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Authored by Michael Maharrey via SchiffGold.com,

When I was a kid, we used to say some things only “sound good on paper.” In other words, they seem like good plans, but there is no way they’re going to work in the real world.

That’s socialism in a nutshell.

The Pilgrims found this out the hard way during their first couple of years in North America.

Socialism really does sound good on paper though, right? We’re all going to own everything together and take care of each other. “From each according to his ability, to each according to his needs.“

It sounds so nice. And we all want to be nice, right? People are emotionally drawn to socialism because it sounds nice. It sounds fair. It sounds good.

Except when people start dying.

Do you know what’s not nice?

Corpses.

That’s exactly what happened when the Pilgrims took a stab at socialism.

Most Americans don’t know that the Plymouth colony was originally an experiment in socialist utopianism and were it not for a complete 180 a couple of years in, we probably wouldn’t have enjoyed the bountiful feasts most of us will indulge in today. There would have been no Thanksgiving because there would have been nobody left to give thanks.

When the Pilgrims arrived in Massachusetts on November 11, 1620, they placed all their food and provisions in a “common store.” These folks were forward thinkers. They didn’t even have Marx’s scribblings to appeal to. They set things up on the socialist principle of, “From each according to his ability, to each according to his need.”

Well, things got off to a bad start. Conditions were miserable, as William Bradford described them.

That which was most sad and lamentable was, that in two or three months time half of their company died, especially in January and February, being the depth of winter, and wanting houses and other comforts; being infected with the scurvy and other diseases, so as there died sometimes two or three of a day, in the aforesaid time; that of 100 and odd persons, scarce 50 remained.”

Now, the Pilgrim’s initial struggles didn’t have anything to do with socialism. They just had the misfortune of landing in Massachusetts at the onset of winter.

Anyway, the following fall, the Pilgrims harvested their first crops and they all went into the common store.

Now, wasn’t that nice? No greed. Nobody getting any more than they should. Of course, nobody was getting much of anything at all – but still – they had to feel good about themselves, right?

So, in November the ship Fortune arrived with more than 30 new settlers, mostly young men. More manpower was welcome, but according to accounts, they brought “not so much as a bisket-cake” with them. The future looked bleak as food supplies ran out and the “planned socialist” community faced starvation yet again.

The following year, the harvest was poor in spite of the added manpower. Nevertheless, the pilgrims again put the meager harvest in the common store. Because, you know, it’s going to work this time!

It didn’t.

That winter, they starved.

The colonists were learning economics the hard way.

Richard Grant in The Incredible Bread Machine wrote:

“For two years the Pilgrims faithfully practiced communal ownership of the means of production. And for two years nearly starved to death, rationed at times to “but a quarter of a pound of bread a day to each person.” Governor Bradford wrote that “famine must still ensue the next year also if not some way prevented.” He described how the colonists finally decided to introduce private property:

[The colonists] began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. [In 1623] after much debate of things, the Gov. (with the advice of the chiefest amongst them) gave way that they should set down every man for his own … and to trust themselves … so assigned to every family a parcel of land. This had very good success; for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Gov. or any other could use, … and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would allege weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”

Reflecting on the experience of the previous two years, Bradford goes on to describe the folly of communal ownership:

“The experience that was had in this common course and condition, tried sundry years, and that amongst godly and sober men, may well evince the vanity of that conceit of Platosand other ancients, applauded by some of later times; — that the taking away of property, and bringing in community into a common wealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For the young-men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without any recompense. The strong, or man of parts, had no more indivision of victuals and cloths, than he that was weak and not able to do a quarter the other could; this was thought injustice…”

Woah! Some people resented doing all the work? They didn’t work as hard when they knew they weren’t going to directly benefit? Shocking.

Actually, it’s not shocking at all. It’s human nature. And we all know it.

Now, we can lament the fact. We can say it shouldn’t be that way. We can finger-point and talk about greed. We can get all holier-than-thou and say we wouldn’t act that way (in other words lie). But people will still be people.

Here’s a harsh truth: good intentions and feel-good policies can’t trump basic economics. You can dream unicorns and lollipops all day, but it won’t change reality.

Scarcity. Human behavior. Incentives. The experience of the Pilgrims vividly demonstrates basic economic principles. Their good intentions could not overpower the cold hard realities of economic principles. They never have. They never will.

As if you already didn’t know, business owners are making it clear: President Biden’s vaccine mandates are making it difficult to hire and are “stoking tensions” among workers.

Employers with 100 or more workers now have to make sure employees are fully vaccinated, according to new federal rules outlined by the Wall Street Journal. Those without vaccination need to test negative for Covid-19 “at least weekly”, the report says. 

While the mandate continues to play out in the courts and OSHA has temporarily agreed not to enforce it, many business owners continue to prepare for it. 

For some, it’s not all good news. Business owner Pete Yohe told the WSJ he supports vaccines:  “But I hate the 100-plus mandate, which forces some of our employees to quit and go to smaller companies.”

40 of his roughly 140 employees haven’t been vaccinated, he said. He expects that two would quit before following the mandate.

Jason Hitch, chairman of Hitch Enterprises Inc., told the Journal he is hoping the courts strike down the mandate. He says while he is encouraging staff to vaccinate, he “doesn’t want to be the police officer of the government’s mandate.”

He is considering staying below the 100 employee threshold simply to avoid the mandate.

When he asked his employees about their vaccination status for the first time, “the response was so negative that they were reluctant to broach it again”, he said.

He predicts 60% of his workers are vaccinated, but that there’s a “vocal minority” who are strongly opposed to it. 

“They understand it’s the government, but we are the implementers. It directs the vitriol towards us,” Hitch said. 

Steven Davis, area manager for Huntsville, Ala.-based Inline Electric Supply Co., says that mask mandates among unvaccinated workers would only cause division amongst employees. He said:  “We are not acting as a team. It is frustrating to me.”

He guesses that about 40% of his company’s 255 employees have been vaccinated, telling the Journal: “We have absolutely tried to educate people. It’s just right now, we have hit a wall. People have dug in.”

48 year old Christian Cook, who is a saw operator at Dyco, had Covid land him in the hospital for five days. He says he is still “on the fence” about being vaccinated. “I don’t need to have somebody tell me what I am going to do and not do,” he said.

Allen Hurlburt, co-owner of H&M Gopher Control in Tulelake, Calif., implemented a vaccine mandate for his 7 employees. Five of his unvaccinated employees quit. 

“Ignoring the problem and [deciding to] continue operations was not an option,” Hurlburt said after replacing his staff. “We do not have the skilled personnel we had, but all are vaccinated. We are filling orders. We are getting the job done.”

Reid Tileston, who owns Giddings Hawkins Maintenance Service, said he didn’t want to take chances with the future of his business. 

“For me as a business owner, it was vaccinate the workforce or face chapter 11 [bankruptcy],” he concluded. One employee refused to get vaccinated and was terminated. 

“His position is no longer available to him,” Tileston concluded.
 

Authored by Robert Murphy via The Mises Institute,

Joe Weisenthal is an editor and host at Bloomberg who has recently been using his large Twitter platform to cast stones at the inflation hawks. In one recent thread, Weisenthal mocked the people worried about the falling purchasing power of the US dollar, and claimed in fact that it would be immoral for currency to maintain its value over time.

As we’ll see, although Weisenthal’s thought experiment of a time traveler is a bit whimsical, it provides a good opportunity for us to explore the underlying economics. The whole episode underscores, once again, why the Austrian school provides the public with a beacon of light amid the confusion of our financial punditry.

Weisenthal’s Time Traveler

Below is the original tweet, which is largely self-explanatory, though interested readers can see me grappling with Weisenthal by clicking here.

In context, Weisenthal (and Adam Singer) are poking fun at the Ron Paul–types who are upset at the steady decline in the dollar’s purchasing power since the Fed was formed in late 1913. Weisenthal thinks it is absurd to expect that actual currency would maintain its market value over the course of a century. Why, what would such a “hoarder” have done to benefit society all that while?

Shrinking the Time Scale

To cut to the chase, Weisenthal is completely mistaken: there was nothing immoral about the classical gold standard and its maintenance of the dollar’s purchasing power over long stretches. But it will be easier to pinpoint the flaw in Weisenthal’s thinking if we first consider a simple story.

Suppose Joey is a teenager who cuts lawns for extra income and he typically makes $25 a weekend. Joey wants to buy a $300 Xbox, so he saves his weekly lawn-mowing money under his mattress. After three months, Joey takes the saved $300 in cash to the mall and buys the coveted electronics.

Does Joe Weisenthal have a problem with this scenario? Did the market economy function immorally by allowing Joey to transfer his purchasing power from the start of the summer to the end of the summer? Was Joey supposed to have done something in addition to cutting lawns to earn the ability to defer his potential consumption through time?

I trust Weisenthal would not object to Joey saving up his currency over the summer. But then, what is the principled difference between Joey’s three-month deferral and Weisenthal’s time traveler who executed a hundred-year consumption deferral?

Present Goods Trade at a Premium for Future Goods

In fact, not only should a time traveler not be penalized for deferring consumption a century, he should be actively rewarded. This is because present goods are more valuable than future goods. (Note that we are here getting into some very technical issues. The interested reader can check out my three-part podcast series—one, two, and three—to hear the intricate details of interest theory in the Austrian tradition.)

So to go back to the original tweets, if a guy in 1921 has two quarters in his pocket, and that would be enough for him to buy a delicious hamburger, then for his willingness to effectively trade away his 1921 hamburger for a burger to be delivered in 2021, the guy should at least get to trade at par. And in fact, he would (normally) be able to obtain a promise for more than one burger in the future, since the former are more valued. (This is no more mysterious than one present burger trading for more than one present hot dog.)

It’s easy to understand why, subjectively, people would need to be promised a greater number of goods in the future to give up potentially consuming their goods today. But how, mechanically, can the borrowers deliver on these promises? How is it possible, technologically speaking, to transform 100 units of present goods into (say) 150 units of future goods?

The answer is that the longer we are willing to wait, generally speaking, the greater physical output we can obtain for a given amount of today’s inputs. Eugen von Böhm-Bawerk famously referred to the superior physical productivity of wisely chosen, more roundabout processes. For example, if a man is in the woods and wants to get water from a stream into his nearby cabin, he has different techniques he could use.

A very fast and direct method is to cup his hands and run back and forth from the stream to his cabin. This delivers some water to his cabin very quickly, but the yield—measured in gallons of water per hour of his labor—is also very low.

An intermediate method would be to hollow out two coconuts to make little buckets, and then go back and forth armed with the newly created capital goods. This would take longer to get the initial water to his cabin, but once the process is underway, it would deliver far more gallons per hour of invested labor—even including the time spent constructing the buckets.

Finally, the man might take several months digging a small path from the stream to his cabin, so that the water flowed directly to him. Once completed, his renovations would be extremely productive if we measure in terms of water volume per hour of his labor time.

And so we see society would be willing and able to reward Weisenthal’s hypothetical time traveler for earning $100 in 1921 and then postponing his consumption for a century. The real resources that would have gone into satisfying him in 1921 would be freed up to be invested in longer processes, which had a higher physical yield. To put it simply, it makes perfect sense that a 1921 hamburger would trade on the forward market for several 2021 hamburgers.

Bonds versus Cash

We can really see the weakness in Weisenthal’s analysis if we suppose the time traveler took his original cash and deposited it into a savings account at the bank. Would it be immoral for a bank account to have $100 in 1921, and to grow to more than that amount by 2021?

Or for another example, what if the time traveler from 1921 initially bought a very long-term bond that would come due in 2021? The time traveler jams the bond into his pocket, activates the time machine, and shows up at Weisenthal’s doorstep. He asks Joe to help him cash his matured bond (and working at Bloomberg, Weisenthal is just the guy). The time traveler is pleased to discover that the nominal interest he earned on the hundred-year bond is just enough to have maintained his purchasing power, since goods are much more expensive than the traveler is used to seeing. Has the market economy behaved immorally by allowing such a transaction to occur?

In principle, the same type of intertemporal trade occurs if people invest their savings not in bank account balances or bonds, but instead in the accumulation of actual cash. Even here, the initial drop in consumption frees up real resources that can be channeled into the production of a greater amount of future goods. As Ludwig von Mises explains in Human Action:

If an individual employs a sum of money not for consumption but for the purchase of factors of production, saving is directly turned into capital accumulation. If the individual saver employs his additional savings for increasing his cash holding because this is in his eyes the most advantageous mode of using them, he brings about a tendency toward a fall in commodity prices and a rise in the monetary unit’s purchasing power. If we assume that the supply of money in the market system does not change, this conduct on the part of the saver will not directly influence the accumulation of capital and its employment for an expansion of production. The effect of our saver’s saving, i.e., the surplus of goods produced over goods consumed, does not disappear on account of his hoarding. The prices of capital goods do not rise to the height they would have attained in the absence of such hoarding. But the fact that more capital goods are available is not affected by the striving of a number of people to increase their cash holdings. If nobody employs the goods—the nonconsumption of which brought about the additional saving—for an expansion of his consumptive spending, they remain as an increment in the amount of capital goods available, whatever their prices may be. Those two processes—increased cash holding of some people and increased capital accumulation—take place side by side.

It is a fascinating topic to ponder the ideal money (if such a concept makes sense) and whether its purchasing power would fall, rise, or remain steady over long periods. What we can say for certain is that rapid and unpredictable changes are undesirable, because a wildly fluctuating money defeats the effectiveness of monetary calculation, which is one of the underpinnings of civilization itself. To wit, double-entry bookkeeping only works when the money units of revenues and costs are comparable.

Conclusion

Contrary to Joe Weisenthal’s musings, there is nothing immoral if a money retains its purchasing power over long stretches. In general, when people channel their savings into conventional vehicles (such as bank accounts or bonds), this frees up real resources that can be used to yield a greater physical amount of output down the road. In principle, holding currency could be merely a different financial asset for achieving the same purpose.

Five members of the US House of Representatives arrived in Taiwan Thursday night for a two-day high level visit with Taipei officials – the second such previously unannounced Congressional delegation to visit the island in less than a month. 

China responded to the “surprise” visit by conducting “combat readiness” exercises in the direction of the Taiwan Strait on Friday. According to Chinese state sources, the People’s Liberation Army’s (PLA) Eastern Theatre Command announced it “organized naval and air forces to continue combat readiness police patrols in direction of the Taiwan Strait.”

“The relevant actions are necessary to deal with the current situation in the Taiwan Strait. Taiwan is part of China’s territory, and defending national sovereignty and territorial integrity is our military’s sacred mission,” the PLA Eastern Command added. 

China’s defense ministry separately confirmed it sent eight aircraft toward Taiwan, including a pair of nuclear-capable H-6 bombers close to the Taiwan-controlled Pratas Islands and through Taiwan’s national defense identification zone. Days ago the US sent a warship through the contested Taiwan Strait for the 11th time this year, in what’s become a monthly “freedom of navigation” exercise, which Beijing fiercely condemned as a destabilizing “provocation”. 

The US delegation which arrived Thursday included Reps Elissa Slotkin (D-MI), Mark Takano (D-CA), Colin Allred (D-TX), Sara Jacobs (D-CA), and Nancy Mace (R-SC). They touched down in Taipei on a US military C40-C transport plane, the second such American high level unannounced arrival since Nov.9.

“Madame President, I want to commend and praise your leadership. Under your administration, the bonds between us are more positive and productive than they have been for decades,” said Mark Takano, chairman of the House Committee on Veterans’ Affairs.

The delegation told Taiwan President Tsai Ing-wen during a Friday meeting that the democratic-run island is a “force for good” in the world. “Our commitment to Taiwan is rock solid and has remained steadfast as the ties between us have deepened. Taiwan is a democratic success story, a reliable partner and a force for good in the world,” the statement added.

Meanwhile, despite tensions remaining high surrounding Taiwan and other issues such as Washington’s repeat condemnation of China’s human rights abuses including crackdowns in Hong Kong and Xinjiang, the PLA military is calling for opening up “good relations” with the US military, in order for communications to be frequent enough so as to avoid stumbling toward war.

Ministry spokesman Wu Qian in statements late this week stressed that positive dialogue would be conditioned on China’s sovereignty being respected (which of course means China’s claims over Taiwan must also be “respected). “As we have said many times, China has principles for the development of relations between the two militaries, which is that China’s sovereignty, dignity and core interests cannot be violated,” Gen. Wu Qian stated.

By Zach Stieber of The Epoch Times

A college professor in Virginia has announced plans to resign after defending pedophiles.

Allyn Walker, a professor at Old Dominion University (ODU), wrote a book that referred to pedophiles as “minor-attracted people” and detailed their “pursuit of dignity.”

Walker, who identifies as nonbinary, told the Protasia Foundation earlier this month that there are “a lot of misconceptions about attractions toward minors” and claimed that it’s not immoral to be attracted to children, provided people don’t carry out sexual abuse against them. The professor has also said the descriptor of “minor-attracted people” is “a less stigmatizing term” than pedophiles.

Walker’s remarks drew widespread criticism but the university initially opted to defend the professor.

“An academic community plays a valuable role in the quest for knowledge. A vital part of this is being willing to consider scientific and other empirical data that may involve controversial issues and perspectives,” the school said on Nov. 13.

Following increased pressure to act, though, the university put the professor on leave last week.

“I want to state in the strongest terms possible that child sexual abuse is morally wrong and has no place in our society,” ODU President Brian Hemphill said in a statement at the time. “This is a challenging time for our university, but I am confident that we will come together and move forward as a Monarch family.”

A new statement on Nov. 24 said Walker decided to resign when the professor’s contract runs out in May 2022.

Walker will remain on leave until that time, according to the university.

“We have concluded that this outcome is the best way to move forward,” Hemphill said. “We hope today’s action helps bring closure for our Monarch family. As we move forward, I encourage all members of the Monarch family to continue our efforts toward healing and civil discourse.”

Walker said in a statement released by the school that the work on pedophiles is aimed at preventing child sexual abuse and alleged it was twisted by outside parties.

“That research was mischaracterized by some in the media and online, partly on the basis of my trans identity. As a result, multiple threats were made against me and the campus community generally,” Walker said.

Students had told media outlets they were shocked by what they described as sympathizing with pedophiles.

“I am baffled and disappointed that an individual with those beliefs would even be allowed to have a job on our campus where children interact frequently,” Grant Rimmer, a junior, told the Daily Mail.

“It is okay to research, it is okay to find out this information. It is not okay to sympathize and create a term to blanket what pedophilia is,” Geni Piatowski, another student, told WAVY.