NYT Editorial Prejudices

Tibor R. Machan

In its November 24 editorial, “Return of the Predators,” The New York Times reaffirmed its utter hostility toward and prejudice against those who work in the market place. It appears that given that in the market people strive to profit, there is no way The Times will ever give it credit for anything worthwhile.

This time it is “for profit loan modifiers” who are the targets of The Times’ prejudice. Modifiers are folks who aim to make some money off renegotiating previously made deals between homeowners and mortgage companies. Some of this is done by non-profit agents who, of course, are completely embraced by The Times and all those who demean the free market. That’s because they “work for no fee.”

There are too many levels at which this disdain of market agents is seriously flawed. For one, people who try to earn a profit from providing their skills to clients are by no means greedy monsters, any more than The New York Times reporter who latches on to a hot story before a competing paper grabs it must be some kind of fiend. The profit motive doesn’t create corruption. Moreover, non-profit seekers face their own ethical pitfalls, such as becoming insufferable buttinskies, folks who thrive on running other people’s lives and may even enjoy being depended upon by others who might benefit from some help.

As public choice theorists have demonstrated, the so called public service that motivates many who enter the non-profit market is often nothing but a personal agenda that gives these people their own type of profit or satisfaction. To think of these folks as if they were saints aiming to get nothing out of what they do is delusional. Nor need there be anything amiss with what they do to try and gain something from their non-profit endeavors. The point is that they do try to gain something from it. The pure altruist is rare and, frankly, no all that virtuous, given that his or her claim to be disinterested is usually a lie.

If those at The Times, and the rest of the anti-capitalists, gave the matter a bit more thought than they do, they might acknowledge that the mutual-benefit arrangements that take place in market transactions are normally completely decent ones. Just consider, The Times benefits substantially from all its advertisers and readers, for whom it provides a service or two, if I am not mistaken. How come its profit seeking conduct manages to be above suspicion but not that of the for profit loan modifier? When there is evidence of malpractice in market transactions, it is, as in all other cases of criminal misconduct, necessary to ferret it out, not simply assumed it to be part of such deals as The Times’ editorial writers do.

Taking it as given that when people embark upon profit making, including in the loan-modification industry, they must be doing something shady is like assuming that when people write for a living they must engage in shady conduct like plagiarism or slander. But this is silly and to think that way betrays a deep seated prejudice, not insight or wisdom. It is no different from suspecting all the reporters at The New York Times of professional mal-practice before any evidence of it had been uncovered.

Of course, for profit loan-modifiers are capable of malpractice, of corruption and such, just as are journalists or doctors or teachers. We know well enough from recent history that The New York Times had writers who were guilty of such corruption. But this does not justify suspecting everyone at the paper of the same.

Similarly, because some of those in the for profit lending or modifying industry have engaged in malpractice it does not follow that most do or will. For The Times to alleged that such people are less likely to be honorable than are reporters as they carry on with their work is rank injustice.

Indeed, all those who indict profit makers of being more susceptible of corruption than non-profit professionals need to rethink their view of human nature. By implication they are claiming that all men and women who seek to earn a living at some type of commerce must be inclined toward vice and crime. There is no evidence of this, certainly less than there is for the contention that all those who seek political office and work in government are likely to be crooks.

Why America Isn't Way Ahead

Tibor R. Machan

In his recent book, Post American World (W. W. Norton, 2008), Fareed Zakaria, host of the disappointingly drab and no longer original CNN TV program GPS (Global Public Square), made some excellent points about how it is with the U.S.A. these days. The central point of his thesis was that America hasn't so much deteriorated, economically and otherwise, but that other countries are beginning to catch up with it now. I myself had compared this phenomenon several years ago to that famous U.S. basketball "dream team" which for a while was way superior to others around the world. In time, however, the national teams of other countries caught up and by now the Americans aren't certain winners at the various international tournaments.

Similarly, the United States, which had been an exceptional country for a long time--despite some of its serious flaws (slavery, military conscription)--is no longer alone in the world with its substantially free institutions. It is no longer the only major country that has a substantially free market economy. Its civil libertarian legal system is also beginning to be replicated elsewhere. And some of the drastically different countries, which had been out and out tyrannies and in which human advancement had been nearly completely retarded, are no longer so different. Take China, for an example, where although much of the old communist ideology is given lip service, the actual economic policies have freed up much of the society's economic energies. Indeed, this is evident in many other countries where there are no fully free institutions but elements of free market capitalism are gradually becoming prominent.

Because the U.S.A. was virtually alone for the better portion of its existence with many free institutions, especially those bearing on economics and the free development of ideas, enormous development occurred here. The immense wealth of the country, as economists like Adam Smith had predicted, arose from removing the government as the primary director of economic affairs. The Wealth of Nations, Smith's famous and path-breaking book that practically invented free market economic science, came out in 1776 and America had followed its advice pretty closely (though by no means fully). In consequence, the country lurched ahead economically, of all others around the globe.

This also produced some undesirable but subtle side effects. The welfare state feature of the American system also grew tremendously; the political power of big labor unions and industries became nearly unchecked so that members could cut some truly awesome (though less than fully voluntary) deals to gain high wages, subsidies, protectionist measures, etc. Indeed, it is arguable that compared to those around the rest of the world, American industries became spoiled. Like the dream team, they could pretty much sit on their laurels.

This is not about whether they deserved it. This is about whether the economic conditions in America made the flourishing of enterprise at all levels quite impressive. The country became the economic model to emulate throughout the world, the economic leader. And this position engendered a great many features of American society that became entrenched, practically fixed. High salaries and wages, good credit ratings, comfortable living for millions, and there-through the envy of the world.

But as other countries started to learn from the Americans, they made progress too, including in their competitiveness with American industry. Given that economic agents around the world had far lower expectations than did American ones, their ability to pose serious competition to Americans grew by leaps and bounds. In time the Americans had to realize that they were no longer able to coast so easy in various areas of the economy and maybe had to tighten their belts, lest they be dispossessed of their economic superiority. The auto industry is a good case in point.

But once people get used to living exceptionally well, it's not an easy thing to say good bye to this advantage over the rest of the world. Great expectations, dreams and all, do get checked by new realities but the mind tends to resist this. And that is where we are now, along with some stupid mistakes made by the ever meddling politicians and bureaucrats who populate our welfare state.

Still, this isn't the end of the world. Once it is acknowledged that the substantially free ride that came from comparatively superior institutions is over, effort and innovation will have to double up and America could well remain on top, though not by default. That is the hope that president-elect Obama ought to be telling us about, not the vague stuff most folks associate with getting a free ride, by way of the largess of the welfare state which is no longer affordable.

"Gifts" from Government

Tibor R. Machan

It was as if President Bush became Santa Clause. An MSNBC-TV anchor announced that the president signed into law a bill that extend unemployment compensation payments to jobless Americans and said, without flinching, that this is "good news." Only mainstream nonpartisan media can carry this off.

For starters, extending the period of time the unemployed will receive money from Uncle Sam is not such good news, even for the unemployed. It doesn't encourage them to find a new line of work from which they could then make an honest living, perhaps even a better one than they made from their old job. Also, the source of the unemployment funds are not personal wealth of donors who do not need to be paid back but come from members of current and future generations, thus making the unemployment payments a kind of loan from unwilling strangers. Overall, the funds turn out to be a loan which will be a burden on the unemployed once they get a job again. Then--and this one is a real lulu--the unemployment funds will be a burden on millions of yet unborn Americans while they had no opportunity to have any say about how the funds should be spent. There goes "No taxation without representation" down the drain even though it was one of the victories that had been won at the founding of the country.

But there is more. What is a professional newscaster doing praising a dubious public policy, especially one that so clearly amounts to robbing Peter in order to pay Paul? Is it really a good thing for a society to practice this way of dealing with problems? Does it teach a good lesson to young people concerning responsible household management and personal finance? One would hope that funding people's expenses by this means isn't something anyone would want to advocate. It is totally unproductive. Any gain by the unemployment compensation recipients must be a loss to those who will have to cover the public expense involved. Yet a major news anchor calls this "good news"!

One way some political theorists and commentators justify policies involving this kind of transfer of financial burdens from one group of Americans to another is by claiming that we are all in the same boat, that America is, after all, a big family or team and everyone must be ready to help out everyone else, especially in an emergency. But this is a myth--we are not a huge family, not, especially, in a country with some 300 million citizens with a immense variety of backgrounds and beliefs.

It is often forgotten that the kind of resource transfer involved in providing the employed with compensation does not even amount to helping. Help is something that's given voluntarily, as when one makes a contribution to the Red Cross or a philanthropic group that supports poor children, stray animals or medical research. Funding the program isn't voluntary and amounts to an unwillingly assumed burden on both living and yet to be born citizens.

Those who claim that all this must be accepted as the price of membership in a human community don't appreciate that such public policies actually undermine the humanity of the community. They make out of people involuntary servants of one another, robbing them of the freedom of choice to contribute to each other when in special need. Civilized people do not simply dip into their neighbors' resources when they are in special need but make a request and await the granting of such a request. Only parasites take from others without those others' consent.

Then of course there is the corrosive impact of public policies such as unemployment compensation when they make it a matter of public policy to treat people as if they could be used by others without their consent. And what about the ill effects of using unearned resources to support oneself and one's family? It is in fact quite humiliating to go on unemployment and, then, it doesn't quite serve to make up for the income one earned while working for pay.

But, of course, the system is now thoroughly entrenched and undoing it would take a revolution, a widespread realization that people must lend a hand to each other of their own free will and not by being commanded to do so by government officials who really have no moral authority to do this. Still, it is useful to call to mind the fact that in a free and just society no one is another's slave or involuntary servant, even in times of emergency.

Society versus the State

Tibor R. Machan

Some careless people, even with academic credentials, confuse the state and the government. But just think, there is no consent where the state is concerned whereas with government you can have, even if it is rare and difficult, the consent of the governed.

Over the centuries countries have mostly had states, organizations that involve some few people ruling, regimenting, regulating the vast majority. This is statism, wherein people are seen as but small parts, even cells, in the large body of the state. Prominent statists were Plato (read in a certain way), Hegel, Marx, and the Nazis, Fascist and Communists. For these folks the individual lacks independent significance. It isn't that individuals do best in life when they form communities among themselves but that they lack an identity apart from membership in such groups. As Marx called us all, we are species beings, ones whose very nature is firmly, irrevocably linked to all the rest Choice is, of course, impossible to such people and is viewed as but a mirage.

A free country, in turn, consists of a large number of individuals who choose, once adults, to be together, to form social units of many varieties but reserve the right of exit. They are at odds with the statists exactly on this point. Statism doesn't accept that individuals are free to be or not be part of a society and that in principle, at least--though with admittedly great difficulty and disadvantage--they could even be hermits. (But it is better to be a hermit than a member of a Fascist or communist state!)

I am moved to remark on all this because several of the people with whom I associate in the academy insist on claiming that everyone belongs to society and that thinking of people as having independence, the right of freedom to choose, amounts to regarding them as atoms, unrelated to anyone else. (The image is silly, of course, since atoms are tightly linked to each other.)

From this rejection of independence follows, of course, the belief that we are all obligated to the state and those who elect to speak for that state may regiment us around, compel us to follow their vision of how we must relate to other people. For centuries and even today many political thinkers and leaders held this idea so the notion that individual have natural rights to their lives, liberties, and property had been rejected and forcibly resisted, too. And indeed it still is, even in that famous free country, the U. S. A.

For example--and many could be listed--the idea of taxation really amounts to the claim that everyone with resources may be compelled to part with quite a bit of it so the "leaders" can do with it as they judge right. And that means, of course, that everyone is subject to forced labor since a great many people's resources come from their work. By the collectivist view this work is the state's property! (Even Karl Marx had some trouble with this notion!)

I am proud to report that I resist such collectivist thinking not just in theory but in practice, as much as I am able. For a small example, instead of staying in hotels, where the proprietor is legally required to take some of my money and hand it to the state, I stay with friends and acquaintances as much as I can. Then I will take them out to dinner or show them my gratitude some other way. I may even "rent" their spare car. In short, I pit the free society of which I am a part against the coercive state into which many folks would gladly conscript me.

I urge you to do the same! On many other fronts, too, one can legally evade the state and, thereby, statism. One need not be a bomb thrower, which tends to harm innocent bystanders. One can come up with various ways to remain relatively free, more so than most, even while the agents of the state, as well as their academic cheerleaders, manage to command the police and army in their efforts to impose their will. Let us continue the American revolution and not make it easy for them. In time these statists might indeed wither away and leave us only with a remnant that makes sense, a just and free government that governs with the consent of the citizenry.

Are the Poor Petrified?

Tibor R. Machan

When I came to America I was seventeen and a half and once I turned eighteen I ran away from my family. My father was a brute and in America I didn't have to accept him as my lord and master past age eighteen.

But, of course, I had nothing at all to my name. I did manage to sneak into the house late one night and take some of my clothes but they were very few. I was really poor but I was finally free, not only of the political system of the country where I grew up, Hungary, but also of my tyrannical father. Nothing else but free! But that was a lot!

First I went to the Salvation Army but it wasn't what I was hoping for so I approached a friend and borrowed $75.00 for a couple of weeks' room rent. The place was not much more than a closet but had a bed and sink and I was glad of it all. I went out an got a job, too, although I was also attending high school and as a new arrival had problems with English. Still, I got a job as a short order cook, preparing salads in what now would be considered a fast food restaurant. A few weeks later I got a better job, in a swankier restaurant, as a bus boy, but it didn't last long since they served liquor and I was too young. I got fired. So then I found another job--as a draftsman at Carrier Air Conditioning. I had some talent drawing and it came in handy here. This was an actual half time job and allowed me to continue with school.

Slowly but surely I saved a few bucks, even established credit with some stores which later served me well with my credit rating. On and on I went, two steps ahead, one behind, more or less. There was also a serious recession in the country after a while and I became unemployed since Carrier couldn't afford me. I went on unemployment for two or three weeks but it got so annoying, to wait in line and then have very little to spend while doing nothing much that I quit. I left the town in which all this went down and found work in another state, not without a little help from friends whom I sought out. I kept getting odd jobs--I recall one was repacking hundreds of boxes of motor oil, which lasted about two months--and I also rented some better places than I did initially, after I bolted from home.

Now I could continue with this but there are millions of such stories, involving folks who are poor and then got less poor and in time joined what is dismissively called the middle class--as if people permanently belonged in those artificial classes conceived of by political theorists of one kind or another. Suffice it to say that by way of some effort, persistence, prudence, and luck I eventually stopped being poor, got some savings together, started a family, bought a home and another and then another, each a bit better than the one before. And my jobs, too, improved because I persisted in going to school and in time earned several degrees.

None of this was awful although at the time some of it seemed so and even scared me some until I learned how to deal with the difficulties. (I insisted on learning to speak nearly fluent English, even though I was a late arrival in America, partly because I was told back in Europe that no Hungarian will ever lose his accent, partly because I wanted to make a living speaking and writing!)

My purpose in telling this story is to point out that poor people aren't crippled. They lack resources other than their resolve and tenacity but those are not negligible by a long shot. If you are alert to opportunities, if you are diligent, if you don't get all dejected by being surrounded with wealth which you lack, etc. and so forth, you can pull yourself out of your poverty and in some cases even become immensely wealthy; it often depends on you, although a bit of luck helps.

Now all this is fairly plain, so why does it need retelling? Because so very many social theorists and commentators have a view of human beings whereby they are all stuck, petrified, frozen in their economic situations and unable to extricate themselves. So they become "the poor," a category of humanity like "the bald" or "the tall." This conception of human beings leads to the widespread belief that unless some great force, such as the all powerful and wise government, comes around to shake things up, the poor will remain poor forever. In fact, however, as the economist Thomas Sowell has reported, most American poor remain poor for about 4 to 5 years and then stop being poor. And if there is a free market for them to navigate economically, matters are even more favorable--the poverty of the poor lasts for an even shorter period.

I suppose it is a bit like talking of the sick as if they were permanently so, not just for a while, now and then, after which they could well recover. For some reason, though, social theorists are very inclined to see people as if they had no way of changing their economic circumstances. Moreover, they refuse to even consider that in certain cases people knowingly choose to be poor, economically unambitious, because they pursue different ways of self-development.

As I noted before, some of this is obvious enough but now and then it is worth reflecting on it anew. It can help us to think more sensibly, even more optimistically, about some of the dire circumstances we face in our lives.

Bailouts Destroy Prudence

Tibor R. Machan

So you notice that your income has shrunk, you may even have lost your job. So you decide to trade in your gas guzzler for a small vehicle and even reduce your monthly car payments, if you have such. And in other realms of your life, too, you may be making adjustments to cope with the general economic downturn. You cook at home instead of eating at your favorite restaurant; you do not purchase that pair of shoes you would have otherwise, etc., etc.

In short, you are acting prudently, tightening your belt, as the saying goes, in the face of the widespread economic contraction. Never even mind why the contraction occurred--some of it could actually have come around simply from people changing their preferences and behavior. (Instead, of course, it happened because the government has been abandoning its proper role as the protector of our rights and like a rouge referee, has been inserting itself into the game for decades on end!)

But now that the results of such bad government have hit so many of us, you are taking steps to deal with them. Ah, but no such luck. Instead of making it possible for you to deal with your reduced resources, instead of letting you make the budgetary adjustments you can make within the context of your own life circumstances, the politicians are insisting that if you refuse to spend the big bucks on those Detroit gas guzzlers, for example, they will tax you and hand over what they have extorted from you to the car makers, never mind your prudent choices. In time the savings you thought you could garner from your good sense and discipline will have to be shelled out in extra taxes so as to bail out those who aren’t getting your business any more. Instead of insisting that those who make the big cars and whatever else that’s no longer in demand in the market place make their own adjustments, tighten their own belts, etc., the politicians insist that they continue to be paid as if nothing had happened, no one changed his or her purchasing behavior, as if the economy continued to be in fine shape.

This is just one of thousands of results of the mixed economy, the welfare state, in which your individuality is abolished and you are treated as a member of some ant colony or bee hive. You will be conscripted to be part of it all, never mind how sensibly you may figure out to deal with the fiasco. No, you will not be allowed to use your good sense, virtue, and occasional luck to address the economic mess the politicians, bureaucrats and their rent-seeking clients produced. These folks were the ones who prevented the realization of the free market and instead created a top-down, planned or managed arena of wealth redistribution.

In such an situation it is impossible to identify the good versus bad players because the government lumps us all into the public for which it presumes to make decisions. Individuals are seen as simple cells in this public body, with governments and their cheerleaders in the academy and think tanks as the head of the body.

All of this is not something that no one could foretell. Among those who warned about where the planning done in a welfare state can take a society was F. A. Hayek, whose The Road to Serfdom, published back in 1944, pretty much foresaw it all. Members of the Austrian economic school, lead by Hayek’s own teacher Ludwig von Mises, kept issuing warnings in all their books and articles but, alas, they were ignored by the all mighty politicians and bureaucrats. (Von Mises’ book, Socialism, published in the early 1920s and translated into English in 1936, showed, among other things, that central planning just cannot produce a productive economy.)

But socialist and near-socialist dreamers kept pressing their wish upon politicians that a top-down system of economic organization be attempted, in one or another form, and in America this came out to be a mixed economy, one with capitalist as well as socialist elements. Such an economy can muddle along for a while but, in time, it simply cannot do what it is expected to, namely, produce wealth and forcibly distribute it so everyone will be equally well off. (I produced an essay for the journal The Personalist, back in 1969, “Justice and the Welfare State,” now part of my book The Right Road to Radical Freedom, in which this point was driven home!)

So if you are appalled that your efforts at economic prudence get you nowhere very fast, the culprit is our blessed mixed economy, the welfare state.

Exceptions Not the Rule

Tibor R. Machan

As a nearly lifelong champion of the fully free society I routinely encounter skeptics who cite cases showing that now and then free men and women do not do the best for themselves and others. From this they conclude that therefore freedom isn't such a great thing after all. Indeed, often they go further than claim that these cases support measures that check freedom for various people and organizations.

For example, the free market system would not entrust to government regulations even if now and then such regulations have done some good. Yes, of course, some regulations can produce more benefits than harms, looked at piece by piece. But there real issues is whether the institution of government regulation of the economy, of various professions, indeed of much of human life, is sound public policy.

Many years ago I saw a guest on The Tonight Show with Johnny Carson who fell out of an airplane without a parachute, landed in a tree that slowed his fall and left him totally uninjured, and lived to write a best selling book about his experience. But, I am pleased to report, he did not become an advocate of everyone jumping out of airplanes.

When one considers the institution of government regulation one needs not only to remember Aristotle's famous statement that one swallow does not a spring make. One must also consider such matters as whether serious violence is being done by such regulation to human beings--after all, governments regulate people who have not been convicted of any crime and thus are perpetrating prior restraint which, in other contexts, is understood to be unjust. It needs also be considered whether some other way of encouraging prudence and foresight are available that do not involve treating people paternalistic-ally--for example tort law or some other type of legal adjudication. There is also the moral hazard that government regulation of market agents engenders--people are given the false impression that government is taking good care of them and they can then proceed without their own strict caution as they navigate the market place. Finally, at least for this short discussion, there is the very strong likelihood of non-governmental watchdog establishments arising in a free market economy where government regulation does not serve as a supposed cautionary measure.

When I make clear that I have fundamental objections to government regulation as an institution in a free society I am sometimes labeled an ideologue, one who blindly clings to a policy, never mind the damage this might produce, a dogmatist, in other words. But that is quite wrong--a principled opposition to various practices can stem from a careful study of the history of such practice as well as analysis of its likely impact. One who in principle opposes all non-consensual sex isn't some dogmatist but has learned that it is simply unacceptable for human beings to use one another without full consent.

Government regulation involves imposing undeserved burdens on market agents, professionals and others who are made subject to it. That is wrong even if on rare occasion it may accomplish something desirable. Using coercive force against people may often be the practical, expedient thing to do but that is no excuse for it. Sadly, we do live an era when principled thinking seems to be scoffed at, demeaned, and experts tend to look at public policies in piecemeal fashion. That is akin to a personal ethics of convenience--I'll lie when it suits me, tell the truth what that works, and generally do what gets things done as I would like them done, never mind integrity, justice, and morality in general.

Government regulation is, in fact, reactionary. It takes us back to an era of mercantilism, when governments intruded on people in the market place at the government's convenience because people really didn't matter much, only the heads of state and their agendas did. Let's not go there again.

The Big Corporations Excuse

Tibor R. Machan

Anytime I mention to someone from the Left that I consider the scope of government way beyond justice and prudence, I am likely to be told that it is big corporations that make this necessary. And, furthermore, I couldn’t really favor liberty for all if I don’t see corporations as a threat and in desperate need of being reigned in.

So far as I understand it, corporations are just large groups of people who have hired some experts in management aiming to achieve some goal they couldn’t achieve on their own, like grow the company, make it seriously prosper. So long as they do this peacefully, without using coercion to get ahead, I see nothing wrong happening. Size is no problem. This is evident in how we deal with people--some are tiny, some medium sized, some huge but they can all get along fine if no one resorts of violence. And if some big fellow comes off intimidating, a few smaller ones can surely contain him--or her, for that matter.

What then is the big problem with corporations? As far as my Leftist pals would have it, they can wield economic power. But what’s that? They can buy stuff, expand their commercial reach, and flourish, yes, but not without first pleasing their customers. And that means they can only get ahead if they serve others in helping them do the same.

Yet there is one area where corporations can be a threat to liberty, justice, and other fine things. This is where they get into bed with governments. Only if governments are strictly limited in their scope of authority, in what sorts of things they are legally authorized to do, can this be avoided. If governments may yield to public pressure to undertake various tasks like giving subsidies, bailing out failing companies, restrict foreign trade, and so forth, this will invite business corporations to seek or lobby for their help. And there is only so much help governments can give, so those who will get it will have an unfair advantage and will also be able to wield influence and political power.

This is where the trouble with corporations arises, although various other associations can gain similar favors from government, such as unions or large professional groups. What is the answer?

There are those who say nothing can help but giving government the countervailing power which will keep corporations in check. I have never found that a convincing solution. After all, usually the problem is government and corporations (or some other group) getting into bed together and running roughshod over others. (This is that famous process euphemistically called wealth redistribution and commonly advocated, naively, as a means by which the unfortunate will be helped but which in fact involves a lot of what economists call rent-seeking, taking from Peter and providing for Paul.)

If one is an economic determinist, one may think that nothing can be done to prevent the corporate state from engaging in predation. But what if education and some prodding can in fact help? What if people could learn, in time, that governments need to be limited to the exercise of certain specific, limited powers--as the American Founders put it, to “securing [our] rights”? What if we could advance along such lines just as we have made progress in the fight against slavery, racism, sexism, and other evils?

The approach taken by libertarians, over all, is to have confidence in the power of reason, in the capacity of human beings to learn to be just. Takes time, yes, but is it hopeless? If it is, then so would be entrusting the taming of the giant corporations--the title of an early book on this topic by Ralph Nader--to governments. Public choice theory has pretty much demonstrated that it is futile to count on government to behave in the saintly way it would have to if this approach held out promise.

The famous statement of Lord Acton, that “Power tends to corrupt; absolute power corrupts absolutely,” is right and undercuts the hope that the way to contain corporations is by giving governments greater powers. Why those on the Left don’t appreciate this baffles me.

The End of Exceptionalism

Tibor R. Machan

America has been thought of as an exceptional country because of its basic political principles. In particular, the recognition of individual rights, the sovereignty of the citizens instead of some king or even democratic assembly, rendered the country extraordinary as far as the nature of human community life is concerned. Although there have always been some who tried to point out that statism is a farce, that government is not what's important in human communities but the individuals who make them up, this idea gained explicit official recognition (in law, in public policy) only with the emergence of the United States of America. The Declaration of Independence, specifically, laid out ideals of human community life that were entirely exceptional, unique, compared to what has prevailed throughout history and dominates the world even now.

But none of this implies that what made America exceptional was the sole feature of this country's system of laws and public policies. America has always been a mixed system. It barely escaped become a monarchy--George Washington had been offered the throne but refused it! Alexander Hamilton much preferred the centralized government of Great Britain to the loose federation that had been the original USA. There was a huge debate about whether the country should have a traditional government-managed central bank and the supporters eventually won.

In short, many, many aspects of the United States of America did not conform to what made it exceptional, namely, its substantially free system. The capitalism so often described as America's political economy was never complete or pure, not be a long shot. Everything from blue laws in thousands of local communities to eventually massive taxation throughout the country undercut the capitalist elements. And later came all the government regulations, based on a (deliberate?) misreading of the U. S. Constitution's "interstate commerce clause." ("To regulate" was supposed to mean "to regularize" not "to regiment.")

None of this should be surprising. After all, for centuries on end throughout the world the dominant form of human community life has been and still is some variety of statism, a top down rule by some people of the rest. In most of history the rule has been brutal, unlimited, and only in some spots and after a while did it become popular to limit governments as the Magna Carta proposed. The notion that government should confine itself to "securing [our] rights" was indeed exceptional and still is. Opposite ideas, however, were quite popular, also, and still are, including with most of the intellectuals and scholars in the field of political theory. (One need but consider that in a supposedly free country education from the primary to the higher levels is mostly administered by governments. That is directly opposed to the notion that government should be limited in its scope to securing our rights!)

One reason all this needs to be considered is that too many people are aghast that Barack Obama is leaning very strongly in the direction of a socialist type government. That would be one wherein the wealth is deemed to belong to society, people themselves belonging to the state, and governments distributing and redistributing much of the country's wealth. There are numerous prominent law professors, for example, at prestigious universities who write books devoted to arguing that private property rights are a myth. (Just consider Professors Liam Murphy and Thomas Nagel, very prominently published book, The Myth of Ownership [Oxford University Press, 2002].) So the idea of socialism is by no means extraordinary in this society despite its going against its basic, original political philosophy. Senator Obama is, in fact, much closer in his outlook to what millions of college students are taught day in and out than to what made the country exceptional by way of what's contained in its declaration and constitution.

Unfortunately all of this is not much discussed in America's high schools and colleges. So when it comes to light in the popular media, it takes most people by surprise. It is time, though, that they realize it all and maybe do something about it next time they get the chance.

What Fundamental Change?

Tibor R. Machan

Senator Obama won over millions of voters by promising fundamental change in America under his leadership. He was not specific about what kind of change but there were hints here and there and by now a fairly clear picture of the proposed basic change has emerged.

In America the way people became better off economically is by working and earning a living from their work. A bit of luck never hurt and some also experienced setbacks. But in the main the American system did not involve fixed economic classes, huge groups of people whose level of prosperity is fixed and rarely if every changes for better or worse. Instead, the American system approximated an on-going, never ending marathon race, with people's positions changing for the better or worse, depending on their self-initiated effort and some luck. Over all, the economy was taken to be, mostly correctly, a win-win process. One person's gain didn't come at another's loss--in all the billions of deals that were struck, big ones or small, all the parties were taken to come out ahead, as judged by their own needs and objectives.

This, indeed, is one central reason so many people from across the globe wanted to be living in America. Elsewhere they were pretty much stuck, for a variety of reasons. They included their social situation from which it is difficult to escape without gaining political pull, favor with the government and members of the upper classes. In America the idea was that people could move without such favoritism, at least in the bulk of cases and government would stick to guarding the rules of the process, with no theft, no fraud, no deception tolerated.

But it looks like that this picture of the economy in America, admittedly never fully realized, will now be systematically altered. Instead of accepting that the citizenry is stretched out over a lengthy economic continuum, from poor to wealthy with all the steps in between and the positions they hold constantly changing, the dominant picture now looks like what it used to be in feudal times, with a small segment of very rich at one end and a huge number of poor or moderately well off at the other. And this is seen to be fixed unless someone like Barack Obama and his team of government managers interfere and forcibly spread the wealth around.

The way the Obama team sees the American economy is that it involves what is called a zero sum game--someone's gain must be another's loss. Wealth is static. For those who lack it they need to take it from those who have it. And since ordinarily that would be criminal, it needs to be accomplished politically, in which case it is deemed to be legitimate wealth redistribution, a matter of socio-economic justice!

This picture also assumes that wealth just happens, that it doesn't require that people create it. Thus no one earns the wealth he or she owns--it just happened to come his or her way. And when some have a good bit of wealth, it must mean they were overly lucky and that, of course, is quite unfair. Those who lack wealth or a good bit of it are, in turn, unlucky. There is nothing they could have done other than what ended them in their situation. And that's grossly unfair.

To remedy the unfairness of it all, the fundamental change that Barack Obama and Co., and their supporters imagine must be achieved in Washington, D. C., the center of the country's political power (certainly not its economic engine). It is not work, entrepreneurship, investment, and some luck that will bring about the prosperity of those who haven't enough of it. No, it is politicians and bureaucrats making policies that will redistribute the wealth of the country. They will tinker with the economy, regulate business, assign privileges and duties and that way they will bring about basic change. They will institute a planned economy, one that rejects the ideals of the free market, of what the Nobelist F. A. Hayek called the spontaneous order, in favor of a highly regimented system.

Of course, that fundamental change has been tried over and over again throughout history, recent and ancient. Earlier it was mercantilism that embodied the idea of a top down planned economic system. It is this system that was criticized by Adam Smith for failing to enable people to produce wealth. Later the top down idea was embodied in socialism and fascism. Both of these were in time total flops.

We will now probably see whether Barack Obama and his team can work miracles by doing the impossible, ordering people to make wealth and taking it from them and redistributing it according to their vision of fairness.

Democracy, When It Suits Me

Tibor R. Machan

Back in the 1970s I think it was, California had one of those referenda on whether to slap huge taxes on oil companies and the thing lost. The person who was an avid supporter—maybe even the main organizer—of the effort, Bill Press, was very unhappy with the result. If I recall correctly, he alleged that the election was rigged, that Big Oil bought off the voters, etc., etc. Press didn't simply accept that his side lost.

Democracy has this about it: most people don't much like being subjected to a vote when it comes to their basic beliefs and conduct. If Big Oil really owes huge bucks to the rest of us, it shouldn't be a matter of a vote whether it will pay up. Indeed, a great many matters on which people get to vote should not be subject to a vote at all. A system of limited government means, among other things, that government doesn't get to intervene with our lives, even when a majority of the voters would prefer that it did. Notice, for example, that no referenda are acceptable about whether Catholics, Methodists, Jews, Moonies and other faithful are free to practice their faith. The First Amendment to the U. S. Constitution, combined with the doctrine of incorporation that applies the amendments to the whole country, rules out voting on people's religious practices. Or what they may publish in their newspapers.

Sadly, however, democracy today is taken to apply to nearly everything else. Voting on whether one may elect to die with the aid of a willing assistant? It is no one's business but the parties who are directly involved and thus voting on the issue is in essence like voting on whether some of us should be enslaved!

This is how it is with California's recent vote on whether gay marriages should be banned. It is no one's business apart from the couple's whether they should get married. Sure, tradition promotes only heterosexual marriages but tradition is no guide since it is all over the place, proposing this here and that there. So long as gays marrying each other forces no one to do anything—and, yes, there are problems with that since once married, the government requires others to treat the couple in certain ways no one should be forced to treat them—it is no one's proper authority to prohibit it.

Because with marriage come various legal privileges that others must provide, the matter isn't all that simple. We aren't just talking about the freedom of gays to marry, to do what they choose to do without compelling others to do anything. Married couples have mandated privileges at work, in renting their homes or apartments, and so on.

So when it comes to the right of gays to marry it turns out that is not all that's involved. That right would appear, at first sight, to simply establish a freedom from interference but, in fact, it also establishes entitlements. People who believe that gays are breaking God's law, for example, will have to fork out support for gay married couples unless there is a ban of the kind that passed in California. Yet, of course, the mandated support for gays is matched by mandated support for heterosexuals. Bottom line: both gays and bigots have rights, including the right of disassociation!

Yet, that should be dealt with apart from the marriage issue. Should people receive legally mandated benefits from being married? No. Anyone has the right to marry and that's it. Others may not be imposed upon by this and one reason there may be resistance to gay marriage is that it requires those who object to it to provide it with certain kinds of support, not simply to tolerate it.

More generally, though, people have all kinds of rights to act one or another way and no one ought to have the legal authority to interfere. To make it possible to vote on such issues—like whether one must take sensitivity classes at a university (another California law)—is already to pervert democracy, which must be limited to issues that do not involve rights violations (like who will be the president or the local sheriff).

The illiberal kind of democracy now running amok everywhere is likely to destroy democracy where it is quite justified. After all, unlimited democracy can be used against itself and has been in many instances that even saw dictators come to power "democratically." In the California case gays should have no obstacles placed before them when they want to marry but should also not demand that their critics be required to support them.

American Commissars

Tibor R. Machan

Back in 1859 Abraham Lincoln noted that “All this [the economic success of America] is not the result of accident. It has a philosophical cause. Without the Constitution and the Union, we could not have attained the result; but even these are not the primary cause of our great prosperity. There is something back of these, entwining itself more closely about the human heart. That something, is the principle of ‘Liberty to all’—the principle that clears the path to all—gives hope to all—and, by consequence, enterprise, and industry to all.” In a related vein, Lincoln also said that “No man is good enough to govern another man, without that other’s consent.”

However much actual public policy may have departed from these strong moral convictions, it was at least acceptable back then to openly declare them.

In contrast, what many very prominent public thinkers proclaim these days has a rather different ring to it. At a recent presentation of his ideas, the political economist James K. Galbraith made no secret of his enthusiasm for the state’s regulation of American citizens. He spoke with open nostalgia about the times when he was in Washington making rules for people to follow. (And I am convinced he is looking forward to be asked by the next US president to return to his favorite job as an economic regulator.)

Another famous American public thinker, a Nobel Laureate no less, MIT’s Professor Robert Solow, pontificated along similar lines in a recent review he penned, in The New York Review of Books, of Peter Gosselin’s book, High Wire: The Precarious Financial Lives of American Families (Basic Books, 2008). The review essay abounds in paragraph after paragraph of elitist proclamations about how government ought to regulate people’s lives because that is the best way for them to be insured against various disasters. No need to go into the details here—the theme is a very familiar one, especially in the pages of TNYRB. The following passage should, however, give one a very clear flavor of the thinking behind these elitist notions:

“The standard argument for leaving all the responsibilities and decisions to the individual in the free market is that, in appropriate circumstances, that is the route, and maybe the only practical route, to economic ‘efficiency’.”

There is more but that is no relevant here. My reason for focusing on these ideas is not so much to dispute them from the viewpoint of sound political economy but to examine them as instances of rank and immoral political elitism. Galbraith, Solow, et al., are the kind of people who take it as unquestioningly given that they are entitled to regiment the society in line with their superior vision. Never mind the consent of the governed, never mind “liberty to all.” Such notions appear to strike these people as primitive and no account needs to be taken of those who might protest being nudged about, regulated, regimented by these high minded intellects, the government’s eager chevaliers.

When at a recent presentation of his views I challenged Professor Galbraith to address the argument of public choice theorists—that school of economists who contend that government regulators are entirely unsuited to be entrusted with regulating us, with exercising the power of government so as to set things right in society—he simply ignored the question. It was evidently beneath him to pay heed to those who express skepticism about the suitability of the likes of Solow and Galbraith as paternalistic regulators who use the vague notion of the public interest as their excuse to govern other people.

I don’t know about you, dear reader, but I am baffled why there are such people, especially in America, how they manage to convince themselves that they may govern others without those others’ consent. I remember similar but rougher versions of these people, back in communist Hungary, the commissars who unhesitatingly ordered us about, knowing full well that their authority arose from sheer power, period. Sadly, the likes of Solow and Galbraith probably imagine themselves more sophisticated than those commissars. But, of course, they are every bit the same.

Obama, Franken & Socialism

Tibor R. Machan

The race in Minnesota was still too close to call on Friday, November 7th but the fact that Senator Obama, who had by than become president elect of the United States, made a strong plea for electing Mr. Franken is a significant and distressing clue to what we are in for over the next several years. Senator Obama sent this message to Minnesota voters:
“I will say that your candidate in Minnesota, Al Franken, is going to be an important part of a coalition that brings about change. He’s really, I think, in this to fight for working families. I’m looking forward to seeing him serve in the Senate.
“And if people are looking for fundamental change over the next eight years, then I think an Obama-Biden ticket, Al Franken in the Senate, is going to be the best answer for working families all across the state.”
Al Franken would indeed strive for fundamental change in America’s system of political economy. “Fundamental” means that the change would amount to completely, basically altering America’s political system. This is also what was suggested in the interview that came to light late in the presidential campaign, one given by Senator Obama in 2001, where he complained about the Declaration of Independence and the Bill of Rights because these did not include a basic right to have the wealth redistributed throughout the country. He also expressed dismay with the legal reforms brought about by the Civil Rights legislation of the 1960s, lamenting the fact that the rights enacted as laws of the land did not include the fundamental human right to be provided with economic support.
After Senator Obama had his brief exchange with “Joe the Plumber,” a debate ensued about just how fundamental a change his doctrine of wealth redistribution would amount to. It was noted by some commentators that holding this doctrine does not make one a socialist. And that is strictly speaking right--advocates of the welfare state, Europe’s Third Way, the mixed economy, and similar hybrid systems of political economy aren’t full blown supporters of socialist systems akin to those in Cuba, North Korea or the former Soviet Union. To become such a full blown socialist, one would have to embrace the idea of the public ownership of the major means of production and of the view of human beings as cells in the larger, more important organism of society or humanity.

But one can come pretty close to this kind of a socialist by wanting to bring about fundamental change in America’s partial capitalist system, one that embraces, at least rhetorically, the basic right of everyone to private property, to freedom of contract, freedom of association, etc. Wanting to change from this kind of system to one that promotes wealth redistribution as a basic feature of society does come very close to embracing the basic tenets of socialism. The idea that it’s the public that owns the country’s wealth, and that government has the role of allocating this wealth among us, may not be soviet socialism but it is very likely a so called democratic version of that system. The difference is that under soviet socialism the strong central government runs the economy according to a blueprint whereas under democratic socialism the government runs the economy in line with what the majority of the voters decide.

In practice, however, the difference is not great. The democratic process isn’t equipped to provide detailed guidelines for managing the economy. At most it can send presumably skilled representatives who will take up that task but then they will carry on pretty much as would the planners in the soviet system.

I remember when Mr. Franken was doing some of his comedy routines for Saturday Night Live and recall how I could detect a very strong tendency toward egalitarian, socialist, and even communist principles. No one made much of it then, given his role as a comic. But anyone who is aware of alternative systems of political economy could tell well enough which way Mr. Franken was politically inclined.

America is, of course, a mixed economy but it does appear that with the leadership of Barack Obama and the help of the likes of Al Franken it will be guided away from virtually all of its capitalist features and head decisively toward socialism.

How Big a Change?

Tibor R. Machan

Supporters of Barack Obama regard his election as promising significant change. If what they mean is that America has elected someone resident who is widely taken to be black or African American, the change is culturally significant, yes. But is it politically?

Senator Obama does appear to openly champion certain ideas that few others on the national scene have in American political history. Yes, there have been some who have promoted wealth redistribution, and one or two has actually run for president, none has come even close to winning such high office.

Senator Obama’s wealth distribution ideas are important because they challenge a basic tenet of America’s founding documents, both philosophical and legal. In the Declaration of Independence everyone is said to have an unalienable right to his or her life and liberty, as well as to pursuing his or her own happiness. Of course, never has American political reality fully implemented this idea but lip service has been paid to it all along. No major candidate has explicitly challenged the Declaration’s ideas, especially the one about one’s right to liberty. When one advocates wealth redistribution by the federal government, one is challenging the idea that a person has a right to liberty—the liberty to obtain and use wealth as one sees proper is contradicted by it. Put generally, in line with the philosophy of the Founders it is individual citizens who get to distribute their wealth as they want to. Senator Obama, in contrast, openly advocates that government be the wealth distributor in society, not individual citizens and groups of them (in their various interactions).
But the Senator may bring one change that Americans ought to welcome a great deal, namely, put an end to America’s foreign military adventurism. However, wealth redistribution by government is no great novelty since the practice has been going on in American forever. Indeed, America has been, like so many other countries in the so called free world, a mixed system, combining elements of several theories of political economy, socialist, fascist, capitalist, etc.

Contrary to what some prominent but sadly untrustworthy historians of the American economy claim, America has never had a capitalist economy. So Barack Obama’s views are not at all far off the beaten path. His view is the more direct and unabashed articulation of the theory that the government exists in part to take wealth from some people even though they came by it honestly, and transfer it, with or without their consent, to others whom officials in the government decide should have it. That idea has thus far been anathema to America’s official economic philosophy—the exceptions had been just that, exceptions. Now it has ascended to a dominant position in the rhetoric of American public policy.

Does this mean that all the talk of change is but empty rhetoric? That can only be judged by those who know Barack Obama far better than I do. Some of his history, some of what he has said in the past, would point to his wanting to make America into more of a democratic socialist system—the government gets to decided how resources are distributed in the country, nominally based on the voting majority’s priorities. Never mind private property rights or freedom of trade. Yet, as noted already, this has been the reality for a long time. The novelty is its promising to become official public policy.

The fact that Barack Obama is “black,” an African American, also adds a novelty, a change, if you will, but this one is more cultural than political. Had it been a black candidate who defends capitalism the novelty would be the same but the policy implications of it would be none. That indeed is the idea of a color blind political legal system, that a government official’s color, race, ethnicity, etc., matters not a whit.

Culturally, though, Barack Obama’s election has considerable significance since it challenges in no uncertain terms the widely repeated charge that all Americans are racists. (This is not hyperbole—several contributors to The New York Review of Books repeat this every year.) But I do not believe that is what Senator Obama and his supporters had in mind when they talked about making changes in Washington, D.C.

In either case, however, the substance of public policy in the country is not likely to change much at all. We will remain a mixed system, a welfare state, with various factions or groups of Americans aiming to have their government officials transfer wealth to them out of the pockets of those who legitimately own it.

Selling the Rope...

Tibor R. Machan

Lenin--or was it Marx or Stalin--is said to have observed that "The Capitalists will sell us the rope with which we will hang them." (Attribution is mixed!) What this means is that people who are in business aren’t political philosophers or economist but have an obligation to make their firms prosper. Because of this they tend to overlook certain possibly dire consequences of their professional conduct.

Business isn’t the only profession with this tendency. Doctors don't look into the backgrounds of their patients, nor do teachers of their students. Indeed, most professionals offer their services without looking into the motivation of those with whom they are trading. And nearly all of us do this when we trade--we go to the mall and purchase stuff from people and companies we barely know. Who knows what is the politics of one’s barber, butcher or baker? Very few of us. And at times this can be a serious oversight. We could be supporting terrorists or criminals!

On the other hand, taking great care about the beliefs of those with whom we do business can also amount to a mistake. Suppose you are Jewish and after the fall of the Third Reich you decided never to purchase a German made automobile, figuring that many who would profit from the deal were complicit in the Holocaust. Well, but many were not, as well.

The market place is just that, a place where deals are made and very little else occurs except accidentally or unintentionally. Every deal benefits both sides, or so each side believes, and that’s all that is promised, no more. Because of that, no one can complain unless something really big is at stake that lies hidden behind the deal.

In a small measure it is possible to witness this all around us. Television and movie production firms bank roll projects that present business executives as shysters. Just think of Wall Street or Erin Brockovich. Think of Michael Moore's ventures. A very ironic instance of this is the many volumes published by book companies supporting the idea of corporate social responsibility or stakeholder theory or corporate management, an idea that actually undermines capitalism.

The managers of these companies, you see, have the obligation to work for their owners, investors, shareholders, and so forth. This does not preclude some pro bono work or being considerate of the needs and wants of employees or even various organizations seeking support within their communities. But their duty is, first and foremost, to enhance the economic welfare of their owners by means of the tasks they set out to perform, publishing books.

Nonetheless, many publishers put out books that advocate just the opposite. Instead of serving shareholders, the authors and contributors of these books want companies to serve stakeholders or society. Not just as part of some limited pro bono work but full time.

For instance, Ashgate is a company in England, with outreach worldwide, that recently put out a corporate social responsibility series, edited by one David Crowther of De Montfort University in the UK. Each of the ten volumes is filled with essays that defend or analyze the idea that corporate commerce must be in the service of society, first and foremost. The company seems to be totally oblivious to the fact that its own management may be complicit in violating the very principles advocate in this proudly published series of books.

The reason is, of course, that the managers of the firm are looking at one thing primarily, namely, what kind of publishing will garner the best profits. If it turns out that the type of publishing that does this amounts to bringing out books that actually attack, consider it immoral for, companies serving their owners and investors first and foremost, that’s not their concern, not ordinarily.

Not that it should never be. Once the managers can see that publishing these kinds of books undermines the very principles in line with which they carry on their business, they would be remiss continuing their program, at least without also putting out works that are critical of the Corporate Social Responsibility doctrine.

The division of labor is a good thing, economically, but when it comes to the broader area of political economy, one must become a conscientious citizen, not simply a skilled profit seeker. Perhaps those rope-makers and rope-sellers needed to know this before they went into business with Stalin and Co.

Maybe Herbert’s Projecting

Tibor R. Machan

Bob Herbert, The New York Times' columnist who is obsessed with the topic, claims that Tuesday’s election will be about how much voters are concerned about Senator Obama’s race. Well, I certainly have no concern about the senator’s race and Herbert’s thinking that many voters do suggests this kind of faulty judgment on his, not on their, part.

I bet that what voters have far more concerns about is Senator Obama’s economic philosophy, just as they probably have concerns about McCain's inept running mate and his apparent refusal to plan to scale down and stop that disastrous war in Iraq!

Actually, race is nothing--might as well be concerned with Obama's height or McCain's lack of it or thinning hair. Bob Herbert appears to be projecting instead of reading the electorate correctly. Yes, there will be those who are thinking about the Illinois senator’s race, whatever that actually is (for that itself is quite ambiguous, not to mention irrelevant). But I would bet that many voters reading Bob Herbert’s ridiculous column are more concerned about the kind of race-baiting he is engaging in than about anyone’s race. What, after all, could race have to do with one’s capacity to perform the job in office he or she seeks?

Even if some voters will vote for the senator just because he is “black,” that is itself may not be so much because they are racists but because they believe that by voting for a black candidate, they are taking a stand against the remaining racists across the country. This is too bad but it is not being a racist to do so. It is more like a reaction to many years of racism people have seen against blacks. One might best construe this as a type of defensiveness.

After all, what are those to do who have been witnessing and decrying racism against blacks throughout their lives when finally a black person does run for office? Most do not know whether Senator Obama has the makings of a good president or whether perhaps it is Senator McCain who does. In our time it seems to be the consensus on strategy that no one lays out his or her basic political philosophy so that voters can make a general assessment of the individual's qualifications. Instead candidates provide lists of promises they propose to fulfill at other people’s expense. Which makes them pretty much indistinguishable. So then given the history with racism in the country, it is not all that surprising that race will be, for some, a kind of last resort factor, especially on the part of blacks who have been targeted with racism far more than whites have been.

What actually is really wrong with racism? It is to judge another individual based on something over which he or she has absolutely no say. As Martin Luther King observed in that famous sentence of his, what matters about someone is the content of his or her character, not the color of his or her skin or, indeed, where he was born, whether man or woman, etc. All these factors about people are beyond their capacity to have any control over. They cannot demonstrate someone’s decency, wisdom, skill or the like.

Racism is an insidious lumping together of people based on having in common something utterly irrelevant, who could differ from one another in matters of substance. Which is why racism is prejudice--pre-judgment. It amounts to judging someone prior to knowing the person’s important attributes, based on ones that matter not even a bit. Such collectivist assessment of others goes hand in hand with prejudices based on ethnic membership, gender, or original nationality, factors over which one has no say, once again.

In contrast, judging someone by his or her political affiliation, even religion, is quite different, or at least can be. These are matters people can certainly choose once they have reached maturity. And some such choices could well be objectionable. Not that some of the assessments based on religion or politics cannot be irrational, when done thoughtlessly, but they need not be. What a person believes is something open to evaluation by others because it matters in how one lives, which can be ranked as good or bad or something in between. All this is very different from judging human beings based on their race.

Sure, there are racists voting in America but I bet that most people worry less than Bob Herbert does about a candidates’ race and more about what’s on their minds and what they might do in office.

What about Wealth Redistribution?

Tibor R. Machan

Ever since Senator Obama’s brief exchange with “Joe the Plumber,” there has been plenty of mention of wealth redistribution in the major media. Then came the recovery of a 2001 interview in which the Senator faulted the framers of the U. S Constitution, and the Founders who authored the Declaration of Independence, for not including a right of everyone to be helped with redistributed wealth. As some have noted, this was all discussed in connection with the Civil Rights legislation which Senator Obama also faulted for its lack of attention to wealth redistribution--maybe reparation, as some have interpreted him. But the central point was more general, clearly.

It is useful, then, to consider just what wealth redistribution is all about. But to do that, we need to consider briefly what wealth is and what amounts to its initial distribution such that some favor its being redistributed.

Wealth is whatever someone owns that he or she and others consider valuable, useful to themselves or others. The ownership, in turn, can arise from working on what is given in nature or by way of earnings from marketable labor, or from gifts and inheritance from those who had earnings in the first place, or from good fortune (as when one wins the lottery or unexpectedly finds oil beneath his land), etc.

There is an ancient dispute about whether such ownership is best regarded as private or as public. At first the dispute was carried on in terms of what type of ownership, private or public, would be most useful or productive. Aristotle gave his defense of private property as follows: “For that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few." (Politics, 1262a30-37)

The historian Thucydides made a similar point when he spoke about owners of public property. He wrote that “[T]hey devote a very small fraction of the time to the consideration of any public object, most of it to the prosecution of their own objects. Meanwhile, each fancies that no harm will come to his neglect, that it is the business of somebody else to look after this or that for him; and so, by the same notion being entertained by all separately, the common cause imperceptibly decays. (Thucydides, The History of the Peloponnesian War, bk. I, sec. 141).

It was, however, not until the English philosopher John Locke laid out his theory of natural rights that more than a utilitarian case was produced in favor the right to private property. For Locke once someone mixes his or her labor with something in the wilds, that thing stops being public--or God’s--and becomes, as a matter of morality, his or her private property. This is because the work invested is properly rewarded with ownership. Thereafter the owner has the right to hold on to the property, exchange it from something else with willing others, give it as a gift to someone, bequeath it to his or her offspring, and so forth. (As to wealth come by via luck, no one is justified to take it from those who are lucky, it can be inferred, otherwise people themselves could be enslaved with impunity.)

A very important feature of Locke’s idea, however, was that property doesn’t belong to the king, state, or government but to private individuals. It is they who work on elements of the natural world, of what is not owned by anyone else, so they are free to obtain it, hold it, trade it, etc. For others to stop them is wrong, a violation of natural rights.

Many have criticized all these ideas, especially people who hold that everything belongs to everyone together and so wealth may not be freely used and distributed by individuals, only by "the community." But, as Aristotle and Thucydides and many others since them have made clear, this idea is seriously flawed and entirely impractical. It leads to the tragedy of the commons, of people all grabbing what they want from the common wealth and failing to use it productively.

Both for moral reasons--the “first come, first gain” principle--and for practical ones--community ownership leads to wastefulness--the principle of private property rights gained influence in Western societies, in their legal and economic systems. This is one main reason that when Senator Obama suggested that what this country needs is systematic wealth redistribution--routinely taking from private owners their wealth and having governments distribute it to non-owners--many folks took umbrage. This is quite an un-American, anti-free market capitalist idea and sounds more like what is preached by socialists and communalists (even communists).

Of course wealth redistribution is a big part of existing American society but it is usually defended for special reasons, not as a general policy. Senator Obama elevated what seemed to most to be an exception in this country to a central feature of the society. And his opponent, of course, couldn’t effectively criticize him because Republicans have been just as willing to redistribute wealth as Democrats, albeit not advocate it as a systematic feature of the legal system as Senator Obama did.

Adoration of Government Regulation

Tibor R. Machan

On a recent Monday I went to hear a talk by Professor James K. Galbraith, author of the free market basing book, Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too. The talk repeated what so many modern liberals have been saying about the current financial fiasco, namely, that it’s all due to the free market, to the late Milton Friedman’s influence, and that deregulation is mostly to blame.

This is not especially novel, given that nearly everything wrong with America is blamed by such modern liberals on, well, the absence of sufficient modern liberalism in the country’s governance. Why not? Champions of the free market make similar claims when trouble arises—modern liberalism is to blame. And I am often among the latter group. I admit—I am much more favorably disposed toward the principles of a fully free society than toward those of a mixed economy (or even fiercer government involvement in the economy).

Let me spend a line or two explaining why I find the hosannas sung to government regulation by the likes of Professor Galbraith so bizarre. First, government regulators are people, no different from those whom they set out to regulate. Second, governments make use of physical force or its threat in order to achieve their goals, while the free market relies on voluntary interaction by market agents. Third, government regulators lack the restraints that market agents face when they carry out their plans in the market place—namely, the need to earn their resources from willing lenders or buyers. Governments can raise their resources through taxation which is collected whether those paying it chose to pay or not. Fourth, government regulators tend to be far removed from the firms and people they regulate, relying on vague, general information instead of local knowledge that market agents use as they make their decisions.

Other differences exists that, in my view, clearly favor market processes as against government regulation—public choice theory (for which Professor James Buchanan received the Nobel Prize and which was left totally out of consideration by Professor Galbraith in his talk), explains them very well. But let me focus on one particular point made by Professor Galbraith in his support of extensive government regulation. He noted that people in the People’s Republic of China prefer buying goods from America because American goods are produced with the benefit of government regulation. So they can be trusted, while those in regions around the globe that lack government regulation are untrustworthy.

This is what is called in logic a non-sequitor because the conclusion does not follow from the premises. Chinese may buy American goods but that could be for innumerable reasons other than that the production processes are regulated by government. Generally American production has a very favorable reputation around the globe. Yes, American goods tend to cost more but that’s because American labor and management is more expensive than labor and management elsewhere. However, one tends to get what one pays for, namely, pretty good products.

American technology is far more advanced than technology elsewhere, which also contributes to the higher quality of American goods. Science and technology in America is top of the line—just count the number of American scientists who have won the Nobel Prize and consider how many foreigners come to study at American technical universities such as MIT and Cal Tech.

Furthermore, even if some of the confidence in American products stems from the fact that there is government regulation in America, it doesn’t follow that government regulation is indispensable. There are plenty of scholars who have found serious flaws in the regulatory process, such as the slowing down of drugs coming on the market because of irrational rules imposed by the Food and Drug Administration, the capture of regulator agencies by the very firms they are supposed to regulate impartially, etc.

In addition, and very importantly, Professor J. C. Smith’s “The Processes of Adjudication and Regulation, A Comparison,” published in a book I helped edit, Rights and Regulation, Ethical, Political, and Economic Issues (Pacific Institute for Public Policy Research, 1983) lays out the case in favor of changing from government regulation to legal adjudication where now the former is deemed to be necessary.

Finally, there is a fundamental injustice involved in most government regulation. This is prior restraint. Burdens are imposed on citizens who are being subjected to government regulation without it having been demonstrated in court that these burdens are deserved. This amounts to treating citizens as if they had been convicted of a crime whereas, in fact, all that can be held against them is that they might possibly do something wrong, injurious, harmful to someone.

The adoration of government regulation is misplaced and belongs with the ancient practice of deference to the monarch who was deemed to be superior in wisdom and virtue to ordinary “subjects.” This paradigm should be tossed. Free men and women deserve better.

M.A.S.H. and Lessons in “Liberalism”

Tibor R. Machan

Many moons ago, when I would now and then check out the very popular TV comedy show M.A.S.H., I noticed that whenever their rightwing villain Frank Burns (played by the late Larry Linville) acted badly, the good guys, lead by Alan Alda’s character, Hawkeye, had no compunction about physically assaulting him. They set traps that would clearly injure him. It was not enough to ridicule him, show up his views as asinine, no. The writers, directors and actors had no problem at all with hurting him.

A few days ago I decided to check out a new legal drama, “Raising the Bar,” and lo and behold the second show featured one of the extremely politically correct guys--you know, the one with the long hair and oozing with sentiment for the little guy, never mind what made him little or how guilty he or she is--punch out one of the politically incorrect ones--you know, the guy who comments on women’s physical attributes and makes nearly racist or ethnic jokes. Evidently, here too, it mattered none that the offense was confined to words. These words deserved to be punished and punished not with equally painful words but with out and out physical assault.

Interestingly both of these shows appear to be emblematic of the political ideology of contemporary liberalism. If something is objectionable, it deserves to be punished good and hard, never mind that no one was actually made to physically suffer, no one’s rights were violated, nada. In the 1980s there was a wing of feminism that made this feature of modern liberalism quite explicit. The University of Michigan law professor, Catharine A. MacKinnon, wrote a book laying out the position. It was titled Only Words and published by Harvard University Press. The thesis put forth was that pornography and other insults toward women need to be banned or punished, if need be by prison sentences. Never mind that the offense consisted only of words. It needed to be dealt with harshly, with physical force.

I mention this because it is often claimed that the Left in America would never go so far as, say, Hugo Chavez of Venezuela, in dealing with opponents to its ideas and policies. But there is reason to think that the American Left can easily degenerate into using physical force when it encounters opponents. M.A.S.H. indicated as much, as did this episode of Raising the Bar and, of course, Professor MacKinnon’s book.

But, you might say, no one in government, however Left leaning it might be, would ever resort to silencing the opposition, not in America. Well, think again.

A little while ago, when the hysteria about global warming was at its highest pitch, when Al Gore’s An Inconvenient Truth made the rounds and garnered its Oscar, some “liberal” members Congress--and I have to put quotes around liberal since it so perverts the meaning of that term--tried to institute certain measures against people in business who would make contributions to think tanks and researchers who were skeptical about global warming. Several such organizations were actually named, including the Competitive Enterprise Institute in Washington, D.C., which had received, I believe, some little support from certain corporations. Whatever governmental favors these corporations received--and, mind you, I think no corporation should receive any such favors--were to be withheld from them if they continued their support of global warming skepticism.

This is worth observing when it is widely believed that only those on the “extreme Right” would use coercive force or its threat against their adversaries. Such policies are usually associated with extreme right wingers or fascists, not with extreme Left-wingers or socialists. But this is entirely mistaken.

In fact, both of these wings, Left and Right, believe in using coercive force to try to have others follow their ways. What else does redistribution of wealth or faith based government funded support amount to than the use or threat of extreme physical force (jail, prison, major fines, etc.) against the non-compliant? And if such non-compliance were to be effectively advocated--say by those who support tax dodging or other means of withholding their support of various public policies the government carries out, be it run by the Left or the Right--certainly the attitude exhibited in M.A.S.H., Raising the Bar, and Only Words could triumph right here in our supposedly free society.

When the libertarian considers both the Left and the Right dangerous and immoral, it is for these reasons, among many others. Right and Left do not want to leave it to free men and women whether their ideas of community life will be adopted. No, both Right and Left want to make sure their ideas will triumph, even if its takes depriving people of their basic right to live as they choose so long as they let others do the same.

Why McCain Cannot Attack Obama

Tibor R. Machan

In The Washington Times Wesley Pruden urges Senator McCain to take the bull by the horn and attack Senator Obama on the basis of the latter’s nearly full blown endorsement of the socialist idea of wealth redistribution. This is indeed a position articulated by Senator Obama in a radio interview he gave back in 2001 and, yes, it does mark him as at least a democratic socialist. (There are, Virginia, different types of socialism, even one called “market socialism.”)

Trouble is John McCain has no credibility, as a loyal Republican, to attack Senator Obama along these lines. Republicans and Democrats both sign up for various measures that could count as socialist. Has John McCain renounced the progressive tax? Has he attacked the idea of taxation as a form of wealth confiscation, arguing that it should be given up in a free society in favor of some kind of voluntary system by which to fund the government? Have Republicans abandoned their support for the heavy hand of government in the economy as exemplified by their age old practice of protectionism and handing subsidies to farms and other businesses? are they against government licensing of various professions? are they against government ("public") educational institutions? (All these are defensible mainly from the premises of a version of socialism.)

Of course not. Nearly all governments, other than the type envisioned by libertarians, happily embrace socialist measures. Indeed, the old system of mercantilism that many conservatives look back to with nostalgia is but a different type of socialism, absent its Marxist trappings. Mercantilists champion the heavy hand of government in the economy and everything else, guided by the monarch--and his minions--or some other revered head of state.

Adam Smith himself wasn’t quite the full blown free market advocate some people imagine him to have been. And his defense of the limited free market was based not on individual rights, as would be a defense based on the ideas and ideals of the American Founders, but on the utilitarian notion that with more freedom, the government will be wealthier than with less--this is the point of the title of his famous The Wealth of Nations. It was not that individuals have the right to accumulate wealth as much as they choose and can, provided they do not violate anyone’s rights. This latter is the defense offered of the capitalist, free market system in the spirit of John Locke, not Adam Smith.

In fact, most economists are not pure free market champions since they tend to think that there are market failures which need to be remedied with government intervention. The most prominent such economist was, of course, John Maynard Keynes. In America it was John Kenneth Galbraith, nearly a full blown socialist who worked hard to remake the Democratic party into a socialist one (as his son, James K. Galbraith, is doing now). (Interestingly, there is a parallel in the philosophical relationship between the late Milton Friedman and his son, David Friedman. The former was a committed limited government capitalist while the latter is a committed anarcho-capitalist, someone who denies any justification and need for government!)

In the heat of a campaign, of course, much is said that is only partly meant. Senator Obama is no full blown socialist even though his sympathies lie with an economic system in which wealth is systematically redistributed so as to provide for those who themselves have or make no wealth, never mind why! Senator McCain is certainly no defender of the fully free, capitalist society (as would be the likes of Milton Freidman, Ayn Rand, or Ludwig von Mises). If Senator McCain were to lay into Senator Obama with charges of the latter’s socialism, it would be simple to reply that Senator McCain is nearly as much of a socialist as he is.

So why not stop this name calling and get to the substance, which is whether a free economy is better, in the main, than one that is planned by politicians and bureaucrats. Perhaps this could amount to a topic in the final days of the campaign season that would tell the voters what exactly divides these two candidates.

All This Utter Distortion

Tibor R. Machan

The following letter appeared in my local paper:

"GREENSPAN’S GOOFS It’s nice to see that former Fed chief Alan Greenspan is finally taking the blame for starting the worldwide economic collapse [‘Greenspan,’ Marketplace, Oct. 24]. Former President Ronald Reagan shares in that blame since it was their combined plan to deregulate everything and let the free market ‘take care of itself.’ This has proved that the ‘free market’ without regulations is anarchy."

First, look at the dishonesty: Greenspan did not take blame "for starting the world wide economic collapse." Why should he? He took blame for mistakenly assuming that the self-interest of those running financial institutions would fully coincide with the clients of those institutions and for some of the results of making this assumption. As to Ronald Reagan, he barely managed to deregulate anything at all. His rhetoric was for more individual initiative in the economy and less government involvement but Congress would not budge so nothing much happened.

Then there is the nonsense about the supposedly unregulated free market during the Greenspan and Reagan eras. Government regulation, especially of the financial portions of the American economy, has been in place since the early 1900s. (The very existence of a Federal Reserve [or central] Bank is a regulatory measure that would not be part of a genuine free market!) Regulations were increased enormously during FDR’s ill conceived and ultimately ineffectual New Deal. (The economy recovered because of World War II’s war-time government spending and labor furor.)

Nearly every profession in America, other than the press and the ministry, is highly regulated. Occasionally there is some experimentation with bits and pieces of deregulation but no one escapes all government regulations by the various federal, state, county and municipal bureaucrats who fill government offices throughout the land. The percentage of the wealth in America that has been spent by all these governments has been steadily growing and has never, never substantially subsided.

The other evening I went to hear a fervent champion of government regulations and critics of the free market, Professor James Galbraith, (author of the bizarrely titled book, Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too), and in his talk he also kept saying that the free market has failed even while he admitted that there has been no free market in place ever, despite some of the rhetoric supporting such a system. He went after the late Professor Milton Friedman for advocating greater economic freedom but then said that Friedman’s views failed to have a serious impact. And he implicitly admitted that he and his fellow champions of government meddling in the country’s economic affairs have been triumphant beyond expectations both in America and elsewhere (e.g., in China where he has been a consultant to that country’s utterly despicable tyrannical government).

This oft-repeated mantra about how the free market must have been responsible for the current economic fiasco is a colossal distortion probably meant to confused instead of inform. That’s because America has been a mixed economy throughout its existence, with periods of greater dosages of capitalism and greater dosages socialism but always a mixture of the two. When such a system experiences maladies, it is understandable that supporters of one part of the mixture will jump at the chance to blame the other part for the mess. But it would be reassuring if there were just a bit of honesty in the debate.

For example, I have been arguing that the various government interventions in the mortgage industry--Fanny Mae and Freddy Mack were both created and given orders by the federal government to ease the terms of loans for millions of home buyers--have fueled the current mess but I have never argued that Wall Street hasn’t been complicit or that America has had a socialist system which is to be blamed.

Why can’t those championing more government planning and regulation admit that there hasn’t been any free market in place in America for over a century? It is no easy task to assess the soundness of economic theories. There are no controlled experiments that can be conducted, no laboratory tests, only the very messy history that needs to be studied and untangled to learn the needed lessons to avoid similar messes in the future. But only if the students of history will be honest, will not taint the evidence with their wishful thinking, will it be possible to learn from their work.

How Socialist Must One be to be A Socialist?

Tibor R. Machan

In recent days the issue of Senator Obama's alleged socialist leanings has become the focus of considerable attention in the mainstream media. This was provoked by the Senator's rather explicit support of wealth redistribution--which is to say, the policy of politicians and bureaucrats taxing substantial portions of the resources of individuals and deciding to hand it around according to some formula of equality. This is indeed associated with the political economy of socialism and has been used to guide various socialist economies throughout human history, although there have always been widely different degrees of socialism in different human communities, from kibbutzes, communes, nationalist socialist and international socialist systems to small communitarian arrangements.

Full blown socialism amounts to the view that all of humanity is of one piece, one organism. Karl Marx proposed that this organism develops from infancy to full maturity, communism, over human history. Individuals in this conception of socialism are but cells in the organism. There is no private property because there are no private individualism. The wealth is spread just as food is spread throughout the human organism, normally without favor to any part of it.

But no all socialists are full blown, nor view the system along these developmental lines. Some socialists stress that the unity among people is something they must bring about, as a matter of their ethical obligations. And as such the socialism involved can be more or less robust, depending on how diligently the population works to establish socialist institutions and policies.

Now, arguing that Barak Obama is no socialist because there were many features of American society that are already socialist--the progressive income tax, for example, the expansive eminent domain policy recently affirmed by the U. S. Supreme Court, and several other measures recently instituted to bail out banks and other financial companies--is disingenuous. The questions no one raises to him--none of the interviews and debates I am away of indicate this--is how extensively would Senator Obama get the government involved in the American economy, how he views the institution of private property, who does he believe owns the wealth of the country. From his words over the years it seems that he would favor a far more socialist society than American is now, although it is true enough that America (as many other welfare states) is quite socialist already. That is why political economists have been calling it a mixed economy.

The most important issue is whether under Senator Obama's political leadership the country would be directed to be more or less socialist, more or less opposed to individualism, individual rights, private property, and so forth. And the next issue is whether where Senator Obama wants to take the country would be something proper, desirable, just.

The objections people have to socialism are based, after all, on the fact that the system views human beings as part of a collective, of an involuntary team or community, rather than as individuals with independent choices and the right to decided whether they will join some community. As Senator Obama appears to view things, a society is an integrated organism wherein individuals have no rights, no independent choices, certainly not about their productive efforts and the results of these, namely, their resources or wealth. He seems to believe that it is the government--the head of the collective--that ought to be in charge of what the rest of the people ought to do with their lives. Maybe he would accept some input, via a limited democratic approach, from the "cells of the body." But the decision would be made at the top, by the political leaders.

Even though some of America's laws and public policies are somewhat--in certain cases considerably--socialist, the country is still quite far from the total wealth-redistribution idea that socialism endorses. Arguably Senator Obama, just as Senator Hillary Clinton, consider this a liability and want to remedy matters. (Senator Obama explicitly faulted the American Framers back in 2001 for failing to include wealth redistribution as a feature of the U. S. Constitution.)

This is what the current talk about Senator Obama's socialism should be about, not about whether he is a pure, Marxist socialist.