Tag Archives: Walter Williams

News

Does the limiting of government spending make children starve?

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This is a pretty illuminating article from Forbes magazine.

Here’s the question:

The budget debates have been illuminating. Apparently, those heartless tea partiers would gladly allow children to starve so millionaires can pay less in the way of taxes. The latter has been a recurring slander leveled against welfare reform in the ’90s and more recently in response to Paul Ryan’s budget proposal.

No one starved then. What if Washington stopped doling out relief now?

Wow. Are conservatives really so heartless? Is government spending really necessary to keep people from starving?

Let’s see:

People who oppose government redistribution contribute four times as much charity as those who favor such schemes. This includes 3.5 times as much to secular charities. Those who prefer free markets also give more blood, are more likely to provide directions, to return change given mistakenly or offer assistance to the homeless.

To truly be charity, alms must be given freely, require nothing in remuneration and offer the donor no material benefit. If possible, benevolence should be anonymous. The left hand ought to not even know what the right hand does.

Instead, the Left hand blares a trumpet about compassion while spending others’ money as it shamelessly smears the Right. Who is really heartless: those seeking fiscal responsibility or those spending our children into peonage?

That’s true – all of this government spending certainly isn’t good for our children. Why do we call it compassion when we impoverish the next generation so that we can spend ourselves into a higher standard of living with their future earnings?

But maybe the poor today really do need the money. Maybe charity isn’t enough and we need to government to take our money to help the poor?

Let’s see:

The real vacuum is federal spending. Washington filters our taxes through a bureaucratic black-hole before spewing out waste and vote-buying patronage. Public charity is an oxymoron. There is nothing moral in confiscating property from one to bestow on another.

As discussed previously, society does not revolve around Washington. The building blocks for an ordered, coherent community are families, friends and neighbors and then church (or equivalent). Only if each fails does government have any justification to execute its own counterfeit charity.

[…]Historically, when private parties provided most benevolence, it was generally administered more prudently than politicians redistributing other’s largesse. Thomas Jefferson bragged that you could travel the entire eastern seaboard and never encounter an American begging. Private charity was readily available and distributed responsibly so as to not create additional social burdens.

Relief was never meant for people who could help themselves, but don’t. Instead of easy handouts, people who neglect their duties could be taught responsibility and the dignity of work. Sensible charity offers a minimal safety net to prevent starvation or exposure, not provide idle comfort.

Poverty once suggested that someone lacked food, clothing or shelter. As the Heritage Foundation observed,

According to the government’s own surveys, the typical “poor” American has cable or satellite TV, two color TV’s, a DVD player or VCR. He has air conditioning, a car, a microwave, a refrigerator, a stove, and a clothes washer and dryer. He is able to obtain medical care when needed. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had sufficient funds in the past year to meet his family’s essential needs.

Not exactly dire circumstances. The average menial laborer today enjoys more material abundance than a prince or tribal chieftain of recent past.

Please click through and read the rest of this article. There is a lot more I’m not quoting.

I think conservatives need to start thinking about this question. We are always being accused of being stingy, because we want to keep our own money, and maybe give it away in charity, while holding the recipients accountable to pull their own weight. Is that so wrong? I give a lot more money in charity than Joe Biden, and I make a lot less. Maybe leftists think that everyone is as greedy as they are. Maybe they think that people shouldn’t be held accountable for making the kinds of simple decisions that cause poverty.

Videos

Walter Williams interviewed by libertarian Reason magazine

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Walter Williams
Walter Williams

Here’s the video. (H/T The Blog Prof)

He’s my second favorite economist, right behind Thomas Sowell.

In his latest column, he explains the famous “Broken Window Fallacy”.

Excerpt:

Economic lunacy abounds, and often the most learned, including Nobel Laureates, are its primary victims. The most recent example of economic lunacy is found in a Huffington Post article titled “The Silver Lining of Japan’s Quake” written by Nathan Gardels, editor of New Perspectives Quarterly, who has also written articles for The Wall Street Journal, Los Angeles Times, New York Times and Washington Post.

Mr. Gardels says, “No one — least of all someone like myself who has experienced the existential terror of California’s regular tremors and knows the big one is coming here next — would minimize the grief, suffering and disruption caused by Japan’s massive earthquake and tsunami. But if one can look past the devastation, there is a silver lining. The need to rebuild a large swath of Japan will create huge opportunities for domestic economic growth, particularly in energy-efficient technologies, while also stimulating global demand and hastening the integration of East Asia. … By taking Japan’s mature economy down a notch, Mother Nature has accomplished what fiscal policy and the central bank could not.”

[…]Why might Japan’s and Florida’s devastation be seen as “pluses”? French economist Frederic Bastiat (1801-1850) explained it in his pamphlet “What is Seen and What is Not Seen,” saying, “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”

Bastiat elaborated further in his “Broken Window Fallacy” parable where a vandal smashes a shopkeeper’s window.

A crowd forms, sympathizing with the shopkeeper. Soon, someone in the crowd suggests that instead of a tragedy, there might be a silver lining. Instead of the boy being a vandal, he was a public benefactor, creating economic benefits for everyone in town. Fixing the broken window creates employment for the glazier, who will then buy bread and benefit the baker, who will then buy shoes and benefit the cobbler and so forth.

Bastiat says that’s what’s seen. What is not seen is what the shopkeeper would have done with the money had his window not been smashed. He might have purchased a suit from the tailor. Therefore, an act that created a job for the glazier destroyed a job for the tailor. On top of that, had the property destruction not occurred, the shopkeeper would have had a suit and a window. Now he has just a window and as a result, he is poorer.

I learned a lot about economics from his columns.

News

Why are Egyptians wealthier in America than they are in Egypt?

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Walter Williams
Walter Williams

This is from Walter Williams, my second most favorite economist after Thomas Sowell.

Excerpt:

Why is it that Egyptians do well in the U.S. but not Egypt? We could make that same observation and pose that same question about Nigerians, Cambodians, Jamaicans and others of the underdeveloped world who migrate to the U.S. Until recently, we could make the same observation about Indians in India, and the Chinese citizens of the People’s Republic of China, but not Chinese citizens of Hong Kong and Taiwan.

[…]Much of Egypt’s economic problems are directly related to government interference and control that have resulted in weak institutions vital to prosperity. Hernando De Soto, president of Peru’s Institute for Liberty and Democracy (www.ild.org.pe), laid out much of Egypt’s problem in his Wall Street Journal article (Feb. 3, 2011), “Egypt’s Economic Apartheid.” More than 90 percent of Egyptians hold their property without legal title.

De Soto says, “Without clear legal title to their assets and real estate, in short, these entrepreneurs own what I have called ‘dead capital’ — property that cannot be leveraged as collateral for loans, to obtain investment capital, or as security for long-term contractual deals. And so the majority of these Egyptian enterprises remain small and relatively poor.”

Egypt’s legal private sector employs 6.8 million people and the public sector 5.9 million. More than 9 million people work in the extralegal sector, making Egypt’s underground economy the nation’s biggest employer.

Why are so many Egyptians in the underground economy? De Soto, who’s done extensive study of hampered entrepreneurship, gives a typical example: “To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections.”

Poverty in Egypt, or anywhere else, is not very difficult to explain. There are three basic causes: People are poor because they cannot produce anything highly valued by others. They can produce things highly valued by others but are hampered or prevented from doing so. Or, they volunteer to be poor.

Some people use the excuse of colonialism to explain Third World poverty, but that’s nonsense. Some the world’s richest countries are former colonies: United States, Canada, Australia, New Zealand and Hong Kong. Some of the world’s poorest countries were never colonies, at least for not long, such as Ethiopia, Liberia, Tibet and Nepal. Pointing to the U.S., some say that it’s bountiful natural resources that explain wealth. Again nonsense. The two natural resources richest continents, Africa and South America, are home to the world’s most miserably poor. Hong Kong, Great Britain and Japan, poor in natural resources, are among the world’s richest nations.

What is necessary for wealth is a capitalist economy, that emphasizes the rule of law, private property, judicial restraint, limited government, etc. Egypt has none of those, and that’s why Egypt is poor. India and Chile used to be like Egypt, but then they revamped their societies to be more like America. Now India and Chile are more prosperous. Economics is not rocket science.

Capitalism creates wealth, and raises the standard of living of the poor and the wealthy. It doesn’t matter what rung of the social ladder someone is on – as long as they can keep what they earn, instead of having it redistributed by socialists, then they will work hard to create something of value to share with others. Poverty is caused by economic ignorance.

More Walter Williams stuff here, and more Thomas Sowell stuff here. These are the clearest-thinking economists operating today.