Relevant and even prescient commentary on news, politics and the economy.

Race, Presidential Politics, and the Winner-Take-All Rule (1 of 4)

The following excerpt from “The Illegitimate President: Minority Vote Dilution and the Electoral College,” by Matthew M. Hoffman is presented under the fair use Section 107 of the U.S. Copyright Act. The article was published in The Yale Law Journal, Vol. 105, No. 4 (Jan., 1996), pp. 935-1021. I have removed the extensive footnotes to facilitate presentation in the blog format. I will be posting one installment a day for the next three days followed by the fourth installment and table of contents on the fourth day.

Race, Presidential Politics, and the Winner-Take-All Rule

Comments (1) | |

Race, Presidential Politics, and the Winner-Take-All Rule (2 of 4)

The following excerpt from “The Illegitimate President: Minority Vote Dilution and the Electoral College,” by Matthew M. Hoffman is presented under the fair use Section 107 of the U.S. Copyright Act. The article was published in The Yale Law Journal, Vol. 105, No. 4 (Jan., 1996), pp. 935-1021. I have removed the extensive footnotes to facilitate presentation in the blog format.

The Free Elector Movement of 1960

Comments (0) | |

Race, Presidential Politics, and the Winner-Take-All Rule (3 of 4)

The following excerpt from “The Illegitimate President: Minority Vote Dilution and the Electoral College,” by Matthew M. Hoffman is presented under the fair use Section 107 of the U.S. Copyright Act. The article was published in The Yale Law Journal, Vol. 105, No. 4 (Jan., 1996), pp. 935-1021. I have removed the extensive footnotes to facilitate presentation in the blog format.

The Wallace Campaign of 1968 and the Rise of the Republican South

Comments (1) | |

Race, Presidential Politics, and the Winner-Take-All Rule (4 of 4)

The following excerpt from “The Illegitimate President: Minority Vote Dilution and the Electoral College,” by Matthew M. Hoffman is presented under the fair use Section 107 of the U.S. Copyright Act. The article was published in The Yale Law Journal, Vol. 105, No. 4 (Jan., 1996), pp. 935-1021. I have removed the extensive footnotes to facilitate presentation in the blog format.

Racial Politics and Present-Day [1996] Campaigns

Comments (0) | |

Scab Labour: Where do we go from here?

Bridget Phillipson is the U.K. Labour MP for Houghton and Sunderland South. “You’re not fit to be prime minister and you’ve got to resign,” she told Jeremy Corbyn at an extraordinary meeting of the Parliamentary Labour Party after the Brexit vote last June. Today, “The Staggers, The New Statesman’s rolling politics blog” published an essay by Phillipson titled, Where do we go from here?
It is a very long read but eventually comes to the Lakoff-inspired conclusion that the Labour Party needs “to frame the debate again as one between collective action and its absence.”

And having formulated that clear sense of how the Britain of 2020 would be run differently between 2020 and 2025 by Labour, we need to work out how to persuade the electorate of that – to work out exactly how we should communicate our promises.

Before arriving at that stirring platitude, however, Phillipson let these dubious cats out of the bag:

I take the view that the right decisions for Britain’s future are not invariably the ones that are immediately and universally popular. If they were, all politicians would be redundant. Sometimes things that are true are deeply unpopular, and sometimes things that are popular would be catastrophic as policy choices. That to me is why we are a representative democracy rather than one governed by referendum after referendum. I also believe that as politicians we have a moral responsibility to tell the truth. …

If we pretend things that are true aren’t so, and pretend that seductively popular options which would actually damage us are without downsides, we deserve to get in trouble. The fastest way to lose trust is to be found out in deceit, and once we lose that trust, we will then find it very hard to gain the support we need to change what can and should be changed. It’s easy for those who don’t believe in government: they have nothing to lose from a diminution of faith in politics and politicians. As Labour politicians we have everything to lose: we have a double responsibility.

So to the point: the ‘lump of labour,’ the notion that there are a finite number of jobs to go round, is a long-known fallacy. Those who pretend otherwise or deny that finding should be treated with the same bemused contempt as Douglas Carswell when he claimed the tides were driven mainly by the sun. … There is something horribly un-socialist about blaming people for the consequences of political decisions of a right wing government. That is the politics of populism not socialism, the politics of easy answers rather than right answers.

If it is the “double responsibility” of Labour politicians to “tell the the truth,” it is a prerequisite responsibility for them to know what “the truth” is and not simply parrot something they happen to have heard from Jonathan Portes or Nigel Stanley. The claim about a lump-of-labour fallacy was conceived and propagated as the core reactionary “frame” for refuting the legitimacy of collective action by workers.

Comments (4) | |

Down the Rabbit Hole with Trump FBI Fanboy, Jimmy Kallstrom

Who is James K. Kallstrom? Kallstrom is the retired FBI assistant director and frequent Fox News guest who has been orchestrating the “revolt” of FBI agents from the New York field office that led to FBI director Comey’s questionable letter to Congress about emails found on Anthony Weiner’s laptop. He is an enthusiastic supporter of Donald Trump and bitter foe of the Clintons, referring to them as a “crime family.”

Kallstrom was a top electronic surveillance expert for the FBI. Here is what the New York Times wrote about him in February 1995, when he was appointed to head the FBI’s New York City office:

A former Marine captain and a Vietnam veteran, Mr. Kallstrom joined the F.B.I. in 1970 and spent most of his career in New York City, heading the unit responsible for electronic monitoring of criminals.

As the head of the Special Operations Division in New York from 1976 to 1990, Mr. Kallstrom oversaw a band of surveillance experts that grew from 15 to more than 300.”

A little less than three years later, Kallstrom retired from the FBI to take a job with MBNA Bank. During his tenure as director of the New York City office, Kallstrom presided over the controversial criminal investigation into the 1996 crash of TWA flight 800.

In a presumably unrelated incident, Kallstrom was a strong advocate of the innocence of FBI agent, Lin DeVecchio, who was indicted in 2007 on charges of helping Mafia informant, Gregory Scarpa, commit four murders in the 1980s and 1990s. Charges were dropped when it was revealed that the government’s key witness, Scarpa’s mistress, had given conflicting accounts of DeVecchio’s involvement. Information Scarpa supplied to DeVecchio played a major role in the “Mafia Commission Case” that established the reputation of young prosecutor Rudy Giuliani in 1985.

Comments (1) | |

The Poverty of Fallasophy

In an interview about his new book, The Wealth of Humans, Ryan Avent recommends coordinating reductions in working hours, “maybe from 40 hours working per week to 30 hours working per week…” But, he stammers somewhat apologetically, “that, that sounds a lot like we’re sort of embracing the lump of labour fallacy.” There is, of course, no such thing.

He tells his interviewer that he’s “very conscious throughout the book that, you know, a lot of this seems kind of sacrilegious, in a way, to people who’ve taken economics.” There is something profoundly wrong with economic teaching when it “seems kind of sacrilegious” to transgress a bogus fallacy claim that has no standing in economic theory and absolutely no supporting evidence. Excerpt from The Wealth of Humans: Work, Power and Status in the Twenty-First Century by Ryan Avent, St. Martins Press:

To say that humanity has too many workers is to defy a basic tenet of economics. Labour is not supposed to work like that. When someone suggests that there are too many people around to do the work society needs done, he is said to be under the influence of the ‘lump of labour’ fallacy: the view that there is only so much work to go around — the lump. This view leads to policies such as those designed to lower the retirement age in order to create more work for the young. If we believe this basic theory, then we should certainly worry about the rise of machines.

Economists, however, are generally of the opinion that the economy works quite differently. They sometimes point to ‘Say’s Law’, the work of eighteenth-century French economist Jean-Baptiste Say, which is often summarized in the phrase ‘supply creates its own demand’. Thus, when older workers stay on the job longer, they earn more money, and when they spend that money they create demand for other goods and services, leading to jobs supporting those goods and services. As far as labour-saving technological change goes, economists believe that when a person loses a job to a machine, it results in savings for someone — to the owner of a firm, or to consumers in the form of lower prices. This, in turn, leaves more money to be spent elsewhere, and that spending ought to create jobs for the displaced workers.

Say was indeed born in the eighteenth century and his so-called law originated in that century but Say didn’t write about it until the early nineteenth century. According to John Kenneth Galbraith, the supposed law was supposed to have sank without trace after John Maynard Keynes — and the Great Depression — eviscerated it in the 1930s.

Oh, but never mind. “Economists,,, are generally of the opinion…” When Larry Summers was at M.I.T. in the 1960s,

…what I was taught as an undergraduate was that basically the people who thought it would were a bunch of idiot Luddites and that obviously there would eventually be enough demand and it would all sort of work itself out, and if people got more productive they’d be richer and they’d spend and maybe we needed some transition assistance, but that it was all basically going to be okay. That was what I was taught.

And just a few months ago, John Cochrane and Jennifer Rubin recycled the same pack of lies as if it was gospel truth. At long last, economists, have you people no decency? As Lionel Robbins — even Lionel Robbins! — wrote in 1929, on the eve of the Great Depression:

Deliberately to recommend an increase of hours when the conditions of demand are not elastic is either very ignorant or very Machiavellian.

The same can be said of those who would counsel against a reduction of hours on the grounds that it would constitute a “lump-of-labour fallacy” to do so. They are either very ignorant or very Machiavellian.

Comments (3) | |

One Man’s Profit is Another’s Loss

There is this fixed quantity of whatever it is and if you get more, I get less. One man’s profit is another’s loss.

This dogma was already advanced by some ancient authors. Among modern writers Montaigne was the first to restate it; we may fairly call it the Montaigne dogma. It was the quintessence of the doctrines of Mercantilism, old and new. — Ludwig von Mises

Add “the Montaigne dogma” to the collection of pejorative phantoms: mercantilism and Malthusianisme, image of limited good, zero-sum fallacy, Luddite fallacy, fixed Work-fund and the theory of the lump of (labor, labour, work, jobs, output).

Except… it really ought to be the Seneca dogma since Seneca was the ancient author whose de Beneficiis Montaigne faithfully borrowed from for ‘his’ essay (find “Demades“). Even Seneca was elaborating on an older maxim by Publilius.

Is it ever true that one man’s profit is another’s loss? You bet! I just gave an example — gambling and other contests of skill or luck are typically zero sum. Your loss is my gain. Our loss is the house’s gain.

But there is a more historically-pertinent operation of the zero-sum game: bills of exchange. As I remarked in that earlier post, one of the prime motivations for early modern merchant bankers to adopt the novel and challenging technique of double-entry bookkeeping was to “prove an alibi” against suspicions of usury. The way that bills of exchange were accounted for made them one of the favorite financial instruments for avoiding an appearance of usury. Raymond de Roover explained:

As a result of the usury prohibition, bills [of exchange] were never discounted but were bought at a rate of exchange which fluctuated up and down according to the conditions prevailing in the money market. There is no doubt that interest was received by the banker who invested his money in the purchase of bills, for a hidden interest was included in the rate of exchange. Because of this subterfuge, the structure of the money market was such that exchange fluctuations were caused either by a change in the rate of interest or by a change in the terms of international trade.

Interest was thus concealed in the exchange rate charged by the banker. As a consequence, the profit on any given transaction was uncertain. A banker, however, could rely on his long-run observation of the fluctuations in the terms of international trade to achieve a high degree of predictability covering a large number of transactions.

By the middle of the 16th century, the use of bills of exchange had become common enough in trade between England and the Low Countries to raise suspicions about manipulation of exchange rates by bankers. This suspicion was articulated in the memorandum prepared for the 1564 Royal Commission on the Exchange, “For the Understanding of the Exchange,” which first noted the ‘usurious’ undercurrents of different exchange rates prevailing simultaneously in London and Antwerp:

…when the English pound is paid for a month before hand [in London], then the price thereof in reason ought to be the less; and when the English pound is not paid for in Flemish money until a month after hand [in Antwerp], then the price in reason ought to be the more. But here you may perceive that this necessary and fair name Exchange might be truly termed by the odious name of buying and selling of money for time, otherwise called usury.

The memorandum then went on to describe “how private gains may be made when the Exchange goeth too low” and “how the bankers do cunningly fall [or raise] the exchange at Antwerp.” Among the remedies proposed for such manipulation of exchange rates was to “govern this realm by good policy” such that would “temper and forbear the superfluous delicacies” of imported goods and cause English exports “to be wrought to the best value before they are vented.” The resulting trade surplus would raise and maintain the value of the English pound.

Of course not every country can run a trade surplus all the time. For the world as a whole, the balance of trade is indeed a zero-sum game.

There are, however, not one but three issues bound up together in the memorandum on exchange. The first is usury and its concealment in the exchange instrument. The second is the effect of exchange fluctuations on the profits and losses of bankers and merchants. And the third is the manipulation of exchange rates, either by bankers for the private gain or by government to counter the cunning tricks of bankers.

Nowadays, we no longer have to worry about fraud by bankers. The old superstitious prejudices against usury have been supplanted by an enlightened embrace of the unequivocal blessings of credit and debt. Comparative advantage has proven that it is economically illiterate to question the universal benefit of globalization.

Verily, we can embrace the von Mise-erly wisdom that “There are in the market economy no conflicts between the interests of the buyers and sellers.” One man’s gain is clearly the alleviation of another’s pain.

Comments (11) | |

Nine Spades Are a Lump of Leets

The section on capital from Joan Robinson’s 1970 review of Charles Ferguson’s The Neoclassical Theory of Production and Distribution employs the “lump of leets” motif to highlight a key issue in the Cambridge critique of neoclassical capital theory. Robinson’s substantive lump-of-leets critique offers an instructive contrast to the abject flimsiness of the proverbial lump-of-labor fallacy claims.

For some years they remained cooped up in this position, repelling all attacks with blank misunderstanding. Then, growing bold, they descended to the plains and tried to prove Sraffa wrong. …

Comments (6) | |

Branko’s Lumps

In a post at his blog globalinequality today, Branko Milanovic claims that “Robotics leads us to face squarely three fallacies.” He then proceeds to “debunk” technological unemployment, satiation of human needs and the environmental carrying capacity of the earth. He concludes his post with the assurance that “history teaches us” we have nothing to fear regarding limits to growth, exhaustion of natural resources and replacement of humans by machines.

A week ago, I posted Outlaws of Political Economy in which I documented the total absence of evidence for the alleged false belief in a fixed amount of work. The fallacy claim, I argued, is a negative projection that is compulsively repeated by economists.

In my post, I cited the entry on “Economic Law” from the 1893 Palgrave’s Dictionary of Political Economy. In turn, the Palgrave’s entry cited an 1892 article, in German, by J. Bonar that I was unable to locate [update: found it]. But the search for it led me to Bonar’s 1893 book, Philosophy and Political Economy, described by Warren Samuels as “one of the most remarkable works in the history of economic thought.” In that latter book, Bonar discussed Niccolo Machiavelli’s notion of a “fixed quantity of happiness” and mentioned Francis Bacon’s enunciation of the same basic idea — that one person or country’s gain is a another’s loss. The rationale, in a nutshell, of mercantilism.

Following up on the Bacon quote, I discovered much the same sentiment had been expressed by Michel de Montaigne nearly a century earlier and a millennium and a half earlier by the mime author, Publilius. In short, long before the fallacy became a “fallacy,” it was a maxim that circulated among the most distinguished literati, Montaigne, Machiavelli, Bacon…

Publilius’s maxim translates as “Profits in trade can be made only by another’s loss.” Montaigne’s is “One man’s profit is another’s loss.”

It just so happens that James Bonar also delivered a series of lectures in 1910 addressing the “subtle fallacies which are apt to invade the reasoning of trained economists in spite of learning and discipline.” One of the sources of error that Bonar discussed in his first lecture was “the existence and prevalence” of “watchwords” or “maxims” that keep alive biases inconsistent with the economist’s reasoning. A watchword is “a detached phrase that has taken the place of an argument” and may even become “a substitute for an argument.”

In his fifth lecture, Bonar specifically addressed one of those tricky watchwords, “in the long run” and replied, 106 years before the fact, to one of Milanovic’s key arguments about “the lessons of history”:

It is not easy to show that the invention of new machines will tend to increase wages. This was the tendency first supposed by Ricardo; but he changed his mind and wrote: “The same cause which may increase the net revenue of the country may at the same time render the population redundant and deteriorate the condition of the labourer.” It was this change of view that made McCulloch doubt the infallibility of Ricardo. The more orthodox position (if we allow that any position of Ricardo’s could be heretical) was that machinery tends in the long run to employ more labour than it has displaced; this was to be the consolation of the hand-loom weaver, thrown out of work by the factory system. It was to be a sufficient vindication of an economic principle, that, if it did not fit the facts now, it would fit them at some time in the future. But in the case of machinery there were more economic principles asserted than one. One seems quite to fit the facts: that there is a tendency under the regime of machinery towards a greatly increased production at less cost. It was a different proposition that the increased product tends to be equally shared. The economist has no warrant for saying that any economic tendency exists which by itself brings about good distribution. The sharing of property was matter of law and political institutions, in some countries religious prejudices; and the conditions so established might prevent any such consummation. It does not seem true that economic tendencies are all made beneficial by length of time any more than a man is necessarily made better by growing old. There is no saving virtue in the ”long run.”

An economist from the 1930s named John Maynard Keynes also took issue with the policy relevance of the legendary long run. Ironically, our old mime friend, Publilius also had something proverbial to say about the long run: “Patience is a remedy for every sorrow.”

Comments (5) | |