Has Capitalism Been Invalidated?

Tibor R. Machan*

“...we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people....” Barack Obama (IHT, 3/24/09)

The French president Nicholas Sarkozy, whose parents include a Hungarian father and, given Hungary's tragic brush with Soviet style socialism, who ought to know better, recently made headlines by announcing that "Le laisser-faire, c'est fini," meaning that free market capitalism is finished.(1) Sarkozy isn't alone in voicing this opinion—such Americans as University of Texas political scientist James Galbraith and Princeton's Nobel Laureate economist Paul Krugman have also gone on record with it. Some indeed, have shown a good bit of glee about what they take to be laissez-faire's failure.(2) One bit of irony about Sarkozy's having said this is that the term "laisser-faire" refers to how one French feudal government official was answered, back in the 17th century, when asked what he could do for business. He was told to get out of the way!

Accordingly, laisser-faire came to refer to a system of economics, a version of which was also defended by Adam Smith and by much of the classical liberal and libertarian political economic tradition, in which the government plays the sole role the American Founders assigned to it, namely, "to secure [our] rights." Just as referees do at games, government has the important role of making sure the rules are followed and violators are punished. In the case of a society, including its economic system, the rules are that the rights to private property and freedom of contract are strictly respected and protected. In the criminal law this approach is characterized as deploying due process and avoiding any prior restraint. Not unless citizens are seriously suspected of rights violating crimes or have in fact been convicted of them may their liberty be curtailed.

This idea has never, ever been fully implemented in any country but here and there, especially in America, it has gained some inroad in public affairs. Certainly compared to the rest of human history and the rest of the globe, America’s economy has often been relatively free but clearly still quite heavily regulated by every level of government. But as with most democracies which may not ban the input of even the most undemocratic ideas, the best that has been achieved from the viewpoint of classical liberal, libertarian political economy is a mixed economy, one with official socialist, capitalist, fascist, theocratic, and even communist features. Thus a genuine, fully free market never existed anywhere, not even in the so called most capitalist country in human history, the United States of America.

Still, whenever some upheaval with economic implications does occur in America and other mixed economies, defenders of some variation of the ancient regime of mercantilism—which include champions of all kinds of statist economic systems such as socialism, fascism, etc.—quickly announce what Sarkozy said, namely, that free enterprise is now dead, proven to have failed. In the current financial fiasco this is all too evident. Day after day one encounters this opinion, in The New York Times, The New Republic, letters to various magazines and newspapers, and certainly on the more prestigious media, such as on PBS TV's The News Hour With Jim Lehrer. On one level this can be written off as nothing more than special pleading—government officials and those aspiring to social engineering, after all, naturally wish to rule the realm and a system that in principle deprives them of the power to rule the economy is likely to be resisted by them and their intellectual supporters. But this is to approach the issue more as a matter of human psychology than is appropriate for a discussion of political theory. In such a discussion it is the arguments for maintaining and even expanding state power over the economy that need to be considered. And while doing this would involve a very lengthy task, a few elements of those arguments can be considered even in a brief discussion such as this one.

A regular feature of the defense of state intervention, put forth often by those who have shown at most minimal sympathy for free enterprise, is to mention that people in the business world are often complicit in promoting state interventionism. But that’s no news at all, of course. Adam Smith already observed it back in the 18th century. As he warned:

"The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." The Wealth of Nations, vol. 1, pt. xi, p.10 (at the conclusion of the chapter) (1776).

It should be mentioned here that Adam Smith himself was no consistent or radical libertarian and by his lights arguably many welfare provisions would be part of the legal system of a just human community. Although this might be a misinterpretation based on a primarily political reading of his A Theory of Moral Sentiments, written several years before The Wealth of Nations. Smith does stress the importance of such moral virtues as generosity and empathy but not necessarily by means of government. After all, governments really cannot be generous or exhibit empathy—they must, for example, conscript the citizenry or confiscate its property in order to provide aid to the poor.

A more serious theoretical problem is that in mixed economies it is often difficult to detect the precise source of economic problems such as a business cycle. Critics of the fully free market—many of whom would naturally prefer to regulate the world of commerce and finance since they tend to believe (following the lead of a certain reading of Plato) that only they are truly qualified to promote justice—too readily blame freedom, including free enterprise, probably in part because that is the main obstacle to their being in charge. Yet, I will argue here, following Oliver Cromwell, that "It will be found an unjust and unwise jealousy to deny a man the liberty he hath by nature upon a supposition that he may abuse it."(3) As Immanuel Kant pointed out, "ought implies can." So if people should help the needy, they must be free of coercion and choose to do so themselves, not be made by law to do so. So as far as moral obligations are concerned, the welfare state isn't a valid means to make room for them. It robs people of the requisite liberty to choose to help.

A way out of this quandary is to maintain that people do not really own their own labor, work, or property, the state does. This is implicit in some old and new arguments for extensive state intervention for the sake of wealth redistribution.(4) A very clear statement of this position is offered by 18th century French thinker, Auguste Comte:

"Everything we have belongs then to Humanity…Positivism never admits anything but duties, of all to all. For its social point of view cannot tolerate the notion of right, constantly based on individualism. We are born loaded with obligations of every kind, to our predecessors, to our successors, to our contemporaries. Later they only grow or accumulate before we can return any service. On what human foundation then could rest the idea of right, which in reason should imply some previous efficiency? Whatever may be our efforts, the longest life well employed will never enable us to pay back but an imperceptible part of what we have received. And yet it would only be after a complete return that we should be justly authorized to require reciprocity for the new services. All human rights then are as absurd as they are immoral. This ["to live for others"], the definitive formula of human morality, gives a direct sanction exclusively to our instincts of benevolence, the common source of happiness and duty. [Man must serve] Humanity, whose we are entirely."(5)

This collectivist way of thinking is contrary to the plain enough fact that those of past generations produced when they thought it worthwhile to do so, on whatever terms they believed were just at the time, except when they were being coerced to produce as serfs and slaves had been. The current generation may be delighted with what it inherited from earlier ones but there is no involuntary servitude they are responsible to submit to so as to "repay" what they have inherited. Normally we do not work so as to bequeath to others apart from our children, perhaps, and sometimes out of charity.(6)

The governmental habit is terribly well entrenched in most societies, including in America. Consider that erudite liberal, Leon Wieseltier of The New Republic who just recently told us that "contrary to what [Americans] have been taught for many years, government is a jewel of human association and an heirloom of human reason; that government, though it may do ill, does good; that a lot of the good that government does only it can do; that the size of government must be fitted to the size of its tasks, and so, for a polity such as ours, big government is the only government...etc." (7)

My simple plea is for people not to accept this facile view. Government--that is, using force against people--is only of value in small, defensive and retaliatory measures, for a limited scope of our social life, just like the cop on the beat, otherwise we promote the police state. The size of government should be fitted to its proper task which is, contrary to what modern but not classical liberals believe, a very limited one, namely, to keep the peace.

Wieseltier is clever and keeps talking of an open society, not a free one. For good reason—openness is a loose idea; a door can be open to a great variety of degrees. But a free society isn't so flexible. You are free if you are the master of your life, if you own it, if you have your right to it fully respected and protected. Otherwise you aren't free and the society in which you live isn't a free one. Ask any former slave whether freedom means not having others intrude on one’s life or whether it means that others intrude only, say, 40 percent.

The current—as all human produced—economic fiasco is mostly the fault of statists who routinely distort the natural ways of an economy. (In this case it had to do with massive amounts of easy money doled out in the name of helping the poor, minorities, and so forth and then, of course, what this policy engendered in the financial markets where the actors are all alert to any opportunity to earn good returns on even the strangest of investments.) As usual, such interference results in disaster. Without official malfeasance, such as governments leaving their post and entering the playing field they are meant to shield from coercive interference, free markets can, of course, experience misconduct but these tend to be self-correcting since in the long run free men and women do better if they are also virtuous than if they routinely misbehave.

Unfortunately those who are responsible for official malpractice have no intention to confessing their guilt in making a fiasco such as that experienced in the world just now and one effective way to hide that fact is to point the finger at the innocent party, human liberty. Freedom isn’t much trusted by those who see themselves as needed to keep others on a righteous path, be they from the Left or the Right. Their influence is considerable.

When President Obama stated that “we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy,” he was giving clear indication of his agreement with the views of his former colleague and friend, Professor Cass R. Sunstein, now at Harvard University’s School of Law, who has been a champion of a radical restatement of America’s principles of individual rights. Instead of viewing these rights as they are laid out in the Declaration of Independence, following the philosophy of John Locke and the libertarian tradition which takes such rights to be negative--that is to say, prohibitions of intrusions on individuals--Obama and Sunstein see rights as demands on the lives and properties of individuals to support various projects they deem worthwhile.(8)

There is no need for a Second Bill of Rights, however. Such a doctrine assumes that people are helpless without the use of force against their fellows, without invoking government’s coercive powers so as to secure the necessities and amenities of life in a free society. As the American Founders stated, in their sketch of their truly radical and anti-paternalist political philosophy, what governments are for is to keep the peace, to protect the rights to life, liberty and the pursuit of happiness. Once the freedom such protection makes possible, citizens will be able and mostly willing to pursue the benefits that Sunstein, Obama & Co. want to secure through a policy for involuntary servitude for all.

Endnotes:
(1) Wikipedia states that “the exact origins of the term ‘laissez-faire’ as a slogan of economic liberalism are uncertain. The first recorded use of the 'laissez faire' maxim was by French minister René de Voyer, Marquis d'Argenson, another champion of free trade, in his famous outburst:
Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé.... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!! (In English this would be “Leave them be, that should be the motto of every public authority, according to which the world is civilized..... A detestable principle that which would not wish us to grow except by lowering our neighbors! There is nothing but mischief and malignity of heart in those satisfied with that principle, and interest is opposed to it. Leave them be, damn it! Leave them be!”)
According to historical folklore, the phrase stems from a meeting c. 1680 between the powerful French finance minister Jean-Baptiste Colbert and a group of French businessmen led by a certain M. Le Gendre. When the eager mercantilist minister asked how the French state could be of service to the merchants, Le Gendre replied simply "Laissez-nous faire" ('Leave us be,' lit. 'Let us do').
(2) When Professor Galbraith gave a lecture at Chapman University in late 2008 he began his talk referring to having just walked past a sculpture of Milton Friedman in the Chapman University Quad. Galbraith quipped "it was a bust, and how appropriate," clearly suggesting that Milton Friedman's laissez-faire economic philosophy has proven to be a bust! Some others, including Nobel Laureate Amartya Sen, are more cautious and propose only that capitalism be re-conceived along lines of FDR's "second bill of rights," with numerous positive or welfare rights given protection equal to those laid out in the Bill of Rights or the Declaration of Independence or the criminal law. See his "Capitalism Beyond the Crisis," The New York Review of Books, March 26, 2009: 27-30.
(3) Oliver Cromwell, from THE WEEK, February 21, 2009, p. 19.
(4) See Liam Murphy and Thomas Nagel , The Myth of Ownership (Oxford University Press, 2004) and Stephen Holmes and Cass Sunstein, The Cost of Rights: Why Liberty Depends on Taxes (W. W. Norton & Co., 1999).
(5) Auguste Comte, The Catechism of Positive Religion (Clifton, NJ: Augustus M. Kelley Publ., 1973), pp. 212-30.
(6) I develop an extensive defense of an individualist conception of morality in my Classical Individualism (Routledge, 1998).
(7) Leon Wieseltier, "Love Me I'm a Liberal," The New Republic, March 4, 2009, p. 48.
(8) Cass R. Sunstein, The Second Bill of Rights: FDR'S Unfinished Revolution and Why We Need It More than Ever (New York: Basic Books, 2004). For President Obama’s position on this, see Mark Whittington, “Barack Obama and ‘The Second Bill of Rights’,” AP, October 28, 2008.

American Labor, Sensible, not Docile?

Tibor R. Machan

Some are comparing American workers to European ones quite unfavorably because in the face of the marked economic downturn many workers in Europe are throwing a major fit, while American workers, on the whole, remain calm and try to solver their problems like adults.

This counts as “docility” on the part of the Americans, at least for Steven Greenhouse of The New York Times. He reports, in his essay in the Week in Review section of The Sunday Times titled “In America, Labor Has An Unusually Long Fuse” (4/5/09, p. 3) that “in the United States, where G.M. plans its biggest layoffs, union members have seemed passive in comparison [to workers in France and elsewhere in Europe]…” How is this to be explained?

Mr. Greenhouse’s proposes that “American workers have increasingly steered clear of such militancy,” the kind shown earlier by “Mother Jones, John L. Lewis and Walther Reuther...for reasons that range from fear of having their jobs shipped overseas to their self-image as full-fledged members of the middle class, with all its trappings and aspirations.” According to David Kennedy “taken together, guilt, shame and individualism undercut any impulse to collective action....”

Well, maybe. But perhaps the good sense of most American workers explains it all much better. Perhaps most American workers know well and good not to look for some scapegoat and rail against it in the street. Maybe they realize that while some people surely bear responsibility for what has transpired in the American economy that has left them jobless for now, this wasn’t a conspiracy by their employers. Maybe they even suspect that the responsible party was America’s federal government, what with all its artificial methods of making everyone a homeowner, even those unable to afford a home, and the ensuing fiasco in the financial markets. Or they may even adopt the principle that one should find the actual culprit, if there is one, before one goes on a rampage breaking windows, burning cars, and risking death and destruction just to vent.

Ah, but that would fail to be misanthropic for the likes of Mr. Greenhouse and Professor Kennedy. Nor would it portray American workers as a bunch of helpless pawns being pushed around by forces they are unable to cope with. While there may be some such workers, my experience indicates that many do not fit this caricature. For example, back in 1957 American experienced a recession, if memory serves me right. I was a young man working as a draftsman at Carrier Air Conditioning Corporation in Cleveland, Ohio, and got laid off. The “demand” for my work disappeared very suddenly because the company got fewer and fewer contracts for its services. I knew well and good that it wasn’t some ill will on the part of my boss that brought this about so it didn’t even occur to me to throw a fit, to go after the firm with some kind of hostile action, to gather with others who were let go and perpetrate some form of revenge.

Instead I decided to take a few weeks of unemployment benefits and prepare to move someplace where I could find work. This happened to be a small town in Pennsylvania where friends of mine informed me that work was available. No, it wouldn’t be drafting but something less interesting yet sufficiently income generating for me—namely, working at an Army Depot unloading boxes from freight trains—so as to justify making the move. I had to leave my girlfriend behind, as well as friends and some family, but I need to earn a living and collecting unemployment payments rubbed me the wrong way even back then. And there were others in my situation who dispersed around the country so as to find new work. The idea of getting bailed out, as it were, just didn’t occur to most of those I knew who faced what I did, namely, need for new work.

I am willing to bet that many workers in America meet the challenge of needing a new job, line or work, even career, without thinking immediately of resorting either to protest marches or to docility. No, they are probably doing the sensible thing of looking for some alternative to the familiar and preferred work they can no longer count on by which to earned their living.

But it looks like the prominent commentators and analysts, of how people are supposed to cope with economic adversity, are oblivious to the approach taken by all those who make the requisite changes in their lives instead of venting their frustration and disappointment on the streets. That would be to give other than our politicians credit for doing something, anything, about the economic downturn we are experiencing. Maybe not everyone in dire straits is looking to be bailed out by President Obama & Co.

The Closest to Royalty

Tibor R. Machan

With my regular exercise going full force, mostly so as to manage my pretty awful sciatica, I get to watch the news for about a hour each day now, while I sweat away on my treadmill. During the half our or forty five minutes when I proceed with this to me quite undesirable exercise, I pick and choose from a variety of news sources--CNN Headline, MSNBC, Fox-TV, NBC-TV, CBS-TV or ABC-TV (if it's the right time for the latter's newscasts).

These days what there is a good deal of on most of these outlets is idolatry, the treatment of something or someone as a God, a false God to be sure. Or, as one of the NBC-TV morning news reporters from Washington, DC, put it, "what comes the closest to royalty" in America, the first couple, Michelle and Barack Obama.

And, yes, the couple strikes a good pose and has done pretty well at impressing Europeans many of whom are, after all, still living under royal rule--in Great Britain, Holland, Norway, Denmark, Sweden and Spain, albeit royalty with but a smattering of political clout. Still, somehow the Europeans hang on to the image, at least, of being governed by some god-sent person, someone one can well near worship.

What is puzzling to me, an emigrant from a country that up until the second world war was a royal protectorate or something--with Admiral Horthy as the regent--is why Americans, especially ones who end up being entrusted with news reporting, think so highly of royalty. Why is it any kind of plus for the president and first lady to amount to "what comes closest to royalty," when the birth of the nation involved overthrowing royalty and establishing the nemesis of it, namely, a republic? I consider this a backsliding in our culture, nothing less. Not that we need to be diplomatically ornery toward royalty abroad--diplomacy requires hard swallowing sometimes--but gushing should be out of the question.

But there is something even more amiss with the reception the Obama couple is getting from the Washington press corps. This is that they are so very enchanted with their good looks, their elegance, their beautiful people status. Mind you, I am actually very much in favor of beauty, including on the part of the figureheads of a nation (for in a free society they aren't leaders, only presiding officers). But the mainstream commentators and observers in our culture are supposed to be disdainful toward beauty, including in women. It was the prominent liberal commentator Noami Wolf who wrote the book, The Beauty Myth, which was to be the last liberal, egalitarian word on the role of beauty in a just society--namely, it should have no role, quite the opposite. It is to be scoffed at as irrelevant in human relationships, something one tends to be born with and therefore does not deserve! Yes, that is the official line.

So then why are these folks falling over themselves about the Obama couple's aesthetic and even sex appeal? Isn't that inappropriate? Kind of like hiring people in your university or company on the basis of, among other things, how good looking they are! Sadly it calls to mind just how easily the modern liberals, egalitarians, gave Bill Clinton a pass when he, Commander in Chief of the Armed Forces of the United States of America, was taking advantage of a young--admittedly willing--intern at the White House. No feminist outcry, nada!

I would have nothing much against welcoming good looks on the part of professionals provided it doesn't overshadow competence and other relevant qualifications. Why not prefer the attractive to the not so? Of course. But that's a right we have in choosing friends and associates that egalitarians and liberals tend to want to abolish, demean, or at least a right the exercise of which they find offensive.

So why, when one of their own turns out to be beautiful, don't they remind us of just how irrelevant that's supposed to be and how much more significant it is whether Mr. Obama's policies are doing any good at all in the quest to return the country to economic normalcy? Where is Noami Wolf now?

Some Sense about Advertising, etc.

Tibor R. Machan

John Kenneth Galbraith was a member of Harvard University's economics department as well as ambassador to India for JFK and a outspoken socialist. His debates with his close friend, the late William F. Buckley, Jr., were famous--and he lost all of them!

In his book The Affluent Society (1969?) he included a chapter, "The Dependence Effect," on advertising which has been reprinted all over the places, especially business ethics collections. He argued that corporations create desires in us all for their wares and services and we become hooked to them and thus corporations keep getting prosperous on and on and on. The even more famous Nobel Laureate economist F. A. Hayek wrote a rebuttal to Galbraith's piece, "The non-sequitur of 'The Dependence Effect'." He argued that Galbraith misunderstood desires, thinking them to be decisive in leading to human action. Hayek pointed out that desires can be governed, controlled, ordered, suppressed even. The two essays are featured in a great many books on business ethics and nearly all discussions of advertising.

I believe Hayek was right all along but if one needs proof, I believe our current economic mess provides it in spades. Consider how readily people, bent on tightening their belts, manage to resist ads everywhere. It is so bad that the government is making desperate efforts to bolster consumption, trying to generate, artificially, demands for goods and services that advertisements don't succeed in getting sold. Now, if corporations had all that power by way of advertising, that Galbraith had ascribed to them, how is it that they aren't bringing in customers? How is it that customers all over the country and elsewhere are these days refusing to spend their resources in the market? Advertising may have moved from newspapers to the Internet but there is plenty of it around, yet customers are no budging.

The likely truth of the matter is that the majority of people are quite capable of ordering their desires, of saying "no" to this ad or that, while "yes" to some others. And they do this mostly with an understanding of their economic situation, so that just now most of them, seeing that money is hard to come by, tend to be reticent, hesitant about spending. (Whether the efforts by governments, following certain parts of John Maynard Keynes' economic theory, to beef up demand works is an interesting and very much open question; books abound disputing the idea as well as supporting it, by reference, especially, to historical epochs such as the Great Depression and the ensuing New Deal.)


This also suggests something important about human choice. When people are said to have free will, it is often mistaken to imply that they act helter-skelter, without anyone able to predict anything they will or won't do. But that's not free will but randomness. Free will means one can set oneself on various courses of action, some short range and some quite long--just think of the commitment made when a the bride and groom utter "I do." Surely we can make some predictions as a result of that yet admit that they were free to choose whether to marry.

One reason the Obama administration's stimulus policy may not work out so well is that people aren't forced to respond to stimuli--they can turn away, refuting the underlying assumptions of what it takes to get them out there to buy stuff! Governments tend to wish we were malleable but we aren't, really. This is just one of many reasons governments ought not to be counted on to direct an economic system. The people of that system might not want to comply with The Plan they hatch there in Washington. They may well have other ideas in mind. In a genuine free market--not to shabby facsimile we have had in place for decades on end--the interacting individuals would figure out what is best for them and follow their judgments thus informed. And that would, like Adam Smith suggested, lead to the optimum overall economic benefit of all!

Equality is not big deal

Tibor R. Machan

In the fields of political philosophy, theory, and economy much debate occurs about just what is most important for a human community—that is, what, as a community guided by a legal system, should the citizenry be aiming for. The issue comes up, of course, outside of academic disputation, as well. For example, in his inaugural address President Obama stressed that America ought to have some large objective, a grand vision, and he promised that the country will pursue just such a vision. Others, like the American founders, don't stress any such overall objective and focus more on making it possible for citizens to pursue their own diverse visions, their happiness as they understand it. In many countries what is taken to be the overall goal is set by the Bible or the Koran or some other religious text. There are also countries, and have always been, in which the issues is left entirely up to some charismatic leader—he or she is to set the goals to be pursued by all.

In our time one favorite choice of political theorists is equality, especially economic equality. Many of these theorists, working at very prestigious academic institutions, think tanks, or writing for journals, established publishing houses and newspaper, contend that what a country needs to work toward is making all equally well off or, at least, reducing drastic differences in the population’s economic well being. This is evident in America, too, although again, initially, the only kind of equality the country was supposed to strive for is the equal protection of everyone’s basic rights, those laid out in the Declaration of Independence, for example, or the Bill of Rights. Sadly even this limited equality was badly violated with slavery.

Later matters changed, under the influence of prominent thinkers and various political movements, so that by the time of the presidency of Franklin D. Roosevelt the leading political figures endorsed not only the goal of the equal protection of individual rights to life, liberty and property—rights, which if conscientiously protected would make economic inequality pretty much the norm—but massive wealth redistribution so as to make people equally well off by political or legal means.

As an immigrant to America my expectations were based on the earlier idea—I thought that here most of the citizens would be at liberty to seek goals of their own which might or might not lead to economic equality. When I was in college I came across a spirited defense of egalitarianism in one newspaper and responded with a similarly spirited criticism of the idea. I noted that while to some people economic welfare may be a priority, to others it may well be something else—having artistic talents, traveling a good deal, or even gaining the favors of outstanding romantic mates. Certainly to quite a lot of us what is most important, at least at a certain stage of our lives, is to be preferred by potential mates whom we find really appealing. Quite a lot of people lament the fact that they are left behind while others are way ahead in the struggle to find appealing partners!

So perhaps what politicians and bureaucrats should set out to do is to secure equal opportunity or even equal results where these important matters to so many people are concerned. Money—economics—may be of considerable importance but money cannot buy happiness, at least not romantic happiness, for most of us. We would, to speak plainly about this, have to have been born and developed to become aesthetically quite appealing but, alas, there is a widespread unequal distribution of such qualities among the population. (I am willing to bet that if people expressed themselves honestly about this, they would agree that to them finding an appealing mate is more important than being as well of economically as the next person.)

Fact is, about some matters there is just no way to get things arranged politically no matter how hard it is tried. Most efforts to establish economic equality lead to some people having much greater political power than others, power that easily leads to abuse. Moreover, even if for a bit of time economic equality is established, by way of taxation and governmental wealth redistribution, in just a short time the pattern is upset by people making all kinds of different decisions about how they will used their resources.

Instead of aiming for economic equality the task of law and politics should be to make sure that in the quest to achieve whatever goals people have, they do not violate one another’s rights, they do not engage in violence but carry on peacefully, kind of like runners in a marathon race do, knowing well and good that at the end they will not be at the finish line all together.

This is Economic Fascism

Tibor R. Machan

Fascism is a political system in which a country is lead by a charismatic leader who has full power to order things about because he (or she) is taken to know best. Obviously this is a mythical sort of regime, with most of its essential features impossible to come by. No such leader exists, period, but there are many who pretend that they are fully qualified.

President Hugo Chavez of Venezuela is an excellent current case in point. So was Mussolini and Hitler and Stalin and so are Cuba's Fidel Castro and North Korea's Kim Jong-il. Fascism in those countries was and is total, not selective. (In contrast, when Chile was ruled by Pinochet, he left much of the economy to run by itself and exercised fascistic powers elsewhere.)

At least the auto manufacturing sector of the American economy has come under fascistic rule. President Obama and his team have assumed such powers pretty much on their own, without a referendum--indeed polls seem to show that most American disapprove of what they are doing, such as firing the head of GM. (One should ask, who are these people to assume such powers? By what right or authority do they do what no citizen of a free country could do with impunity?)

Is this move on the part of Obama & Co. justified? No. GM ought to suffer the consequences of its bad management, its loss of costumers, and the influence of the union leadership to which most of the workers belong. Big or small, there is no justification for a company to stay in business when it has lost most of its customer base and has become credit unworthy. Indeed, one of the best features of a genuine free economy is that such companies go out of business.

When critics of corporate America, such as Ralph Nader and his associates and co-authors, complain about corporate power, their beef is that the corporations are immune to market forces. They are all wrong, of course, and history has shown just how wrong they are, with companies going bust all over the place and at most periods of time. But when government confiscates the resources of its citizens and makes promises in behalf of millions who have no say in the matter, then such companies can be given a lease on their lives. Maybe the scam will work and some such companies will recover--Chrysler did so about half a century ago. But it is still wrong.

Only a country the economy of which is ruled by a fascist economic tsar has the power to subvert justice and good sense this way. Most genuine democracies would not comply with their leaders, although some have given them the power to become arbitrary rulers. (Hitler came to power democratically, as did Chavez!)

I must say it is very scary to me that this is going on in a country that once had every right to claim to be the leader of the free world. But no fascist system can make such a claim since it stands in direct opposition to liberty. But none of these should be very surprising to Americans. They have seen their federal and state governments act in fascistic fashion, for example, via the war on drugs, the Iraqi war, all kinds of intrusive ordinances throughout the country, and other features that are clear marks of a command economy. Now the chicken are coming home to roost and America is becoming something that would really upset its founders, a monarchy with a monarch who is laying claim to near absolute powers.

Unlike Venezuela, which is now pretty much stuck with Hugo Chavez for an indeterminate period of time and the citizens of which are mostly powerless to change the leadership, America still has periodic elections. Obama can be ousted the next time around if the Republicans can come up with a halfway decent candidate--which, sadly, is unlikely even if possible.

Or Americans can take off their rose colored glasses and begin to see President Obama and his team clearly, as a bunch of power hungry politicians and bureaucrats who have no other answer to the country's troubles than to increase their intrusions in the economy and, who knows, may be other parts as well. (I can easily imagine that if I were more widely read and they became aware of my column, they might go to the lengths of trying to silence me, just as Hugo Chavez has done with his opponents.)

Brazil's President Lula, Venzuela, and the U.S.A.

Tibor R. Machan

The president of Brazil, Luiz Inacio Lula Da Silva--President Lula for short--was recently interviewed by Fareed Zakaria on the latter's Sunday CNN program, GPS (Global Public Square). In this interview much was discussed in rather vague, geo-political terms, with banalities being the norm rather than the exception. For example, President Lula insisted that in the international community all the different cultural and national political practices and histories must be accorded equal respect, a notion, like multiculturalism, that is at best a gesture, more likely an impossibility and certainly something without much practical prospects.

At one point in the interview, however, President Lula discussed Venezuelan president Hugo Chavez and proposed that Chavez and Barack Obama reach some kind of rapprochement. And one particular proposal he gave voice to is that President Obama "show generosity toward Venezuela," especially now that oil prices are falling and the country's president no longer can afford to persist in its obstreperous ways. President Lula wasn't oblivious to America's own current economic difficulties. Yet he compared Venezuela to a looser in a boxing match, with America being the winner, so that by all the terms of good sportsmanship it is America's role to reach out and embrace Venezuela.

Of course, much of this is quite offensive to anyone who knows well and good that America and president Obama do not literally have the capacity to be generous. Generosity is a moral virtue of individuals who can, if they choose, dip into their own resources--which can include goods and services one may be able to produce--and give those to others whom they deem deserving. Countries can only be generous through the generosity of their citizens--so that, for example, when one calls America a generous country one must mean that the people of America practice the virtue of generosity in their own lives. Or they can have organizations, such as Rotary or the Salvation Army, with voluntarily generous members. But no president of a country can be generous except in his or her personal life. To confiscated resources from the citizens of the country of which one is the president and then give those resources to someone simply isn't being generous. Sure, people often talk that way but it is a mistake and produces a lot of confusion.

There may be various ways in which the president of the United States of America can facilitate better relations with another country--although when that other country's president calls the US "Satan" and is by all reasonable assessment a fascist dictator (see for this Enrique Krauze, "The Shah of Venezuela," The New Republic, April 1, 2009, pp. 29-38)--but generosity simply isn't one of them. Perhaps President Obama should push for foreign aid and similar wealth-redistibutory measures toward Venezuela, although these would have their own moral problems.

More likely, what Obama could do is promote the elimination to all restraints on trade with Venezuela. Yet, again, with Hugo Chavez it is difficult to fathom whatever would induce in him anything but hatred for America. He despises liberal democracies, for example, and he aspires to be the supreme ruler of the Americas. That seems to me difficult to reconcile with the principles of even a relatively free country like the USA.

President Lula seems like a man of good will but he, like so many others who head up governments around the world, seems to be totally oblivious to the idea that it is not he but the citizens of Brazil who are sovereign and that he is a civil servant, period. And of course Hugo Chavez is not just oblivious to what he really is in Venezuela but insists on claiming for himself virtual monarchical powers, as if these were a genuine possibility rather than a fiction from the past.

Sadly, as some have pointed out, America's own civil servants appear to be under the illusion that they are saviours, that their judgments in economic and other spheres must be superior to those of American citizens. (Obama's whole team appears to operate like the owners and managers of a huge corporation, which completely repudiates the idea of a genuine free society!) Maybe America will move toward the European model of social democracy, given that not much movement is actually needed any longer.

Still it is worthwhile to observe and critique the collectivist ideas that are in ascendancy these days, including the notion that President Obama and his administration could by any stretch of the imagination engage in generous conduct toward, say, Venezuela.

For Liberty, 100%

Tibor R. Machan

Over the years as I have learned more and more about how vital liberty is to a good, just human community, I have encountered sizable not just opposition and skepticism but out and out ridicule for holding this position. Of course, there are those, like Venezuela's Hugo Chavez, who are unabashed fascists and make no pretense of any devotion to human freedom. Those like Cuban dictator Fidel Castro and North Korea's Kim Jong-il make no bones about supporting anything but a regime of individual liberty for all its citizens. But within countries like the United States of America there are few political players who do not in some measure claim to be advocates of human freedom, including economic freedom.

Many who advocate the welfare state or some other half way system, in which government has a substantial role managing, regimenting human--especially economic--affairs claim that they are concerned with individual liberty. They often assert that their system is in fact more free than what defenders of the fully, libertarian political idea promote. They will maintain, with a straight face and one must assume very sincerely, that when they promote innumerable forms of government intervention, such as vast economic regulations and wealth redistribution, sometimes even curtailment of the right to free expression such as what is normally associated with the First Amendment to the federal constitution, they are the true defenders of freedom while those advocating a full, uncompromising free society are, in fact, making human liberty vulnerable to abrogation. Thus, as an example, it is sometimes argued that regulating business isn't an intervention in human liberty but a way of support it, to defend it from, for example, big corporations. The same with taxing people's resources!

But then there are those who say without hesitation that an unbridled free system isn't really one that's best for us. They will use terms like "market fundamentalism" by which to indicate that they find the idea of a fully free market system anathema to justice, that freedom is really not right, not if it is the basic standard for justice for all. Such folks sometimes call themselves democratic liberals, or even social democrats, indicating that they have no objection to the curtailment of an individual's right to liberty if that curtailment came about democratically. Market socialists, too, will give support to some measure of freedom of enterprise but will insist that it is best not to take that too far and to promote a regime that keeps society partially socialized. Often such people reserve some area of human social life as in need of total freedom, such as art or religion, but certainly in the area of economics they are eager supporters of extensive government intrusion in people's lives. Now and then you will hear that someone claims to be a libertarian even while championing limiting individual liberty along such lines.

If one is found to be advocating a fully free system, with no compromise on the principle of individual liberty--not in economics, not in the professions, not in education, not in farming, nada--then one is deemed to be an extremist by the self-described levelheaded, moderate folks who supposedly know better than to promote anything as crazy as full freedom for citizens of a just society. No, that would be going too far. (Some even say that full freedom implies defending the right of some to provide for themselves by taking the resources of others, so they are, in fact, the true defenders of liberty.) We need, after all, some governmental interference in how people conduct themselves in their commercial or economic lives, or some other sphere where such people regard it as only civilized and proper that some people will be in charge of how others carry on in their lives. We need some government regulation, don't we? Otherwise chaos will break out, the weak will go unprotected against the powerful, etc., etc., and so forth.

Not all of this can be addressed in a brief discussion but I believe keeping a certain point in mind will at least suggest that there is a fallacy in such partial support for individual liberty, for the denial that the right to liberty requires 100 % protection, with no exceptions, not at any rate as a feature of a just legal order. (We all know that some extremely rare cases can justify limiting liberty, as when you prevent someone you are walking with from stepping into an open whole or drinking a glass of liquid that you happen to know contains poison. But as the saying goes, "hard cases make bad law," so acknowledging some exceptional cases like these does not justify including violations of human liberty on a systematic basis! That is, by the way, what the fuss about government's use of torture is all about--it must not be government's official policy.)

Now, if one were to discuss human slavery, including that which was part of the United States of America not all that long ago, it is generally appreciated that none of it is tolerable in a just legal system. All the ink that columnist Nicholas D. Kristof of The New York Times spills on locating even the tiniest elements of human slavery around the globe and working to abolish it are taken by most people who love justice to be fully justified. Few would dare suggest that Kristof is a freedom fundamentalist, an extremist, for insisting that no slavery at all be tolerated, anywhere, for any reason anyone might cook up. When slaves are set free, finally, the suggestion that they be kept under supervision by local authorities, that their conduct be regulated or regimented since full freedom leads to chaos--all such stuff is clearly off the table and mostly seen as morally obscene.

Well, it is exactly in that spirit that it is obscene to limit economic liberty for anyone. Human beings have a right to liberty and that includes any sphere of, for example their economic, conduct. If they haven't violated another's liberty, if they haven't been shown via due process of law to deserve to have their liberty curtailed or limited, there is no justification for it. And all those who defend the total liberation of people from government interference in their peaceful conduct can say, with no apologies at all, that yes they are free market fundamentalist. I certainly am such a one.

Can't They See the Contradiction?

Tibor R. Machan

In the March 28, 2009, issue of Science News there is a story on physically shrinking fish. Presumably because fishing often involves keeping large fish but throwing back small ones, there is evidence from close observation that development is headed toward smaller sized fish. The story also suggests that those doing the fishing could act differently from how they do, namely, change their practice of throwing back only small fish. Since they fail to do so, a slow reversal of the effects of such fishing may need to be induced.

The puzzle here is that on the one hand we have evolutionary forces in play but on the other we do not. So fisheries biologists can--and may need to--counter evolutionary forces. And that suggests that evolutionary forces aren't ubiquitous but operate selectively. How can that be? And if it can happen vis-a-vis fish, where else might it happen?

In addition to this puzzle there is another one, specific to the editorial stance of Science News itself. Some issues back Tom Siegfried, Science News's editor, wrote an essay in which he said that free will is an illusion (albeit one with some kind of evolutionary function). That is to say that while human beings do not have free will, they cannot make basic choices as to how they will conduct themselves, evolution has produced for them the conviction that they do. Never mind that this impugns the effectiveness of evolutionary forces since evidently Mr. Sigfried was able to go against the belief that evolution supposedly created. He, after all, by his own testimony does not believe in free will! Neither do thousands of others, especially in the community of biologists (though there are some exceptions, especially among evolutionary biologists). Quite apart from that puzzle, there is also the one about how one can implore those doing the fishing to do better at what they are doing, namely, preserving fish populations while they are also said to be incapable of choosing their conduct, including how they do their fishing.

The famous 18th century German philosopher Immanuel Kant, along with some others, spelled out the preconditions of intelligibly ascribing moral and other responsibilities to someone. He coined the motto, "'ought' implies 'can'," which means that if someone ought to or should do something or refrain from doing it, it must be the case that he or she is free to choose whether to do it. Saying that A ought to do x makes no sense if A has no choice about doing x.

Science News appears to have fallen prey to the contradiction of both claiming people lack free will and that they ought to act differently from how they do. This is not only so when it comes to some of the practices of those doing fishing. It also applies to when Science News chides a given government administration for failing to be friendly to the sciences or praises another for being friendly to them. To spell it out, if all politicians and their constituents are incapable of making choices about their conduct, including what public policies they will support and enact, then holding them responsible for failing to be friendly to the sciences is entirely moot. If free will is, as Science News editor Siegfried argued, an illusions, then the idea that fishing might be done differently from how it is being done or that people should be giving better support to the sciences just makes no sense.

Maybe this all a problem of hubris. Maybe Mr. Siegfried and Co., just cannot fathom that they need to reflect on matters a bit more deeply then they do, that they may need to see if their position on some issues can be reconciled with those on others. If you are going to engage in moral criticism or praise, then it is best not to sound off against the very preconditions of such criticism or praise. Either it is all qué será, será or people can indeed make better choices about their conduct than what Science News disapproves of.

Egalitarian Fallacies

Tibor R. Machan

Very few duplicities are as blatant as those exhibited by academic champions of egalitarianism. This is because most of them are extremely well positioned in the academy, published by the most prestigious journals and book publishers, invited to the fanciest conferences, and otherwise singled out for privileges unknown to others, especially to those who do not advocate egalitarianism.

Take, for example, a couple of famous law professors, one at the University of Chicago, another at Yale University. They are both avid and indeed fervent supporters of equal opportunity for people (although not necessarily for everyone across the globe). They insist it is grossly unjust for children to be born into widely varying economic circumstances, ones that see them enjoy vastly different health, educational, and other benefits. They champion, instead, public policies that would provide everyone with nearly identical opportunities. They realize that in time some of them would turn these equal opportunities into varying actual advantages because of their own decisions or the vicissitudes of nature and society. But as far as starting points are concerned, they insist it is a categorical imperative of justice that we all begin just like everyone else does, akin to how those running a marathon race must all begin at the same point.

However, none of these champions of human equality volunteer to share their professional positions with others who do not enjoy the benefits they enjoy from theirs. I once actually asked the late John Kenneth Galbraith, who was then a professor at Harvard University and whose works would get published in the best places—the joke is that someone like Galbraith would have publishers’ representatives rummage through his or her trash to find something to include in the house’s latest catalogue—but received an instant brush off instead of an answer as to why he, the fountainhead of egalitarianism, should not share his riches with, say, some community or junior college professor.

The late Robert Nozick, himself an unapologetic beneficiary of high academic appointment at Harvard University, gave a fine illustration of how egalitarianism is a complete nonstarter. Let’s assume a society enjoys public policies that manage to start everyone off with nearly identical benefits. As soon as this occurs, people begin to redistribute the benefits among themselves and upset the established equal pattern.

Nozick’s example was Wilt Chamberlain, the famous basketball player, who would immediately receive a disproportionately large amount of wealth from all those who want to see him play. Multiply this case over all kinds of athletes and other performers, as well as people with talent in the sciences, law and, yes, the academy, and you can see how the hope of a same starting point immediately crumbles.

What is morally odious to me is how little the champions of egalitarianism try to walk their talk. I know that none of them has ever offered to exchange their powerful academic post with my meager one. Nor have I ever heard of any of them make such an offer to anyone else. And for good reason—such an effort would be in vain. The result would look like what George Orwell illustrated so poignantly in his novella, Animal Farm, where in no time the equal distribution of benefits among members of the farm produced a condition in which some were clearly “more equal” than the rest.

As the late Murray N. Rothbard pointed out, in his book, Egalitarianism as a Revolt Against Nature and Other Essays (1977), that equality is simply everywhere and cannot be erased if for no other reason than the simple one that those doing the erasing of it would enjoy vastly greater—unequal—powers from what those do who are subjected to the erasure. I personally won’t ever understand what is so appealing to people about everyone being equally well off. Kurt Vonnegut’s short story, Harrison Bergeron, published in The Magazine of Fantasy and Science Fiction (October 1961), is another nifty bit of fiction that shows just how unattractive is this idea once examined closely and how it wreaks of envy rather than justice.

Those who are in dire straits or suffer disadvantages may well benefit from some serious help but attempting to make us all equal just doesn’t do it at all.

Myths Are Born This Way

Tibor R. Machan

Education is filled with more or less accurate accounts of what is what, including human (American) history. Various champions of systems of ideas eagerly work to capture for themselves the stories that bolster their doctrines. This is one reason so many prominent statists are relentlessly spreading the lie that our current economic fiasco is the result of market forces—of the free market, capitalism, free enterprise, the unregulated market place, and so forth.

If they are successful in spreading this rank distortion, they secure for themselves and their ideological brethren a greater chance of ascension to political power, which is what statist desire most.

Defenders of the free society haven’t any political power at stake in the debate about how the fiasco was produced because in no case are they going to gain, for among other matters they do not want, political power. What such folks are after is the truth and the reason is that with the truth comes, in this instance, a more prosperous and more just political economy.

Yes, defenders of the market are also quite self-interested in this matter for they know that everyone’s lot has a better chance of improving when freedom reigns in a society. No, there is no guarantee that freedom will make us all happy and successful in life. That utopian dream is only peddled among the dishonest promoters of statism since with the state’s rise to economic power we are all supposed to do well. All one needs to verify this is to listen to the likes of Barack Obama, Paul Krugman, Robert Kutner, et al. They are all advocates of greater government power over the economy for the purpose of solving our economic problems, problems that stand in the way of the country’s flourishing. With sufficiently huge stimuli plucked out of thin air and dumped into the American, indeed, world economy at various points, everyone will be happy and, especially, equal justice will be served big time.

Free market advocates cannot make this promise because they know that none has the power to deliver such a result to millions and millions of human beings in a highly complex and uncertain economic environment. Sure, free market advocates do argue that free men and women are more prone to prosper since they are, naturally, free to turn their careful attention to their economic prospects. But that has never been a guarantee of triumph over unforeseen obstacles; it is merely the best chance of overcoming them.

So what is one to make of a letter such as this one in the International Herald Tribune (3/14-15/09): “David Brooks gives Republicans sensible advice. But for all of Brooks’s honesty, we could wait forever and neither he nor the Republicans will own up to how they overestimated the power of market forces”? We can tell that it is a clear illustration of the attempt to distort history. After all, there have been hardly any genuine, bona fide market forces at work in the American economy for decades now, not since the federal government basically seized the reigns of American finance back when the Federal Reserve Bank was established, since the dollar was destroyed as a sound currency, and since all those alphabet soup federal agencies began to intervene with the decisions of market agents in every nook and cranny of the economy. Ours, as well as those of all Western societies’ economic systems are mixed ones, plain and simple, with huge doses of socialism and fascism operating within corrupted markets.

So however well or badly “the power of market forces” would do, such forces haven’t been in evidence for honest students of economics to study and track. Instead economic history has been a history of substantially and predominantly statist forces, as they have been throughout human history with but bits and pieces of exceptions in small regions of the world. Sure, prospective market agents will naturally try to turn all of it to their advantage—that’s their job just as most of us attempt to do well in our commercial endeavors—mostly, however, in the messy arena of markets-cum-politics. Yes, the exceptions have most likely produced economic wonders that are denied only by statists who just cannot credit economic freedom for anything good anywhere—such freedom leaves them with nothing much to do! But because of the massive doses of state intervention at every turn, no clear record of how the market is doing can be gleaned from taking some time slice such as the recent fiasco and reporting on it.

There haven’t been clean, undisturbed market forces at work for us to tell just from the record of events what their impact has been on our lives. For that it is necessary to do some very honest and detailed theoretical and historical research. Instead, of course, the statists just keep asserting that the free market is responsible for every economic problem we have which, if believed by enough, will help them gain and keep political power. What free market are they talking about?

Beholden to our ancestors

Tibor R. Machan

When the idea of paying taxes, especially the exorbitant ones extorted from the well to do, is debated, defenders sometimes maintain that these are due because we owe it to our ancestors who forged institutions and other results that now benefit us all. So even our own selves, our bodies, health, pleasant looks, and, of course, any inheritance we were left by our elders do not really belong to us free and clear.

No, these are all owned by us conditionally, provided we pay back some of the goodies, through taxation and other burdens on us. We owe it, in other words, to our ancestors because they left us with lots of benefits, including such institutions as the legal system that protects us and our property. The great art we have inherited from those who went before us, for example, and the science, too, are what came our way and our use and enjoyment of these all bestow upon us the obligation to pay with our labor and resources which, of course, are to be collected from us by the government. As one prominent defender of heavy taxation and government wealth redistribution put it, "we haven't just 'come across' our unearned wealth. We--meaning the children of the rich--have inherited through a systematic institution, which needs principled defense or critique." And from this it is supposed to follow that we owe the government(!) and those it picks for its largess big time.

Well, all this is quite open to dispute and skepticism. For one thing, even if our ancestors, including parents and grandparents, left benefits and riches for us to enjoy, it doesn't follow that we owe something in return. They, too, gained from their parents and grandparents and from the surrounding world from which they obtained what they picked. And when they produced what we inherited from them, they didn't do so, at least as a rule, so as to benefit us! It is a fair assumption that they created and produced all the values they did because they believed it was something they ought to do, something important quite apart from those of us who followed in their footsteps. So we may safely assume they made their wealth, art, science, and so forth because they wanted to do it quite independently from what we inherited from them, except when, in fact, they specifically planned to benefit their offspring or some causes they believed in.

Another problem with this thesis is that when you give a gift to someone who hasn't asked for it, you don't later get to go to that individual or group and ask for payment! Unsolicited benefits are supposed to be given gratis, free and clear of obligations in return. The artists and scientists and entrepreneurs who have benefited us all unless they were coerced to do so did it of their own free will and for reasons of their own and did not attach the rider, "You may have all this provided you pay your government for it." (Why, indeed, would it amount to payback to fork out money to the government for all this? Those who provided us with the benefits are, after all, long gone and current governments are not working for them any longer but for current citizens.)

The best system for what some call inter-generational justice--for squaring with our ancestors fairly--is the private property system that does a reasonably decent job of securing for everyone what he or she has a right to, what everyone is entitled to. The country's system of property law translates this idea of the right to private property from one generation over to the next and except for cases of corruption or error, this is how rights and obligations stretch out into the future. Those in the past may be presumed to have taken good care of themselves with the aid of this system as we are supposed to do for ourselves. (Cases of corruption would be when those in the past stole from their fellows, like the Europeans did from the native Americans for instance, and when slave holders robbed the labor and time of their slaves, or when successful common criminals did this from their victims! In these cases restitution is due where it is possible to establish it through a just and functioning legal system.)

Over the history of political thought there have often been those who wanted to represent previous generations and take from current ones what they regarded as payments but it is little more than either a gross error or an outright ruse. It is a ploy by which some today get to take from their fellows and has nothing at all to do with collecting various mythical obligatory repayments!

The Unearned Wealth Trap

Tibor R. Machan

Sometimes defenders of human liberty put their case badly and one such instance is when they defend the right to private property by identifying all expropriation or extortion as the taking of earned wealth. But it isn't a matter of whether the wealth was earned or not--quite a lot of one's wealth, the benefits one enjoys in life, belong to one even if one hasn't earned these.

Surely it is not even possible to figure out how much of what one has is earned, how much one came by through luck or accident--even in the market place sometimes there are windfall profits or earnings, as when someone sells his or her labor for big bucks yet it took little effort to provide it. Indeed, when one finds a bargain one would have paid much more money for, one is getting something extra, beyond what one has earned. Some artists, for example, sell works that took just a tiny bit of effort for huge sums and many of us work at jobs we love and would do even if we were paid less then we are. Beautiful people often get paid big bucks to appear on covers of magazines or just adorn something in a commercial. It is convoluted to claim they all earned this as if they had done hard labor to get the goodies.

So if one rests one's case for private property rights on whether the owners actually earned their wealth or resources, much of what people actually do own will appear not to be rightly theirs and there for others to claim for themselves.

Fact is, we all have stuff we just ran across, stuff that we obtained simply because of being somewhere at a lucky time or being born into a hard working or lucky family. And yet the goods that come with this luck are all ours by right, no one else's. If the opposite were true, other people could rip off our good fortunes with impunity. Any wealth we got without strictly earning it could then be construed as public property, available for others to confiscate from us. Any money we get for just being lucky would then turn into unowned resource and others could take it for themselves and trying to hang on to it would make the owners some kind of thief.

No. Even if you have what you have by sheer luck, others have no authority to take it from you. It is what is called in logic a non-sequitor to deny the point--it doesn't follow from the fact that my pretty smile gains me fame and fortune that others may take this from me, not by a long shot.

For one, that kind of outlook would make slaves of us all. People could just take any benefit we enjoy that we were born with, our talents, our attributes that are popular with others and bring wealth to us as a result. Why should it be these others rather than the original lucky ones who have the authority to use and dispose of the wealth that's come by through fortune? No reason at all. Those others who claim a share of our wealth because we came by it through luck have no leg to stand on since we didn't promise other people that they could have such wealth, the wealth we didn't earn.

Now it may appear to be a plausible idea that if one hasn't earned his or her wealth, this means others may have it but it isn't true. What makes it plausible is all the talk about how one's property involves what one has earned, worked hard to obtain. But that idea is wrong. So it follows that the belief is false that such unearned wealth is available to others, however much they might like or even need it. (After all, if one didn't enjoy the luck--say, by not having been born at all--others couldn't even imagine getting it for themselves!)

The bottom line is that what one has a right to is one's life, one's liberty, and the property that arises from these whether come by some hard way or easy. Otherwise we would all be at the mercy of other people who see fit to intrude on us at their pleasure. But they haven't the moral and should not have the legal authority to do such a thing, however tempted they are to do so.

Government Regulations Revisited

Tibor R. Machan

You might not think it considering my relentless concerns about the growing power of government, but I am not a pessimist. There are many areas of life where liberty is making advances--e.g., gays are no longer being so persistently harasses by government and even the obscene "war" on drugs may eventually give way much saner policies. But in the economic realm, where it causes so much direct damage to us all, government's interference is on the rise.

Yet many people do not fully appreciate how that interference is evident throughout the economic sphere. As a friend recently pointed out to me, many people believe that government regulation of business, industry, the various professions and so forth is but a legitimate effort to carry out the fundamental task of a government, which is the protection of our basic rights. Government regulation, according to this view, amounts to no more than shielding Innocent citizens from "the bad guys," say the likes of Bernard Madoff or the Enron team of corporate rogues.

How, then, could most people appreciate that government regulation amounts to what I have for years called petty tyrannies? All those regulators are like the cop on the beat, standing there to repel crime. Isn't that so?

There are elements of the regulatory system that do function like that, yes. For example, the SEC (Securities and Exchange Commission) polices corporate fraud, among other things, which is indeed one legitimate function of the government of a free country. And other regulatory agencies, too, do some things that amount to rights protection--for example, the FCC (Federal Communications Commission) prevents invasions by some broadcasters of others on the electromagnetic spectrum or the airwaves.

But the bulk of government regulation is very different. It involves regulation or regimentation, leading various professions by the hand to act in accordance with various codes or rules that are intended to preempt any malpractice. That is to say, such regulations target innocent people in the various professions, mostly in business but also in medicine or farming, so that the professionals avoid malpractice, so they are prevented from doing anything wrong--dangerous or hazardous. The FDA (Food and Drug Administration) is a clear case in point--their edicts to drug manufacturers and researchers is all about guiding the conduct of the people working in the industry, as is OSHA's (Occupational Safety and Health Administration).

Government regulations are, in the main, preventive measures which is why I refer to them as a species of prior restraint and policies that aren't compatible with the principles of a free country. These principles prohibit controlling people's conduct unless the people have been shown to have done something wrong. Government regulations are more akin to the policies of a police state, where the government regiments the population so as to make sure everyone is acting correctly, properly.

Measures like such regimentation are attractive because many people believe that governments are highly qualified to supervise what we do, as if they were like our parents or teachers or coaches. But the plain fact is that government is simply a bunch of other people, with no special qualifications to run our lives, to supervise us all. Many of the American Founders and various prominent presidents were aware of this so that, for example, Abraham Lincoln wrote that “No man is good enough to govern another man, without that other’s consent.”

Not only is government regulation unjust because it places some people in a position to rule others--albeit always with the excuse that this serves the public interest--but it is most often quite ineffective. Government regulators are frequently captive to the very industries they are meant to steer straight. They don't actually know much about the industries or professions they are required to regulate--for example, the SEC had no clue at all about derivatives when all the financial shenanigans occurred over the last few years. Or, as with the FDA, the regulators are so afraid of risks that they themselves facilitate illness and even death by policies that delay the availability of medicines.

As usual, the immoral turns out also to be largely impractical. And this exactly how it is with government regulations.

Regulation Mania

Tibor R. Machan

Government regulation of the American economy--with the implication for all economies--is back in favor with politicians, bureaucrats and, most importantly, certain outspoken economists. (Nobel Laureate and Princeton University professor Paul Kurgman, who is a regular columnist for The New York Times and a very frequent talks show guest is a good example, as is political scientist James Galbraith of the University of Texas at Austin.) These and a lot of other people have lamented the very moderate deregulatory efforts under the Reagan and subsequent Republican administrations. Their refrain goes, "If only there had been more government regulation, the current economic fiasco would never have happened."

A couple of matters need to be said in response to the mania for government economic regulation. First and foremost, government regulators are no Gods, nor angels, but human beings every bit as susceptible to making mistakes and even being corrupted as are all those folks who work in the market place. The question, "And who will regulate the regulators?" hasn't ever been answered satisfactorily because no one will. It is an irreparable situation--something for which Professor James Buchanan received the Nobel Prize when he and Gordon Tullock identified the problems with public choice. The gist of this theory is that all persons, in or outside government, tend to promote their own agendas. I would add that this is especially the case in government where accountability and budgetary constraints are minimal and where the very loose, vague idea of the public interest is impossible to follow as a guide to forging policy.

There is also a serious problem with government regulation that is rarely mentioned, namely, that it involves something inimical to the free society, namely, prior restraint. In the criminal law it is well recognized that no one may be incarcerated or otherwise punished unless he or she has been convicted of a crime. But government regulations impose burdens on millions in the market place who haven't been convicted of any crimes! This is unjust. Not that matters of injustice figure heavily in contemporary political thinking which is now proudly pragmatic, unprincipled, and thus allows for arbitrariness.

Third, government regulation is very, very costly and removes resources from the market place that could generate economic growth, employment, and deposits that could be used to provide loans for starting business enterprises. I am not here in the position to recount the enormous cost of government economic regulations but there are many works that demonstrate it clearly and convincingly, including such popular fares as John Stossel's early special on ABC-TV, "Are We Scaring Ourselves to Death?" Stossel showed, with concrete numbers, that the cost of government economic regulation actually results in extensive poverty, something that is the major cause of misery in a society.

Arguments for government regulation are plenty but they aren't good ones. One is based on the phenomenon of market failures but omits from considerations that there is a far greater hazard from political failures when governments regulate the market. Another is based on the myth of positive human rights, duties everyone owes to others to take care of them, a position that encourages impermissible involuntary servitude in society. The only slightly credible support for government regulation, identified in an article by Kenneth J. Arrow, another Nobel Laureate in Harper's Magazine back in 1984, comes from what Arrow called judicial inefficiencies associated with air pollution and other negative externalities or harmful side effects of economic activities such as manufacturing. But even this is unnecessary when one considers that such bad side effect could be dealt with through public health laws that prohibit defiling the air mass and other public realms.

All in all, the case for government regulation is weak and those who promote the idea seem more convinced of their own invincibility as managers of the economic lives of the rest of us than of any positive elements of the process. It is time to stop the expectation that government regulators can solve our problems.

One's Right to be Wrong

Tibor R. Machan

In a recent demonstration outside the Earl Warren Bldg in San Francisco someone was waiving around a sign that read: "A moral wrong can't be a civil right." Well, in fact it can! A simple case in point is when someone writes something that is immoral or produces pictures or movies that are morally corrupt or writes a book that praises Hitler or Stalin or Pol Pot (Khmer Rouge). In America one definitely has a legal or civil right to do all this even though it's all arguably morally wrong. And all human beings have this right, actually, whether their legal system acknowledges it or not.

Indeed, the entire point of having rights is to be in charge of a sphere of one's life, which means one is free to act well or badly within such a sphere--it is entirely up to the individual and others may not invade the sphere even if quite rightly they judge what one is doing morally wrong.

This does not mean there is no right and wrong, or that no one can know it. It means only that whether one does what is right or does what is wrong must be up to the oneself and may not be imposed on one. The only exception is with wrong conduct that is a violation of someone else's rights because in that kind of case the intervention is not for correcting the bad conduct but for protecting the victim of rights violation.

This, at least, is the way rights are understood in a fully free society or country. Obviously in regimes that do not prize individual rights and liberty, what the people "in charge" will try to do is impose their own understanding of right on everyone else, just as if these others were their children! Even in a relatively open welfare state such as America, Britain, Canada, or Germany, the government will often impose on people its conception of what it amounts to be moral or ethical, thereby robbing them of their chance to be sovereign, to govern themselves. For example, all the so called compassion that governments engage in involves forcing citizens to part with their resources so governments than can do with them as they see fit, which sometimes amounts to helping certain citizens but more often comes to supporting some favorite project of the politicians and bureaucrats. The same with forcing people to be prudent about their use of drugs or alcohol! These are all challenges individuals must face on their own or with the help of family and friends.

Why should people have the freedom to do what is wrong, provided they aren't violating anyone's rights? Because they are by their very nature moral agents which means they can make decisions based on their convictions and this is how they earn credit or blame for how they live. And doing so is a person's major life project, to do the right thing of his or her own free will. But that also means they might fail, as many of us do quite often. By not permitting one to fail at living a morally good life, one also robs him or her of the chance to succeed! And that basically amounts to undermining their very humanity, the thing that makes them human--their moral nature.

What many folks even in America do not grasp is that the most important aspect of the American political tradition, including the revolution that got it more or less fully implemented in the country, is this establishment of the regime of individual sovereignty, of demoting the king and governments in general from their pretense of being in charge of the lives of their so called subjects. Government was identified, for example in the Declaration of Independence, as existing only to protect the rights of the citizenry not to run those lives.

Indeed, president Barack Obama would do well to keep this in mind as he talks of laying out grand plans for the country, plans that inevitably intrude on the personal projects of the citizenry. A free country isn't about such plans but about making it possible for all citizens to embark upon their own peaceful plans and projects, grand or modest.

Opulence for All!

Tibor R. Machan

As I drive to work in the morning I pass a community college on my right and for years now I have been struck by its opulence. This facility looks like some palace built for pharaohs, not a supplementary educational institution helping people with a few under-division college courses each term. No, by now at least California has several of such fabulous schools--I recall Foothill College up in the Bay Area, which matches some of the best endowed private universities in its architecture, as well as Santiago Canyon or Santa Barbara City College. These and others stick to my mind but there are hundreds of them, as well as similar so called public facilities that show enormous investment at taxpayers' expense or on government credit.

When I hear about California's enormous budget deficit--were they not constitutionally required to balance it each year?--my mind quickly focuses on these and other indulgences throughout the state. They certainly make it appear that whoever plans the state's educational programs has no concern about frugality or thrift. Instead the mentality that appears to go into these projects is that if anyone anywhere is studying at a marvelous college, well then everyone must, including those who spend but a few hours three times a week on campus.

This egalitarian mentality seems to me to have contributed big time to the country's financial wows. Although I am convinced of the superiority of privatizing all education, I figure that if the government is going to get into the education industry, it could certainly practice some restraint. Subsidized education ought at least to be modest and the opulence witnessed around California and some other regions of the country--Long Island, New York comes to mind, as does Florida and Texas--is simply way over the top. Certainly if I am going to ask my friends to help me out with some of my personal needs, such as purchasing a car or dish washer, I would be abusing the privilege if I spent their good money on the most expensive of these items.

But the egalitarian entitlement mentality is such as to insist that if some people in society are studying at institutions with outstanding and beautiful facilities, well then everyone is entitled to the same. Never mind that the money is obtained through the extortion method called taxation, a relic of feudal times when monarchs had to be compensated for allowing their realm to be used by their subjects.

Which brings to mind a related matter--Nevada Senator Harry Reid's recent contention in an interview widely circulated on the Web that taxation is voluntary and that when taxes are collected, it's like collecting dues from us which we all owe because we choose to pay them. Bunk.

Dues are the result of signing up for a benefit with the provision oft paying an agreed upon weekly, monthly, or yearly fee. But taxes are nothing like this. Just being born and trying to make a living qualifies one as the subject of it, to being extorted arbitrary portions of one's livelihood.

But back to the egalitarian opulence that has contributed to the current fiscal meltdown in so many regions of not only America but the rest of the world. It may be driven by envy or by a phony political ideology, namely that everyone is naturally entitled to equal "shares" of the country's wealth but in either case it is nonsense. And it's costing big time.

Of course there is an ancient habit afoot that supports this sentiment. It is one that sees society as a club or team to which everyone belongs as an ant to a colony and from which everyone may draw maximum benefits, so long as the leadership allows it. In the time of kings and other mythical leaders of state it was an ideal to aspire to because it was one way to wrest of the wealth from the rulers--persuade them it isn't theirs in the first place (which it wasn't though they firmly believed it was). But once it was widely enough realized that societies were supposed to be realms wherein we all were to be free to work and aspire to some level of success but not entitled to end up like everyone else, this was supposed to change and we are all more or less competing with the understanding that in a competition people end up in different places at different points of the race. But by refusing to see it this way, the society is seen as obligated to maintain everyone in a state of economic opulence and that is simply unsustainable and leads to George Orwell's very apt depiction of an egalitarian society in his novella, Animal Farm, wherein everyone is equal only some are far more "equal" than others.

Executive Compensation

Tibor R. Machan

Most executives draw pretty reasonable salaries, maybe up to $250m+ per year and bonuses, depending on how the company is doing or how important the executive's contributions is expected to be. This isn't unlike how baseball and football players are hired and compensated, especially the stars among them.

Some people are sought out very eagerly and promised exorbitant pay, including bonuses above the regular salary, and all this is agreed to from the outset, after pretty heavy negotiation. Contracts usually specify the terms, some of them unconditional, some conditional. If bonuses are promised no matter how the company is doing, this will be binding just as such contracts are binding in professional sports so that if a very promising hire turns out not to have done well, payment must still be made.

With the current brouhaha about high payouts in bonuses to company executives whose companies didn't manage to be successful, it may appear to be unjust to pay as per the terms of the contract but it isn't. As the saying goes, a promise is a promise.

Where trouble arises is when a company is receiving public funds in order to remain in operation and a sizable portion of these funds is used to pay bonuses agreed to prior to the bailout. What has happened is that the company's authority to pay the bonuses has diminished since the original contract was drawn up independently of the public intervention and subsidy. That, of course, could also have been taken care of by the terms of the contract--it could have specified that regardless of whether the company receives bailout funds, the compensation to the executive will remain the same. Or the terms of the bailout could have included a provisions that the original terms granting huge bonuses to executives needs to be changed for the bailout to go into effect.

I think looking at the matter along these lines should clear up any confusion about the current furor of executive compensation. But, sadly, the executive compensation issue seems to be a fodder for once again tearing down capitalism. And this time out of rank envy. Why all the fuss about the high pay executives get so long as they aren't stealing it? Makes you sick to see all these people fret about how well their fellows are doing. Oddly, in sports this attitude doesn't appear to be dominant, so when Tiger Woods is doing well people aren't demanding that he be brought down and make room for inferior golfers. Or with Kobe Bryant or Michael Phelps.

But when CEOs make big bucks from their closed offices, never mind what goes into their work, how much aggravation and preparation and anxiety, they immediately get attacked. This is precisely what makes some of us concerned about Obama & Co., this attitude of always looking at how others are doing, how well off they may be and how this cannot be tolerated. It is in fact the typical socialist mentality, one that was evident all over the Soviet bloc when I lived there--the snooping, the worry about how well others are doing. And that made some sense since socialism is a collectivist system and the tragedy of the commons and a zero sum game mentality prevail there, with no clear way to tell who earned what, who should enjoy how much. But in a near capitalist society agreements take care of this--if the CEO gets what was agreed to, that's the end of it. Unless, of course, the system has come to be corrupted by bialouts and subsidies and partial nationalizations.

I recall when I came West from communist Hungary I enjoyed all the wealth that surrounded me despite having hardly any of it myself. What a great thing that people can make lots of money and obtain what they needed and wanted for themselves and their loved ones. Look at all those great homes, fabulous cars, exquisite eateries, you name it and I found it all thrilling because it showed what all is possible for those who work hard and have a bit of luck.

But not long thereafter I realized, to my dismay, that even in the West, even in America, too many people are green with envy and would rather work on bringing down their fellows than getting up there themselves. Shame on them all!

The Infinite Dullness of PBS TV

Tibor R. Machan

Over the last few months I have had my TiVo record the News Hour with Jim Lehrer, the famed PBS TV program deemed very highfalutin by my liberal colleagues and pals. It's not so much that I lack news sources but more a matter of my own limited amateur investigative journalism. I am curious how a substantially government-funded news program deals with the current national and international economic fiasco.

By now I have watched over three months of this program and just as I suspected, it is so terribly biased, so uninterested in balanced reportage that it has become very boring to watch it evening after evening.

First of all, the two commentators, David Brooks (a slightly conservative or more accurately moderate Republican who writes a column of The New York Times) and Mark Shields (a moderate but reliably liberal pundit and perpetual TV commentator) are the dullest people one will encounter on TV, with virtually predictable right/left observations, "criticisms" and not an idea that hasn't been sanitized by the Washington press corps. All is just so terribly "respectable" and snooty that one may wonder how many viewers use their input as sleeping aids.

Then there are Jim Lehrer's minions, Judy Woodruff and Co., all of whom report the news as if it went through the editorial scrutiny of The New York Times and The Washington Post. Anytime these sterling journalist are given the task of gathering some educated opinions about various elements of the news, they manage, dutifully, to collect the very few usual suspects. There are all the apologists for President Obama's recommendations and policy proposals, of course, most of them members of the administration, and a few dissidents from the Republican opposition in Congress. When experts are called upon, the most frequent sort are the likes of Paul Krugman or Thomas L. Friedman, both, as you probably have guessed by now, from the Op Ed page of The New York Times. James Galbraith of the University of Texas at Austin shows up, with his predictable cheers for neo-Keynesian ideas and praise for anything that came out of the New Deal. (The idolatry toward FDR on The News Hour is truly embarrassing!)

I have been following the academic debate over President Obama's economic proposals and policies and none of it shows up anywhere on The News Hour. It is as if all the country's professional economists had to offer was more or less fierce Keynesian stuff. Not a dissenting voice! You would think that just as a matter of being differentiated from, say, Fox TV News, The News Hour would invite Professor Gary Becker of the University of Chicago or Professor James Buchanan of George Mason University outside Washington, DC, or perhaps some of their highly credentialed students of political economy but nothing. It's just neo-Keynesianism over and over again, with an undisguised glee, given how Keynes is (quite mistakenly, by the way) taken to be an unqualified supporter of huge government intervention in the market economy and how much this team of pseudo-journalists find the current fiasco a major excuse for bolstering the big government ideology that keeps PBS TV itself in business. (In the field of journalistic ethics it is clearly a case of unethical self-dealing for The News Hour to be so blatantly biased in favor of big government!)

Perhaps I am being naive to even bring up the idea that The News Hour ought to pay attention to the ethics of journalism by broadening its coverage of educated economic opinion. Maybe these folks are so unabashedly partisan, so bent on propaganda instead of journalism--reminiscent of Pravda and Izvestia of the old Soviet Union--that speaking up about it makes me appear to be a country bumpkin. But, dammit, The News Hour is taking money from the whole gamut of American taxpayers and has a professional duty to make room for a wide variety of political-economic opinion even if those producing and regularly appearing on the program find it unpalatable to do so.

Alas, however much one chides these people, they know who is in power now and will not budge a millimeter in the direction of presenting their viewers with a decent debate on public policy. Instead they are, well, propagandists, albeit of a somewhat nuanced variety--with that tone of snobbish voice so familiar from another of these public broadcast services, National Public Radio (which broadcasts at nearly every university radio station across the country).

It's a wonder most of us do not just throw in the towel, what with the dogmatic refusal of these people to show any interest in a national debate on vital public policy matters.

Revisiting Socialism

Tibor R. Machan

During the recent Conservative Political Action Conference, held in Washington, D.C., several speakers laid in on President Obama for his alleged promotion of socialist policies. They were referring to various provisions of his bailout program as well as elements of his admittedly highly dubious neo-Keynesianism, the idea that it is best now for government to create demand for goods and services to offset the proclivity of Americans to withdraw from the market, to stop buying stuff and thus to impeded employment and economic growth. These conservative Republicans, especially radio talk show star Rush Limbaugh, allege that bringing the government into the economy as President Obama and his team are bent on doing is tantamount to socialism.

Well, that’s not quite right and by making the charge one thing these conservative Republicans are certain to achieve is to discredit themselves, to demonstrate their ignorance.

Socialism in the sphere of political economy amounts to the public ownership of the major means of production. Nationalizing banks and car companies and farms and so forth would qualify as socialist. But what Obama & Co. are proposing is in fact what has been called over the last century a system social democracy. Yes, much of the free market is undermined by social democratic policies but that’s not quite socialism, not what most of us think of when invoking that term.

In the non-economic realms of society, too, what Obama & Co. are pushing for doesn’t quite qualify as socialism. That would involve the complete abolition of a system of individual rights, including civil rights, and the collectivization of the bulk of society. Under socialism actually no individuals are even recognized to exist. Society is the focus of attention and it is even contended that society is a living entity of which the population are the cells. No independent individuality is recognized because socialists claim that people are integral parts of society, just as someone’s organs, limbs, and related biological constituents are integral parts of a human being.

Certainly there is no direct attempt to bring about this socialist vision, not at least so far, although bits and pieces of the vision presented by President Obama come close. Furthermore, there is something to the claim, which is perhaps what these conservative Republicans are referring to, that an American version of socialism is being promoted by the current crop of Democrats in Washington. Consider, in this connection, what Normal Thomas, the leader of the American Socialist party and six time presidential candidate of the Socialist Party, said in a 1944 speech:

"The American people will never knowingly adopt socialism. But,
under the name of ‘liberalism,’ they will adopt every fragment of
the socialist program, until one day America will be a socialist
nation, without knowing how it happened."

Thomas then continued: "I no longer need to run as a Presidential Candidate for the Socialist Party. The Democrat Party has adopted our platform."

So, arguably, a certain version of socialism could be said to be the goal of President Obama and the leaders of the Democratic Party. However, this is not Soviet Socialism--so when Rush Limbaugh refers to Lenin and Stalin in his criticism of President Obama’s regime, he is engaging in hyperbole, even in demagoguery, rather than helping his audience understand what is happening in America today.

As with many political systems, socialism has several versions. That’s true with capitalism as well, although in its pure, unqualified version capitalism is, plain and simple, an unregulated economy with full protection of the right to private property (including in the major means of production) and freedom of contract. But most people call various system with significant protection of the right to private property “capitalist,” including the current American or Canadian or English welfare states.

It is true that under the leadership of President Obama the American government is very likely to move closer and closer to a full scale socialist regime, so much so that in time many of the non-economic aspects of society will reflect socialist, collectivist principles. Perhaps in time there will not even be much room for the right to freedom of speech since a socialist government could well regard the exercise of such a right as a very serious obstacle to bringing about various goals of the government. Even totalitarian socialist measures could be coming down the pike if the government believes that its needs to micromanage the country so as to achieve its objectives.

But that’s not where we are now and to claim otherwise renders those making the claim disingenuous and robs them of credibility. It may be tempting to simplify in the realm of day to day politics but it is very doubtful that the distinctions warranted need to be abandoned, even in the heat of political debate.