Looking at: ‘The rich are getting richer, and the poor are… also getting richer’ by Daniel Hannan

Index

Introduction
Central statements made by Hannan
His twelve claims evaluated
Overall commentary on the sources Hannan uses
Conclusions about the sources
The examination, including sources

Introduction

The rich are getting richer, and the poor are… also getting richer. What’s driving this wealth creation process? In this video, Daniel Hannan explains why it is capitalism — and capitalism alone — that has led to the unprecedented enrichment that is the central fact of Western life.

On the  Eight of October 2018, PragerU published one of their 5-minute videos. The video was called As the Rich Get Richer, the Poor Get Richer and was presented by Daniel Hannan.

Attached is a document in which I go through the list of facts & sources and examine each of them and see if they support his claims. In this post I give a summary my findings. 

Central statements made by Hannan
– As the richer get richer, the poor get richer too.
– Capitalism has led to the unprecedented enrichment that is the central fact of Western life.
– Capitalism alone has done that.
– Why has Capitalism done that?
 These for claim are supported by twelve subordinate claims that each has several references to sources. Below you will find an evaluation of these claims in regards to the use of sources.
His twelve claims evaluated
As free market capitalism has grown, global inequality has fallen. Yes, the rich are getting richer, but the poor are getting richer faster.   
If capitalism grows and other things happen at the same time this does not mean that they are related.  Poor getting richer, infant mortality declines,  life gets extended and literacy is on the rise. It all needs to be linked. Hannan does not do that linking. He just says   things happen at the same time therefore they must be.  Just like a myriad other things. This claim is therefore not supported.
The most rapid declines in poverty are happening in countries that are adopting free trade policies.
Hannan makes a claim that puts a burden on him to poof that the declines in poverty happen in those countries that adopt free trade policies. Hannan doesn’t offer sources that do this. Hannan shows  figures regarding the growth of GDP or the grownt of the ‘economy’. Which might have a bearing on this claim, but by themselves they do not proof that poverty declined or grew in any of the examples. He has to show figures related to poverty and then show that they are related to GDP and  then show that the GDP growth or decline was  related to free trade policies. Even in the case of China Hannan does not show that China’s remarkable GDP growth had any bearing on the poverty figures.Because of this he did not proof his claim.
The expansion of the free market has helped slash the percentage of those living in extreme poverty from 35% to 10% in 25 years. 
This point has been brought up before and is thus repeating something that he has not proven. The rest is opinions or related sources.
Point has not been proven.
Since it adopted more capitalistic policies starting in 1979, China’s economy has enjoyed an average of 9.5% growth annually. 
This point is proven by one source. However, it doesn’t proof any of his central statements. For one, Hannan doesn’t show if this has led to the unprecedented enrichment that is the central fact of Western life, as he claims.
Capitalism is not about greed. It’s about incentivizing people to match their skills to their goals and create earned success.
This is unsourced opinions. It does not proof anything. It is also irrelevant to the central statements.
While free trade-embracing Colombia’s capitalistic economy has grown, protectionist Venezuela’s socialist economy has collapsed. 
This is a repeat of an earlier point and this part does not add anything new. This point has not been proven.
Capitalism caters more to the masses than the economic elite, making things increasingly more affordable for more people. 
While much can be said about the quote of Schumpeter, superficially it can be used to support the claim made. However, note that in this context we are speaking about the masses and not the poor. As Schumpeter elaborates (see point in detail above.) he notes two other things: that this is about goods and that economic development comes with up and downs.I grant the point as such. However, it doesn’t support any of the central claims.
As Vietnam has embraced free trade, its economy has pulled ahead of protectionist Laos.
This point has been discussed before. This part doesn’t add anything new. Not proven.
Opposing capitalism isn’t standing up for poor people, it’s standing in the way of the best way to attain a better lifestyle.
This is all opinion and does not have any bearing on the central claims. Unproven.
The expansion of free trade, property rights, and entrepreneurship around the world helped millions pull themselves out of poverty. 
This is all opinion. Unproven.
A desire for wealth is a part of the human condition. In capitalism, the way to succeed and grow wealth is to offer a service to others. 
More opinions. Unproven.
Myth: Capitalism is plundering developing countries. Reality: Countries that embrace capitalism see dramatic economic improvement. 
This is again a repeat of earlier claims. Again unproven.
Overall commentary on the sources Hannan uses
Hannan’s central claims are supported by twelve subordinate claims referencing forty-five sources. However, these forty-five references point often to the same source thus the total sources actually come down to twenty-two unique sources.
Of these twenty-two sources, ten are offered as related reading, meaning they are not directly used to support the claims. Seven of these are PragerU videos. Three are books on amazon.  This is 45.5% of his sources.
Five are unsourced opinion pieces. Two are by Hannan himself, one by Mark j. Perry and two by  Arthur C. Brooks
This is 22.7% of his sources.
Six offer hard figures. Four from the World Bank Group, one from the OECD  and one from Index Mundi.
This is 27.3% of his sources.
One is a news article with an accompanying video from CNN(Moneycnn).This is 4.5%.
Now this gives a 67 % for sources that can be considered as not direct relevant or unsourced opinions. However, if one considers the amount of references, then the picture is different.

Picture1

Conclusions about the sources
An impressive list of forty –five references are used for the video. Whether one looks at the unique sources used, twenty-two,  or the total amount of references, forty-five, at least two thirds of the sources are opinion pieces or related videos.  This leaves one third for other sources. This doesn’t mean that the sources are always of the best quality or used in a proper manner. Overall it is surprising that on examination two thirds of the sources do nothing to support his claims.

Sloppy writing reflects sloppy thinking

During my examination I ran into a post that Hannan indirectly refers to that that listed quotes by Milton Friedman. One of them heads this section.
Hannan’s comes over as sloppy. He makes various claims that by themselves are worthy of many many books and these cannot possibly be addressed in a five minute video. But even the marginal claims he tries to support, he supports with opinions, videos that are just related and statistical sources that have no relevance.

The sloppiness goes even deeper.  Hannan mixes terms that are unrelated. He swaps the free market for capitalism as if they are the same thing, while these are not nor are they unbreakable linked. Capitalism refers to an economic system based on private ownership. The free market refers to a system where supply and demand are determined by consumers and producers. One can exist without the other. And when both exist they can exists in many forms.

He is also sloppy in the sense that he assumes things. Like he assumes that “an improvement of the economy”  means it has a positive influence for everyone, including the poor. However, a country might experience an economic upturn , but this does not mean the poor benefit, let alone benefit more. In fact, we don’t know who benefits unless that is researched.

Hannan biggest claim, as taken from the title, is that  as the rich get richer, the poor get richer too. In all irony this not supported by the most important source he uses to proof this statement: the World Bank. In the 2018 report of the World Bank, which is freely available,  this subject is addressed. In the chapter Shared Prosperity: Mixed Progress. Shared prosperity examines if the bottom 40 percent share in prosperity. In the chapter is is mentioned that  “To conclude, although most countries have made progress in shared prosperity, the results are mixed.” On page 51 a table is given for 91 countries that shows how the bottom 40 percent of the populace does as compared to the whole populace.

Now we compare this with the Index of Economic Freedom that is maintained by the Heritage foundation. The index has five classifications: free, mostly free, moderately free, mostly unfree and repressed.

Of the nations Hannan mentions China and Vietnam are mostly unfree yet in those countries the bottom 40% have benefited more than the overall populace. Colombia is moderately free and also the bottom 40% benefited more. Venezuela and Laos are repressive states but not mentioned in the World Bank report.

Let us see what the World Bank report says about the top three and bottom three states we can find in the Index.

Top three:
Switzerland(free): No difference.
Ireland(free): Bottom benefited more than whole.
United Kingdom(mostly free): No difference.

Bottom three
Mozambique(mostly unfree):  Bottom benefited less than whole.
Bolivia(repressed): Bottom benefited more than whole.
Iran(repressed): Bottom benefited more than whole.

All of the above are just some figures which I show just to show that nothing much can be said about it without more information.  Capitalism might very much be more beneficial to the poor than the rich, but saying so doesn’t make it so. And it is this what Hannan does.
It reminds me of a discussion that was cut short with the words: but I think it is so. To use the words of Christopher Hitchens: what you assert without evidence can be dismissed without evidence.

A splash quite unnoticed

XIR3675

According to Brueghel
when Icarus fell
it was spring

a farmer was ploughing
his field
the whole pageantry

of the year was
awake tingling
near

the edge of the sea
concerned
with itself

sweating in the sun
that melted
the wings’ wax

unsignificantly
off the coast
there was

a splash quite unnoticed
this was
Icarus drowning

 

William Carlos Williams – 1883-1963

I think you would agree with me that it would be a herculean task to respond to any video on youtube that is out there that requires one.  Addressing the flood would make a considered reaction almost impossible.

However, sometimes I feel that a response is required. And I felt this need regarding a video called Why they don’t tell you about Hitler’s “Shrinking Markets ‘.    The main reason for my unease with this video is that the maker of this video, a man who calls himself TIK, schools people on what history is. If you claim to know what history is, then leading by example would be a thing for sure.  The proof of the pudding is in the eating, though. So how edible is his course?

The case

It warrants to represent TIK’s argument in a proper manner. So let me lay out his case for you, so you can both check that I got it right and also understand the whole of his argument.

There are two ways to represent his argument. In a (very) short way and in the full way.

The short argument

Hitler was a socialist.

The long argument

They, the (Marxist-)Socialists who invaded the state controlled universities and schools since the Cold War era, if not earlier, want to prevent you from knowing about the shrinking markets because then they would have to tell you that Hitler was a socialist and that socialism, which means total state control of the economy and people – coupled with his racism caused the holocaust.
(note: I updated this long description to better reflect what was said on August the tenth)

I assume that you will agree with me that the short argument would be the easiest to respond to. The full argument is so complex in nature and raises so many additional questions that any response  will be very long indeed. So let me address the short version at the moment. That is, let’s see how TIK approaches this argument that Hitler was a socialist as a historian.

Screenshot - 7_9_2019 , 10_19_08 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - Opera

Socialism according to IEP

Before taking a look at TIK I want to point to another source first.  The reason is that the problem with the short argument is that we need to find a definition of socialism.  For this I make uses of the Internet Encyclopedia of Philosophy(IEP)   The IEP is a peer-reviewed encyclopedia. The reason I do so it not for the most obious reason, that is to show it conflicts with the definition that TIK gives, but rather to point out that there is no agreement even among socialists disagree on how socialism is to be realized. The IEP  gives the following definitions on socialism as an economic system and an ideology.

A socialist economy features social rather than private ownership of the means of production. 

Socialist ideology asserts the moral and economic superiority of an economy with these features.

But it adds a cautionary remark:

How, precisely, socialist concepts like social ownership and planning should be realized in practice is a matter of dispute among socialists. 

IEP points out that:

Considered as an economic system, socialism is best understood in contrast with capitalism.

Capitalism designates an economic system with all of the following features:

  1. The means of production are, for the most part, privately owned;
  2. People own their labor power, and are legally free to sell it to (or withhold it from) others;
  3. Production is generally oriented towards profit rather than use: firms produce not in the first instance to satisfy human needs, but rather to make money; and
  4. Markets play a major role in allocating inputs to commodity production and determining the amount and direction of investment.

An economic system is socialist only if it rejects feature 1, private ownership of the means of production in favor of public or social ownership. But must an economic system reject any of features 2-4 to count as socialist, or is rejection of private property sufficient as well as necessary? Here, socialists disagree

My point here is to show that even if there is agreement about the fundamental concepts of socialism, there is disagreement about how to realize it. And it is in particular important as we soon will see.

Socialism according to TIK

Now let’s have a look at how TIK defines the concept for us.

Socialism: you get money for free when you murder and steal from the bourgeoisie(or jews)(2:55).

Socialism: the technical definition is: the socialization of the means of production(4:14).

Socialism is the state control of the economy(8:03).

(Real)Socialism is the state(8:44)(23:09)

The true nature of socialism – total state control of the economy and people – totalitarianism(19:24)

The reason why I have listed all the definitions in is because TIK uses these different ones to make his argument.  I cannot find where TIK takes his definitions from as he doesn’t quote any sources. He names two books: Basic Economics and Economics in One Lesson. But neither Sowell nor Hazlitt define socialism. Nor do they refer to socialism in the way he does(thievery and murder for example), even though Sowell points out some of the traits of Socialist states, to which he never says that these traits are exclusive to those states.

Screenshot - 7_9_2019 , 9_55_36 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - Opera

It is perhaps of interest in this context to give a quote by Hazlitt. The underscore is mine.

When analyzing fallacies, I have thought it still less advisable to mention particular names than in giving credit.
To do so would have required special justice to each writer
criticized, with exact quotations, account taken of the particular emphasis he places on this point or that, the qualifications he makes, his personal ambiguities, inconsistencies,
and so on I hope, therefore, that no one will be too disappointed at the absence of such names as Karl Marx, Thorstein Veblen, Major Douglas, Lord Keynes, Professor Alvin
Hansen and others in these pages. The object of this book
is not to expose the special errors of particular writers, but
economic errors in their most frequent, widespread or influential form. 

Economics in One Lesson, page IX(1946 version).

In other words: where TIK uses Marx and Keynes, Hazlitt declines to do so because he knows very well that he would have to address each of them extensively. Sowell refers to Keynes a few times(six results on two pages). Marx is mentioned more. Hitler is hardly mentioned by either, and not in the context of socialism.

I supply this to point out that TIK doesn’t quote the sources he bases himself upon and that two books he mentions do not supply the definitions he uses. It follows that his definition must be his own. And his definition is has quite a certainty: socialism is the state. In others words: where IEP defines that socialist have a dispute.. TIK offers certainty. Unsourced, unfounded and unsupported certainty.

TIK vs the rest of the world

Now let me be clear here; TIK can, without restraint, claim that Hitler was a socialist. However, to make his argument TIK has to come up with a definition and one that at least most people can accept. Why? Because otherwise we cannot communicate concepts. If you define green as red and do not communicate that you do so, you will be in a traffic accident in no time and if you have followers believe the same, they will be too.  We have to agree on definition not only to communicate, but also to make the arguments work. And you have to stick to that definition.

Screenshot - 7_9_2019 , 10_15_47 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - Opera

And here is where TIK sinks his own boat. To argue his case he gives at the beginning of his video a list of  people whom he calls Marxist-Socialists. These people, so Tik explains,  all believed in shrinking markets.. just as Hitler did. Then when he defines socialism as state control of the economy or, to drive the nail home, the total control of the people and the economy, Marxist-Socialists by this definition are no longer socialists. As IEP states: Not only will communism (unlike socialism) do away with class, material scarcity, and occupational specialization, it will also do away with the state.  In other words. Marxist-Socialists cannot therefore be used to support his argument regarding socialists. He has refuted himself.

His arguments are shaky in another way too, as he when he defines socialism as totalitarianism. In other words: socialism has become synonymous to totalitarianism.  If socialism is the same as totalitarianism then it has lost any meaning as a separate concept. In other words: anyone striving for totalitarianism has now become a socialist too and any socialist has become a totalitarian. It might again be important that in this TIK doesn’t support what he says with sources. Again, he must be using his own definitions.

You could of course argue that socialism and totalitarianism share common traits, but then you have to argue that point where they differ. Or you can argue that socialism is a subset of totalitarianism, but then you have to argue that point. TIK does neither. He makes a blanket statement by making the one equal the other.

Another way he digs a hole to fall in himself is by defining socialism as the state. Again this includes a lot of people who support the idea of a state but who might not see themselves as socialist. Take conservatives. And again, he doesn’t name any sources.

Screenshot - 7_9_2019 , 11_28_01 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - Opera

TIK further expands on this idea in his slide where he equates group to tyranny and the individual to liberty.  And he explains this via etymology: Public is the same as the State. And the group is the same as tyranny.

Screenshot - 7_9_2019 , 10_50_35 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - OperaScreenshot - 7_9_2019 , 10_50_50 AM (1) Why they don't tell you about Hitler's _Shrinking Markets_ problem - YouTube - Opera

Now this creates another problem. Just like Marxist-Socialists are no longer socialist, anyone who strives for the common good now supports tyranny by definition.  As he says: there  And would it be superfluous again to point out that he doesn’t name any sources for his claims?

The result of his redefinition of terms is now that some people are no longer socialists, while a lot of other people have become socialists.

The point

To drive this point home: TIK is totally free to claim that Hitler was a socialist. My post is not to respond to that claim.

Most don’t even know the meaning of the terms, and when, you point them out – backed by a host of sources and examples from their own literature(actual evidence) you get told that you don’t know what you are talking about(23:35).

As pointed out: TIK’s  definitions are totally his own and keeps being changed by him during his 28 minutes of diatribe.  He hasn’t presented any ‘host of sources’ to support his definitions. TIK refers to books by Sowell and Hazlitt, neither used in his video, nor does he illustrate that they support what he says. The  Marxist-Socialists cannot be used according to his own definitions as they are no longer socialists. He fails to make a coherent argument by playing fast and loose with definitions and failing to source them.

Crescendo

Vidal (loftily): As far as I’m concerned, the only pro- or crypto-Nazi I can think of is yourself. Failing that—

Smith: Let’s, let’s not call names—

Vidal: Failing that, I can only say that—

Buckley (snarling, teeth bared): Now listen, you queer, stop calling me a crypto-Nazi or I’ll sock you in your goddam face, and you’ll stay plastered—

Gore Vidal vs William F. Buckley 

And then this final thing. What to say about a man who complains about his ideas being suppressed, but showing himself all too eager to hamstring the free exchange of ideas? If you deny that Hitler is a socialist, you deny the holocaust is the kind of argument that has no place in history.  TIK goes even a step further. He claims that socialists actually promote the holocaust(22:06).  History works when it allows for the free exchange of ideas. TIK has done himself a great disservice, he shows himself not to be the historian he claims to be.

The irony

TIK mentions a world wide socialist conspiracy to dominate the narrative, but doesn’t name the people involved, nor explains how it works on a global level, nor how it works  for privately owned  universities or for countries run by non-socialist governments for decades. He never supports anything he says.  But most ironical is it that he references men as David Glantz and Rainer Zitelmann in t and his other videos, both whom have studied at the same state controlled universities. But then I guess, checking his sources isn’t his strong suit.

David Glantz
Born in Port ChesterNew York, Glantz received degrees in history from the Virginia Military Institute and the University of North Carolina at Chapel Hill, and is a graduate of the U.S. Army Command and General Staff CollegeDefense Language Institute, Institute for Russian and Eastern European Studies, and U.S. Army War College.

Rainer Zitelmann
Zitelmann studied history and political sciences at the Darmstadt University of Applied Sciences and completed his doctorate in 1986 under Prof. Dr. Karl Otmar Freiherr von Aretin with the grade of “summa cum laude”, the subject being the goals of Hitler’s social, economic and interior policies.