Tuesday, July 18, 2006


Who do we owe exactly?

Many of these sorts of opinions are held by the folks on the left.

Interestingly enough, they seem to be held by many religious groups as well.

In my opinion, the notion that indivdauls can only act in particular ways or achieve great things with the assistance of some other group, some deity, governmental action and assistiance or by the sheer grace of God is flawed.

For me that really down-plays the will and ability of human beings, especially in the achievement of groups of people that feel that they could only accomplish great things, or get a good income because of the people that came before them and paved the path for them.

I don't know why I have such a problem with this thinking exactly. It just seems to me that it gets people into believing their own stereotypes and following those "self-fulfilling prophecies" about their own individual limitations.

Perhaps it is because I don't believe that people can not achieve great things because they are held back by some invisible 'force' that keeps them poor, or limits their upward mobility. Since I believe that anyone can accomplish great things, I do not believe in the convenient excuses built into failure -- somebody was out to get me, they only hire this type of person, or they don't like people like me. For me, that's just a cop-out. A convenient, self-limiting psychological crutch that maintains our complacency and shadows our laziness. Why do any more, if we can make ourselves believe that somebody else is holding us back -- the key is to blame some one else for our own failures.

Never taking any individual responsibility is the key to this type of life and is intimately tied to believing in "owing someone else" when things do go well, because life is beyond our control. We must first appease the gods , since we are mere puppets on a string.

Well, I don't know what you mean by great things, but I do know that I wouldn't be able to do anything I enjoy doing without other people.

I drive in a car I didn't build, to a building I didn't construct, in a organization I didn't found, to sit behind I computer I didn't...you get the idea.

This the very insight of Smith's division of labor--we can make more when we do less (when we specialize).


As to your point about the illusions of societale constraints on success, I'm not sure I would speak so soon. There can certainly be constraints that keep people from achieveing thier full potential. I don't think a black man born into slavery in 1855 would be wrong in saying that society kept him winning@lyfe.

But I think your point is that no such constraints like these exist in the United States today. I'm not sure if they do or not.
Chris: Amen.

This wasn't an "I, Pencil" piece. It was a "you haven't suffered anything except that which is common to man" piece.

Excuses, I used to tell my students, are like butts. Everyone's got one, and they all stink. My boss didn't like that, so I switched it to, "like toes, and they all stink." Then I read "The Mainspring of Human Progress." Now I say, "Excuses are like idols that you worship instead of the truth."

We are meant to be free. Most of us agree about this one point, though we arrive at it from different directions. Rand and Epstein arrive at Natural Rights quite differently and I think it does affect the logic further down the line.

What I think we can agree upon is that freedom carries with it responsibility. It is this responsibility that causes people to forsake their liberty. I would say that paganism encourages the "appease the gods, we're all puppets on a string" fatalistic mentality. And all centralized government systems also encourage this "appease the official, placate the masses, no whatever seems necessary" mentality. Thus centralized arbitrary government is pagan.


But I think the principles behind "I, Pencil" still apply. The underlying theme of Read's essay was that markets co-ordinate the activity of millions of people into a productive whole.

But what if markets fail? What if something about the institutional structures leads to unproductive or even bad outcomes? I don't see any reason to blame the people that are victimized by failures that are beyond their control.

I always read "I, Pencil" from the "use of knowlege" angle. No one fully knows how create wealth in this world. But when self-interested individuals come together (in mutual benefit), then resources can be allocated in new and different ways to produce goods and services.

In Read's essay, I think it is irrelevant to wonder if there could potentially be a market failure, by this cooperation. What are the alternatives?

Can wealth be created by the public sector? Would it exceede the confiscated wealth of the private sector?
There are always constraints. It is unlikely that there exists individuals independent of any constraints.

I just don't buy into the easy excuses of some invisible wall, that people of a partiuclar demographic can not exceed. It is the self-fulfilling prophesy that I was referring to. It is mostly psychological -- if you buy into this artificial barrier, whether it is true or not, you won't be able to move beyond it.

An example is the 4 minute mile.
Student, "I don't see any reason to blame the people that are victimized by failures that are beyond their control."
I never blame anyone for what happens to me, whether I am a victim or not. I assume full responsibility. Everyone has stuff happen to them. Attitude determines how we will respond.

I thought much of this shortly after Katrina, when so many people were casting blame at government officials at different levels. I heard very few people blaming God. If government is responsible, I don't have to do anything but wait for my check. If God is responsible, then I better get busy doing something about my condition, because no noe else is going to do it for me.

Have any of you ever read or listened to some of the popular how-to-get-rich stuff out there? A lot of it is quackish, but much of it is focussed on just the change in mentality we have been discussing here.
I've noticed a similar trend in "prosperity" preachers in churches.

Read's point was obviously to illustrate a successful example of market co-ordination. So in that sense, the notion of a co-ordination failure is beyond the scope of his essay.

But the idea underlying his story begs the question to be asked. If the market can successfully co-ordinate self-interested individuals to successfullly produce a pencil, is there ever a time it wont be successful?

But just the scope of Reads article makes you realize how very little control you have over your life when playing the game of markets. Your ability to buy a pencil DEPENDS on the actions and decisions of many other people you can't control. In the same way, your ability to find a job depends on factors outside of your control.

What if the economy slides into recession just as you graduate college and you can't find the job you want, is that your fault? What if you take a less appealing or prestigous job and that limits what you achieve through out your career because you started off from at worse position than someone that graduated during an economic boom (research suggests this is an accurate story for Economists that graduate in booms v. busts).

When so much of what you do depends on what miillions of other people do, it is impossible to give anyone total blame or credit for the outcomes they experience.

Are there better alternatives? I don't know. Personally, I think the market does its job pretty well most days. But that isn't the question at hand. The real question we're asking is if you can be blamed or credited for where you end up in life. And to a large extent that answer seems to be NO.
What does it mean to "get the job you want"? That sounds like entitlement. Why not CREATE the job you want?

You can only claim credit when you assume the risk yourself.

If you don't assume the risk, you deserve all the blame.

Read's article come straight out of the First chapter of Wealth of Nations, which also points out that we create wealth when we find ways to meet other peoples needs. If you just have a job, well then, its not likely you are creating much wealth. If you have anything akin to an entitlement mentality the world approaches the zero-sum game to your eyes. The true Capitalist recognizes that the only way to get rich is to satisfy the wants of others, and make them rich, too. See Letter From a Grandfather, by Kent.

By "job they want" I only mean a higher paying/more prestigous job they would have liked to have, but wasn't available due to an economic slump.

If I remember correctly, there is arecent study which found that Economists that graduated in years when the economy was in recession went on to earn less than economists that graduated in boom years. I'm not at work so I can't search now.

But, we can either believe that it's all coincidence, or that a lot of what we achieve is out of our control.
I think it is the profit incentive that makes the world go round. That is why we don't need to control those other people, to get the things we want.

Yes, there are likely to be some coordination problems in there, but what is without its problems?
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