Simple Contexts, Simple Logic

     It doesn’t take long for the observant student of economics to realize that the whole field is about incentives, disincentives, and human decision-making within their grip. There’s the Law of Supply and Demand, the Law of Diminishing Marginal Value, and Coase’s Theorem. All else is about particular cases and exceptions that, largely, prove not to be exceptions at all.

     Those laws are so comprehensive that to make a name in economics as an original scholar takes some damned hard thought. Indeed, their universality led the late, great Ludwig von Mises to propose an uber-law, the axiom of human action:

     Praxeology rests on the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals. This concept of action contrasts to purely reflexive, or knee-jerk, behavior, which is not directed toward goals. The praxeological method spins out by verbal deduction the logical implications of that primordial fact. In short, praxeological economics is the structure of logical implications of the fact that individuals act. This structure is built on the fundamental axiom of action, and has a few subsidiary axioms, such as that individuals vary and that human beings regard leisure as a valuable good. Any skeptic about deducing from such a simple base an entire system of economics, I refer to Mises’s Human Action. Furthermore, since praxeology begins with a true axiom, A, all the propositions that can be deduced from this axiom must also be true. For if A implies B, and A is true, then B must also be true.

     That axiom has been making “professional” economists weep and swear for several decades. For the sphere of the “professional” economist is not economics per se, but what’s usually called political economy:

     Political economy is the study of production and trade and their relations with law, custom and government; and with the distribution of national income and wealth.

     The 800-pound gorilla in the room, which endlessly meddles with the incentives and disincentives that pertain to human decisions, is the State. What the State forces upon its subjects will naturally alter the context in which they pursue their desires. Inversely, what the State permits its favored ones to get away with will also alter that context – sometimes fatally.

     For example, we have a corporation, Walgreens, which has been so badly beset by legally protected shoplifting that it’s been closing outlets where such theft is rampant. Theft has been rampant in Roxbury, Massachusetts, a majority-black district of Boston. As of today, there are no Walgreens open in Roxbury, Massachusetts, and “Squad” member Ayanna Pressley is furious about it:

     Democratic Rep. Ayanna Pressley has condemned Walgreens for ‘racial and economic discrimination’ after closing a pharmacy in Boston.
     Pressley, a member of the ultra-progressive ‘Squad’, said the chain was ‘abandoning’ low-income communities with the most recent closing in Roxbury on Wednesday.
     Walgreens announced the closure of several stores nationwide due to what the company has described as ‘rampant theft’ in some areas.
     Pressley said this decision targets areas with significant minority populations, calling for the company to reconsider their decision instead.
     In a speech addressing the house, she said: ‘This closure is a part of a larger trend of abandoning low-income communities like the previous closures in Mattapan and Hyde Park, both in the Massachusetts 7th.

     Yet the economics of the Roxbury context is particularly straightforward: rampant shoplifting is not penalized in Roxbury. A store, the local presence of a commercial concern, cannot tolerate unlimited losses to shoplifters, no matter what their race or ethnicity. Corporate management will not permit it. For the sake of completeness, neither would a family-owned business.

     But Roxbury is majority-black. So Ayanna Pressley shouts “racism,” and gets a respectful hearing from the ignorant, the diehard “progressives,” and the black race-hustlers who are always on the lookout for a new cudgel to wield.

     The great tragedy here is not ignorance, for that can be remedied. Indeed, take any “progressive,” and subject him to a simple test case:

     “Imagine along with me for a moment. Let’s say you’re the owner of a general store in a particular district. Let’s say further that in that district, the cops refuse to arrest shoplifters and the courts refuse to try and convict them. As a result, the rate of shoplifting has gotten so high that your store loses money every day. The losses are about to drive you out of business. What would you do?”

     In a couple of short, simple sentences, you’ve eliminated the ignorance factor. You’ve reduced the situation to a personal one with clear incentives and disincentives. But what would that “progressive” reply to your hypothetical question?

     If he’s a relatively polite progressive – yes, there are some – he’d probably say “I don’t bother with hypothetical scenarios. We’ve got to deal with the real world case before us. After all, there are people hurting.” If he’s other than polite, he’d do what Ayanna Pressley did: he’d call you a racist, insensitive to the “special needs” of “minority communities.”

     Such deliberate dismissal of the facts is common on the Left. Leftists don’t accept the laws of economics – or any other observable patterns that militate against their preferences. Their minds are impervious to the power of incentives and disincentives. For example, a young acquaintance once admonished me that if my house were to start losing value because of an influx of black families to my neighborhood, with the crime and disorder that usually follows them, it would be my “moral duty” to remain in it. If you haven’t faced such abuse, you’re either very young or have led a remarkably sheltered life.

     But the laws of economics are as inviolable, long term, as the laws of physics. They will not change as long as human beings behave according to Von Mises’s axiom of action. And no amount of tutelage in such things will change “progressives’” minds…short of finding themselves on the receiving end, that is.

     Until the polities of Boston and Massachusetts once more prosecute all theft, including shoplifting, with the full enforcement power of the law, conditions will remain as they are: i.e., no Walgreens in Roxbury. The incentives and disincentives determine that inexorably. It simply won’t matter that the residents would greatly prefer it to be otherwise. Neither will the color of their skins.

     Have a nice day.