Practical definition: Union success

Posted by Marc Hodak on December 8, 2008 under Practical definitions | Be the First to Comment

“They made this company the success that it is.”

That is Leah Fried, spokesperson for the United Electric Workers, talking about the bankrupted-into-liquidation Republic Windows and Doors. Fried goes on to describe the effects of this success on her workers:

And on the eve of Christmas, they shouldn’t simply be thrown out on the street. And if the federal government can’t intervene to protect these workers, then I think we’re failing in our main obligation.”

The workers, who are protesting the liquidation of their company with less than 60 day’s notice, may or may not have a legal basis for their grievance–that remains for the courts to sort out. What caught my attention was the way Fried subtly transformed their personal legal struggle into a universal morality tale: “we’re failing in our main obligation.”

“We” Tonto? I, for one, would be happy to let the courts sort out what is and isn’t my obligation on this one. It’s likely from her tone that Ms. Fried really wants us to assume this obligation as a moral one regardless of what the courts decide. More to the point, she wants our obligation to her workers to be our “main” one.

You may have your own ideas of what you consider your “main” obligations, but a collectivist will reflexively assume away your preferences in favor for what she thinks your “main” obligations ought to be. If Ms. Fried did not intend that meaning with her words, it’s only because she is so sloppy with the language. The lazy MSM lets her get away with such sloppiness because it’s easier to write that way, and it’s very likely that the author and editor who got gratuitous Cs in math, unable to grasp relevant distinctions and logic, instinctively buy into all the conflations implied by “we” and “our.”

Of course, when one begins to actually think about this situation in terms of distinct individuals, “you,” “me,” “those guys over there,” “these people over here,” it’s difficult to avoid the contribution of the union to this particular mess. These workers who have been unceremoniously tossed on their butts are so screwed precisely because they have worked for above-market wages for so long. They know they are not going to be able to force another firm into paying them so much. They won’t come close to acknowledging that those above-market wages to which they felt entitled were the same costs that helped push the company into bankruptcy.

Their union doesn’t believe that, of course, because they don’t believe in this thing called ‘markets.’ They behaved as if the company’s revenue were a given, and its distribution were a zero-sum game between their workers and capitalists. The idea that the capitalists are suddenly out of both their returns and their investment, without so much as 60 day’s notice, is left out of the narrative of indignant workers with a sense of entitlement.

So, I hope that the company does what it must under our laws. But please, Ms. Fried, don’t pretend that your workers, who continued to suck off the teat of a sickly cow when it was no longer healthy enough to produce enough nourishment for its own existence, are entitled to some “obligation” from the rest of “us.”

Practical definition: Involuntary servitude

Posted by Marc Hodak on November 7, 2008 under Practical definitions | Read the First Comment

Will our first black president bring back involuntary servitude, i.e., requiring certain people to work for no pay in jobs they don’t choose?

I’m not sure this is serious, since Obama was careful not to mention mandates in the context of National Service, but this is what it says on, which appears to be a bona fide Obama web site:

The Obama Administration will call on Americans to serve in order to meet the nation’s challenges. President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps. Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year. [emphasis mine]

I wonder what that massive youth vote that propelled BHO to victory will think about being sentenced to 100 hours of community service per year in college as a result of electing him.

HT: Coyote, who is mining this great find to the hilt

Update: Well, is living up to its name by changing the last sentence quoted above to:

Obama will call on citizens of all ages to serve America, by setting a goal that all middle school and high school students do 50 hours of community service a year and by developing a plan so that all college students who conduct 100 hours of community service receive a universal and fully refundable tax credit ensuring that the first $4,000 of their college education is completely free.

Practical definition: Ask

Posted by Marc Hodak on November 1, 2008 under Practical definitions | 3 Comments to Read

At a rally yesterday where Senator Obama promised all sorts of goodies to the crowd, he said that as president:

I’ll help pay for this by asking the folks who are making more than $250,000 a year to go back to the tax rate they were paying in the 1990s

He’ll ask them?

What if they don’t all accept his request? Oh, yeah. In political new-speak, “ask” doesn’t mean “request,” it means an request you can’t refuse.

Here’s what I don’t get. There is probably not a single person in the crowd who would really mistake “ask” for “force” in this context. Yet, the good Senator, who is extraordinarily careful with his words, uses “ask.” Why is that?

Practical definition: Failed city

Posted by Marc Hodak on October 17, 2008 under Practical definitions | 2 Comments to Read

For Sale in Detroit

Failed city: Any major city in North America where the average home price is $9,250. No, I didn’t forget any zeroes. How ironic that in the Motor City, cars now cost more than homes?

HT: Walter Olson

How the LA Times defines “freedom”

Posted by Marc Hodak on September 13, 2008 under Practical definitions | Comments are off for this article

In this article, the LA Times headline helpfully explains that, “New rules would give FBI more freedom in U.S. operations.” That’s right, the editors there apparently consider giving government agents more leeway to spy upon, deceive, and coerce its citizens as a form of “freedom.” Did I miss something in my civics classes? Or is this just the intermediate step to Orwell’s definition?

Practical definition: Priorities

Posted by Marc Hodak on July 27, 2008 under Practical definitions | Read the First Comment

Randy Pausch of “Last Lecture” fame passed away at the end of last week. It was quite an exit.

I was inspired by Randy in many ways, not least by the number of people he had touched in his years as a teacher. Before his “Last Lecture,” Randy thought he would be best remembered on the Internet for his talk on time management. In that talk, he showed Covey’s matrix on prioritization. The key is to do what’s important, and leave off what’s not, regardless of urgency. If you do it right, the important stuff is less likely to become urgent.

The whole thing has made me rethink my priorities, including the value of daily entries on this blog. These things take time for me to write, time that arguably comes at the expense of things I’m actually paid to do, not to mention time with my family. I have toyed with simpler posts, but others have already cornered that market. I was hoping someone would join me to post material. A couple of people I thought would be great have, in fact, asked to contribute, but other things overtook them and they crapped out on me (you know who you are, you rats!).

So, I will likely drop down to a couple posts per week along these lines:

- Comments on executive compensation (for my clients, if not my fans)
- Catalogue of examples of perverse incentives, especially unintended consequences of well-intentioned policies, great and small (for a maybe future book)
- The occasional movie or book review (as little as I get out)

If there is news about corporate incentives, I will feel compelled to blog about it more promptly since that seems to get picked up by the major news outlets and sometimes leads to broader coverage. We’ll see.

In the meantime, Randy’s inspiration will remain with me so I might contribute anything like what he was able to in his too few years.

Is my cat as good at math as Bill Gates?

Posted by Marc Hodak on June 30, 2008 under Practical definitions | 2 Comments to Read

Michael Kinsley and Conor Clarke have opened up a discussion on Bill Gates’s new, big idea: “creative capitalism.” Kinsley tries to confer some intellectual heft upon these musings by labeling Gates “the most successful capitalist in the history of the world.”

Bill Gates is arguably the most successful businessman in history, and he achieved his success in a largely capitalist system, so I suppose it’s fair to refer to him as a successful capitalist.* But does that endow Gates with any special insight into the system of capitalism, i.e., the legal and social framework under which market-based economies function? In other words, does his great success as an economic agent make him a great economist? I don’t think so, any more than my cat’s ability to jump from the floor to the window sill without knocking over a vase makes her a great mathematician or physicist.

Gates is certainly more self aware of market and political processes than a cat is about angles and muscle reflex, but that doesn’t get him anywhere close to being an expert on capitalism. In fact, one of the key features of economics is that you don’t have to be an expert in anything except your space in the overall market in order to be a financial success. Ignorance of unrelated matters may even help, if it contributes to enhancing one’s focus on one’s own business.

All this is not to say that Gates has nothing to say about capitalism. His contributions, however, are far more likely to be empirical than theoretical. Unfortunately, I’m doubtful that he will be forthright about his achievements on the empirical front. I doubt we will hear about the virtues of vaporware in marketing, or how the vigorous attempt to monopolize via the network effect gave him a sustainable competitive advantage. I say this as one who was never bothered by Gates’s ruthlessness in achieving market dominance. I actually supported Microsoft in their defense against federal anti-trust charges.

So, I don’t think Gates will defend capitalism the way he practiced it, red in tooth and claw. It appears that he has joined the pursuit of a third way. That’s a shame, because he does understand vanilla capitalism better than most, and the Gates Foundation is capable of doing much good short of saving the world. But the title of “world’s most successful capitalist” makes him no more likely to develop a better approach capitalism than his ability to leap onto a big, new stage will enable him to develop a new proof in math or physics.

* I tend to think of a successful capitalist as one who made their pile as an investor rather than entrepreneur, but that’s a minor quibble in this discussion.

Practical definition: Government climate scientists

Posted by Marc Hodak on June 23, 2008 under Practical definitions | Comments are off for this article

Government climate scientists: policy advocates who may or may not have science credentials, such as PhDs in physics or chemistry

The USA Today headline was “Scientists: Weather extremes consistent with global warming.” Wow. They’re not exactly saying the weather extremes are actually caused by global warming, but that distinction is bound to be missed by headline readers, which is the likely intent of the headline writers. More to the point, they’re implying that scientists are making this connection. So, you’d think that they were quoting scientists. They work at something called the U.S. Climate Science Change Program.

Folks, these people are not scientists, they are advocates. They may have scientific credentials, and may even conduct real science in other contexts, but in this context, they are advocates.

Science is a process of developing and testing models based on theoretical and empirical evidence. Models tell you the relationship between A and B. Concluding that B is bad and therefore we should do less of A is advocacy.

I won’t get into whether the climate models behind the grand pronouncement of this headline has any merit or not (better persons than I have looked at this already). I will only suggest that once a scientist has signed up for “change” they are no longer doing science. They are doing advocacy.

Sometimes, the line can be blurred. Let’s say that a scientist develops a model that says: “If you put tennis balls into a toilet, the world will blow up.” If they release these findings, it may safely be implied that they are doing two things at once: they are explicitly illustrating a relationship between tennis balls in toilets and global destruction; and they are implicitly advocating against tennis balls in toilets. Although these things are happening at the same time, one can still distinguish between their science and advocacy.

When Einstein wrote and published his paper on Special Relativity, he was acting as a scientist. When he wrote a letter to FDR suggesting the possibility of developing a nuclear bomb, he was acting as an advocate. That’s not to say that Einstein wasn’t a scientist when he wrote that letter. The point is that the letter itself was advocacy, not science.

The line between science and advocacy is further blurred by high impact results with a low statistical significance. For example, statistics may indicate a less than one chance in 20 (a common standard in science) for the relationship between tennis balls and global destruction to be true. But the stakes are so high that a less than one-in-20 chance may still be alarming. In this case, it is clearer that a scientist publishing these results is acting as an advocate, but it’s less clear that they are also acting as a scientist since their work has not met a common standard for scientific achievement.

People working in a “Climate Science Change Program” illustrate this blurred distinction. Scientists suggesting that industrialization creates global warming are acting as scientists as long as they are clear about the statistical significance, or lack thereof, of their findings. But scientists who know that the statistical significance of their findings are low, and parade the results anyway, and highlight the negative effects of global warming, or linking global warming to select events in order to portray it as bad, are simply advocates in white robes.

Read more of this article »

Practical definition: Political promises

Posted by Marc Hodak on March 27, 2008 under Practical definitions | Comments are off for this article

In Jared Diamond’s excellent book Guns, Germs, and Steel poses a question via the mouth of a Papuan native: “Why do you have so much cargo?”

“Cargo” is a native word for ’stuff,’ as in the kinds of goods commonly produced by an advanced society. Every primitive culture that has come into contact with an advanced civilization for the first time has shared an understandable awe at the explorer’s (or invader’s) ‘cargo’–from their explosive armaments down to their metal shoe buckles.

Now, a civilized person might assume that natives faced with ‘cargo’ might try to understand how it was made so they might begin to build approximations of it. But that would reflect the civilized person’s naivete. In fact, primitive people commonly endow things with a mystical property that goes beyond its form or function. For them, everything is guided by a higher spirit, a spirit may send the cargo their way versus toward someone else.

Down that mystical path, natives will begin engaging their existing theories about what moves the spirits, and begin to exhibit what, to us, looks like strange behavior to persuade the spirits to drive cargo their way. This is called a cargo cult.

Civilized people look upon cargo cults with a sense of wonder and amusement. We shake out heads at shirtless people dancing and praying to their version of Gaia, as if that might somehow make a washing machine appear. Civilized people would never do that.

Practical definition: Workers

Posted by Marc Hodak on October 27, 2007 under Practical definitions | 4 Comments to Read

John Edwards released a statement giving some details about how he would erode our liberty. In the introduction alone, he mentions “social compact/contract” seven times, which should give you an idea of how he bends in the trade-off between individual rights and collective obligations. I’ve already provided a practical definition of social contract, which sounds all pleasant (social) and legal (contract):

“Social contract” - Those with political power telling everyone else what to do.

Contrast with this:

“Brute-force collectivism” - Those with political power telling everyone else what to do.

Today, I want to highlight one of the groups Edwards wants to empower–regular workers. Here is what he means by that:

“Regular worker” - Union member, or someone who isn’t a union member, but should be.

Edwards clearly believes this is a potent constituency:

Unions helped ensure that regular workers were part of the social contract in the last century, but today the right to unionize is poorly enforced and routinely violated by employers…The share of workers covered by union contracts has fallen by nearly half since 1978. To help the 60 million workers who would join a union if they could, Edwards will pass the Employee Free Choice Act to let workers unionize when a majority of them sign cards… He will also ban the permanent replacement of strikers to give workers the leverage to demand their fair share of rewards for their work

Here is where delusion might do him in. Edwards may be able to convince himself that this “60 million” number is real. Or, even if he knows its bogus, he may be able to convince the unions that he deserves their support with statements like this. Among non-union workers, no doubt, many of them would like to join a union. They should be free to do so in non-coercive elections. But if he thinks that he won’t alienate the 55 percent of workers that would rather slurp freshly wretched bile than join (or remain in) a union, then he is in for an even bigger loss than he’s already courting.