Robert E. Wright's Blog, page 6

A Non-Lethal Solution for Mass Shootings

A Non-Lethal Solution for Mass Shootings It is 2020 and about twenty twenty-somethings are in an open office setting that looks like an updated Houston mission control station. In front of each of these modern day "Top Guns" sits a monitor and joystick and a huge screen, currently black, looms at the front of the room. The young men and women joke and jibe with each other, various limbs akimbo as friendly insults and soft objects crisscross the room.
Suddenly, an alarm goes off and Stacy's monitor lights up. In a flash, her hands are in control of a drone just released from a liar so secret that only a few know of its existence, let alone its exact location. The others don't even flinch and some look bored until Stacy blurts out, it's a school, and this is not a drill. Almost instantly, a supervisor buzzes into the room and the Top Guns take up their stations as the big monitor at the front pops into life. 
Some take control of drones from nearby buildings and race them to the scene, just in case. But Stacy has this. The shooter, barely 15, is wearing goggles so she deftly switches from mace to Taser and is on him so fast that he barely gets a shot off at the drone as three of his classmates scamper to safety. A split second later, he is on the ground, convulsing. Stacy instructs the school's security system to sound the all clear, a unique series of sounds only the teachers know the meaning of.
Just as she does so, however, another Top Gun, a geeky looking male who got his job by winning an international first person shooter video game tournament, shouts "Second shooter, 6 o'clock!" He's too far for her second Taser so Stacy switches to the tranquilizer gun and puts one into the assailant's chest, toppling him. Meanwhile, the supervisor has switched off the all clear chime, alerting teachers to remain on lock down. Stacy then hits the first shooter, who is starting to recover from the Taser, with a tranquilizer. 
The backup drones begin to arrive but both shooters remain motionless until later revived by EMTs, after law enforcement personnel secured them to ensure that they cause no harm to themselves or others. The Top Guns then return to a typical boring day of false alarms, equipment tests, and training drills. 
Like other first responders, the Top Guns actually want their days to be uneventful, but as employees of an entrepreneurial company, they know full well that their success will only induce those with evil intent to change tactics. The big boss is already adding electronic bomb sniffing devices to the drones and thinking about ways to stop truck attacks with a level of violence far short of RPGs.
This story is obviously fictional, and highly dramatized, but the events described are technologically possible TODAY. Why are Americans debating the Second Amendment, again, instead of discussing practical, humane, do I daresay Christian, steps to reduce the impact of gun violence? Do we want to save innocent lives or score ideological points of no real value?

U.S. Tax Policy, Inflation, and the Euthanasia of the Individual Investor in the 1970s: The Views of Gadfly Journalist Wilma Soss

Since the financial fiasco of 2008, some U.S. investors have been subjected to a subtle but invidious injustice: they have paid income taxes on interest earnings that are below the rate of inflation. Although they enjoyed nominal gains they suffered real, by which I mean inflation-adjusted, losses. This has not become a major policy issue because many such investors did not itemize their deductions and many fewer will do so under the “Tax Cuts and Jobs Act” of 2017. Moreover, the difference between the savings and inflation rates was just a few percent at most and interest rates have been so low that interest earnings typically pale compared to income. The stakes are simply too low to get riled up about the situation.But what if the U.S. economy were to suffer a major bout of inflation? Although the Federal Reserve has found it difficult to increase inflation to its target, key policymakers and economists have admitted that they do not understand why that is the case. The Panic of 2008 and Great Recession basically broke their models, and all the Fed chairperson’s economists and all the Fed chairperson’s computing power has not been able to put the econometric Humpty Dumpty back together again. Nobody seems much concerned about this but the last time the Federal Reserve was as clueless about the causes of changes in the price level was in the wake of the shocks that occurred in the early 1970s, including the end of the Bretton Woods gold exchange standard and the oil crises. Those events triggered a decade-long bout of inflation unparalleled in peacetime America. That episode, commonly known as the Great Inflation, exposed the grave injustices of a tax code built upon nominal values.Bracket creep is a fairly well understood injustice from the era, a time when tax protesters “sent in band-aids with their returns to show it hurts … a lock of hair to indicate that they’ve been scalped … and a piece of shirt off their backs” (PN, 4/12/70).

Let’s Not Kill Two Birds with One Stone: A Technological Solution to America’s Twin Firearms Crises

Let’s Not Kill Two Birds with One Stone

A Technological Solution to America’s Twin Firearms Crises
Two firearms crises currently haunt America, the specters of mass and police shootings. An inventor-entrepreneur could solve both and become a millionaire, if not a billionaire, overnight.
What America needs is an affordable, long-range, non-lethal weapon no bigger or heavier than a handgun. A gizmo easy enough for even a teacher to use that can reliably incapacitate a threat at 50, maybe even 100, yards with very low mortality risk.
Such a weapon would greatly decrease the costs of mistakenly shooting an innocent and could be used without hesitation by law enforcement personnel or citizens, in public or at home. For many people, taking a human life, even the life of someone shooting at them, is not an act easily contemplated, much less carried out. Few hesitate, though, to spray mace in an attacker’s eyes, or to tase him.
A technological intervention makes both political and common sense. Deployment of non-lethal weapons does not infringe anyone’s Second Amendment rights but can mitigate the threat to human life from the millions of firearms already in private hands. It also does not preclude stronger gun control regulations. Law enforcement personnel can still use firearms but can be trained to use the non-lethal option in many situations that now entail the use of deadly force.
Existing personal self-defense weapons only work at very close range. What we need is the equivalent of setting our “phasers to stun.” Phasers do not yet exist and probably will not for some time but some very real, well-understood technologies could be adapted to cause incapacitation instead of death.
The weapons I have in mind will not solve all of America’s problems. They will not be able to stop snipers, bombers, or drivers but they will be effective against suspects, home invaders, and school shooters. Muggers and rapists will want to use them to facilitate commission of their dastardly deeds but the weapons will not be firearms and hence can be tightly regulated without violating the Constitution.
The fact that engineers have not already provided a long-range, non-lethal technological solution for America’s twin firearms crises is largely attributable to the odd, polarized discourse surrounding both mass and police shootings. We all agree that we do not want innocent blood spilled but all we seem to talk about is guns, guns, guns. If we put half as much effort into developing a practical, workable solution, entrepreneurs would have the incentive to invent one, knowing full well that they will be rapidly rewarded with brisk sales.
If I have underestimated the development costs or overestimated the size of the market, let the federal government and/or some corporation or foundation fund an XPrize. By 2020, we should all be able to incapacitate shooters less than 50 or 100 yards away for long enough to close the distance and physically restrain them before they regain enough of their consciousness or senses to pull the trigger again.

It’s Time to Release the Kraken … of Competition

It’s Time to Release the Kraken … of Competition

Repeal? Replace? How About Step Aside and Let Entrepreneurs Work? Especially in Healthcare.
Do you remember the great chewing gum crisis of 2005? When chewing gum cost $367 a pack on average, was only available in two inconveniently located stores, and tasted like sawdust? Of course you don’t, because it never happened. That is because the production and sale of chewing gum is left largely to market forces: supply, demand, innovation, and, ultimately, consumer choice.
Healthcare and health insurance are more complex than chewing gum to be sure but that is an argument for decreasing the government’s role in it, not turning it over to distant, unaccountable bureaucrats and, perhaps worse, politicians jockeying for position in the next election.
I am already on record with my own business plan, a mutual insurer offering combined life-health-disability policies that can begin in utero. I think it will work, but I do not know for certain. Other social entrepreneurs, like the trio of Amazon, Berkshire, and Bank of America, have their own plans, equally uncertain. Health insurers and healthcare providers, like Sanford in the Midwest, also have ideas percolating. The only real test is to offer rival plans to consumers and see which they prefer.
Right now, health insurance entrepreneurs are almost completely stymied by the dictates of the Affordable Care Act (ACA). Idaho is attempting to sidestep ACA but potential insurance entrepreneurs know that a state government cannot readily protect them from the federal government. (Look at how the Feds stomped on Colorado marijuana sellers by denying them access to the banking system.)
What entrepreneurs need is a credible commitment by the federal government to allow them to experiment with health insurance and healthcare delivery systems for the next 10, 15, or 20 years. That would require passage of a law requiring healthcare organizations to pay the same taxes on the same basis as their peers but otherwise giving them free reign to experiment in an environment that no longer favors employment-based group health insurance. 
Releasing the Kraken of competition will allow providers, insurers, and consumers to negotiate with each other directly, rather than via the government. If market forces are truly allowed to determine the results, they will almost certainly be better than ACA or any single payer or universal health system. If they are not, the political path to some system of socialized medicine in America should be clear. Before America goes down that likely irreversible path, however, it needs to do something that it hasn’t done since World War II, allow consumers to decide what type of healthcare and health insurance they want without distorting markets in favor of the largely pernicious employment-based variety.
What about the impoverished? It is quite possible that (social) entrepreneurs will find a way to adequately meet their healthcare needs, just as they do their needs for clothing, entertainment, food, refrigeration, transportation, and, yes, chewing gum. If not, the proper policy is to provide vouchers and let them decide which healthcare and insurance plans work best for them.
I call my proposal the Kraken, a mythical sea monster of mammoth proportions, to invoke the power of markets to destroy the old and thereby make room for the new. The Kraken of competition is indeed scary but it never destroys wantonly or capriciously. Rather, it directs its wrath at the weak and inefficient, at the institutions and practices that have made our healthcare and insurance system the wreck it is today.

Let's Value Quality Activist Scholarship as Much as the Traditional Variety

After the Great Debacle of 2008, I decided to connect my scholarship more deeply to the real world because the people in charge, who ranged from close to clueless to utterly useless, clearly needed help. I left the Stern School of Business for a more policy-oriented position in South Dakota, began writing policy history, and joined the board of Historians Against Slavery(HAS), an international NGO dedicated to using scholarship to help reduce the number of people enslaved in the world today. Subsequent events, including the Citizens United decision in 2010 and the 2016 election results, have only strengthened my conviction that America’s policy-making apparatus bears a striking resemblance to a toxic stew of incompetence and venality.
Other scholars have also decided that they can no longer remain on the sidelines. Joining the hundreds active in HAS are hundreds of others affiliated with the Tobin Project, “an independent, non-profit research organization motivated by the belief that rigorous scholarship on major, real-world problems can make a profound difference” and “improve society.” Named after James Tobin, recipient of the Nobel prize in Economics in 1981, the Tobin Project won the McArthur Award for Creative and Effective Institutions in 2013.
My goal is not to lure out researchers who desire to remain in their ivory towers conducting traditional forms of scholarship because I, like most scholars, believe that the pursuit of knowledge for its own sake is a noble endeavor. Rather, my goal is to induce ivory tower-types to: first, not stand in the way of those of us who would like to address real world problems in direct, yet scholarly, ways; second, ask themselves if they actually pursue knowledge for its own sake or if they merely engage in intellectual self-titillation.
On the first point, I have heard too many promising scholars say that they would like to try to improve the world but they cannot work on that right now because their chairs, deans, or provosts expect them to push out articles or books if they want tenure. If they dare push back, they are met with malarky about metrics, standards, and other bureaucratic detritus. If department chairs and other campus administrators cannot discern the quality of their own faculty without outside crutches like ‘journal ratings,’ they ought to step down, or at least aside, and leave the decision to those who are unafraid to make difficult judgements.
Many tenured professors also feel pressure to conform to the dictates of administrators and churn out ‘scholarship’ that few will read but that will raise their department’s ‘ranking,’ as if a number based on essentially nothing matters while people needlessly suffer and die, the environment deteriorates, and institutions of higher education degrade. Again, almost everyone values those seeking knowledge for its own sake but I would like to see scholars who want to improve the world not be punished professionally for doing so, i.e., to enjoy the academic freedom they once did. As John Stauffer noted in a recent speech at the International Slavery Museum in Liverpool, the best historians long engaged in activist scholarship, as have important scholars in other disciplines, including John Dewey, the Lynds, and Robert J. Lifton, among many others who conducted research before the professionalization virus struck the academy, like the swine flu, several generations ago. In short, those who like the ivory tower should by all means stay up there but out of the way of scholars-activists like Sara Goldrick-Rab, who makes a telling distinction between scholarly activism and political advocacy.
I would also enjoin traditional scholars to introspect and ask themselves if they truly seek knowledge for its own sake or if they merely amuse themselves and a few acolytes. Veteran economist Steven Payson raises the same difficult question in How Economics Professors Can Stop Failing Us (2017), a scathing indictment of academic economics. The economics journal ranking system, he argues, is rigged in favor of the students and friends of superstars, most of whom simply churn out derivative mathematical models too abstract to represent any real economy, past or present. (Little wonder, then, at the events of 2008.) The emperor of economics has no clothes, Payson explains, because he is actually buck naked, not because non-economists lack the mathematical prowess to see his highness’s resplendent garb. Based on personal experience, casual conversation, and discipline-specific critical literature, I believe that Payson’s critique of academic economics also holds to some degree for other social science disciplines, history and the humanities, management, and even science and engineering fields.
Acknowledging the shortcomings of traditional scholarship, however, should not be taken to imply that all activist scholarship is worthy. The new subfield called the ‘history of capitalism’ is particularly suspect. Most historians of capitalism have an activist agenda, whether they openly admit it or not. They want to expose the flaws of capitalism (which they never define but basically equate with the status quo) to pave the way for financial reforms and reparations for the descendants of slaves. Their activist impulse is not the problem, though, their poor scholarship is. Most of the subfield’s canonical works have been heavily criticized by economic historians, like myself (The Poverty of Slavery, 2017), and economist historians, including most recently Eric Hilt (“Economic History, Historical Analysis, and the ‘New History of Capitalism’,” Journal of Economic History, 2017).
Contrary to common assumption, scholarship with any chance of improving the world has to be better, much better, than traditional scholarship. That is because its audience, so to speak, is reality, not a handful of self-appointed experts or the friends of the author’s dissertation adviser. To have any chance of improving the human condition, activist scholarship has to address real world problems rather than traditional academic questions, follow the rules of logic, and ground itself empirically as well as theoretically. (For an excellent recent example, see the 2017 Tobin Project volume attacking the Citizens United decision edited by Naomi Lamoreaux and Bill Novak, Corporations and American Democracy.) Even the best activist scholarship probably will never help anyone or anything, but it is far more likely to improve the world than is careerist work, like proposing marginal tweaks to some arcane ‘literature’ and getting it published with help from academic nepotism.
So let’s all endeavor to start valuing quality activist scholarship truly aimed at improving our deeply troubled world as much as we value scholarly work performed for its own sake, self-gratification, or professional advancement.

A note to my "progressive" friends ...

Progressives, lend me your ears!

Yeah, you have every right to be upset with the state of the nation and the world and kudos for trying to change it. But here's the thing. Waiving your arms at "capitalism" isn't going to accomplish anything useful. For starters, nobody agrees what capitalism even means. It has become a catch all for "scary stuff I don't like," much the way that "Glass Steagall" became some kind of supposed super regulation after the Panic of 2008. Most of you have no idea how financial markets and intermediaries work and hence have no clue about which regulation(s) might be better than others and you wouldn't know adverse selection from moral hazard.

To have any chance of changing the world for the better, you have to understand it first! If you blog, tweet, even snap, crackle and pop to the same few (hundred, thousand, million) like-minded people, you're just pandering to a base, not effecting positive change. If you don't have the analytic skills and knowledge base to critique a system in concrete terms, you have no intellectual basis for calling for the eradication of this, or the regulation of that.

Until you understand some economics (theories as well as institutional details), please stick with human rights issues. I hate to have to criticize the thoughts of friends and colleagues but feel I must when they start talking out their you know whats. If you agree and want to learn more about economics, the financial system, public policy, and so forth, feel free to start here.

Why are many Indians so poor? In short, BIA-induced socialism!

Little Biz on the PrairieBy Robert E. Wright, Nef Family Chair of Political Economy, Augustana UniversityFor West River History Conference, Rapid City, So. Dak., 13 October 2017
My book about the history of entrepreneurship in South Dakota, Little Business on the Prairie, has two themes relevant to this conference. The first is that South Dakota has an unusually strong record of entrepreneurship, proprietorship, and self-employment in part because it always has. The second is that taking the Indian’s land was not the worst thing that Euroamericans did to them, stripping them of their entrepreneurial heritage was.History tells me that I better talk a bit about entrepreneurship. Specifically, last year at the annual South Dakota book doohickey held in Brookings a woman straight up asked me how the word was pronounced and what it meant, pointing at it in the subtitle of my book. “No wonder it has only sold a few dozen copies,” I thought to myself. Will Baumol, my good, now deceased friend from New York University’s Stern School of Business, where I used to teach courses in business history, always said there were three types of entrepreneurship: innovative, replicative, and exploitative.The first type is what people usually think of as entrepreneurship: inventors, business innovators, and what not. You know Thomas Edison and Elon Musk types. South Dakota has had its fair share of inventors and business innovators. A good way for history buffs to while away an afternoon is to look through the old patent records by using Google’s advanced patent search engine and the names of inventors mentioned in my book. Unfortunately, researchers still cannot systematically search patent applications by state for patents filed before the mid-1970s. I found the ones in my book the old fashioned way, by digging around.South Dakota has also had its fair share of exploitative entrepreneurs, though perhaps none as famous as the fictional Tony Soprano, the most recognizable exploitative entrepreneur, who make a living by raid instead of by trade, by taking rather than making. The so-called Wild West was full of sundry bank robbers, desperadoes, gunslingers, and so forth. Some Indians were exploitative entrepreneurs, too. The most well-known example is the massacre and slave raid at Crow Creek circa 1350 AD.But most entrepreneurial activity in South Dakota, both before and after Columbus, was replicative. Replicative entrepreneurs extend existing techniques and technologies to new geographical areas, so almost all agriculturalists, butchers, dentists and doctors, fishers and hunters, photographers, shopkeepers, and all other proprietors engage in replicative entrepreneurship. Their employees and government workers are the non-entrepreneurs according to Baumol’s typology, which is the one I use because it’s the best.Previous typologies made lame distinctions between, for example, legal and illegal enterprises. Well, a gambling establishment or a brothel in Deadwood, though illegal, is just replicative entrepreneurship because the patrons willingly pay for the services offered. A legal monopoly, by contrast, Baumol rightly categorizes as exploitative because it has the power to set prices or quantities to maximize its profits at the expense of buyers.So we can now turn to the proposition that South Dakota has always been very entrepreneurial. We know that because big businesses were few and far between in the state from its inception as a territory to the present. Eventually mining companies like Homestake supplanted individual placer miners and the timber and food processing industries spawned or attracted companies that employed hundreds of people. Nevertheless, more of South Dakota’s income comes from proprietors than any other state. Throughout history, relatively few South Dakotans were employees and most of them were employed by very small businesses, from ranchers to small retailers to professionals.The relatively strong entrepreneurial presence in early South Dakota attracted yet more entrepreneurial types, whose very example helped to spur even more to form their own businesses. A few entrepreneur-driven companies, like Raven, became very successful and relatively large but many entrepreneurs were happy just to make a living and moved on to new endeavors as the economy transformed away from extractive industries like mining and ag and into trade, light manufacturing, and professional services. Those people, called serial entrepreneurs, that is S E R I A L not C E R E A L entrepreneurs, sometimes became public or private sector employees for awhile before growing tired of bosses or co-workers and struck off on their own once again.In most states, economic recessions led to high rates of unemployment but in South Dakota laid off workers tended to simply go into business for themselves. An exception was during the Great Depression and that was because there was no money to start up a new business as most banks that hadn’t failed during the agricultural recession of the 1920s failed during the great bank failure waves of the early 1930s. And the remaining banks were not about to finance new businesses that would not be able to find paying customers.As I already mentioned, the book makes a big point about Indians. If you believe in the theory of conquest, the big crime was not taking their land, it was denuding them of their entrepreneurial heritage to the point that today some Indians themselves believe that their ancestors were somehow non-economic entities. In fact, Indians, including the Lakota, had a long history of entrepreneurship well before Columbus sailed the ocean blue, so the kids in South Park could have a day off “skoo.” In addition to exploitative entrepreneurship like that at Crow Creek, Indians were innovative and replicative entrepreneurs as well. From the time they arrived in the New World some 12,000 or more years ago until incarcerated on Reservations in the late nineteenth century, Indians were thriving. One piece of evidence of that is that they populated both North and South America lickety-split. And their bones look good, better than those of Europeans over most time periods.Innovative and replicative entrepreneurial activities include the Mitchell site, which apparently was a factory that produced pemmican from bison and prairie berries that was then shipped down the Big Jim and Mighty Mo rivers in bull boats to Cahokia, near present day St. Louis, where it was traded for pottery. Other evidence of long distance trade also abounds. It turns out that those trading meets held throughout the West were not the idea of Euroamerican trappers, as once assumed, but long-standing and purely native institutions analogous to European trade fairs.‘Tis true that Indian technology lagged behind that of the Europeans in some ways but that does not mean that it was stagnant. Atlatls, for example, eventually gave way to bows and arrows. Moreover, Indian medical technology was well ahead of its European counterpart in many ways. It was the Europeans, after all, who didn’t bathe very often and who thought everything could be cured with a good dose of mercury and a blood-letting.As Jared Diamond pointed out some 20 years ago now, the Europeans were able to conquer the Indians due to guns, germs, and steel. The germs were pure luck of the draw, the steel due to Eurasia’s relatively huge market area and hence relatively more advanced division of labor, and the guns due to the European’s proclivity for warfare, which was in turn a function, Diamond explained, of its funky geography, which lent itself to the creation of numerous competitive polities and hence lots of warfare. The point of all this is to show that Indians were not unusually dumb or lazy, or uninterested in technology or entrepreneurship, they simply found themselves on a part of the planet that was not the best suited to inventing guns or steel first. For that, they suffered the loss of their land. As I mentioned before, that taking is somewhat justified by human history. The Lakota themselves drove off other indigenous peoples, for example. But what is unconscionable, and the second theme of Little Business on the Prairie, is stripping Indians of their willingness and ability to engage in entrepreneurial activities. The Bureau of Indian Affairs is the main culprit here as it has essentially created socialist enclaves throughout the U.S. in the form of Indian Reservations. It created a system of socialized medicine and education and denied Reservation Indians the right to own land in fee simple, which is the way most Americans do. It even mandates acceptable signage, which is why most of the few native-owned businesses on Reservations do not have appropriate signs to indicate their existence. To make matters worse, various Left-leaning anthropologists in the 1950s and 1960s managed to convince some Indians, particularly Lakota, that their ancestors were eco-friendly communists. Yeah, they often used all of the bison but do you think that any part of cattle or hogs or chickens go to waste today? Heck no! Does that make Morrell’s an eco-friendly communist? Heck no! In fact, individual Lakota were extremely entrepreneurial, until that spirit was sucked out of them by generations of welfare programs deliberately designed to infantilize them. Of course such policies all began, in the Dakotas anyway, in the late nineteenth century. The problem is that we allow them to persist and then blame the Indians themselves, or their culture, for the extreme poverty still found throughout much of Indian Country.When Tom Isern, a North Dakotan scholar, reviewed my book, he chastised me for asserting that all the Indians need to thrive is the ability to borrow money to form small businesses and otherwise to be left alone. I really do not understand his criticism as Indians have always taken advantage of economic opportunities until they are snatched away, usually by the BIA. From natural resource exploitation to tax-free smokes and gas to casinos, Indians know how to make a buck or two, or two billion in the case of some well-placed casinos. Leave them alone, let them borrow money when their ideas merit it, and they will do just fine, just like all other South Dakotans will, from immigrant Norwegians to immigrant Germans to immigrant Ethiopians. South Dakotans don’t need fossil fuel fracking to thrive, as they can summon corn from the ground, balloon companies out of thin air, and tourism out of Chinese birds, old bones, and just about anything else you can think of!Thank you.Any questions?

Banking System Stability/Fragility: The Roles of Governance and Supervision in Canada and America

Banking System Stability/Fragility: The Roles of Governance and Supervision in Canada and AmericaBy Robert E. Wright, Nef Family Chair of Political Economy, Augustana University
After surviving the Great Depression, the Great Recession, and the 75 years in between with barely a discernible scratch, the Canadian banking system has developed a reputation for stability. The resilience of Canadian banks after the Panic of 2008 seemed particularly impressive given the close connection between the Canadian economy and that of the United States, the epicenter of the financial fiasco.


Notes

Slavery/Antislavery Today

By Robert E. Wright, Nef Family Chair of Political Economy for the Rokeby Museum, Ferrisburgh, Vermont, 10 September 2017
            The student who has had the most effect on my career was, hands down, also the most annoying student I have ever had in a career that now spans two full decades and every type of school imaginable, from elite public to elite private to not-so-elite public to whatever DeVry is. The term was Fall 2010, the course the first half of the American history survey, and the student an education major with what to her was a major problem, the fact that I kept using words and ideas that she had never heard of before. Struggling in the class, she decided that she would try to score some points by asserting, repeatedly and quite vocally, that she would have been an abolitionist had she lived in the nineteenth century. I could not help but express my doubts, noting that only a small portion of the population were activists. Oh no, she insisted, she would have been right there next to Frederick Tubman and Harriet Douglass carrying slaves across the Rio Grande River to freedom in Vermont every night, rain or shine. Okay, maybe I am exaggerating the extent of this student’s ignorance but as I said she was the most annoying student to ever cross my path. After her third attempt at armchair abolitionism, I recalled meeting Jim Stewart at the Society for Historians of the Early American Republic conference in my hometown of Rochester, New York that summer. Jim told me that slavery had made a comeback, a fact that I whipped out right there in class to embarrass my tormentor. She was stunned but starting asking questions that I didn’t have answers to, like where were all these slaves and what work did they perform? I mumbled something about this being a history class and the need to move on, which thankfully the other members of the class were by then quite willing to do. From my initial state of ignorance, I started reading books about modern slavery and paying attention to news stories about sex trafficking and decided that I had to act. So I joined Jim Stewart’s NGO Historians Against Slavery, developed and delivered courses on modern slavery and antislavery, and even wrote a book about the economic aspects of global slavery called The Poverty of Slavery: How Unfree Labor Pollutes the Economy, which Palgrave published this spring. While I am no Harriet Tubman, I aspire to be a modern day Hinton Helper, the North Carolinian who exposed the economic destructiveness of antebellum chattel slavery. To that end, I became treasurer of Historians Against Slavery when Jim retired and I give talks about modern slavery whenever anyone will have me speak, even if I have to drive from South Dakota to do it.The ugly truth is that slavery never ended, not in the United States and not anywhere, it simply transmogrified into new forms with new labels more palatable than slavery. Slavery has become such an ugly word that people regularly apply it, willy-nilly, to any reprehensible situation. That is bad because when a word can mean anything, it comes to mean nothing. None but God above are free from external constraints, so the mere presence of constraints cannot define slavery. Gravity does not enslave us to flightlessness. Slavery means a very specific set of constraints imposed by specific individuals for specific purposes. So a good part of my research concerns defining slavery, which I ultimately do as the absence of freedom on twenty key questions regarding the relationship between owners slash employers and their workers. CEOs and college professors score 20, or nearly so, on my freedom scale, so we are not slaves even if our department chairs tell us we have to teach at 8 a.m. on occasion or stockholders tell us that we can’t pay ourselves $200 million a year after cutting dividends to naught. Antebellum slaves worked in gangs on a large Southern plantation would have scored 0 on my scale and nobody doubts they were slaves. Likewise, nobody doubts that slaves in the upper South who were able to hire out their own time, and who might score a 3 or 4 on my freedom scale, were also slaves. So I have no problem applying the word slave to anyone who scores near the bottom of my freedom index but I also don’t object when people call them unfree or bound laborers instead. The key fact is that none of them can voluntarily leave their place of work in search of something better. Most are physically beaten and psychologically manipulated, receive payment in kind rather than in cash, and have little or no control over sexual access to their own bodies, where they live, what they wear, what they eat, or even their own names. Call such persons what you will, but their condition is far below that of the stereotypical sweatshop worker, who receives his or her pittance in cash and can leave when he or she wishes with names and reproductive parts intact.People who score 4 or below on my freedom index, call them what you will, number between 30 and 50 million worldwide today. Whatever the exact figure, which is difficult to determine because modern slavery largely takes place behind closed doors, it is absolutely staggering. At an average height of 4 feet, which is not far from the mark given that many slaves are malnourished children, 40 million people laid end to end would stretch over 30,000 miles, or around the earth at the equator and then from Burlington to Los Angeles and a good ways back.That’s a lot of destroyed lives and for what? Nothing good economically. Yes, slavery is profitable for enslavers, which is why it has been around as long as humans have been and why it was not destroyed by the Civil War or any of the other Great Emancipations of the nineteenth century. Profits are only half the economic equation though. On the other side lay the costs, and they swamp slavery’s profitability. Slaveholders are adroit at getting society to foot most of those costs, rendering them what economists call negative externalities, the most common example of which is pollution.On the other hand, 40 million is but a small portion of the total global population, which as of May of this year now tops 7.5 billion. In fact, slavery as a percentage of the total global population is the lowest it has ever been, at least during recorded history, which, unfortunately, begins when slavery was already widespread.What do those 40 million slaves do? About half are the victims of sex trafficking. About a quarter toil at mundane tasks ranging from bidi rolling and carpet weaving to quarrying and fishing. India’s brick kilns alone enslave millions, most kept at the hot, dangerous work under ancient customs of debt bondage. The final quarter of today’s slaves are domestic drudges in places like Haiti and Tibet where it remains much cheaper to own a child slave than to buy and operate a dishwasher, a washer and dryer, a refrigerator, and so forth. Yes, slavery is illegal throughout most of the globe today but that doesn’t mean much. Murder, rape, and methamphetamine production are also illegal but they still occur with disturbing regularity. The illegality of slavery has made it much harder to identify and fight and has also rendered it much more noxious for those enslaved. Today’s slaves, antislavery activist and author Kevin Bales points out, are in some ways much worse off than legal slaves were, not in terms of their degree of freedom but in terms of their day-to-day treatment. Legal slaves commanded high prices, as high as $100,000 in today’s dollars, and hence it was in the masters’ interest to provide them with basic human necessities. Slaves today, by contrast, are dirt cheap, selling for as little as $10 and rarely for more than $1,000. Hence, they are disposable people. Enslavers work them to death and have been known to murder them when the season’s work is done because that is safer and cheaper than maintaining them all year or letting them go. The bodies of small boys do not naturally end up in the bellies of Great White sharks and Bengal tigers, they are found in such places after enslavers kill them and leave their little, innocent corpses to be scavenged.   And they might be the lucky ones. Ex-slaves today almost invariably suffer from PTSD, or post traumatic stress disorder. Child soldiers in Africa suffer from PTSD because they actually engaged in combat but so too, in a sense, do prepubescent girls forced to sexually service scores of adult men every day, week, month, and year until their bodies give out or they contract AIDs or some other STD that is more costly to cure than the girl is to simply replace.You might now well wonder where all these slaves come from and the answer, generally, is from the lowest caste or class in every country in the world. Yes, occassionally Liam Neeson’s daughter is abducted and prostituted overseas but the vast majority of trafficked persons were tricked into going abroad with a stranger posing as a friend, boyfriend, or employer. Once in a foreign country where they don’t know the language, they are stripped of their passports and seasoned by being raped or beaten, often by corrupt police officers. With no way, or where, to run, the young girls and boys become ashamed of their actions and many sink into a torpor that helps them to survive the ordeal. If they emerge alive, though, many need years of therapy and education to have any hope of leading a normal life. A valiant few, like reincarnations of Henry Highland Garnet or Harriet Jacobs, join the modern antislavery movement but many more end up back in some sort of servitude, often in conditions worse than those in which they originally suffered.Slaves are one of the few goods that get more valuable as they move away from their place of origin. That is because every mile they move themselves away from their homes makes them that much easier to control. It wasn’t that American Indians were unproductive slaves, as sometimes claimed, they simply found it too easy to escape. Scholars like Andres Resendez are now discovering that large numbers of Indians were trafficked to the West Indies, often in exchange for African slaves. The demise of the indigenous peoples of North and South America is looking less like largely accidental germ-warfare and more like outright genocide. Today, the Dalits of India, the Tharu of Nepal, the Karen of southeast Asia, and countless other downtrodden groups are experiencing a similar genocide as they send away their children with traffickers in scant hope that they will have a better life abroad.Many enslavers are forcing their minions to destroy the earth’s most fragile ecosystems. Satellite images documenting the destruction of the Brazilian rainforests can be overlaid with maps showing an almost one to one correlation with known slave labor camps. In Bangladesh, children enslaved as fishers are quickly destroying the precious mangrove swamps with acre upon acre of drying racks hacked by scads of tiny hands.The United States is home to a small percentage of those enslaved globally but that is still thousands, and perhaps tens of thousands, of individuals. Most are trafficked for sex but some literally slave away cleaning hotels or picking fruits and vegetables in places like Florida. Slavery is more prevalent in some states than others. South Dakota is one of the worst offenders because of its tourism industry, specifically pheasant season and the Sturgis motorcycle rally, both of which bring hundreds of thousands of horny men into the state for a week of shooting off their guns and shining up their hogs.If government-owned slaves are included, the states with the largest slave populations are certainly Florida, Texas, and California.Yes, government-owned slaves. I sometimes imagine U.S. law enforcement officials confronting enslavers by asking where they learned to steal the labor of others. The enslavers turn and say, indignantly, as in that drug commercial from the 1980s, “you, okay, I learned it from you.” It is no coincidence that America has the highest rate of incarceration in the world, save for a few brutal dictatorships like North Korea. Simply put, imprisoning people pays. Politicians get to look tough on crime; police departments get more personnel and equipment; most insidiously, private corporations earn big profits running jails or hiring prison labor at a small fraction of the going market rate.It would help if the 13thAmendment were itself amended so that those duly convicted of a crime were no longer exposed to enslavement by the state. For too many decades, governments have used the convict loophole to arrest, prosecute, and enslave Americans, mostly African-Americans but Indians, poor whites, and members of other downtrodden groups as well. Doug Blackmon’s Slavery by Another Name and David Oshinsky’s Worse than Slavery opened the floodgates to reams of studies describing the horrors of what has come to be known as the carceral state, from the coal mines of Alabama to the chain gangs of Mississippi to the panty-sewing gals of Orange Is the New Black. Two of the best recent studies are Dennis Childs’ Slaves of the State and Talithia LeFlouria’s Chained in Silence. They make clear that state-sanctioned slavery is still slavery. We as a society have to figure out how to induce people to follow the law without killing them, mutilating their minds and bodies, enslaving them, or merely warehousing them for arbitrary periods because clearly the current system isn’t functionally properly and perhaps never did.Hopefully by now you are appalled that something as morally reprehensible as slavery still exists and disgusted by the enormous negative consequences of slavery’s continuance. Members of the modern antislavery movement are trying to reduce slavery by not just raising awareness but by leveraging awareness into action. We know that we simply cannot buy slaves and free them because that practice reinforces the notion that humans are for sale while also increasing demand for new slaves. We also know that the supply of slaves is so vast and so vulnerable, basically any of the several billion people who somehow survive on $2 or less per day, that we can’t cut off supply either. What we try to do, then, is to reduce demand by one, introducing new technologies that can do the work more cheaply than slaves can, two, scaring multinational corporations with threats of boycotts into policing their own supply chains, and three, inducing governments worldwide to pass more stringent antislavery laws and enforce them. Basically, we need to make the expected cost of enslaving others so high that no one will dare to put to work anyone near the bottom of my freedom scale for fear of being caught, outed, prosecuted, and stripped of their assets.If Carol Faulkner had been able to come today, she would have discussed the pros and cons of boycotting slave goods. I’ll make no sweeping claims about the matter as I have studied only one historical example in detail but it is one that has regional if not local connections. In the late 1830s, the sugar beet bug struck New England’s farmers. Soon, yet another agricultural bubble, like previous ones in Merino sheep, super chickens, mulberry trees, and other commodities, puffed into existence and spread into the Middle Atlantic states, Ohio, Illinois, and even Arkansas and Virginia. Realizing that the sugar made from beets was chemically identical to that made from cane, abolitionists jumped on the bandwagon too, pledging to buy only free sugar made by free laborers in the North. This was real sugar, after all, not maple sugar made from trees.
            So everybody soon bought sugar from sugar beets and soon sugar cane plantations went out of business and slavery ended without bloodshed forever. Not quite. Not even close, actually. For starters, because cane and beet sugar were identical chemically, and because America’s intellectual property laws had not achieved the state of perfection they currently enjoy, there was no way to tell the difference between slave and free sugar, except price. The latter cost more, not due to differences in slave versus free worker productivity but because of the laws of physics and chemistry. It simply took more energy to get the good stuff out of a beet until improved machinery came along decades later, by which time sugar beet production had largely moved to the western U.S. The main product that kept the early beet sugar factories going was the sale of the remnants of the beet, post-processing, as livestock fodder. Hogs will eat about anything.Incidentally, three of the incorporated beet sugar manufactories to crop up in the late 1830s were in New Hampshire and one was in Vermont, in Enosburgh, Franklin County, about 65 miles northeast of here. Its incorporators were Austin Fuller, William N. Smith, and Charles B. Maynard, on the off chance those names mean anything to anyone here. You can follow up by downloading my database of over 20,000 U.S. for-profit corporations chartered before the Civil War at MEAD, or the Magazine of Early American Data, which is hosted by the University of Pennsylvania’s Van Pelt library.Of course this discussion of boycotts, modern slavery, and so forth is just the tip of a very large, very ugly iceberg. If you want to know more, read my book Poverty of Slavery, any book by Kevin Bales, or any of the books recommended by Historians Against Slavery on its website, http://historiansagainstslavery.org/, that is h t t p historiansagainstslavery all one word dot o r g.And as for that very annoying student I mentioned in the beginning of this talk, I eventually married her and we’ve had three children together. Not! She’s half my age and I’m not kidding about how annoying she was. In fact, if she ever learns about her influence on my career path into neo-abolitionism I’m sure she’ll claim that God works in mysterious ways or something equally annoying.Thank you for your time! Any comments or questions before I head to Toronto to discuss bank governance?
P.S. to readers: If you find yourself in Vermont looking at leaves or hunting from Champ, stop by the Rokeby. It's permanent antislavery exhibit is phenomenal!!! Pick up some maple syrup when in town too.

C-SPAN Talk: Little Business on the Prairie Notes

These are my notes, or what I intend to say about my Little Business on the Prairie in front of the C-SPAN cameras shortly. We'll see!

Like many scholars, I have a sense that great disparities in income and wealth may be socially and even economically problematic. The biggest disparities are not within countries, it turns out, but between them. That begs the question, why are some countries rich, developed, high income, First World, call them what you will, while others are poor, undeveloped, and so forth. Such questions tend to attract ideologues so for decades there were competing stories none of which accurately described reality or satisfied the most scientifically-minded scholars, who pined for the ability to put countries into test tubes and conduct controlled experiments on them.
Well, that is impossible, of course, but some scholars noted that it is possible to conduct so-called natural experiments where nations were more or less randomly divided into two and endowed with different systems of political economy, with different rules about business formation and property ownership in other words. Decades later, the results could be observed and hypotheses about the causes of economic growth tested.
For example, after World War II Germany was arbitrarily split into two parts, as was its leading city, Berlin. The eastern portion was placed under the system of political economy known as command economy communism while the western part was placed under a system called private enterprise representative government. In less than half a century, the economic differences between the two halves of the country, and the two halves of Berlin, were so enormous that the eastern regime collapsed and East Germany and East Berlin rejoined its affluent neighbors. Although scars remain, the two sides continue to converge under a single, free system of political economy. Korea was also divided randomly and to this day remains divided between a poor communist north and an affluent private enterprise south.
China likewise found itself divided into 3 parts, the mainland, Hong Kong, and Taiwan, and, once again, the part that restricted human rights, of which economic freedom is a major component, failed economically while the parts that supported economic freedom flourished. Mainland China is now in the throes of a long transition to become freer, more prosperous, and more like Hong Kong and Taiwan.
Those and similar episodes induced scholars to scour history, where they began to turn up other natural experiments, including some in North America. Prosperous upstate New York in the early 19th century, for example, was often compared favorably to the adjacent parts of Canada, which wallowed under local autocrats, a distant monarch, and a moribund economy.
But what of income and wealth disparities within nations? Well, most obviously, the Northern states, also known as  the Free States, did much better economically by most metrics than did the slave Southern states. Most people think that slavery ended with the Civil War, but in reality, as many scholars, including myself in The Poverty of Slavery, have pointed out, slavery did not so much end as transform itself into debt peonage, prison labor, company town tyranny, white slavery, and what we today call human trafficking. We do not yet, however, have enough data to assert that those new forms of slavery impeded economic growth by state or region.
We do, however, have estimates of income inequality by state and I was surprised to discover that my adopted state of South Dakota has a Gini coefficient of wealth inequality of just .33, the lowest in the nation. Digging further, I discovered that three of the poorest counties in the nation are located in the Mount Rushmore State and they are all coterminous with Indian Reservations. Then it dawned on me that the federal and state governments had conducted a type of natural experiment right here in South Dakota..
The counties ruled by Pierre, which is how the state capital is pronounced believe it or not, enjoyed a classical liberal government that supported human rights, especially economic freedom. So the government strove to be efficient, a la Alexander Hamilton, which meant getting as much public service bang for each tax dollar as possible. That allowed for a low level of taxes, often the lowest in the nation, without denuding the state of roads, schools, or other public goods. The state government also encouraged entrepreneurship, even the simple self-proprietor variety. That kept levels of entrepreneurship higher in the state than elsewhere because to a large extent entrepreneurship begets entrepreneurship as people learn through friends and relatives that they too can start their own businesses. That keeps the market for certain goods, like restaurant meals and retail, extremely competitive, especially in Rapid City and Sioux Falls, long the state’s two largest urban areas. Entrepreneurship also keeps unemployment low and while most companies remain small proprietorships, many hire a few people and a few grow to become substantial concerns, like POET and Raven.
For the most part, the state’s Indian Reservations are ruled not from Pierre but from Washington, DC, by a bloated, autocratic bureaucracy called the Bureau of Indian Affairs or BIA. The BIA means well but all that means is that it is highly paternalistic. It does not think that Indians can manage their own affairs, in other words, so it micro-manages them on their behalf, as if they were children. The BIA also provides Indians with their own sub-standard health-care and education systems and makes it difficult for Indians to start a new businesses, obtain a business loan, sell property to start a business, and so forth. Little wonder that Pine Ridge, Rosebud, and other Reservations look like Third World Countries because they are ruled the same way, with the same top down, command political economy.
Now racists, and there are still a lot of them out there, will tell you, usually quietly and on the side, that the BIA is not the main culprit, the Indians themselves are to blame. Rosebud is run down because Indians are too lazy, stupid, ignorant, drunk, depressed, and diabetic to form their own businesses. Such claims are dangerous because they are not wrong per se: Reservation Indians in South Dakota do suffer from much higher rates of alcoholism, diabetes, and suicide than the general population. And their average educational achievement is much lower. But I guarantee that the racists have the cause and effect backwards. Indians would thrive if allowed to. In other words, if you put the Euroamerican population under the thumb of the BIA and freed Indians to do as they list, within 50 years you would see the situation exactly reversed, with whites living in shacks eating government cheese and Indians thriving under the Dakota sun.
I can guarantee that because in southern Appalachia some whites were oppressed, at first by slaveholders and later by sheriffs beholden to mining corporations, and they responded by getting drunk, living in shacks, and so forth. I know because they are my ancestors.
I also know that whenever Indians are free of the BIA, as some are today thanks to successful casino entrepreneurship, they thrive economically, as they did before the arrival of the BIA and other Europeans. They had not attained the same level of technology as the Europeans had upon contact 500 years ago but for reasons that need not detain us here. The Indians were numerous and prosperous when the Europeans came and became dependent upon government handouts only after centuries of germs, enslavement, which we are now learning was much more prevalent than hitherto understood, and warfare decimated their numbers and socio-cultural support systems. Long distance trading networks, large-scale factories for the production of pemmican from bison, the rapid introduction of European technologies, the acceptance of debt, and other indicators show that Indians were not a-economic beings but humans much the way Adam Smith described them, interested in bartering and trading to mutual advantage.
Little Business on the Prairie fills in all the interesting and remarkable details of this natural experiment, from South Dakota’s prehistoric past to its prosperous present, with special attention paid to the plight of the Indians who lost their independence along with their lifeways. It concludes that the lives of Indians will not be improved until they are allowed to adopt a political economy better suited to their natural human desires to learn, grow, and develop. It also suggests that other states, ones with slower growing, more unequal, and more fragile economies, might be able to learn some lessons from the Mount Rushmore State and improve their level of economic freedom by lowering taxes and barriers to entrepreneurship and rendering their governments more efficient. South Dakota has at least 99 problems, but its flexible economy is not one of them.