Friday, June 16, 2017

Progressive Equal Pay and Capuchin Monkeys

“Most people are pretty happy with what they’ve got until they see what the other guy has got.” – Alfred E. Neumann, Mad Magazine

Photo: Wikipedia
An article about “equal pay,” which appeared on my screen recently, caught my eye. The article was entitled, “What Happens When Two Monkeys are Paid Unequally for the Same Work?” The embedded video was clipped from a TED talk by Frans de Waal, primatologist, ethologist, and professor of primate behavior at Emory University, who talked about the “fairness study” as it involved the pillars of morality, reciprocity and empathy. His study was done with Capuchin monkeys who appeared to “reject unequal pay.” http://www.upworthy.com/2-monkeys-were-paid-unequally-see-what-happens-next?g=3

The outcome of the monkey video embedded bears no resemblance to the economics of remuneration but, to the untrained mind, it seems to validate the snowflakes’ mantra that we should all receive equal pay because it is our human right. These days, in the progressive philosophy, all welfare and the results of human activity are a human right bestowed upon us by the generous and omnipotent government that receives its money and generosity from thin air and money trees.

If two Capuchin monkeys were given cucumbers, they were perfectly happy. If one monkey was given grapes, the results were different. Using new monkeys who have not done the task before, the results were comical. 

The two monkeys paid the human with a rock first and then received the treat, either cucumber or grapes. The monkey on the left got cucumbers and the monkey on the right received grapes. The first piece of cucumber was fine, the monkey ate it, however, after she saw the monkey on the right receiving grapes, a better tasting treat, the first monkey rejected the next slice of cucumber and threw it in apparent displeasure back to the human running the experiment. Each time the monkey received cucumber, she was agitated, banged and rattled the glass enclosure and threw the cucumber back. As the presenter said, this is the “Wall Street” protest on display, the audience erupted in laughter. https://m.youtube.com/watch?v=dMoK48QGL8

This may seem like a convenient lesson of Economics 101 and why all Capuchin monkeys should be paid equally for the price of a rock, however, it is more a lesson on malicious Envy, a deadly sin.

Keynesian economics, taught in our colleges and universities, tells us that “The United States has rather more income inequality than most other industrialized countries,” and “The distribution of income in the United States has grown substantially more unequal since about 1980.” (Economics Principles and Policy, William J. Baumol and Alan S. Blinder, tenth edition, p. 450)

First of all, we are not Capuchin monkeys. Secondly, food is not income, nor pay, unless we live in a primitive society and use food as commodity money.

Thirdly, progressives recite the politically correct talking points that agitate and enrage them, demanding equal pay, an economic impossibility. They have failed to learn in school the real causes of income inequality.

1.      Differences in ability (Some of us can do math faster, some are better wordsmiths, some program computers more accurately, some run faster, some can play an instrument, and some are born with poor health due to genetic mutations or have different IQs.)

2.      Differences in intensity of work (Some like or are able to work longer hours without making mistakes)

3.      Risk taking (Entrepreneurs gamble sometimes all they have and win, other times they lose and start all over again with the same energy and curiosity)

4.      Compensating wage differentials (Some people work the night shift or work very dangerous jobs that other people are not willing to take; consequently they must be paid more as an incentive to work.)

5.      Schooling and other types of training (Those who go to college and receive a degree with an employable skill are going to receive higher pay upon graduation; those who choose to end their learning with a high school diploma or a worthless college degree with no possibility of employment at the end of four years, will experience an income differential that they will not like but it was based on a voluntary decision.)

6.      Work experience (Research has proven that workers with more experience earn higher wages.)

7.      Inherited wealth (Children of wealth can go to more expensive schools and can finance businesses and thus potential success; there is no guarantee that inherited wealth will make one successful but, in most cases, it is quite beneficial; Chelsea Clinton received a very high salary on her first job even though she had no experience whatsoever in the field, it was based strictly on nepotism.)

8.      Luck (Chance and luck play important part in income inequality. Someone develops an idea that makes him/her a multi-millionaire. At the same time, thousands others toil for years on great ideas that never take off.)

When it comes to unequal pay due to economic discrimination, Americans find this intolerable. Economic discrimination, according to Economics 101, happens when equal factors of production receive different payments for equal contributions to output. This sounds great in theory but in practice, how do you measure, each and every time that two factors of production are equivalent; it is always a subjective determination, not a precise and objective one.

You may spend eight hours a day at your desk but your productivity may be half of someone else’s because you spent part of the time day dreaming, surfing, taking breaks, talking to your co-workers, playing computer games, and not turning your assigned report on time. Should you get paid the same as another person who completed twice as much work as you in eight hours? In the case of assembly line production, it is easier to measure productivity based on the number of widgets you produce.

Even Keynesian economists agree that “equality is bought at a price” and that there are better ways to promote equality by seeking policies that do the least possible harm to incentives and efficiency in the economy. They prefer redistribution of income to fight poverty. “Neither complete laissez faire nor complete equality would normally be society’s optimal choice.”

Centralized planning economics has experimented with equal incomes for most professions, and failed miserably in every communist country it was tried, with disastrous effects. People became even lazier than they are by nature, hid and slept part of the day instead of working, pretended to work because they knew the commies pretended to pay them, justified stealing from work to supplement income, and developed a black market in order to survive.

Charles Murray and Richard Herrnstein, a social critic and a psychologist, wrote a book, The Bell Curve, which became rather controversial due to the claims made on the distribution of IQ tests on a bell curve. Most people clustered in the middle, with fewer at both ends.

As Baumol and Blinder said, “No one doubts that intelligence contributes to economic success, nor that genetics has some bearing on intelligence.” But some argue that environmental factors are more important than genetics in determining intelligence and that “true” intelligence is different from test-measured intelligence. I might add common sense, which is not so common anymore, to the list of economic success. Cognitive ability is certainly not the main ingredient in economic success. Why else would a ball player and some actors make so much money? They have a unique skill or talent that most people don’t have.

To sum it up simply, we are not Capuchin monkeys, envy is a sin, and, in my humble experience, progressive equal pay at all levels is a utopian communist promise that cannot be fulfilled; it is just equal misery for all.


 

 

 

 

 

1 comment:

  1. One of the best things you have ever written. Please post more articles on the basic principles that can be understood by all those with no background knowledge in the science of economics.

    ReplyDelete