Sunday, February 19, 2006

How Capitalism Makes You Stupid #2: Scott Adams vs. Scott Adams

In the last post I related how Scott Adams claims reducing America's dependence on foreign oil won't affect the foreign sources. It's a weird, extreme claim, typical of his intellectual laziness.

Worse, however, it's directly contrary to his thinking on crime. In The Dilbert Future, Adams looked forward to the "rise of the Hairy Reasoners" who would speak slowly and clearly (because people who don't get Scott Adams' lunatic and ignorant ideas are stupid) and say that locking up career criminals for life would indeed reduce crime, because otherwise you would have to accept the ludicrous, impossible notion that new people would step in to commit the crimes previously committed by the three-strikes offenders. That, therefore, claiming it wouldn't reduce crime is insane, and the only real issues are justice and fairness and workability.

There are several problems with this:

1. While the three strikes laws usually start with a conviction for a violent offense, after that your strikes can be purely status crimes, vice crimes, or economic crimes. This is to the point, because, frankly, most crime is an economic activity. Nearly everything organized crime does is economic, virtually all white-collar crime is, and most petty and otherwise retail crime is. Hiring a hitman is economic, so is killing a spouse or relative for insurance or an inheritance.

Moreover, even noneconomic crime is heavily effected by both the health of an economy and what kind of system it is. Therefore, you have to treat crime as a kind of market (clearly, where crime and market merge is in the black market and the underground economy, which virtually every society has).

Adams' argument is the kind of economic thinking that led right-wingers to say by taking on MicroSoft, the Clinton administration ruined the dot-com boom. It's thinking that if you remove an actor from a market, the market itself contracts that much. Somehow, according to Adams, that doesn't happen with oil, but it does with crime. Crime is due only to the depravity of the criminals, not to any incentives or disincentives being present, and not due to any needs or desires on their parts.

2. You also have to look at what kinds of criminals get the three strikes. Clearly, never a white-collar criminal. Also, not a really skillful criminal, or they wouldn't get caught three times in the same state and face life in prison. Not the most heinous criminals, because you can already get life for them. So what you're taking out of the market are agents who are poor, minorities, not good at crime, and not the worst offenders. Given that, the assumption that it's a certainty that actual crime will go down is absurd. What probably would go down are, eventually, for a while, arrests and convictions. That's not nearly the same thing.

And the economic reasoning above assures us that eventually people will indeed step in to take up the slack. Because that's what happens in economic activity. If MicroSoft folded its tent tomorrow, people would still make and sell computers with operating systems. Obviously, no market is perfect and there would be *some* effects, but they wouldn't likely be permanent or earth-shaking.

Anyway, if Scott was right, the nations with the most Draconian laws would have the least crime. Period. Because people don't step up to do the crime the other were doing. Ever. Some work that way - Singapore, for instance. Others don't - lots of developing nations have both Draconian laws and rampant crime. Most of Europe is not as crime-laden as the US, but laws are generally much more lenient, and none that I know of have ever even considered things like the "three strikes" laws.

3. Moreover, who's to say, and for what reason, that if I committed a violent crime (armed robbery, say), was convicted, then convicted for burglary of a store with no one in it, and then got caught, say, selling hash, and knew I faced life in prison, I wouldn't try to shoot my way out of an arrest? That's the kind of thinking the law proposed by George Bush Sr. a while back about giving the death penalty to drug kingpins inspired. It's entirely likely that three strikes laws would not only not decrease crime, but that they'd increase the amount of violent crime, especially involving police, informers, or accomplices.

Just saying, according to adams, markets immediately fill the gap of demand - when it's oil from the mideast - or never fill the gap of demand - when it's the fruits of criminal activity. Stolen goods, including money, aren't fungible, and mideast oil is. Etc.

4. Of course, it betrays Adams' bias against the poor. No white collar criminal - they're the source of all the significant crime - is going to be affected, and no criminal corporation. Because three strikes laws are so unconstitutional, they will cause the cases that do go through to be hard and expensively fought, so people like Adams can point to how the retail criminals are costing us money in the courts. It's like saying getting rid of high judgements on torts by people against corporations will save money on health and other insurance, and court costs. Most of the court judgements, most of the money, most of the time in billable hours, is by corporations suing each other and people. In his panels on oil and funding terrorists, of course he's not going to mention that the current vice president is a funder of terrorism and derailed legislation that would have enabled tracking of terrorist funding - after 9/11! It also betrays how someone with very little education and awareness like Scott Adams can think he's a genius and a polymath simply because he's wealthy.

Is it obvious how completely full of it he is?

But here's where I wrap up. Scott Adams did not get rich by following his own economic theories. If he had, the minute Enron folded he would have said, okay, i can never invest in anything to do with energy again. that'd be thinking the ludicrous idea that someone else will do the energy trading Enron did! When WorldCom filed for bankruptcy, that would be it for telephone activity, which would have been depressed by exactly WorldCom's market share until it re-established itself as MCI.

Scott Adams got rich by finding his niche and doing what he was good at. So did Jim Davis, of Garfield fame - a brilliant marketer, but not a great cartoonist. He got nearly as rich, or as rich, as Adams. Adams caught the zeitgeist in American offices of the 80s and 90s. He's a good three-panel cartoonist. That's what he's competent at. If you want to emulate him, do what he did, not what he says. Don't disdain buying a fuel-efficient car because you're too ignorant to know why you should do so. Educate yourself. Don't assume Draconian and disproportional punishment actually prevents crime. Study up yourself and see how it actually works. Just as MicroSoft the OS maker depended on MicroSoft's real abilities, making strategic alliances, cornering markets, imitating the R&D of others and leveraging monopolies, Adams the pundit rests on Adams the cartoonist. Here, Adams the pundit is being so stupid it ruins the work of the real breadwinner.

This is very reminiscent of how the "developing nations" actually developed. They noticed that both the United States and Britain used trade barriers and tariffs to develop. Later, those two nations said to their own and other people that free trade and capitalist ethics and entrepreneurship and freedom and ingenuity were what caused them to grow rich. The developing nations also noticed that the Soviet command economy recovered extremely quickly from the second World War, without Marshall Plan aid. Therefore, most of them adopted barriers, tariffs, AND economic coordination by the government, and they prospered. They also noticed that the Soviet model degraded after a while and so they had limited periods of economic authoritarianism.

By focusing on how things really work, not by how the successful presented themselves, they prospered.

If you reacted to one of Adams' cartoons or books with the feeling that someone who wasn't as clued in as you are was condescending to you, you were probably right.

[NOTE, this is something of a skeleton, as soon as i can scan the relevant cartoon bits and text from The Dilbert Future in to it, I will].

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