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Walter Williams
Walter E. Williams
28 Jan 2015
Defense Against Demagogues

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Basic Economics

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Tyrants and Human Nature


The agendas of liberals, progressives and assorted tyrants desperately depend on the aspects of human nature they often condemn, such as acquisitiveness, profit motive, self-interestedness and greed. This crossed my mind while reading "How Departures From Economic Freedom Can Affect Freedom In General," by Dr. John Taylor, a Hoover Institution scholar. Taylor tells how former Wells Fargo CEO Dick Kovacevich was forced to take Troubled Asset Relief Program funds even though Wells Fargo did not need or want the funds. Kovacevich was threatened that if he did not accept TARP money, regulators would declare his bank capital-deficient even though Wells Fargo had a triple-A rating. At the time, October 2008, Wells Fargo was in the process of acquiring Wachovia, and to be declared capital-deficient would have killed the deal. U.S. Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke could rely on acquisitiveness, profit motive and self-interestedness to bully Wells Fargo into accepting TARP money. They also knew that Wells Fargo's competitors would go after Wachovia. If all sound banks had refused TARP money, Paulson and Bernanke's tyrannical threats would have failed.

Imagine a person was ordered by the U.S. Fish and Wildlife Service not to harvest timber on land that he owned because it threatened the habitat of the red-cockaded woodpecker. What would the average agency tyrant propose in order to make him obey? If you said levy a fine, you'd be absolutely right. If he were to continue to disobey the order, he'd face the imposition of a higher fine. The agency tyrant's behavior simply acknowledges the first fundamental law of demand, which correctly predicts that the higher the cost of doing something the less people will do it. Conversely, the lower its cost the more people will do it. There are no known exceptions to the reality of the law of demand.

Though the law of demand is not rocket science, liberals and progressives sometimes pretend it doesn't exist.

Suppose one wants to reduce the number of rapes, robberies and homicides. Should we raise or lower the cost of committing such acts? Though the death penalty exacts a high cost for a homicide conviction, most liberals and progressives are against it. Some liberals and progressives don't hold criminals responsible, because they believe that poverty and discrimination are the cause of crime and that it's society that must be cured. Others think that soft sentences and rehabilitation programs reduce criminal behavior. Both visions lower the cost to criminals of committing a crime.

An excellent example of how liberals and progressives — and even some respected economists — deny the law of demand is their support for increases in the minimum wage. The effect of mandated wage increases is to raise the cost of labor. The entrepreneurial response to higher labor costs is to use less of it by finding substitutes, and examples abound. Back in the 1930s, '40s and '50s, when you pulled into a gasoline station, there was a kid to pump the gas, wipe your windshield and check the oil. Today virtually all gasoline stations are self-serve, and it's not because today's Americans like smelling gas fumes. The minimum wage has destroyed that kind of job. Other responses to higher mandated wages include automation and relocation of production facilities to places with cheaper wages.

Though a few liberals and progressives acknowledge the minimum wage law's negative effects on low-skilled workers, none acknowledges the law's racially discriminatory effects. If an employer must pay a minimum of $7.35 an hour to everyone he hires, the costs to discriminate in the employment of people whom he doesn't like are less. The minimum wage is so effective at promoting racial discrimination in employment that it was a major tool in the arsenal of South Africa's racists during its apartheid era. Racist unions were the country's major supporters of minimum wages for blacks.

Liberals, progressives and tyrants acknowledge the reality of human nature when it fits their agenda and ignore it when it doesn't.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at



14 Comments | Post Comment
Sir;... How do you lump Liberals with Progressives when the progressives were Republicans, and then lump either with tyrants...Certainly tyranny depends upon aquisitiveness, either of power, which is rights, or wealth, in addition...It is perfectly possible for some one to be good out of self interest as it is to be bad... It is impossible for anyone to be nationalistic and self interested only... When people are self interested in a good way, it is because they see themselves as part of the social self, the nation, the people; and not putting their welfare above all others...It is okay to be wealthy, to enjoy the tangible honors of ones intelligence and effort... To be wealthy out of the degradation of a whole people is a crime of insanity, for being practiced, and for not being rooted out with a spade...
A free society will always allow individual freedom, but it will not accept excess and licence... To do so is stupid, and to do so on principal, in the hope that some good will drip out of evil is insane... No society should accept tyranny, or anarchy, or plutocracy, or oligarchy...A moral society like the moral person will never be without self government...The criminal will always call the hangman a tyrant, but if justified, the hangman is the best friend of society and criminal alike...No one could possibly want to do their only society an injury, even an injury that is continuous and mortal...Democracy, like society must benefit all individuals and no individual should put his benefit above all others...
Comment: #1
Posted by: James A, Sweeney
Mon Jul 16, 2012 11:41 AM
Well, I sure do pity Wells Fargo having to take that TARP money. That sounds messed up. Damn Liberal, Progressive Tyrants!

How dare they force those funds down the throat of a poor, defenseless, too big to fail bank? My soul thirsts for Justice! What shall we do about this?

Of course! Let's enact the Death Penalty and refuse any increase in the Minimum Wage! That is the only logical solution to the problems of…eh… Big bank? …TARP? ... Bail-outs? ...

Toto, I don't think we're in Kansas anymore.

For the record, the Death Penalty is onerous not because “it's society that must be cured” but because a] it allows for no remedy and b] it discriminates against the poor.

At the same time, blaming the tendency of businesses to minimize overhead and maximize profit on those greedy Minimum Wage workers looking for free ride on the $7.35 per hour Gravy Train is patently ludicrous. Companies hire the employees they need to get the work done. Period. That said, is there any reason those employees should not get something akin to a living wage?
Comment: #2
Posted by: ABarkus
Tue Jul 17, 2012 11:02 AM
Sir;... The more I read you, and I do reread people, the more I must ask if you have been to a doctor... You are too educated to be dummm... You must be demented... What makes you accept such a fragile and unsupportable notion of property rights as you do without having lost your mind... Property as we have it has only come recently on the scene, and the protection of the privilage of property reached its high point with the formation of this country with the Constitution... You take a certain relationship based upon the form of property you know as if for granted, but it is only lately come into being...
Other ages with other economies had other senses of the meets and bounds of property...Do you think the king owned all??? Do you think the serfs held no property??? Each held different sorts of rights in the property, and no one could be said to own it as we consider ownership... The Peasants had what the Chinese once called bottom rights, and the lords had top rights...There was never a time when a lord did not pay for his fief with a fee...
It took a modern age and a modern class with a modern definition of property to dispossess the people from their land... And today, now that the rich have dispossed the many with a simple definition of property and right; they want to do the same thing to the whole nation, and you want the government that is supposed to defend that nation to instead defend your definition and your property...It is you, and that whole class who have shown how fragile and dependent is property upon its definition and the ability to enforce that definition in a court of law...
It is essential to your definition of property that the law is owned as well; but what these forms, law and property, have in common is that each depends upon the will of the people- that is slipping away... Law does not bring justice so it does not work, and though the expense is great, it produces more criminals out of the material of injustice...
When law says that a person in possession of a piece of property has the right to destroy all that grows on it and all that strays upon it which is the power to do an injury to the true owners of all the real estate, the people; who should support it???...Who wants to defend such a conception of property rights only to be injured by it??? So law does not work better than property for the good of the nation, and that failure rests on the definitiion of each of these social forms...
People say: Why should I be taxed on what I have once bought??? It is because that tax buys protection, and if it does not support protection then the people without property must pay for the protection of property for which they see no benefit for the real possibility of injury...
Property is a form... All forms are forms of relationship... People relate through their moral forms like liberty, or love, or God just as they relate through social forms like Government or Economy... But; if people are unable to define their forms in such a fashion that their forms work, and serve them, meaning- serve the good of the whole society, then they will be defined by their forms in such a way that they will no longer recognize each other or themselves...
How would we define ourselves... Seeing correctly and formally, I would say that we are a nation of victims made victims by the quality of forms we try to work through which are failed and false...Just as people in the past defined themselves through the definition of property, and actually defined themselves into property with a modern conception of property, we must step back now, and reconsider the issue...
The definition of modern property has no legs... It is held aloft and written into law by the will of the people to see it work, and by their faith that it will work... It does not work, and cannot be made to work... The rich need to realize, going in, that all property is as a trust, and work of faith between the individual and his society, That property does not give rights, but all have equal rights in the common property of the society which is unenforced if an individual is thought to make something of nothing, and improve a property so it will pay... When a person buys property they buy rights, but they are not exclusive or infinite, and must still be paid for....And only the use of the property is a person's right, and it depends upon an obligation to support the society, usually with taxes, but it is in no sense hereditary any more than the right of commoners to the commons was hereditary when the court and the rich decided otherwise...
No one can ever show a time when the responsible use of property was not the usual expectation and demand of society...Property is not simply an empty form... Property is a relationship that the whole society has to see benefit out of, or must change... To maintain an outrageous construction of property rights as standing against democratic tyranny is the mark of a cretin... Where in hell do you get your ideas??? Certainly not from history...
Comment: #3
Posted by: James A, Sweeney
Tue Jul 17, 2012 11:16 AM
Re: James A, Sweeney
The progressive, fascists, communists and socialists are slight variations of the same thing: Statists. Statists believe in the superiority of the state over the individual and use the power of the state to enforce their will on the populace. They may all mouth different justification for the evil they do, but those are just words.
Comment: #4
Posted by: ConradCA
Tue Jul 17, 2012 10:48 PM
@ABarkus thank you for your post, which distills lefty tropes and rhetorical devices into a concise package. Most of you tend to overdo the copy-and-paste so thank you for your brevity.

However, you still managed to squeeze in sarcasm, non sequiturs, cliche', and a fascinating inability to comprehend the very article you just read. Instead, you merely see buzzwords and approved targets of your sing-song school bus mockery and let fly with the usual mindless, repetitive stuff.

Since you seem to be struggling, here's a few Cliff Notes: economic laws, such as the Law of Demand, are both predictors and explanations of human behavior. Ignoring these laws and attempting to convince others that the laws don't apply to them as citizens or politicians is foolish at best and tyrannical at worst. A 'leader' who claims he can make a river flow uphill is dangerous only to himself, until he uses the power of the state to impugn and threaten those who point out that gravity will not allow such an outcome.

You save the worst cliche' of all for last: the holy, perfect Living Wage. It's so seductive. It makes the Living Wage proponent sound benevolent and altruistic. Like 'fairness' in tax policy, you never say what this number should be - but then, you can't. Nor can anybody else - because it doesn't exist except in the minds of statists.

Another very basic example: Business Owner A has $100 budgeted for labor costs. The minimum wage is $50 so he hires B and C. B is a hard, conscientious, punctual worker while C is the opposite. Owner A would love to give B a raise to $75 and reduce C to $25 for poor performance but the minimum wage law says that he can't. A need for shift coverage means he needs two employees and economic realities (taxes, fees, 'compliance' etc.) won't allow him to increase his labor costs. As a result of this arbitrary, government-imposed stratification, B realizes there is no incentive for him to work as hard so his performance declines. C realizes he can't be punished monetarily for his already-poor performance so he carries on as before. The combined effect of these individuals' decisions and attitudes - a direct result of the minimum wage law - means that it will take Owner A more time and effort to expand his business if he's able to at all, thus delaying or denying an opportunity for B to be promoted to manager of a second location where B would be paid $200 with an opportunity for increases, even an ownership stake, based on the new location's sales. Making matters worse, the availability of unemployment, disability, EBT and other government handouts with low thresholds for eligibility (which can be easily circumvented through fraud) may convince both B and C that work is for suckers and that Owner A doesn't care about sales, growth, or service, he just wants to exploit people.

It's no accident that this same stratification is a fact of life in unions, particularly closed-shop operations such as the many American auto plants killed off by the UAW - plants marked by low productivity, low morale, and a crabs-in-a-bucket mentality where individual who showed initiative and/or efficiency was treated with contempt and even threats. When we remove the union stratification from the equation, we see that Americans can build fantastic products in energetic, efficient fashion as the various German and Japanese-owned auto plants, mostly in the South, demonstrate.
In effect, the minimum wage is an attempt to instill this union mentality in all workers as well as an attempt to create an artificial or real chasm between two groups of Americans. Politicians will claim that only they have the means to bridge the chasm, mostly by plundering one side.

But why do bother with all this? Your willingness to believe and repeat nonsense in a flippant fashion demonstrates that either lack the educational or cognitive means to synthesize these many dynamic, contemporaneous factors. But these factors have always existed and always will no matter how many lefty spleens are vented online. That's why they are called Laws of Economics - but these laws can't be repealed or overturned.
Comment: #5
Posted by: Patchy
Wed Jul 18, 2012 4:21 AM
Re: James A, Sweeney
"To be wealthy out of the degradation of the whole people???" Andrew Carnegie was one of the wealthiest men in America. His steel and rail empires transformed America. I have seen the census records of my ancestor and under occupation it says - worked on railroad - and they mean built the railroad - and they were happy to do it rather than work on the farm.
Carnegie also built - 3500 libraries across America and some in Europe. Any town that asked him got the funds to build a library. How could it have possibly been BETTER to have forcibly confiscated that money to give to government to pay to legions of bureaucrats who would have then funneled only a fraction of the original money to the actual libraries? Carnegie created wealth, he created demand for travels by lowering the cost of travel for millions of people - so demand went up. These entrepeneurs deserve their own shrine they do so much good for so many people in so many ways.
Comment: #6
Posted by: BellaMia7
Wed Jul 18, 2012 5:48 AM
Re: BellaMia7;... Carnegie did not create wealth, but took the commonwealth cheap in the form of raw materials and the labor of people cheap because it was possible, since if you can increase the supply you can lower the demand and the price...It is labor that creates value, and it is also what sets the price, and for that reason people with the power to do so always force less people to do more work for less wages... And, while I believe in reading, and think the building of libraries is a noble cause; we should never forget that Carnegie had a part in the put down of bloody strikes, held property on the lake whose dam caused the Johnstown flood, and bought his way out of service to the union during the civil war...It is likely his great talent would have been wasted on the military, but consider how many talented people we never here about because they were too poor to buy themselves an escape, and died...
We do have our Rush Limbaughs, and our Mitt Romneys who eluded the call to service... The numbers of such chicken hawks are inestimable...
The object is not to make a lot of money on your own nation, and then give them back a fraction so you can have some respect as a philanthropist...The object is to raise the level of the least, to give opportunity to all, to reward hard work and ability enough to encourage all, and make justice commonplace... We have no obligation to make a class of rich people who never contribute one single thing to society... Why should wealth which is a part of the commonwealth be made hereditary when it comes complete with political influence???... Hereditary government did not work, and yet hereditary wealth leads to the same conclusion, and even the spectacle of some one Like Mr. Bush the lesser who had nothing of character to recommend him, and only his ability to buy the talent that made fools of you and his opponents...
The tendency we have had in society since men figured out their part in procreation is for them to look after their children at the expense of all others, and so destroy society in order to promote their own, and in the end see both their society and their children crushed in the gears of time...The way for your children to best survive is in a society with justice and opportunity because that society will survive...Does anyone care who was the richest man in Russia before the revolution??? Does anyone care who owned the most slaves in the South before the Civil War??? People screw up their own societies by taking too much and leaving too little and all suffer their doom...
I do not care if there a rich people, and I like it if talented people are rewarded for their intelligence and invention... If the commonwealth cannot take back its wealth, the poor will suffer and hate society, and the rich will become traitors to all the good we should stand for; but mostly, society will lose the ability to offer an incentive worthy of hard work...Some people still dream of success... Some people still create out of their genius; but because of the impossiblity of social advancement, too many people give up and die, and some before they ever knew what hit them...
Comment: #7
Posted by: James A, Sweeney
Wed Jul 18, 2012 8:00 AM
Re: ConradCA;... The state always grows out of class division, and this is true of our own... We have many police, and much of police effort goes into protecting the wealth of the wealthy... Still, there are more private police that public police... The rich can afford much of their own protection so they balk at paying taxes for police...And consider our military... In a democracy, which is a defensive form of social organization, any force exists for the defense of all... What is our military used for??? We protect our interests, when our interests means the interests of the rich in property abroad that they own or control...We have fought ideological wars, for free enterprise, and against communism...
When we can see the perversion of our own democracy by money which the courts would not prevent, and no person is empowered to prevent; how can we dare to export democracy, and what version do we export... Do we give people the crippled, and diseased version of democracy which leaves the whole population powerless in its affairs, or do we export what we do not have, the sort of democracy that made for the survival of all primitive peoples, the democracy that made justice for all possible??? The state is empowered to protect rights and privilages, but privilages are the destruction of democracy, so rights get no protection and privilage gets all...We say a person should be secure from unreasonable search and seizure in their places and in their persons, but only in ones places do people have protection... The right does not extend to those without property...
If we say: state, and try to grade them from bad to better; it is in the concern for justice out of the knowledge that injustice leads to social conflict that one is an improvement on another... No justice means no peace; but it is out of conquest, and out of a class of conquerors living with a class of conquered that states first come into being... The object is a productive and peaceful partnership between the classes as can be seen in Caste societies... But we see in our society the myth of social communication and upward mobility become meaningless... The state does not tax the rich, but taxes the poor, and so the poor become poorer, helpeless, and helpless without education or ambition...
Those who do not accept this situation are thrown in prison, but society is creaking under the weight of all the law that does not bring security, nor peace, nor the promise of a better future for all... Law does not protect us, and it does not protect the poor who are the most common victims of all crime... Law, the state, does protect the rich from the poor, but the poor are too poor to pay the state to protect the wealthy from them...
A stronger state is more likely than a just state... Look a Rome... The poorer class of citizen, driven from their homes and fields by slaves, they put Caesar in the saddle, and this did bring the Senatorial class to heel; but the Caesars never brought justice to the citizens of Rome, and when they found that all they needed was the army behind them to have power, the citizens of Rome were as degraded as ever...
The right could absolutly have tyranny if they so choose, and much easier than they could have democracy; but the stronger state would be a terror to them as to all...We do not need a stronger state... The state has powers it is not using because it is controlled by the rich... We need more democracy even if that means denying the power of wealth to influence government, even if it means we trash the parties and make such collusion illegal...The people need to be reminded that the power is theirs, and that they are the law, and that they have the power to do and to undo, and all they cannot undo is death...
Comment: #8
Posted by: James A, Sweeney
Wed Jul 18, 2012 8:36 AM
Re: Patchy
Dear Sir,
I am gratified that you appreciate the brevity, if not the lucidity, of my post. Would that I could return the accolade.
Unfortunately, I could find nothing in your carefully constructed [and blatantly slanted] example of the Laws of Economics that negates the validity of my opinion that workers deserve a living wage.
I certainly sympathize with Business Owner A. I don't believe I ever asserted that running a business was easy. But if Mr. A cannot create sufficient demand for his product or service to offset the overhead required to run his business why is that the fault of employees B and C simply because they would like to be able to pay their rent and feed their families?
Seems to me Mr. A has a flawed business plan and will shortly go out of business… and that too is a pretty basic law of economics.
Oh, and if employee C is not performing up to expectations then let him go [which will be difficult, of course, but please see my point about running a business above] and hire employee D. Presumably, the overall increase in productivity will generate more revenue enabling Mr. A to give employee B that raise he so richly deserves.
But then, what do I know?
Comment: #9
Posted by: ABarkus
Wed Jul 18, 2012 9:25 AM
So....the business owner has a 'flawed plan.' Nothing to do with government coercion, mandates, taxation or regulation then.

You failed to specify this living wage panacea. Again. Your myopia is quite revealing. And possibly permanent.
Comment: #10
Posted by: Patchy
Wed Jul 18, 2012 10:01 AM
Re: Patchy
Please refer to the note in my previous post regarding running a business not being easy.

"I can't make enough money! The government wants to keep me honest and mty employees want to make a living! It's not fair!!"
Do you righty types whine like this all the time or only when someone asks you to "play by the rules"?
Comment: #11
Posted by: ABarkus
Wed Jul 18, 2012 10:17 AM
Re: Sweeney. Lengthy, not well said but you made your points. Well done.

Re: ABarkus, don't always agree with you, but on this you are point on....and Patchy goes down. Anything else from Patchy will be sputtter from his deflated ego. Well done, well said.
Comment: #12
Posted by: morgan
Thu Jul 19, 2012 7:31 AM
Re: Patchy

You didn't expect this collection of Marxist malcontents to actually address your points, did you?
Comment: #13
Posted by: Jeff Gunn
Fri Jul 20, 2012 12:49 AM
Not sure what Morgan was reading because Patchy completely destroyed ABarkus' and his tired and failed viewpoints.
Comment: #14
Posted by: Thetruth
Sat Jul 21, 2012 6:04 PM
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