Tag Archives: Alex Tabarrok

The Real Minimum Wage Is Always Zero

30 Friday Jun 2017

Posted by in Living Wage, Minimum Wage

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Min Wage Denmark

A minimum wage study from Denmark reinforces the findings of the Seattle study released this week by economists at the University of Washington. Both studies conclude that increases in the minimum wage have negative effects on low-earners, at least for large increases in wage floors of the type advocated by “living wage” proponents. Alex Tabarrok provided commentary of both studies this week on the Marginal Revolution blog.

The Seattle study found that both employment and hours worked declined substantially among low-wage workers following the city’s minimum wage hikes. This became particularly clear after the most recent increase from $11 to $13 per hour. The average low-wage worker in Seattle lost $125 per month, according to the findings. The study has generally been praised for its detailed data and careful methodology.

The Danish study took advantage of the fact that the minimum wage rises by 40% on a worker’s 18th birthday. The chart above pretty much boils down the results. Employment drops by a third at age 18. Even worse, Tabarrok notes that after one year, 40% of workers who lose their jobs at age 18 are still unemployed, while 75% of those who keep their jobs at 18 are still employed. The fate of these two groups is likely driven by a gap in talent and skills, and that gap can only expand as the least-skilled are idled.

The minimum wage is a misguided policy that hurts those who can least afford it: low-wage, low-skilled workers. Firms forced to adjust to the higher mandated wage are worse off as well, not to mention their customers, who are likely to face higher prices and degraded service levels. Even those who remain employed at the minimum wage might suffer under less generous job perks and working conditions. Today, large increases in the wage floor can be expected to bring premature automation of jobs.

In the real world, workers of low skill vary tremendously in their actual ability, prior training and discipline to perform in a structured environment. Many of these individuals simply cannot add value over and above the legal wage. Some are simply incapable of understanding the demands of arriving on time and delivering effort over the course of a work day. Hiring firms cannot easily discern these differences up-front from social cues. They might try, however, which could lead to decisions that are unfair to some individuals. An even higher minimum wage makes these decisions all the more difficult and risky, and forecloses opportunities to a broader swath of low-skilled workers, consigning them to dependency on family or the state.

The minimum wage has always had appeal as an exclusionary tactic by higher-paid union workers. Cowed by its ostensible first-order effects on worker incomes, the left latched onto it as a fundamentally just policy. The negative second-order effects are predictable however. The economic evidence has been piling up, while methodological flaws in an earlier, prominent study finding the opposite in the 1990s have been exposed. As a policy, the minimum wage is unjust in its effects on the incomes of low-skilled workers and on their ability to gain valuable work experience, and on businesses attempting to deliver value to their customers.

Note: I believe Don Boudreaux should be credited with the phrase used in the title of this post, which I’m sure I’ve quoted before. For more background on minimum wage effects, see these earlier posts on Sacred Cow Chips. There are 20 posts with that tag, and some are more focused on the minimum wage than others, so keep scrolling!

May You Live For a Thousand Years

27 Tuesday Sep 2016

Posted by in Human Welfare, Life Extension, Progressivism

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What if human life expectancy doubles over the next 50 years? Triples? Mark Zuckerberg and many others with money to spend, such as Peter Theil and Larry Ellison, want to accomplish that and more. For example, Zuckerberg and his wife Priscilla Chan have pledged $3 billion over the next decade to “rid the world of disease”. The implications are fascinating to ponder. In developed countries, most of the life extension would come from reducing mortality in adulthood and late in life, simply because childhood mortality has already reached very low levels. Assuming that the additional years are healthful, the dynamics of population growth and the labor force would change. Family structure could take new directions, especially if extended fertility takes place along with life extension. The coexistence of six, nine, or more generations might make one’s descendants virtual strangers. And it might be possible for an individual to have children who are younger than the great-grandchildren of progeny conceived early in one’s adulthood. For love or money, your great-grandchild might couple with an individual a generation or more ahead of you. Scandalous!

Some pundits foresee dark implications for humanity. Alex Tabarrok comments on some musings in The Telegraph by Jemima Lewis, providing the following Lewis quote:

“We’d better hope they don’t succeed. What would it do to the human race if we were granted eternal health, and therefore life? Without any deaths to offset all the births, we would have to make room on earth for an extra 208,400 people a day, or 76,066,000 a year – and that’s before those babies grow old enough to reproduce themselves.

Within a month of Mr Zuckerberg curing mortality, the first wars over water resources would break out. Within a year, the World Health Organisation would be embarking on an emergency sterilisation programme. Give it a decade and we’d all be dead from starvation, apart from a handful of straggle-bearded tech billionaires, living in well-stocked bunkers under San Francisco.“

Of course, people will still die in accidents and from some illnesses that cannot be anticipated; some people will always engage in self-destructive behavior; and there will always be natural calamities that will take human life, such as earthquakes and hurricanes. Nevertheless, life-extending technologies will increase the human population, all else equal. I say bring it on! But Lewis’ attitude is that increasing life expectancy is a bad thing, contrary to our almost uniformly positive experience with longer lives thus far, including improvements in the quality of life for aging seniors. More fundamentally, her view is that people are a liability, a collection of helpless gobblers, rather than valuable resources with the promise of providing themselves with an increasingly rich existence.

Lewis’ article demonstrates a special brand of ignorance, now common to many on the left, going back at least to the time of Robert Malthus, at about the turn of the 19th century. Malthus’ pessimism about the world’s ability to provide for the needs of an expanding population is well known, and wrong. The Club of Rome‘s report “The Limits To Growth“, published in 1972, pretty much continued in the Malthusian tradition. That report predicted increasing shortages and mass starvation. Of course, the Club erred both empirically and theoretically, as Julian Simon forcefully argued in the 1980s and 1990s. The crux of Simon’s argument was the existence of a renewable resource of vast promise: human ingenuity:

“Because of increases in knowledge, the earth’s ‘carrying capacity’ has been increasing throughout the decades and centuries and millennia to such an extent that the term ‘carrying capacity’ has by now no useful meaning. These trends strongly suggest a progressive improvement and enrichment of the earth’s natural resource base, and of mankind’s lot on earth.“

There are certain conditions that must be in place for the planet to provide for ongoing advances in human well-being. Markets must be operative in order for prices to provide accurate signals about the relative scarcity of different resources. When particular resources become more scarce, their prices provide an incentive to use existing substitutes and innovative alternatives. Competition facilitates and helps perfect this process, as new producers continuously seek to introduce innovations. Needless to say, the more restrictions imposed by government, and the more the state gets involved in picking favorites and protecting incumbents, the less effective this process becomes.

From a global perspective, the human race has done quite well in eliminating poverty during the industrial era. Impressive measures of progress across many dimensions are chronicled at the Human Progress blog, where Marian Tupy writes of “Looking Forward To the Future“. These improvements fly in the face of predictions from the environmental left, and they demonstrate that humanity is likely to find many ways in which extended lifespans can be both enjoyed and contribute to the world’s productive potential.

Extended lifespans will bring changes in the way we think about our working years and retirement. Both parts of our lives are likely to be extended. Job experience utilizing incumbent technologies will become less scarce, and will thus command a lower premium. Continuing education will increase in importance with new waves of technology. There will be changes in the time patterns of saving and investment and the design of retirement benefits offered by employers, but long periods of compounding might reduce the pressure to save aggressively. Bequest motives would almost surely change. Mechanisms like family endowments benefitting members of an extended family via education funding, medical technology and end-of-life care might become common.

There will have to be many changes in our physical makeup to ensure that life extension buys mostly “quality time”. For example, it’s probably not possible for many parts of the human body to function reliably after a century of use. The technologies of skeletal, organ and muscle replacement, or rejuvenation, will have to advance significantly to ensure a reasonable quality of life in an older population. The bodies of older humans will either be cyborgized or freshly regenerated as life extension becomes a reality.

As more radical life extension begins in earnest, it’s likely to begin as the exclusive province  of the rich. However, like everything else, the technologies and benefits will eventually diffuse to the broader population as long as competitive pressures are present in the relevant markets. It will be a matter of choice, and perhaps the most unhappy among us will choose to forego these opportunities. However, such technologies, to the extent that they become a reality, would have the potential to improve the physical well- being of almost anyone.

Dramatically extending the human life span will bring dramatic change and many social challenges, but ending disease is a worthy goal, and one that most certainly will benefit mankind. Tabarrok casts Jenima Lewis as an Ayn Rand villain, though he must realize that she is simply ignorant of the forces that create growth and an improving existence. Unfortunately, she is one of many on the left enamored with a perspective that is “anti-mind, anti-man, anti-life” (to quote Tabarrok quoting Rand).

For additional reading on the left’s anti-human agenda, see this Fred Siegel piece in the City Journal, “Progressives Against Progress” (HT: Glenn Reynolds).

 

Seeding the Grapes of Graft

23 Saturday Apr 2016

Posted by in Big Government, rent seeking

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Are you investing in graft and rent-seeking activity without knowing it? Is a significant share of your saving channeled into sectors that profit from political influence over politicians, regulators and government planners? Maybe it’s no surprise, and you knew all along that your capital backs firms who manipulate the political system to extract resources beyond what they can earn through honest production. You have an interest in the success of the rent seekers, and you might well get a tax benefit to go along with it!

All this is almost certainly true if your savings are in a 401k, an IRA, a public or private pension fund, or in publicly-traded stocks. These sources of investor funding are dominated by firms that rent seek…. an indication of just how far the cancer of corporatism has gone toward completely subverting free market capitalism. It can be turned back only by ending the symbiosis between industry and government and encouraging real competition in markets.

This question of investing in rent seekers is raised by Guy Rolnik at Pro-Market (the blog of the Stigler Center at the University of Chicago Booth School of Business):

“Put another way, are we facing an economic model in which tens of millions of Americans’ pensions are relying on the ability of companies to extract rents from consumers and taxpayers?“

Rolnik’s emphasis is primarily on mergers and acquisitions, industrial concentration, diminished competition, and monopoly profits extracted by the surviving entities. As Alex Tabarrok at Marginal Revolution notes, “The Number of Publicy Traded Firms Has Halved” in the past 20 years. At the same time, the trend in business startups has been decidedly negative. While I strongly believe in the benefits of a healthy market for corporate control, these trends are a sign that the rent seekers and their enablers in government are gaining an upper hand.

Monopoly must be condoned if there are natural barriers to entry in a market, but such monopolists are generally subject to regulation of price and service levels (complex issues in their own right). If there are other legitimate economic barriers to entry such as differentiated products and strong brand reputations, there is no reason for concern, as those are signs of value creation. And given the private freedom to innovate and compete, there is little reason to suspect that above-normal profits can persist in the long run, as new risk-takers are ultimately drawn into the mix. That is how a healthy economy works and how prices direct resources to the highest-valued uses.

Rent seekers, on the other hand, always have one of the following objectives:

Government Protection: Increased concentration in an industry is a concern if there are artificial barriers to entry. One sure way to protect a market is to enlist the government’s help in locking it down. This happens in a variety of ways: tariffs and other restrictions on foreign goods, patent protection, restrictions on entry into geographic markets, implicit government guarantees against risk (too big to fail), union labor laws, and complex regulatory rules and compliance costs that small competitors can’t afford. The upshot is that if we want more competition in markets, we must reduce the size of the administrative state.

Subsidies: Another aspect of rent seeking is the quest for taxpayer subsidies. These are often channeled into politically-favored activities that can’t be sustained otherwise, and the recipients are always politically-favored firms with friends in high places. This is privilege! Look no further than the renewable energy industry to see that politically-favored, subsidized, and uneconomic activities tend to be dominated by firms with political connections. Naturally, good rent-seekers have an affinity for central planning and its plentiful opportunities for graft. With big-government control of resources you get big-time rent seeking.

Contracts: Government largess also means that big contracts are there to be won across a range of industries: construction, defense, transportation equipment, office supplies, computing, accounting and legal services and almost anything else. Because these purchases are made by an entity that uses other people’s money, incentives for efficiency are weak. And while private firms may compete for these contracts, there is no question that political connections play an important role. As government assumes control of more resources, more favorable rent-seeking opportunities always appear.

Influencing public policy is a game that is much easier for large firms to play. Moreover, the revolving door between government and industry is most active among strong players. This is not to say that large corporations don’t engage in many productive activities. They often excel in their areas of specialization and therefore earn profits that are economically legitimate. However, when government is involved as a buyer, subsidizer or regulator, the rewards are not as strongly related to productive effort. These rewards include above-normal profits, a more dominant market position, a long-term pipeline of taxpayer funding, the prestige of running a large operation with armies of highly-skilled employees engaged in compliance activities, and prestigious appointments for officers. Some of these gains from graft are shared by investors… and that’s probably you.

For society, the implications of channeling saving into rent-seeking activities are unambiguously negative. To say it differently, the private return to rent seeking exceeds the social return, and the latter is negative. Successful rent seekers artificially boost their equity returns and may simultaneously undermine returns to smaller competitors. The outcomes entail restraint of trade and misallocation of resources on a massive scale. The public-sector largess that makes it all possible gives us high rates of taxation, which retard incentives to work, save and invest. If taxes aren’t enough to cover the bloat, our central bank (the Fed) is not shy about monetizing government debt, which distorts interest rates, inflates asset prices and  inflates the prices of goods. In the aggregate, these things warp the usual tradeoff between risk and return and worsen society’s provision for the future.

How should you feel about all this? And your portfolio? As an investor, you might not have much choice. It’s not your fault, so take your private returns where you can find them. Some firms swear off rent seeking of any kind, like Koch Industries, but it is not publicly traded. You could invest in a business of your own, but know that you might compete at a disadvantage to rent seekers in the same industry. Most of all, you should vote for lower subsidies, less regulation and less government!

End The FDA’s War On Drug Development

16 Wednesday Dec 2015

Posted by in Health Care, Regulation

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FDA Secret Happiness

For the seriously ill, the phrase “regulated to death” might hit close to home when it comes to the U.S. Food and Drug Administration. The agency is a notorious bottleneck on the availability of new, potentially life-saving drugs. Its policies seem to rely on an over-reading of the precautionary principle: that the risk of harm must be weighted heavily regardless of the opportunity cost in terms of curative, life-extending or palliative potential. The facts are as economist Alex Tabarrok describes:

“It costs well over a billion dollars to get the average new drug approved and much of that cost comes from FDA required clinical trials. Longer and larger clinical trials mean that the drugs that are eventually approved are safer. But longer trials also mean that good drugs are delayed. And the more expensive it is to produce new drugs the fewer new drugs will be produced. In short, longer and larger trials mean drug delay and drug loss.“

One billion-plus dollars of incremental cost for the average new drug! Not only are the lengthy delays unacceptable, but the added cost seriously inflates new drug prices. Furthermore, it is difficult for small, innovative competitors to engage in development in the face of costs like these. And while large pharmaceutical companies might be forced to limit investment in new drug research and might rightfully bemoan their cost structures, they are in a much better position to handle the regulatory burden than start-ups.

Tabarrok has long advocated “reciprocity”, or U.S. approval of “drugs, devices and biologics” that have been approved by authorities (such as the European Medicines Agency, or EMA) in certain other developed countries. He has also advocated “Free To Choose Medicine” principles, which would create a dual track allowing certain patients to opt into the use of drugs at a relatively early stage in the FDA’s approval process. Research studies cited by Tabarrok suggest that expedited drug approval can provide substantial benefits in terms of patient survival years without compromising safety.

A bill introduced by Senators Ted Cruz (R-TX) and Mike Lee (R-UT) would authorize reciprocity in the U.S. In October, Cruz discussed the legislation in this article:

“The FDA model is risk-averse, by its very nature obstructing promising innovations. It largely assumes that the biology of patients is the same, rather than recognizing that individuals’ genetic makeup varies widely. As a result, the only drugs the agency tends to approve are those that help a broad spectrum of patients and harm close to no one. That method may work to fight diseases that affect us all in a similar way, such as smallpox or cholera, but it does not work for diseases such as Alzheimer’s and cancer, which are highly tailored to each individual’s genetic makeup. In medicine, a one-size-fits-all approach ignores the diversity of the human person and limits the discovery of innovative cures to a small segment of those afflicted with disease.“

Tabarrok anticipates a certain objection to reciprocity:

“The argument for reciprocity, however, isn’t that the FDA is uniquely bad or always worse than the EMA or vice-versa. The argument is that it’s wasteful to duplicate the lengthy approval process and that both agencies sometimes make mistakes. As a result, it’s simple common sense to let Americans avail themselves of drugs and devices approved in other developed countries.“

There are other reform proposals in play. The Goldwater Institute has advocated “Right to Try” laws at the state level that would allow terminally-ill patients to access unapproved medicines. Representative Fred Upton (R-MI) has introduced the 21st Century Cures Act, which includes:

“... steps to streamline clinical trials; advance personalized medicine by encouraging greater use of drug development tools, such as biomarkers; and creat[es] incentives for developing drugs for uncommon but deadly diseases.”

Regulation is often an obstacle to vibrant competition and innovation, and the FDA’s antiquated drug approval process is certainly a hindrance. The process adds time and expense to drug development that carries unacceptable human costs. It is beyond comprehension that drugs can be rejected for procedural reasons when their proposed use involves circumstances that could hardly be worse, when those drugs carry little incremental downside risk. The rights of patients and the judgements of their physicians should take precedence over the sometimes picayune concerns of a regulatory bureaucracy. The reforms discussed above would be positive steps toward establishing that primacy.

 

Government and Perpetual Poverty

07 Thursday May 2015

Posted by in Welfare State

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The welfare state has 1) reduced measured poverty, but it has 2) failed to provide sufficient opportunity and economic mobility. In “Two Premises on Poverty and Culture“, Ross Douthat writes that it should be easy for Left and Right to agree on these points. #1 is a fairly well-established empirical fact, while #2 leaves plenty of room to debate what went wrong and how to fix it. The Left might well call for more resources to be plowed into the effort; the right believes that the welfare state has fostered dependency and subverted social institutions. The best that can be said is that the modern welfare state leaves the poor “running in place”, but that concedes far too much to programs rife with disincentives for legal, market work effort. I wrote about this topic just over a month ago, in “Poverty Maintenance Is Not a Win“. While Douthat’s short essay sought common ground upon which Right and Left can debate reforms, he notes that anti-poverty programs:

“... raise incomes but also increase dependency, encourage idleness, crowd out the basic institutions of civil society, and so on through the libertarian critique.“

This is not to diminish the waste inherent in other areas of government largess, such as corporate subsidies, defense spending, and over-regulation. Virtually any government program can be called out on waste and unintended consequences. Tonight, however, we’re featuring the dismal results of the welfare state. Thomas Sowell, a well-known African American economist, is uncompromising in his condemnation of the welfare state in connection with recent protests by blacks against perceived injustices in “The Inconvenient Truth about Ghetto Communities“:

“Anyone who is serious about evidence need only compare black communities as they evolved in the first 100 years after slavery with black communities as they evolved in the first 50 years after the explosive growth of the welfare state, beginning in the 1960s. …

We are told that such riots are a result of black poverty and white racism. But in fact — for those who still have some respect for facts — black poverty was far worse, and white racism was far worse, prior to 1960. But violent crime within black ghettos was far less.

There is no doubt that the behavioral dysfunctions induced by welfare state incentives have been compounded by the war on drugs. Like all prohibitions, it offers black market “opportunities” to the poor and unskilled while promoting violence and a high risk of arrest and imprisonment, contributing to the destruction of families and communities. But the welfare state itself effectively subsidizes the drug-war pathway to perdition:

You cannot take any people, of any color, and exempt them from the requirements of civilization — including work, behavioral standards, personal responsibility, and all the other basic things that the clever intelligentsia disdain — without ruinous consequences to them and to society at large.

Non-judgmental subsidies of counterproductive lifestyles are treating people as if they were livestock, to be fed and tended by others in a welfare state — and yet expecting them to develop as human beings have developed when facing the challenges of life themselves.“

The usual trope promoted by the Left is that more resources are required to end the cycle of dependency. That is dubious in light of the dramatic increases in U.S. welfare spending over the past 50 years. Those increases have been fairly steady, yet significant decreases in the incidence of poverty came to an end before 1970:

“Today, government spends 16 times more, adjusting for inflation, on means-tested welfare or anti-poverty programs than it did when the War on Poverty started. But as welfare spending soared, the decline in poverty came to a grinding halt.“

Finally, here is a little object lesson in the way Leftists typically misperceive facts surrounding the actual allocation of budgetary resources and the concomitant results. On April 28th, Jon Stewart said:

“If we are spending a trillion dollars to rebuild Afghanistan’s schools, we can’t, you know, put a little taste Baltimore’s way. It’s crazy.“

Alex Tabarrok castigates Stewart for this gross misrepresentation of the foreign aid budget and the complete distortion of the facts surrounding school funding in Baltimore. Actually, per-student funding for the Baltimore city public schools is over 26% greater (a difference of more than $3,500 per year) than for the schools in Fairfax County, VA. The latter is considered one of the best school districts in the country. The funding of Baltimore schools is dominated by state contributions, but federal funding there exceeds local funding.

Immigration and Reverse Discrimination

09 Thursday Apr 2015

Posted by in Immigration

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Affirmative Action

Conflicts between anti-discrimination law and presumptive constitutional rights were discussed Monday’s SCC post. Another avenue for such conflicts is when anti-discrimination efforts interact with other policies to foster a perverse spiral of encroachments upon presumed rights. In a post entitled “Immigration and Equality“, Nicholas Rosenkranz asserts that affirmative action programs not only discriminate unfairly against “unprotected classes”, but that their interplay with an open-borders immigration policy makes these reverse discriminatory effects far more pernicious.

I favor a liberalized immigration policy, provided that it is accompanied by security at entry to ensure health and public safety, and without subsidizing either potential employers or the immigrants themselves (except perhaps for short-term settlement assistance). Most critics of liberalized immigration focus on negative employment and wage impacts for established residents, but this piece in The New York Times Magazine debunks that notion. Alex Tabarroc adds some great points on the subject here. In essence, the evidence suggests that the short-run economic impact of immigration is not negative, and the long-run impact is unambiguously positive. The always passionate Don Boudreaux makes a case for liberalized immigration, and he is skeptical of the assertion that immigrants, once endowed with voting rights, will always support statist policies.

Yet as Rosencranz argues, affirmative action policies may attract flows of immigrants to the U.S. that are not supported by the labor market and general economic conditions. In this view, the contention that immigration is an always beneficial flow of productive resources is erroneous. Instead, the policy may attract an excess supply of immigrant labor that truly would undermine wages and employment for established workers. It could also give rise to other negative consequences such as skewed college admission decisions.

Federal anti-discrimination law has roots of varying depth in a few different parts of the Constitution, but the “protected status” conferred to specific classes or minorities is statutory, based on several federal laws, beginning with the Civil Rights Act of 1964. Government and private affirmative action programs favor hiring or advancement of members of protected classes to eliminate discrimination against them, or as a form of reparation for past discrimination. Rosenkranz has this to say about these programs:

“American law and policy will discriminate in favor of most immigrants — those of favored races such as blacks and Hispanics — and their children, and their children’s children. Correspondingly, American law and policy will discriminate against Americans of disfavored races — Asian Americans, Indian Americans, Caucasian Americans — and their children, and their children’s children.”

Rosenkranz believes this creates a “natural bargain”, a political compromise involving immigration reform in exchange for an end to government affirmative action programs, which have institutionalized “discrimination on the basis of race“:

“Democrats believe that immigration is a winning political issue for them; they believe that it makes them look compassionate while it makes Republicans look churlish. Affirmative action, on the other hand, is a political winner for Republicans; polls overwhelmingly oppose it, and it allows Republicans to argue for the ringing principle of equality under law, while Democrats are left to defend the status quo of institutional discrimination and racial spoils.”

I seriously doubt that such a compromise can be reached, but it’s a nice idea.

On a related note, the federal judge who placed a hold on President Obama’s immigration order has denied the administration’s request to lift the hold, and in rather dramatic fashion.

Gender Wage-Arbitrage Makes Me Happy

27 Saturday Sep 2014

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Should we condemn a man who hires a disproportionate number of women for his tech firm because “they are cheaper”? Or should he be praised for offering those women opportunities in a field in which they are severely under-represented? More likely the latter, and I’m not even sure he deserves criticism for thumping his chest about it in a talk he gave at a startup conference. Alex Tabarrok ponders this employer’s hiring practices, noting that he angered some women in the audience and on Twitter. But Tabarrok objects:

“Women’s wages aren’t pushed down by employers who hire women but by employers who don’t hire women. So why does Thornley [the CEO] get the blame?”

Tabarrok blames the negative reaction on a phenomenon that Arnold Kling calls the  “intention heuristic.” This is an often misleading, judgmental rule-of-thumb that gives the benefit of any doubt to good intentions, and casts suspicion on actions taken in self-interest. This presumption is quite common among my friends and certainly in the media. Tabarrok goes on to say (about the CEO):

“…[He] has overcome prejudice (his or his society’s), recognized the truth of equality and taken entrepreneurial action to do well while doing good. It’s Thornley who is broadcasting the fact of equality to the world and encouraging others to do likewise.”

Maybe, but absent the fanfare, Thornly is simply responding to incentives, doing what a good capitalist ought. The response of resources to incentives is a major virtue of capitalism.