Mark W. Hendrickson
Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.
The Palpable Politicization of Science by Global Warming Alarmists
For over 20 years, a number of politicians have sought to reduce our consumption of fossil fuels and/or raise taxes on such fuels for the stated purpose of trying to save the world from catastrophic climate change. They insist that scientific research has proved conclusively the validity of the anthropogenic global warming hypothesis that is now called "climate change." Increasingly, people have their doubts about whether this is so.
Why? I don't think it is because people don't respect science. On the contrary, people generally have a high regard for science due to the multitude of ways science has benefited the human race. What many people distrust is the palpable politicization of science by climate alarmists.
People naturally have had trouble enough believing the alarmist line that carbon dioxide inevitably raises global temperatures. The simple reason for this belief is that there has been no global warming for the past 16 years in spite of rising atmospheric concentrations of CO2. However, the alarmists have shot themselves in the foot, weakening their case and diminishing their own credibility by their own misconduct.
The so-called "climategate" scandal of a few years ago cost the alarmists dearly in terms of lost credibility. The more than 1,000 emails that came to light showed a pattern of manipulation and dishonesty on the part of leading British and American scientists. In the words of E. Calvin Beisner, the emails provided shocking evidence of
. . . serious scientific malfeasance - the fabrication, corruption, destruction, hiding, and cherry-picking of data . . . intimidation of dissenting scientists and journal editors . . . and efforts to evade disclosure under Freedom of Information Laws in the United Kingdom and the United States.
That scandal was followed a few weeks later by charges from Russia's Institute of Economic Analysis accusing Britain's Meteorological Office of deliberately editing Russia's temperature data to skew the results.
Anecdotal reports over a period of decades reveal a pronounced tendency by alarmists - whether politicians, scientists, or journalists - to crush or censor dissent. Politicians have purged government offices of dissenters. As William Perry Pendley writes in his excellent new book, Sagebrush Rebel: Reagan's Battle with Environmental Extremists and Why It Matters Today, this has been going on at least since 1977, when the Carter administration fired Dr. Vincent McKelvey, the director of the U.S. Geological Survey, for daring to write that there was an abundant untapped supply of oil at a time when the president was trying to advance a "running out of oil" scenario.
Scientists and even professors in social sciences have told of colleagues or university officials warning them that non-alarmist research could damage their careers or cause the loss of a government grant. In his book Eco-Tyranny, Brian Sussman exposed the Society of Environmental Journalists, a group that provides lists of scientists that either are recommended for interviews (alarmists) or not recommended (skeptics).
Politicized science is very much in evidence in the tactics of the UN's Intergovernmental Panel on Climate Change (IPCC), which is highly regarded by alarmists and provides the final say on the science invoked to justify costly and disruptive policy changes. The IPCC unequivocally makes the case for potentially catastrophic anthropogenic climate change, right? As the commercial says, "Not exactly."
For example, the IPCC's 2007 report stated that it is "very likely" that human activity is causing global warming. Why then, just two months later, did the vice chair of the IPCC, Yuri Izrael, write: "The panic over global warming is totally unjustified. . . . There is no serious threat to the climate . . . [humanity is] hypothetically . . . more threatened by cold than by global warming"? Why did Dr. Vincent Gray, a member of the IPCC's expert reviewers' panel assert, "There is no relationship between warming and level of gases in the atmosphere"?
The discrepancy between the IPCC's reports and some of its leading scientists is explained by certain facts. Rule three of IPCC procedures states, "Documents should involve both peer review by experts and review by governments." The IPCC's policymaker summaries (the ones the media rely upon) are produced by a committee of approximately 50 government appointees, many of whom are not scientists. (Remember: it's an "intergovernmental," i.e., political, body, not a scientific body.) Those political appointees are given considerable latitude to modify the scientific reports.
Another fact appears on page four of Appendix A to the Principles Governing IPCC Work. It states:
Changes (other than grammatical or minor editorial changes) made after acceptance by the Working Group of the Panel shall be those necessary to ensure consistency with the Summary for Policymakers or the Overview Chapter.
According to reports in the U.K.'s The Telegraph and other news outlets, leaks of the soon-to-be released Fifth Assessment Report of the IPCC document reveal that the policy-making committee has requested approximately 1,500 changes in the text on behalf of the government leaders they represent. Would you want to bet on the scientific integrity of such a report?
It is clear that politicians are willing to go to great lengths to produce the best "science" money can buy in order to "prove" the need for major action on the climate change front. In fact, our own government alone has spent tens of billions of dollars in support of "climate change." Why do both the UN and American liberals support the alarmist scenario so strongly? Part of their agenda is to redistribute wealth by curbing American energy consumption (the more energy a society consumes, the wealthier it tends to be) and part of it is the fact that Western governments are desperate for more revenue to fund their ambitious wealth redistribution plans. A tax on energy would be the mother of all excise taxes, producing an immense stream of additional government revenues.
So, when we read reports (this again from The Telegraph) about a "recent survey of 12,000 academic papers on climate change [that] found 97 percent agree human activities are causing the planet to warm," should we be swayed or persuaded? First, one would want to know if the added warmth is significant or negligible. Second, one would need to know more about how and why those particular papers were selected. Were they selected by random, or perhaps cherry-picked, using a list like the Society of Environmental Journalists' list of who "the good guys" are? It would be crucial to know how many of those papers were produced by individuals or institutions that received government grants in support of their work. What is the percentage of papers on climate change that were produced by those not receiving government grants concluded that human activity is warming the planet significantly?
Even if 97 percent of academic papers come to similar conclusions, that doesn't mean they are correct. In my profession, economics, the majority of economists believed in the benefits of large-scale government control over economic activity, and many even believed that socialism was the path to a more prosperous future, only to have their academic theories exploded by subsequent events.
Here is the bottom line: If we truly want public policies grounded on sound science, our best chance is to get government money out of the process. Science, like religion, is a search for truth (the main difference being that scientists are seeking physical truth whereas religionists often are more concerned with metaphysical truth). The U.S. has a well-established tradition of keeping church and state separate for the purpose of preventing religion from being corrupted by politics. That is as it should be. The contorted political shenanigans and, yes, corruptions, of climate science make it plain that it is now time to erect a wall of separation between science and state. Science is too important for us to allow it to be hijacked by political and economic special interests. It is time to remove federal funding from scientific research, liberate scientific research from political influence, get scientists off the federal gravy train, and let the market decide what scientific work is worthy of being funded. The statement, "we're toast," is far more likely to be true if politics dominates science than from using fossil fuels to improve our lives.
William Graham Sumner: The Forgotten Man Who Reminded Us About "The Forgotten Man"
This week (Oct. 30 to be precise) marks the 173rd anniversary of the birth of William Graham Sumner (1840-1910). Sumner, one of the founders of American sociology and the first professor of sociology at Yale, wrote an amazingly clear and quotable book entitled, What Social Classes Owe to Each Other in 1883. Remarkably, it is completely relevant today.
Sumner is a largely forgotten man today, but his lesson about "the forgotten man" as a prototype remains timely. According to Sumner, the various political schemes of social reformers:
. . . may always be reduced to this type - that A and B decide what C shall do for D. ... In all the discussions attention is concentrated on A and B, the noble social reformers, and on D, the "poor man." I call C the Forgotten Man, because I have never seen that any notice was taken of him in any of the discussions.
Sumner continues his observations and says:
The State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.
Later in the book, Sumner states, "It is plain that the Forgotten Man and the Forgotten Woman are the real productive strength of the country."
Sumner has no use for muddled collectivist notions, writing, "'Society' is a fine word, and it saves us the trouble of thinking." With bracing logical rigor, Sumner skewers the sloppy theory of collective guilt:
The French writers of the school of '48 used to represent the badness of the bad men as the fault of "society." As the object of the statement was to show that the badness of the bad men was not the fault of the bad men, and as society contains only good men and bad men, it followed that the badness of the bad men was the fault of the good men.
In regard to "the state," Sumner writes:
. . . it is not at all the function of the state to make men happy. They must make themselves happy in their own way, and at their own risk.
A few pages earlier he notes that:
History is only a tiresome repetition of one story. Persons and classes have sought to win possession of the power of the State in order to live luxuriously out of the earnings of others.
Sumner makes another point saying:
A man who is present as a consumer, yet who does not contribute either by land, labor, or capital to the work of society is a burden. On no sound political theory ought such a person to share in the political power of the State.
Sumner offers insight on rights when he says:
If anyone thinks that there are or ought to be somewhere in society guarantees that no man shall suffer hardship, let him understand that there can be no such guarantees, unless other men give them - that is, unless we go back to slavery, and make one man's effort conduce to another man's welfare.
He also points out that, "Rights do not pertain to results, but only to chances . . . to the pursuit of happiness, not to possession of happiness."
On equality Sumner writes that:
. . . if there be liberty, some will profit by the chances eagerly and some will neglect them altogether. Therefore, the greater the chances the more unequal will be the fortune of these two sets of men. So it ought to be, in all justice and right reason. The yearning after equality is the offspring of envy and covetousness, and there is no possible plan for satisfying that yearning which can do aught else than rob A to give to B; consequently all such plans nourish some of the meanest vices of human nature, waste capital, and overthrow civilization.
He also discusses liberty, writing:
The notion of civil liberty which we have inherited is that of a status created for the individual by laws and institutions, the effect of which is that each man is guaranteed the use of all his own powers exclusively for his own welfare.
. . . the product of all history and all philosophy up to this time is summed up in the doctrine, that he should be left free to do the most for himself that he can, and should be guaranteed the exclusive enjoyment of all that he does.
Sumner writes about the importance of entrepreneurs when he says, "Great captains of industry are as rare as great generals." Later, he says that the entrepreneur
. . . contributed . . . what no one else was able to contribute - the one guiding mind which made the whole thing possible. In no sense whatever does a man who accumulates a fortune by legitimate industry exploit his [employees], or make his capital "out of" anybody else. The wealth which he wins would not be but for him.
Writing on various do-gooders, busybodies and social engineers, Sumner says:
For A to sit down and think, "What shall I do?" is commonplace; but to think what B ought to do is interesting, romantic, moral, self-flattering, and public-spirited all at once. It satisfies a great number of human weaknesses.
Then Sumner reminds each of us of a largely forgotten principle (what the Bible called getting the beam out of one's own eye, and Adam Smith described as the social virtue, "prudence." Sumner writes, "Every man and woman in society has one big duty. That is, to take care of his or her own self. This is a social duty."
Sumner writes more about would-be reformers, saying:
It no doubt wounds the vanity of a philosopher who is just ready with a new solution of the universe to be told to mind his own business. So he goes on to tell us that if we think that we shall, by being left alone, attain a perfect happiness on earth, we are mistaken. . . . Under all this lies the familiar logical fallacy, never expressed, but really the point of the whole, that we shall get perfect happiness if we put ourselves in the hands of the world-reformer. We never supposed that laissez faire would give us perfect happiness. We have left perfect happiness entirely out of our account. If the social doctors will mind their own business, we shall have no troubles but what belong to Nature.
There is a lot more timely and timeless wisdom and insight in William Graham Sumner's What Social Classes Owe to Each Other, and I encourage you to check it out.
Burglarizing JPMorgan Chase and Slapping Down Prudential: The New, Tyrannical Normal?
If there is one truth that became apparent during the financial panic five years ago, it is that Big Government and Big Finance are inseparable. Of course Uncle Sam was going to bail out Wall Street, for without the financial infrastructure that Wall Street provides to maintain orderly markets in various securities, particularly debt instruments, the multi-trillion dollar operation of our federal government would cease to function.
I wrote about "The de facto Nationalization of JPMorgan Chase" in April, 2008, suggesting that when the Federal Reserve helped to plan and finance JPMorgan Chase's absorption of many of Bear Stearns' assets and operations, it represented "a major turning point in U.S. financial history." Subsequent events have corroborated that assessment.
If anyone doubted that Uncle Sam was moving to take charge of the U.S. financial system, those doubts should have been dispelled by the passage of the Dodd-Frank Act in 2010. Dodd-Frank conferred unprecedented leverage over financial institutions through its enforcement arm, the Consumer Financial Protection Bureau. Through its power to designate the institutions of its choice as "too big to fail" or "systemically important," and, as I fear we shall see, to effectively dictate policy to firms so designated, the federal government is moving to convert gigantic private corporations into administrative arms of government.
Two recent stories illustrate this point that the trend is moving toward government dominance of Big Finance. The insurance giant, Prudential Financial, attempted to resist the feds designating it a SIFI (the acronym du jour: Systemically Important Financial Institution.) Not a chance. Washington regulators crushed Prudential's resistance and trampled the principle of federalism by usurping the state insurance regulators that heretofore have overseen Prudential's operations. According to Richard Liskov's account in The Wall Street Journal, the feds apparently are devising rules on the fly, having assumed regulatory control over Prudential before the actual regulations have been drafted.
The other incident showing that Big Government is subjugating Big Finance is the record $13 billion penalty that Attorney General Eric Holder has extracted (some would say "extorted") from JPMorgan Chase.
A lot of people don't care about JPMorgan Chase's vicissitudes. "They're just a bunch of corrupt Wall Street fat cats"; "They can afford it"; "It serves them right"-seem to be the yawning reaction of a largely apathetic public. If those who are indifferent to this episode were to understand what's at stake here, they wouldn't be so sanguine.
First, there is the question of justice. The feds strong-armed JPMorgan Chase into absorbing Bear Stearns, and now they are penalizing them for things Bear Stearns had done before the takeover - specifically, peddling low-quality, high-risk mortgage-backed securities. Never mind the fact that the primary impetus to crank out large volumes of such shoddy (and eventually "toxic") securities came from Uncle Sam, particularly the Department of Housing and Urban Development which pressured Fannie Mae and Freddie Mac to increase the number of risky mortgages that were the main ingredient of mortgage-backed securities.
Even if you don't think big financial corporations deserve justice, you should be concerned about the economic impact of Uncle Sam's heavy hand coming down hard on SIFIs. Already, according to Investors Business Daily, JPMorgan Chase and other megabanks are setting aside billions of dollars of capital in anticipation of settlements and legal expenses. That means less capital for entrepreneurs and businesses that could create wealth and provide jobs.
Besides the capital that the government is taking from the banks in penalties, the banks are hemorrhaging capital in another way. Again, Investors Business Daily reports that, "HUD is forcing banks to eat $57 billion in bad FHA loans." It appears that the Federal Housing Administration is HUD's current henchman, having supplanted the disgraced Fannie and Freddie. Again, there goes more capital down the proverbial drain instead of financing wealth-creating enterprises.
The feds are playing a dangerous game by bleeding the megabanks of capital. According to Richard Parsons in the Wall Street Journal, 3,000 banks have failed over the last 30 years. The industry is being consolidated into a progressively shrinking number of lenders. Due to financial stress (i.e., under-capitalization) 30 of the 50 largest U.S. banks in 1980 no longer survive as independent entities - many because federal regulators have merged them into larger, better capitalized banks. If the feds weaken the remaining megabanks by draining capital from them, they are going to exhaust the supply of financially healthy banks available to absorb failing banks. Someday, the only alternative remaining to the Big Government advocates will be to nationalize the banks - to confer de jure status on the de facto reality that banks are being reduced to servile vassals carrying out the will of the federal government.
The current trend of bank consolidation is heading inexorably toward "Centralization of credit in the hands of the State, by means of a national bank with state capital and an exclusive monopoly" - Marx's fifth plank in his ten point program for incrementally achieving socialism. You may not like the big banks, and they surely aren't blameless, but if Washington effectively monopolizes the flow of credit in this country, our economic future will be dismal indeed.
"Average Is Over"-rated: Comments on Tyler Cowen's Doom-and-Gloom Scenario
Years ago, I thought that if I ever attempted to write a novel, I would describe a future dystopia in which the ruling elite were those who made and understood computers and the rest of us would be techno-klutzes like me who wouldn't recognize a byte if it bit me on the behind.
Now, George Mason University economist Tyler Cowen is making a splash with his new book Average Is Over. The book is a nonfiction prediction of an American society comprised of 10 to 15 percent highly prosperous achievers and a "permanent underclass" dwelling in shantytowns and subsisting on beans. With all due respect to the highly erudite Cowen, this is not the natural evolutionary future of market economies.
Let me emphasize that this is not a review of Cowen's book, but an attempt to show why his gloomy vision is flawed in its very conception. This may be the gloomiest pronouncement by an economist since the Malthusian/Ricardian "iron law of wages" mistakenly posited that laborers would inexorably have to settle for subsistence wages.
Cowen's book may provide fodder to the left's incessant refrain "the rich are getting richer while the poor are getting poorer," but to regard this mantra as true requires an abandonment of both economic logic and history.
How are the wealthy to gain their vast riches without selling their products to the masses? Even in the much-maligned "Gilded Age," when the Carnegies, Westinghouses, Fords, and Rockefellers earned their vast fortunes, the standard of living of the vast majority of working Americans also rose.
Indeed, the two phenomena were, and still remain, interdependent. The billions earned by successful entrepreneurs mirror the billions of dollars of value they provided to the mass of consumers. We should hope that 10 to 15 percent of our population become wealthy entrepreneurs, a far higher percentage than was the case during the Gilded Age, because they will uplift standards of living far higher than was possible with the relatively small number of entrepreneurs in the past.
The growth in the number of wealth creators will tend to raise wages rather than lower them. Andrew Carnegie and other early entrepreneurs enjoyed a buyers' market for labor due to the large supply of labor relative to the capitalist demand for labor. As economic development progressed - that is, as more capitalist entrepreneurs wanted to "exploit" workers and provided them with the capital that increased their productivity - the law of supply and demand swung in favor of workers, and the affluent American middle class was the result. With more "exploiters," the potential for higher wages in the coming decades is enormous.
Alas, Cowen appears to have channeled Ned Ludd (see: Luddism), who revolted against technology. Holy smokes, should we now undo the Industrial Revolution? Machines have been raising the productivity of labor in the U.S. since our founding, enabling us to feed ourselves and manufacture a wide variety of products with ever-smaller numbers of workers. Rather than turning waves of unemployed workers into paupers, the country grew richer from all the additional goods and services that erstwhile farmers and shop workers produced.
Is there any scenario under which Cowen's gloomy forecast could come to pass? Yes, but such a tragedy would have political, not economic causes. In a free market, the notion of a permanent underclass is absurd, because, as millions of earlier Americans have proved, freedom includes economic opportunity and opens the door to upward social mobility. Only when the state rigs the system to determine economic winners and losers - as in feudalism, mercantilism, and socialism - do class divisions become rigid. Capitalism remains the best antidote for such social pathologies. Only when the state crushes wealth-producing entrepreneurs do job opportunities dry up and incomes stagnate. This is our current political situation. Progressives have made idleness pay more than employment, engaging in unremitting harassing of and hostility toward profit-seeking (i.e., wealth-producing) business. President Obama has favored the governing elite while attempting to divide us into two Americas.
The last comment I'll make about Cowen's book is that it's a shame he has been taken in by the macroeconomists' and socialists' obsession with "average." Socialism indeed seeks to make citizens average, but at the cost of freedom, dignity, and prosperity. The only "average" that government can enforce is to average down standards of living. That won't happen to us if we remember to respect, appreciate, and value those among us who excel at producing wealth. Average is worse than over-rated. It is unworthy of our aspirations. Let us exalt excellence.
What we need to do today is to dismantle the system of privileges that has supplanted the rule of law in America and has corrupted free enterprise. Big government cronyism has the potential to divide us into the nation that Tyler Cowen envisions in Average Is Over. Alternatively, genuinely free markets under a government that protects, rather than persecutes, wealth creators would blast Cowen's gloomy forecast into oblivion.
The Federal Government Shutdown Raises a Crucial Constitutional Question
For political junkies, October 2013 is shaping up to be a month that will be remembered. The current government shutdown over the bitterly contended issue of whether Obamacare should be funded is only a prelude to the main act - the donnybrook over raising the debt ceiling that will be upon us later this month. Although the two issues partially bleed into each other, the current fracas over Obamacare raises a fundamental constitutional question that nobody seems to be addressing.
First, though, the theatrics: The shutdown standoff reminds us of why politicians are so widely despised. Let's start with the president. In public statements before the start of the shutdown on October 1, Obama stated, "Are they [congressional Republicans] really willing to hurt people just to score political points?" That's a hoot. Once again, this president has projected his own methods of operation onto his opponents. At the outset of sequester-related spending cuts last spring, Obama made it abundantly clear that he has no compunctions or reservations about trimming government services that cause the maximum amount of unpleasantness or inconvenience for the American people in his own attempt to "score political points."
Already this week, Obama has used the shutdown as a pretext to block access to the World War II memorial in Washington. Meanwhile, although most of the White House staff has been furloughed, those who wait on the First Family are still on the job. It wouldn't hurt to let Their Majesties make their own bed and fix a few meals. Well, maybe Ms. Obama is so busy working to influence what people eat that she needs some domestic assistance, but the Golfer-in-Chief certainly has enough time to take out the garbage. Alas for fans of Bill Clinton, this is a president who doesn't feel our pain.
Moving over to Congress, an AP report quoted top-ranking Senate Democrat, Dick Durbin of Illinois, as declaring Republicans' refusal to pass a budget as "conduct unbefitting a responsible Congress." Excuse me, Sen. Durbin, but why didn't you criticize Majority Leader Harry Reid's irresponsibility for refusing to allow the Senate to debate or pass a budget? How quickly politicians change their tune when the partisan shoe is on the other foot.
Then there are some Republicans who, in spite of the almost daily revelations that Obamacare is even more dysfunctional, disruptive, and downright destructive than originally thought, think, "We shouldn't try to stop it. It will wreak so much havoc that we'll gain seats in next year's elections." How terribly cynical! They are willing to sacrifice the American people's welfare on the altar of their own political ambitions. Who wants creeps like that to represent them in Washington?
Thank goodness for the other Republicans who, at least temporarily, are willing to take a stand and try to block the implementation of a program that already is costing Americans lost income opportunities, higher health insurance premiums, dropped coverage, and a host of other problems. But is this strategy constitutional? As Harry Reid asks, "What right did they have to pick and choose what part of government is going to be funded?"
That's a fair question. So is this one: What right does Obama have to "pick and choose" which federal laws his administration will uphold (No Child Left Behind, Defense of Marriage, immigration, and even sections of Obamacare itself)?
So, which is it? Can the House of Representatives, which has the constitutional power of the purse, decide what parts of legislated acts to fund? Can the president unilaterally decide what laws to enforce? In this colossal tug of war, which branch of government, the legislative or the executive, ultimately has the upper hand? Can each essentially thwart the other, or must one prevail?
I don't know the answer to these questions. Maybe the constitutional experts out there can shed some light on it. Would it be too extreme to suggest that if we go forward with uncertainty about which legislative acts really are the law of the land, we'll descend into chaos and political disintegration? *