.S. Education Secretary Rod Paige, himself a former Education School Dean, reported in 2003 in Meeting the Highly Qualified Teachers Challenge and as Frederick Hess also documents, most teacher certification programs offer “high barriers with low standards: certifications requirements annoy the talented without culling the turkeys.

The research rings true from my experience. As a University of Maryland sophomore back in 1978, I decided against becoming a high school teacher when an education professor very condescendingly explained that I need not understand what I taught since “the curriculum people will tell you what to teach.” This convinced me to spend six years in graduate school to become a college professor. Though I make less money than most high school teachers of comparable experience, as a professor I’m a respected professional. I decide what I teach and how I teach it. (Two friends who wanted to teach high school got identical advice from their education professors with tragic results — they became attorneys.)

He gives some common sense solutions:

Clearly, policy-makers and educators need to reform our schools of education so that their certified teachers are truly qualified teachers. Until that happens, however, we should make it easier for professionals from other fields to enter teaching, while carefully monitoring the performance of all teachers to reward excellence and terminate incompetence. In the long run, we need to move to a system of high standards with low barriers, rather than high barriers with low standards. This will require many changes, but our kids are worth it.