Tag Archives: Socialism

Jay Richards: eight common myths about wealth, poverty and the free market

I have a key that will unlock a puzzling mystery
I have a key that will unlock a puzzling mystery

Have you read Jay Richards’ book “Money, Greed and God?” Because if you haven’t, he’s written a series of articles that summarize the main points of the book.

The index post is here.

Here are the posts in the series:

  • Part 1: The Eight Most Common Myths about Wealth, Poverty, and Free Enterprise
  • Part 2: Can’t We Build A Just Society?
  • Part 3: The Piety Myth
  • Part 4: The Myth of the Zero Sum Game
  • Part 5: Is Wealth Created or Transferred?
  • Part 6: Is Free Enterprise Based on Greed?
  • Part 7: Hasn’t Christianity Always Opposed Free Enterprise?
  • Part 8: Does Free Enterprise Lead to An Ugly Consumerist Culture?
  • Part 9: Will We Use Up All Our Resources?
  • Part 10: Are Markets An Example of Providence?

Parts 4 and 5 are my favorites. It’s so hard to choose one to excerpt, but I must. I will choose… Part 4.

Here’s the problem:

Myth #3: The Zero Sum Game Myth – believing that trade requires a winner and a loser. 

One reason people believe this myth is because they misunderstand how economic value is determined. Economic thinkers with views as diverse as Adam Smith and Karl Marx believed economic value was determined by the labor theory of value. This theory stipulates that the cost to produce an object determines its economic value.

According to this theory, if you build a house that costs you $500,000 to build, that house is worth $500,000. But what if no one can or wants to buy the house? Then what is it worth?

Medieval church scholars put forth a very different theory, one derived from human nature: economic value is in the eye of the beholder. The economic value of an object is determined by how much someone is willing to give up to get that object. This is the subjective theory of value.

And here’s an example of how to avoid the problem:

How you determine economic value affects whether you view free enterprise as a zero-sum game, or a win-win game in which both participants benefit.

Let’s return to the example of the $500,000 house. As the developer of the house, you hire workers to build the house. You then sell it for more than $500,000. According to the labor theory of value, you have taken more than the good is actually worth. You’ve exploited the buyer and your workers by taking this surplus value. You win, they lose.

Yet this situation looks different according to the subjective theory of value. Here, everybody wins. You market and sell the house for more than it cost to produce, but not more than customers will freely pay. The buyer is not forced to pay a cost he doesn’t agree to. You are rewarded for your entrepreneurial effort. Your workers benefit, because you paid them the wages they agreed to when you hired them.

This illustration brings up a couple important points about free enterprise that are often overlooked:

1. Free exchange is a win-win game.

In win-win games, some players may end up better off than others, but everyone ends up better off than they were at the beginning. As the developer, you might make more than your workers. Yet the workers determined they would be better off by freely exchanging their labor for wages, than if they didn’t have the job at all.

A free market doesn’t guarantee that everyone wins in every competition. Rather, it allows many more win-win encounters than any other alternative.

2. The game is win-win because of rules set-up beforehand. 

A free market is not a free-for-all in which everybody can do what they want. Any exchange must be free on both sides. Rule of law, contracts, and property rights are needed to ensure exchanges are conducted rightly. As the developer of the house, you’d be held accountable if you broke your contract and failed to pay workers what you promised.

An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.

On this view, what you really need to fear as a consumer is government intervention that restricts your choices in the marketplace, or makes some choices more expensive than they need to be (tariffs).

If you care about poverty, it’s often tempting to think that it can only be solved one way – by transferring wealth from the rich to the poor. But that is a very mistaken view, as any economist will tell you. The right way to create prosperity is by creating laws and policies that unleash individual creativity. Letting individuals create innovative products and services, letting them keep what they earn, making sure that the law doesn’t punish entrepreneurs – that incentivizes wealth creation. Fixing poverty does not mean transferring wealth, it means giving people more freedom to create wealth on their own. Free trade between nations is an important way that we encourage people to create better products and services that what they have available in their own countries.

Economists agree on the benefits of free trade

Who could possibly disagree with free trade? Well, many people on the left do. But economists across the spectrum of ideology (university and private sector and public sector) agree on the benefits of free trade.

Harvard economist Greg Mankiw explains what most professional economists agree on.


Here is the list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

Socialist economic policies don’t work because they are making policies that are based on economic myths. We know that these myths are myths because of economics is a mathematical science, and because we have tried good and bad policies in different times and places. We have calculations and we have experience to know what works and what doesn’t work. If you want to help the poor, you have to respect what economists know about how wealth is created. The solution is not to “spread the wealth around”, it’s to encourage people to create more wealth by inventing things that people freely choose to buy.

How did Obama’s plan to let government run student loans work out?

Obama nationalized student loan administration in 2010
Obama nationalized student loan administration in 2010

I’m a free-market capitalist, so I believe that economic decision-making is best done by the people it concerns, not the people in government. If it is a decision that affects the family, let the family decide. If it’s a decision that affects the business, let the business owner decide. Obama has a different view – he thinks that government should make all of the decisions, even though government earns none of the money.

Here is an article in Investor’s Business Daily about his policy of letting the government take over student loan decision-making.


A report from the Department of Education notes that the net cost of the federal government’s direct loan program is quickly heading into the red. This program, mind you, was supposed to be a moneymaker for the government, as students paid back federal loans with interest.

But as it turns out, borrowers have been flocking toward various loan forgiveness programs, by which the government will lose money, erasing gains from other loans. The report shows that the direct loan program went from a $25 billion surplus in 2012 to less than $5 billion by 2015.

A separate report says that this program ran a $36 billion deficit last year, up from $8.4 billion in 2016.

This is not how this federal loan program was supposed to work when President Obama launched it eight years ago.

In 2010, President Obama effectively nationalized student lending by cutting banks — which had been offering government-backed loans to students — out of the equation and having the government make the loans itself.

“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said when he signed this change into law. “That’s real money.”

As a result, federal student loan debt shot up from $154.9 billion in 2009 to $1.1 trillion by the end of 2017.

As everyone knows, under Obama’s big government leadership, the national debt skyrocketed from $10 trillion to $20 trillion in only 8 years. Obama ran up as much debt in his 8 years as ALL the other presidents, combined. Why? It’s simple. Because government isn’t as careful with other people’s money as people are careful with their own money. People make better decisions than government because they care about the money more – they earned it. The right people to solve an economic problem are the people in the families, and the people at the local bank branches nearby. When government takes over economic decision-making, they use other people’s money to buy the votes of people who make poor decisions.

We shouldn’t be allowing students to take 4-year vacations at taxpayer expense, so that they can learn English or Women’s Studies and then stick taxpayers with the bill. Some of those taxpayers had to study hard things like engineering and pay their own way. Some of those taxpayers had to get jobs in the trades as electricians and plumbers to pay for the bad decisions of these spoiled brats. Student loan administration should not be something for big government to control. When government decides who gets loans, students feel no pressure to study subjects and get credentials that will allow them to pay back what they borrowed. I want the banks to make the lending decisions and loan out their own money, so that they can deny people who are studying nonsense that won’t get a return.

That’s why we should never have elected a big-government liberal to be president. They make a lot of promises about how great they are with money, but it never works out. Big government is never the answer to problems that are outside of what the Constitution describes as the boundaries of government.

(Image Source)

How secularism and socialism killed marriage and family in Canada

Marriage and family
Marriage and family

This is actually a news article from National Post, the more prestigious and less progressive of Canada’s two national newspapers.


Couples without kids are outpacing their procreating counterparts, same-sex relationships are blossoming, multiple generations are living under the same roof and more people than ever are living alone, Statistics Canada revealed Wednesday as the 2016 census showcased more seismic changes in the way Canadians are living their lives.

[…]Canada is skewing older, with fewer children and less affinity for marriage — forcing legislators to adjust and adapt their policies and programs to fit a rapidly evolving reality.

[…]Higher rates of separation and divorce also mean more people living alone or as lone parents, as does an increasing number of women in the workforce, which fosters a greater sense of economic independence.

Childless couples grew in number at a faster rate over the last five years than couples with at least one child, leaving the latter group at 51.1 per cent of the population, the lowest level ever recorded.

The baby boomers who fuelled such population growth in the 20th century are empty nesters in the 21st. The census found younger Canadians who do have kids are living in places like Alberta, long a magnet for job-seeking families, or Nunavut, where fertility rates are high.

They also important large numbers of unskilled immigrants who paid less in taxes than they used in social programs:

Canada’s 35.15 million people are getting older; there are now more seniors than children under the age of 14. Immigration contributed two-thirds of the country’s population growth between 2011 and 2016, and that diversity has also added complexity to the Canadian family portrait.

At the time, the Liberal Party thought that importing a lot of non-Christians who would vote for bigger government dependency was a good idea. And it was a good idea to keep them getting elected, but now they are facing the long-term consequences of importing a lot of unskilled have-not socialists.

Canada legalized same-sex marriage, and same-sex marriages don’t produce children naturally:

And a decade after census-takers first collected numbers on same-sex marriage, such couples now make up one per cent of all households, with their overall numbers having increased by 60.7 per cent since 2006. Opposite-sex couples grew by just 9.6 per cent during the same period.

Today, about 12 per cent of all same-sex couples are living with children, be they biological offspring, adopted or members of a stepfamily. In raw numbers, there were 10,020 children aged 14 and under living with 8,770 same-sex couple parents on census day last year.

Canada legalized same-sex “marriage” a decade before America did.

Basically, the problem here is that men don’t get married in a big government socialist country, because they are taxed to pay for the big government, but they aren’t allowed to lead the family. The money men earn that would be used to make decisions about their households is eaten up by secular socialist government programs. Instead of gun ownership, Canada has a politically correct and ineffective police force. Instead of home-schooling or a network or private schools, there are failing public schools that indoctrinate rather than educate. Instead of a choice of medical providers, there is a single-payer system that makes you take a number and wait your turn. Instead of stay at home mothers, they have expensive, ineffective government-run daycare. Instead of deciding what kind of car to drive, car money is confiscated for public transportation. Canada has some of the worst anti-male divorce and custody laws. And so on and so on. Big government makes men opt out of marriage. The whole society is set up to undermine the male aspiration to be the provider, and to let government make all the important decisions.

In Canada, it’s now a criminal offense to disagree with transgenderism, and in the province of Ontario, if parents disagree with transgenderism, the government will seize your children. Speaking as a Christian man with a high income, and a high net worth, I find it unappealing to think that I would be paying the salaries of secular socialists so that they could then interfere in my life and rule over me. I would be forced to give social engineers my money, and they would be continuously overruling my leadership in the home.

Canada, as a nation, decided a while back to embrace non-judgmentalism and redistribution of wealth to make sinful lifestyles produce the same outcomes as traditional lifestyles. Everybody gets free health care. What this means is that only working people pay for health care, but only the immoral people used it. They thought that this was “compassion”, but it just meant that fewer people would work, and more people who go off down immoral rabbit trails in their personal lives. They have free abortions and free drug injection clinics and free sex change surgery. But they don’t have free homeschooling, free stay at home moms, or tax breaks for chastity and sobriety. Everything wrong was subsidized, and everything right was taxed. The state became an unofficial arbiter of disputes between husbands and wives, always siding with the unhappy, emotional wife against the husbands who attempted to lead their families to be moral and spiritual.

What we are seeing now is similar to what has been observed in European countries for decades. An aging population that is depending on government to provide health care and pensions for them in their old age. When government grows large, human beings become more and more irresponsible. The population of Canada has been trained to think that their future needs are government’s problem. They don’t have to marry and make children to care for them in their old age – that’s government’s problem. They don’t have to save their own money for old age – that’s  government’s problem. When the government taxes all your money and takes over everything in the private sector, including the traditional roles of churches and charities, people become passive and irresponsible. Canada proudly embraced abortion and the redefinition of marriage, and now they don’t have a new generation of taxpayers to pay for their bloated government.

Next stop, Greece. Well done, Canada. If you want to have secularism, socialism and feminism, then you can’t have liberty, marriage and family. They made their choice, and we ought to be learning from their mistakes.

What is masculinity, and why do leftists oppose it?

Air Force TACPs confirm target locations with their map
Air Force TACPs confirm target locations with their map and GPS

My friend Adina shared a splendid article from the American Thinker with me. People often ask me why I speak about policy and politics so much on a Christian apologetics blog. My usual answer is that things like money and religious liberty are central to how Christians run their lives. But this article made me think of a deeper reason, one that’s been the driving force in my life for a long time.

First, let’s see some of the article, then I’ll talk about why this article is a key to really understanding men like me.


An ongoing mantra of the left is that everyone is a victim, with a singular carve-out for white men.  A large group of the female population has embraced this chant.

While there may be a number of grievances put forth by this movement, there also comes a theme that is particularly dangerous: the feminist attack on masculinity.  This is derived not only from feminists; it comes from the left in general.

There has emerged a war on masculinity.  Why?  Because masculine men are harder to control under tyrannical socialism.  The modern beta male, on the other hand, craves socialism.  This is why the left has branded masculinity as toxic: it stands as a roadblock to their endgame.

That’s the thesis of the article, and here is a snippet that I want to talk about:

The feminist hatred for masculinity is only another tool in the toolbox of communism.  Masculinity tends to make a man individualistic.  Individualistic men are capitalists, not communists.  They are men who cherish individual liberty, and they rely on themselves rather than on government.  Self-reliance is a four-letter word for leftists, and masculine men are generally self-reliant.  Beta males like Pajama Boy rely on government, and such modern men, devoid of any semblance of masculinity, are ideal for leftist indoctrination.

Were the frontiersmen communists or capitalists?  How about the cowboys?  How about the Navy SEALs or Army Rangers?  Sure, the press may find in the military a few Che Guevara t-shirt-wearing idiots and parade them all over the place, but I am willing to bet that the majority of SEAL Team 6 comprises masculine capitalists.

What games do young boys play?  They pretend to be cowboys.  They pretend to be soldiers.   They don’t pretend to be soviet textile workers slaving under Stalin’s system.  They don’t pretend to be entitled Millennial brats who congregate at Starbucks and talk about the wonders of socialism, either.  Most boys hit the ground embracing masculinity.  Some maintain it, but many have it berated out of them by the weak society they walk in or by their leftist parents.

Masculinity leads a man to seek to better himself in many regards, while collectivism thrives on mediocrity.  Collectivism in this country is sought by the lazy who don’t want to work but feel entitled to free handouts of all kinds.

I can confirm from my reading of SEAL and Ranger autobiographies that they are overwhelmingly conservative in their politics.

OK, so two points about this. First, I grew up in a very liberal environment where masculinity was already under attack starting from elementary school. It started in the public schools with the lazy public school teachers. In college, I saw lazy college students doing non-STEM degrees because they were easy. And then they wanted bailouts for their unpaid student loans.

I really noticed it when I worked for the government during a couple of summers. Most people in unionized jobs just don’t have the marketable skills to make it in the private sector, where people are paid based on performance and can easily be fired for failure to perform. Public schools and government are two places where people who can’t perform go in order to make money without having to perform. Even their raises are defined by collective bargaining, not individual merit. (My public school system even went on strike, and I would see the teachers holding signs in order to get paid more, instead of doing what normal people do, and producing more). Working in the public sector just not acceptable to people who want to work hard and advance by merit.

The more I experienced this, as a student and as a government employee, the more I realized that I wanted to get as far away as possible from laws and policies that reflect a desire to provide security for lazy people. I wanted these people out of my life. I didn’t want them getting my money. I did not want them making the rules that I had to live by. I wanted to cut government funding and enact right-to-work and school choice laws. Just to stop the forced funding of lazy people through mandatory taxes. I didn’t yet realize that there was any masculine-feminine distinction going on, I just knew that these were lazy people, they made poor choices because of their desire for fun and laziness, and they ought to be starving, not getting paid. And as the left started to crack down on free speech, guns, and other freedoms, I started a lifelong journey from blue states to red states. I just wanted nothing to do with these people interfering in my life, and leeching off of me. I wanted to post pictures of a Steyr Aug on Twitter and tag all my female public school teachers and their nanny state allies, who didn’t like guns because “they are loud and scary”. (Note: I do not yet own a Steyr Aug. Maybe some day.).

My second point is about how this denigration of masculinity works out in relationships.

I wanted to get married pretty much from high school. Since I didn’t have a stay at home mom, I decided early on that I wanted that for my children. I can remember thinking about this in my junior year of high school (grade 11). So, I talked to my Dad about it, and he suggested that I not follow my dream of becoming an English teacher, and instead focus on computer science. I was just as good at computer science as English literature in those days – good enough for the class awards every year in both subjects. So, I got the BS and the MS, and then moved to find work that would pay a lot. And I saved a lot of what I earned.

Fast forward to my relationships. What I found is that women who were influenced by leftism had zero respect for my ability to lead in areas like education, career and finance. Since they had been taught that masculinity was toxic, they would often prefer younger, penniless, unemployed students who were more easily manipulated. They resented that I would offer them advice about what to study, where to work, and how to save more, which – along with apologetics and raising parrots – is about the only stuff I’m qualified to give advice about! Basically, they had been trained to see male competence as toxic. Male leadership – even when it was clearly demonstrated from past success – was toxic. And the “best” men were the men who let them make decisions based on their feelings, which mostly involved pursuing fun and being irresponsible – and sometimes even immoral. Men exist to give women “feelings”, and for no other purpose than that.

Well, that’s what I wanted to say about how my experience with anti-masculinity in education, career and relationships has affected me. My masculinity came about naturally, as a result of encountering leftism in different areas of my life. And I think having to deal with it up close just pushed me further in the masculine direction. That is not to say that I am a promiscuous, risk-taking thug. I’m chaste, I’m a software engineer, I don’t drink, I have no tattoos or piercings, I’ve never been arrested, and I’ve saved most of what I earned. But if I could move to a place where government kept out of my business and out of my wallet, then I’d move. If I could find a woman who respected the strengths of men, then I’d marry her.

I basically want to be in a place where the government and the women around me are respectful of my different priorities and different life goals. Unfortunately, I’m living in a time of great foolishness, and much of that has been brought about by leftism. Much of my income is confiscated so that other people can spend it and call themselves “generous” with money they did not, and could not, earn themselves. My liberty is constrained, and the people who cost me money or do me harm – illegal immigrants, criminals, terrorists, etc. – are treated better than I am. All in the name of “compassion”. We are in a time and place where people in high places are at war with masculinity. I wish I could opt out of every nanny state policy, but there’s no opt-out.

How much does the average American corporation make in profit?

How much profit does the average American corporation make?
How much profit does the average American corporation make?

A while back, there was a story about how Americans vastly overestimate how many people in the USA are homosexual. According to Gallup polls in 2011, Americans estimated that 25% of the people in America were homosexual. In 2015, it was 23%. The actual number is about 3%. So it’s very clear that Americans can have wildly inaccurate perceptions about reality. Why are Americans so wrong? I think it’s because they see a lot of gay people in high profile areas, particularly in the entertainment industry.

I thought about this failure to perceive reality when I saw a story about how much profit Americans think that corporations make. My guess was that the average corporation makes about 5-10% profit margin. I know this because I used to buy and sell stocks regularly and that’s one of the numbers I would look at. Most Americans own stocks, so I thought they most Americans would know the number as well. But it turns out that American perceptions of corporate profits are wildly off the mark.

Check out this article from the prestigious American Enterprise Institute:

When a random sample of American adults were asked the question “Just a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?” for the Reason-Rupe poll in May 2013, the average response was 36%! That response was very close to historical results from the polling organization ORC International polls for a slightly different, but related question: What percent profit on each dollar of sales do you think the average manufacturer makes after taxes? Responses to that question in 9 different polls between 1971 and 1987 ranged from 28% to 37% and averaged 31.6%.

How do the public’s estimates of corporate profit margins compare to reality? Not surprisingly they are off by a huge margin. According to this NYU Stern database for more than 7,000 US companies (updated in January 2018) in many different industries, the average profit margin is 7.9% for all companies and 6.9% for more than 6,000 companies excluding financials (see chart above).

[…]“Big Oil” companies make a lot of profits, right? Well, that industry (Integrated Oil/Gas) had a below-average profit margin of 5.6% in the most recent period analyzed, and separately, the Production and Exploration Oil/Gas industry is losing money, reflected in a -6.6% profit margin. For the general retail sector, the average profit margin is only 2.3% and for the grocery and food retail industry, it’s even lower at only 1.6%. And evil Walmart only made a 2.1% profit margin in 2017 (first three quarters) which is less than the industry average for general retail, possibly because grocery sales now make up more than half of Walmart’s revenue and profit margins are lower on food than general retail.

Sometimes, the government makes MORE from the sale of goods or services than the company that does ALL the work:

Interestingly, Walmart’s profit margin of 2.1% is actually less than one-third of the 6.5% the average state/local government takes of each dollar of Walmart’s retail sales for sales taxes. Think about it – for every $100 in sales for Walmart, the state/local governments get an average of $6.50 in sales taxes (and as much as $10.12 in Louisiana and $9.45 in Tennessee, see data here), while Walmart gets only $2.10 in after-tax profits!

I think that Americans are getting their false anti-corporation views from listening to the mainstream media. The mainstream media is overwhelmingly leftist according to recent studies of their political donations. I think that the anti-corporate views of the average American comes from their uncritical consumption of mainstream media propaganda. They think they are getting objective news reporting, but what they’re really getting is socialist propaganda.

Here is a short little video that explains more about profit margins, and what would happen if a socialist like Bernie Sanders were put in charge of a corporation:

If you’d like to help with this problem of anti-business economic illiteracy, please watch the video and share it, or share the AEI article, which contains the video. America will be a better country when Americans have accurate, informed beliefs about important issues.