80/20 Day: July 15, 1848, Vilfredo Pareto joined the human race

July 15, 2014

Happy 80/20 Day!

Italian economist, engineer and political activist Vilfredo Pareto was born on July 15, 1848, in Paris, where his father had fled due to political difficulties.

Pareto should be more famous, for his explanation of the 80/20 rule, and for his contribution to making better things, the Pareto chart.  Many economic texts ignore his work almost completely.  Quality management texts ignore his life, too — generally mentioning the principles they borrow, but offering no explanation.

Vilifred Pareto, Wikipedia image

Vilfredo Pareto, Wikipedia image

His contributions, as accounted at Wikipedia:

A few economic rules are based on his work:

And now you, dear reader, having just skimmed the surface of the pool of information on Vilfredo Pareto, know more about the man than 99.99% of the rest of the people on the planet.  Welcome to the tip-top 0.01%.

Resources:


Dramatic, graphic difference between Labor and Capital

March 28, 2014

How do Labor and Capital differ?  They differ in two key ways:  First, in the burden they carry; and second, in the way they carry that burden.

Illustrations from a book I would definitely like:  Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists:

Figure 6.5: Anon, ‘The Difference between Labor and Capital’, Life, c. 1887.  Courtesy Huntingdon Library, California.  From Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists

Figure 6.5: Anon, ‘The Difference between Labor and Capital’, Life, c. 1887. Courtesy Huntingdon Library, California. From Monash University Publishing, Drawing the Line, Chapter 6. ‘All the World Over’ The Transnational World of Australian Radical and Labour Cartoonists

 

This view of Capital and Labor was not unique to the anonymous source; from the same year:

Figure 6.4: Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887.  Courtesy State Library of New South Wales.

Figure 6.4: Phil May, ‘Poverty and Wealth; It all depends on the position of the bundle’, Bulletin, c. 1887. Courtesy State Library of New South Wales.

Capitalists appear to have all eaten well, well enough in the eye of the public that a fat man with a vest was quick, cartoonist shorthand for “capitalist.”  If it did not apply in every case — see John D. Rockefeller, Andrew Carnegie, and the younger Cornelius Vanderbilt, for example — it applied often enough that “the fat guy” was instantly recognized as the capitalist, the factory owner, the boss.

Click over to that Monash University site; there are a score of great cartoons in that one chapter.


Insta-Millard Pundit, economics edition: Adam Smith was a bleeding heart liberal

December 21, 2013

In a new book, author Jack Russell Weinstein argues that we should pay more attention to Adam Smith’s first book, The Theory of Moral Sentiments,  and not allow Smith’s humanitarian pleas for good community be hijacked by libertarians, conservatives or liberals.

Adam Smith’s Pluralism, Jack Russell Weinstein, Yale University Press, 360 pages

Adam Smith, updated. Illustration by Michal Hogue.

Adam Smith, updated. Illustration by Michal Hogue.

A review of the book explains further, at American Conservative, “Adam Smith, Communitarian:

Weinstein builds upon Smithian harmony, explaining that while life is not always commercial, it is always communal. Community, in turn, derives its lifeblood from “imagination,” because imagination creates the capacity for sympathy. Unlike Kant and other Enlightenment thinkers, Smith “presumes human difference” as a necessary and inherent aspect of civilization, rejecting the Kantian ideal of “noncontextual normativity.” Smith recognized that cultural, temporal, and social differences shaped norms and values, making it impossible to create a single, all-inclusive norm of human behavior. This is why sympathy is so important. It offers a means that is natural to the human condition—our desire to commiserate with our fellow man—to bridge the gap between our differences.

Smith believed that “political society is not derived from a social contract,” according to Weinstein. Instead, society is a natural expression of what it means to be human. The state of nature for Smith is one of community, and the ultimate questions related to human society are questions of morality and virtue, not economics and politics. Thus, a broad, morally robust education rooted in a particular community is essential to forming sympathetic individuals. While Smith did not idealize the role of education—it could not completely eliminate human selfishness and vanity—he believed it had the power to “direct vanity to proper objects” and to “convert competing passions into a harmonious character.”

[The blog post’s headline should be read with more than a hint of sarcasm; hate to have to explain that.]

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“It’s a Wonderful Life,” Republican edit

December 17, 2013

It's a Wonderful Life

Movie house poster for “It’s a Wonderful Life” (from Wikipedia)

Jimmy Kimmel’s crew put together the trailer for the new, GOP-edition of “It’s a Wonderful Life.”

Tip of the old scrub brush to Frank Milewski, and the “real communists of Bedford Falls.”

It’s a wonderful life, Christmas, Capitalism, Communism in America Politics.

More:


Quote of the moment, again: Abraham Lincoln on job creators, ‘labor is the superior of capital’

September 4, 2012

Lincoln enters Coles County, Illinois, by Charles Turzak

Abraham Lincoln as working man, woodcut by Charles Turzak circa 1933 – Abraham Lincoln Presidential Library & Museum; caption on this image at the Lincoln Library site notes that Turzak portrayed Lincoln as the working man Lincoln himself never aspired to be, though he well respected those who did labor.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed.

Labor is the superior of capital, and deserves much the higher consideration.

President Abraham Lincoln, Annual Message to Congress, December 3, 1861 (the “State of the Union”)

Abraham Lincoln took great inspiration from Americans and their striving to move up in the world.  He admired inventions and inventors, he admired working people and their drive to become their own managers and proprietors of their own businesses.  Lincoln had been there himself.

By the time he stopped at the Wisconsin State Fair in 1859 — a full year before his campaign for the presidency — Lincoln was a relatively wealthy lawyer, a good trial lawyer whose better-paying clients included the largest industrial companies of the day, railroads.  Lincoln grew up on hard-scrabble farms, though, and he had been a shopkeeper and laborer before he studied law and opened his practice.  Lincoln also owned a patent — a device to float cargo boats higher in the Sangamon River that served Sangamon County where he lived, the better to make the entire area a figurative river of free enterprise.

Lincoln was invited to comment on “labor,” at an exhibit showing new machines to mechanize America’s farms.  At the Wisconsin fair Lincoln complimented farmers, inventors, inventions, and all laborers.  Just over 24 months later, excerpts from that speech showed up at the close of his State of the Union declaration, his December 3 remarks delivered to Congress as the Constitution required.  Lincoln probably did not deliver the remarks as as a speech, but they appear in the Congressional Record as a speech, and it is often cited that way.  He spoke something like these words in Wisconsin, and they were his views at the end of the first year of the Civil War, expressing yet again his hope that the union would survive, and continue to prosper, for all working people.

Below is a more complete quoting of Lincoln’s remarks from the Message to Congress.

It continues to develop that the insurrection is largely, if not exclusively, a war upon the first principle of popular government– the rights of the people. Conclusive evidence of this is found in the most grave and maturely considered public documents, as well as in the general tone of the insurgents. In those documents we find the abridgment of the existing right of suffrage and the denial to the people of all right to participate in the selection of public officers except the legislative boldly advocated, with labored arguments to prove that large control of the people in government is the source of all political evil. Monarchy itself is sometimes hinted at as a possible refuge from the power of the people.

In my present position I could scarcely be justified were I to omit raising a warning voice against this approach of returning despotism. It is not needed nor fitting here that a general argument should be made in favor of popular institutions, but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effort to place capital on an equal footing with, if not above, labor in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them and drive them to it without their consent. Having proceeded so far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.

Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed.

Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them. A large majority belong to neither class–neither work for others nor have others working for them. In most of the Southern States a majority of the whole people of all colors are neither slaves nor masters, while in the Northern a large majority are neither hirers nor hired. Men, with their families–wives, sons, and daughters,–work for themselves on their farms, in their houses, and in their shops, taking the whole product to themselves, and asking no favors of capital on the one hand nor of hired laborers or slaves on the other. It is not forgotten that a considerable number of persons mingle their own labor with capital; that is, they labor with their own hands and also buy or hire others to labor for them; but this is only a mixed and not a distinct class. No principle stated is disturbed by the existence of this mixed class.

Again, as has already been said, there is not of necessity any such thing as the free hired laborer being fixed to that condition for life. Many independent men everywhere in these States a few years back in their lives were hired laborers. The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him. This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all. No men living are more worthy to be trusted than those who toil up from poverty; none less inclined to take or touch aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which if surrendered will surely be used to close the door of advancement against such as they and to fix new disabilities and burdens upon them till all of liberty shall be lost.

From the first taking of our national census to the last are seventy years, and we find our population at the end of the period eight times as great as it was at the beginning. The increase of those other things which men deem desirable has been even greater. We thus have at one view what the popular principle, applied to government through the machinery of the States and the Union, has produced in a given time, and also what if firmly maintained it promises for the future. There are already among us those who if the Union be preserved will live to see it contain 200,000,000. The struggle of to-day is not altogether for to-day; it is for a vast future also. With a reliance on Providence all the more firm and earnest, let us proceed in the great task which events have devolved upon us.

[Excerpted here from the online Classic Literature Library, Writings of Abraham Lincoln Vol. 5; the complete Message to Congress of December 3, 1861, begins here; the section quoted above can be found on pages 143 and 144.]

Yes, I should have reposted this yesterday, for Labor Day.  Lincoln’s words are good 365 days a year, 366 days in leap years.  Keeping the thought with us is what counts.  (This was originally posted in February 2012.)

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If Stalin said America is “a healthy body,” why can’t anyone find the source?

March 14, 2012

Joseph Stalin, via Chicago Boyz

Joseph Stalin would have to have been drunk to call the U.S. “healthy,” and to have complimented America’s patriotism, morality and spiritual life. Even then, it would be unlikely. Why does this quote keep circulating?

This has been floating around Tea Party and other shallow venues for a while, but I’ll wager Stalin did not say it:

“America is like a healthy body and its resistance is threefold:  Its patriotism, its morality, and its spiritual life.  If we can undermine these three areas, America will collapse from within.”

I can’t find any source for it; it’s mostly quoted on right-wing sites where people marvel over what a prophet Stalin was.  All requests for a citation in five or six different forums I’ve checked, are unanswered.  Nothing like it appears at the often-checked Wikiquote.  The Stalin Archive holds nothing close to the claimed quote.

Perhaps more telling:  Is it likely that Joe Stalin ever would have called the U.S. “a healthy body?”  Stalin was of a school that claimed capitalism was diseased, and America was infested with a soon-to-be terminal case.  If he called America “diseased” by patriotism and religion, it would be consistent with other statements, but his calling America healthy for patriotism and spiritual life, it’s inconsistent with other claims he made, about America and about capitalism (see Stalin’s 1929 remonstrance to the U.S. Communist Party, for example).

So, Dear Readers, my request to you:  Can you offer the source of this quote, Joseph Stalin or not?

Why would a false claim from Stalin get such a life on the internet?

Update, March 15, 2012:  I’m calling this one:  It’s a bogus quote.  Joseph Stalin didn’t say it.  Not as many comments here as e-mails and comments on other discussion boards and Facebook — no one has come even close to anything like the line above from Stalin.  No source quoting the line even bothers to give a decade, let alone a year, a location, and a citation that would pass muster in a sophomore high school English class.  Tea Partiers, you’ve tried to twist history again — stop it.

Update March 1, 2013: If you’re checking in here studying for a DBQ for an AP class, please tell us in comments, which AP class, and what city you’re in.  Thanks.


Quote of the moment: Abraham Lincoln on job creators, ‘labor is the superior of capital’

February 16, 2012

Abraham Lincoln as working man, Charles Turzak woodcut - Abraham Lincoln Presidential Library & Museum

Abraham Lincoln as working man, woodcut by Charles Turzak circa 1933 – Abraham Lincoln Presidential Library & Museum; caption on this image at the Lincoln Library site notes that Turzak portrayed Lincoln as the working man Lincoln himself never aspired to be, though he well respected those who did labor.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed.

Labor is the superior of capital, and deserves much the higher consideration.

President Abraham Lincoln, Annual Message to Congress, December 3, 1861 (the “State of the Union”)

Abraham Lincoln took great inspiration from Americans and their striving to move up in the world.  He admired inventions and inventors, he admired working people and their drive to become their own managers and proprietors of their own businesses.  Lincoln had been there himself.

By the time he stopped at the Wisconsin State Fair in 1859 — a full year before his campaign for the presidency — Lincoln was a relatively wealthy lawyer, a good trial lawyer whose better-paying clients included the largest industrial companies of the day, railroads.  Lincoln grew up on hard-scrabble farms, though, and he had been a shopkeeper and laborer before he studied law and opened his practice.  Lincoln also owned a patent — a device to float cargo boats higher in the Sangamon River that served Sangamon County where he lived, the better to make the entire area a figurative river of free enterprise.

Lincoln was invited to comment on “labor,” at an exhibit showing new machines to mechanize America’s farms.  At the Wisconsin fair Lincoln complimented farmers, inventors, inventions, and all laborers.  Just over 24 months later, excerpts from that speech showed up at the close of his State of the Union declaration, his December 3 remarks delivered to Congress as the Constitution required.  Lincoln probably did not deliver the remarks as as a speech, but they appear in the Congressional Record as a speech, and it is often cited that way.  He spoke something like these words in Wisconsin, and they were his views at the end of the first year of the Civil War, expressing yet again his hope that the union would survive, and continue to prosper, for all working people.

Below is a more complete quoting of his remarks from the Message to Congress.

It continues to develop that the insurrection is largely, if not exclusively, a war upon the first principle of popular government– the rights of the people. Conclusive evidence of this is found in the most grave and maturely considered public documents, as well as in the general tone of the insurgents. In those documents we find the abridgment of the existing right of suffrage and the denial to the people of all right to participate in the selection of public officers except the legislative boldly advocated, with labored arguments to prove that large control of the people in government is the source of all political evil. Monarchy itself is sometimes hinted at as a possible refuge from the power of the people.

In my present position I could scarcely be justified were I to omit raising a warning voice against this approach of returning despotism. It is not needed nor fitting here that a general argument should be made in favor of popular institutions, but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effort to place capital on an equal footing with, if not above, labor in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them and drive them to it without their consent. Having proceeded so far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.

Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed.

Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them. A large majority belong to neither class–neither work for others nor have others working for them. In most of the Southern States a majority of the whole people of all colors are neither slaves nor masters, while in the Northern a large majority are neither hirers nor hired. Men, with their families–wives, sons, and daughters,–work for themselves on their farms, in their houses, and in their shops, taking the whole product to themselves, and asking no favors of capital on the one hand nor of hired laborers or slaves on the other. It is not forgotten that a considerable number of persons mingle their own labor with capital; that is, they labor with their own hands and also buy or hire others to labor for them; but this is only a mixed and not a distinct class. No principle stated is disturbed by the existence of this mixed class.

Again, as has already been said, there is not of necessity any such thing as the free hired laborer being fixed to that condition for life. Many independent men everywhere in these States a few years back in their lives were hired laborers. The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him. This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all. No men living are more worthy to be trusted than those who toil up from poverty; none less inclined to take or touch aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which if surrendered will surely be used to close the door of advancement against such as they and to fix new disabilities and burdens upon them till all of liberty shall be lost.

From the first taking of our national census to the last are seventy years, and we find our population at the end of the period eight times as great as it was at the beginning. The increase of those other things which men deem desirable has been even greater. We thus have at one view what the popular principle, applied to government through the machinery of the States and the Union, has produced in a given time, and also what if firmly maintained it promises for the future. There are already among us those who if the Union be preserved will live to see it contain 200,000,000. The struggle of to-day is not altogether for to-day; it is for a vast future also. With a reliance on Providence all the more firm and earnest, let us proceed in the great task which events have devolved upon us.

[Excerpted here from the online Classic Literature Library, Writings of Abraham Lincoln Vol. 5; the complete Message to Congress of December 3, 1861, begins here; the section quoted above can be found on pages 143 and 144.]

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