From the Energy Corridor

I don’t usually spend so much time on either local or political things. But what we’re facing in my newly created congressional district is a David/Goliath battle against an establishment bent on ignoring the will of the people. So, at least until the primary is over (March 1), and maybe a runoff a couple of months after that, I’ll be talking about this race. And a surprising amount of this is the actual battle for constitutional conservatism. So it may be instructive for others working toward freedom, prosperity, and civilization.

Today’s topic is, specifically, about oil and gas—and energy more generally. This new district encompasses the Energy Corridor, a section of Houston along I-10 where a lot of energy companies are located. It seems logical that such a district ought to have a representative who knows that industry—in addition to knowing how to return to our Constitution. Mark Ramsey is that candidate.

Last week he was interviewed by the Houston Chronicle in preparation for their making recommendations. The Chronicle is anything but a constitutional-conservative newspaper. You can tell that even in the questions they ask. Today they came out with their recommendation in this race—and of course it was for the Washington, DC, pick—even though that guy reinforced his reputation for never showing up by not even responding to their request for an interview. And their characterization of our candidate was—well, not very accurate.

But let’s give them credit for an interview in which Mark got to spend half the time talking about the energy business—in far more detail than the reporter could grasp, even though he should have; it was all clear enough to me.

I’m hoping we’ll have clips of the recorded interview to share. But today I just happen to have made a transcript of the energy questions. So, let’s just let that run, with minimal commentary from me.

 

Oil & Gas—God’s Gift to Mankind

Mark Ramsey—candidate for CD 38: First and foremost, I would be the best advocate for oil & gas in the entire 435-member Congress. I’m a career oil & gas engineer. I have worked and taught how to drill wells more efficiently, safely, faster, etc., cleaner, on six continents. I have seen the benefit, the actual, real-life benefit to families, particularly in developing countries, where, effectively, if it were not for the oil & gas industry, they would still be a hundred, two hundred years behind Western civilization.

Instead, because of the oil & gas industry’s effect, which— I truly believe oil & gas is God’s gift to mankind. It powers Western civilization. But I have seen firsthand how the oil & gas industry has provided good, high-paying jobs, not just in America but in—all over the world. And that in turn has led, directly or indirectly, to roads, to schools, to hospitals, to clean water, to sanitary sewer systems—things the developing world did not have 50, 60, 70 years ago.

Almost all of that good has come about because of the oil & gas industry. The abundant, the relatively low cost—in spite of today’s price of oil at $92 bucks a barrel—it’s a low-cost energy compared to all the alternatives.

And now, with technology we’ve developed over my lifetime, it’s clean burning…. People think that carbon is an issue; one of the solutions is, you do electric generation with natural gas. That’s one of the cleanest things we can generate electricity with.

 

Mark Ramsey, left; Nick Powell, right
screenshots from Mark Ramsey's personal recording of the interview

No, It’s Not Greed; It’s Supply and Demand and Overregulation

Nick Powell, reporter: Let me just ask you real quick on, you mentioned the rising prices of gas. One of the reasons gas prices are going up is because American producers have decided not to invest in the producing more oil at the moment. They’d rather have higher prices and higher prices.—

Mark: No, that’s not entirely— I can’t really let that slide, but go ahead.

Nick: Well, I was just going to say, you’d say that they bear some responsibility for higher prices in this climate right now?

Mark: No, absolutely not. The reason that we are kind of entering a bit of a scarcity—not a lot; it’s a seasonal scarcity we see every year when cold weather hits; particularly with natural gas, not so much with liquids—but the reason we haven’t actually been drilling as much: oil wells have to be replaced. They deplete. They’re not pipes into the ground that produce forever. They deplete over time. Some last a very long time—20, 30 years or more. There’s fields in east Texas that are still producing almost a hundred years after they were discovered. That’s unusual. Most fields will deplete 3, 4, 5 years after the well is drilled.

We have to continually replace those wells. What happened is, through the ESG [environment, social, and corporate governance] movement, mostly out of New York and northeastern United States, that has shut off a lot of the funding, primarily to the independent and the wildcat style, the smaller companies.

It’s been an orchestrated effort by Wall Street to shut off funding, which is required with these very expensive projects to drill wells. The technology has advanced just spectacularly. But without the funding to actually drill the wells, you’re not going to be producing as much oil and natural gas.

oil rig in Gulf of Mexico, image found here

The second thing is the Obama-era regulations that came in have almost destroyed the Gulf of Mexico. Prior to the Obama-era regulations, we had on the order of 60, 70, and sometimes even higher than that, what are called deep-water rigs. These deep-water rigs, uh, they are typically either direct personnel that are working on the rigs or indirect personnel that are working on land—those represent approximately a thousand high-paying oil & gas jobs for every rig that’s operating in the Gulf of Mexico. Today we’ve only got about 15. And that’s due to these Obama-era regulations.

What’s even more important, perhaps, than the decrease in the number and the loss of these jobs—most of them permanently at this point—is that most of the activity by these deep-water rigs is primarily in workovers, and in repairing wells that are already there. There’s not a huge amount of true exploration or even drilling in already discovered fields. So that doesn’t bode well for energy independence, which we had achieved under President Trump. And now we’re not quite as energy independent as we could.

I would add one more thing, that the nature of oil & gas prices is that, when prices go higher, that does spur more investment. There’s a time lag that ranges from 6 months to maybe a year or two. But when, prices go high, as they are right now—and that’s not President Trump’s fault; that’s not the industry’s fault; that’s a direct result of things like the Keystone Pipeline being shut down, of federal lands being off limits to drilling. We just had a judge shut down about 1.7 million acres that had been lawfully leased in the Gulf of Mexico, over a Greenpeace-type lawsuit—that’s what caused the scarcity. That’s what causes prices to go up. It’s not greedy capitalist companies. The companies are out there competing tooth and nail. If we could free up the capital to drill more wells, gasoline prices would come back down very very rapidly.

 

Alternative Energy Welcome—but Without the Subsidies

Nick: Let me just ask you this. Let me ask you, what role do you see alternative forms of energy playing in the future, given that, you know, there is a push even by oil companies, Exxon and others, to, you know, to de-carbonize, I guess? How do you see wind, solar, nuclear, geothermal factory in the future?

Mark: Welcome to the energy business. But they should not be subsidized at taxpayer expense. The problem we had with the Valentine Day freeze, almost a year ago now… was that Ercot [Electric Reliability Council of Texas] price structure was putting reliable, low-cost generating capacity—natural gas topping units, basically—it was putting them serving effectively as backup to the wind and photovoltaics. And, as you may recall, the wind and photovoltaics dropped to about 3% of installed capacity in the Valentine’s Day freeze. There’s not hardly a machine, an industry, a plant in the entire world that would be considered a success if occasionally it was only delivering 3% of whatever its product was, in this case electricity.

frozen windmills, Texas Valentine's Day freeze 2021
image found here

Some of that has been corrected with legislation in the past year. The big issue right now is that there is a federal production tax credit on photovoltaics and on wind power that is so generous to those entities that they can sell power into the grid at a loss, and they still make money, due to the production tax credits. And that’s coming out of your pocket. That’s coming out of my pocket. That’s coming out of everyone’s pocket that’s paying federal income tax in the country. That is fundamentally unfair.

If you look at what President Trump did with China, we tried to level the playing field. We tried to stop the imbalance to American manufacturers. We have the exact same situation here in Texas with the wind power. I’m all for wind power. I just don’t think that we should be subsidizing it.

Nick: I have a couple other questions I want to get to and, you know, time is a little bit tight here. But let me, so, to clarify, you don’t support subsidizing renewable energy. Do you support subsidies for oil & gas? Federal subsidies?

Mark: That’s really not accurate. There are no real subsidies for oil & gas. Oil & gas is overregulated. that’s a big tax. For example, every time BSEE [Bureau of Safety and Environmental Enforcement] comes out to inspect a rig out in the Gulf of Mexico, it’s a surprise inspection. There’s no warning. There’s no notice. Every time the helicopter lands, the operator gets a bill for about $30,000 to pay for the helicopter flight. That’s not a subsidy. That’s a penalty that’s going on. We’ve had— Unfortunately, the American government has had a war on the oil industry that dates back several decades now.

 

It's Time to Shut Off the Subsidies

There was a point in the Chronicle interview where Mark was about to tell this anecdote about solar energy subsidies but got interrupted. I think it should be included in a post about energy—and the free market. I had recorded him speaking in January at a meet & greet, and he included this story. So this is a transcript of Mark from that event.

Mark: I’ll give you a little anecdote. I used to live in Colorado. Right down the road from me was a place called the Solar Energy Research Institute. Sounded great. I was fresh out of college. You know, what could be better? Just free energy from the sun, kind of thing. So I went and interviewed with them, OK. I mean the job I had was great, but that one was even better. So I went and interviewed with them. It was an interesting interview. And at the end of the interview, they asked me if I had any questions. I did of course. One of the things I asked them was—this is back 40 years ago—one thing I asked them was, how long is it going to be until this is commercially viable without subsidies? I’ve been a conservative since a long time ago. This was actually back then, right out of college. “When is this going to be viable without subsidies.” You know what the answer was? Five years. Five years, OK. Five years.

I’m still on their mailing list. I like reading their stuff. Just recently they sent an annual report out. It was real interesting. It had something in the annual report: How long will it be until this is viable without subsidies? You know what the answer was? Ten years. Ten years. Ten years.

So that gives you an idea of where I’m coming from. It’s time to shut off the subsidies. Maybe phase them out. But get rid of the subsidies so that everything’s competing on a level playing field, and we’re not forcing oil & gas and nuclear and coal to play second fiddle to all these others.

 

Mark Ramsey, candidate for Texas Congressional District 38
image from campaign materials

The main opponent, by the way, the one who doesn’t show up—the Chronicle reports that he “acknowledges the importance of combating climate change but believes oil and gas are still critical in this transition period toward a decarbonized future.” In other words, he’ll keep subsidizing alternatives and penalizing oil & gas, including clean burning natural gas. And energy independence—which we had up until a year ago—is not even among his concerns.

The Energy Corridor is in this district. CD 38 deserves to be represented by an oil & gas expert. And it’s time Congress had an oil & gas expert among them. We can have that with Mark Ramsey.

The Family Educational Relief Program

How do you lower costs while improving quality? Use the free market.

That is a straightforward, easy to understand concept. We’ve seen it work with phones, computers, and other technologies. It’s true for various services and products as well.

Combine that concept with this one we often say, about government’s role and its interference:

Whenever government attempts something beyond the proper role of government (protection of life, liberty, and property), it causes unintended consequences—usually exactly opposite to the stated goals of the interference.

Today we’ll apply the free market and getting government out of the way to education. If we can allow the free market to do its thing and innovate, we’ll get better quality education at lower cost—guaranteed better than government has been doing.

from the cover of Waiting for 'Superman'

We need to let go of the fear that says, “We can’t trust the free market with something so important to us.” No. We can’t trust government interference with something so important to us.

Isn’t education, though, a basic responsibility of government? Definitely not at the federal level; it isn’t an enumerated power in the Constitution and was never granted to the federal government. The fact that there is a federal Department of Education is a usurpation—a seizure of power not granted.

At the state level, at least in Texas, for better or worse it is written in the state constitution that the state will provide a free education to all students up through high school. So that means it has to be done.

How much did school closures due to
COVID-19 set Texas student's back?
Infographic from FamiliesEmpowered.org

But, if you lived through 2020, you know, better than you did before, that government doesn’t actually follow through on its promise to educate your children. And, when it doesn’t, it makes you pay for it anyway. For parents who have used an alternative method of educating their children—private school, homeschool, charter school—they’ve been aware of that inequity for a long time.

The Texas legislature is in session. That means (besides that our freedoms are in jeopardy), if we’re going to do something about this—following a year when public schools failed pretty spectacularly—this is the time.

My State Senator, Paul Bettencourt, filed bill SB 1968  last Friday, and later that day Representative Mayes Middleton filed the identical House companion bill, HB 4537. It is called the Family Educational Relief Program.

The bill looks to me to be similar to an Education Savings Account (ESA), although there are some differences. Arizona is noted for doing ESAs several years ago, limited to special education students. The parent would have the option of taking 90% of the amount allotted for the child, to be used in any combination of ways the parent sees fit. It’s similar to a medical savings account in that way. Only approved expenses could come out of the account. But the person manages their own funds.

The Texas bill isn’t aimed at special education students, but at special needs; namely low income. While it could be expanded in future years, as a pilot it is aimed at those whose incomes qualify them for federal free or reduced-cost lunches. Lack of choice harms low-income families’ children most.

There’s a Need

Texas educates approximately 5.5 million K-12 students, roughly 10% of the children in the US’s 50 states. 

A few years ago, we heard from Colleen Dippell, founder of FamiliesEmpowered.org, which specialized in helping families get access to charter schools. She told us in 2017 that there are 900,000 Texas students (almost 1 in 5) attending over 1,000 failing Texas schools—meaning the school didn’t meet the minimal yearly progress (a pretty low bar) for three years in a row.

One approach to solving that deficiency has been charter schools, which are growing ever more prevalent. But her estimate at that time was that there were 130,000 students on wait lists for charter schools. Charter schools simply can’t meet the demand. You might also note that there are multiple bills we have to oppose this session aimed at making it harder for a charter school to start or expand.

Meanwhile there are 100,000 empty seats in private schools.

There’s a demand. And there’s a supply. But they aren’t getting together.

Maybe it’s because the pent-up demand is coming primarily from low-income families who can’t afford to pay private school tuition, and the private schools can’t exactly provide education for free.

This bill uses money already being spent on those students and allows them to use it for private school tuition. It could also be used for online courses—of the parents’ choice, rather than what has been inflicted on them by their school districts during closed schools this past year. It can be used for curriculum, or therapies, or other materials as well.

 

What Are the Details?

If we use round numbers, we can say $10,000 is allotted per student per school year. Of that $10,000, 90% means $9,000 put into a trust for the student, with the parents as trustees, instead of the school district’s board of trustees.

The remaining 10% stays with the school district to pay maintenance and operations costs and loan interest. In other words, for every student in the program, the school district gets $1000 for a student they don’t have to educate. That means, the more students use the program, the higher per pupil spending the school district has. There’s incentive to let the students go into the program.

There are limitations. One is that the payments can’t go to a household member or relative (within three degrees of consanguinity). In short, homeschoolers can’t use it to pay one parent to teach, for example. But a homeschooling family can use it for curriculum, online programs, therapies, etc.

We homeschooled for ten years. Our total costs added up to much less than that for the entire decade, including field trips and camps. That was for all three children. In other words, all our expenses, barring of course loss of income from a second parent working, would be easily covered under this program.

If the account has money remaining at the end of the school year, it rolls over in the child’s account for the following year. That means there’s incentive for the parent to shop around and get a good deal—free market at work.

The Arizona version was arranged to roll over yearly and could eventually be used for college tuition. This Texas version also rolls over to each next year but is only available as long as the child is eligible for public school. That means it could be used for dual-credit courses at a community college, as we did with our kids by age 15 or 16. Or it could be used for university courses—in person or online. But, unlike the AZ plan, once the child graduates and is no longer eligible, any funds remaining return to the program fund for other students to use. That means there’s even incentive for the state to hope families use the fund, because the state educates those students with a possible rebate at the end.

What about parochial schools? Is that a problem? No, it isn’t. The Supreme Court recently ruled in a Montana case that money used by parents for the education type of their choice is not an establishment of religion when it goes to a parochial school; in fact, it would be an infringement on freedom of religion to bar that educational choice only for religious reasons. So that is now settled law.

 

What about Accountability?

Service providers and vendors must get pre-approval according to rules set by the Comptroller to participate (i.e., to get paid by a parent out of the child’s fund).

Private schools have to show notarized documentation related to following the rules, including the number that can be accommodated, safety measures at the location, etc., and would need to be accredited. Actually most private schools in Texas are unaccredited, so this is a limitation. Or it is incentive to get accredited. (Note: there is no correlation between accreditation and education quality.)

Private tutors, therapists, or teaching services must provide notarized documentation of their qualifications, licensing, current employment (when applicable), and criminal history.

Online course or program providers must show notarized documentation of their qualification to serve the students, accreditation, etc. Services and vendor types not listed must also provide evidence of qualification to serve.

In other words, it’s on the service providers to apply, and the Comptroller’s office to verify their validity, so the parent doesn’t have to.

Theoretically, if a parent wanted to use something not on the list, they could let that service provider about the program and suggest they apply. But otherwise the parents simply use those services already verified by the Comptroller. The state’s agent would post a list of approved service providers and vendors for parents to use.

While an education service provider may not charge a child participating in the program an amount greater or less than the provider’s standard amount charged for that service, a parent can choose to pay out-of-pocket for anything either not on the list or any cost beyond the limits of the student’s allotment. For example, in a market where this program is well established, it is likely private schools would work to make costs fit within the allotment; however, more expensive private schools can still be used, but the parent would pay anything over and above the allotment. This is still better than having to pay the full tuition over and above the taxes the parents pay the state without receiving any educational service from the state.

 

Where Does Funding Come From?

image found here

The Comptroller allots money for the program. The amount allotted is the only limitation on how many students could participate. Funds come from the state's education funding and also from grants, gifts, and donations as well as from additional general funds the Comptroller may put toward the program.

About those grants, gifts, and donations: A company wishing to donate could make a tax-deductible gift to the program. Even better, it could apply for a tax credit—up to half the entity’s estimated tax payment could be allotted to this program. (This comes under Chapter 230, Subsection B, which is longer and more technical than I want to go into here.) This would actually increase funds going to education without raising more tax revenue to do so.

A small percentage of the student’s allotment (no more than 3% of any of four payments or a total of 5% annually) goes to the Comptroller’s office for administering the program.

No Curriculum Interference: Another good feature is that the Comptroller’s office has a hands-off approach to curriculum; it only handles the funding. If the TEA or Commissioner of Education were handling the fund, they would no doubt attempt to control what is taught and how, which kind of defeats a main purpose of school choice.

There’s no federal money used, which means there’s no federal control over what is taught or how, or anything else to do with the program. That’s a definite plus. I think it also means, any education block grant to the state is divided up among students still in public schools, leaving more of any such funding to spread among fewer students—another incentive for public schools to support this program.

 

Any objections?

The people who have drafted this bill have decades of work and experience behind them, working toward school choice. They have addressed every objection opponents have voiced.

·         It particularly helps low-income students.

·         It does it without causing public schools to lose funding; it even increases their per student amount.

·         Vendors, service providers, and private schools are all held accountable—as are the parents serving as trustees of their child’s accounts.

It doesn’t address the opponents’ unvoiced objections—that they want to maintain control over what is taught, and that’s more important to them than actually providing an education to every student.

It’s voluntary. This is only for parents who are interested and involved in their children’s education. Uncaring parents don’t have to bother with it; they can leave their children right where they are.

 

It Introduces the Free Market

The most valuable thing about this program is that it introduces the free market into this tiny corner of what has been a failing government monopoly. Free market, once introduced, is likely to grow. That is likely to lead to innovation, which means better education at lower cost, something people have been saying couldn’t be done, even by adding obscene amounts of money. It can’t be done by government. But when government gets out of the way, and allows caring parents and the free market to see to education, the possibilities are unlimited.

If you’re in Texas, let your state senator and representative know you support the Family Educational Relief Program. If you’re outside of Texas, let your representatives know about it and ask them to do something similar in your state.

Real Caring Requires Thinking More than Feeling

Caring looks different sometimes from what we immediately think it should look like. That will be true when we look at many issues, for example:

·         Economic inequity

·         Borders

·         Gender dysphoria

·         Healthcare

·         Affirmative action

There’s a way of looking at these and other issues that is the quick gut version of caring. And then there’s a way of looking at the same things, with a little further thinking, to see whether the quick gut version will really help. Because, if it doesn’t, then real caring requires something else.

This concept came up in a couple of things I was listening to this weekend—Jordan Peterson debates, again. In a debate with Slavoj Zizek, titled “Happiness: Capitalism vs. Communism," Jordan Peterson (on the side of capitalism) says this:

Jordan Peterson in "Happiness" debate
screenshot from here

If you’re actually concerned that the poorest people in the world rise above their starvation levels, then all the evidence suggests that the best way to do that is to implement something approximating the free market economy.

In other words, all that stuff about fairness, or getting rid of inequality, because you care about the poor—that doesn’t work. He provides data:

The one thing you can say about capitalism is that, although it produces inequality, which it absolutely does, it also produces wealth—and all the other systems don’t. They just produce inequality.

So, here’s a few free market stats: From 1800 to 2017 income growth, adjusted for inflation, grew by 40 times for production workers and 16 times for unskilled labor, while GDP rose by a factor of about .5 from 1 AD to 1800. So, from 1 AD to 1800 AD it was like nothing. Flat. And then, all of a sudden, in the last 217 years there’s been this unbelievably upward movement of wealth.

And it doesn’t only characterize the tiny percentage of people at the top, who, admittedly, do have most of the wealth…. [The absolutely poor at the bottom are] getting richer faster now than they ever have in the history of the world.

And we’re eradicating poverty in countries that have adopted moderate free market policies at a rate that’s unparalleled. So, here’s an example. One of the UN millennial goals was to reduce the absolute rate of poverty in the world by 50% between 2000 and 2015. And they defined that as $1.90 a day. Pretty low, you know. But you have to start somewhere. We hit that at 2012, three years ahead of schedule.

And you might be cynical about that and say, well, it’s kind of an arbitrary number. But the curves are exactly the same at $3.80 cents a day and $7.60 a day. Not as many people have hit that, but the rate of increase towards that is the same. The bloody UN thinks that we’ll be out of poverty, defined by $1.90 a day, by the year 2030. It’s unparalleled.

Do you really care about getting the poor out of poverty? Because we know how to do that: free markets.

In a different debate—this one was a Jordan Peterson/Sam Harris debate in Dublin, moderated by Douglas Murray, which I reviewed via a response by commentator Chris Kohls on his Mr. Reagan podcast. The debate was on the efficacy (or harm) of religion, but Harris failed to engage on that. So there was a diversion to other themes, which includes our main theme for today:

There’s just as much error on the side of empathy as there is on the side of too little empathy. And that’s a hard thing for everyone to learn, because empathy feels so good. Like, if you feel mercy towards a suffering child, that is kind of an indication that you’re an ethical person. But that’s not the basis for complex and sophisticated foreign policy.

from left, Jordan Peterson, Douglas Murray, Sam Harris
in the Dublin debate, as reviewed by Mr. Reagan podcast
screenshot from here

Jordan Peterson was talking about borders, which I’ve heard him talk about elsewhere. But this is an excellent way of thinking about them, so I’ll share this version:

Borders exclude and privilege those within the borders. Yes. OK, now let’s take that seriously. Now, part of the seriousness is, poor innocent children are hurt at borders. That happens all the time. OK, the question is, are you willing to give up the borders?

Now let’s think about what borders are. Your skin is a border. And you’re prejudiced in protection of your skin. For example, you won’t just sleep with anyone; you reserve the right to keep that border intact. Right? And to be choosy about the manner in which it’s broached. You likely have a bedroom; it probably has walls. You have clothing. You have a house. You have a town. You have a state. You have a country. And those are all borders. It’s borders within borders within borders within borders. And you need those borders, because otherwise you will die. So we could not be too hypocritical about the damn borders. We don’t know how to organize fragile things without putting boundaries around them.

You see that in Genesis, right? As soon as people realize that—I’m sneaking in a little religion here, in case you didn’t notice—as soon as people realize, they become self-conscious. They wake up and realize their vulnerability. The first thing they do is manufacture a border between them and the world. And we need borders between us and the world.

 And we pay a bloody price for borders. And I say those words very carefully. We pay a bloody price for borders, and it’s often in the price of other people’s blood.

And so, then, the question might be, well, how should you conduct yourself ethically in a world where other people are paying in blood for your borders? And the answer that I’ve been trying to communicate to people is, get your damn house in order. Bear as much responsibility as you can. Act as effectively as you can as an individual in the world. Because then you can justify your privilege. You can justify your luck and your good fortune. And maybe, within the confines of your border, you can be more productive and useful than you would be in the absence of borders altogether.

You do what you can where you can. You don’t say, “I want to feel good about that poor suffering child at the border, so I’m going to insist that the whole country gives up that border.” Meanwhile, who cares what happens to the property owner right there at the border, or anyone else who is harmed by the lack of a border? And, for that matter, what does getting rid of the border do to help the poor suffering child there? It’s not a certainty that getting rid of the border would even help her.

We don’t really have room today to cover all the other issues on that list. But we can briefly cover a couple of them.

Gender Dysphoria

It might make you feel good to say, “I care about that poor person who was born a male but thinks he/she is a female.” OK, but it isn’t self-evident that the best treatment is to get the whole world to support that person in their self-deception. No matter how elaborate the costume—which could include hormones and surgery—the body will still be a male body, with male DNA in every cell. What could have been a reproductively fertile body could be rendered permanently infertile. Isn’t it worth considering whether there is another, maybe better, solution? Especially since outcomes for those who have transitioned are not very positive (suicide as high or higher, body dysphoria continues), and since many have overcome the dysphoria without transitioning, and many who have transitioned have regretted taking that drastic step.

It may be that the best way to care for that individual is to actually care for them individually, and get them the support and treatment that will do them the most good. That very well might include mental health therapy to deal with the gender dysphoria or confusion first. Certainly waiting would be a better way to deal with children—the majority of whom are likely to outgrow the problem by adulthood.

Affirmative Action

It might make you feel good to care about a student from a minority group that suffered discrimination in the past. But it isn’t self-evident that the best solution is to give that student special treatment, in college admissions, for example.

It might be that a black student scores relatively well on exams, showing he would do well in just about any state school, but would be well below the mainstream or even the bottom of students at an Ivy League school. Do you help that student by putting him in an environment where he’s not likely to thrive? High dropout rates among blacks given affirmative action shows it’s not a kindness. They’re also like to choose an easier major, avoiding STEM fields, where they would have done well enough to follow a good career path, if they’d gone to a good-enough college instead.

Malcolm Gladwell tells a story in David and Goliath, that illustrates this. A young woman black woman excelled in science and math in high school. She chose to attend Ivy League Brown, instead of University of Maryland. But it turned out to be overly competitive, and she struggled, coming to believe she was stupid and incapable, because she was comparing herself to even smarter students, and ended up giving up her lifelong science dream for an easier field.

Gladwell then says this about affirmative action:

Affirmative action is practiced most aggressively in law schools, where black students are routinely offered positions in schools one tier higher than they would otherwise be able to attend. The result? According to the law professor Richard Sander, more than half of all African-American law students in the United States—51.6 percent—are in the bottom 10 percent of their law school class and almost three-quarters fall in the bottom 20 percent. After reading about how hard it is to get a science degree if you’re at the bottom of your class, you’ll probably agree that those statistics are terrifying.[i]

Derryck Green, of Project 21, talks about the results of affirmative action in a recent PragerU video; the segment is from about 1:40 to 3:50, but you can watch the whole five-minute video below.

To summarize, we all need to take a clearer look at caring. Stop killing with kindness. Doing something  that looks like caring in order to make yourself feel good about how virtuous you are is called virtue signaling. Instead, try stepping back from the immediate emotion, and thinking through the specific case, or the full range of possible consequences. And then do a rationally kind act. And do that act yourself—instead of pushing, or even requiring, others to do it.

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[i] Gladwell, Malcolm, David and Goliath, p. 91. The statistics he references are from Mismatch: How Affirmative Action Hurts Students It’s Intended to Help, and Why Universities Won’t Admit It.

Pareto Distribution

The past three posts [here, here, and here] were all a declaration that feminism doesn’t speak for me. That was prompted by a video of an interview with Jordan Peterson. I hadn’t been aware of him before, but I was certainly not the only one whose attention was caught by that interview. There were entire collections of responses to it on YouTube, and a series of memes featuring the flummoxed interviewer.

When you watch something on YouTube, a whole list of suggested videos appears based on what you were watching. I was thinking it was time for an economic post. It turns out Jordan Peterson can help there too. I came across one where he talks about income inequality, on the Joe Rogan podcast, from October 2017. (You can watch the whole 25-minute interview below.)

In this discussion, Jordan Peterson presents the problem, or the phenomenon of inequality. He refers to the Pareto distribution, which I had to look up. The Pareto principle is also called the 80/20 rule, which is, in essence, that 80% of outputs come from 20% of causes. And, further, 20% of producers bring about 80% of production in any particular class of production.

Image from Wikipedia, which explains
"The Pareto Principle claims that
only a 'vital few' peapods
produce the majority of peas."

Jordan Peterson explains it this way:

If you look at any creative endeavor that human beings engage in—so that would be an endeavor where there’s variability in individual production. It doesn’t matter what it is. Here’s what happens. People compete to produce whatever that is, and almost everybody produces zero. They lose completely. A small minority are a tiny bit successful. And a hyper-minority are insanely successful. And so, the Pareto distribution is the geometric graph representation of that phenomenon. And so, here’s how it manifests itself.

If you have 10,000 people, 100 of them have half the money. So the rule is, the square root of the number of people under consideration have half of whatever it is that’s under consideration. So, this works everywhere. So, if you took 100 classical composers, 10 of them produce half the music that’s played. And then, if you take the 10 composers, and you take 1000 of their songs, 30 of those songs, which is the square root of 1000, roughly speaking, are played 50% of the time.

So, when people work to produce something—anything: a product, wealth, music—the outcome will be unequal. Quite dramatically unequal. In a distribution we can estimate with a mathematical formula of

√X = ½ Y 

where X is the total number of something, and Y is the recipient of the reward or whatever you’re counting.

There’s a field of study that measures this kind of thing—econophysics. Econophysicists, Peterson tells us, “use the same mathematical equations that represent the propagation of molecules—gas molecules into a vacuum, to describe the manner in which money distributes itself in an economy.” Cool. I didn’t know that.

He also refers to the Matthew effect. This references the parable of the talents. To one man is given five talents (a sizable amount of money); he doubles that for the master and is rewarded. To another is given two talents, which he doubles for the master, and he is also rewarded. To a third man is given a single talent. He does nothing with it and returns only that single talent to the master at the day of reckoning. He made no use of what he was given, so he has that talent taken from him and no reward.

The verse referred to as the Matthew effect is 25:29:

For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.

In a parable, things are metaphorical. It is about using what you have—not about producing five more or two more of something. But sociologists describe this effect as “the rich get richer and the poor get poorer.”

As we also know from scripture, “For ye have the poor with you always” (Mark 14:7), there will always be work you can do to help them.

The question being discussed in the podcast is a combination of “Why are the poor always with us?” and “Is there something that can or should be done about it?”

The whole discussion shows just how interrelated economic and social issues are. Given the Pareto effect, as long as people do different things, think up different things, and find solutions to various problems, they will acquire differing rewards for their efforts. Some will create wealth more successfully than others.

As Peterson explains, “The problem is, if you let a monetary system run, all the money ends up in the hands of a few—a very small number of people.” That is only a problem when things are wildly unequal—more than that, wildly unequal and with some having essentially zero—subsistence with no way out. Add to that a sense of oppression or systemic unfairness, and bad things happen.

People with no way out get desperate, which leads to high crime, or revolt. That’s what you see in Pearl Buck’s The Good Earth. I wrote about this result of disparity in 2015:

In Pearl Buck’s novel The Good Earth, there’s a point where the poor are starving and growing daily more desperate, squatting along the walls of the wealthy, until things get so heated, the poor rise up and raid the property of the wealthy, looting and killing. That was a book of fiction, but the Durants’ book [The Lessons of History] describes that as a typical cycle.

It might look like the problem is too much wealth at the top, but it’s really about too little at the bottom. When people are starving and suffering while the wealthy ignore their needs, that is an injustice that won’t stand indefinitely.

As Peterson put it, “If you don’t have any money, it’s really hard to get some. Once you have some, it’s not so hard to get some more.” And that's the underlying problem of inequality--not too much in some places, but too little in some places.

As Peterson points out, “what Marx observed was that capital tended to accumulate in the hands of fewer and fewer people, and he said that’s a flaw of the capitalist system. That’s wrong. It’s not a flaw of the capitalist system; it is a feature of every single system of production that we know of, no matter who set it up and how it operates.” 

But it becomes more troublesome when someone—usually a Marxist—reframes the situation as rich = evil and poor = good. It is not the fault of successful people that they tend to accumulate the good stuff. It is also true that being poor is not simply a matter of failing to work hard enough. Getting the ones at that near zero situation unstuck is necessary, not only for those stuck there to improve their lot, but also for the successful to not lose what they have from a revolt.

I don’t think the discussion got all the way to a solution, but Peterson frames it right:

You need innovation. You pay for innovation with inequality. But you need to bind inequality, because if it’s too intense, then things destabilize. OK, we can agree on that. We’ve got the parameters set. Now we have to start thinking very carefully through how to do the redistribution issue, and we don’t know how to do that.

I understand what he’s saying, but I wouldn’t use the term “bind inequality.” That sounds like something that needs to be imposed from some greater power—although I don’t think he intended that. He’s literally talking about the “redistribution issue,” but I wouldn’t use that term either, although technically that is the issue. Redistribution, again, sounds like something imposed.

What we really want—and he suggests, although I’m not sure how we get there—is “equality of opportunity. Because people are actually not as resentful about the success of others as you might expect; they’re resentful about it if they feel that the game is fixed.” He adds, “It has to be a straight game. And that’s why ethics is so important to keep this landscape stable. People can’t play crooked games.”

So a discussion of civilization has to come into it. People have to be honest in order for it to work for everybody.

Also, people have to care about those stuck at zero, where high IQ and conscientiousness—the best predictors of success—are just not enough to get going. In a civilized society, people care about one another. They give freely to help those who are temporarily downtrodden, or those who are not capable of helping themselves, or who just need a break.

We can only have that to give, if we’ve had enough success to build up surplus beyond our needs. And we only get surplus—or wealth—by creating more than subsistence and having a way to store the surplus. The most effective way ever invented—the natural way—is trade in a free market economy.

The answer comes down to free market—free of crony capitalism and con games—plus philanthropy. We’ve talked about that before [here, here, and here]. The addition today is, there will always be natural inequality, but even the wealthy benefit economically by being honest and giving freely. So, you need a civilized people to get and keep a healthy, prosperous economy.