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smitty_one_each's Journal: William Graham Sumner, prescient 23

Journal by smitty_one_each
http://en.wikipedia.org/wiki/William_Graham_Sumner sounds a nifty chap. (Emphasis mine below)

http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=345&chapter=166265&layout=html&Itemid=27
ON THE CASE OF A CERTAIN MAN WHO IS NEVER THOUGHT OF
[1884]

The type and formula of most schemes of philan-thropy or humanitarianism is this:
A and B put their heads together to decide what C shall be made to do for D.
The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked. I call C the Forgotten Man. For once let us look him up and consider his case, for the characteristic of all social doctors is that they fix their minds on some man or group of men whose case appeals to the sympathies and the imagination, and they plan remedies addressed to the particular trouble; they do not understand that all the parts of society hold together and that forces which are set in action act and react throughout the whole organism until an equilibrium is produced by a readjustment of all interests and rights. They therefore ignore entirely the source from which they must draw all the energy which they employ in their remedies, and they ignore all the effects on other members of society than the ones they have in view. They are always under the dominion of the superstition of government, and forgetting that a government produces nothing at all, they leave out of sight the first fact to be remembered in all social discussion -- that the state cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.

The friends of humanity start out with certain benevolent feelings towards "the poor," "the weak," "the laborers," and others of whom they make pets. They generalize these classes and render them impersonal, and so constitute the classes into social pets. They turn to other classes and appeal to sympathy and generosity and to all the other noble sentiments of the human heart. Action in the line proposed consists in a transfer of capital from the better off to the worse off. Capital, however, as we have seen, is the force by which civilization is maintained and carried on. The same piece of capital cannot be used in two ways. Every bit of capital, therefore, which is given to a shiftless and inefficient member of society who makes no return for it is diverted from a reproductive use; but if it was put to reproductive use, it would have to be granted in wages to an efficient and productive laborer. Hence the real sufferer by that kind of benevolence which consists in an expenditure of capital to protect the good-for-nothing is the industrious laborer. The latter, however, is never thought of in this connection. It is assumed that he is provided for and out of the account. Such a notion only shows how little true notions of political economy have as yet become popularized. There is an almost invincible prejudice that a man who gives a dollar to a beggar is generous and kind-hearted, but that a man who refuses the beggar and puts the dollar in a savings-bank is stingy and mean. The former is putting capital where it is very sure to be wasted, and where it will be a kind of seed for a long succession of future dollars, which must be wasted to ward off a greater strain on the sympathies than would have been occasioned by a refusal in the first place. Inasmuch as the dollar might have been turned into capital and given to a laborer who, while earning it, would have reproduced it, it must be regarded as taken from the latter. When a millionaire gives a dollar to a beggar, the gain of utility to the beggar is enormous and the loss of utility to the millionaire is insignificant. Generally the discussion is allowed to rest there. But if the millionaire makes capital of the dollar, it must go upon the labor market as a demand for productive services. Hence there is another party in interest -- the person who supplies productive services. There always are two parties. The second one is always the Forgotten Man, and anyone who wants to understand truly the matter in question must go and search for the Forgotten Man. He will be found to be worthy, industrious, independent, and self-supporting. He is not, technically, "poor" or "weak"; he minds his own business and makes no complaint. Consequently the philanthropists never think of him and trample on him.

One might summarize the point as: you can't fulfill the ethic to "love you neighbor as yourself" by proxy.
OTOH, without a government legislating it, so many would do nothing whatsoever.
Not exactly a question lending a 'correct' answer.

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William Graham Sumner, prescient

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  • The man who has earned something does so because of the stability and the markets that can only be provided by government. Look around at the capital markets where money is made these days. These are all government creations. Without government, the apex of commerce would be dickering for a rug on a dusty street in an impoverished neighborhood.

    • That's true. That's one of the reasons Obama is a dangerous man.

      This guy is proposing giving the courts the power to invalidate contracts (mortgages). The power to unilaterally re-define the terms and intent of the contract.

      If he starts doing things like that, who is going to put up money and sign a contract with anyone not having 750+ credit? Who is going to want to sign a contract if he knows a court could step in and just go changing agreed upon terms? And if he's willing to do it in the real estat

      • All contracts are subject to governance, and in particular what we find in the mortgage crisis is that a some of the contracts were made under fraudulent conditions. These things are well documented, so no need to go into them here in detail.

        You also need to consider that the courts are going to be re-working these contracts, not the executive branch. The courts already make decisions about the validity of contracts, so that's not changed.

        I suggest that your characterization of the proposed new rules are no

        • All contracts are subject to governance, and in particular what we find in the mortgage crisis is that a some of the contracts were made under fraudulent conditions.

          True. The courts can declare a contract "void". But actually re-writing the terms... to declare, "oh, your property is actually now only worth X instead of Y, so you now only owe Z"... I do think the advocacy of such measures is cause for concern. But thanks for your thoughtful input.

          • They don't actually declare that the property is worth something other than what it's worth. Valuation is set for property through the market.

            What the courts are going to have is the authority to forgive some of the debt, or set terms on payment of the debt. This is exactly what the courts already have the authority to do under the current bankruptcy laws. This bailout that we're paying for is meant to substitute for a regular bankruptcy. If we had all the time in the world and everything didn't hinge on th

      • If he starts doing things like that, who is going to put up money and sign a contract with anyone not having 750+ credit? Who is going to want to sign a contract if he knows a court could step in and just go changing agreed upon terms? And if he's willing to do it in the real estate market, you can believe he'd be ready to do it in other markets as well.

        If the underlying contract makes sense to both parties, it will be honoured by both partes. Giving a $750,000 mortgage to someone making $14,500 a year d

        • If he starts doing things like that, who is going to put up money and sign a contract with anyone not having 750+ credit? Who is going to want to sign a contract if he knows a court could step in and just go changing agreed upon terms? And if he's willing to do it in the real estate market, you can believe he'd be ready to do it in other markets as well.

          If the underlying contract makes sense to both parties, it will be honoured by both partes. Giving a $750,000 mortgage to someone making $14,500 a year di

          • by iminplaya (723125)

            What next - bailouts for people who lose big at casinos?

            Well, come to think of it, if we have to pay taxes on our winnings, we should be able to write off our losses...no?

            • by tomhudson (43916)

              What next - bailouts for people who lose big at casinos?

              Well, come to think of it, if we have to pay taxes on our winnings, we should be able to write off our losses...no?

              You know, I never really got why that's not the case ... a card-counter playing blackjack is a better bet than the stock market. The card-counter has a consistent advantage, whereas the stock market has overhead that the "house" takes on every bet, as well as inconsistent performance.

              So, if you can deduct loses on stocks, why not on

    • Do you think a computer system is a helpful analogy?
      The OS kernel decouples hardware from software and regulates the whole affair.
      But the OS kernel provides means, not ends.
      The question of whether that kernel drives the applications, or simply regulates and de-conflicts their activities seems to be the heart of the matter.
      And, yes, an OS kernel presents a relatively tinker-toy analogy, oversimplifying the complexities of Real Life.
      But the imperative to keep public and private, cart and horse, driver an
      • If we're going to go with this very questionable analogy...

        The founding fathers abolished Kernel Mode code. It's all Real Mode now. One execution level, no privileged instructions. Thus process separation is a myth. The national government need markets for prosperity, and the markets need the national government for stability and existence.

        • Ok, then: why do we even have state governments anymore? A nice 1:1 ratio between government and private sector. No capitalism is the ultimate capitalism.
          • We have state governments for historical reasons and for administrative reasons. Same reason we have counties, townships, etc.

            • OK, I guess that makes me a total boob for wondering aloud why state governments go completely unmentioned in the discourse on addressing the mortgage crisis.
              I still contend that history argues the centralization of authority currently going on will eventually, though by no means soon, result in the very autocratic regime the Constitution was written to prevent, if we allow the trends to carry on.
              • I guess I don't see what role state government can effectively play. In any organization, you tend to push command down to the lowest level that encompasses the area commanded. Not always, but often. In this case, a national crisis cannot be pushed down to a state level. It's a national problem.

                • I don't dispute that the institutions involved (public and private) are already national, and load-shedding them is about as sensible as O'Reilly ripping Frank's face off, however emotionally satisfying the thought.
                  But, as a change of direction, to say that state governments are going to be brought in to watch the watchmen, and start taking responsibility for their own citizens, is not a bad move, IMHO.
                  Given the bipartisan clownishness and ineptitude on the issue, over time, I submit that pushing command
      • by cmacb (547347)

        Do you think a computer system is a helpful analogy?

        Yes and no.

        A foundational element of capitalism is that allowing everyone to work and create to benefit themselves (and their families, churches, charities and other voluntary affiliations) provides the greatest total wealth for the economy as a whole. It is generally accepted that the poor in our country are better off than the poor in the more socialized nations, although it is always possible to find a case or two "proving" that the opposite is true.

        Th

        • My personal theory on the current mess is that Bush had to compromise to get his way on Iraq, and the loyal opposition set itself up for the big win in the election.
          IOW, it's all political theater.
          What I think is going on, over time and across parties is that the US Constitution is imploding, as the levels and branches of government are worn down by the greedy seeking to maximize profit.
          I would contend that Marx tried to preach the Kingdom of God without so much God. Marxism fails to model the human spi
  • The Government was established on the principles of Locke, which have been 'bait and switched' for the principles of Locke.

    This is NOT a right/left or libertarian/socialist dynamic, like we've been trained to jerk-our-knees.

    • Did you mean Rosseau, or was that the old "under capitalism man abuses man: under communism, the reverse is true" jape?
  • And the claim in the above breaks down if all parties, c included, decide that help must be legislated, and resources taken from all in {a,b,c} to help d. The nature of the democracy is that not everyone in {a}, nor everyone in {b}, nor everyone in {c}, need agree, but the majority can decide based on reason to legislate what must be done, and do it. This is what brought us police and fire services, which I think are universally considered a good function of government, except among a fairly naive class of

    • I would differentiate between general infrastructure, e.g. fire services, police, and roads, even schools,
      and individual services like Social Security, health care, and mortgages.
      The argument that we all chip in and receive benefit from general services is more straightforward.
      Even if there are economies of scale, one still suspects that the entire thing falls victim to http://en.wikipedia.org/wiki/Ecological_fallacy [wikipedia.org] --should you, who've eaten well, exercised regularly, etc., pay for care for Bluto Blata

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