Does U.S. Senate follow advice it honors?

Every year, the U.S. Senate has a member read George Washington’s Farewell Address.  For more details of this, see https://www.senate.gov/artandhistory/history/minute/Washingtons_Farewell_Address.htm.

It is a slog for many of us today to read the Address in its entirety, but it has much that has been ignored, even by those who read it.  For example,

"Hence likewise they will avoid the necessity of those overgrown military establish-ments, which under any form of government are inauspicious to liberty, and which are to be regarded as particularly hostile to republican liberty."

Or, very germane to the current Senate:

"The alternate domination of one faction over another, sharpened by the spirit of revenge natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism.  The disorders and miseries which result gradually  incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation on the ruins of public liberty.”

Have the many Republican Senators who have read the Farewell Address already forgotten:

"It is important, likewise, that the habits of think-ing in a free country should inspire caution in those entrusted with its administration to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another.  The spirit of encroachment tends to consolidate the powers of all the departments in one and thus to create, whatever the form of government, a real despotism."

There is much to agree with and some to disagree with, but the main thrust should be a guide for all of us.  What bothers me is how much those who annually read and listen to the reading of this document soon ignore it.

I ask my readers to select a few key points and write, email, or phone their two Senators if they are honestly following these points or have compelling reasons in the public interest to ignore some of Washington’s advice.

For the text, see https://www.gpo.gov/fdsys/pkg/GPO-CDOC-106sdoc21/pdf/GPO-CDOC-106sdoc21.pdf.

See also "Did George Washington warn us about Donald Trump".

Religious freedom and commerce

Much is being written about serving gays violating a merchant’s freedom of religion.  But what is the real question here.  Is the merchant being forced to serve people he or she doesn’t like or being forced to participate in activities that he or she doesn’t like.

The latest case I’ve seen is about a photographer being forced to photograph a gay wedding.  In this case, the photographer is being requited to participate in something he or she does not approve of.

On the other hand, if two men showed up at the studio can the photographer deny them service?  Not if they act as any two buddies might having their picture taken.  If they put their arms on each other’s shoulders the photographer should not have a complaint.  But if they insisted on a picture of them kissing each, then the photographer would have a complaint.

Similarly with a baker being asked to bake a wedding cake.  If two men showed up to order a wedding cake, then the baker should provide it, even if he knew they were gay.  However, if they asked him to put two male figures on the top of the cake, then the baker now becomes a direct participant in the choice of the two men.

Suppose a neo-nazi asks a Jewish baker to make a cake with a swastika on top. The baker has every right to refuse on both religious and ethical grounds.  However, if the neo-nazi just asks for a cake off the shelf, then the baker should serve him.

Suppose a Roman Catholic grocer is asked to deliver groceries to a nudist camp.  He has every right to refuse.  However, if one of the nudists comes to his store fully clothed to buy groceries for the camp, then the grocer should serve him.

Essentially, we should not be expected to participate in activities of which we disapprove, but we can’t refuse to serve those of whom we disapprove when they are acting in a socially acceptable manner.

A good case in point is the shock jock, Fred Tupper, in “Little Mosque in the Prairie”, who spreads all kinds of misinformation about Muslims.  He is welcome in Fatima’s restaurant, as long as he doesn’t spout off too much.

Conservatives conserve what?

This entry was triggered by Ross Douthat’s “Trumponomics Is Reform Conservatism’s Evil Twin”, http://www.nytimes.com/2016/08/10/opinion/campaign-stops/trumponomics-is-reform-conservatisms-evil-twin.html, New York Times, 2016-08-10.

Once again, a commentator uses “free market” without clearly defining what it means.  And of course, they really never define what is being conserved.

“Free markets’ generally mean that corporations are free to do what they please, no government regulation, no interference from shareholders, and no unions.

The Constitution states that Congress has the power to regulate commerce among the  states.  Isn’t contamination of rivers that flow into other states “commerce among the states”.  Isn’t the smokestack pollution that goes into neighboring states “commerce among the states”.

But those conservatives who are so quick on the “patriotism” of
"limited government” quickly ignore the conservatism of carefully reading the Constitution.  The Constitution has lots of checks and balances to have a fair government for all, but these “conservatives” only note those that fit their agenda.  For example, they want legislators to attend “prayer breakfasts”.  But isn’t the political pressure to attend a “prayer breakfast” a religious test for office, a test prohibited by the Constitution?

The Invisible Adam Smith

Many who claim to be "free market proponents" cite the "invisible hand" of Adam Smith in "The Wealth of Nations".  However, Adam Smith only uses the term once, only in reference to individuals, and in the context of trade among nations. The chapter is "Of Restraints upon the Importation from Foreign Countries of Such Goods as Can Be Produced at Home".  Among the questions Smith raises is :

If a restriction benefits an industry, does it also benefit society?

As to the "invisible hand", Smith does not apply it as a metaphor for an absolutely free market, but as an indication that the acts of an individual can lead to consequences not intended by the individual.  A more complete citation than "invisible hand" is:

"[The individual] generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." - pages 242-243

In other words, seeking his own security he may benefit society and seeking his own gain he may harm society, or otherwise, depending on the circumstances.  In no way does this describe a "perfect market".

All page references are to the PDF version of "Wealth of Nations" transcribed by the Gutenberg Project.  You can select your preferred format from http://www.gutenberg.org/files/3300.

For the most part, I don't think Adam Smith provides a prescription of how an economy works.  Instead he provides a description of what he observed worked or didn't work.

Smith only uses "free market" once, in a discussion of the bad effects of restricting exports - pages 353-354.  Woolen manufacturers wanted to restrict exports of wool so that their supply of wool would be increased.  The problem was that English wool was inferior for clothing compared to wool from other countries.  The prohibition of exports caused the price of wool to drop drastically, making it unprofitable to produce.  The "invisible hand" now works to raise the price of mutton because the farmer has to pay his costs.  That means to give the woolen manufacturers cheap wool is to give the consumers expensive meat.  So, restricting exports did not give society much benefit.

A word that Smith uses frequently is "labour", would you believe over one thousand times?  And how many times do you hear proponents of the "invisible hand" talk about labor, other than "greedy labor unions"?  Smith looked favorably on labour, both as the basis of all economic activity and how labor can be marginalized by those with power.

The opening paragraph of "The Wealth of Nations" is:

"The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies [sic] of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations." - page 3

In other words, without labor, nothing happens.

"The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards."

As the National Football League found out, not paying referees what they asked lowered the owners wealth.

As for those who complain about "greedy unions" and promote "right-to-work laws", consider:

"The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it. In all such disputes, the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks, which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year, without employment." - page 142

Few seem to understand the need to balance interests.  When profits and wages are out of balance we are in deep trouble.  Given the rising cash hoard of many large corporations and the still uncertain job market, we should consider:

"It is the stock [materials, equipment, and workplaces] that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society. The plans and projects of the employers of stock regulate and direct all the most important operation of labour, and profit is the end proposed by all those plans and projects.  But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin." - page 142

In other words, without corporations much work doesn't get started and without labor it doesn't get finished.

Finally, Smith didn't think business people ["those who live by profit"] should be trusted in public affairs:

"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." - pages 142-143

Adam Smith was an academic who read widely, considered what he read, and wrote an opinion for the powers-that-be.  Those who consider "invisible hand" and "free market" as the only things important about economics, should consider reading more of modern economists, who have the benefit of having read all of "Wealth of Nations" and over two centuries more of data to consider.  They are no more in an ivory tower than Adam Smith was.

For a poster of "The proposal of any new law…" see "Poster: A warning from the 'Invisible Hand'".

Updated 2013-07-21 to include Adam Smith's words for "business people.
Updated 2013-08-20 to include link to the poster.

Legislators must prove they have read the books

I have had on my to-do list for awhile to write a blog entry about a standardized test for legislators.  After all, if a standardized test is good enough to judge school children's abilities, a standardized test should be good enough to judge legislators' abilities.

I was prodded to act on this to-do item on seeing "Teachers must prove they can do the math", Rachel E. Stassen-Berger and Kim McGuire, Star Tribune, 2012-02-23.  Gov. Mark Dayton signed a law that "requires would-be teachers to pass a college-level basic skills test before they can lead a classroom."

So, again sauce for the goose is sauce for the gander.  Shouldn't we have a requirement that legislators pass a political history test before they can serve in a legislature?

Here are a few questions:

What did Adam Smith state was the basis of a nation's economy?

Was Adam Smith concerned with special interests?

Was Adam Smith more sympathetic to workers or to employers?

Did Adam Smith think that banks should be regulated?

Were the writers of the Constitution concerned with the common good and virtue?  Please define these terms and give examples of their use in the Federalist Papers.

To what degree did the writers of the Constitution think that commerce should be regulated?

What was the intent of the writers of the Constitution when they used the words "people", "person", and "citizen".  Please define each term.

Did Thomas Jefferson think that "limited government" applied to financial institutions and other corporate interests?

Please feel free to send these questions to your legislatures at the state and federal level.

Being charged for receiving unsolicited advertising

I just received my Verizon Wireless bill.  It was 21 cents higher than last month.  I'm kind of used to the crazy gyrations of phone bills, and I usually check why.

This time it was for a text message.  Guess who from?  Verizon Wireless after I upgraded my phone!  Twenty cents isn't a big deal, but consider how many phones they sell a day.

I don't know what percentage of the market Verizon has, but over one billion cell phones are sold every year.  At 20 cents for each phone sold, that's getting consumers to pay over 250 million dollars to be advertised to.

And businesses get upset about being regulated.  Many aren't regulated enough.  Congress did have the power to regulate commerce until commerce bought Congress.