Saturday, September 22, 2007

What Free Country?

Tibor R. Machan

When I first arrived on these shores, back in 1956, the idea that America is a free country had at least some rhetorical currency, backed by frequent enough association between the country’s founding documents and the desirability and undesirability of various public policies. Just as Abraham Lincoln, so many others who addressed what kind of laws the country ought to have tended still to invoke the authority of the Declaration of Independence, the Bill of Rights, and ideas from the Founders and Framers.

Not that it was all hunky dory with the country then or, indeed, before. But the prevalence of ideas of basic rights—the kind that marked out one’s personal, private dominion—and liberty—of the negative sort, freedom from intrusions by others, including governments—was in plenty of evidence in public discussions, debates in Congress and so forth.

Today there seems no one—other than the lone Texas Representative Ron Paul—on the political scene who is concerned with the freedom of American citizens. Correspondingly, public policies and laws are passed and enforced, via ordinances and legislation, as well as court rulings, that pay no attention to whether they invade the rights of individuals to their lives, liberty, and pursuit of happiness. It’s all about entitlements, instead. The so called civil rights era is now widely understood to be one that simply granted blacks and other minorities certain privileges, maybe to make up for previous mistreatment, maybe as a way to establish the Nanny State as the norm. It isn’t seen primarily as being about setting blacks free of state intrusion in their lives.

Along with the ubiquitous expansion of the public square, one that spreads the idea that people’s behavior is to be regimented by politicians in accordance with some supposed consensus in the country (and privacy can be ignored since everything is about that vague thing called “the community”), this trend has pretty much served to return the American continent to its pre-revolutionary European roots where the issue of the rights of individuals is hardly alive. A good case in point is a report in, of all places, the October issue of Road & Track magazine. It is short and to the point, so here it is in its entirety:

“Seniors Denied: The owner of a service station in Merrill, Wisconsin, has been ordered by the state to raise its prices. The proprietor was offering senior citizens a 2-cent-per-gallon price break and youth sports boosters 3 cents per gallon. However, the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin’s Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price. The owner received a letter from the state auditor stating he would be sued if he did not comply.” (p. 32)

So, even while the business ethics and law communities are awash with complaints about how greedy people in the market tend to be and with the theory of Corporate Social Responsibility—the one that insists that companies focus not on enriching their owners but “stakeholders”—a simple act of generosity by a merchant is rejected by public authorities in Wisconsin. Who knows that motivated the bureaucrats, apart form simply affirming their legal power to tell people how to run their business, lest someone take it seriously that in America there is a free market system of economics. No, that cannot be tolerated.

Instead, in the spirit of all the court rulings and laws that gain their impetus from Article I, Section 8 of the US Constitution, the interstate commerce clause (which courts have interpreted for about a hundred years as granting public authorities carte blanche over the economic affairs of everyone in society), regimentation is the economic norm now.

Yet, while this is a growing trend, apologists of statist economic intervention, such as Princeton economist Paul Krugman, a columnist for The New York Times, keep claiming that America is fallen victim over the last few daces to an extreme laissez-faire ideology. This is not only blatantly false about the country as a whole but it is contradicted daily by the kinds of local and state economic policies we see on exhibit in Wisconsin.

A simple act of generosity, of trying to help out seniors, is struck down! What a shame, in this, supposedly, free country!

Wednesday, September 19, 2007

Triumph of Envy at EU Court

Tibor R. Machan

The thirteen member European Court of First Instance has delivered its decision reaffirming the judgment against Microsoft Corporation, claiming that the company has been wielding excessive market power by way of its addition of a digital media player to Windows, something the court claimed undermined an previously dominant firm, Real Networks. This judgment will cost Microsoft $689,400,000.00 in fines as well as having to allow competitors to make use of Microsoft’s confidential computer code.

Just the other day I was looking through a magazine I get, Liberty, in which one of the articles is titled “Why I dislike Europeans.” I was thinking that this is a silly title since Europeans are a diverse lot and, moreover, why would it be important why someone dislikes them all. But when these kinds of news come out of the old continent, I, originally from there, too am tempted to develop a dislike for Europeans. Of course, this is only one of their courts but as with courts everywhere, this one probably is giving expression to a widespread attitude, in this case of envy toward Microsoft.

The act of bundling simply should not be any kind of crime. It is their product and they have the right to bundle and to keep the way they do it secret. So long as this is disclosed to potential customers, there is not a thing morally—and should not be legally—wrong with it. Bundling is, after all, a practice of nearly all industries that produce goods and services for sale—cars come with radios installed that would cost a fortune to remove and replace with some other radio of one’s liking. Prominent actors who star in movies ask for others they want to have in the project, directors, actors, and so forth. The list of bundling could go on endlessly.

Envy seems like a far better explanation for how the European Court ruled in this case. Microsoft’s success just must drive these people to distraction. Given the history of how most people in Europe had gained their wealth and economic dominance, namely, through politically and militarily backed conquest of and expropriation of resources from millions of subjects—the real exploitation of the feudal, not capitalist, era that gave credibility to Karl Marx’s theory of exploitation—it is perhaps understandable that many in Europe and elsewhere around the globe believe all wealth comes from malfeasance.

Massive fortunes used to be gained through looting, thieving, and rank oppression, including especially the conscription of labor. So the idea that a company like Microsoft could obtain its market success honestly, mainly through ingenuity and hard work, simply hasn’t gained a foothold. The achievement of wealth through market processes is relatively new in human history and only taken to be the norm by most people in the United States of America and a few other places.

Still, one would expect the erudite members of a prominent court to have shed the prejudice that it takes to persecute a firm like Microsoft but it appears that this is a vein hope just yet. I haven’t checked, but I am pretty sure most editorials in Europe welcome cutting Microsoft down to size. Few, I bet, are taking the court’s ruling as an opportunity to teach some lessons in free market economics, the right to private property, freedom of trade. Instead most probably share Harvard University law professor Andrew I. Gavil’s not surprising academic opinion that the court’s “decision is a strong endorsement for what in the United States would be considered aggressive policy on dominant firms,” one “that’s going to continue to play out in other kinds of cases.”

I am sure Microsoft doesn’t need my help to carry out the practical, legal aspects of this battle but given Bill Gate’s political philosophy—revealed in his obstinate support of the estate tax and other policies coming from the Left—the philosophical case for his company could probably use some shoring up. Perhaps he ought to familiarize himself with Ayn Rand’s world-famous novel, Atlas Shrugged, the 50th anniversary of the publication of which is being celebrated this year. It could help him understand the motivation behind a court ruling that is punishing him for being a success in the market place.

Sunday, September 16, 2007

Shoring Up the Nanny State

Tibor R. Machan

Given how bad the arguments are for forced wealth redistribution, it is no great surprise that mainstream welfare statists are constantly revamping them. In the August 22, 2007, issue of the International Herald Tribune, the European paper that’s put out by The New York Times, an editorial makes yet another attempt to help give the nanny state the moral advantage. Let us take a look at how this attempt is made.

“...The United States has long had one of the most meager tax takes in the industrial world. America's social spending—on programs ranging from Medicare and Social Security to food stamps—is almost the stingiest among industrial nations. Among the 30 industrialized countries grouped in the Organization for Economic Cooperation and Development, only four—Turkey, Mexico, South Korea and Ireland—spend less on social programs as a share of their economy.

“Long a moral outrage, this tightfisted approach to public needs is becoming an economic handicap. Shortchanging public health impairs America's competitiveness. If the United States is to reap the rewards of globalization, the government must provide a much more robust safety net—to ensure public support for an open economy and protect vulnerable workers.”

To appreciate these desperate lines, it is necessary to render them into more honest terms. So, first of all, what we are actually being told is that the United States has achieved what in human history cannot be but a triumphant accomplishment—it extorts far less of its population’s resources than do other countries; most of them are still stuck in the ethos of pre-capitalist economics, mercantilism, where the government manages the bulk of the economy (i. e., its citizens). Instead, in the USA economic challenges are dealt with mostly by free men and women, not by politicians and bureaucrats.

Instead of lamenting this, it ought to be celebrated. What else is due a country that has managed to substantially abandon the notion and practice of having its population live off the work and resources that are extorted from its productive citizens? Instead of depending on kings, tsars, pharos, and other rulers of the realm, in America individuals and families are starting to fend for themselves by means of voluntary cooperation—trade, insurance, inheritance, etc. And they are exporting this idea to many other regions of the globe via globalization and privatization.

To call advancing toward greater self-sufficiency by a substantial portion of a country’s population that has become less and less dependent upon the government “a moral outrage” is to engage in Orwellian doublespeak. It is a moral triumph not to depend upon stealing from Peter to provide for Paul and to provide a legal infrastructure in which both Peter and Paul have an excellent chance of flourishing economically (and otherwise).

But there is also a problem with the facts in those two passages. While certain kinds of taxes are lower in America than elsewhere in the industrial world, other types are more Draconian. All the hidden taxes involved in the extensively regulated economy which people in commerce need to pay by way of vast bureaucracies and legal teams, are not accounted for. Firms need to pay vast sums so as to fend off the feds, to cope with anti-trust suits, etc.!

The so called public health problems in the USA, such as they are, are mostly the result of the government’s extensive intervention in medical and insurance matters—the health professions are the most highly regulated by the governments in the country. Only education is more socialized, from elementary to the highest levels.

This idea, that “If the United States is to reap the rewards of globalization, government must provide a much more robust safety net—to ensure public support for an open economy and protect vulnerable workers” is utter nonsense. Governments must steal any provisions to make them available, which then means resources that people might allocate according to their own understanding of what they need and want are being managed by people who are clueless as to what actually needs to be produced.
The idea also lacks the benefit of the insights of public choice theory, namely, that politicians and bureaucrats are far from public servants. Instead they pursue agendas of their own depriving the resources from those who produced them and thus rendering them unavailable to be used as their owners would chose. Local knowledge is a far better guide to what is needed than the ideas that legislatures and bureaucracies concoct about the public interest (which is really mostly private interests having been lobbied for successfully).

In fact the nanny state is mostly a matter of providing appealing intentions, not of coming up with successful performance. No doubt, some folks benefit from its policies but never without imposing the cost on others who then are stymied in their efforts to pursue their goals. And there is nothing to celebrate about that.