I used to think that only the left suffered from cognitive dissonance. Whenever the left encounters truths about topics such as the hereditability of intelligence, or how the incentives of welfare caused an explosion of out of wedlock births, they get all mad and go into a state of denial.
Because of my dislike of the left, I was pretty shocked when a commenter called my post about worker pay “leftist garbage.”
It seems that anarcho-capitalists suffer from the same problems of cognitive dissonance as leftists. The anarcho-capitalist philosophy is apparently founded on the religious-like belief that people’s wealth is rightly and justly came by. They believe that the money people have is exactly equal to the value they contribute to the economy.
Such is the view of the Ayn Rand novel Atlas Shrugged. In her novel, the world’s richest men all give up and move to a hidden valley in the Rocky Mountains. Without their immense contribution to the world, the economy collapses. But this is utter nonsense. If the hundred richest people in the world disappeared tomorrow, we would probably not even notice their absence. Bill Gates is actually proving there’s nothing he does that others can’t do by retiring to run his charity. (As I previously wrote in my blog, philanthropy is entertainment for rich people. Also, see my post on baseball and Atlas Shrugged.)
I used to buy into the idea that how much money people have is very closely correlated with their contribution to the economy. But the more research I do, and the more hard thinking I do, the more I come to the conclusion that there is only a small correlation between the value people are capable of contributing to the economy, and the income people actually make.
For example, my analysis of the General Social Survey data reveals that verbal IQ has barely any effect on income after accounting for education. I was surprised as anyone by the conclusion, and did a lot more fiddling around with the GSS data to make sure that I didn’t do anything wrong. But indeed, those are the real results.
I did some fiddling around with the NHIS dataset and discovered that if a man is 5’7” or shorter, this wipes out half of the income boost of a college degree. If people were compensated based on their actual ability to contribute to the economy, then the data would be telling us that a short man with a high IQ and a college degree is less capable of contributing to the economy than an average height man with only an average IQ and a college degree.
Of course, you don’t really need to examine data to realize that income isn’t so highly correlated with ability. The reason why Dilbert is such a popular cartoon is because such a large percentage of the population identifies completely with the boss being dumber than the employees. Everyone who ever worked at a medium sized or larger company knows of idiots in high places.
At one of my first jobs, I was given the computer of the company’s controller because he was upgraded to a better computer. I discovered that he left a file on his hard drive containing the salary of every person who worked at the company. I learned that there was only a rough correlation between people’s contribution to the company and their salary. And of course I learned that the highest paid people at the company were the salesmen, the people who didn’t actually create anything of value. (I’m not saying that the salesmen didn’t contribute to the company’s profitability, only that they didn’t actually create anything of value.)
But anyway, in response to the guy who called me a leftist, the difference between myself and the leftist is that the leftist hates the idea that people’s salaries are correlated with their ability to contribute to the economy. I, on the other hand, actually like the idea. The problem is that I see only very little correlation between salary and ability to contribute.