Socialism big lie of 20th century

February 19, 2014

Mark J Perry explains why socialism failed:

Socialism is the Big Lie of the twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality was achieved only in the sense that everyone was equal in his or her misery.

In the same way that a Ponzi scheme or chain letter initially succeeds but eventually collapses, socialism may show early signs of success. But any accomplishments quickly fade as the fundamental deficiencies of central planning emerge. It is the initial illusion of success that gives government intervention its pernicious, seductive appeal. In the long run, socialism has always proven to be a formula for tyranny and misery.

A pyramid scheme is ultimately unsustainable because it is based on faulty principles. Likewise, collectivism is unsustainable in the long run because it is a flawed theory. Socialism does not work because it is not consistent with fundamental principles of human behaviour. The failure of socialism in countries around the world can be traced to one critical defect: it is a system that ignores incentives. .

In a capitalist economy, incentives are of the utmost importance. Market prices, the profit-and-loss system of accounting, and private property rights provide an efficient, interrelated system of incentives to guide and direct economic behavior. Capitalism is based on the theory that incentives matter!

Under socialism, incentives either play a minimal role or are ignored totally. A centrally planned economy without market prices or profits, where property is owned by the state, is a system without an effective incentive mechanism to direct economic activity. By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail. Socialism is based on the theory that incentives don’t matter!

The failure of the car industry in Venezuela provides a very good example of why socialism and the central planning which goes with it fails.

Leonardo Hernandez had hoped to buy a new car this year, ending nearly two years of waiting on various lists at different dealerships throughout the country.

Those hopes were dashed last week when Toyota Motor Co. said it would shut down its assembly operations in Venezuela due to the government’s foreign exchange controls that have crippled imports and made it impossible to bring in parts needed to build its vehicles.

The country’s other car manufacturers, including General Motors and Ford, haven’t even started operations this year, while waiting for needed parts to arrive. . .

 

Yes, Prime Minister


NZ’s GDP = South Carolina’s

February 9, 2014

The USA’s GDP was around $16 trillion in 2012.

Over at Carpe Diem, Mark J Perry has calculated each state’s contribution to the total and found a country whose GDP was similar.

New Zealand’s economy was $171,256, just a little more than South Carolina’s.gdp mapYou’ll find a bigger map and a table with the GDP of each state and the country with which it’s comparable by clicking on the link.


Real gender wage gap about 5c

February 2, 2014

Women earn less than men, right?

Well yes, but if this is right, it’s only 5c?

. . . President Obama repeated the spurious gender wage gap statistic in his State of the Union address. “Today,” he said, “women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.”

What is wrong and embarrassing is the President of the United States reciting a massively discredited factoid. The 23-cent gender pay gap is simply the difference between the average earnings of all men and women working full-time. It does not account for differences in occupations, positions, education, job tenure, or hours worked per week. When all these relevant factors are taken into consideration, the wage gap narrows to about five cents. And no one knows if the five cents is a result of discrimination or some other subtle, hard-to-measure difference between male and female workers. In its fact-checking column on the State of the Union, the Washington Post included the president’s mention of the wage gap in its list of dubious claims. “There is clearly a wage gap, but differences in the life choices of men and women… make it difficult to make simple comparisons.” . . .

The real gap is only about 5 cents and no one knows if the five cents is a result of discrimination or some other subtle, hard-to-measure difference between male and female workers.

Much of the wage gap can be explained away by simply taking account of college majors. Early childhood educators and social workers can expect to earn around $36,000 and $39,000, respectively. By contrast, petroleum engineering and metallurgy degrees promise median earnings of $120,000 and $80,000. Not many aspiring early childhood educators would change course once they learn they can earn more in metallurgy or mining. The sexes, taken as a group, are somewhat different. Women, far more than men, appear to be drawn to jobs in the caring professions; and men are more likely to turn up in people-free zones. In the pursuit of happiness, men and women appear to take different paths.

But here is the mystery. These and other differences in employment preferences and work-family choices have been widely studied in recent years and are now documented in a mountain of solid empirical research. By now the President and his staff must be aware that the wage gap statistic has been demolished. This is not the first time the Washington Post has alerted the White House to the error. Why continue to use it? One possibility is that they have been taken in by the apologetics of groups like the National Organization for Women and the American Association of University Women. In its 2007 Behind the Pay Gap report, the AAUW admits that most of the gap in earnings is explained by choices. But this admission is qualified: “Women’s personal choices are similarly fraught with inequities,” says the AAUW. It speaks of women being “pigeonholed” into “pink-collar” jobs in health and education. According to NOW, powerful sexist stereotypes “steer” women and men “toward different education, training, and career paths.”

Have these groups noticed that American women are now among the most educated, autonomous, opportunity-rich women in history? Why not respect their choices? For the past few decades, untold millions of state and federal dollars have been devoted to recruiting young women into engineering and computer technology. It hasn’t worked. The percent of degrees awarded to women in fields like computer science and engineering has either stagnated or significantly decreased since 2000. . .

All evidence suggests that though young women have the talent for engineering and computer science, their interest tends to lie elsewhere. To say that these women remain helplessly in thrall to sexist stereotypes, and manipulated into life choices by forces beyond their control, is divorced from reality—and demeaning to boot.  If a woman wants to be a teacher rather than a miner, or a veterinarian rather than a petroleum engineer, more power to her.

The White House should stop using women’s choices to construct a false claim about social inequality that is poisoning our gender debates. And if the President is truly persuaded that statistical pay disparities indicate invidious discrimination, then he should address the wage gap in his own backyard. Female staff at the White House earn 88 cents on the dollar compared to men. Is there a White House war on women?

Commenting on this Dr Mark J Perry asks two questions:

Some questions: Who has the most control over setting salaries in the workplace? For most organizations it would be the Human Resource (HR) Department. And what are the demographics of Human Resource professionals within that profession? Several recent studies reveal that women hold 71% of HR positions nationally. So if women now dominate the HR profession and hold almost three of every four positions, are they not directly responsible for the supposed 23% wage differential between men and women that Obama and women’s group keep talking about? If it seems illogical and impossible that female HR professionals would systematically discriminate against female employees, doesn’t that expose the 77-cents-per-dollar gender wage gap as a myth?

Related question: Why is the HR profession, whose supposed platform is a commitment to diversity in organizations throughout the country, itself not a very gender-diverse profession? Is is possible that women naturally gravitate to the HR profession and far outnumber men in that career choice in the same way that men naturally gravitate to engineering and far outnumber women in that career choice? The concern about gender imbalances always seems so selective and uni-directional.

The figures used are for the USA, but the situation is likely to be similar here.

I am one of those who bring the numbers down for women, having had only temporary or part-time work since I was in my mid-20s.

That’s been my choice.

Where I live would make full time, permanent work more difficult, but if I really wanted to do it I could.

For a multitude of reasons I haven’t chosen to.

Feminism aims to let women do anything.

I’ve chosen part time and temporary work, combined with raising a family, a supporting role in the family business and a variety of volunteer roles.

Those of us who choose to do this add to the statistics which give the impression there’s a gender gap.

Those figures from the USA show that if the multitude of factors which influence pay is taken into account it it is insignificant.


Free enterprise best anti-poverty measure

January 27, 2014

Dr. Mark J. Perry provides the chart of the century:
wordpoverty2-600x387

 

. . . the chart above could perhaps qualify as the “chart of the century” because it illustrates one of the most remarkable achievements in human history: the 80% reduction in world poverty in only 36 years, from 26.8% of the world’s population living on $1 or less (in 1987 dollars) in 1970 to only 5.4% in 2006. (Source: The 2009 NBER working paper “Parametric Estimations of the World Distribution of Income,” by economists Maxim Pinkovskiy (MIT) and Xavier Sala-i-Martin (Columbia University).

What accounts for this great achievement that you never hear about? AEI president Arthur Brooks explains in the video below, summarized here:

It turns out that between 1970 and 2010 the worst poverty in the world – people who live on one dollar a day or less – that has decreased by 80 percent (see chart above). You never hear about that.

It’s the greatest achievement in human history, and you never hear about it.

80 percent of the world’s worst poverty has been eradicated in less than 40 years. That has never, ever happened before.

So what did that? What accounts for that? United Nations? US foreign aid? The International Monetary Fund? Central planning? No.

It was globalization, free trade, the boom in international entrepreneurship. In short, it was the free enterprise system, American style, which is our gift to the world.

I will state, assert and defend the statement that if you love the poor, if you are a good Samaritan, you must stand for the free enterprise system, and you must defend it, not just for ourselves but for people around the world. It is the best anti-poverty measure ever invented.

Politicians on the left like to think they are the champions of the poor.

Yet they fight tooth and nail against free trade, denounce globalisation and promote policies which would get in the way of free enterprise.

Rather than policies which assist free enterprise they proffer ones which get in the way of it, favouring redistribution rather than growth.

Hat tip: Kiwiblog

 

 

 

 

 

 

 


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