Overcoming The Economic Fallacies From Which Our Racial Problems Emerge.

Sep 15, 2025

America has been shaken by the footage of 23 year old Iryna Zarutska getting stabbed to death in the subway by a black man (Decarlos Brown Jr.). Popular media personality Nick Fuentes understandably expressed views which are shared by many Americans when he mentioned:

“...young beautiful white blonde haired girl. She’s a refugee from the war in Ukraine. So she leaves a war-zone, comes to America…she boards the light-rail car… sits down in front of a giant black man... And you know, that’s your first mistake…within minutes he gets up behind her….and stabs her in the middle of her throat with a knife… How many times does it have to happen…It seems like it happens hundreds of times. How many times is enough before people start to demand change….This is a racial issue. It is always the same color. It’s always the usual suspects. And it is not just these random acts of violence. It’s everything else too. Every carjacking. Almost every package theft. It is always the same profile every single time. These videos that we see on tiktok, on twitter, of people shoplifting, of people causing chaos in stores..on public transportation, in an airport. They[blacks] are so few, such a small segment of the population, 13%, and yet they comprise the majority it seems of these public outbursts, of the property crime, of the random sociopathic crime. Like this! And I said earlier in the year… This is how I feel, this is how a lot of people feel. We don’t want to be around black people anymore. We don’t want to live near them. We don’t want to associate with them. When we see them coming we go the other way… We’re justified. Is there a better example than this?! Of the axiom, that around black people you can’t relax.”

The general attitude of many in the so-called ‘Political Right’ is that Decarlos is clearly a malicious “evil” murderer deserving of swift and severe punishment, with some alleged scholars and scientists believing that there is something inherent in blacks that explains their overrepresentation in crime and Nick’s frustrations above. The general attitude of the so-called ‘Political Left’ is that the gruesome murder is not really Decarlos’ fault, but that of the environment in which he grew up, complex cultural factors like the ‘legacy of slavery’, racism, various alleged injustices embedded in Capitalism and how America functions, and more. Both general narratives are “widely held but false beliefs or ideas”, in other words, myths. As with the alleged benefits, morality, or superiority of Socialism, which can be seen as yet another myth which fooled many bright people into socioeconomic chaos, ideologues on the mainstream “Left” and “Right” likewise remain ignorant of the root causes of our racial problems thus the polarizations and chaos continue to expand.

We have to begin by quickly summarizing some vital economic and historical wisdom.

The emergence of the modern “capitalist” socioeconomic order, and the subsequent rise and relative fall of Socialist mythology.

Until the late 1700s most people lived in small, nearly self-sufficient farming towns. Innovations like the printing press greatly increased the rate at which superior information could be preserved and spread, which began to give the whiter looking homo sapiens in Europe a temporary relative advantage compared to others. As technology improved (engines and factories), the rate at which mankind could transform raw materials into wealth was rapidly increasing in cities. A growing class of businessmen-entrepreneurs-capitalists were constantly innovating, and due to people's ‘freedom to trade’ their private property only for things they deemed superior alternatives, entrepreneurs also had to copy the innovations of competitors thus inadvertently creating and spreading superior information, turning cities and eventually the entire planet into supercomputers that were constantly reordering mankind in increasingly productive and technologically advanced states. Competition between increasingly wealthy-productive factories-entrepreneurs motivated them to pay increasing amounts of wealth for labor relative to what people could earn in farms causing people to move to cities, quickly leading to massively complex metropolises-supercomputers and steadily increasing technology and living standards for everyone.

These changes, what we could refer to as the emergence or evolution of modern capitalism, were not the deliberate design of people, or more erroneously biological changes tied to Europeans, they were ideas or software that were, as Carl Menger writes: “the unintended results of historical development”, or in the words of Adam Ferguson: “indeed the result of human action, but not the execution of any human design.”

Since these cultural (not biological) changes were “unintended”, their benefits were not widely understood. Ignorance of how competing private sector companies were the creators and spreaders of superior information and subsequent social order, erroneously and resentfully seeing the growing fortunes of some entrepreneurs and investors as exploitation of laborers among numerous other fallacies, led to the rapid spread of a new erroneous ideology-mythology-software, Socialism. Misguided ideologues and resentful masses increasingly thought that private companies led to unfair differences in wealth and exploitation, and that abolishing them or having them managed by a competition-immune coercive bureaucracy of experts, in other words, the state or government or the ‘public sector’, would be better for society. Naive intellectuals would describe these increasingly popular fallacies-myths in a manner that was bound to go viral and that is what sort of happened with Karl Marx and his bite-sized 'Communist Manifesto' where he famously writes:

"the theory of the Communists may be summed up in the single sentence: Abolition of private property."

Socialist myth believers like Lenin, Mao, Castro, and countless others supported by fanatical masses replaced competing private sector companies by coerced-monopolistic-competition-immune governments led by “experts”-bureaucrats whose “central plans” could not work if people were free not to fund or go along with them — so they required massive compulsion. Without private property there are no free entrepreneurs and private sector companies creating-copying-spreading superior information and order, as well as businessmen ordering labor-resources-society in a manner where more wealth is produced (sales revenue) than consumed (costs), thus being profitable and thus pie-wealth–life-order increasing. Socialist countries inevitably descended into tyranny, technological stagnation and decline, and famines. After decades of self-mutilation reformers like Gorbachev emerged who mentioned: “[Communism] in principle, as a system, as a philosophy, as a model of organizing society, of reforming society, has to be rejected.”

The fallacies of eugenicists, IQ pseudoscience, and their ramifications.

Eugenicists like Hitler, being a man of his time like other major racists like Churchill and Roosevelt, given the relative technological advantage whites-Europeans had compared to non-whites, understandably fooled themselves into believing that race or tiny biological differences within homo sapiens were a vital factor for socioeconomic prosperity. It was culture-software, the above-summarized emergence of capitalism and related social institutions like private property, money, finance-banking, the rule of law, etc., NOT biology-“hardware” (blue eyes, white skin, etc.), which was the main factor in the rapid relative socioeconomic advancement Europeans had enjoyed paving the way for their misguided imperialism of the time. The cultural—not biological—evolutionary process which has created capitalism is much, much faster than the slow genetic biological evolution, thus rendering slight genetic differences between races and populations largely irrelevant. As Hayek writes:

“…biological evolution would have been far too slow to alter or replace man’s innate responses in the course of the ten or twenty thousand years during which civilisation has developed… Thus it hardly seems possible that civilisation and culture are genetically determined and transmitted. They have to be learnt by all alike through tradition.”

As numerous great free-market thinkers like Mises, Robert Higgs, and Ralph Raico have shown, during the last couple thousand years different groups of people, in widely dispersed locations like the Middle East, Asia, and Europe, traded the sort of title for most socioeconomically-advanced places. Mises makes this point and criticizes people who erroneously focus on race:

“But it is by all means an unsatisfactory answer to say that a genius owes his greatness to his ancestry or to his race. The question is precisely why such a man differs from his brothers and from the other members of his race. It is a little bit less faulty to attribute the great achievements of the white race to racial superiority. Yet this is no more than a vague hypothesis which is at variance with the fact that the early foundations of civilization were laid by peoples of other races. We cannot know whether or not at a later date other races will supplant Western civilization.”

Mises writes regarding the similar mental capacity of “all men of all races, ages, and countries”:

“It is a general fallacy to believe… that the logical structure of mind of primitive man was and is categorially different from that of civilized man...the fundamental logical relations and the categories of thought and action play in the intellectual activities of savages the same role they play in our own life. The content of primitive man's thoughts differs from the content of our thoughts, but the formal and logical structure is common to both…No facts provided by ethnology or history contradict the assertion that the logical structure of mind is uniform with all men of all races, ages, and countries.”

For a summary of the inadequacy of IQ testing we quote Prof. Sowell:

“Like fertility rates, IQ scores differ substantially among ethnic groups at a given time, and have changed substantially over time — reshuffling the relative standings of the groups. As of about World War I, Jews scored sufficiently low on mental tests to cause a leading “expert” of that era to claim that the test score results “disprove the popular belief that the Jew is highly intelligent.” At the same time, IQ scores for many of the other more recently arrived groups — Italians, Greeks, Poles, Portuguese, and Slovaks — were virtually identical to those found today among blacks, Hispanics, and other disadvantaged groups. However, over the succeeding decades, as most of these immigrant groups became more acculturated and advanced socioeconomically, their IQ scores have risen by substantial amounts. Jewish IQs were already above the national average by the 1920s, and recent studies of Italian and Polish IQs show them to have reached or passed the national average in the post-World War II era. Polish IQs, which averaged eighty-five in the earlier studies — the same as that of blacks today — had risen to 109 by the 1970s. This twenty-four-point increase in two generations is greater than the current black-white difference(fifteen points).” (Sowell, ‘Ethnic America: A History’, p. 8–9)

If IQs can change so much with socioeconomic achievement and cultural factors, it does not tell us much about differences in mental capacity. And whatever differences might exist are insignificant compared to what really matters, culture-software and the way the economy works, as the classic comparison of North and South Korea shows.

Let us also make the likely erroneous assumption that there are some significant differences between races-populations. So what?! If this is the case, then the best thing to do is to do nothing and allow the incentives in a free society to naturally find the ideal place for each individual, the exceptionally bright, and the not-so-much. As the great economist Prof. George Reisman reminds us:

“If two people both want to be an automotive engineer, and the better qualified succeeds, while the less qualified ends up as an auto mechanic, the better qualified one can raise the productivity of the poorer-qualified one by designing a better car for him to work on. If their positions were reversed, this would not be possible.” (Reisman, ‘Capitalism: A Treatise on Economics’, p. 357)

The same white Europeans who inadvertently stumbled upon Capitalism, were also the leaders in spreading disastrous Socialist mythology. If whites had been so “smart” as to “invent” Capitalism, surely they would have been “smart” enough to avoid the Socialist calamity. But, again, the emergence of Capitalism and related legal-cultural changes was neither the result of the “reason”-design of whites, nor their biology, it was “the unintended results of historical development.”

How bad economic policies via minimum wages, the war on drugs, and welfare, destroyed black culture and birthed rap and hip-hop culture.

If a teenager uses a tree-trimmer to produce one mowed lawn valued at $50 in 10 hours, his 'rate of production' is $50 / 10 hours = $5/hour. If next month he uses a riding lawn mower and mows the same lawn in 1 hour, he will have increased his 'rate of production' 10-fold to $50/hour. In the free private sector everyone is trying to discover the best information with which to acquire and reorder existing wealth in the most profitable and thus pie-increasing way. There are many businessmen, like John, who know how to rearrange labor and resources to produce wealth (sales revenue) at a rate of $15/hour, so they are motivated to trade $12/hour for the wealth in terms of labor that Tom produces and further incorporate his labor into a plan that produces wealth at a $15/hour rate so he can profit the $3/hour difference. If the minimum wage is set to $15 or higher, then obviously John would not be making any profit, or worse, losing money-wealth. Minimum wage laws just outlaw all rearrangements of society that can grow the economic pie at a rate equal to or lower than the set minimum. If the minimum wage is set to $20/hour, that just means that all ideas that can reorder society in a manner that grows the economic pie at a rate of $20/hour or less per laborer are not allowed to be executed. Customers lose superior choices, John loses $3/hour, and Tom has no job or income and has to be sustained by charity or coercing away wealth taxpayers traded a part of their lives to create.

Minimum wage laws essentially say that if a person can’t produce wealth at a rate faster than the mandated minimum, no one will be legally allowed to trade for their labor (hire them). The people whose rate of production is lowest are the last skilled, like teenagers, the elderly who are understandably slowed down by old age, foreigners who may not speak the local languages, and blacks who due to complex factors may be additionally discriminated against. Economist D.W. MacKenzie writes:

“While it is true that minimum wages do not drive the national unemployment rate up to astronomical levels, it does adversely affect teenagers and ethnic minorities. According to the Bureau of Labor Statistics the unemployment rate for everyone over the age of 16 was 5.6% in 2005. Yet unemployment was 17.3% for those aged 16-19 years. For those aged 16-17 unemployment was 19.7%. In the 18-19 age group unemployment was 15.8%. Minimum wage laws do affect ethnic minorities more so than others. The unemployment rate for white teens in the 16-17 age group was 17.3% in 2005. The same figures for Hispanic and black teens were 25% and 40.9% respectively. Of course, these figures decrease for older minorities. Blacks aged 18-19 and 20-24 had 25.7% and 19.9% unemployment in 2005. For Hispanics unemployment was slightly lower — 17.8% at age 18-19 and 9.6% at age 20-24.”

Morals are information which also emerges and spreads via economic competition to considerable degrees. It is hard-working, courteous, dependable, responsible people-workers, that treat others-customers-coworkers with mutual respect in a manner that maximizes cooperation-production-profitability regardless of age-sex-religion-race, who thanks to competition, motivate everyone else to be likewise. As Hayek writes:

“Competition is, after all, always a process in which a small number makes it necessary for larger numbers to do what they do not like, be it to work harder, to change habits, or to devote a degree of attention, continuous application, or regularity to their work which without competition would not be needed.”

Thus having a job is vital for shaping a civilized character. If nearly 50% of young black men can’t enter the job market due to minimum wage laws, they will have a much harder time shaping a civilized character and understandably be more likely to engage in criminal behavior, end up in jail and so on.

The high price of drugs is a measure of the large amount of wealth that is consumed from the economic pie by the thousands of people in the drug business. The high price of illegal drugs pays for the drug dealers who work many hours just to secretly move small amounts of matter-drugs, the bribes to police, complex concealment of shipments, weapons, etc. This is why a kilogram of cocaine may cost $200 to create in a Bolivian jungle yet sell for $20,000 in New York City. The $200 pays for the consumption of all the things the farmers in Bolivia need to live, the other $19,800 help sustain the aforementioned dealers, mercenaries, corrupt politicians-police and so on. If drugs were legalized, no wealth would have to be consumed by such activities thus lowering their price to that of your average multivitamin.

Every drug-bust puts people in jail at an astronomical cost ($500,000/year per inmate in NYC), reduces the supply of drugs while still as many people are willing to trade money for them, so more money per smaller amount of drugs means higher prices for drugs which motivates other drug dealers to expand or new people to enter the drug-trafficking business. Economic incentives guarantee that this cycle NEVER ends, filling up jails, destroying lives and further taxing citizens. Young black males, already far more likely to not find employment given the high minimum wage laws, have even more motivation to enter the drug trade and find their lives ruined by jail and all that is related.

Due to both biological and cultural factors, women are more suited to childrearing which makes the man have a better role as the “breadwinner”. If a teenage girl with a single child and her parents-family had to fully deal with the consequences-expenses of raising a child she would be far more selective of the type of man she had sex with, one who could provide for a child, which means one who has the values and productive morals needed to get and keep a job and stay out of trouble. Various welfare programs introduced in the 1960s which paid large sums to women with children destroyed these incentives causing marriage rates for blacks, which had been comparable to whites, to greatly decline. As Prof. Thomas Sowell writes:

"The black family, which had survived centuries of slavery and discrimination, began rapidly disintegrating in the liberal welfare state that subsidized unwed pregnancy and changed welfare from an emergency rescue to a way of life."

In any environment the people who are emulated are the ones that excel in it, their mannerisms and gestures are the ones that are mimicked by the young minds around. The aforementioned disastrous economic policies created the environment that led to the evolution of rap music and some of its less-than-ideal socioeconomic consequences. Rapper Ice-T’s video for his iconic song “New Jack Hustler” comes to mind. The video begins with three young black kids bouncing a basketball around. One says he wants to be a pilot when he grows up, the other says he wants to be like Michael Jordan, and the third says “I want to be like them across the street”, pointing to Ice-T and his gangsters.

There is probably no tougher environment in America than black ghettos. At a certain level we might rationalize that guns and gangs are counterproductive to society, but at a more instinctive level being successful in this world is very appealing to our manly instincts and a great source of confidence and pride. The man who reaches the top and survives in this world gains a great sense of confidence. As rapper Busta Rhymes tells us in his song “In The Ghetto”:

“That’s where I … Get my instincts and survival tactics
Ain’t nuttin like the hood nigga, I don’t care
You surviving in the ghetto you can make it anywhere”

The source of confidence and pride that comes with being tough enough to survive in the ghetto helps with the ladies as well. A once popular song titled “Soldier” by “Destiny’s Child” provides a good example:

“If his status ain’t hood
I ain’t checkin for him
Betta be street if he lookin’ at me”

Thus we can see how economically ignorant minimum wage laws, the war on drugs which imprisoned and greatly hampered the lives of millions of blacks, and disastrous welfare schemes, not anything tied to “race” or “IQ”, created the environment which further transformed black culture from being an amazing example of how freedom had quickly transformed a once enslaved population who had to overcome countless injustices and difficulties, to singing about gangster rap and embark upon a sort of cultural self-mutilation.

Since the recent emergence of modern Capitalism overlapped with European imperialism, many people, especially non-whites who suffered domination by whites, were more likely to erroneously equate Capitalism with some oppressive ideology and thus be more likely to fall for Socialist mythology. This helps explain why former colonized non-white populations (Asia, Middle East, Africa) fell harder for Socialist myths, which further destroyed their potential prosperity, and also made it easier for misguided racial-eugenics fallacies to spread.

Since the economically ignorant masses, regardless of race, hate the rich-Capitalism and want to see redistribution of wealth and coercive central planning via a government monopoly of "experts" as the solution to every problem, it makes perfect sense that such sentiment would be stronger with blacks and "minorities". For example, perhaps America's most famous black leader, Martin Luther King, like most other prominent black political leaders and intellectuals, had little understanding of economics, and for reasons already hinted at, his economic views leaned more towards Socialism. One of today’s leading mainstream African American intellectuals, Michael Eric Dyson writes:

“King also contended, in 1967, that “the roots [of economic injustice] are in the system rather than in men or faulty operations.” In a remarkable statement in a speech he gave to his staff in 1966, King laid out the ideological basis for his deepened assault on poverty, economic injustice, and class inequality:
“We are now making demands that will cost the nation something. You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with the captains of industry….Now this means that we are treading in difficult waters, because it really means that we are saying that something is wrong… with capitalism….There must be a better distribution of wealth and maybe America must move toward a Democratic Socialism”
This statement is remarkable since King rarely allowed his positive response to democratic socialism to be recorded. His usual practice, according to one of his aides, was to demand that they “turn off the tape recorder” while he expounded on the virtues of “what he called democratic socialism, and he said, ‘I can’t say this publicly, and if you say I said it I’m not gonna admit to it.’ ” King “didn’t believe that capitalism as it was constructed could meet the needs of poor people” ” (Dyson, M. E. (2000). I may not get there with you: the true Martin Luther King, Jr. New York: The Free Press.)

So understandably MLK had to keep his Socialist economic views under wraps but it was hard to conceal the fact that he was often surrounded by communists. Another great American black leader, Malcolm X, sent a letter to President Truman letting him know that “I have always been a communist”. Perhaps the most famous international black leader, South Africa’s Nelson Mandela who won the Nobel Peace Prize in 1993 was also a Socialist ideologue. In a statement at the beginning of the trial that would send him to jail for 27 years he said:

“We all accept the need for some form of socialism to enable our people to catch up with the advanced countries of this world and to overcome their legacy of extreme poverty...I should tie myself to no particular system of society other than of socialism.”

The Black Lives Matter organization which has been taken to almost religious-like reverence by so many well-meaning white people is also understandably an economically ignorant Marxist-communist organization. Black lives matter founder Patrisse Cullors mentioned that "we're trained Marxists".

These black leaders-intellectuals should not be solely blamed for the fact that they have inadvertently pushed America in the wrong socioeconomic direction, have helped keep Africa devastatingly poor, and via the ideologically Marxist-Communist Black Lives Matter organization are taking America towards a racial civil war. We want to understand the complex environmental factors that lead to the economic fallacies which then manifest themselves in the more obvious-trivial "identities" of socialists-communists-etc., and place the "blame" on such fallacies instead of blaming the current "identities" of people which can easily change with the proper understanding of economics. These men were courageous individuals with the best of intentions who knew their views would likely have them killed as happened with MLK and Malcom X. We must always be aware of how difficult it can be to overcome economic fallacies and understand freedom. For example, the great free-market black intellectual-economist Prof. Thomas Sowell still considered himself a Marxist even after getting a Masters degree in economics from Columbia University. Sowell writes in his autobiography:

"The more other government programs I looked into, over the years, the harder I found it to believe that they were a net benefit to society. I had remained a Marxist, despite being at the University of Chicago, but now my experience in Washington began a process of changing my mind completely as to how to deal with social problems. Fortunately, it was a gradual process, so that I was spared the traumatic conversions which some other Marxists have suffered." (Sowell, ‘A Personal Odyssey’)

As already mentioned, freedom and competition has helped evolve our morals-ethics-culture to be “civilized”, and was quickly overcoming the problems created by slavery. Unfortunately blacks didn't just get increasing freedom once slavery ended, they also got constant 'social engineering'-Socialism from well-intentioned whites and economically ignorant Socialist-minded black leaders which did more harm than good. Frederick Douglass' advice in his 1865 speech-essay ‘What the Black Man Wants’, was just as important then as it is today:

“Everybody has asked the question. . .“What shall we do with the Negro?” I have had but one answer from the beginning. Do nothing with us! Your doing with us has already played the mischief with us. Do nothing with us! If the apples will not remain on the tree of their own strength, if they are wormeaten at the core, if they are early ripe and disposed to fall, let them fall! I am not for tying or fastening them on the tree in any way, except by nature's plan, and if they will not stay there, let them fall. And if the Negro cannot stand on his own legs, let him fall also. All I ask is, give him a chance to stand on his own legs! Let him alone!”

Frederick Douglass also said a few words that carry more wisdom than anything coming out of the mouths of all American psychiatrists combined: “Men are so constituted that they derive their conviction of their own possibilities largely from the estimate formed of them by others.” During slavery, long after, and probably still to this very day, some black people must have felt that they in fact were intellectually inferior to whites. This was understandable given that all the technology, the ability to read-write and just about everything that was much more advanced compared to what blacks had achieved was associated with white people. And of course, the "experts" and "the science" of the day had all sorts of myths as to why blacks were allegedly inferior and needed whites to make them more productive-civilized. For example in 1851, American physician Samuel A. Cartwright hypothesized that a mental illness he called “Drapetomania” caused slaves to flee captivity. Believe it or not, sometimes the established "science"-Faucis can be wrong.

According to grok, Decarlos Brown Jr. was 16 years old in 2007 at the time of his first misdemeanor charge, which was related to shoplifting or larceny. If minimum wage laws already made it so difficult for a black teenager to find a job and thus benefit from its civilizing benefits, now with a criminal record, he, like millions of other young black men, would be significantly destined to a life of crime and chaos.

Hayek writes:

“…nothing could contribute more to the cure of humanity’s ills than to give people a better understanding of economics. This knowledge is indispensable for any responsible discussion of the far-reaching problems of social organisation.”

Mises elaborates:

“If we want to avoid the destruction of Western civilization and the relapse into primitive wretchedness, we must change the mentality of our fellow citizens. We must make them realize what they owe to the much vilified "economic freedom," the system of free enterprise and capitalism. The intellectuals and those who call themselves educated must use their superior cognitive faculties and power of reasoning for the refutation of erroneous ideas about social, political and economic problems and for the dissemination of a correct grasp of the operation of the market economy. They must start by familiarizing themselves with all the issues involved in order to teach those who are blinded by ignorance and emotions. They must learn in order to acquire the ability to enlighten the misguided many. It is a fateful error on the part of our most valuable contemporaries to believe that economics can be left to specialists in the same way in which various fields of technology can be safely left to those who have chosen to make any one of them their vocation. The issues of society's economic organization are every citizen's business. To master them to the best of one's ability is the duty of everyone.”

And per Mises’ great student, Prof. George Reisman, we need more “friends of mankind”:

“As should be increasingly clear, economics is a science which can make possible the construction of a social and political system in which human success is a feature of normal, everyday life everywhere. It is truly the humanitarian science, and only those who have studied it well and who are prepared to implement its teachings deserve to be called friends of mankind. The most important charity which true friends of mankind can pursue is to disseminate knowledge of this vital subject as widely and as deeply as they know how.”

Jorge Besada - The Civilized Ape

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