Californians, Your Votes Don't Count!

Update: It is hard to tell exactly what is going on here. According to a pdf from the Secretary of State, as of 9:10 a.m. today, approximately 2,640.855 ballots remain uncounted. The total I gave below of 873,242 is based on the total reported number of presidential ballots cast minus the vote totals for all of the candidates. As Bruce Webb mentions in comments, Los Angeles and Orange counties do indeed have a large share of that 2.6 million -- some 822,000 + but that still leaves  a half dozen or so counties with over 100,000 uncounted ballots each, etc.

According to the California secretary of state's office, as of 11:04 a.m., June 10, 2016, a total of 873,242 votes from the June 7 presidential primary -- about 13.7% of the votes cast -- remain uncounted. A little more than 68% of the votes already counted were in the Democratic primary. If the party affiliation of the uncounted votes are proportional to those already counted, approximately 570,674 Democratic primary votes remain uncounted.

Given Hillary Clinton's lead of 456,699 among counted votes, it is unlikely the final count will affect who "won" the state but since delegates are assigned proportional to votes, it may well affect the number of delegates each candidate received from California.

Nothing to see here, move along.

AP already made it clear that Californians' votes don't count by proclaiming Hillary Clinton the presumptive nominee the night before the California primary.

A Possible Perfect Economic Storm For Donald Trump

Right now Donald Trump is down in the polls, with his remarks about the judge on his Trump University case reverberating and Hillary Clinton getting a bounce from having finally captured the Dem nomination (I know, I know, Bernie still has a chance if she gets indicted before the convention, but... ).  But it was just quite recently that they were nearly even in the polls, and that condition could return.  Nobody should forget that at this time in 1980, Jimmy Carter had a double digit lead in the polls over Ronald Reagan and Dems were just salivating at the chance to run against that "extremist." But, well, heck, there we go again.

So the problem is that it looks like the US may be weakening.  Last month's job report was simply dismal, and most are writing it off as a one month wonder.  I hope so.  But there have also been reports that the US job market has been weakening since January.  We may be on a trend here that may be hard to reverse.

Janet Yellen has been still talking up interest rate increases, but even she recognizes "four uncertainties," and a concatenation of more than one of these could easily tip a weakening and fragile world economy downwards even into a recession, possibly with a market crash this fall.  The obvious near term shock could be positive Brexit vote, and while I think some have exaggerated the near term badness of this for the UK economy, even a small shock at the wrong time can push things over, as old chaos theorist me knows all too well, and we may have such a fragile situation.

Once things get going down this can easily spread.  Parts of Latin America, especially Brazil, are not doing well.  Europe has interest rates as low as they can go pretty much, even though all of the EU except Greece currently has positive GDP growth.  Concerns about China have retreated somewhat, but its property market remains way overvalued, and its growth has decelerated.  All this is fragile.  And one of the uncertainties is oil, where a shock of one sort or another could show up with little warning.

In short, the probability of the US economy actually going into a decline prior to the November election is higher than many think, I think.  All it probably takes is a couple of those uncertainties hitting, and the Fed is pretty limited  in what it can do in the short term, and, of course, there will  be no fiscal policy stimulus.  Heck, the Republicans in Congress would welcome such an event,  given its likely political result.

Throw on top of this the non-trivial possibility that terrorist groups will make a major attack shortly before the election in an effort to get Trump elected (having an overtly Muslim-hating US president would be great for  their recruiting), and, well, I shall be holding my breath all the way, whatever others may be doing.

Barkley Rosser

Hoisted from Comments: Omar al-Ubaydli Replies

Here is Omar's response to my blog/letter addressed to him. I will have a follow up post either tomorrow or over the weekend but I just want to say I think this is a genuine breakthrough, facilitated by the Rapoport ethical debate prescription. There is a lot of additional context but the immediate context can be gleaned from the series of posts commencing with Pain for Profit on June 6 and including As Common as Ditchwater and the aforementioned Dear Omar al-Ubaydli. See also my posts back in April on game theory and Rapoport.

Dear Tom 

Thank you for taking the time to provide a comprehensive response, and your position is much clearer to me than before. Here are some of my thoughts. 

1) In retrospect it was sloppy of me to imply that all the proponents hold a certain position when the reality is clearly that only some of them do. 

2) Your summary of my position is satisfactory but it omits the most important part, which is what the data from Europe show. 

I was asked to take a position on the expected effect of shorter work weeks on unemployment as part of a point counterpoint. My position is primarily based on what the data show, which is mixed effects, but never a substantial decrease in unemployment. 

Given the position of the other contributor it made sense to cast me in the "more unemployment" role. While many of the other outcome variables that you consider are important they are not part of the brief, and one can only consider so much in 750 words. Also in the EU unemployment is unquestionably the overriding impetus behind work sharing schemes, assuming that one takes politicians at face value. 

I then use economic theory to explain these empirical findings, and to explain why simple models may underlie the position of some proponents. 

3) The goal of my contribution was not to provide, or claim to provide, the final word on the issues at hand. Point-counterpoints are supposed to engender constructive discourse. I think that your contributions are valuable, but they seem to regard my contribution as verging on the conspiratorial, or reeking of ignorance. I think that you should lower the bar on what you expect to be delivered by such pieces, and refrain from accusing contributors of lying, especially since you are clearly not just a troll, but that's a minor point. 

4) If I was to repeat the exercise, it would have been useful for the brief given to the authors to be disclosed openly to minimize confusion over the goals of the contributors. 

Best 

Omar

Dean Baker on Australia’s 25 Percent Corporate Tax Rate

Dean is right about a few things here:

As Australia’s election campaign heats up, it seems that one of the central issues is likely to be a plan to cut the country’s corporate income tax from 30 percent to 25 percent. The argument is the same that proponents of corporate tax cuts make everywhere; it will cause companies to invest more money in Australia. This is great children’s story, but it has little basis in reality. There actually is a great deal of research on this topic and it finds very little relationship between corporate tax rates and investment. In the case of my country, the United States, the investment share of GDP peaked in the 1970s when corporations faced a 50 percent tax rate, considerably higher than the 35 percent rate they now face. Of course since U.S. corporations have become quite adept at avoiding taxes, their effective tax rate is close to 20 percent.

His main theme, however, is very misplaced (even if the last sentence in the above quote is quite right):

One of the ironies of proposals to reduce Australia’s tax rate is that the U.S. Treasury would be a major beneficiary. The logic is straightforward, even if seldom advertised by proponents of the tax cut. Under tax treaties, the U.S. credits it multinationals with tax payments to the Australian government on a dollar for basis. This means that if a U.S. multinational has its Australian tax bill cut by $10 million then its U.S. tax bill likely increases by the same amount. The money saved by the company in Australia will go straight to the U.S. Treasury.

This statement not only contradicts his claim about U.S. multinationals having an effective tax rate near 20% - it forgets about permanent deferral of repatriating foreign based profits. Dean may have been misled by the Australia Institute:

It’s important to understand that the US is the largest foreign investor in Australia accounting for over a quarter of all foreign investment. All of those companies will pay the same tax as before, only less to the ATO.

The Australian Tax Office (ATO) is actually much better than the IRS at enforcing transfer pricing. The UK government actually cut its tax rate from 30% to 20% but is putting pressure on its tax authority to step up its game with respect to transfer pricing enforcement. We Americans should learn from the Aussies and the Brits. Also note that if only 25% of Australian foreign investment is from U.S. based multinationals, then the other 75% is from other nations which often have tax rates that may be lower than 30%.

Hung Out to Dry: "Democracy" in the U.S.A.

This is a "polling station" in Long Beach, California at Super Suds Laundromat.

Let's not quibble about AP "calling" the Democratic Party nomination the day before the primary voting or whether the broken machines and fouled-up voter registration rolls were a conspiracy to suppress votes.

Just look at the picture. This is a picture of official contempt for the voting process. The polling place is only in a laundromat because they couldn't fit all the paraphernalia into a portable outhouse. The U.S. Supreme Court has declared, in Citizens United, that only money counts as speech. The on-the-cheap dysfunctional voting system in the U.S.A. is more of that same speech.

It says: "your votes ain't worth shit."

Dear Omar al-Ubaydli:

Yes, Omar, I would be delighted to elaborate. Thank you for asking.

The point I am trying to make was stated by John Stuart Mill in On Liberty, "He who knows only his own side of the case, knows little of that." The truth of that maxim is illustrated by the claim, in your counterpoint to Dean Baker, that "proponents of work-sharing believe an economy requires a fixed amount of work to be performed by a limited number of people."

Not only is that assertion untrue, but it has been repeated ad nauseum for two hundred and thirty-six years without any effort by claimants to ascertain what "proponents of work-sharing" (etc.) actually believe.

Not only is the claim unfounded, but it has been refuted half a dozen times or more by notable economists. Those rebuttals have never been addressed by the antagonists who repeat and repeat the fixed amount of work mantra.

Not only is the claim untrue and unfounded, but it is rote -- a monotonous, mechanical repetition of the same catchwords and phrases that have been recited a thousand time over the span of more than two centuries.

The Rise Of Negative Interest Assets

An article buried deep in the Weekend Financial Times reports that the total of public bonds bearing negative yields has now passed US $ 10 trillion.  I have made an effort to check on the current global  size of such issues. I found a 2012 number that put it at 56 trillion, so maybe this number has now risen to 70 trillion of higher.  But I am sure it is still well below 100 trillion.  So, this total of negative yield public bonds is well over 10%, whatever precisely it is.  It is now a non-trivial portion of the total.

The article also reported that there is also a noticeable, if  much smaller, amount of privately issued such bonds, now at about US $ 380 billion.  This is certainly a miniscule portion of those bonds, but most people probably think that this total is zero or barely above. 

I am one of those who early on became aware that we might have nominal negative interest rates (as well as negative prices) with these first appearing momentarily publicly in the mid-1990s in Japan, even as the vast majority of economists declared such a phenomenon to be impossible.  As a a matter of fact I know that the federal funds rate went negative during intra-day trading on Dec. 31, 1986, the last day of the old tax code prior to the implementation of the Reagan tax simplification.  The rate also went as high as 18% during that day of wild trading, obviously an extreme case.  I have this from the person who handled Fannie Mae's trading account with the Fed and is not public informiation.  But it happened.

I have been someone not all that bothered by this phenomenon and have even welcomed moves by central banks to use them.  However, I confess that seeing a rising portion of public assets bearing such negative yields, I  become concerned about longer run if this continues.  Yes, boring annuities and insurance companies and such entities, and all that, but they have trouble doing what they are supposed to  do if there are not some positive interest rate assets around out there.  I imagine that the vast majority will  remain positive, so probably this is not a big deal.  If the world economy will just get growing more solidly, these negative yield bonds will  disappear, and I am not a fan of  some of parts of the insurance industry, such as the US health care part.  But if in fact positive yield bonds become scarce, there will be a lot  of things society will  have to do, such as taking over  insuring against fire, theft, and many other things.  This is probably silly paranoia, but then I was aware of the reality of negative interest rates long before most thought such were even remotely possible.

Barkley Rosser. 

As Common as Ditchwater

I would like to draw the readers' attention to an item I posted yesterday and say a few words about the significance of the discovery mentioned in it. The mock "theory of the Lump of Labour" was invented in 1891 by David Frederick Schloss in an article titled "Why Working-Men Dislike Piece Work." The Oxford Dictionary cites Henry Mayhew's London Labour and the London Poor (1851) as an early published instance of "lump work," referring to a form of labor subcontracting that was common on the docks and persisted in the building trades.

John Mills's 1843 novel, The Stage Coach, or the Road of Life predates Mayhew by more than half a decade, it employs the exact phrase, "lump o' labour" rather than a close approximation and, most importantly, it provides a substantial context that illustrates what the characters meant by the phrase. From that context, it is clear that the lump of labor refers to a given expenditure of effort and is related to the expectation of a proportionate reward for that effort. Jack Hogg's father ruminates, "we ought to be well satisfied when we get moderate profits to a lump o’ labour or pain."

Evidence that the phrase is consistent with working-class London patois from the period is found in the expression "lump o' lead," which is Cockney rhyming slang for head. The Lump or "lump hotel" is a slang term for the workhouse. Mills's lump o' labour thus had a concrete reference and is not an abstraction contemplating change -- or lack of it -- in the macro-economy. The theory of the lump of labor is strictly Schloss's fiction. More precisely, the kind of fiction Schloss engaged in was caricature, based on social class, that presumed the superiority of the classes from which the readers of The Economic Review were drawn. Such derisive caricature -- frequently based on ethnic, racial and gender stereotyping -- was rampant in the late 19th and early 20th century.

Schloss's caricature of "theory" was relatively mild -- condescending rather than overtly hostile and defamatory. But that should not obscure the fact that it patently wasn't an attempt to explain or understand what workers thought. Rather it was a routine maneuver in the construction of otherness -- so standard as to be a cliche. Schloss's "certain fixed amount of work to be done" hearkened back more than a century to Dorning Rasbotham's "certain quantity of labour to be performed" by way of half a dozen or so intervening slight paraphrases and reiterations.

It is almost as if the Schloss/Rasbotham fixation on fixedness is trying to tell us something about their own discourse. In "The Other Question," Homi Bhabha described the "dependence on the concept of 'fixity' in the ideological construction of otherness" in colonial discourse:

Fixity, as the sign of cultural/historical/racial difference in the discourse of colonialism, is a paradoxical mode of representation: it connotes rigidity and an unchanging order as well as disorder, degeneracy and daemonic repetition. Likewise the stereotype, which is its major discursive strategy, is a form of knowledge and identification that vacillates between what is always 'in place', already known, and something that must be anxiously repeated... as if the essential duplicity of the Asiatic or the bestial sexual license of the African that needs no proof, can never really, in discourse, be proved.

To state it plainly, the lump-of-labor fallacy myth is colonial discourse in which the worker is the colonized other -- the "idiot Luddites" Larry Summers was taught as an undergraduate at M.I,T, to dismiss as "a bunch of goofballs." That was way back in the 1970s. Just the other day, in a point/counterpoint with Dean Baker (Point: Shorter Workweeks Will Defeat the Robots), Omar al-Ubaydli (Counterpoint: Shorter Workweeks Will Increase Unemployment) trotted out the old formula:

A glaring red flag is how simple the proposed solution seems to be: Proponents of work-sharing believe an economy requires a fixed amount of work to be performed by a limited number of people.

That old colonial discourse. Shame.

Growth in GDP, Growth in Carbon Emissions: Cause and Effect

There’s a link at Naked Capitalism to a Real News Network debate between Bob Pollin and Peter Victor over whether degrowth is part of the answer to the threat of climate change.  I posted a comment to NC, but it never got posted.  Readers of EconoSpeak might be interested, however, so I’m putting it up here.

To wit:

I put a question about this on a statistics exam a couple of weeks ago, based on recent work by Mir and Storm challenging the so-called Carbon Kuznets Curve.  (Updated from the original comment.)  The evidence that increases in GDP per capita are strongly correlated with increases in carbon emissions per capita is incontrovertible.  If you use a consumption-based rather than production-based metric for emissions, no decoupling is yet visible.

But: correlation is not causation (that was the answer), and the GDP per capita variable is, ahem, not identified.  In fact, from the vantage point of the broad sweep of human history, it seems clear to me that the discovery and exploitation of fossil fuel resources has been a major boon to economic growth.  To put it negatively, if we adhere to the program of reducing fossil fuel consumption (weighted by greenhouse effect) by 8% per year, we are likely to see economic growth here and elsewhere take a major hit.  I realize that Bob Pollin disagrees, and that’s worth exploring at some point, but let’s put that aside for now.

To the extent that decarbonization will have negative effects on measured economic output, what do we do about it?  What bothers me about the degrowthers is that they appear to celebrate this.  Who needs all that nasty GDP stuff?  Let’s simplify our lifestyles and turn economic shrinkage into an opportunity.  I think the unreality of that position, it’s disinterest in how economic collapse is likely to play out in the real world, is frightening.  (Or it’s just sprinkled with fairy dust, as in Naomi Klein’s assurance that we will have both reductions in GDP and an increase in jobs.  Right.)

So I guess I have problems with both sides.  I think it will be difficult to prevent serious economic harm if we mobilize against climate change, and we should do what we can to keep that harm to a minimum.

Pain for Profit

from The Stage Coach, or the Road of Life (1843) by John Mills, chapter XI “The Mudlark”:

The night was very bright; a sharp frosty air whistled from the east, and the moon and the stars sparkled like frozen sleet in the sun. After the governor had scraped off the worst part of the slush, cleaned my face, and did the best he could for me, he shelled out the contents of the sack upon the side o’ the wessel, and commenced countin’ and feelin’ the pieces of silver with wonderful pleasure. 

“I feel, Jack,” said the governor, smilin’ as if a feather was blown into his ear, ” I feel, Jack, as though I could play leap-frog with the lamp-posts. There’s a hundred ounces if there’s one.” 

“If there hadn’t been a good swag,” replied I, almost fit to blubber with smarting so, “there’d a-been a deal o’ pain for short commons o’ profit.” 

“As common as ditchwater, that is,” added my father, fixin’ the sack over his shoulders, “and we ought to be well satisfied when we get moderate profits to a lump o’ labour or pain. However, Jack, get on my back, and I’ll carry ye home.”

The above is the earliest literary mention of the “lump o’ labour” that I have ever found. “One-eyed” Jack Hogg is telling the story of the time when he was 10-years old and there was a fire at the silversmith’s shop at the corner of Adam Street.The melted silver was carried by the water into the storm drain. Jack’s father, a scavenger (the “mudlark”), sends him into the sewer to recover the lumps of silver but on his way back Jack drops his lantern and is immediately attacked by the sewer rats. He runs to the exit where his father beats off the last clinging rats and then cleans him up in the river. The retrieved “swag” is enough to keep the family in relative luxury for the next six months.

The preceding chapters of the book tell the story of a visiting professor of phrenology and the ruse played on him using a plaster cast from a Swedish turnip. I found the Mills book when I was looking up statistics in connection with something I was writing about John Ramsey McCulloch and the story about the turnip and the phrenologist seemed a perfect parody of McCulloch's approach to inquiry:

It was only in the mid-1820s that governments began to publish systematic social statistics of any description, yet already in 1827, the political economist John R. McCulloch proclaimed the soundness of Dorning Rasbotham's 1780 opinion and concluded, definitively, "There is, in fact, no idea so groundless and absurd, as that which supposes that an increased facility of production can under any circumstances be injurious to the labourers."

The double injunction against any disputation is telling. Not only is it "groundless and absurd" to question the beneficence of machinery "under any circumstances" but it is, "in fact," the most groundless and absurd idea. "In fact"? That is to say this is no mere opinion or observation but is incontrovertible. 

Handler und Helden Redux

A year after World War I started (1915), the German economist, Werner Sombart, published a book entitled Handler und Helden (should be an umlautt over that "a"in "Handler"), English translation: Merchants and Heroes.  It was his contention, quickly picked up and propagandistically spread by the German war machine, that the Germans were heroes (Helden), their entire civilization in fact, while the British were a bunch of boring meaningless merchants (Handler), whose century long Pax Brittanica was a big snooze that needed a big shaking up and overthrowing by some God-fearing Helden from Germany.  We know how that sort of thinking ended up a couple of decades later when Wagner-Helden-drenched Hitler really went for the Gotterdammerung big time, killing millions.  So much for merchant-Handler boredom!

Well, this sort of thinking is back.  On May 25, George Will in the Washington Post , who has fervently criticized Donald Trump as a de facto fascist, nevertheless resurrected parts of this terminology in English to characterize the Brexit debate.  In this case, those in UK favoring Brexit are "rebels" against the boring bureaucrats of the European Union, who have "removed the grandeur of Europe" in favor of "commerce."  Will recognizes that the appeal here is not that far from Trump's but he distinguishes the British case by focusing on Boris Johnson, "who went to Oxford" and supposedly is poetic and intellectual and all that.  But he is all for the rest of the European nations to also dispense with the  EU, not noticing that most of those in those nations pushing such ideas are racist nationalists who, well, look a lot more like Mussolini than Boris Johnson.

I do not have a strong view  about Brexit, although it seems that most of those in UK supporting it do look a lot like Trump, if not worse.  I suspect that establishment forecasts of total economic collapse in UK  if Brexit passes, may be exaggerated, although there are lots of reason to expect their GDP growth rate to fall in the near future, quite likely into recession territory, if it does pass.  And, of course, everybody is expecting that if Brexit passes, the Scots will revive their independence move so as to rejoin the EU. But, hey, who needs Great Britain anyway?  Let them be Helden-heroes in their decline and collapse.against those awful EU Handler.  Let us return to the good old days of WW I (if not II or III or IV) when Handler und Helden killed millions to prove their nationalistic points.

Barkley Rosser

A Sure Sign Hillary Clinton's Campaign is Flagging

Fuel Oil, Whale Oil and Snake Oil

Not that I’m obsessed with Ms Klein, but consider this passage from her Said Lecture as published in the London Review of Books:

....the thing about fossil fuels is that they are so inherently dirty and toxic that they require sacrificial people and places: people whose lungs and bodies can be sacrificed to work in the coal mines, people whose lands and water can be sacrificed to open-pit mining and oil spills.

Yes, oil spills are very bad, but before we had a world-spanning petroleum industry we had whale oil.  Commercial whaling, on which whole economies were built, was a very nasty business to whale and whaler alike.  Its replacement with petroleum was a big improvement in almost every respect.  If it were not for climate change we could delete the “almost”.

Coal mining has also been a miserable business, but so has every other form of mining, in every part of the world and for all of human history.  Unfortunately, no bronze or iron age without bronze or iron.  And the use of wood as the principal fuel source for heating and industry was unsustainable as populations rose, and it consigned a whole class of people to extreme poverty.  There’s a reason the most pitiable characters in traditional stories are woodcutters.

Climate change is real.  The advantages of fossil fuels are real.  That’s why we have a problem.  You have to rewrite a lot of history to claim otherwise.

Modernity and Capitalism

Well, that’s a heavy title.  I’m not going to say the last word about it in a blog post, but I would like to make a fairly simple observation: for at least a century, defenders of capitalism have argued that the two are inextricably connected.  If you like modernity you have to like capitalism, and if you get rid of capitalism you will lose modernity with it.  By modernity I mean a way of life that is science-based, rational and skeptical, technologically innovative, liberal, cosmopolitan and adapted to markets.

The traditional response of the left was to argue that modernity under capitalism is flawed and that a better, socialist modernity is possible.  In other words, it rejected the identity and saw modernity as bigger than any particular version of it.

That position has been complicated by the collapse of traditional models of socialism that do seem to fail the modernization test: they were clunky and inefficient, closed to the outside instead of open, stultifying instead of dynamic.  Now, I can already hear the cries of paleo-socialists in my ear: No!  Socialism didn’t fail in Russia/China/Cuba/wherever; it was encircled by the forces of capital and betrayed from within.  I don’t agree, but I won’t debate it here; my only point is that most of the left is not paleo-socialist, so they’ve had to figure out what it means to be left wing and anti-capitalist in a world in which capitalism and modernity (in their eyes) largely coincide.

The result that seems to be unfolding is a widespread rejection of modernity on the activist/committed left.  This is obvious in a book like Naomi Klein’s This Changes Everything: Capitalism versus the Climate.  She denounces “western science” and the industrial revolution.  She is against globalization and wants each of us to stay put and cultivate our relationship to the soil—to native plants and local, stable communities.  She has rediscovered spirituality and finds it answers life’s questions better than rational skepticism.  She thinks traditional societies lived better and possessed more wisdom than those swept up in modernity.  And of course, any use of markets (other than carbon taxes) is to be denounced as the sin of greed.

What Klein writes wouldn’t matter so much if they were only her personal thoughts (just like mine don’t matter very much), but the reception her book has received shows she has distilled a worldview shared by much if not most of the left.  Her anti-modernist stance is not even mentioned; it is taken for granted.  Or more precisely, it is how we understand her to be radical and left-wing: that’s what it means to oppose capitalism in the Anthropocene.  (My spell-checker doesn’t recognize Anthropocene yet.  Give it time.)

So that’s how we’ve come full circle.  The identity between modernity and capitalism is no longer offered in defense of the existing order but (or also) as the basis for its rejection.  My prediction is that the benefits of modernity are so obvious and compelling for the vast majority of humanity that anti-modernist leftism will be an evanescent cult, something future generations will look back upon with curiosity.

And I still think we need to consider what form a non- or post-capitalist modernity might take.

(Postscript: If you want to think about how this conceptual turn of events began, you might look at the emergence of postmodernism, which transferred the critique of capitalism to the critique of modernity and arose at about the same time classical socialism/communism lost its intellectual luster.)

(Postscript ^2: This is not about anarchism vs Marxism.  Anarchists used to be modernists.  Read Kropotkin's Fields, Factories and Workshops or, for cultural modernism, Emma Goldman's Living My Life.)

Work-houses the best Charity?

John Graunt's observation, "if there be but a certain proportion of work to be done," was directly challenged by Thomas Cooke in Work-houses the best Charity: "A SERMON, Preacht at the Cathedral Church of Worcester, February 2d 1702."

Cooke's argument was that "another advantage to every community, where all Hands are provided with an Employ, is this, That it enlarges Trade according to the number of the Hands imployed." This is an ambiguous claim and much weaker than Josiah Tucker's "infallible maxim" that "one Man's Labour creates Employment for another." Cooke summarized Graunt's argument and then presented his objection:

The Ingenious Observator of the Bills of Mortality, tho he hath furnished us with many excellent and useful Observations, hath yet one that extreamly Labours, and he seems at once to be mistaken in his Charity, and his Politicks. He tells us that it were better for the State to keep the multitude of Beggars at a publick Stock, tho they earn’d nothing, then let them be maintain’d as they are, by the voluntary Contributions of charitable and pious Persons; and having made this assertion, he explains himself, having begg’d the question, that if there be but a certain proportion of work to be done, which be already done by the not Beggars, as he stiles them, then the imploying the Beggars in this work were but transferring the want from one hand to another, in which the latter by spoiling it, would do more hurt than good.

But this is limiting Men's Labour to one particular imploy, of which indeed he gives an instance, which the curious may have recourse to, which is all the strength of that argument: But our Modern States Men look much further than this Gentleman's Observations. ‘Tis true as to our exported Trade of Manufactures there must be some Limitation and restraint; for we must make no more, then we have demand for, and the Dutch as he very well observes and since them the French, having run away with a considerable part of the Antient English Trade, we will easily allow him, that should all Hands be employed that way only, they would be too many. But when we confider the vast quantities of Forreign Manufactures imported, which are consumed by our own Inhabitants, and the many thousand Families that might be plentifully maintained by the Manufactures of those very Commodities, Should they be brought over unwrought, methinks the Avarice of our Merchants, and the Pride of our Inhabitants Should not be able to prevail against that common good, which the limiting of those Manufactures to our own People would produce…

Unless I am mistaken in reading Cooke's proposal, he was advocating import substitution, relying on the establishment of compulsory workhouses for the poor to manufacture the substituted goods. I'm not inclined to argument the merits of Cooke's scheme but simply want to point out that it is hardly what one would consider a laissez faire, free-market, free-trade proposition.

In fairness to Cooke, his economic case for workhouses was only a secondary consideration. His main argument was a religious one, resting on selected Biblical citations and furious exhortations against the depravity of sloth. His published sermon was crowned with a big shout-out to 2 Thessalonians 3: 10:

A commandment from which, according to Cooke, lazy rich folks were exempt by virtue of their inheritance. But I'm no more interested in Cooke's mean-spirited theology than his stilted economic analysis. Why, then, exhume his archaic sermon? Cooke's sermon offers direct evidence that Graunt's commentary on employing beggars was known in the early 18th century, at a time of agitation for the establishment of workhouses.

A passage in Boswell's Life of Samuel Johnson suggests that Graunt's commentary on employing beggars had become somewhat of a commonplace by the late 18th century. Johnson's Dictionary of the English Language (1755) made frequent reference to Graunt's Bills of Mortality for examples of usage of words. The following quote is attributed to Johnson in 1780:

It may be questioned, whether there is not some mistake as to the methods of employing the poor, seemingly on a supposition that there is a certain portion of work left undone for want of persons to do it; but if that is otherwise, and all the materials we have are actually worked up, or all the manufactures we can use or dispose of are already executed, then what is given to the poor, who are to be set at work, must be taken from some who now have it, as time must be taken for learning, (according to Sir William Petty's observation,) a certain part of those materials that, as it is, are properly worked up, must be spoiled by the unskillfulness of novices.