Saturday, January 21, 2012

BBC’s Biased Coverage of Capitalism

Tibor R. Machan

On the BBC website an interview was featured recently with the famous orthodox Marxist, Eric Hobsbawm, who promptly denounced capitalism as if he had established definitively its inferiority as a political economic system. Is the BBC such an irresponsible news organization that it will feature Mr. Hobsbawm’s characterization of capitalism with no one who champions that system featured responding to him? (If you search, no such balanced presentation can be found on the BBC website.) Or is this happening because, after all, BBC is a state broadcast endeavor and has a big stake in discrediting a system that relies on private initiative?

From a Marxist perspective especially this conclusion is quite reasonable, since we are all supposed to be driven by economic motives and here is an instance that might just fit this idea perfectly. The BBC would be one of the casualties of capitalist inspired privatization! As a creature of the state it relies on confiscated resources for its operations and capitalism goes against that policy big time.

The question that was put to Mr. Hobsbawm by the BBC’s interviewer, had to do with capitalism and responsibility. That is, whether agents in a free market would be motivated to act responsibly and the answer Mr. Hobsbawm gave is “No.” Yet if people act irresponsibly in genuine free markets, this will soon be known and they would lose trust from fellow market agents. Only when governments protect market agents from the consequences of their behavior will they be able to persist in acting irresponsibly.

Moreover, if those who would regulate our economic conduct are, as they must be, human beings, why would they be virtuous while the we would not be? Why would they not use their monopolistic legal power to secure advantages for themselves, just as public choice theory (as per James Buchanan and Gordon Tullock) postulates?

What free market capitalism cannot offer, because it doesn’t control people, is compliance with all tenets of ethics. But neither can anyone else make such a promise and when they pretend they can, this invites the most insidious lack of ethics, namely, tyranny.

The bottom line here is that if you are interested in the nature of capitalism, don't ask a Marxist but a champion of that system of political economy, such as Professor Richard Epstein (NYU) or Randy Barnett (Georgetown U.) or, yes, me! Then go and find some critics and contrast their different answers and let the audience assess which approach is more reasonable.

The BBC doesn’t appear to honor this approach, the only balanced one, when dealing with the nature of capitalism. Too bad. Failing to let a competent defense of that system be aired on BBC may even promote some major economic malpractice, including the appointment of all kinds of petty tyrants who presume to know how to run our economic affairs.

“As an economic system capitalism has nothing to do with responsibility,” says the Marxist sage, yet this is perverse, uninformed, given that trust and being responsible to fulfill one’s promises is essential to free market capitalism. Indeed, one reason that that system works pretty well when uncorrupted by state interference is that those who fail to be responsible do not flourish in it unless favored with privileges they haven’t earned.

As many have pointed out, the famous association between capitalism and the pursuit of self-interest is widely misunderstood. “Self-interest” in how capitalism operates means nothing more than that people are doing what they want (since they are free to do so). But what they want to do may be for their own or for someone else’s benefit; nothing in capitalist theory spells that out. Indeed, it is a strong feature--not without some problems--of capitalist economic theory that saying that people pursue their self-interest says nearly nothing about what they are likely to do. This is because in that theory self-interest is understood subjectively. Whatever one believes is in his or her interest is exactly what is; but this makes it perfectly reasonable that someone who wants to consume heroin or engage in innumerable other self-destructive activities (by common sense standards) is actually pursuing his or her self-interest.

In any case, the main point here is that the BBC seems not to care to practice responsible journalism even while asking Mr. Hobsbawm to comment on the relationship between responsibility and capitalism. How ironic.

Tuesday, January 17, 2012

MLK’s Public Philosophy of Freedom

Tibor R. Machan

As I flew home across the country from NYC on January 16th, the holiday this year in honor of the birthday of Dr. Martin Luther King, Jr., I had the opportunity to watch several programs on television devoted to his legacy. I was especially struck by the fact that commentators -- for example Amy Goodman, the host and executive producer of Democracy Now!," a national, daily, independent, award-winning news program" -- keep imputing to him a welfare statism that seems not to have been part of his thinking. (I have no idea what Democracy Now! is independent of since all the programs on it evidence a distinct perspective, no less so that those on Fox TV.)

During the flight I managed, also, to listen again to the entire speech Dr. King gave in Alabama, on the day before he was assassinated, and what it was mostly about is freedom, not at all about welfare statism.

There are, admittedly, several senses of the term “freedom” in use. In particular there is negative and positive freedom. The former is strongly associated with the American political tradition -- spelled out, for example, in the Declaration of Independence and the Bill of Rights -- the latter with the ideas of FDR’s New Deal. The first means being free from the intrusions of other people, including government, however well intentioned; the second means being provided with support by others, including the government through its power of taking what belongs to one so as to hand to another. So one is free to do what one chooses to do if one is free in the first sense, while one is free from having to cover one’s various expenses in the second sense.

The free society as understood by classical liberals stresses the protection of the freedom of the citizenry with a suitably framed legal system, while the society fashioned by modern liberals stresses government's providing to people what they are said to need by way of confiscatory taxation for this purpose.

It seems to me that Dr. King was talking about the former kind of freedom, freedom from the oppressive acts of most whites toward most blacks, for example. Many of those who today wish to invoke his stature and ideas for their political purposes, however, are talking about the second kind of "freedom or liberty." That is the freedom, so called, that the welfare state is supposed to protect for people, at the expense of those whose resources are confiscated so as to achieve this goal. Yet there are many who insist that Dr. King had in mind the second type of freedom -- or perhaps that he believed in both. As one commentator put it, “On that day, Dr. King spoke of two types of freedom -- one from ‘the chains of discrimination’ and one from living on ‘a lonely island of poverty in the midst of a vast ocean of material prosperity.’ Somehow his first message has been taken to heart while his second has been forgotten.” (This is what John Fullerton, founder of Capital Institute, declared in his recent essay on Huff Post.)

The problem with attributing to MLK this two-pronged idea of freedom is that if it is correct, it makes his ideas incoherent. The first type of freedom just cannot co-exists with the second. If A can be coerced to provide support for those who are “living in a lonely island of poverty in the midst of a vast ocean of materials prosperity,” then A would have his right to freedom violated. If anytime that someone achieves material prosperity that individual becomes a target of the adjusters who would not accept his or her freedom to make use of it, then such an individual is not free in the first sense. To steal from Peter so as to provide for Paul does not support freedom but servitude.

It is much more sensible to attribute to Dr. King the more coherent view that if the freedom of individuals to do as they choose is properly respected and protected, they will be enjoying the first kind of freedom -- freedom from others’ intrusions -- and become capable of achieving freedom from poverty. Free men and women have generally been quite able to provide for themselves, perhaps with occasional voluntary help from their friends and neighbors. That is one of the lessons of history! It is entirely inappropriate to suggest that one person’s poverty authorizes others to take from those who have managed to achieve prosperity. I doubt that Martin Luther King Jr. didn’t grasp something so elementary -- it is an insult to his memory to believe that.

Instead what seems to be happening is that people who are aspiring to rule others are invoking his good name for their coercive purposes. It would be a shame if this were tolerated by all those who admire Dr. King for his championing of human liberty.