Controversial Essays

by Thomas Sowell

  If we were really running low on these resources, they would be getting progressively more expensive, instead of progressively cheaper. This is elementary supply-and-demand economics. But those addicted to overpopulation hysteria are no more interested in economics than they are in evidence.

  What overpopulation theory provides is far more emotionally satisfying than facts, logic or economics. It is one of a whole family of theories which depict other people as so dangerously thoughtless that imposing the superior wisdom and virtue of some anointed social missionaries is all that can save us from disaster.

  This vision inspired the eugenics movement in the early decades of this century, the recycling movement today and innumerable other heady crusades in between. Contrary facts mean absolutely nothing to the true believers. Those who insist on talking about those contrary facts encounter only hostility and demonization.

  Julian Simon understood that. In a letter to me a couple of years ago, he mentioned a certain Nobel Prize-winning economist who had said to him that “even with all his prestige he would not say that population growth might well be a good thing because he was afraid he might lose credibility.” Such is the power of intimidation in our time.

  “Yes, one can always argue that such prudence is wise. But we all know the consequences of such ‘wise’ choices,” Simon wrote. It is a society where strident hysteria drowns out truth and where our policies are based on headstrong nonsense, loudly shouted.

  With a full understanding of the opposition and smears he would encounter, Julian Simon nevertheless wrote The Economics of Population Growth, Population Matters and—his best-known book—The Ultimate Resource. To him, the ultimate resource was human intelligence.

  We should also add, in honor of Julian Simon, the courage to use that intelligence.

  THE ROLE OF THE RICH

  A recent catalogue from the giant second-hand camera dealer KEH listed a Canon camera made for the Japanese navy during World War II. This model is described as one of only 15 such cameras made and as being still in excellent condition. Its price is $40,000.

  Most of us who shop for second-hand camera equipment aren't planning to pay 40 grand. But clearly there are some who are rich enough and nostalgic enough to pay a hundred times more than is necessary to buy a camera of comparable photographic quality today.

  Those on the political left, for whom indignation is a way of life, are deeply offended by such frivolous expenditures by the rich. Congressman Dick Gephardt or Congressman David Bonior could no doubt produce several sermonettes on the subject. But the great Supreme Court justice Oliver Wendell Holmes said that the real cost of the rich to the rest of society is what they consume. How much is it costing the rest of us that some old-money heir or heiress, or some new Silicon Valley millionaire in his twenties, is splurging on this half-century-old camera that practically nobody else wants?

  Suppose instead that the rich wanted the same things that everybody else wanted. What if Bill Gates developed a fetish for meat and potatoes, and spent ten or twenty billion dollars collecting vast amounts of meat and potatoes in refrigerated warehouses? This would deprive many working families across America of food and drive up the price to others.

  The more far out and off-the-wall the purchases of the rich are, the less anybody else is deprived. When some rare stamp or antique piece of furniture is auctioned off for a small fortune at Sotheby's, it is no skin off anybody else's nose. To me, antiques are just old furniture and a stamp that won't get my letter where it is going is just a little piece of paper with some glue on it.

  By definition, the rich can take all the serious necessities of life for granted. In fact, so can millions of other Americans who are not rich. What is left for the rich to want? Stuff that gives them a sense of specialness or distinction.

  Vanity is not the most attractive of human traits, but it is not the most harmful either. Nor is vanity confined to the rich. Young slum hoodlums who fight—or even kill—other kids to get their designer clothes or sneakers are doing the same thing, at a lot higher cost to others.

  There was a time when the poor stole bread to feed their children. You could understand that. But today, when riots and looting sweep through some slum, food is left unmolested while the looters—supposedly “enraged” by some injustice—can be seen happily carrying off TV sets, fancy clothes and the like.

  Ironically, what the rich are often praised for is likely to do more harm than what they are condemned for. Donating money to left-wing causes brings automatic approbation in the media, in academia and wherever else the intelligentsia hang out.

  Buy up land and donate it for “open space” and an idle heir or heiress will be forgiven for all the money that some ancestor of theirs earned by providing goods and services to millions. But this is much more like buying up meat and potatoes than it is like blowing 40 grand on an old camera.

  The less land is available to build on, the more people are going to be crowded in the remaining land that is available—and the higher rents are going to be on that land. Should people packed into slums be grateful that the actions of the rich are driving up their rents and preventing them from getting a little elbow room in what the anointed like to call “urban sprawl”?

  Then there are those rich people who bankrolled all sorts of Communist-front and fellow-traveler movements during the Cold War. How many people in the Gulags do you suppose felt the same glow of appreciation for their open mindedness and moral equivalence that was felt in Hollywood or Martha's Vineyard?

  Some rich Silicon Valley entrepreneurs like to “give back” by literally serving food to the homeless. In other words, they are showing their gratitude to American society by subsidizing the lifestyle of people who refuse to work, in an economy with millions of unfilled jobs, and who carry out all sorts of antisocial or even criminal behavior on the streets.

  All in all, the vanities and vices of the rich may do far less harm than their supposed virtues. Idle self-indulgence may not be pretty, but if it keeps the rich off the streets and out of mischief, so be it.

  PERENNIAL ECONOMIC FALLACIES

  Every time some new income statistics come out, two predictable fallacies follow in their wake. The first is that the rich are getting richer, while the poor are falling behind. The second is that the real income of American families has not risen significantly for years.

  These fallacies return as regularly as the swallows returning to Capistrano, though not nearly as gracefully. A typical headline in the New York Times proclaims: “In A Time of Plenty, The Poor Are Still Poor.” Yet study after study has shown that “the poor” do not remain poor in contemporary America.

  An absolute majority of the people who were in the bottom 20 percent in 1975 have also been in the top 20 percent at some time since then. Most Americans don't stay put in any income bracket. At different times, they are both “rich” and “poor”—as these terms are recklessly thrown around in the media. Most of those who are called “the rich” are just middle-class people whose taxes the politicians avoid cutting by giving them that name.

  There are of course some people who remain permanently in the bottom 20 percent. But such people constitute less than one percent of the American population, according to data published by the Federal Reserve Bank of Dallas in its 1995 annual report. Perhaps the intelligentsia and the politicians have been too busy waxing indignant to be bothered by anything so mundane as facts.

  Alarmists are not talking about real flesh and blood people. They are talking about abstract categories like the top or bottom 10 percent or 20 percent of families or households. So long as all incomes are not identical, there will always be top and bottom 10 percents or 20 percents or any other percents. But these abstract categories do not contain the same people over time.

  Households do not contain the same numbers of people, even at a given time. The bottom 20 percent of households contains 39 million people, while the top 20 percent contains 64 million. Comparing households is comparin
g apples and oranges.

  If you are serious about considering the well-being of flesh and blood human beings, then you can talk about their real income per capita. But alarmists avoid that like the plague, because it would expose their little game for the fraud that it is.

  Real income per capita has risen 50 percent over the same span of time when household income has remained virtually unchanged. How is this possible? Because households are getting smaller. The very fact that there are higher incomes enables more people to afford to go out and set up their own independent households.

  Behind both the statistics on inequality that are spotlighted and the statistics on ever-changing personal incomes that are ignored is the simple fact that people just starting out in their careers usually do not make as much money as they will later on, after they have had years of experience.

  Who should be surprised that 60-year-olds have higher incomes and more wealth than 30-year-olds? Moreover, that was also true 30 years ago, when today's 60-year-olds were just 30. But these are not different classes of people. They are the same people at different stages of their lives.

  At some times and places, there have been whole classes of people who lived permanently in poverty or in luxury. But, in the United States today, the percentage of Americans who fit either description does not reach beyond single digits.

  It is one thing to be concerned about the fate of flesh and blood human beings. It is something very different to create alarms about statistical relationships between abstract categories.

  Despite desperate efforts of activists to keep “hunger in America” alive as an issue by manipulating numbers, actual examinations of flesh and blood people show no nutritional differences between people in different income brackets. In contrast to the gaunt and undernourished poor of other times and places, Americans in the lower income brackets today are slightly more likely to be overweight than is the rest of the population.

  The magnitude of statistical differences may tell very little about the condition of human beings. A two-to-one difference in the amount of food available would be very painful if it meant that those on the short end did not have enough to eat. But a thousand-to-one difference in price between wearing a Rolex and wearing a Timex is something that can be left to the alarmists—especially since both watches tell time with about the same accuracy. And both are a lot more accurate than “income disparity” hysteria.

  SWEATSHOPS AT HOME AND ABROAD

  It is truly ironic that people at colleges and universities across the country have been organizing to protest sweatshop labor in the Third World, when the greatest examples of sweatshop labor in America are on their own campuses.

  Where else can a nationwide cartel work people for no money at all, while collecting millions of dollars from the fruits of their labor? That cartel is the National Collegiate Athletic Association (NCAA) and the people whose work brings in millions at the gate are the athletes who play on college teams.

  In big-time college football and basketball, it is not uncommon for the coach to make more money than the college or university president—sometimes several times what the academic chief executive makes. But if any money finds its way into the hands of the players who put their bodies on the line, that is called a “scandal.”

  One football player who put his body on the line and is now paralyzed as a result of an injury sustained during a game, Kent Waldrup, Jr., of Texas Christian University, was recently denied any right to disability benefits from the university by an appellate court because he was not an “employee.”

  The academic aspect of campus life is not a lot better, as far as sweatshop labor is concerned. Teaching assistants across the country are joining labor unions to try to get better pay for their work. Parents who pay megabucks tuition for their children to go to big-name colleges and universities may not realize that their offspring are all too often being taught by no-name teaching assistants who are paid a pittance, rather than by the big-name professors who give the institution its aura and collect six-figure salaries.

  Teaching assistants do not simply assist with teaching. They teach many of the courses all by themselves. In some departments, more classes are taught by TAs than by professors. These include some of the top-rated universities in the country.

  With both college athletes and TAs, the claim is made that they are being compensated by getting an education. Only for the TAs is that likely to be true in most cases. Big-time football and basketball are full-time jobs. Athletes have to go through the motions of getting an education, for the sake of appearances and eligibility to play. But those who actually get a degree—much less an education—are the exceptions, rather than the rule.

  Teaching assistants are usually graduate students who are working toward their Master's degrees or their Ph.D.s, while taking on the job of teaching undergraduate courses that their professors don't want to be bothered teaching. In a big-name university, anyone taking introductory courses in math or English is very unlikely to see a member of the faculty standing in front of the class.

  Graduate students in general are very vulnerable, since their first opportunities in the professional careers ahead of them depend on the recommendations of their professors, some of whom have exploited that dependency unconscionably. Some professors have stolen their graduate students' ideas and published them as their own. Others have exploited their graduate students sexually.

  One professor at Stanford was accused of having sexually molested the son of one of his graduate students and committed suicide shortly thereafter. Most, however, pay no such price—or any price at all. Even the accused molester had a medal struck in his honor after his death.

  If the morally anointed on campus want to protest exploitation, they need not look overseas—or even beyond their own ivy-covered buildings.

  As for the people in the Third World, jobs with American companies operating there are likely to be among the best jobs available, even if these jobs don't pay as much as they pay in the United States. Since the workers are unlikely to produce as much output per hour as American workers, pressuring companies to pay American wages means that fewer Third World workers will have jobs at all.

  If the real purpose of all the uproar about sweatshop labor in the Third World is to allow college students and professors to feel morally one-up on businesses that are providing much-needed jobs in poor countries, then it accomplishes that purpose. But it may accomplish nothing else, except perhaps to demonstrate yet again academic hypocrisy.

  SANITY IN SAN FRANCISCO

  Congratulations are in order for the San Francisco Weekly, for an informative article that introduces sanity into a subject where insanity is the norm—namely, rent control in San Francisco.

  What has happened under stringent rent control laws in the city by the bay is what has happened in virtually every other city around the world where such laws have been passed. But it will still be news to rent control advocates, who seldom bother to get the facts.

  According to the San Francisco Weekly, new construction of multifamily housing dropped by 32 percent within a decade after the city's rent control law was passed in 1979. Over the past ten years, the number of rental units in the city has declined absolutely by 7,500. The vacancy rate is below one percent. Nor has rent control meant low rents. The average rent for a one-bedroom apartment in San Francisco is nearly $2,000 a month.

  None of this is unique to San Francisco. A study of 16 cities by William Tucker of the Cato Institute showed “that the advertised rents of available apartments in rent-regulated cities are dramatically higher than they are in cities without rent control.” In view of this, it is not surprising that he also found homelessness more prevalent in cities with rent control.

  How can this be, when the whole purpose of rent control is to keep rents down? First of all, the purpose of any policy tells you absolutely nothing about what will actually happen under that policy. Too many disastrous laws get passed because those who pass them win politi
cal points for their good intentions and nobody bothers to check up later to see what actually happened.

  The San Francisco Board of Supervisors has recently commissioned the first official study ever done of the effects of rent control in the city. Imagine! The first rent control law was passed in 1979 and has been amended more than 50 times in the two decades since then—usually tightening the controls—but nobody in government has yet bothered to find out what the actual effect has been.

  Politics is not about empirical realities, but about popular images. So long as the image of rent control is good, it wins votes at election time—and that is what it is all about, as far as politicians are concerned. Meanwhile, there is a whole movement of rent-control activists and tenants' rights advocates who say things like, “Housing is not a commodity.” Mindless mantras like that make them look and feel like the morally anointed, and apparently that is good enough for them. Who needs facts when you have myths that serve your purposes?

  The biggest myth is that rent control helps the poor. It does help those poor people who happen to have an apartment when rent control laws are passed—but it also helps the affluent and even the rich who happen to be on the inside looking out. However, as the housing supply dries up, who gets left out? The homeless people on the streets are certainly not the rich.

  Studies in both Cambridge, Massachusetts and Berkeley, California showed that “rent-controlled apartments were concentrated among highly educated professionals.” In New York, people living in rent-controlled apartments have included the president of the New York Stock Exchange and even Hollywood stars who keep such apartments to use when they happen to be in town.

  San Francisco's rent-control law, like those in other cities, was passed as a “temporary” measure to deal with some immediate crisis—in this case, the runaway inflation of the late 1970s. A cynic once said that there is nothing more permanent than a temporary government policy. Rent control laws were also passed as “temporary” measures in London and Paris during the First World War—and remained in force on past the Second World War.