American Elephants

The Most Powerful Defense of Market Capitalism You Will Ever Read. by The Elephant's Child

(Click to enlarge)

Economist Deirdre McCloskey recently spoke in London, and this brief summary captures the essence of her talk and her work on the power of economic freedom. Next year, her latest book: “Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World”  will arrive, the final book of a trilogy on the wonder-working power of modern capitalism. Here is a seven page summary of her upcoming book, and below is a summary of her summary by James Pethokoukis of AEI.


Perhaps you yourself still believe in nationalism or socialism or proliferating regulation. And perhaps you are in the grip of pessimism about growth or consumerism or the environment or inequality.

Please, for the good of the wretched of the earth, reconsider.

Many humans, in short, are now stunningly better off than their ancestors were in 1800.  … Hear again that last, crucial, astonishing fact, discovered by economic historians over the past few decades. It is: in the two centuries after 1800 the trade-tested goods and services available to the average person in Sweden or Taiwan rose by a factor of 30 or 100. Not 100 percent, understand—a mere doubling—but in its highest estimate a factor of 100, nearly 10,000 percent, and at least a factor of 30, or 2,900 percent. The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments. Explaining it is the central scientific task of economics and economic history, and it matters for any other sort of social science or recent history.

What explains it? The causes were not (to pick from the apparently inexhaustible list of materialist factors promoted by this or that economist or economic historian) coal, thrift, transport, high male wages, low female and child wages, surplus value, human capital, geography, railways, institutions, infrastructure, nationalism, the quickening of commerce, the late medieval run-up, Renaissance individualism, the First Divergence, the Black Death, American silver, the original accumulation of capital, piracy, empire, eugenic improvement, the mathematization of celestial mechanics, technical education, or a perfection of property rights. Such conditions had been routine in a dozen of the leading organized societies of Eurasia, from ancient Egypt and China down to Tokugawa Japan and the Ottoman Empire, and not unknown in Meso-America and the Andes. Routines cannot account for the strangest secular event in human history, which began with bourgeois dignity in Holland after 1600, gathered up its tools for betterment in England after 1700, and burst on northwestern Europe and then the world after 1800.

The modern world was made by a slow-motion revolution in ethical convictions about virtues and vices, in particular by a much higher level than in earlier times of toleration for trade-tested progress—letting people make mutually advantageous deals, and even admiring them for doing so, and especially admiring them when Steve-Jobs like they imagine betterments. The change, the Bourgeois Revaluation, was the coming of a business-respecting civilization, an acceptance of the Bourgeois Deal: “Let me make money in the first act, and by the third act I will make you all rich.”

Much of the elite, and then also much of the non-elite of northwestern Europe and its offshoots, came to accept or even admire the values of trade and betterment. Or at the least the polity did not attempt to block such values, as it had done energetically in earlier times. Especially it did not do so in the new United States. Then likewise, the elites and then the common people in more of the world followed, including now, startlingly, China and India. They undertook to respect—or at least not to utterly despise and overtax and stupidly regulate—the bourgeoisie.

Why, then, the Bourgeois Revaluation that after made for trade-tested betterment, the Great Enrichment? The answer is the surprising, black-swan luck of northwestern Europe’s reaction to the turmoil of the early modern—the coincidence in northwestern Europe of successful Reading, Reformation, Revolt, and Revolution: “the Four Rs,” if you please. The dice were rolled by Gutenberg, Luther, Willem van Oranje, and Oliver Cromwell. By a lucky chance for England their payoffs were deposited in that formerly inconsequential nation in a pile late in the seventeenth century. None of the Four Rs had deep English or European causes. All could have rolled the other way. They were bizarre and unpredictable. In 1400 or even in 1600 a canny observer would have bet on an industrial revolution and a great enrichment—if she could have imagined such freakish events—in technologically advanced China, or in the vigorous Ottoman Empire. Not in backward, quarrelsome Europe.

A result of Reading, Reformation, Revolt, and Revolution was a fifth R, a crucial Revaluation of the bourgeoisie, first in Holland and then in Britain. The Revaluation was part of an R-caused, egalitarian reappraisal of ordinary people.  … The cause of the bourgeois betterments, that is, was an economic liberation and a sociological dignifying of, say, a barber and wig-maker of Bolton, son of a tailor, messing about with spinning machines, who died in 1792 as Sir Richard Arkwright, possessed of one of the largest bourgeois fortunes in England. The Industrial Revolution and especially the Great Enrichment came from liberating commoners from compelled service to a hereditary elite, such as the noble lord in the castle, or compelled obedience to a state functionary, such as the economic planner in the city hall. And it came from according honor to the formerly despised of Bolton—or of Ōsaka, or of Lake Wobegon—commoners exercising their liberty to relocate a factory or invent airbrakes.

The Illusions of Green Energy by The Elephant's Child best places for wind turbines have already been used. To supply the United States with energy from wind power would take a wind farm the size of Texas with densely sited turbines, but there’s not windy places for the turbines everywhere. A turbine requires wind blowing at a certain speed to produce power. If it blows too hard, the turbines have to shut down for they could be damaged. If it blows too gently, they do not produce energy at all , the backup power station which has been running all the time has to take over the production of energy.

I frequently say that the great fault of wind power is that wind is too intermittent. It just doesn’t blow at a steady strength at all, but you have been out in the wind, and you know that.
part-1-fig-11-1024x6611 Here is a graph of electricity production as a percent of wind capacity. I think this one is from Bonneville Power, but I just saved the graph, not the source. Assume that the correct speed for producing electricity from these turbines is at the 50% mark. The power plant operating on natural gas is chugging away, and whenever the wind drops below 50% the gas takes over. So to however much the energy produced by the turbines costs, you have to add in the cost of the natural gas fired power plant.

The Obama administration is eager to shut down any coal-fired power plants to eliminate the CO2 that might go into the atmosphere to fertilize the plants of the earth and enhance our food supply, might add to the tiny bit of CO2 in the atmosphere and cause the earth to warm uncontrollably, although the amount is almost too small to be measured, and there has been no warming at all for eighteen years and eight months. Here’s a bit of reality.


Up until very recently our coal-fired power plants were producing over 40 percent of our electricity. Obama, persuaded that an increase of CO2 in the atmosphere would cause the oceans to rise and the earth to boil,  set about shutting down coal-fired power plants, which will accomplish nothing at all except to put more hundreds of workers out of a job. Oddly enough, as the big coal companies neared bankruptcy, thanks to Mr. Obama, George Soros popped up to buy a controlling interest in the big coal companies. You can figure out what that means on your own.

Everything is Connected, But That Doesn’t Mean You Can Make Sense of it by The Elephant's Child

saudi-arabia-oilFor those of us who have forgotten our history, 1973 was the year of the Yom Kippur War. Egypt and Syria launched a surprise attack on Israeli positions in territories occupied by Israel. In August, Saudi King Faisal and Egyptian president Anwar Sadat met in Riyadh and negotiated an accord whereby the Arabs would use the “oil weapon” as part of the coming military conflict.

October 6, Egypt and Syria attack Israeli-occupied lands in the Sinai Peninsula and the Golan Heights on Yom Kippur, the holiest day in the Jewish calendar. The Soviet Union acted to supply Egypt and Syria with weapons and supplies. (Notice that Russian interest in Syria is not new) October 8, Israel goes on full nuclear alert.

The United States initiates Operation Nickel Grass, a strategic airlift to provide replacement weapons and supplies to Israel. OPEC negotiations with the major oil companies to revise the 1971 Tehran price agreement fail. October 19, Congress appropriates $2.2 billion in emergency aid to Israel. Libya proclaims an embargo on oil exports to the U.S. and Saudi Arabia and other Arab states follow suit the next day. October 26, the Yom Kippur War ends in complete defeat for the Arab forces. Dissension, negotiation. Israel agrees to withdraw from the west side of the Suez Canal. Oil ministers , with the exception of Libya, announce the end of the embargo. The 1973-74 stock market crash ends.

OPEC forced the oil companies to increase payments dramatically. Price of oil quadrupled to nearly $12 U.S. per barrel. The oil exporting countries got very wealthy. Gold faucets and fancy yachts.

The U.S initiated price controls. Out of that developed the 55 mph speed limit, the Strategic Petroleum Reserve, The Department of Energy, and the National Energy Act of 1978. Ad campaign “Don’t be Fuelish,” compact cars, front wheel drive and 4-cylinder engines. Greater interest in “renewable energy.” Research in solar power and wind power. More emphasis on Mass transit. End of big cars with tail fins, welcome for the Volkswagen Beetle, rise of Japanese cars.

1978, Protests against Mohammad Reza Pahlavi Shah of Iran, wave of political unrest and violent clashes, Muslim fundamentalists seek a Muslim state, 1979, Shah leaves on vacation, never to return. One million Iranians march in support for exiled Ayatollah Khomeini. Ayatollah returns to Iran after 14 years of exile. Gasoline shortage, world oil glut. OPEC increases full 14.5 % increase in price. Iran takes western hostages. Jimmy Carter tried to rescue hostages, made a mess of it. Ronald Reagan succeeded Carter, hostages were released.

This is all more or less accurate, but perhaps gives a sense of the back and forth of cause and effect that got us where we are today, but not much sense of what to expect. The middle east still has vast oil wealth, but we are no longer dependent on their oil nor natural gas, but instead need approval to export our own plentiful supplies of oil and gas.

In the first years of the seventh century, when the Prophet Mohammad began his mission in Arabia, the whole of the Mediterranean was part of Christendom. A few decades after the death of the Prophet, his Arab followers burst out of the Arabian peninsula and attacked Persia and Byzantium. The Persian empire was conquered, then Syria, Palestine, Egypt and North Africa — and then Spain, and Sicily. It’s been going on ever since. The aim of the fanatics is to return to the pure Islam of the days of the Prophet. The aim of the West seems to be a colony on Mars.

What? You Mean America is Not a Hotbed of Racial Hatred? by The Elephant's Child

DiverssityMapIn this worldwide poll, people were asked to choose which, if any, groups of people they would not want as neighbors. (Click to enlarge)  Kind of a test of prejudice or diversity. The nations of the Anglosphere, with some additions from South America, are the least likely to object to having people of another race or religion as neighbors. (I guess they didn’t ask in the grey areas)

So much for Democrats propaganda about diversity and inclusion, which they use constantly to tell people of other races in this country that 1. The Democrats are very inclusive, and care about diversity, and thus thus they care about people of other races.  2. They have found that by dividing the electorate up into voting groups they can direct specific messages of how prejudiced the Republicans are to those specific groups, and gain votes.

This is why Obama is attempting to get so many illegals into the country and offer them amnesty, and why he wants to import so many refugees. Republicans will reliably object, because we are a nation of laws and Republicans want the laws obeyed.

As far as I can tell, Republicans don’t spend a lot of time worrying about race simply because they don’t think a different race is a big deal. They, for the most part, actually do judge a person on their character, not the color of their skin. When they object to illegal aliens, it is not because of their race or ethnicity, but because of the illegal part.

A Little Good News for a Change by The Elephant's Child

green-7 by anild sud courtesy eyeTraffic in the Seattle area was impossible yesterday, due to e visit of Chinese President Xi Jinping, and aside from his entourage, there must have been hundreds of newspeople. The rest of us still have our ordinary errands, which became hours long instead of minutes. Should have stayed home.

On the East Coast they have the same problems because of the visit of the Pope. Today, a horrible traffic accident in Seattle between a tour bus and the Duck Bus  (another tourist enterprise), four people killed, forty-four taken to hospitals. It’s clearly time for some good news and Ronald Bailey at the Reason Foundation supplies it, from their latest magazine.

Paul Erlich, notorious spreader of gloom and doom, was deeply concerned with overpopulation, along with his wife biologist Anne Erlich in the March 2013 Proceedings of the Royal Society B. Not only overpopulation, but overconsumption of natural resources, but “global toxification” which has “exposed the human population to myriad subtle poisons.

Hasn’t happened, for the greening of the earth caused by the natural fertilization of plants from increased amounts of CO2 in the atmosphere means more food. Fewer people across the world are going hungry.

Most people think that the risk of dying from cancer is going up because of chemicals and pollution, but even as the number of man-made chemicals has increased, your risk of dying from cancer has been decreasing for more than 40 years. Age-adjusted rates of cancer have been dropping largely because fewer people are smoking,  more Americans are having colonoscopies, and cancers are being diagnosed and treated earlier.

The overall incidence of cancer has been falling by about 0.6 percent a year. Modern medicine has increased the five-year survival rates of cancer patients from 50 percent in the 1970s to 68 percent today. That means that in recent years about 100,000 people each year who would have died are alive today.

Although President George W. Bush has been widely criticized for the Medicare Drug program because of the program’s cost, it has saved a lot of lives by getting needed medications to seniors at prices they could afford. It is the only program that came in at less than the estimated cost because of the “donut hole” incentive that encouraged seniors to use generics when they were as effective as more expensive brand-name medicines. Democrats, who simply do not understand incentives, eliminated the incentive, so costs are higher now.

The Erlichs are still going on about overpopulation and shortage of food, but in most societies women with more education have fewer children. Given current age, sex and education trends world population will most likely peak at 9.6 billion by 2070 and then begin falling. If education levels are pursued more aggressively, would population could top out at 8.9 billion in 2060 before starting to drop. Increased economic opportunities, more education, longer lives, more liberty are all trends that reinforce each other and accelerate the trend of falling global fertility.

In 1950 the average yield in the U.S. for a acre of corn was 51 bushels which would support 5 people for a year.  Today, the yield from an acre of corn is 166 bushels that would supply enough calories to support 16 people for a year. (Since we are a rich country, we’re putting a lot of it in our gas tanks) In India the average is 42 bushels that would support 4 people and in Africa, the yield is an average 32 bushels per acre per year to feed just 3 people. With lots of room for improvement.

Much of the increase in our food supply can be attributed to advances in biotech crops.

The board of directors of the American Association for the Advancement of Science (AAAS) the largest scientific organization in the United States has, on October 20, 2012 point-blank asserted that “contrary to popular misconceptions, GM crops are the most extensively tested crops ever added to our food supply. There are occasional claims that feeding GM foods to animals causes aberrations ranging from digestive disorders, to sterility tumors and premature death. Although such claims are often sensationalized and receive a great deal of media attention, none have stood up to rigorous scientific scrutiny.” The AAAS board concluded, “indeed, the science is quite clear: crop improvement by the modern molecular techniques of biotechnology is safe.”

The entire article is here, and offers some positive news for those who follow the IPPC’s version of fear about global warming as well.

We still have our worries about the economy, national security, wars and trials and tribulations, education, and the general messed-up state of humanity, but really, there is good news.

All Because of Democrat Talking Points! by The Elephant's Child

California Governor Jerry Brown, sometimes referred to as “Governor Moonbeam,”is at it again. He wants to control greenhouse gas emissions. That’s the climate change agenda of the country’s most prominent Democrats. They have pledged to reduce carbon-dioxide emissions by 80% by 2050. They’ve given this the clever slogan “80 by 50.”

Earlier this month, by just two votes the Assembly rejected SB32 which would have required the state to reach 80 by 50. Pushing the bill was the state’s Democratic leadership, the governor and  U.S. Senators Barbara Boxer and Dianne Feinstein. President Obama has repeatedly endorsed the plan as have all of the candidates for the Presidency except Jim Webb.

What, asks Robert Bryce of the Manhattan Institute, would this mean to real people, or the citizens of California? Residents of California would be asked to night1emit less carbon dioxide than do the current residents of North Korea. Surely you have seen the satellite pictures of North Korea at night. That one bright spot is undoubtedly Kim Jong Un’s palace.

Wind and s0lar energy cannot accomplish the desired reduction — they require vast acreages of land and 24/7 backup from a conventional power source.  Nuclear energy would do the trick, but Democrats and environmentalists are totally opposed to nuclear energy, and building nuclear energy plants is not cheap. Germany estimates that for them to reach the 80 by 50 target would cost another $1.3 trillion. For us it would be over $5 trillion.

That brings us to an interesting article from Phillip Rucker of the Washington Post. He asks if Democrats and Republicans are talking about the same country? Of course we are not. Democrats follow Democrat talking points. They all march to the same tune. They are interested in income inequality, although their policies do nothing to reduce it. They simply accept climate change as a crisis, not because they have ever looked into the science, but because they just accept Democrat talking points as gospel. They care desperately about workplace equality for women, although equal pay for equal jobs has been the law since 1963. Other than a campaign issue, they don’t pay any attention to the law anyway. Women in the White House are paid less for the same job, as are, I have read, women in Hillary’s campaign.

On climate change, I refer you to my previous post, about 20 scientists  asking that climate deniers be prosecuted for their beliefs. It turns out that the organization responsible for the letter to the President asking for skeptics to be prosecuted is almost entirely funded by U.S. taxpayers. Scientists with the Institute of Global Environment and Society gets millions from taxpayers, and the lead scientist gets a six-figure salary for part-time work.

On top of that, we have the Associated Press changing the language. The AP announced today that it will no longer use the terms “climate change deniers” or “climate change skeptics” to refer to “those who don’t believe the world is warming or don’t accept climate science.”

The wire service sets the style standard for many news organizations. They announced they will refer to “individuals who reject climate change” as “climate change doubters” or “those who reject mainstream climate science.”  Oh please! Could I possibly ask for a better demonstration of why I seldom pay attention to news from the Associated Press? The American people’s trust in Mass Media has returned to an all-time low at 40% who believe the news is reported fairly and accurately.

The scientists who do not accept the work of the IPCC, don’t accept it because it is not correct, and designed for a political point, not a scientific point. The earth is always warming and cooling as it has done for millions of years. We have had periods much warmer than today as the Medieval Warm Period when grapes grew in England, and the Vikings farmed in Iceland. It’s known as the finest climate ever, and led to the Renaissance. We have also had Ice Ages, and more recently the Little Ice Age in the 1800s.

Another day, another battle over whether of not climate change is a catastrophe. Representative Paul Gosar (R-AZ) has filed Articles of Impeachment against EPA Administrator Gina McCarthy, with 20 other members of Congress because she committed perjury and made several false statements at multiple congressional hearings, and as a result is guilty of  high crimes and misdemeanors.

And About Socialized Medicine Like The Canadians Have by The Elephant's Child

This is a story we’ve heard before. Usually The Canadians deny it, and the Americans deny it; cross border relations, you know. But as with our VA Health Care, and the Indian Health Service, and the poor Alaska natives living on the Canadian coast who can’t get a simple road to the airport so they can fly out for live-saving care — our Secretary of the Interior denies them a road because it might disturb the birds. Government does many things poorly, and many things very badly. Bureaucracy is an enemy, and the larger it grows the more poorly it works and the worse the results.


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