Send People the Money

So I went to the bank
To see what they could do
They said
Son, looks like bad luck got a hold on you
--Simply Red

A question that seems to escape many people is this. If the goal of monetary policy is to stimulate economic growth, then why do so indirectly? Lower interest rates and quantitative easing (i.e., central bank bond buying) do not put money into people's hands directly.

On the contrary, these policies grant privilege to a select few who, because they are first to use what amounts to newly minted cash, derive the most benefit from it in terms of purchasing power.

If the goal is to stimulate growth in a manner where everyone has an equal chance to benefit from the stimulus, then why not simply send an amount, say, $10,000 to each US citizen? Such a policy should fairly distribute the inflation among the citizenry and grant 'equal opportunity' for all, right?

Why aren't champions for 'social justice' et al clamoring for a helicopter drop?

War Memorial

All the burning bridges
That have fallen after me
All the lonely feelings
And the burning memories
Everyone I left behind
Each time I closed the door
Burning bridges lost forevermore
--Mike Curb Congregation

On Memorial Day we are prompted to remember those who serve in the military, particularly those who lost their lives in battle. It seems also worthwhile to reflect on whether those wars where millions have lost their lives were necessary.

And for those in the military and for those who voluntarily support the military, it seems a good day to reflect on whether their actions are offensive (unjust) or defense (just) in nature.

A couple of years back these pages discussed Leonard Read's "Conscience on the Battlefield." Here it is again for reflective purposes.

Climate Gestapo

And the men who spurred us on
Sit in judgment of all wrong
They decide and the shotgun sings the song
--The Who

Another aspect of DOJ lawlessness has been agency attempts to use law enforcement resources to stifle debate on global warming, a.k.a. climate change. In particular, energy companies such as Exxon (XOM) have been threatened with legal action for issuing statements that oppose the Obama administrations energy agenda.

Such action, of course, is a blatant violation of the First Amendment.

Now, five senators have written AG Loretta Lynch and demanded termination of all related DOJ activities. They also want an explanation of what steps the DOJ will take to prevent the infringement of the rights of US citizens who disagree with prevailing climate change orthodoxy.

My sense is that the louder and more visible this pushback becomes, the worse its gets for the administration and the Democratic Party in an election year.

no positions

Open Borders in Welfare States

After three days in the desert fun
I was looking at a river bed
And the story it told of a river that flowed
Made me sad to think it was dead
--America

Jacob Hornberger argues that, in order to remain ideologically consistent, libertarians must support open border policies in welfare states. He says that "the best way for libertarians to fight tyranny is not by supporting more tyranny, but rather by a steadfast adherence to libertarian principles."

However, in welfare states the tendency is to let immigrants have access to healthcare, education, and other resources that must be funded by taxpayers. Opening borders in such situations mean that the burden on taxpayers will increase.

Hornberger suggests that if adhering to his principles means paying higher taxes, "then so be it." But by consenting to higher taxes for both himself and others, isn't he in fact supporting the same tyranny that he purports to fight? He is using strong armed government agents to forcibly take from some in order to get what he wants.

To be fair, Hornberger does mention that laws could be passed that preclude immigrants from going on welfare. If such laws were passed and adhered to, then open borders would be more consistent with libertarian philosophy because no aggression has been added to the system. Unfortunately, Hornberger's argument does not stay on this track--perhaps because he suspects that the likelihood of passing and adhering to such laws in welfare states is low.

Absent such laws, however, open borders in welfare states further compromise the liberty of some, which should be unacceptable to lovers of freedom.

Outsourcing Immorality

You're begging me to go
Then making me stay
Why do you hurt me so bad?
--Pat Benatar

Interesting article suggesting that one purpose behind politics in society is to create a channel for outsourcing wrong yet expedient conduct to others. While the article calls this 'moral outsourcing' it is actually a process for outsourcing immoral behavior.

Outsourcing immorality provides a mechanism for maintaining a positive self-view while still getting what we want. It allows us to avoid the social and psychological costs of unethical actions because someone else (the politician) is seen as responsible for that poor conduct.

When they contract with political agents, people believe that they are not doing anything wrong--someone else is. This is, of course, supreme self-deception.

They are the ones creating conditions of agency. They are, by definition, the principals of immorality. They are outsourcing violence.

DOJ Lawlessness

Highway to the danger zone
Ride into the danger zone
--Kenny Loggins

Judge Nap discusses recent lies of DOJ lawyers in the case of President Obama's illegal plan to make undocumented immigrants US citizens. On several occasions, the lawyers told federal judges that the plan had not yet been implemented when in fact it had. As a consequence, a federal judge ordered the lawyers to take ethics classes, amounted to a mere slap on the wrist.

This DOJ continues to operate above the law as it does the bidding for a lawless administration.

Hit Man

With a little perseverance
You can get things done
Without the blind adherence
That has conquered some
--Corey Hart

Saw Don Mattingly managing the Miami Marlins yesterday. The Hit Man was one of my faves during my 80s playing days. Some huge years with the Yanks at both plate and in the field. League MVP in 1985. Career .307. Nine gold gloves.

I particularly recall his 8 consecutive game home run streak in 1987. That was my last year as a player. Loved how he got ready at the plate and incorporated a bit of his style into my preparation in the box with good success.

Mattingly's injury shortened career has kept him out of the Hall of Fame due to the "not enough years" excuse.

Seems wrong to me.

GOP Roots Not Libertarian

And the parting on the Left
Is now parting on the Right
and the beards have all grown longer overnight
--The Who

Heard today that "the Republican Party needs to return to its libertarian roots." The Republican Party was not rooted in libertarian principles. The GOP was rooted in Hamilton's Federalists which became the Whigs. Its platform was the American System--a collection of interventionist policies designed to consolidate power in centralized government. The first Republican Party president, Abraham Lincoln, nailed those planks into his platform in 1860.

Instead, it was the Democratic Party of Jefferson founded in 1800 that more closely resembled what we know today as libertarian philosophy. Its anti-federalist motto was 'that government is best that governs least.'

As Rothbard recounts, the libertarian roots of the Democratic Party were extracted by the progressive movement nearly 100 years later.

Although the current political landscape might suggest the GOP as slightly closer to libertarian ideals than the Democratic Party, it is a mistake to think that the Republican Party was grounded in libertarian roots.

Venezuela

You see it in the headlines
You hear it every day
They say they're gonna stop it
But it doesn't go away
--Glenn Frey

The latest socialist state to collapse is Venezuela. The handiwork of former president Hugo Chavez is now coming home to roost big time. As is always the case in socialist states, economic resources have been grossly misallocated. Production and distribution have withered.

To compensate for hard times, bureaucrats have inflated the currency. Rather than increasing prosperity, this action has only led to hyperinflation.

Shelves are bare. The bolivar is next to worthless.

Socialism strikes again.

Great Enrichment

No more running down the wrong road
Dancing to a different drum
Can't you see what's going on
Deep inside your heart?
--Michael McDonald

Prof Deirdre McCloskey ponders why we are so rich. For thousands of years, average world income remained essentially unchanged. Two centuries ago it was about $3/day. Today it is $33/day, an eleven fold increase. Of course, developed countries like the US greatly surpass the world average.

Why? What happened a couple of hundred years back that explains the tremendous increase in standard of living that McCloskey refers to as the Great Enrichment?

Marxian types attribute it to increases in exploitative market practices--capitalists seizing surplus value from workers and keeping it for themselves. But this does not explain why those who have purportedly been exploited are far better off today than even kings were not long ago.

Others, according to McCloskey, think it relates to capital--excess saving that can be allocated toward productivity improvements. But this is a circular argument of sorts. Excess saving is only possible when people are productive enough to set aside some resources for future rather than present consumption. It does not explain the increases in productivity that enabled savings and capital to be accumulated.

To others, it has been the development of legal institutions such as English common law that has brought about progress. But many of these institutions preceded the Great Enrichment. Besides, it can be argued that legislative and judicial bodies can be (and have been) readily employed to expropriate wealth rather than to create it.

What explains the Great Enrichment, then? Liberty. Freedom from being under the control of others. Liberated people are free to pursue their ideas, to innovate, without fear of having their creations (i.e., their property) forcibly taken by others. Slaves, serfs, subordinated individuals, bureaucrats frozen in hierarchy are not.

McCloskey suggests that with liberty comes the principle of equality. Not the Marxian notion of equality of income. The idea is equality under the law. All people treated the same, no favors given to special interests or 'protected classes.' Knowing that justice treats all people the same regardless of position on the social pyramid emboldens people to pursue their interests. The prospect, not the guarantee, that hard work will lead to improved prosperity unleashes human ingenuity.

As these pages have observed, the idea of liberty remains new and radical. Continued progress along the curve of the Great Enrichment depends on the expansion, not the contraction, of liberty.

Worker Exploitation

Standing in line marking time
Waiting for the welfare dime
'Cause they can't buy a job
--Bruce Hornsby & the Range

One of the many myths regarding capitalism is that it exploits workers. As discussed here, Marx's definition of exploitation involved the extraction of surplus value from workers. Because Marx's theory has been refuted over the years, sympathizers have broadened the definition toward the concept of taking unfair advantage of others' vulnerability.

This definition leads many to believe that capitalism is rife with opportunities for exploitation. In particular, powerful capitalists are often proposed to take unfair advantage of workers in order to maximize profit.

The video observes that many capitalists would indeed like to exploit workers in order to maximize profits, but competition with other capitalists prevents them from doing so. Competition forces employers to pay workers close to the value of their productivity whether they want to or not. If a capitalist tries to pay a worker below market wages, then there is incentive for other employers to hire that individual for a greater salary because the employer will profit by doing so. In competitive markets, wages reflect worker productivities.

What the video does not note is that workers would also like to exploit the capitalists. They would like to get paid more than they are worth in order to maximize their incomes. But competition also forces workers to offer their services close to their productivities, lest they would be let go in favor of individuals who offer their services at prices more reflective of realized productivity.

The video does go on to note that changes of exploitative practices in capitalistic systems are reduced because exchanges in unhampered markets are voluntary. No one puts a gun to the head of either employers or workers to contract with each other. Even in examples often presented by interventionists, such as payday loans and child labor, both parties expect to gain more in the exchange than they give up, lest they would not engage in trade.

Mutually beneficial exchanges are how wealth is created in society. The more wealth that is created, the lower the vulnerability for exploitation by those engaged in trade.

The alternative to capitalism, intervention by the state, leaves individuals much more vulnerable to exploitation--exploitation by politically connected interests--than unhampered markets ever could. By definition, forced exchange brought about by the strong arm of the state guarantees that exchanges will not be mutually beneficial.

Exploitation in labor markets is reduced by reducing interventionary forces and freeing people to make more voluntary exchange.

Economics in One Lesson

And nobody wants to show you now
And nobody wants to show you how
--Corey Hart

What one book would I recommend to anyone seeking basic understanding of economics--particularly as it pertains to political economy? Easy: Hazlitt's Economics in One Lesson.

Hazlitt was not an economist by formal training. Probably a good thing, as it permitted him to see economic realities much better than most PhDs. He excelled in explanation, which permits him to convey economic concepts wonderfully.

HH demonstrates just how broadly Bastiat's Broken Window Fallacy applies to economic and social action. That lesson alone is worth the price of admission, which turns out to be merely an open mind that is willing to learn.

Positivism

Let me be your ruler
You can call me Queen Bee
And I'll rule, I'll rule, I'll rule, I'll rule
Let me live that fantasy
--Lorde

Partisans from both parties worried about what happens if the 'other' candidate becomes president. This is because our system has migrated from rule of law to rule by men. Discretionary rule. Positivism.

Our founding ancestors sought a different design. One that would not depend on who sits in the big chair.

Discretionary rule is ok with people as long as their guy is in charge. But sooner or later...

Audit the Fed

I think that you're afraid to look in my eyes
You look a little sad boy, I wonder why
--Madonna

Encouraging to the see the 'Audit the Fed' bill (H.R. 24 Federal Reserve Transparency Act) sponsored by Kentucky rep Thomas Massie moving closer to full vote in House. The Fed and central banks in general are the single most corrosive factor in social functioning today.

Anything that permits the people to better understand the cesspool of central banking is welcome. Mandatory, thorough audits of Fed policies and open market transactions, including those with foreign groups such as other central banks, would be a positive step forward.

Bank Watch

This is the craziest party that could ever be
Don't turn out the light 'cause I don't want to see
--Three Dog Night

Keeping an eye on the bank index here. Downward pressure against the near-term uptrend line and on the 50 day moving avg.

Would be prone to interpret a decisive break thru support as a bearish tell.

position in SPX

Miner Shiners

So far away from me
So far I just can't see
So far away from me
You're so far away from me
--Dire Straits

The recent lift in gold has propelled the mining sector higher--with many names up at least 100% since the beginning of the year. The chart of Pan American Silver (PAAS) demonstrates the strength.

Thus far well defined 'boxes' with high volume spike each time the stock moves to the higher box.

An interesting related tidbit. During its quarterly conference call last week, PAAS management was asked ZERO questions by the investment community. Implication: there is little interest in mining shares by fund managers and analysts despite their big move.

That's bullish on the margin.

position in PAAS

Time Scarcity and Focus

"Go on, lean in. Listen. You hear it? Carpe...you hear it? Carpe...carpe diem. Seize the day, boys. Make your lives extraordinary!"
--John Keating (Dead Poets Society)

One of our most difficult challenges is to live in the present. The past and future distract us and sap attentive capacity from the here and now.

What causes this lack of focus? Perhaps it is an assumption that time is abundant. We think that there will be opportunity in the future to more fully use each minute.

But time is deceptively scarce. We extrapolate life today into a long projected future. But tomorrow, as the saying goes, is promised to no one.

Perhaps a daily self reminder--that God's ultimate gift is more scarce than we think--would improve focus on the present.

Falsification of History

There are things we won't recall
And feelings we'll never find
It's taken so long to see it
'Cause we never seemed to have the time
--Phil Collins

In a series of essays first published in 1952, Mises penned "How Modern History is Taught" which essentially described the propaganda war against capitalism waged primarily by historians, teachers of social science, journalists, and other intellectuals. In this excerpt, Mises notes many of the urban legends perpetuated by the propagandists, including:

Life was better prior to the Industrial Revolution. Capitalists converted plenty into scarcity.

Central planning is the preferred way to organize economically. Currently floundering experiments with central planning suffer only from not have the right bureaucrats in charge of production and distribution decisions.

The enemy of the common man is business.

The rise of industry rose not out of the demands of the ordinary person, but of the rich. Business caters to the needs of the few, not the many.

Diseases and other social problems today have, at their root cause, capitalism to blame.

Sixty plus years after Mises wrote this essay, little has changed in the propaganda war against capitalism. Hampered markets, the hallmark of socialism, perpetuate the falsification of history.

Robots and Minimum Wage

Thank you very much, Mr Roboto
For doing the jobs nobody wants to
--Styx

Article notes that fast food restaurants are installing self-serve kiosks in stores as a response to laws that raise the minimum wage. As stated, "Companies will not pay $15/hr for an $8/hr task just because the government tells them to." As long as employers are free to hire who they want to, productivity dictates wages, not government edict.

Instead, operators will adjust. This will include hiring robots if possible.

Which leads to the following proposition: The higher the minimum wage, the greater the interest in automation as a substitute for labor.

Hillarygate Escalates

"The wheels of justice turn slowly down here but they do turn."
--Detective Marie Mitchell (Hard Target)

Judge Nap continues to track developments in Hillarygate, a story that remains largely shunned by mainstream media. The noose continues to tighten, and Ms Clinton does not seem to be helping herself with her ongoing stream of dismissive remarks about the investigation.

Perhaps this is because she feels that the Dept of Justice stonewall will be high enough to deter a breach. We now learn that DOJ employees have contributed nearly $75,000 to the Clinton campaign--far more than to other presidential candidates.

Whether her DOJ friends will be able keep Hillarygate from blowing wide open remains to be seen.

Chief Fiction Peddler

But don't be fooled by the radio
The TV or the magazines
They show you photographs of how your life should be
But they're just someone else's fantasy
--Styx

Recently President Obama has expressed regrets that he has not been able to convince Americans that the economy is actually strong. He is not the first bureaucrat to say as much. The thinking is that the only thing standing in the way of economic strength is confidence. "If we could only get them to feel good about spending, then things would be fine."

This is classic Keynesianism. What we need is more spending. In order to do that, we need to instill confidence.

No amount of propaganda changes the reality that we have overspent in the past and are drowning in debt. Debt needs to be paid back (or defaulted upon) and savings need to be built. Less consumption, not more.

In efforts to perpetuate economic delusion, the president assumes the role of chief fiction peddler.

Minding the Gap

When the good times never stay
And the cheap thrills always seem to fade away
When will we fall
When will we fall down
--Toad the Wet Sprocket

Took a small starter position in Gap (GPS). We laid out a fundamental case for GPS last fall. Since then the shares have had their ups and downs--most recently down as fears grow about slowing mall traffic.

Enterprise value now rests in $7-8 billion range, fairly well aligned with what I believe is long term free cash generating potential of this operation. Balance sheet cash:debt still about even. Dividend yield approaching 5%.

My sense is that the stock will trade lower still. Five year support rests at about $15. Not going wild here. But plan to nibble some more if price moves in my favor (lower).

position in GPS

Trump's Truth

Well I've heard lots of people say
They're gonna settle down
You don't see their faces
And they don't come around
--Lynyrd Skynyrd

David Stockman observes that, despite Donald Trump's many wild pitches, his recent comments concerning US debt were right down Broadway. Were he president, Trump said that he would seek to negotiate 'discounts' on paying back the debt.

Flabbergasted, pundits associated 'discounts' with 'restructuring' (a.k.a. 'default'). Trump later said that outright default is not what he meant: "First of all you never have to default because you print the money I hate to tell you, so there is never a default."

Stockman notes that central banks led by the Fed have been doing precisely this for years: buying government debt with the click of a mouse:

"The world's central banks own more than 50% of the publicly traded US debt of $13.5 trillion, and not one single penny of it was purchased with real savings or anything which remotely resembles honest money. It was all scooped up when central banks hit the 'buy' key on their digital printing presses."

The government and Wall Street have been in on this scam from the beginning. Governments can finance profligate spending cheaply when central banks buy their paper below free market rates, and financial racketeers get rich peddling information, services, and securities that would never be in demand under sound money regimes.

Creditors, meanwhile, get paid back with inflated currency that purchases less than when 'contract' between lender and borrower was established.

Indeed, paying back the national debt with 'discounts' is already official policy and has been for decades. Like all statists, Trump wants to perpetuate the practice.

Motherhood and Capitalism

"It's a giant of a human thing."
--Mary Rafferty (The Valley of Decision)

As we wrap up a wonderful Mother's Day weekend, Prof Horwitz observes that much of what we currently celebrate about the institution of motherhood was facilitated by the advent of capitalism and the wealth that it created.

Pre-industrial revolution families were essentially units of economic production. Fathers generally acted as chief operating officers who directed production, while all family members--fathers, mothers, children, and extended family worked the land or small business. Most families scratched by on the brink of survival.

Because mothers were expected to generate income themselves, childcare was often delegated to grandparents and older children whose lower marginal productivities in the family line of work made them more useful in child governance.

This is not to say that mothers of this period did not care for their children. Rather, moms were unable to allocate more attention to their children out of economic necessity.

As capitalism took root during the Industrial Revolution, two factors helped change the motherhood dynamic. Capitalism took production out of the home and placed it in other facilities, such as factories and office buildings. Households began to shift from sites of production to sites of consumption.

The second factor, the increase in wealth from the improvement in labor productivity, then took over. As productivity grew, one adult (usually the father) became capable of supporting an entire family on a single income stream. This enabled women and children to exit the workforce, thereby planting the seeds for the institution of modern motherhood.

Other factors certainly played roles, but it seems unlikely that motherhood as we now celebrate it could have evolved without the influence of capitalism.

"We" Rhetoric

Too many shadows, whispering voices
Faces on posters, too many choices
If, when, why, what
How much have you got?
--Pet Shop Boys

Professor Higgs discusses the insidious use of "we" and other collective rhetoric in political discourse. The intention is to fool people into thinking that groups or institutions act monolithically. They do not. Only individuals act.

"We" rhetoric posits widespread agreement that rarely exists in a axiomatically diverse world.

As William Graham Sumner observed long ago, "we" often means "you" in the sense that you should support someone else's agenda--often couched in terms of some "greater good."

Used in this manner, "we" can be viewed as a positive substitute symbol employed by propagandists.

Higgs concludes, "Man, said Aristotle, is a political animal. A corollary of this proposition is that the political man is a fallacy monger who employs language to get what he wants at other people's expense."

Endgame

So hold on
Here we go
Hold on
To nothing we know
--The Motels

When it comes to investing and market knowledge, who do I regard as the smartest guy in the room? Quite possibly legendary hedge fund manager Stanley Druckenmiller, whom these pages have discussed various times. At a recent investment conference, legendary Druck delivered a presentation entitled "The Endgame." ZeroHedge has published it along with his slides. I plan to read it several times.

In a nutshell, Druck highlights the absurd policies of Federal Reserve and of China that have resulted in reckless investment behavior, financial engineering, and overleverage. He believes that TINA (there is nothing alternative) attitudes with respect to investing in equities are wrong, and that global equity markets are in the process of topping in preparation for a major trend change. He likens this period as the mirror image opposite to the bullish investment set up in the early 1980s.

He finishes with tip of the cap toward gold, noting that "we regard it as currency and it remains our larges currency allocation."

Druckenmiller is prepping for the endgame.

position in gold

Third Parties

And the parting on the left
Is now parting on the right
And the beards have all grown longer over night
--The Who

There is talk among Republicans dissatisfied with developments in the current presidential campaign of forming a 'third party.' Implied they mean significant third party as there are, and have been, numerous other obscure political parties that have placed candidates on ballots.

Personally, I applaud the idea of numerous (i.e., beyond three) political parties as the competition should suppress markets for political favor.

I am not well-versed in political theory, but I suspect there has been research that demonstrates that, in a system governed by a decision rule that says that candidates with majorities of votes win (a.k.a. 'democracy'), then the tendency over time should be for only two significant political parties. This would seem particularly true when the system permits the winners to employ the strong arm of government to forcibly take resources from the losers for their benefit.

In the spirit of game theory, coalitions of special interests are likely to form to amass votes for their side. Because the goal is to get just over 50% of the vote, it seems that no coalition would be satisfied with, say, 5% of potential voters because they know that they would lose the game. Instead, special interests would keep combining until they get to what they think is a winning mass--about half the vote. Third parties would be 'acquired' or crowded out into obscurity.

In democracies, there seems little theoretical room for a third significant party. This suggests another way how democracy and diversity are opposed.

US Oil Imports

Out where the river broke
The bloodwood and the desert oak
Holden wrecks and boiling diesels
Steam in forty five degrees
--Midnight Oil

Nice time lapse graphic showing change in US oil imports from 2000 to 2015.

Key takeaway is that imports from OPEC countries (and many other places) have generally gone down, imports from Canada have gone up.

Palace Revolution

Everywhere I hear the sound of marching charging feet, boy
--The Rolling Stones

With Donald Trump's win last night in Indiana and Ted Cruz's subsequent drop from the race, it appears highly likely we are headed for another authoritarian president--whether the next elect be Republican or Democrat. While there is an argument to be made that the present disarray in the two mainline political parties is a long term positive, I have my doubts that the republic will be able to withstand another statist regime.

By definition, extreme events are low probability affairs--at least in the near term. However, that should not discourage vigilance in keeping an eye out for factors that might spawn such 'tail risk.'

As I see it, yesterday's development in the presidential race adds one more factor to an already growing list that increases the likelihood for a major socioeconomic meltdown over the next four years. This is not a prediction. I am merely saying that the chances of an extremely negative scenario unfolding have gone up significantly in my mind's eye.

In the spirit of scenario planning, I intend to manage this risk accordingly.

Voting for Evil

So if you meet me have some courtesy
Have some sympathy, and some taste
--The Rolling Stones

Have heard several people recently say that they will vote for the presidential candidate that they believe is 'less bad'--i.e., the one that is the lesser of two evils. I am reminded of Frank Chodorov's quote below.

Why compromise with evil?

Intolerance in Diverse Environments

Miyagi: You remember lesson about balance?
Daniel Larusso: Yeah.
Miyagi: Lesson not just karate only. Lesson for whole life. Whole life have balance. Everything be better. Understand?
--The Karate Kid

Extending their previous work on victimhood culture, sociology professors Bradley Campbell (UCLA) and Jason Manning (WVU) propose how one form of cultural homogeneity amid other forms of diversity shapes conflict and moral climate.

Environments with little diversity give rise to moralities concerned with purity. To be moral is to share the belief's of one's ancestors, family, friends. Deviations from the norm become subject to ridicule and rejection. Heresy is seen as a serious offense.

Diverse environments, on the other hand, give rise to moralities of tolerance. Freedom of speech and religion are seen as rights. To be moral is to respect and value differences in others. Heresy is no longer offensive. On the contrary, opposition to diverse cultural expressions and opinions is viewed as offensive.

Why, then, do we see intolerance toward acts of 'underdiversity,' such as behaviors labeled as 'microaggressions,' in environments that seemingly value much diversity (such as college campuses)? Campbell and Manning argue that highly diverse environments become hypersensitive to even small challenges to diversity which results in a less tolerant environment. On its face, this argument does not resonate with me as it seems contradictory--i.e., diverse environments act like homogenous environments.

Their second explanation is more sensible. When administrative institutions populate diverse environments then those institutions become sources of moral dependency as individuals who feel offended by acts that challenge their views run to administrators for redress. As previously noted, this seems a straightforward extension of resource dependence theory as individuals become dependent on administrators to provide problem solving resources for their social coping problems.

In perhaps their freshest contribution, Campbell and Manning also argue that environments that are diverse on some dimensions but homogenous on others might paradoxically promote acts of intolerance. For example, college campuses, while diverse in many ways, are relatively homogenous when it comes to political views. As particular academic disciplines lean more to the left (e.g., sociology), then hostility grows in reaction to challenges to a discipline's sacred political beliefs.

Cultures that are not fully diverse--that have nested 'pockets of purity'--then, give rise to movements of intolerance.

The authors suggest two remedies in the context of university environments. One is to reduce the population of administrators to lower capacity for moral dependence that arises when individuals seek bureaucratic solutions to perceived offenses. Individuals would have to resolve conflicts on their own rather than leaning on administrators for help.

The other solution is to increase the political diversity of collegiate faculty. Balance left with more right, for example, in order to create a more stable and robust learning environment in higher ed.

Classification

There's a place where the light won't find you
Holding hands while the walls come tumbling down
When they do, we'll be right behind you
--Tears for Fears

The opening thought of Marx and Engels (1848) was, "The history of all hitherto existing society is the history of class struggles." They go on to blame such 'classification' on capitalism, otherwise known as free or unhampered markets.

Their insinuation, of course, was precisely backward. By the time Marx and Engels published their Manifesto, movement of world economies toward the capitalistic end of the spectrum was breaking down class systems--particularly with respect to income mobility. Never in the history of the world were more people breaking chains that bound their ancestors to the bottom of the social pyramid and beginning their ascent to higher standard of living.

A case that such mobility is slowing today and once again binding people to lesser economic destinies is reasonably grounded in the phenomenon of dwindling capitalism and growing socialism. As these pages have previously observed, Jeff Tucker notes that all Marx and Engels' ten points for destroying capitalism in favor of a socialistic state have been in motion for years.

Much of the allure involves the promise of 'free stuff' that drive democratic process toward a larger state. Paradoxically, the more free stuff people vote for, the more classbound (and less free) they are.