Liberty versus Stimulus

Tibor R. Machan

Despite all the bad blood and heated rhetoric--name calling, besmirching, hyperbole and other polemics--involved in our current political-economic controversies, there really is a substantive point of considerable difference at issue. Put bluntly, the Obama team is convinced that unless people get a push from the state, or some kind of prompters, they will not move; whereas many in the Tea Party and their allies believe that people will move on their own once they are free to do so.

Free market champions tend, in the main, to believe that what is needed for economic growth--including the ensuing surge in productivity, sales, investments and employment--is for the government to stop butting into people’s economic lives. Once that happens, the bulk of libertarians and free marketeers think, there will be plenty of action, generated by the people who will then be free to exercise their initiative. Freedom of enterprise is the main issue for these folks. They aren’t mean, they do not lack compassion, they just have greater confidence in human beings picking themselves up by their own bootstraps then in others beating them into action, stimulating them to move out, etc. As to those who need help, this too is best left to private initiative than to state action which is fraught with corruption.

In the most general way the Keynesians who are advising and cheering on President Obama consider this free enterprise doctrine primitive, something for which the philosophical and scientific basis has been thoroughly discredited. The grandfather of the American system, John Locke, often spoke as if people did have free will--basically they are all free and independent, he held. Similarly Adam Smith believed that a regime of liberty will unleash the kind of energy that gets people to seek to prosper--that is the gist of the invisible hand idea. Governments may need to help with keeping the peace since there will always be some miscreants who want to cheat their way to prosperity on the backs of their fellows but in the main those are exceptions, The bulk of the population in a society can get on with the job of earning a living, of creativity and productivity, without government meddling and prodding and waiving around all sorts of artificial inducements for people to get to work.

That has been, roughly, the outlook of modern free market political economists, although that’s not to say that all of its champions have been in full agreement about the basic ideas. Free will, for example, isn’t what all champions of economic and political liberty accept but even those who do not hold to the idea that there is some kind of inner drive--some call it self-interest, some the profit motive, some the instinct for survival--that will be unleashed in a free system.

In contrast, the sort of view of human nature found in Keynes and among his followers comes to the idea that to get moving from their natural and preferred state of rest, people have to be pushed or stimulated. Only if policies that exhibit these features are implemented will there be economic activity. (Even the free market champions embrace some of this when they claim, as a lot of them do, that what gets people to work is “demand.” The famous supply and demand idea suggests this, although there are free marketeers who are what used to be called supply-siders, which is to say that they believe the way the economy gets going is with people thinking up stuff to produce and taking it to market which will then generate purchases, etc. So the issue isn’t neatly describable.)

So, the crux of the debate is between those who expect economic growth to come from personal initiative that is usually thwarted by governments and those who believe some super agency needs to spur us all into action--via thousands of regulations and the planning of the economy in ways the state agents think important but the economic actors do not have in mind.

Thus the stimulus that Mr. Obama & Co. advocate comes with state generated public works that are supposed to beef up the infrastructure, create demand for what they think would be important to produce, etc. The free market people, in contrast, leave the economic growth to the multitude of interactions among free economic agents who aren’t told to do this or that, to build roads or bridges or paint or write or whatever (which is what planners usually count on for getting economic activity going). No, the free market champions leave it to the people and their creative and productive initiative to generate economic activity, with results that aren’t predictable and that cannot be planned out by politicians and bureaucrats.

So, the bottom line is that the big dispute is indeed a substantive one, between those who have confidence in freedom and those who trust manipulation--out right force or substantial nudging.

SS: Ponzi Scheme Isn’t the Problem

Tibor R. Machan

Everyone by now knows what a Ponzi Scheme amounts to. We all became familiar with it when Bernie Madoff was caught using it to amass a fortune at the expense of clients who were unaware that his plan to put away money for them amounted to such a scheme.

The issue in the case of Madoff wasn’t actually so much the scheme but the lack of full disclosure about it. Ponzi schemes are legion around the world and people knowingly take part in them. Most insurance companies use them, collecting funds from new clients and paying old ones in part from the new cash. Retirement systems make use of the scheme as well. Those who have paid in are often getting the funds the new clients pay now. So with the social security system.

But the social security system would be no problem if it were voluntary and those who are part of it knew from the start the risks involved. Fractional reserve banking is like that too: when people deposit their money in banks the money isn’t all left in vaults until they withdraw it but much of it is used to give loans and make investments. And clients of the bank know this but figure the bankers are skilled at what they are doing and will not use the funds recklessly, irresponsibly. But they do not expect all costumers to suddenly withdraw their funds; the banks could handle that. But since it is common knowledge, nothing is amiss in such arrangements.

So that’s not what’s wrong with the social security system. The problem is that once you work, you are forced to be part of them system (with only some exceptions, such as when the state you work in has its own similar scheme in play). This, just like the income tax, is a form of extortion. Just like what happens when organized criminals force merchants to cough up money for them or they will burn down the business! Sending working people to jail or imposing immense fines on them unless they pay their taxes, social security or otherwise, is just like that. One has no choice if one wants to make a living: “Pay the government or have no job!”

When Republican candidate Rick Perry called the social security system a Ponzi scheme, a bunch of his critics, even fellow Republicans, expressed shock. Their ire, however, is misplaced. But the Republicans have no more leverage with pointing out that social security is mandatory than would the Democrats. Republicans and Democrats--indeed all political parties other than the Libertarians--favor extorting funds from the citizenry, only for different purposes. So what they argue about isn’t really all that important. Ponzi schemes are everywhere. What is much more problematic is when everywhere some people force others to carry on in certain ways, take part in various schemes, whether they chose to or not.

If there is a feature of the modern world that is basically different from ancient systems is that it is less enamored by outright force--slavery, serfdom, torture, etc. Such things are these days more widely seen as uncivilized, barbaric. And if a political system or public policy embodies coercive force that some use on others, it is now more suspect than it used to be in olden days. Not everywhere, of course, and not even in so called Western democracies. After all, democracies can contain a great deal of coercion and do everywhere you look. Still, the coercion in democracies is less brutal than in systems with top down dictatorial rulers such as the ones in the Middle East.

What needs to be discussed about social security in not the Ponzi scheme element but that is forcibly imposed on all working people in the country, never mind whether they want it or not. It would be quite enlightening if this aspect of social security were debated. That would bring up a central feature of most governments, namely, their coercive nature. That is what the American Founders and Framers were concerned about and while they didn’t reject all coercive policies --e.g., slavery, taxation--they were very hesitant about them.

Welfare Statism and Compassion

Tibor R. Machan*

There are many debates in political theory, most of them focused on what kind of legal system is just. It is an ancient topic, of course, and the various positions do not change all that much, merely get slightly revised by their new generation of champions.

Yet, whatever one’s political convictions, there is widespread enough agreement about what is a political versus an ethical position. The welfare state is a political idea, whereas, say, altruism or utilitarianism is an ethical one. Of course, which is the correct ethical position, which ought to guide human conduct, is also widely debated and has been from time immemorial.

Anyone aware of this elementary point of the history of ideas knows, also, that it is a central feature of any ethical position that when it is practiced by people, they need to practice it voluntarily. No moral credit accrues to someone who does what ethics requires because he or she is coerced to do so. Every parent knows that a child begins to mature ethically when good behavior is exhibited as a matter of free choice, not out of fear of physical punishment. This is regardless of what school of ethics is expected. Whichever ethics is correct, it only earns moral merit if it is done from choice, never because it is done from fear.

Another elementary point is that while support for a given political position can gain one moral credit, that too must be voluntary. If you place a gun to someone’s head and march the individual down to the polling place and he or she votes for a candidate or measure because you have forced it on him or her to do so, that is not credit worthy either. Whichever is the correct political position, it too must be a matter of free choice for one to gain credit for championing it.

So once this is appreciated, let’s suppose that it is morally creditworthy for people to act compassionately, to offer their help to those who need it. Once again one could gain credit only if one acted so because that is what one wants to do. And that’s so with other virtues as well. One is morally praiseworthy only if one practices the virtues because one wants to. Accordingly the flack received by Representative Ron Paul from some of his critics because he does not believe government should engage in welfare policies must be seen in a certain light. It isn’t a sign of Dr. Paul’s lack of compassion to reject government’s role here, not at all. That’s because compassion, too, must come from a free choice, not because government takes one’s resources as hands these to the needy.


So when in his New York Times column on September 16th Paul Krugman chided the likes of Ron Paul (as have some other democrats or liberals) for their lack of compassion in their refusal to back government administered funding of health care, etc., he was quite confused. Just consider: a few days ago the news showed about a dozen people pitching in to lift an automobile so a motorcyclist who was pinned under it could be pulled out and saved. We may assume that these people pitched in voluntarily, not because someone made them do so. But Professor Krugman and his fellow critics of Rep. Paul would have had to consider it far more compassionate had these people reached for their guns at the scene of the accident and forced others to pull out the motorcyclist from under the car. That is the crux of the difference between Professor Krugman's conception of compassion and Rep Ron Paul's.

Those who champion government programs to provide support to anyone, the poor, farmers, artists, or others are not in fact being compassionate. They are bullies aiming to make others act in ways that would be compassionate if individuals did it of their own free will. But they are not being compassionate, not by a long shot.

*Machan is the author of Generosity, Virtue of Civil Society (1998).

Machan’s Archives: The Myth of Job Creation and Security (1996)

Tibor R. Machan

During one of his campaigns for the presidency Bill Clinton was stomping one state with a talk parts of which were aired on National Public Radio, the radio network of record on what pleases the modern liberal establishment. The excerpts were typical. Mostly the pres was taking his lines from that funny little movie, DAVE. In it the fictional president-stand-in, played by Kevin Kline, proclaims that first on his political agenda is the secure a job for everyone in the country.

It is one of these pitches coming from politicians that are truly sick. This is because if there is one promise on which politicians cannot possibly deliver it is the one about providing jobs or job security. No one can give another person job security, not unless someone else is placed into involuntary servitude. That is, to secure a demand for some productive activity in the market place, others must make the free choice to purchase its result. This means that there is no way to guarantee any job for anyone if potential customers are treated as sovereign, free agents. If, however, job security is promised to us, those who make such a promise must give up on treating customers as sovereign, free persons. They have to be treated as slaves to the products that have to be purchased in order to secure the jobs in question.

Consider my job. I was at this time a tenured university professor at a large state university. Only if I committed a crime could I be fired or laid off (unless the entire institution were abolished by the politicians in the state). (Which is to say that even politicians cannot force people to keep paying for something, as the Soviet Union found out.) The only way I could have had job security is by forcing the taxpayers of the state to give up their income for the goals I serve, teaching college level philosophy courses.

I, then, had job security only because the citizens of my state were placed into involuntary servitude for the sake of supplying the productive service of college teaching. I lived off their involuntary service, extracted from them in the form of taxes -- that is, the forcible relinquishing of a portion of their earnings -- each April 15th. The reasons here do not matter -- many think education is so important to produce that people ought to be forced to pay for it, never mind their own choices in the matter. This is one of those places where talk about what "we" want hides the fact that some people may well not want it, so the "we" really is just some of us, while the others are being coerced.

In a relatively free society bits and pieces of such job security may get by, even if they, too, are something of a fraud since, after all, the majority of voters may change their minds, too, and pull the rug from under the tenured professors sometime. This has already happened at some colleges and universities that have abandoned tenure and even reneged on it because the money wasn't there to continue this job security myth. But to promise, as President Clinton did, job security to all workers is rank deception.

No one can deliver jobs or job security to workers in the private sector. A company would be lying if it made such a commitment. How are they going to keep their customers coming back for their product -- at the point of a gun? That is exactly what would be needed to deliver on that kind of a promise. And even then the enforcers may go on strike! Eventually the country can collapse from lack of personal initiative. So the promise is phony in any kind of society. Mostly it is phony in one that pretends to some measure of citizen -- including consumer -- sovereignty.

Wishful thinking has won many elections and, no doubt, without some alternative and realistic vision to take its place, this fraudulent ideal of jobs and job security will once again gain Democrats sizable support in American electoral politics. But the ideal itself is corrupt and that means we will pay for pursuing it -- or rather our children will when stagnation sets in as it inevitably must from attempts to institute forced labor in a society.

Who Builds Obstacles to Real Stimulus?

Tibor R. Machan

Where I work we have a retirement plan. It comes with the job so once you get your employment you are also part of the system.

Turns out that the accounts set up can contain quite a lot of cash. However, even if one is over the age of 65, even 70, the plan does not permit one to make any cash withdrawals if one is still working full time. One is able to take out loans but these, of course, need to be paid back in monthly payments, so they offer little help with one’s expenses in bad times like ours.

Anyway, what is most interesting is that freeing up some of the retirement funds--say about 15 or 20 %--could make it possible for many of those who work at such places to inject substantial funds into the economy by paying off a mortgage, making improvements on one’s home, purchasing an automobile, taking a vacation or whatever. This is just what the current administration in Washington aims to achieve with money printed or borrowed, i.e., with non-productive economic stimulus.

I haven’t got the figures but I bet that the change of such plans at various companies, universities, hospitals and so forth, so that participants could withdraw some funds and use them to make purchases of various kinds, could amount to a pretty penny! Might even help jump start a dormant system!

When one looks into why these plans do not permit any cash withdrawals, at first it appears that the rule is made by the employers and changing them would require some procedures that a single employee is rarely set up to carry through but a group of them might manage. With some tenacity they could. But a little more investigation shows that it is useless to appeal to the employer. It is certain Department of Labor regulations that in fact coerce employers to disallow such withdrawals by working employees.

In particular, Chapter 4 (Payment of Benefits) of the Employee Retirement Income Security Act of 1974 (ERISA) “sets standards for most employer and union sponsored plans in private industry and imposes responsibilities on those running the plan.” Aha. I was almost convinced that my employer experienced a fit of paternalism at some point and set up the retirement plan in a way that no cash withdrawals are possible if one is still working full time. (Never mind now whether such withdrawals might be wise or not--one size does not fit all in these as in many other cases.) But it turns out that my employer’s hands are tied by federal law.

Talk about government regulation that imposes severe restrictions on citizens regarding how they may use their own resources. That, of course, is the idea behind social security--coercing us all to “save” for our old age! Never mind, once again, that different folks could well use different strokes here, as elsewhere.

It is odd that at this time, when Washington is desperate for some genuine, bona fide economic stimulus, real funds that make it possible for citizens to go to market and generate commerce, including, of course, employment, that very same Washington is prohibiting the use of funds for just that purpose. Instead, it promotes using artificial funds, money printed and borrowed, with which to engage in a Keynesian pseudo-stimulus, with its bizarre device of the multiplier, the something from nothing idea that injecting such phony funds into the market will produce multiples of those funds--as if the law of the conservation of mass and energy had been overturned.

It is sometimes useful to check out the obstacles to coping effectively with some of life’s challenges. It may appear that they are placed there by corporations, businesses, and other economic institutions and one might actually be able to have a chance of removing them by persuading the people at these institutions to change their minds. But, no, it is often the federal government--in this case the Department of Labor via ERISA--that renders it impossible to make adjustments that could help citizens to manage their affairs and, also, downturns in the economy.

Obama’s Keynesian Superstition

Tibor R. Machan

President Obama gave a speech on Thursday afternoon announcing the American Job Creation Act. There were numerous points that were open to criticism but before dealing with a few, it is important to state what creates jobs: Jobs are created when people who have earned an honest buck go to the market and purchase goods and services that other people need to produce. If a good many go to the market to do this, there will be many jobs, if only a few, there will be few jobs. Moreover only if the people get to choose what purchases they make in the market will the resulting jobs be more than make-belief, artificial jobs, like digging holes and filling them up again.

Mr. Obama and his team appear to believe that printing money and handing it to people who may or may not take it to the market and spend it on goods and services serves to create jobs but this is sheer superstition. It is like thinking that steroids produce healthy muscles in one’s body. Such spending is more akin to fueling artificial production--like getting a bunch of extra haircuts with phony money one has obtained from a forger. Or numerous baths or car washes--as if people had no ability to allocate their limited resources prudently but will do well by spending the phony funds (or other peoples’) on duplicate goods and services. So, bottom line: jobs are created from people spending honestly earned income, not from spending phantom income.

Now back to Mr. Obama’s address. He started by telling us all that “the millions of Americans who are watching right now do not care about politics.” Oh? Who are those millions of people who take part in primary elections, in caucuses, and in all the campaigns around election times?

Obama continues: these millions of Americans “have real life concerns,” as opposed to politics. What a thing to say for a lifelong politician. It is a strange confession, to proclaim that politics is not a real life concern. How these little asides turn out to be very revealing from a Harvard educated politician!

Obama also told us that all these Americans “know that Washington hasn’t always put their interests first.” No kidding--”hasn’t always”? How about has very, very rarely. Anyone with only a cursory familiarity with public choice theory--an idea Professors James Buchanan and Gordon Tullock developed (for which Buchanan received the Nobel Prize), in their book The Calculus of Consent (1962)--can appreciate that Obama completely understated the degree to which Washington fails to put the interests of Americans first. For one, Americans are a highly varied lot and they have zillions of interests which plainly cannot be addressed by Washington. Politicians aren’t deities, Mr. President.

Then, also, politicians are mostly busy looking out for their own interests--mostly getting reelected the next time they run for office--except when looking out for the interests of special groups and major donors that happen to further their own. So this entire line of reasoning on which it seems the president is basing his American Job Creation Act is fallacious.

Here is yet another howler from Mr. Obama: “The people in this country work hard to meet their responsibilities.” Well, some do but some don’t. Many people in America believe that they are entitled to benefits from the government simply because they exist, they have been born here, kind of like the what millions of Greek citizens evidently believe. And many believe that they are credit worthy even while being anything but. Which is to say millions of Americans have expected to be provided with loans to buy homes even though they had no idea how to pay them back or had the collateral to back them. This does not testify to what the president has claimed about the people of this country.

The entire plan of the jobs bill amounts to nothing more than artificially manufacturing jobs, from phony money, phony demand. And this doesn’t even address the issue of Mr. Obama’s favorite superstition, namely, his idea that he can somehow turn America into a showcase of green life without incurring massive expenses for this, expenses the country cannot afford. (It is interesting how Obama has avoided the subject of his giving awards to certain companies that went green big time and then went belly up!)

One could go on. Sadly if an Obama enthusiast were to come across these points they would most probably be dismissed as nothing but dirty Republican or Tea Party politics. No one of Obama’s team ever confronts the arguments--they just ridicule the people who put them forth, even demonize them.

And don’t forget the persistent rich bashing that made its appearance in this lecture just as it tends to in every other given to us by Mr. Obama or members of his team. Ok, so some rich folks are doing well even these days. So why begrudge them this? It’s like wanting to injure able bodied folks because there some some who are disabled. Disgusting. Moreover, even as a public finance, the idea of targeting the wealthy is ridiculous. If all those with over $250,000 had their money confiscated by the feds, hardly any dent would be made on the national debt, especially if one subjects the idea to more public choice analysis.

Mr. Obama, you aren’t going to make jobs and you aren’t going to do any good to most Americans apart from some of your pals in the bureaucracy with what you want to do. Take an entirely different approach, namely, remove government regulations and lower taxes for everyone and that will most likely energize the country’s economy.

Liberty: Both Radical & Traditional

Tibor R. Machan

At times libertarian or classical liberal--or, in yet other words, pure laissez faire capitalist--ideas are dismissed as part of a misguided modernity that’s lacking proper pedigree. But this is all wrong. Already back in circa 600 B.C.E. the Chinese sage Lao Tzu had weighed in with libertarian ideas, writing

"Why are people starving?
Because the rulers eat up the money in taxes.
Therefore the people are starving.

"Why are the people rebellious?

"Because the rulers interfere too much.
Therefore they are rebellious...."

And in ancient Greece, Xenophon records an exchange between Pericles and Alcibiades in which the latter dismisses all government edicts that are coercive as plainly unlawful. As he put it, “It would seem to follow that if a tyrant, without persuading the citizens, drives them by enactment to do certain things--that is lawlessness.”

Of course, merely because a good idea has seen the light of day at some point in time, it doesn’t mean it actually carried the day. Ideas of individual liberty did not begin to animate actual political affairs until rather late in the day, starting around the 11th century A. D. A good example of some such ideas beginning to make an impact is the Magna Carta. And then, in time, came the American Founders, with the Declaration of Independence and the Bill of Rights. They managed, finally, to use the libertarian position, which they absorbed through their reading of history and philosophers such as John Locke, for practical, legal purposes. Why so late with the emergence of practical legal measures that support individual liberty?

One reason is that in much of human history what carried the day was unmitigated, unabashed physical coercion, the powerful and well armed running roughshod over the rest. Conquering thugs, armed to the teeth by monarchs and tribal chiefs, would not let up on their brutal subjugation of the population so they could extort from them their labor and whatever meager resources they have accumulated. There had been slave and peasant revolts but not until a substantial middle class emerged, with the capacity to create wealth, did those not in the ruling class manage to be able to mount a resistance to the rulers. And while some knew about the ideas that supported individualism and libertarianism, many were hoodwinked by stories of the divine rights of monarchs and the widely promulgated myth of class privilege.

In the modern era what stood in the way of the liberation of individuals, the overturning of class rule, is the idea that individualism had been invented to serve the economically lucky and powerful. This was a ruse, of course, perpetrated by the cheerleaders of modern rulers, the likes of Auguste Comte and Karl Marx, who had no patience for individual rights and liberation but believed in a collectivism that included the entire globe! They appealed to the myth of tribalism which they managed to sell to millions of people who, in turn, signed up for a unity of the workers but, of course, under the leadership--read: brutal rule--of the likes of Lenin and Stalin. Or they gave up their chance for freedom to national socialists or fascists like Hitler and Mussolini.

Even today the ideas and ideals of individual liberty fare badly because of the many excuses people use to keep others oppressed. The idea of class warfare that even American politicians deploy, for example, undercuts individualism. Ethnicity, racism, gender politics, and the like are all obstacles to making headway for bona fide individualism, with its politics of everyone’s equal unalienable natural rights as the foundation of the legal system, even as their proponents sometimes invoke individualist ideas to excuse the special political privileges they seek.

The Marxists dismissed individualism as an ideology that supposedly served the capitalist, thereby aiming to destroy the most efficient social engine of productivity, the one that unleashed the enormous energy of individual initiative and entrepreneurship. We are, sadly, still in the grips of the big lie that individualism is some kind of insidious ideology.

What’s the remedy? Relentless, vigilant education in the history and philosophy of individualism and libertarianism. That’s the greatest hope for human liberation.

Moral Responsibility and the Poor

Tibor R. Machan

Two central dogmas of contemporary liberalism are that the rich are to be blamed for all our ills and that in the end all people are the same and no one is more or less worthy than anyone else. Blaming those who are not so well off as others is unjust because they are not well enough socialized to be ambitious and diligent.

At the same time, those who are well off get a lot of moral criticism for failing to be generous, kind, charitable or giving. Indeed, they are so bad that they need to have their wealth reduced by way of heavy taxation--not just the familiar progressive kind but whatever else the politicians and bureaucrats with this line of thinking can manage to extort from them. (Remember, taxation is extortion. It is the legacy of the feudal era, the kin of serfdom.)

Not only that but even those who stand up defending the wealthy are morally guilty, deserving of scorn and contempt, not civilized discourse about the matter. I know this quite well since I have been standing up against extortion for decades now. For me it isn’t a matter of whether a wealthy deserve their wealth--I don’t know the bulk of them so I cannot tell--but whether anyone is justified it doing such extortion. (I may not deserve my good health or pretty face but this doesn’t justify anyone levying a tax on it!)

The liberal attitude about morality stems, in part, from widespread scientism, the view that science has invalidated morality, made it something bogus like astronomy has made astrology bogus. Extrapolating the empirical scientific method to everything else of interest to human beings achieves this distortion.

Everything is not subject to the experimental method--for example whether faking research is ethical isn’t. And this is the beginning of the confusion and obfuscation--those who are championing the abolition of morality are just as morally ticked off with those who distort their ideas as anyone else is with bad conduct. They become moralists, all of a sudden, never mind that no natural science can show there is anything amiss with faking research, with distorting anyone’s views, etc.

So from the git-go the effort to abolish the moral perspective fails. But what then about denying to those not so well off a moral criticism? Is it right to hold that the poor or disadvantaged cannot be held morally responsible?

That would be rank dehumanization. These folks are not invalids or infants but full human beings who for whatever reason lack substantial wealth. But that doesn’t mean they could not be guilty of acting irresponsibly. All bona fide human beings are subject to moral assessment, usually by those who know them well but when the conduct is evident to us all, to anyone aware of how they are acting. It doesn’t take intimate knowledge of a terrorist to know that what he or she is doing is contemptible. Or of a child molester or cheat.

In the realm of economics, also, that some people refuse to make the effort to lift themselves out of poverty is quite subject to criticism. Or that despite being poor, they keep producing children they cannot care for and then then dump on the rest of society as if others were the parents.

But if all this is true, then all this blaming the rich needs to be seriously reconsidered. Maybe the rich--or at least most of them--are the good guys, having worked hard or deployed their skills and talents wisely so they’d end up well enabled to carry on in their lives.

And all this also implies that the public policy debate about who is to be held responsible for housing bubbles, becoming debt ridden and unemployed and such needs some serious revision. Instead of penalizing the rich, perhaps most of them ought to be praised and held up as models for the rest of us. And the poor ought not to be let off so easy when they come under scrutiny. As Herbert Spencer observed,

“Sympathy with one in suffering suppresses, for the time being, remembrance of his transgressions….Those whose hardships are set forth in pamphlets and proclamations in sermons and speeches which echo throughout society, are assumed to be all worthy souls, grievously wronged; and none of them are thought of as bearing the penalties of their own misdeeds. “(Man versus the State, p.22)

Intolerable Nudging

Tibor R. Machan

Champions of government intervention in our lives make every effort, especially in a country with a tradition of libertarian political rhetoric, to disguise that they are embarking upon tyranny. Yes, much of it may be of the petty kind, such as thousands of government regulations produced by various congressional committees. But as politicians and bureaucrats always reach beyond their authority to gain power over us, these petty tyrannies, these minor intrusions that the nudging amounts to, begin to get out of hand. In time the population just will not stand for it. We get political movements like the Tea Party arising to defend our liberties even from these allegedly minor nudgings.
It was the influential Professor Cass Sunstein -- now President Obama’s regulation czar -- and his buddy Richard H. Thaler who wrote the book Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale UP, 2004) in which they developed the idea that what governments need to do is not deploy brute force and its threat to make citizens comply with their agendas but make use of small bits of coercion, to nudge them, so they do not find the process objectionable. They make use of the examples of people encouraging their friends, for example, to conform to various rules, as when they place a bunch of footwear by the door so that those coming to their party will take off their shoes before they come into the rest of the house or flat. They will not even notice that they have been forced into compliance with the house rules! They won’t complain or protest that they have been imposed upon.

Now the analogy here is a poor one because such encouragements usually occur in areas over which the guests don’t have rightful control, quite the contrary. Nudging is quite acceptable when it occurs within the nudger’s realm, his or her home or garden or yard or office. All of that is quite different from when governments nudge us, that is to say, push people around.

In public policy an example of nudging would be to provide special tax exemptions to married couples or to those who choose a certain profession or those who purchase homes -- e.g., the famous mortgage interest deduction that has been partly responsible for the housing meltdown by having encouraged people to buy homes never mind whether they can actually afford the mortgage.

All these manipulative techniques may seem harmless to those who have no objection to controlling other people for purposes they believe are worthwhile. But if one thinks about it, nudging is paternalistic -- indeed Thaler has called in “libertarian paternalism,” never mind that the very idea is an oxymoron, like pacifist military ethics.

Most folks will not do much to resist governmental nudging, mainly because it is too much trouble, too time consuming and expensive. Like most of us will not sue people who bump into us on a sidewalk or step on our toes on a tram. Yet, if this becomes routine -- if one runs across somebody who makes a habit of bumping people or of stepping on their toes or spilling coffee on them, etc., etc. (all minor intrusions on their own but capable of graduating to serious encroachments once regularly repeated) -- it stops being simply a nuisance. Indeed, if a society starts being overrun with nudging, it is likely to foster a good deal of acrimony among its citizens.

It is arguable that movements like the Tea Party are in part reactions to incessant nudging. Such public policy methods may well serve to wake up the citizenry to how public officials have become anything but public servants but grown into power hungry bureaucrats.

As with many aspects of human relations, it is one thing to accept minor intrusions if they are accidental, occasional and unintended; it is quite another when they become elements of deliberate public policy. Of course, power hungry people would like us all to accept all the nudging that drives us to do their bidding. And because most of us tend to be civilized and tolerate people, we do not speak up about these matters regularly. However, if they get out of hand, look out.

Another Criticism of “Animal Rights”

Tibor R. Machan

Though this is a topic that I have visited on several occasions, having recently become an avid fan of the Discovery Channel’s series on life in the deep oceans and other seas, I am motivated to observe just how absurd the notion of animal rights really is.

Here we have the oceans of the globe teeming with billions of critters of immense variety. Looked at close up these are often very beautiful animals, indeed, and their agility is fantastic, to say the least. Not that people cannot match what these animals can do, although some of their feats are not within human reach except with extensive technological assistance. But it is undeniable that the wales, octopuses, herrings, crabs, seals, sharks; they do have amazing lives and incidentally put on a great show. At times what they do takes one’s breath away!

But there is an element to the lives of all these animals that makes it very clear that although there is much that we humans share with them--as with other animals across the earth--there is one area where humans really are distinctive, namely, in having a moral dimension in their lives. The widespread and unrestrained carnage that is routine in the seas is something that is mostly found seriously objectionable when evident among people, at least for the last several thousand years. Not that human beings always conduct themselves peacefully, properly and in a civilized fashion. But that when they do not, it is properly found to be wrong, morally objectionable. It is no excuse to say, well that’s just how we are--carnivorous beasts, through and through. Animals, however, are mostly just that. And their fans among us testify to this when they direct their moral ire at us, not the killers among them.

Here what comes to my mind is the moral high ground claimed by those who object to eating meat, by vegans, for example, who choose to consume only vegetables not for reasons of nutrition but for supposedly moral ones. In short, the claim is that vegans act as we all should, refraining from killing and otherwise using animals. (Exactly why it’s OK to kill fruits and vegetables is a complicated story told by them.) Clearly, however, all those murderous animals of the seas, planes and forests are acting just as they must--there is nothing of “should or should not” about any of it. Right and wrong do not pertain to how nonhuman animals carry on, mainly because they have no choice about it, at least none that is evident. In contrast, people have identifiable standards that guide them to do what is right and avoid what is wrong. And when these are violated, they can be chided, even condemned. In short, people have a moral nature which other animals do not.

It can be wished for, of course, that the carnage in the wilds diminish, that wild animals behaved nicer toward one another but that is all it is, a wish. That’s the Bamby syndrome, as some call it, extrapolating from the human animal to the rest, a bit in the fashion of Disney animations.

But there is no justification for this, seriously! Any careful observation of the rest of nature will make it evident that applying moral criteria to how animals live is in error--what philosophers have called a “category mistake.” And at the same time and for similar reasons, ascribing rights to animals is also misguided, just as would be to ascribe guilt to them when they carry out their killings and maiming in the wilds.

I am not about to speculate on the motivation behind the way some animal lovers want us to relate to animals and why they insist on confusing them with us in certain important respects. These may vary a great deal. Certainly empathy plays a role--we do share a great deal with the rest of the animals, including the capacity for feeling pain and even loss. But none of these translate well into the moral point of view and making the attempt can lead to unnecessary hostilities among human beings and even worse, to public policies that are very intrusive.

From Machan’s Archives: The Deficit and the Tragedy of the Commons

TIBOR R. MACHAN
(December 2004)

In the 4th century B. C. Aristotle identified a very important principle of community life. He demonstrated the social value of the right to private property. He said,

"That all persons call the same thing mine in the sense in which each does so may be a fine thing, but it is impracticable; or if the words are taken in the other sense, such a unity in no way conduces to harmony. And there is another objection to the proposal. 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)

This same idea was more recently clarified by Professor Garrett Hardin, in his 1968 article, "The Tragedy of the Commons," published in the prestigious magazine Science. Hardin gave the example of common grazing area used by several owners of cattle to feed their livestock. Because there are no borders identifying what area belongs to which cattle owner, the commons tend to be overused, not because of any greed but because each cattle owners wants to achieve the best possible results, namely, feed the cattle adequately.

The principle at issue has been very fruitfully applied to environmental problems and the conclusion has been drawn by many scholars that without extensive privatization of what are now treated as public properties - lakes, rivers, beaches, forests, and even the air mass - environmental problems will remain unsolved. Everyone knows that a problem exists with common ownership but no one can do anything about it without changing what is commonly owned to private property. The political will and savvy to achieve the solution is, of course, lagging far behind the analysis that identified the solution. Still, in this area, at least, such identification has occurred.

What has not been widely noticed is that a tragedy of the commons exists, as well, in our national treasury. We have here what by law amounts to a common pool of resources from which members of the political community will try to extract as much as will best serve their purposes. Be it for purposes of artistic, educational, scientific, agricultural, athletic, medical, or general moral and social progress, the treasury stands to be dipped into by all citizens in a democratic society. And everyone has very sound reasons to try to dip into it - their goals are usually well enough thought out so they have confidence in their plans. They know that if they receive support from the treasury, they can further their goals. So they will do whatever they can to do just that, namely, extract from the commons as much for their purposes as is feasible.

But, as both Aristotle and Professor Hardin knew, the commons are going to be exploited without regard to standards or limits - "that which is common to the greatest number has the least care bestowed upon it." Which explains, at least in part, why the treasuries of most Western democracies are being slowly depleted and deficits are growing without any sign of restraint. Japan, Germany, Great Britain and, of course, the United States of America are all experiencing this, as are numerous other societies that make their treasuries available to the public to use for sheer private purposes. For how else can we construe education, scientific research, the building of athletic parks, the upkeep of beaches and forests and so forth than the pursuit of special private goals by way of a common treasury?

Some might try to obscure this by claiming that all these goals involve a public dimension. Of course. So does nearly every private purpose - including the widely decried phenomenon of industrial activity that produces the negative public side effect of pollution and contributes to the depletion of a quality environment. Private goals can have public benefits. But their goal is to serve the specific objectives of some individuals. When AIDs research is supported from the public treasury, the first beneficiaries of success would be those with AIDs, not those who haven't contracted the disease. When theater groups gain support from the National Endowment for the Arts, there may be beneficiaries beyond those obtaining funding but they are still the ones who benefit directly, immediately. When milk producers gain a federal subsidy by having the price of milk fixed or their withholding of production compensated, they are the first to gain from this, not some wider public.

And so on with thousands of other "public" projects - they are, actually, supporting private goals, first and foremost. One need only observe who lobbies for them. But because the treasure is public property, there is no way to allocate what is in there rationally, with proper budgetary constraints. Instead politicians embark on deficit spending - taking non-existing funds, ones not yet collected but only rather uncertainly anticipated, and funding the requests without restraint.

And there is no end in sight. Only when the country no longer has the credit worthiness in the world community, so that its bonds will no longer be backed by hopeful lenders, will the Ponzy scheme be called to a screeching halt. We will have to declare bankruptcy and those of our citizens who had nothing at all to do with the enterprise will be left to hold the empty bag, namely, our grandchildren.

Not unless the treasury stops allowing private projects to be funded from its coffers, confining itself to the support of bona fide public projects - the courts, the military, and police – will there be an end that avoids the perhaps greatest tragedy of the commons. To reach such a position of financial responsibility, the governments of our society will have to sell off all the unwisely held common assets - lands, parks, beaches, buildings, forests, lakes and such - to private parties. They will thus liberate members of our future generations from the shackles that have been so irresponsibly placed upon them by means of the tragedy of the commons.

--
Tibor R. Machan holds the R. C. Hoiles Chair in Business Ethics and Free Enterprise at the Argyros School of Chapman University. His (unproofed) columns are stored @ http://tibormachan.rationalreview.com/ & http://szatyor2693.wordpress.com/

Political Hyperbole!

Tibor R. Machan

I am baffled by how critics of some Tea Party stars engage in rank hypocrisy. For example, they--such as many commentators on CNN-TV--have been claiming to be utterly shocked with former Texas Governor Perry’s polemical answers to interviewers. He said, at one point, that it would be “‘almost treacherous or treasonous,’ if the Fed under Bernanke increased the money supply before next year’s election.” He added something about how such untoward policies might be dealt with in Texas, namely, harshly!

This is supposed to be some kind of intolerable, uncivilized outburst, not to be expected from any serious political candidate in the heat of election campaigning. Never mind that the Vice President of the United States just a week prior to Perry’s hyperbole, said something more indiscreet about the Tea Party. Biden was reported to have agreed with Rep. Mike Doyle (D-Pa) who said about some hard line Tea Party Republicans at a two-hour, closed-door Democratic Caucus meeting: “‘We have negotiated with terrorists,’ an angry Doyle said, according to sources in the room. ‘This small group of terrorists have made it impossible to spend any money.’ Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, backed Doyle’s comment” with his own ultra-hyperbolic statement: “They have acted like terrorists.”*

Notice that unlike in Perry’s remark, there was no qualification in what Doyle and Biden said, nothing about “almost treacherous or treasonous.” Instead the words were, “They have acted like terrorists.” Both of these are, of course, polemical remarks but the formers is more cautious and thus more civilized than the latter. And the analogy with terrorism offered by Perry is also more accurate since what he was talking about is Bernanke’s plan to increase the money supply to such an enormous extent that it will most probably severely lower the value of millions of people’s income, retirement, savings, etc., etc., and breed inflation to boot. That kind of destructiveness is indeed reminiscent of what terrorists do, namely wreak havoc with whatever their targets value, including their lives all in the name of some supposedly higher goal.

All of this needs to be appreciated in the light of numerous complaints offered over the last few years about how Republicans and Tea Party folks especially are engaging in irresponsible rhetoric, how they have been uncivilized as they have engage in their political exclamations, outbursts, etc. President Obama himself chimed in about this, I recall, and so has, of course, his buddy Professor and pundit Paul Krugmann. Yet if one considered the two different hyperbolic statements, those made by Perry and those by Doyle and Biden, it is crystal clear that the latter have been far more indiscreet in how they have characterized--let’s call it what it is, besmirched--their adversaries.

Maybe one could say that all this is simply par for the course when it comes to campaign rhetoric. As many have noted, the same has been going on for a couple of centuries. Thomas Jefferson, Sam Adams, Alexander Hamilton, et al have done nothing less when they sparred verbally in their political encounters. (As someone who writes columns and receives letters about them galore, I can testify that exaggerated charges having little to do with substance and a whole to with character assassination are routine.)

So yes, there is nothing peculiar with all the heat (and little light) in what the different parties to the various current political exchanges say. What is remarkable, however, is that news anchors and reporters at places like CNN, CNBC, MSNBC, and Fox join in. That is blatant lack of professionalism. And if one is permitted to point this out in how Wall Street traders, politicians, physicians, educators, and other professionals conduct themselves, it is certainly appropriate to point it out in the case of journalists. Especially when these folks intone with such righteous indignation about the missteps others take as they express themselves, as they chime in on various topics. After all, journalists are supposed to be professionals at expressing themselves and when they do this badly, that should be pointed out by those who watch them since it amounts to out and out malpractice.

*http://www.politico.com/news/stories/0811/60421.html#ixzz1VUc0qtOE

The Keynesian Non-Answer

Tibor R. Machan

The New Republic editorialized recently about the current economic mess and it is worth quoting it because the central passage is largely non-hyperbolic, non-polemical: “The classic response to [our current economic] situation, put forth by John Maynard Keynes in the 1930s, is for the government to spend money. During the Great Depression and then World War II, the Roosevelt administration and its allies did this in part by employing people directly, an idea that still makes sense even if it’s utterly unfashionable. But there are other ways to prime the pump. Government can invest in public works, whether it’s building roads or fixing up schools. It can put money in the hands of those who will spend it, by increasing public assistance or by targeting temporary tax relief to the poor and middle class. It can also supply money to state and local governments, which because of balanced-budget requirements are busy laying off first-responders, teachers, and other employees—making the unemployment problem worse.”

Notice that of course, the editors simply take it for granted that governments are authorized to engage in this kind of economic regimentation. Never mind that when citizens decide not to spend money they are doing it with what belongs to them and may indeed know what they are doing. But this doesn’t matter to the advisers of master planners. Such moral issues are to them trivial. They think like statists have always thought--what matters for them is only what the king, czar, or some other government aims for.

The history in the passage is wrong. Roosevelt’s Keynesian schemes didn’t work, as it has been shown by numerous economists. (See The Critics of Keynesian Economics [1960] edited by Henry Hazlitt, and Hunger Lewis’s Where Keynes Went Wrong [2009], among many works that critically and mostly dispassionately address Keynesian economics.)

Investing in public works is a complete illusion--most of such spending by government is directed politically; it’s nearly always graft, and what else could it be since government officials haven’t the faintest clue as to what the money they have extorted from the citizenry should be spent on. So the spending will be a response to the pleas of lobbyists and others who can be of help in reelecting the politicians.

Of course, balanced budgets are very rarely implemented. Politicians do not want their hands tied.

The citizens who taxes are extorted could, of course, spend their own funds or invest them or place them in banks that can lend them out all of which would end up employing people for purposes that actually fulfilled what the public wants. Indeed, it is only such spending that amounts to support for public works since the so called public works are nothing but made up projects that serve the agendas of the politicians and bureaucrats. (The editors are evidently unfamiliar with public choice theory for which Professor James Buchanan received his Nobel Prize. The idea is, simply put, that politicians and bureaucrats do not spend on public projects but on what they regard is important. It should also be considered that even those who would try to serve the public interest stumble upon the difficulty of knowing what that might be, seeing that the public is made up of millions of people who have hardly any common interests or objectives.)

I have never managed to appreciate why these people keep assuming that the judgments and actions of government officials are superior to those of the citizenry throughout the world where these Keynesian proposals are being made and followed routinely. I keep asking, “Who are these people whom we can trust with such tasks as running a country’s economic affairs?” Somehow thousands of intellectuals who would never entrust government with tasks such as censoring literature and newspapers nevertheless have no compunction about entrusting them with the very delicate and idiosyncratic tasks of directing people’s economic affairs. (I tend to think it is the ancient governmental habit, left over from feudal times.)

Anatomy of the bona fide Compromise

Tibor R. Machan

On the current political front there is a lot of talk about whether to compromise on various issues, such as continuing or increasing the Keynesian economic stimulus, abortion, gay marriage, extending the debt ceiling, continuing the two--or is it three--wars America is involved in abroad, getting tough on illegal immigration, how to treat radical Muslims in the courts, etc., etc. The president’s stance, peculiarly, is urging compromise on all fronts and not sticking to any firm position based on principle but entering the discussion with a middle-of-the-road outlook.

Yet there is something basically amiss with Mr. Obama’s position and indeed with that of all those who insist that there is great virtue in compromise. The main problem is that a compromise is the outcome of discussions between those with basically different positions. So, for example, if you hold that injecting more stimulus into the American economy is a good idea and I believe that it is not, we might compromise by agreeing in the end that a bit of stimulus will be injected but not as much as promoters of the idea hope for. Thus, to take a concrete case, if Paul Krugmann of Princeton University and The New York Times believes that the government should inject massive amounts of fiat money into the economy, via public works and subsidies, and various make-work projects--one’s the free market would not fund but government officials believe might generate employment--and another economist, say Don Boudreaux of George Mason University and The Pittsburgh Tribune Review, argues for avoiding any policy of printing and spending any kind of fiat money to stimulate employment, the result of spending a modest amount of such fiat money might be a compromise.

Notice that in such a case the two sides did not enter the discussion with what the result turned out to be. Compromises, in short, are what come out of debates between people discussing what kind of public policy should be adopted. Just as the middle between two points is something that cannot be established without knowing where the beginning and the end lie, so a compromise is dependent on positions that aren’t themselves the results of compromises.

Anyone who argues like President Obama--and his cheerleaders such as CNN commentator Fareed Zakaria--that what is needed on all sides is more willingness to compromise haven’t a clear idea what a compromise is. If they did, they would start by laying out the two sides that they urge to reach a compromise and indicating what would it be given the base positions of the two sides. What is it, for example, that Krugmann and Boudreaux really want and then why should they give up their commitment to that position and go along with something else, namely, the proposed compromise the likes of Zakaria propose?

The bottom line is that in any important debate one rationally demand of the debaters that they compromise prior to the process that must preceded it, namely, the debate. Maybe in the debate one side will manage to demonstrate to the other that it’s position is better that the opposition’s. In principle this has to be a possibility. But if one starts with demanding that people who enter such debates start with compromises, one is asking for the impossible. After all, the reason people tend to have firm positions is that they believe them to be sound, to be the right solutions to problems. But because the problem faces groups of people who must come to some kind of common resolution, it is likely that they will not be able to succeed with having their firm positions accepted by all parties to the debate. So what is sensible to ask for is that everyone involved in the discussions will go slow and only accept changes if they see no other way to proceed. To put it differently, the result of a compromise is never desired by those debating issues. These results are grudgingly accepted at best and imply that neither side was successful in convincing the other of the soundness of its stance.

Bottom line is: Don’t urge people to compromise; urge them to debate seriously and intelligently. The resulting compromise will then be the best and only one that could be achieved among these people who have to make collective decisions.

From Machan's Archives: 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.)

Krugmann’s Failed Analogy

Tibor R. Machan

Ok, so I’ll give him this: finally Dr. Krugmann put forth something akin to an argument instead of merely demonizing those with whom he disagrees! (See his column, The Hijacked Crisis, The New York Times, August 11, 2011.) The argument, however, is an analogy and as with many analogies, it fails to be an apt one.

Krugmann tells us that suggesting that what the US government should do is significantly cut back on spending is misguided because the economy is in need of immediate and drastic emergency treatment. Like a man who is bleeding profusely, this is not the time to counsel greater prudence and preventive treatment. What it needs is the infusion of massive doses of blood, as some patients require blood transfusions so as to save them from imminent death. We may assume, then, that once the infusion has done its job, the long term remedy of cutting spending can get under way. As he wrote recently, "For the fact is that right now the economy desperately needs a short-run fix. When you're bleeding profusely from an open wound, you want a doctor who binds that wound up, not a doctor who lectures you on the importance of maintaining a healthy lifestyle as you get older. When millions of willing and able workers are unemployed, and economic potential is going to waste to the tune of almost $1 trillion a year, you want policy makers who work on a fast recovery, not people who lecture you on the need for long-run fiscal sustainability. ... What would a real response to our problems involve? First of all, it would involve more, not less, government spending."

Looks like a good piece of advice initially, but it misses the mark. The economy, first of all, isn’t some biological system. (And Krugmann has never ever conceded that spending cuts are needed, ever! Government must always spend and thus stimulate the economy.) As to the first point, the government’s taking massive amounts of money from people so as to spend it on "public" works, as per the priorities of government officials and their advisers, doesn’t constitute an emergency measure but only a change of who will do the stimulation. Instead of having the citizenry spend its labor and resources on what it chooses to spend it on, it will be government officials--politicians and bureaucrats--who will do so.

Even if the analogy had some promise, there is no reason to believe that these officials are going to spend our labor and funds on projects that will stimulate anything, certainly nothing that will do so better than were the citizens themselves to spend their own labor and resources as they see fit. If anything, when government takes over what by right we should be doing, they are far more likely to misspend than we would. You and I have some pretty good idea as to what we need to spend our funds on, whereas those in government are at best getting their priorities via the political process which very likely distorts the feedback system that informs the economy about what is most important to invest in, to spend on. Worse than that, they actually get it from their own imagination and fantasy, as when they want to build huge dams or highways where they are not at all needed.

The radical remedy Krugmann favors could well work in the case of a human individual, a biological entity whose medical needs can be ascertained by most physicians. But when it comes to an economy such as that of the USA, wherein the “demands” of the citizenry are inordinately diverse and can, thus, be best assessed locally, not by planners from Washington or even state capitols, doing the kind of stimulus Krugmann favors is just impossible (a la Hayek’s good teachings). Which is why the stimulus didn’t work before and isn’t working now.

So, yes we finally have something of an argument from Paul Krugmann. But it involves a misguided analogy. Individual human organisms are one thing; economic systems of a huge country another entirely. So what he attempts to derive from his analogy is in fact a colossal non-sequitor. It doesn’t follow and never has.

Further Distortions of Libertarianism

Tibor R. Machan

In his essay “The Tea Party Jacobins,” with its hyperbolic and besmirching title, Mark Lilla, whose The Reckless Minds: Intellectuals in Politics I once favorably reviewed, advances the notion that the Tea Party’s “libertarian irruptions … [attracted] individuals convinced that they can do everything themselves if they are only left alone.”

I am reminded of this point by Andrew Hacker’s essay “The Next Election: The Surprising Reality,” in The New York Review of Books (August 18, 2011), which quotes Lilla favorably. But check this: Libertarians demonstrably do not believe what Lilla claims they do. Libertarians aren’t “convinced that they can do everything themselves if they are only left alone.” What they believe, instead, is that free men and women can do things much better than bureaucrats and politicians, mostly in voluntary associations. Teams, orchestras, clubs, corporations, choirs, and many other such associations aren’t “individuals convinced that they can do everything themselves.” No libertarian I have every known--and I have known a great many, having edited one of the first collection of essays by libertarians for Nelson-Hall Publishers of Chicago back in 1973 (The Libertarian Alternative)--is convinced of such an idiotic idea. None want to do things “themselves.” What they want is not to be coerced into associations to which they may object, especially by the government. They don’t believe people ought to be forced to contribute to social security, medicate, and similar programs not of their own choosing. It is a complete non-sequitor to hold that this means they want to do things by themselves.

Comments like those by Lilla suggest to me that critics of libertarianism are running very low on bona fide objections to the position. Instead they need to make it appear that the libertarian positions embraces ideas that it clearly does not embrace or even remotely implies. Only that way can they come of up with criticisms of it.

This has been going on for centuries, actually. For example, Marx argued that individualists, the libertarians of yesteryear, think they are self-sufficient and defend the right to private property so as to make use of what they own arbitrarily and selfishly. As he put it, “the right of man to property is the right to enjoy his possessions and dispose of the same arbitrarily, without regard for other men, independently from society, the right of selfishness.” This line of criticism, along with the charge that free market advocates believe in atomistic individualism, has been repeated over and over again, not just by the Left but also by the Right. And it is bunk.

In fact, the main thing that the right to private property secures is the individual’s liberty to choose how to dispose of his or her labor or resources. It is this choice that bothers the critics who all contend that they, not you or I, can decided best how we ought to use our labor and goods. Indeed, under socialism your and my labor is public property and to be allocated as the party leaders decide because they have the requisite knowledge, something you and I supposedly lack. (Why they but not we is an unanswered question!)

Anyway, Lilla and his ilk just don’t want to deal with the bona fide libertarian viewpoint. They need the nonsense they impute to libertarians so as to make the position appear ridiculous. But contrary to what they suggest, it is not at all ridiculous. It does not hold that people are all isolated atoms who believe they can fend for themselves, all alone. No sane person believes this. But once you allege that some people do, they can be dismissed as nut cases, which is just what it seems Lilla & Co. would like to do with the Tea Party folks. One cannot help thinking that what these critics are after isn’t to get it right about politics and economics but to secure for themselves the exclusive authority to call the shots for everyone.

Getting Serious About Recovery
This is how economic recovery can be encouraged by all levels of governments in the U. S.:

1.Remove all preemptory government regulations of all the professions and businesses.
2.Cut taxes to the bone, when possible totally abolish them.
3.Cut all subsidies and protectionist measures.
4.Eliminate all minimum wage laws.
5.Close down all the alphabet soup agencies (a corollary of #1).
6.Sell off all government properties that do not relate to the military defense of the country.
7.Abolish the war on drugs.
8.Abolish all blue laws, everywhere (including states, counties, and municipalities).
9.Stop all non-defensive military endeavors.
10.Basically and most generally, follow the edict of the Declaration of Independence where it assigns to government the job of securing the basic rights of the citizenry.
It is by freeing up human productivity and creativity that economies are most likely to grow. Apart from natural calamities, governmental interventions are the worst obstacles to economic development. Makes perfectly good sense. Government is no good at picking winners and losers. Bureaucrats and politicians have no more wisdom and virtue than do the rest of us, so they must not take over the direction of our lives, including our economic affairs. The top down regimentation of economic affairs is perverse and will surely prolong our economic wows.

If these measures aren’t followed, the country will continue to struggle and decline.

Cleaver’s Bad Theology

Tibor R. Machan

Representative Emanuel Cleaver of Missouri produced a sound bite following the recent passage in Congress of the compromise bill on the dept ceiling and spending cuts. Even as this bill didn’t by any means manage to demonstrate Congress’s serious understanding of economic reality, Cleaver said that the bill amounts to a devil’s sandwich, by which he meant that it amounts to the defiance of centuries of teachings of the world’s greatest religions about how one must look out for the poor and needy as one lives one’s life.

The remark needed to be put in the sound bite form because any detailed investigation of those teachings would reveal something very different from what Cleaver had in mind. Let us grant that most religions do implore us to lend those in need a hand, to help the poor and indigent. Indeed, there is no ethical system that doesn’t make some room for this idea. Even the ethics of Aristotle implore us to be generous, even as we strive to achieve our happiness in life. Indeed, generosity or liberality is a virtue people ought to practice, or so Aristotle teaches. And comparable teachings can indeed be found in most of the world’s religions.
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Yet the use to which Rep. Cleaver wants to put this idea is quite perverse. He doesn’t urge us to be generous, kind, compassionate, charitable and such. No he urges us to engage in robbery and to use the loot we obtain by this means to provide help to those the robbers believe should get some of it. Generosity and the like are supposed to be virtues that people ought to practice in their own lives. It’s individuals who ought to help out the needy. It is they who must choose to be generous, charitable and such. Nothing less will serve as virtuous, ethical or moral conduct then good deeds that are chosen by the agent.

Stealing from someone else and handing some of the loot to a needy individual will not do. It simply isn’t virtuous to do that since it is tainted by a serious immorality. Generosity or charity with other people’s labor or resources is impossible. Both Representative Cleaver and President Obama have shown their utter misconception of the nature of generosity or charity, claiming, falsely, that it involves robbing Peter so as to benefit Paul. This is very similar to the widespread misunderstanding of the legend of Robin Hood who didn’t rob the rich to help the poor but recovered the loot taken by the tax man and returned it to those who had been deprived of it by taxation.

And even the simplest common sense morality rejects that one can do good deeds on the backs of others. A good deed must come from oneself. It is into one’s very own picket that a generous person must dig in order to earn moral credit for giving away his or her own labor or resources. And that is certainly not what Rep. Cleaver had in mind. He was making devious and corrupt use of the idea that is taught by most of the world’s religions and morality, namely, that one ought to help those in dire straits. That is cynicism, not bona fide ethics or morality. Putting a gun to other people’s heads and thus enabling oneself to “help” others is morally wrong, plain and simple. It is a sign of how morally ignorant many in Congress and other centers of political power across the globe tend to be to hold otherwise.

As the old saying has it, charity must start at home--and it must end there, as well.

Just Say “No”

Tibor R. Machan

After sustained profligacy comes the dreaded cold turkey. Any kind of habitual indulgence can only be stopped if at some point the “addict” says “no,” with no excuses.

I would assume most people have been through this. I know a few personally. They have kept up spending in the face of lacking funds an even lacking the promise of funds. Credit card companies accept clients with hardly any creditworthiness--indeed, I have been there myself. So how is this to be brought to a halt?

I would suggest that deep cuts in one`s spending habits is the best way. Sure, few people can go cold turkey on food or necessary medicine. But what about going to fancy nail salons? What about having premium coffees every morning, noon and afternoon? What about getting top of the line clothing and cars?

The trick profligate politicians use is to raise the specter of Draconian elimination of, say, social security and medicare benefits but this is a phony ploy. After all, both of these programs are supposedly funded by beneficiaries themselves. They are supposed to be more like insurance than like welfare.

What is certainly not essential to anyone is, for instance, subsidies to all the varieties of special interest groups. Or huge public works that only benefit some select but influential citizens. What about selling off some public lands? Why does the government, any government, own and maintain national forests and parks? Who will go without basic necessities if these are seriously cut back?

One could continue forever with the list of available cuts in federal and other government spending that would not impact the indigent or elderly. Never mind that even here the idea that government exists to fund such programs is perverse. Does that count as securing our rights? Certainly not--no one has a right to other people`s money and work, not unless there has been a mutually agreed to deal about these.

The debt ceiling must be dealt with by administering a total halt and this may well be the time to fess up to that fact. Think of it as indispensible financial house cleaning, something every family needs now and then. It would be unthinkable to dump all of one`s debts on total strangers who happen to live nearby. And it would be even less thinkable to dump it all on members of future generations who aren`t even around to protest or consent.

Of course some people will feel the pinch of the ceiling. But that is the price that has to be paid when so many people think they can get something from nothing. However drastic the remedy, it is indeed a remedy.