PrintFebruary 13, 2011
Caring, Consequences, and the Commonweal
Few terms are more sentimentalized than "I care." When uttered by a charismatic rhetorician, audiences reflexively sigh and coo. Of course, it's cloying drivel -- the utterance and the sentiment. The truth is "I care" is worse than meaningless. If one stops and thinks, and too few do, "I care" is often disturbing and always creepy when uttered by someone other than a confidant.
Though not as sentimentalized as "I care," "make the world a better place" is equally off putting; it is rarely uttered in proper context -- when promoting value creation through voluntary exchange. "Make the world a better place" is mostly a plea by major government bureaucrats, minority-studies professors, social workers, and bombastic Hollywood types to rationalize sticking their and their recruits' noses into someone else business.
Simply mouthing, "I care" and "make the world a better place" goes only so far. Sure, a demagogue with high oratory skills can direct the converted to lap up the drivel like dogs lapping up spilled gravy. The rest of us require a little more persuading, which is why the nonsense is usually buttressed by the scientific legerdemain of economists and professors eager to stamp their imprimatur on the world.
These political attendants, however sincere in their endeavor, suffer from "Irving Fisher Syndrome." Fisher, a twentieth-century economist, is best remembered for his colossally mistimed pronouncement, days before the 1929 stock market crash, that "stock prices have reached what looks like a permanently high plateau."
Fisher was a polymath, in that he also scribbled poetry and was facile with numbers. (Fisher is also often wrongly credited for inventing the rotary card file trademarked as Rolodex, which was invented a decade after his death by Arnold Neustadler.) Fisher advocated in favor of tooling the economics trade with concepts and measures borrowed from classical physics. Fisher managed to meld the two into one heaping deceptive skein, which dominates economics to this day.
Armed with science, Fisher went forth to do good, starting with the temperance movement. Fisher calculated that "the productivity of labor would be increased from 10 to 20 percent by effective prohibition." Fisher put his math bona fides to work by noting, "each daily glass of beer reduced productivity 2 to 4 percent, it follows that the productivity of labor would be increased from 10 to 20 percent." What is more, the grain rescued from the brewer's kettle and the distiller's still would produce "eleven million loaves of bread a day."
Fisher's downfall -- and the downfall of so many interventionists to this day -- was his myopia on what is seen. The unseen -- the unintended consequences and opportunity costs -- are always lost in the ornate, deterministic algorithms. In Fisher's day, the unseen was the concurrent increase in crime, homicides, corruption, alcohol poisonings, moral decay, government intrusion, and flouting of the law that occurred during prohibition. We can be thankful Fisher was less successful in popularizing his other hobby -- eugenics. His trite doggerel "Breed out the unfit and breed in the fit" never quite caught on with the great unwashed.
The drive to care and to improve on Brobdingnagian scale can often be traced to fecklessness on an individual scale. Irving Fisher, wrote How to Live: Rules for Healthful Living Based on Modern Science, published in 1916. Three years later, modern science would kill his daughter, Margaret. Fisher believed the modern science of Henry Cotton, who hypothesized mental illness was a by-product of infections residing in the roots of the teeth, recesses in the bowels, and other nooks and crannies of the body. Surgically removing the infections would remove the mental illness.
As fate would have it, Margaret was diagnosed with schizophrenia; Fisher consented to Dr. Cotton removing numerous sections of his daughter's bowel, colon, and uterus. Unfortunately, Margaret's organs were exhausted before her schizophrenia, and she died on Nov. 7, 1919.
Despite his many failures and dreadful prognostications, Irving Fisher is held in high regard by many economists; no doubt because Fisher legitimized the models so many of them employ to champion their own efforts to remake the world. Fisher also proved that experimenting with other people's lives is a helluva lot preferable to experimenting with your own, a notion today's do-gooders have taken to heart.
Democratic societies, more than others, are plagued with Fisheresque caring and world-improving schemes. Democratic society encourage the "carers" and the world-improvers to organize vociferous minority that can lobby logic-addled politicians to fund the minority's strain of caring and world improving.
The 1960s Great Society and War on Poverty are monuments to minority-instigate redistributive caring. The spendthrift utopians of the Lyndon Johnson era were inspired by Michael Harrington's paean to redistributive economics, The Other America. Never mind that Harrington was a member of the Socialist Party of America. Harrington's premise was that poverty is a purely economic problem: the poor simply lack the material resources to lead productive, happy lives. Supply these resources, the theory posits, and the poverty problem will be solved. "The means are at hand," declared Harrington, "to fulfill the age-old dream: poverty can now be abolished."
Actually, it can't, and never will. For one, no one can define great society: one person's utopia is often another person's hell. Nor can anyone define poverty, at least in the United States. Is poverty relative or absolute? If relative, then what is it relative to? If it is absolute, then only a very few in the United States are poverty stricken by world standards. And are the US poor really poor? The poor are notorious for operating in the cash society in order to maintain the flow of government transfer payments. What we do know is that we are at least $16.7 trillion (in inflation-adjusted 2008 dollars) into this means-tested experiment.
Today, we are overrun with Fisher's caring, world-improving epigones, many of whom are locked and loaded with ridiculously precise statistics: a $0.35-per-pack cigarette tax will lower average individual consumption by 12.35 cigarettes per day; a ban on trans fat will lower LDL cholesterol by 13.83 points; one additional ton of anthropogenic CO2 output will melt 7.345 liters of arctic ice. Want statistics to show that $500 billion in government spending will produce $673.37 billion in gross domestic product while preserving 2.8795 million jobs? No problem, a professor at Princeton or Stanford will produce the data to prove the outcome.
But the real attraction of caring and world improving on a macro scale is that reverence and reputation (along with earning capacity) survive long after the grand scheme's unintended consequences and opportunity costs have rendered the initial hypothesis into idiotic ramblings.
To wit: Paul Samuelson wrote in his magnum opus on government interventionism, Economics, "[Karl] Marx was wrong about many things...but that does not diminish his stature as an important economist." To which P.J. O'Rourke offered the obvious riposte, "Well, what would? If Marx was wrong about many things and screwed the baby-sitter?
Unfortunately, the baby-sitter always gets screwed when caring and world-betterment depend on anything other than free and voluntary exchange.
Stephen Mauzy is a financial writer, analyst, and principal of S.P. Mauzy & Associates. Send him e-mail at steve@spmauzyandassociates.com
