How to Unlock the Free Market Possibilities of Net Neutrality's Repeal

How to Unlock the Free Market Possibilities of Net Neutrality's Repeal

06/11/2018Per Bylund

Past all the incendiary rhetoric, one of the key differences between Democrats and Republicans is the question of how far-reaching government intervention should be. Nowhere is this more apparent than in the most recent battleground over regulations: net neutrality.

Federal Communications Commission (FCC) Chairman Ajit Pai -- a Republican appointee -- championed a commission vote in December to repeal net neutrality regulation, arguing that deregulating internet service providers would bolster the economy.

Under a repeal, broadband providers would no longer be prohibited from blocking websites or charging for higher-quality service or certain content. The FCC, under Pai's leadership, says that ISPs like AT&T and Comcast will offer a better variety of niche services to enhance the customer experience if they are liberated from pesky regulations.

The issue is hardly settled: Democrats in the U.S. Senate disagreed with the FCC move and last month voted 52-47 to quash the repeal, but their bill is not expected to pass the House. And, even if it does, President Trump is extremely unlikely to sign it. As it stands, the repeal of net neutrality is set to take effect today, June 11.

The FCC’s repeal uncorked a tidal wave of outrage from net neutrality advocates, who fear a future of slower internet service, higher costs and fewer consumer choices. But those advocates should hold on -- because the loosening of regulatory hurdles actually fits into a market-oriented mindset that breeds entrepreneurial innovation. Here's how:

Read the full article at Entrepreneur. 
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Noah Smith Wants Harvard to Abandon Its Devotion to "Libertarian" Economic Theory. Really.

03/15/2019Troy Vincent

Let's talk about Econ 101, scientism and modern economics.

At Bloomberg, Noah Smith argues that Greg Mankiw's Principles of Economics textbook is out of date because academic economists are more concerned with empirics and wealth inequality.

Furthermore, Smith pushes the view that economic theory itself is outdated. Not only because academic economists no longer study it or care about it, but supposedly because empirics have proven the laws of economics to be out of touch with reality.

He purports that Mankiw proposes theoretical insights that are skewed against redistribution because of his "libertarian political slant." This just seems to be another way of saying that it avoided most Keynesian mathematics and empiricism and focused on the foundational theory.

Many libertarians derive their views on economics from the Austrians. It's worth noting that Mankiw admittedly never read any Austrian economists in undergrad or grad school and only first read Hayek and added a note on Hayek to the 4th edition of his text in the mid-to-late 2000's. If you're conflating politics with economics, Mankiw is far from an Austrian or Austro-libertarian.

Smith neither addresses Mises' a priori defense of economic theory, or praxeology, nor Hayek's criticism of the scientism of the social sciences.

Smith also doesn't address the obvious: economic incentives explain the rise in empiricism in academia. And the politicization of the economy and growth in government explains why the economics professions have shifted politically left and focused their efforts on income distribution.

Smith states that new empirical methods prove that the assumption that economic actors are perfectly rational is false and uses this insight to disparage economists and libertarians relying on insights derived from the foundations of economics.

Disparaging Mankiw's lessons as skewed by libertarian thought ignores the fundamentals of Austro-libertarian economics. Mises did not rely on a view of perfect rationality to arrive at economic conclusions or to confirm the laws of economics. As Mises stated in Theory and History:

The sciences of human action starts from the fact that man purposefully aims at ends he has chosen. It is precisely this that all brands of positivism, behaviorism, and panphysicalism want either to deny altogether or to pass over in silence.

I will conclude with Mises' address to this very debate:

Economic statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification and falsification on the ground of experience and facts. They are both logically and temporally antecedent to any comprehension of historical facts. They are a necessary requirement of any intellectual grasp of historical events.

While Mankiw is no Austrian, we should not let Smith dictate the discussion or get away with wrongly conflating various economic and political views given that he's completely ignoring long-standing economic explanations that address his criticism of foundational economic insights.

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Recession Will Turn Debt Into Junk

03/15/2019Doug French

Diane Swonk says the 20,000 payroll number for February was a head fake. She blamed bad weather, the government shutdown, and other gobbledygook to explain away the 160,000 job miss for the year’s shortest month.

According to Michael Snyder, in a piece posted on Zerohedge.com,

The U.S. economy is growing at a 0.3 percent annualized rate in the first quarter , based on data on domestic construction spending in December released on Monday, the Atlanta Federal Reserve’s GDPNow forecast model showed.

Mr. Snyder lists 18 data points on his blog “ The Economic Collapse ” supporting the idea that an economic winter is coming.


#1 Farm loan delinquencies just hit the highest level that we have seen in 9 years .

#2 We just learned that U.S. exports declined by 4 billion dollars during the month of December.

#3 J.C. Penney just announced that they will be closing another 24 stores .

#4 Victoria’s Secret has just announced plans to close 53 stores .

#5 On Thursday, Gap announced that it will be closing 230 stores over the next two years.

#6 Payless ShoeSource has declared bankruptcy and is closing all 2,100 stores .

#7 Tesla is also closing all of their physical sales locations and will now only sell vehicles online.

#8 PepsiCo has started laying off workers and has committed to “millions of dollars in severance pay” .

#9 The Baltic Dry Index has dropped to the lowest level in more than two years .

#10 This is the worst slump for core U.S. factory orders in three years .

#11 We just witnessed the largest decline in the Philly Fed Business Index in more than 7 years .

#12 In January, sales of existing homes fell 8.9 percent from a year earlier. That was the third month in a row that we have seen a decline of at least 8 percent. This is an absolutely catastrophic trend for the real estate industry.

#13 U.S. housing starts were down 11.2 percent in December compared to the previous month.

#14 Compared to a year earlier, home sales in southern California were down 17 percent in January.

#15 In December, home sales in Sacramento County fell a whopping 22.5 percent compared to a year earlier.

#16 Pending home sales in the United States have now fallen on a year over year basis for 13 months in a row .

#17 More than 166 billion dollars in student loan debt is now “seriously delinquent” . That is an all-time record.

#18 More than 7 million Americans are behind on their auto loan payments. That is also a new all-time record, and it is far higher than anything that we witnessed during the last recession.

None of this has kept individuals, companies and governments from ramping up debt levels. Leverage abounds, everywhere. Grant’s Interest rate Observer writes, “companies are tapping credit lines to compensate for shortfalls in cash flow.”

Defining a zombie company as one failing to generate cash flow to cover interest expense for three consecutive years, Grant’s points out that 128 companies in the S&P 1500, fit the description. The percentage of living dead has increased over the past 12 months, ending January 31st, from 12.4 percent of the broad index to 13.6 per cent.

Money manager Jeff Gundlach told Grant Williams on Real Vision ,

the economic data continues to deteriorate. And we're starting to see reversals and unemployment claims now rising on a four week moving average basis. We're starting to see earnings estimates collapsing, margin estimates collapsing, sales dropping. You see housing is negative, Surprise indices-- confidence is deteriorating. None of these things are at the alarm-bell recession, but they're getting fairly close.


Gundlach and Williams spoke about the 800 pound elephant in the room, the U.S. government’s off balance sheet obligations. “123 Trillion, six times GDP. If we wanted to fund our liabilities, the 123 trillion-- over the next 60 years, we'd have to put 10% of our GDP aside, from negative 7 today to plus 10,” Gundlach quipped.

After reflecting on investors buying AAA-rated mortgage-backed bonds back in 2005, believing they were playing it safe, Gundlach said,

Well, we have similar-- maybe not as egregious-- but it's an echo of a rating problem in the bond market right now, in the corporate bond market, where the corporate bond market has exploded in size. It's more than double where it was 10 or 12 years ago, and a lot of it is, I think, overrated. There was a report by Morgan Stanley Research that suggested that fully, fully 45% of parts of the corporate bond market would be rated junk right now, if you use leverage ratios alone. Now, they use more than leverage ratios.


There's other variables that go into rating. But the leverage ratio seems to be really important.

Right now the ratings agencies are buying what debt issuers are selling —a rosy future. But with recession clouds gathering, Gundlach figures,

there's not going to be any working towards a better place. And so all of those bonds potentially could be downgraded into a junk status. And as we all know, when a triple-B-rated corporate bond crosses the line into junk status, the price goes down. It doesn't go up. So you can find people that have poured into corporate bonds-- that includes corporate pension plans-- which thought that they had a clever idea of matching up their liabilities, which are discounted by the single-A long corporate rate, and so let's match them with assets that are corporate bonds, so they move together.

As I wrote a couple weeks ago, when debt turns to junk, ETFs and institutional holders will desperately be looking to sell at any price. “So will they sell?” Gundlach wonders rhetorically. “I think the answer is yes. And so if you have a misrated market, and it goes into a downgrade problem, you get tremendous forced selling. And that's what happened in '08 with the securitized market, and this time, I think it's the corporate bond market's turn.”

MacroMavens Stephanie Pomboy echos Gundlach’s view,

In 2007, the lie was that you could take a cornucopia of crap, package it together, & somehow make it AAA. This time, the lie is that you can take a bunch of bonds that trade by appointment, lump them together in an ETF, & magically make them liquid.

So, with this storm brewing, the Fed’s committee to save the world has started its roadshow.

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How Many Economists Still Get Subjective Value Wrong

03/14/2019Per Bylund

Subjective value is not objective. Sounds obvious, but the distinction is lost on most — scholars and practitioners alike.

People seem to think subjective value is simply a person's 'willingness to pay' a price. Well, it's not. Subjective value cannot be expressed in dollars and cents, because that would simply mean subjective value is an expression in terms of objective market purchasing power.

If value is subjective, however, that purchasing power too is subjectively valued, in terms of what subjective value it can provide (through the actual goods and services the money can purchase). And, in any market-like setting, willingness to give up purchasing power for a good only indicates that the person subjectively values that purchasing power (however it is appreciated by him/her) less than the value expected from the good that can be purchased.

Willingness to pay, expressed in the dollars and cents that in turn can command goods and services, only means the buyer expects to be better off from going through with the exchange. In terms of value theory, there may be no connection between the value of that which is forgone and that which is gained in return, other than them being valued differently (the former higher than the latter). 

Scholars should know better than to confuse these things, but they're obviously quite confused. 

Instead of thinking about the meaning of what they say, they adopt a practical shorthand used to get a dollar amount on a customer's valuation. This makes some sense from a practitioner's perspective, where a customer's willingness to pay for one's good is a rough estimate of what money price could potentially be charged for the good. 

It's not accurate, however, which is why entrepreneurship models suggest that entrepreneurs should make sure to charge a price lower than customer's stated willingness to pay (if it can at all be trusted). 

Also, the actual willingness to pay depends on offering the actual good along with the argument for why it would be valuable for the customer to have/buy it.

In a different time and place, and with different messaging, this 'willingness' changes both with how the good is subjectively appraised and with the other opportunities available to the customer. I might value a hamburger, but I value a hot dog more

Consequently, if there are hot dogs my willingness to pay for hamburgers is practically zero; if there are no hot dogs in sight, my willingness to pay for hamburgers may be significant. See how this works?

One's willingness to pay is not about the [subjective] value of the good itself (that is, the satisfaction experienced, or in any case expected), but is contingent on alternatives available. Practitioners who are careful can gain insights from willingness-to-pay estimations. But it is still a very blunt tool, since what actually matters is the subjective valuation of a good and the subjective valuation of alternative goods (the comparison/tradeoff). 

That scholars equate subjective valuation with objective money prices should be considered severe professional misconduct. For those who are in the business of thinking carefully about things, there is no place for conflating things. 

Or, as in this case, mistaking (interpreting, really) subjective value for being objective. This is inexcusable and should disqualify you from the academy.

Originally published on Twitter @PerBylund

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College Admissions Scandal: More Meddling by the Feds

03/13/2019Peter G. Klein

As with the federal investigation into college basketball recruiting, the college admissions scandal announced yesterday seems to fall into FBI jurisdiction only because of the overly broad mail and wire fraud statutes and federal racketeering laws — which make every tort or contract violation into a federal crime. Put differently, if rich parents bribed Yale or Stanford to take their kids, this is between those schools and their employees who took bribes, the kids and parents who lied on their applications, and possibly the other kids who attended (or were denied admission) around that time. Why is the US taxpayer funding this investigation?

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Bipartisan Attacks on the Second Amendment

03/12/2019Ron Paul

A nationwide system of gun registration could be a step toward national gun confiscation. However, antigun bureaucrats need not go that far to use the expanded background check system to abuse the rights of gun owners. Gun owners could find themselves subject to surveillance and even harassment, such as more intensive screening by the Transportation Security Administration, because they own “too many” firearms.

Republican control of the White House and the Senate does not mean our gun rights are safe. Republicans have a long history of supporting gun control. After the 1999 Columbine shooting, many Republicans, including many who campaigned as being pro-Second Amendment, eagerly cooperated with then-President Bill Clinton on gun control. Some supposedly pro-gun Republicans also tried to pass “compromise” gun control legislation after the Sandy Hook shooting.

Neoconservative Senator Marco Rubio has introduced legislation that uses tax dollars to bribe states to adopt red flag laws. Red flag laws allow government to violate an individual’s Second Amendment rights based on nothing more than a report that the individual could become violent. Red flag laws can allow an individual’s guns to be taken away without due process simply because an estranged spouse, angry neighbor, or disgruntled coworker tells police the individual threatened him or otherwise made him feel unsafe.

President Trump has joined Rubio in wanting the government to, in Trump’s words, “take the guns first, go through due process second.” During his confirmation hearing, President Trump’s new Attorney General William Barr expressed support for red flag laws. California Senator and leading gun control advocate Dianne Feinstein has expressed interest in working with Barr to deprive gun owners of due process. It would not be surprising to see left-wing authoritarians like Feinstein work with right-wing authoritarians like Barr and Rubio on “compromise” legislation containing both a national red flag law and expanded background checks.

My years in Congress taught me that few politicians can be counted on to protect our liberties. Most politicians must be pressured to stand up for freedom by informed and involved pro-liberty citizens That is why those of us who understand the benefits of liberty must remain vigilant against any attempt to erode respect for our rights, especially the right to defend ourselves against private crime and public tyranny.

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Jeff Deist Joins TV Azteca to Discuss Free Markets and Liberty

03/12/2019Jeff Deist

During a recent trip to Mexico City, Jeff Deist was able to join Sergio Sarmiento of TV Azteca's adn40 for a great discussion on the meaning of liberty and the power of markets.

The interview is available here.

The Mises  Institute  been excited to increase our reach in the Spanish speaking world in recent years thanks to trips like this, as well our growing library of Spanish-language translations available at Mises.org/es.

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Notes on Fed Chair Jerome Powell's 60 Minutes Non-Interview

03/12/2019Jeff Deist

Jerome Powell, Chairman of the Federal Reserve Board of Governors, appeared on the TV magazine 60 Minutes last night. If you're craving empty calories, watch it here. The whole interview was an exercise in banal pleasantries, not to mention deadly dull. It's what we've come to expect from Fed Chairs, nothing to see here, move along...

But financial twitter, including our friend Danielle DiMartino Booth, was not impressed:

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Granted, this was 60 Minutes and not Bloomberg or the Wall Street Journal. It was a puffball interview. But is it too much to ask the man who holds tremendous sway over our financial well-being to give the American people a substantive primetime interview? Go back and listen to presidential debates thirty years ago, or old Firing Line shows. We weren't always subjected to dumbed down cartoon versions of policy issues. If Americans can't—or won't—understand the basics of central banking, we really do have bigger problems than unaccountable technocrats at the central bank.

A few notes:

First, it's apparent Mr. Powell has developed his own brand of non-speak. For all his talk of a more transparent Fed, he's still a lawyer who uses language carefully to the point of obfuscation. He's not as opaque and wordy as Alan Greenspan, who could issue forth for several minutes without saying anything comprehensible. He's not as stiff or suspicious as the always-guarded Ben Bernanke. No, Powell sounds more like Chance the Gardener in Being There: monotone assurances that "growth will be healthy," the U.S. economy is "in a good place," and the Fed must be "patient" when assessing interest rates. 

Second, reporters do a uniquely bad job covering the Fed. We don't know much about Scott Pelley at 60 Minutes, but his idea of a tough question was whether Trump had the power to fire a Fed Chair (he finally got Powell to squeak "No" after a bit of dissembling about legal consensus). Where were the questions about quantitative easing, the most radical monetary policy in human history? How about the Fed's enormous balance sheet, and whether in fact it will be unwound? Can money and credit simply be created without harm to the economy? Can the U.S. federal government continue to service its debt if interest rates rise into the historically average 5-10% range? Is inflation really as low as Chairman Powell claims, or do grocery shoppers know better? How about the moral hazards involved with reinflating equity and housing markets? Or why not just a homespun question about how elderly savers are expected to manage when money market and CD rates are below 3%? 

These are all simple, essential questions which would help Americans gain a sense of Mr. Powell's confidence in the big picture. 60 Minutes could have enjoyed a rare scoop, bringing the vital but critically under-examined topic of monetary policy to a big audience. But instead we got to hear Powell's views on the opioid crisis and immigration, and his soft murmurs about muted inflation. What a wasted opportunity.  

Finally, we've heard versions of the "cautiously optimistic" mantra so many times it begins to sound like a sedative. Alan Greenspan said it in the late 90's and then stocks blew up. Ben Bernanke saw nothing particularly untoward in U.S. housing markets in 2007. Janet Yellen believes we won't have another financial crisis "in our lifetimes" (she's in her 70s...). And now Jay Powell "sees no reason" the economy can't keep chugging along (even though he recently backpedaled on rate hikes and aggressively tapering the Fed's swollen balance sheet). And of course that's true until it isn't.

The lesson here is plain for all who will see it: booms and busts are engineered and created by central banks, not by some mysterious manifestations of markets themselves. They can be traced back to expansionary monetary policies in the past. in 2019 we're going on ten years of boom, one of the longest in American history. If things go south, as they did in 2008, the Fed has far fewer tools at its disposal—and the world has far more debt. As Professor Per Bylund reminds us, central bankers ought to spend more time learning what causes bubbles instead of scrambling to figure out what burst them after the fact.

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Bovard: Ethiopia Crash of Boeing 737 Max Might Be Latest Example of Backfiring Safety Efforts

03/12/2019James Bovard

Another Boeing 737 crashed Sunday in Ethiopia, killing all 157 aboard. This is the second crash of the new Boeing model Max 8 since October. Investigators have only begun sorting out this tragedy but some experts suggest that the plane’s automated safety software may have prevented the pilot from preventing the fatal plunge.

If software and sensors designed to prevent crashes actually increased the risk of catastrophe, then the Boeing accidents are another reminder that safety policies can have unintended fatal consequences.

Unfortunately, policymakers routinely ignore the unforeseen costs of well-intended safety efforts. For instance, the Transportation Security Administration, seeking to make air travel perfectly safe from terrorists in the months after 9/11, spawned airport checkpoint regimes that are so intrusive that many Americans choose to drive instead.  A Cornell University study estimated that TSA’s heavy-handed policies helped boost traffic fatalities by at least 1,200 additional deaths.

A Business Week analysis noted, “To make flying as dangerous as using a car, a four-plane disaster on the scale of 9/11 would have to occur every month, according to an analysis published in the American Scientist.…People switching from air to road transportation in the aftermath of the 9/11 attacks led to an increase of 242 driving fatalities per month — which means that a lot more people died on the roads as an indirect result of 9/11 than died from being on the planes that terrible day.”

Read the full article at USA Today

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Americans Have Much More Living Space than Europeans

03/11/2019Ryan McMaken

In the United States, local governments continue to play a sizable role in constraining the amount of develop-able land, and in adding costs to housing development in the form of development fees, zoning, building-materials mandates, and minimum-size mandates.

Yet, housing continues to cheaper in the US when compared to much of the world.

According to the OECD, for example, housing expenditure in the United States is 18 percent of gross adjusted disposable income. That's the third-lowest in the OECD. Moreover, housing costs in the US by this metric are only 75 percent the size of what they are in Denmark and the United Kingdom. US costs are 78 percent the size of housing costs in Italy.1

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Similarly, the OECD notes that in the United States, there are on average 2.4 rooms per person. Only Canadians have more rooms per person. In Switzerland, Spain, Denmark, and Japan, however, there are only 1.9 rooms per person. That's one-fifth less than the average in the US.2

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And the number of rooms aren't the only metric by which US homes are bigger. According to the BBC, floor space in newly built homes in the United Kingdom is less than half of what it is in the United States:

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Scholars have also noted these differences for years. In their book Living Wages Around the World: Manual for Measurement by Richard Anker and Martha Anker note:

Floor space is higher still in the United States where households at the 20th percentile ofthe houshold income distribution had 28.8 square meters per person in 1985 and 33.5 square meters per person in 2005, implying around 115 and 134 square meters respectively for a lower income household of 4 persons.

In other words, as the BBC chart shows, the square footage for a lower-income household in the US is similar to the overall average for living space in France.

Growth in home size is larger in the US as well. According to State of the World 2004, authors Brian Halweil and Lisa Mastny write:

The United States represents the extreme case, where average new homes grew nearly 38 percent between 1975 and 2000, to 210 square meters (2,265 square feet) twice the size of typical homes in Europe or Japan and 26 times the living space of the average person in Africa.

And certain amenities are bigger in the US:

The average size of refrigerators in US households, for example, increased by 10 percent between 1972 and 2001, and the number per home rose as well. Air conditioning has taken a similar path: in 1978, 56 percent of American homes had cooling systems, most of which were small window units; 20 years later, three quarters of US homes had air conditioners and nearly half were large central systems.

Square footage isn't the only measure of living space either, As noted in Perspectives on the Performance of the Continental Economies edited by Edmund S. Phelps, Hans-Werner Sinn

A considerable part of the US advantage in cross-country comparisons of living standards must stem from the much larger size of average American swelling units, both their internal dimensions and the amount of surrounding land. Fully three-quarters of the American housing stock consists of single-family detached and attached units. The median licing area in the deteched units is 1,720 square feet, with an average acreage for all single-family units of 0.35 (equivalent to a lot size of 100 by 150 feet or 1,394 square meters). Another figure that must seem unvelievable to Europeans is that fully 25 percent of American single-family units rest on lots of one acre or more, equivalent to 4,052 square meters. Available data, though spotty for Europe, suggest that the average American dwelling unit is at least 50 to 75 percent larger than the average European unit.

These factors ought to be considered when we look at disposable income comparisons between countries. "Disposable income" tells us about the cash income that people receive, but these measures tell us little about some of the differences in the standard of living and cost of living as they vary form place to place. For whatever reasons, Americans have for decades preferred to exchange a higher cost of living in many cases for a larger amount of living space. It doesn't have to be this way. Americans could have preferred to economize on housing in order to spend more on other living expenses. But they have not. Instead, a great many Americans have chosen to reinforce both private sector and public sector policies that produce larger housing units.

  • 1. This data point includes rental housing. See: "Better Life Index, Edition 2017" https://stats.oecd.org/Index.aspx?DataSetCode=IDD
  • 2. Rate = number of rooms divided by the number of people living in the dwelling. OECD states: "This indicator refers to the number of rooms (excluding kitchenette, scullery/utility room, bathroom, toilet, garage, consulting rooms, office, shop) in a dwelling divided by the number of persons living in the dwelling."
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There's No Evidence that Women Were "Forced" to Enter the Work Force "Just to Keep Up"

03/11/2019Ryan McMaken

In discussions about the ease or difficulty with which one may attain the so-called "American Dream" it is not uncommon to hear that in the past, a family needed only a single wage earner in order to attain the alleged dream.

This is generally based on assumptions about the the past in which it is imagined that most married women stayed home and provided domestic services such as cooking and cleaning and childcare. They did the family's shopping, took the children to school, and managed the household.

Now, since the rise of industrialization and departure of working men to a place of work other than the home (of the fields surrounding it) there is no doubt that women took on a role of household management, which grew in economic importance as time went on.

The question remains as to whether or not most households could afford to have the wife do nothing other than household chores and household management.

It appears plausible that many upper middle-class women could indeed afford to do this. Outside of households in the upper reaches of household income, however, attaining the much-vaunted "single-income family" wasn't as easy as many today assume. This can be seen in the fact the number of wage-earning married women, contrary to myth, slowly grew continually throughout the first half of the twentieth century. Moreover, some observers tend to attribute changes in the the working habits of married women only to economic need. But, as we will see, changes in the social acceptability of wage-earning married women changed over time, and not necessarily as a result of economic need. Thus, it is inappropriate to assume women enter the workforce primarily in order to maintain a standard of living that had allegedly been attainable with only one income previously.

A Brief History of the Housewife

Prior to industrialization, the idea of the stay-at-home housewife didn't even exist in most families, largely because it was simply assumed that both husband and wife needed to constantly attend to a wide variety of productive tasks at home. Those tasks were often segregated, but it was assumed that while the husband worked in the fields, the wife would spin yarn on a wheel, attend to the dairy animals, prepare meals, and wash clothing. These were not minor or quickly-accomplished tasks.

As an ideal, the housewife gained increasing popularity during the nineteenth century in part because it seemed possible for middle-class women to possibly attain what was seen as the "idle" lifestyle of upper-class women. Thus, a woman who did no wage work or production work was seen as having attained a higher status.

Over time, this became ingrained in the idea of proper "womanhood," but rarely — prior to the twentieth century, at least — did it ever have much to do with everyday reality. Susan Cruea writes:

The vision of women as wan, ethereal, spiritualized creatures bore little relation to the real world,especially of the working class, where women operated machines, worked the fields, hand-washed clothing, and toiled over great kitchen stoves. Even middle-class girls raised to be idle and submissive found themselves overwhelmed when it came to managing household duties as wives and mothers.

Nor was avoiding this fate a simple matter of finding a quality husband.

Massive economic changes in America also made arranging a desirable marriage difficult. Carroll Smith-Rosenberg notes that commercialization, industrialization, and advancements in transportation led to a mass departure of young men from the New Eng-land agricultural area "either to the West or to the new urban frontier." As a result, women's marital opportunities became limited, and more were forced to seek employment.

Economic historian Claudia Goldin has pointed out the importance of wage work to young and single women who greatly swelled the ranks of wage workers in the late nineteenth century. Once they married, however — assuming the new household was relatively well off — the women usually left the workforce.

This avoidance of wage work, however, could not be assumed in most cases. Sociologist Juliet Schor writes:


At least until late in the nineteenth century, most families could not afford to devote the labor of an adult solely to housecleaning, cooking, and mothering. Although social mores confined them to the home, married women, especially among the working classes and the poor, remained enmeshed in the cash economy. They earned income by taking in laundry, accepting boarders, or doing piecework. In rural areas, they worked on family farms. A large fraction of the population relied on this money for survival.

Throughout the early twentieth century, much of this work done by women in the cash economy remained informal because more institutional types of employment were closed to married women as part of the so-called "marriage bar."

Schor continues:

Why were housewives effectively excluded from the market? Among middle-class women, outright prohibitions on suitable jobs played a crucial role. In teaching and clerical work, women faced "marriage bars" - restrictions against the hiring of married women, or the firing of single women once they did marry. According to economic historian Claudia Goldin, at their peak, these bars were used by 87 percent of local school districts and covered 50 percent of office workers. Teaching and office work were two of the most important occupations for middle-class women whose class position would prevent them from going into factories or other work from which they were not barred.

In the working class, married women were also excluded from the labor market. Their (male) trade-union movement had long argued against women's employment in manufacturing industries. ... Men fought to be paid a "family wage" — remuneration generous enough to "support" a wife at home. But it was not only outright discrimination that kept women out of the labor market. There was also the sense that a family with a full-time housewife had achieved a privileged position in society.

In other words, the number of women "who stayed home" was artificially inflated by the presence of marriage bars and social mores. The number who stayed home was not simply a matter of economic abundance making a single-income household easily attainable.

But even with these marriage bars in place (which nonetheless went into steep decline in the 1940s), the number of married women going into wage work increased throughout the 1930s to the 1950s. Goldin notes:

From 1930 to 1950 the labor force participation rate for married women 35 to 44 years old in-creased by 15.5 percentage points, or from about 10 percent to 25 percent. Whereas just 8 percent of employed women were married in 1890, the number rose to 26 percent in 1930 and 47 percent in 1950. The fraction of single women in the labor force had not declined by much.Rather, the labor force participation of married women had increased substantially.

Moreover,

For married women in the 35- to 44-year-old group, participation increased from 25 to 46 percent from 1950 to 1970.

Some of this was facilitated by the new appearance of "scheduled part time work" which allowed many married women to enter into employment involving fewer than 35-hours per week.

"Need" vs Preference

There are a few things we can extrapolate from this information, and which are relevant to the idea that, allegedly, women did not "need" to engage in any wage work in the past.

First of all, it is simply not true that mothers and married women did not take on wage work or participate in the cash economy prior to the second half of the twentieth century. Agricultural women, of course, did manual labor all day long. But even as these households transitioned to industrial-based economies, married women still took on other types of additional work to supplement incomes. This was especially true in the working classes and lower-middle classes.

Secondly, it's important to remember that the number of women in the workforce was suppressed by social convention and by active, concerted efforts to keep married women out of the work force. Essentially, the marriage bar and efforts by labor unions acted to make it much harder for women to find "respectable" employment. While the marriage bar did not cover all types of employment, social convention prevented many middle-class women from taking jobs as laborers or factory workers. This sort of work was socially unacceptable. Thus, it is not appropriate to assign "economic need" the same level of importance in all time periods. Even if need existed in the days of the marriage bar, many families elected to simply do without in order to conform to social rules.

Thirdly, it is likely many women entered the workforce as a matter of personal preference and due to the desire for an even higher standard of living.  The fact that many women chose to enter the work force over these decades cannot be just assumed to be a function of a supposed decline in real wages. The increase may just as much be a function of the fact that many women chose to enter the workforce because they wanted to — and because it became more socially acceptable — and not just as a function of income needed to maintain a certain standard of living.

In fact, from 1950 to 1970, real wages increased considerably. This would not be the case if women had to enter the workforce "just to keep up" or just to maintain a formerly affordable standard of living as many contend to be true when they point to women joining the workforce after World War II. If that were true, real wages would be flat or nearly flatduring the period in question. As Goldin has described, nearly half of married women in the 35-44 year-old group — right in the middle of child-raising years — chose to enter the work force by 1970, either on a full time or part time basis. And this occurred while household incomes were increasing over the previous two decades.

So, it is not evident that because more women chose to enter the workforce after 1950 that this somehow "proves" the standard of living open to single-earner households was declining.

Moreover, while many contend the "American Dream" was becoming unattainable, we actually find that households were expanding their ownership of homes and cars at the same time more women were joining the work force.

As we've seen, the average size of homes US homes increased by two-thirds from 1967 to 2017, and increased from around 1,000 square feet to over 1,600 square feet from 1950 to 1970. All the while, the number of women joining the workforce increased. At the same time, the number of automobiles available to US households increased significantly during the 1960s, 1970s, and 1980s. The number of households with no car was nearly cut in half from 21 percent to 12 percent from 1960 to 1980. The number of households with access to two or more cars nearly doubled from around 22 percent in 1960 to about 53 percent in 1980.

Some might claim that was because married women "were forced" to get jobs, and thus needed transportation to that jobs. However, one might just as plausibly claim that many women wanted access to their own automobiles, and preferred wage work and an automobile to no wage work and no automobile.

And this brings us to the fundamental problem of assuming that women "have to" enter the workforce. Given that the US standard of living is far, far above subsistence levels, it's obviously not the case that average American households "cannot survive" on a single income. On the contrary, it's obvious that most American households today could certainly attain what would have been considered a middle-class standard of living during the 1950s and 1960s: a 1,000 square foot two-bedroom, one-bath house with a carport for the family's one car. There were rarely annual vacations to resort-like places out-of-state or overseas. In-home electronic entertainment consisted of a single television with four or five channels.

The fact is, however, that most American households don't want that sort of standard of living. They want smart phones, and an automobile for each adult. They don't want the children to have to share a bedroom. They want cable television.

Consequently, many households have elected to choose the benefits of higher incomes — and the downside of less leisure time and child-parent time — for the benefits of a higher material standard of living. It is also entirely possible that many couples would have preferred to do the same in the first half of the twentieth century had it been more socially acceptable to do so.

Usually, when people contend that in the past a single income brought a cornucopia of wealth manifested in the American Dream, they tend to base this on anecdotal experience from the point of view of a middle-class person who grew up in the mid twentieth century. These people forget that the standard of living was much lower then, and they also don't realize that the number of hours worked by the one household breadwinner tended to be higher than in later decades.

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