More Ironies of the Left

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As Gary Jason recently noted in his Reflection "Galt’s Gulch: Somewhere Near Moscow?", some high profile people are leaving France after the latest round of tax increases. In particular, the new 75% income tax rate created by President Hollande hit a nerve. Well-known actor Gerard Depardieu settled in Belgium, publicly denouncing this tax, which kicks in at about $1.2 million a year. He was offered a passport from Russia, and he expressed admiration for that country, which, incidentally, also offers a 13% flat tax rate.

But ironically, Depardieu has firmly rooted leftist opinions.

In the ’80s, he campaigned for François Mitterrand, the head of the French Socialist Party, who became president in 1981. In 1993, he publicly supported the French Communist Party, which was disintegrating after the end of Soviet Union. In 2002, he made a large donation to a fund created for rebuilding the Party — with little success, fortunately. Later, he supported president Sarkozy, a "conservative" who picked many socialists for key positions of his government and continued the statist policies of the Left.*

Depardieu more or less willingly cultivates an image of an uncouth, rustic drunkard, and is prone to excess that raises some eyebrows even in France. Especially in 2011, when he got kicked off a plane, charged with pissing on the carpet. Needless to say, this doesn't make him less popular; au contraire, the paparazzi love him.

However, the man isn't a simple-minded boor. A highly paid actor, Depardieu invested wisely and has enjoyed for years a sizable income outside of the movie industry. He owns vineyards, restaurants, a media production company, and other profitable assets.

It is therefore obvious that his sudden interest in low-tax countries is entirely because of his personal financial interests. Sadly, I didn't find any article pointing out Depardieu's hypocrisy. When they criticized the actor, journalists merely deployed a tired class warfare rhetoric.

Depardieu is not an exception. Other left-leaning French showbiz celebs have said adieu to France, which was a taxpayer abattoir even before Hollande took over. Their favorite destination is Great Britain, where PM Cameron has announced he will roll out the red carpet for this exile of French notables. Many of the French nouveaux riches already live in Switzerland or Monaco, where streets are safe and taxes are low — two things that are now a memory to Parisians. However, the discreet exile of all this French talent and money never really caught the attention of the media.

Depardieu is not a role model. But his noisy, cantankerous escape from overtaxed France had the merit of drawing attention on the disgusting duplicity of rich leftists who cannot stomach the policies they wished for. High taxes for thee, but not for me.

*See this report from the French desk of the Huffington Post, and also this from the newsmagazine L'Humanité.




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Prostitution and Coercion

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I was recently thinking about why prostitution is illegal. As a libertarian I think that it should be legal, as an extension of people’s absolute right to own their own bodies. But many Americans disagree. If there is a rational, persuasive argument against the legalization of prostitutes (or “sex workers,” as they should be called) it is that a need for money would coerce poor women into becoming sex workers and selling their bodies. Poor women who need money to buy food and pay bills would feel economic pressure to become sex workers, this argument goes, so we need to protect them from coercion by denying them the opportunity to sell their bodies.

Some version of the coercion argument underscores a great deal of anti-libertarian sentiment: poor people will be coerced into selling their organs and body parts, which justifies denying them the right to do so. Poor people are coerced into accepting dangerous, low-paying jobs such as coal mining, or are coerced into working long hours for wages that are lower than what they want. They are coerced into buying cheap high-fat fast food, or are coerced into buying cheap meat, packed at rat-infested plants, and so on. The coercion argument is a thorn in the side of laissez-faire politics, because socialists argue that poor people aren’t really free in a capitalist system where they face economic coercion.

An example of the grave seriousness of the coercion myth is legal scholar Robert Lee Hale’s famous law review article “Coercion and Distribution in a Supposedly Non-Coercive State” (1923). Hale brainwashed generations of law students with his argument that capitalist employers exert coercion upon workers, and socialism would not produce more coercion or less freedom than capitalism. The coercion argument goes far beyond the issue of prostitution; it is crucial for the integrity of libertarian theory that we have a definitive refutation to offer the public. This essay presents two strategies for refuting the coercion argument. I will focus on sex work to develop my ideas, but my arguments extend by analogy to every application of the coercion myth.

Assume that there is a poor woman (or man) who cannot pay utility bills and grocery bills and healthcare bills, and does not want to sell her body, but if she becomes a sex worker will earn enough money to pay the bills. Is this coercion? There are two approaches to arguing that it is not. The first approach is to argue, as a matter of deductive logic, that economic pressure can never amount to coercion, and therefore this scenario does not satisfy the definition of “coercion.” The second approach is to argue that economic pressure can be coercion but that capitalism is better than socialism at preventing the situation in which a poor woman has to do work she hates in order to have enough money. This involves showing why libertarian economic policy will create an abundance of economic opportunity for American working-class women.

In the remainder of this essay I will offer my thoughts on how to use each approach, focusing on the analytical approach first and the empirical approach second. I will argue that economic pressure is not and can never be coercion, because economic pressure does not fit the definition of “coercion.”

What is coercion? My 1998 Oxford Dictionary of Current English identifies it as the noun form of the verb “coerce,” which it defines as “persuade or restrain by force.” Dictionary.com defines “coercion” as “the act of coercing; use of force or intimidation to obtain compliance.” A serious question is whether coercion requires, by definition, physical force or the threat of it. I don’t feel it’s necessary to answer that question. I think a good common-sense definition of coercion is “threats of physical force or psychological intimidation that pressure someone into doing something he doesn’t want to do.”

The coercion argument is a thorn in the side of laissez-faire politics, because socialists argue that poor people aren’t really free in a capitalist system where they face economic coercion.

To make my point, permit me to present what academic philosophers call a “thought experiment.” Imagine an English sailor in the late 1700s who is marooned on a desert island after his ship was blasted apart by cannon fire from a pirate attack. This person washes ashore, explores the island, and finds that he is the only human there. There are some animals and plants and trees, and some land that he thinks could be farmed. This sailor faces a choice. Either he hunts for animals or farms vegetables and perhaps gets enough food to support his life, or he starves and dies. He could choose to seek food, which would require doing a lot of sweaty labor, or he could choose to be lazy and sit around and wait and eventually die. Work or death is the choice that he faces.

Few people would say he was coerced into working the job of hunter or farmer. Why? Because the thing that forces him to work is the nature of reality and the circumstances of the desert island. Coercion is typically regarded as an action, as something that one person does to another person to force the latter to conform to the former’s wishes. Where there is only one person there can be no coercion. Reality can be such that you must do something or face an unpleasant punishment, such as hard work, but reality has no mind capable of intentions and therefore has no intent to pressure you to obey some sort of scheme or plan.

It seems counterintuitive to say that reality coerces you, or that the aspect of reality called a desert island coerced you. It is the nature of reality, of humanity in the state of nature, that you work or die. If the sailor resents being forced to work by the human need for food, in a situation where it is obviously reality itself that poses this requirement, then he is rebelling against reality and the nature of human life. The demands of reality are not coercion; they are merely human existence.

This sheds light on the phenomenon that I call “worker’s rage,” a rage that most people feel sometimes and some people feel most of the time — a fear-fueled hatred of the fact that material success requires hard work and entails the risk of failure. I think that many socialists are motivated at a deep psychological level by the feeling that a strong socialist government could somehow create a magical utopia where there is no risk of failure or any need to do work in order to enjoy material comforts. Money and capitalism have come to symbolize the need to do work in order to survive. But as the desert island thought experiment suggests, the “work or die” condition of human existence is the result of humanity in the state of nature. It cannot be the result of capitalism if it exists someplace where there is no economic system. Thus “work or die” is perfectly natural; it is the condition of humans in the state of nature. The actual cause of worker’s rage is reality and not capitalism.

But now let us change the scenario slightly. Suppose that two sailors are shipwrecked on an otherwise desert island. One sailor, let’s call him John, finds a plot of land and sows some fast-growing fruit seeds and produces an orchard (or, for simplicity's sake, let's say a crop) of edible fruit. This sailor also builds a fence around his land, topped with sharp spikes. This fence cannot be scaled without serious risk of death. The second sailor, James, just sits on the beach, doing nothing but watching the waves.

Now James faces the same situation that the sailor in the first thought experiment faced: either he works or he dies of starvation. The new wrinkle is that if John were to give some of his fruit to James, then James would have a third option, to eat John’s fruit, not work, and not starve to death. Let us assume that James asks John to give him some fruit, and John says “no” and refuses to open the gate to his fence to let James in. Has John coerced James?

Here, for reasons similar to those of the first hypothetical, it's difficult to say that John has done anything to James that constitutes “coercion.” In the first place, there isn’t anything that John wants James to do. Therefore there is no intent or plan of John for James to conform to. We can hardly say that John coerced James into doing something when there is nothing that John wanted James to do.

The demands of reality are not coercion; they are merely human existence.

In the second place, if James dies from starvation, it will not have been John who killed him. Everything bad that could happen to James (such as starvation), will have been caused by the island, by the circumstances of not having an abundance of free food waiting to be taken, and by James’ own decision not to work. There is no threat from John directed at James, and any harm that befalls James will not have been caused by John. James’ death by starvation will have been caused by his own decision, combined with the nature of reality and of human beings, and the laws of physics and biology. Of course, John can prevent James’ death by giving him free fruit, but if he doesn't, he has still not taken any direct action toward him, so it can’t truly be said that John caused anything that happened to James.

“Ah, but John built that fence, and in so doing he murdered James!” the hardened socialist will say. If you don’t believe that anyone would seriously claim that the protection of private property constitutes coercion against the poor, let me inform you that the Robert Hale essay used precisely that argument.

My reply is that, in the first place, coercion requires the use of force or threats, at the very least to reduce freedom of choice. James’ freedom of choice has not been reduced. He is free to hunt, farm, sit on the beach, or do anything else he wants to do. John has done nothing to interfere with James’ freedom. Coercion is what would happen if John aimed a gun at James’ head and said, “Sing and dance or I will shoot you in the head.” That is what the government does when it gives orders to be enforced by the police and the army. John's staying behind his fence, farming and minding his own business, while James does whatever he wants on the other side of the fence looks nothing like coercion. John is not doing anything at all to James, and therefore is not “coercing” him.

The only thing that John prevents James from doing is invading his land and stealing his fruit — actions that are not properly within James’ scope of freedom. It strains credulity to think that protecting property that you have the right to own is coercion against people who try to steal it from you. If James were to steal John’s fruit, then James would be feeding off John as a parasite, and John would become James’ slave. James would be using force to steal from John. John’s attempt to prevent him from doing so, by building a fence, is not the aggressive initiation of force; it is merely self-defense. Self-defense protects the defender’s own freedom of action; it in no way pressures or controls the attacker. As can be seen from this example, James’ freedom of action and his ability to survive are in no way impeded. The only thing the fence does is prevent James from stealing from John. Even if John had fruit to spare, which he could give to James without missing it, the fact remains that John has done nothing to control or pressure James. If James cuts a hole in the fence and steals fruit from John, then one might say that James used violent force to coerce John into growing fruit for James to eat, and that James is trying to force John to stand between James and reality so that James can escape from the fact of having to work or starve. But it is reality and the desert island that punish James for his lazy choices.

John faced a risky situation. If he had chosen to reap his crop too late in the summer, a tropical storm might have wiped it out and condemned him to death. James wants to avoid the risks of having to make such choices. He wants to steal the bounty of John’s good choices, acting on the ground that John does not need all the fruit, but he himself does. This is robbery. For John to build a wall to prevent James from robbing him does not force James to make any of the choices available to him. The fence merely prevents James from exploiting John’s choices. Thus, John’s fence cannot reasonably be interpreted as a form of coercion.

Coercion is what would happen if John aimed a gun at James’ head and said, “Sing and dance or I will shoot you in the head.”

Now consider a third thought experiment. Assume that John and James are both stranded on the island, and that John has grown crops and built a fence, while James lies on the beach and enjoys the cool breeze in his hair. James asks John to give him some fruit, and John says "no." But now, with this third and final fact pattern, let us assume that John tells James that he would be willing to give him some of his fruit if in exchange for it James would be willing to do something for him. Here at last we have some elements that suggest the possibility of coercion: John has some purpose or intent that he wants James to fulfill, and James can avoid death by starvation, at least for a few days, if John gives him that fruit. The socialist would say that John has the power to coerce James with the threat of not giving him the fruit, and therefore John can pressure James into doing what James does not want to do. This is the heart of the coercion argument.

But let us look more closely. John does not want James to obey him blindly. John is proposing a trade whereby James does something for John (some sort of sex work, let us assume), and in exchange John gives something of value to James. This would be a free trade of value for value. John does not really want James to “obey.” He wants James to make a rational economic decision in which he gives John something of value to John, in exchange for something of value to James. When a baker gives twenty pizzas to a mechanic and receives a bicycle repair in return, both sides receive something that they wanted or needed more than the things that they traded away, so both sides end up happy. In a free trade both sides are always better off, at least in the sense that they always get what they want or what they choose, because if you don’t think you will be better off from making a trade you simply walk away from it.

But the socialist says that James cannot simply walk away. He says that James has no other choice than to make this deal, because John is the only farmer on the island and so owns all the fruit, and James might die if he refused John’s terms. But if we look at the scenario carefully, we see that nothing has fundamentally changed from the first and second scenarios. What will kill James is the desert island and starvation, not John; there is no aggressive physical force used by John against James. James is free to go off to another part of the island and build his own farm, and John is not restricting any of James’ abilities, with the single exception of his ability to steal. John owes nothing of his fruit to James. He would therefore be fully justified in not giving any of it to him.

Having established that James has no right to John’s fruit, we can see that it is good for James that John offers to trade some fruit in exchange for some work. Unless John chooses to give some of his fruit to James, there is no reason why James should be entitled to any of John’s fruit, so it is perfectly right and ethical for James to have to come up with some value he can give to John in order to make John freely and voluntarily give some of his fruit to James. It simply isn’t true that John is threatening James or trying to intimidate James, because James’ danger of starvation is caused by the island and not by John, and John is not doing anything to prevent James from going off and doing anything he wants, including starting his own farm.

Capitalist freedom is the only kind that lets you make your own decisions rather than having someone else run your life.

Whether or not there is “unequal bargaining power,” as socialist lawyers like to say, is irrelevant. The fact remains that John has every right to make a proposal that James is free to accept or reject. John is free to accept or reject James’ request, and James is free to accept John’s offer or reject it and face the consequences of the dangers of life on planet Earth.

James’ freedom to choose is real and substantial. The socialists say in a capitalist system a poor person’s freedom illusory. Actually, however, capitalist freedom is the only kind that lets you make your own decisions rather than having someone else run your life. This freedom benefits everyone, rich and poor alike. When the socialists say that James’ alternative to accepting John’s offer is death, what they mean is that they don’t want James to have to do the work and take the risk of starting his own farm. They want to use their guns to tear down John’s fence and let James steal from John so that James won’t have to face risk and make choices, as is proper for a human being trying to cope with the harsh problems of life on earth.

My inquiry thus far has been about whether John is coercing James, not whether John should give James charity voluntarily and out of compassion. Obviously he should; in most cases it is a sin to let other people die, especially if you can help them without putting yourself in danger and they have not committed any morally repugnant crimes. And in a real market economy there is always competition, so no businessman can ever have the kind of monopoly on trade that John does. But I stand by the arguments presented above, which show that John’s offer of money for sex is not coercion. Leftists equate the mugger’s “your money or your life” with the employer’s “work for me on my terms or I won’t pay you, in which case you might starve.” The difference is that the former is a threat of murder, whereas the latter is merely the expression of “work or die,” a reiteration of the natural condition of human life. To say that in practical terms the cases are identical is to ignore every word I wrote in this essay. And where there is no threat there can be no “coercion.”

I will now shift gears and present the second approach to refuting the coercion myth, which is the empirical factual approach. This approach allows that economic pressure might be coercion, but libertarianism would actually produce less economic pressure than statism and would therefore be preferable.

The first step is to frame the question properly, in this way: assuming that economic pressure is coercion, which is the economic system that produces the least economic coercion and the most economic freedom? Is it the capitalist libertarian system, which would legalize prostitution, or is it the socialist, protectionist, statist system, which criminalizes prostitution and uses either central planning or a welfare state? Also, assuming that neither capitalism nor socialism has the ability to erase all poverty (poverty being, after all, a relative term), the question is not which system will eliminate coercion; the question is which system will minimize coercion, because that is the achievable goal.

The logic of this argument must begin with a key observation. Even if prostitution is illegal, poverty will still put pressure on poor women to become sex workers. Criminalization makes prostitution more dangerous and therefore a less attractive choice, but it does not completely prevent poverty from coercing women into becoming sex workers. The widespread existence of sex workers in America proves just how ineffective the ban is. Therefore, whether or not prostitution is illegal doesn’t factor heavily into this analysis; the crucially important question is whether capitalism or socialism is more efficient at creating jobs for poor women.

So long as poverty exists and sex work is a way to make money, there will be economic pressure for women to become sex workers, so one might think that legalization of prostitution would necessarily increase coercion. But libertarianism is not the reason why sex work is repulsive to some women — or why it frequently pays well. That has its roots in human nature and the nature of sexuality. Assuming that the availability of other jobs is the best way to decrease economic pressure, it is perfectly reasonable to examine libertarianism and statism to try to determine which one would be better at providing more choices for women. We can say that a system in which most poor women are not forced to become sex workers is one that is not generally coercive.

The question is not whether it is capitalism or socialism which will eliminate coercion; the question is which system will minimize coercion, because that is the achievable goal.

The explanation for why, under laissez-faire capitalism, there will be more opportunities for the poor than under socialism is that in a capitalist system the entrepreneurs and business owners depend on the skill, talent, intelligence, and hard work of their employees in order to compete. The manager can’t do everything, so if the employees do a bad job, the business fails. Thus, management must always be searching for people who will do a good job, and seeking them wherever they may be found. An employee who is smart and works very hard is valuable. Employers will hunt for and abundantly reward productive employees. If a poor woman chooses to work hard and be a good employee, under capitalism she is likely to find a non-sex-work employer who will hire her. The public education system traps the poor in poverty by giving bad educations to children who can’t afford private schools; but privatization of education, using a voucher system, can solve this problem, and we can assume this as a feature of the libertarian system we are considering. We can also assume that wealthy people would support banks willing to give student loans to well-qualified poor people in order to develop the workforce necessary to compete with rivals.

More wealth in an economy and a higher average standard of living create more opportunities and career choices for everyone, including poor women. Capitalism is simply more efficient at producing wealth than statism, because it is better at providing the incentives that motivate people to be productive. Because free-market capitalism will create more career choices for poor women than statism, they will actually feel less economic pressure in a libertarian society than they would under socialism. Banning prostitution, on the other hand, simply eliminates a way to make money. A ban does nothing to solve the problem of poverty or to reduce the pressure to take unpleasant jobs.

One variation of the coercion argument is that a woman might choose to become a sex worker, but she would not want to if she had a choice (or, to be more precise, if she had money), and therefore the government should make her choice for her. This argument claims that protectionism actually increases freedom by giving people the situations that they would have chosen if they had been free to choose. But no one's choices can be predicted; the human mind is too complex for that. The only way to know what choice someone would make is to give her the freedom to choose, then see what choice she ends up making.

Outlawing prostitution does not magically solve the problem of poverty or help poor women pay their bills.

If a woman (or, again, a man) is horrified by the idea of becoming a sex worker, in a libertarian society she would be free to seek another job and persuade some employer that she would be a good worker and should be hired. F.A. Hayek's famous argument in The Road To Serfdom is that when people face a difficult choice (such as whether to become a sex worker or else have money trouble), they often want the state to eliminate this choice; but if the state destroys their freedom to choose, it has not eliminated the problem of a difficult choice. It has merely made that choice for the people instead of letting each person choose for herself. The poor woman who does not want to become a sex worker but who faces money problems must sometimes make a difficult choice, but outlawing prostitution does not magically solve the problem of poverty or help poor women pay their bills. It merely deprives women of the possibility of becoming sex workers if they wish.

There would probably be a sharp increase in sex work if prostitution were legalized. But there is no reason to assume that such an increase would be caused by coercion, not by the freedom accorded to women who would view sex work as comparatively easy money. There are some human beings who view sex as a physical act devoid of emotional or spiritual significance and who would view sex work and washing dishes as comparable. The idea that no woman could possibly want to become a sex worker is rooted in a very conservative, old-fashioned religious ideology. The state has no right to take the religious views of some people and force them upon others, particularly in light of the First Amendment's separation of church and state.

Looking beyond prostitution to broader issues of coercion, it is also worth remembering Hayek’s classic argument that when government makes people’s choices for them, there is but one authority that everyone must depend on, whereas in free-market competition there are hundreds of thousands of employers and millions of sales and deals happening constantly. The government has the power to coerce you by using its guns to force you to obey, but no capitalist can own every business or control every job. A worker under capitalism always has options and choices. If a woman faces poverty and hates the prospect of becoming a sex worker she is free to seek another job, and if one employer refuses to hire her then she can apply for positions with fifty others. The number of employers it is feasible for any one person to seek employment from, and the costs and sacrifices that any person must make in order to find a job, are real factors, real, empirical questions that vary for each individual. Some people may need to move to find a job, or to make other adjustments in their lives, just as they often do when seeking a spouse, getting an education, and so forth. Generally, however, in competitive capitalism there will be many more choices than in a socialist system.

To conclude: economic pressure is not coercion, but even if it were, libertarianism would produce less coercion than statism. Opposing arguments are common in American culture, especially among leftist or Marxist intellectuals and people influenced by them. The coercion argument is the foundation of many socialist illusions. It is the justification for laws that attempt to protect people from the tough choices that they would feel pressured to make in a free market. The truth is, however, that when the government tries to protect us by eliminating our freedom, that action is coercion. Libertarian capitalism, in which people can make whatever choice they want, is freedom, and freedom is a good thing. I hope that this essay’s framework — a double-barreled shotgun approach to refuting the coercion myth, with one barrel comprised of analytical deduction and another barrel coming from empirical fact — is a step in the right direction on the path toward replacing the state’s coercion with the people’s freedom.




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Hurting the Poor, Helping the Rich

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Coming from Randian roots, I have a deep appreciation for the virtues of business, and of wealth that has been earned. I do not consider myself to be a liberal-tarian. I usually agree with the Right and disagree with the Left. But the more I look around, the more I see that socialism is really a tool by means of which millionaire elites keep the poor masses from rising up. Libertarianism or “classical liberalism,” on the other hand, can accurately be described as the friend of the poor and the enemy of the rich. I have already written in Liberty (January 2010) about how capitalism helps the poor. What I want to focus on in this Reflection is how statism helps the rich, especially the old money aristocracy, the metaphorical James Taggarts of the United States.

The evidence is overwhelming. Look at education. Rich people send their own children to expensive private schools, which put them on track for Ivy League universities and white collar jobs; meanwhile the political establishment makes sure that the only choice available to poor children is a horrible public school system that teaches nothing and trains students only for low-income jobs. The public schools are controlled by teachers' unions that oppose merit-based pay and favor a seniority system, which is a terrible model for achieving high educational excellence. The modern liberal reply is to say that the system is broken but could be fixed by raising taxes to give more funding to public schools. The real solution is to use school vouchers so that poor children can attend the rich children’s schools — a prospect that few wealthy parents care to consider.

Or look at business. Statism helps wealthy corporations in many ways — not by giving them tax breaks as the modern liberals complain, but by giving them rentseeking handouts such as farm subsidies and defense contracts. Ending all subsidies and all pork barrel spending would be a huge loss for rich people with political connections, yet the modern liberals have bamboozled the poor into thinking that statism actually helps the poor and hurts the rich. On Wall Street, the SEC’s maze of rules makes legal compliance so difficult that it is virtually impossible for newcomers to compete with the old established investment banks. Established businessmen use taxes and regulations to stifle competition from start-up entrepreneurs and up-and-coming small businessmen who can’t afford to hire compliance lawyers and tax consultants, as their old money rivals can. Yet small business is precisely the engine of opportunity for hard-working ambitious people from poor backgrounds.

Now look at the professions. Affluent professionals in the medical and legal fields enjoy salaries that are artificially increased because the AMA and the ABA maintain systems of doctor licensing and lawyer licensing that restrict the supply of new doctors and lawyers. I predict that if ObamaCare does lead to a socialist single-payer national healthcare system, that system will be run by AMA-approved bureaucrats whose inefficiency and nepotism will drive up the price of healthcare, allowing doctors favored by the state to make more money than they would have in a free market. In the ObamaCare nightmare the rich will probably be able to afford to obtain treatment from high-quality doctors, but the poor will be faced with no alternative to the low-quality healthcare that the system is certain to produce. ObamaCare will be a disaster for the working poor.

In every situation mentioned, above socialist measures help the rich and hurt the poor, creating a caste system in which vast fortunes can be inherited but cannot be built up from scratch. The instances described above have all been justified on the ground that they benefit society as a whole or protect the whole public from the dangers of free markets — in itself a distinctly socialist justification. But a logical person would expect socialism to favor the wealthy, because it vests tremendous economic power in the class of bureaucrats and government officials, and one would expect the upper class to have the means to exploit that power. The rich are the ones most likely to be able to afford to run for office and to purchase influence among politicians by means of campaign contributions and special interest lobbying.

Socialism favors the wealthy because it vests tremendous economic power in the class of bureaucrats and government officials, and it is the upper class that has the means to exploit that power.

What I am offering is not an empirical claim but a deductive argument: the wealthy are inherently better positioned than the poor to exploit the state’s power; therefore, the more powerful the state becomes, the more advantage the rich have over the poor in terms of the opportunity to make money. Ayn Rand hinted at this idea when she contrasted “the aristocracy of money,” that of people who earn wealth, with “the aristocracy of pull,” that of people who exploit the state to obtain wealth. But in the end I think Rand loved the rich so much that she failed to see how socialism may actually be a plot by the rich against the poor.

My criticism is directed mainly at wealthy members of the socialist or extreme-leftist wing of the Democratic Party. It is no coincidence that many of the most famous Democratic politicians who preach that they are the champions of the poor graduated from Ivy League universities that most poor people could never get into because they could not afford to attend the most prestigious private high schools. Many of these millionaires could not possibly imagine what it is like not to have enough money to pay your bills or to have to work two shifts to make ends meet.

Consider Democratic presidential candidates, past and present. President Obama comes from Harvard Law. John Kerry has the Heinz fortune. Bill and Hillary Clinton were products of Yale Law. And the members of Joe Kennedy’s clan have vast amounts of wealth and several Ivy League degrees behind them. Looking farther back, Franklin D. Roosevelt, the champion of the socialist New Deal, was a man of wealth and privilege; the Rockefeller family inherited an enormous fortune, yet produced many left-leaning politicians, one of them a presidential candidate. People like the ones just mentioned have no right to say that they speak for the poor and underprivileged. Such people are merely exploiting leftism to maximize their already substantial influence.

It is true that the higher taxes championed by modern liberals would hurt the rich. But the bottom line is that in the American capitalism-socialism hybrid, the leftist rich retain the ability to own their vast fortunes while also exploiting the advantages of socialism to prevent ambitious poor people from competing with them. While socialist interference in the economy drives up prices and eliminates jobs, the rich retain their connections, their ability to land good jobs, and their ability to pay for what they want to buy. By contrast, the poor have no choice other than to accept whatever goods and services the government-ruined markets have to offer, and they must desperately seek jobs in a market crippled by taxes and regulations.

The socialist wing of the Democratic Party thinks that decades of the welfare state have made the American poor so lazy and dependent upon government charity that they can be controlled like dogs and trained to bark at capitalism whenever the leftists blow the whistle. This twisted scheme has worked to some extent: common sense and conventional wisdom now hold that lower-class economic interests are aligned with the welfare state.

Libertarians would be well served to focus our ideological energy on fighting this myth. The working poor in the United States have enough trouble to worry about as it is, and it’s not fair to them to tolerate a political system that hurts the poor and favors the rich.




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The Bowels of the Occupy Movement

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According to its website, Occupy Wall Street (OWS) is a people-powered movement organized in "response to the Great Recession caused by our financial and political leaders." It vibrates with activity as people organize against corporate greed. Working groups pulsate, "planning actions, coordinating with community groups, engaging with the press, supporting each other, and strengthening solidarity within the movement." They intend to work tirelessly until inequality, injustice, poverty, and war are eradicated, all the while "refusing to be silenced," presumably by powerful movements clamoring for inequality, injustice, poverty, and war.

The early days of the OWS movement experienced rapid growth, its popularity boosted by media coverage and support from celebrities and Democratic politicians. In recent weeks, it has been joined by labor unions, community organizers, human rights groups, and the Communist, Socialist, and Fascist parties. Implying a form of automatic enrollment for everyone whom big business and big government has been sticking it to, the hope is that the "99%" name will increase membership to, well, 99%. There is also a small, but vocal, anti-Semitic faction, no doubt formed from the belief that Jews own all of the banks. And since OWS demands "indictments and prosecutions of all crimes committed by banks, brokerage firms and insurance companies," a very large legal faction is expected to develop soon.

Much of the anger is understandably directed at our democratic-capitalistic system. But a poll conducted for the movement by CUNY sociologist Héctor R. Cordero-Guzmán found that 70.3% of OWS'ers are politically independent and 64.2% are under the age of 34. That is, most probably don't vote. The poll also found that 92.1% had some college, a college degree, or a graduate degree; 13.1% are unemployed; and 71.5% earn less than $50,000 a year. So most OWS'ers are highly educated and have jobs, but almost 85% (13.1 + 71.5) pay 0% in income taxes — in contrast to, for example, Tea Party members, who are old and uneducated, but pay 30% of their income in taxes.

In addition to Wall Street and the 1%'ers, OWS'ers hate big corporations, especially ones that make huge profits, ship jobs overseas, and "plunder the planet." During a working group debate, one protestor tweeted "X on sucks" to his followers by using his new $560 iPhone 4S. I assume he was talking about Exxon, a giant American oil company with a profit margin of 9.66%. Apple, which recently surpassed Exxon as the world's largest company, extracts a profit margin of 35% on iPhones, which are manufactured by Samsung in Taiwan. Evidently, big corporations that screw consumers can get an OWS protest exemption if they make cool products.

Similar logic applies to people. Corporate CEOs are demonized because of their sinfully high salaries. True, the top ten CEOs averaged $43 million in 2010. But the top ten celebrities averaged $100 million. Instead of castigating them, however, OWS'ers pay them tribute, by purchasing exorbitantly priced tickets to attend their bourgeois movies, concerts, and sporting events.

Despite numerous anti-capitalist signs (e.g., "End Capitalism" and "Smash the Pillars of the Pig Empire") and an equally large number of signs advocating socialism and communism, the OWS movement insists that it doesn't want to destroy business; it just wants to make a few changes. Specifically, it wants American business to hire more people, increase salaries and benefits, provide free health care and education, reduce the prices of products and services, and eliminate pollution and greenhouse gas emissions. The profits (if any, after all the wealth-sharing) should be returned to society. So the new system would be a hybrid in which capitalists could own businesses but control neither their property nor their profits. Let's call it Marxalism.

Self-respecting socialists cannot be expected to carry their clever anti-capitalist signs while shivering and holding their noses at their own fetor.

Nationwide demonstrations by rebellious youth may annoy and disrupt American business, but they are unlikely to cause an immediate, voluntary switch to Marxalism. Nor will they result in a swift enactment of anti-greed laws. The real leaders understand the futility of such languid tactics. They are professional radicals, hiding in the bowels of the movement — deep thinkers for whom class warfare is a full-time job. They are the friendly statists from ACORN-like orgs, whose anti-capitalist outrage calls for social revolution. And they want it before ADHD and cold weather drive demonstrators back to their jobs and classrooms.

To ignite a revolution, the movement needs rebellious leaders with the ability to rouse and incite the masses. Who should be the provocative face of the revolution? Given the number of protestors wearing chic T-shirts imprinted with the image of Mao and Che Guevara (not to mention Marx, Lenin, and Stalin), it would be tempting to use modern-day versions of these idols. However, Che-like leaders would be demoralizing. The original Che denounced the “spirit of rebellion” as “reprehensible” and those who “choose their own path” as "delinquents." Chairman Mao has become a cult hero, perhaps more trendy than Che. California even has "Mao's Kitchen" restaurants. But it would be difficult for Mao-like leaders to explain the miserable failures of the original Mao — for instance, the "Great Leap Forward" to create a just, egalitarian society that ended up killing 45 million innocent Chinese men, women, and children. As with Che's idol, Stalin, justice and equality were evidently unimportant goals for Mao.

There are even problems with frontmen such as Michael Moore. On the plus side, he is highly visible and somewhat popular, has no history of supporting mass murder, and has never been seen in a Che T-shirt (although he has endeared himself to Fidel Castro). A recent convert to the OWS movement, Mike hates capitalism, which he regularly and vehemently denounces. He often alludes to violence in the streets if Wall Street doesn't pay back what it has stolen: our pensions, our money, and the futures of our children. But the spectacle of Michael Moore raging against corporate fat cats would hardly ignite a revolution. And a T-shirt image of a fat 57-year-old man, with bangs sticking out from under a goofy ball cap, is simply ridiculous.

In terms of the stated goals, two months of demonstrations have achieved nothing. As the OWS movement has grown and spread, so too has its proclivity for violence and revolution. Writing in the New York Post of a recent visit to Zuccotti Park, Charles Gasparino "found a unifying and increasingly coherent ideology emerging among the protesters, which at its core has less to do with the evils of the banking business and more about the evils of capitalism — and the need for a socialist revolution." Unfortunately, the latest recruits to the cause — for the most part, criminals, drug users, panhandlers, and the homeless — have produced little more than a stench pervading the carnival-like encampments. Indeed, the increasing violence and decreasing sanitation of the movement has begun to wear out its welcome in many cities. And with the onslaught of winter, many protestors plan to retreat, vowing to return with the fair weather of spring. Self-respecting socialists cannot be expected to carry their clever anti-capitalist signs while shivering and holding their noses at their own fetor. Besides, it is an image more ridiculous than that of a Michael Moore T-shirt.

In the bowels of the OWS movement lie zealous agitators who see themselves as its true leaders. Privately they regard the mainstream media, vocal celebrities, and shrill professors of socioeconomic equality as useful idiots. When it comes to money and power, they are as greedy and exploitative as any of their oppressors. By offering false hope and fomenting hatred and unrest, they seek to extort capital and usurp power for themselves. And with thousands of eager demonstrators at their disposal, they believe their moment is now (or next spring).

But there is an obstruction, a chronic irritation — the lack of charismatic demagogues to articulate the ideology. Some would say the movement has been stricken with irritable bowel syndrome. Alas, for this strain, no medicine seems to be available.




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Poisoning the Well

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Young people are getting an education on the free enterprise system that prejudices them against it.

Their educators tend to see its ethos as one of “dog eat dog.” They believe that fierce competition is its only feature, and that this competition must always be destructive. They believe that some will win and others lose, and that the winners must completely obliterate the losers.

Kids learn that lying in business is sharp and shrewd. That successful businesspeople use every dirty trick in the book to get ahead. That, given the nature of the system, they absolutely must do this to succeed. Dishonesty may be considered wrong everywhere else in the world, but in the workplace it is a skill necessary for survival.

Of course this is the detritus of Marxist philosophy. Even at its mildest, it is not what people who esteem the free enterprise system, who support it as the one most conducive to freedom and prosperity, believe. But youngsters who aspire to succeed in business tend to believe these things, because they’re what’s being taught. They carry such notions into the business world, and this accounts for the abysmal lack of ethics we see in all too many of them.

People who notice this bad behavior are often told that “that’s business,” and believe it. Thus they are vulnerable to the rhetoric of “progressive” political hucksters who preach warmed-over Marxist ideas such as the redistribution of wealth and the supposed necessity of government intervention in the marketplace. And thus does the vicious cycle perpetuate itself.

But among those who care about free enterprise, there is a sense of what, for lack of a better word, I might call sportsmanship. While at one level a business competitor may be a rival, in the larger scheme he is actually a partner. You might defeat him today, he might defeat you tomorrow, but next week you might succeed together. As for customers, they are not suckers to be bamboozled; they are every company’s greatest resource. A continuously profitable business doesn’t try to fool them once, then go in search for other suckers; it establishes a mutually beneficial, long-term relationship with them.

The economic chaos we face today didn’t spring full-blown from Obama and the Left. It is the product of both major parties, and the years of confusion over which they’ve presided.

An understanding of these principles is almost totally absent in the minds of many young folks in the corporate world. And this has opened a Pandora’s box of ills. It has much to do with why tycoons pay expensive lobbyists to get legislation passed forcing competitors out of business. It’s why big corporations gobble up struggling small fry and — with the help of bought and paid-for elected officials — strangle other entrepreneurs in regulations that keep them from building better companies. It’s how so many of them can thrive on taxpayer-funded subsidies, then congratulate themselves on their commercial genius. Such tricks are then described, by anti-free enterprise professors, as capitalism in action.       

What the young are not being told is that there is a beauty, balance, and wisdom to the free enterprise system. That it can thrive only in an atmosphere of trust, based on individual integrity and mutual respect. That it is up to each of us to keep that trust. It’s true, we all compete, but only so we can become our best. And if personal dishonesty becomes too widespread, it will undermine and erode our ability to trust one another.

The well is being poisoned right at its source. William F. Buckley raised an alarm about the fouling of this spring in his first bestseller, God and Man at Yale, more than 50 years ago. His warning is as timely now as ever. We are paying small fortunes to educate our sons and daughters, and they are being taught to distrust the very waters in which they must swim. They are being taught that the only way to clean them up is to pay self-designated geniuses to regulate the flow.  What will happen is that the pool will dry up.

I spent my early college years at public institutions, and I remember being taught that the system in which I had to survive was evil. Then I transferred to a small, private college, and for the first time I heard that the economic system developed in my country had become a blessing to the whole world. For the first time, from professors not beholden to socialist dogma, I was exposed to a gospel of hope. It was many years before I was able to sort through the confusion of those conflicting doctrines and find my way to the truth. Kids today are confused, too, but they are as salvageable as I was.

They won’t hear the truth from the GOP-led Right. That crowd preaches free enterprise, yet feeds into the corruption and calls the bitter sweet — at least until the Democrats are in charge. The economic chaos we face today didn’t spring full-blown from Obama and the Left. It is the product of both major parties, and the years of confusion over which they’ve presided. Most of our would-be leaders learned from the same kind professors who now teach our kids, so they are no less befuddled.

Competition can be healthy. It can make us grow. But it can also be sick and deranged, goading us to tear each other apart, which is what happens when people compete for money and economic privilege that are taken from others and given to them. Thus Solyndra enjoys half a billion dollars provided at the expense of taxpayers who are losing their own jobs and homes. But there are still examples out there of beneficial competition in action, of good people working to keep our country great. I suspect, however, that Washington DC is the last place we’re going to find them.

If we can be made to believe the bad press about free enterprise — whether it comes from academia, from Hollywood, from the news media, or simply from our friends—we will act according to such notions. We’ll lie, cheat, and try to rig the game, and no one will have any cause to trust us. This was how the well got poisoned to begin with. The economic system that made America great needs better public relations. But we can’t merely entrust the job to any self-styled expert. We must, each and every one of us, take it up ourselves.

We must stop subsidizing schools that sow destruction. There are good schools, and responsible professors, who still teach the principles that can save us. There are still candidates, and voters, who care passionately about liberty. This is no time for passivity or despair. It is time to speak up, and to practice what we preach with greater fidelity than ever before. Our kids are watching every move we make to see how closely it corresponds with our words.

In the break room at one of my many corporate jobs, there was a poster promoting carpooling. It showed a throng of cars packed into a traffic jam. In each was a single driver, and from every driver’s head came a thought-balloon saying, “I can’t make a difference.” Although this was government-funded “green” propaganda, and the phrase has, unfortunately, become a cliché, it carried a grain of truth.

Each of us can make a difference, because although we are individuals, we are not alone. But we are individuals, and we are each responsible for ourselves. The great cleanup of the well can only begin with us.




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Did You Build Grand Central Station?

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On Sept. 29, President Obama gave a TV interview in which he said, “The way I think about it is, you know, this is a great, great country that had gotten a little soft and, you know, we didn't have that same competitive edge that we needed over the last couple of decades. We need to get back on track."

Notice that when the president said that “we need to get back on track,” he didn’t mean that “you and I” need to do so. He didn’t mean that he had lost his competitive edge during the past 20 years and needed to reform himself. He meant that you had lost your edge. The I he reserves for such statements as “I’m going to be signing an executive order today,” or “I urge Congress to move forward,” or “I need to win elections so I can become my own father.” (That last statement is something that he’s never actually said but that he has probably, poor man, always felt.)

In 1927, Charles Lindbergh published a book about his solo flight across the Atlantic. The book was called We. The reference was to Lindbergh and his airplane, The Spirit of St. Louis. Those two were “we.”

Please imagine the effect if he had called the book I. Even Ayn Rand changed the name of her second novel from Ego to Anthem. If you want to call a book I, it had better be your autobiography. (And it had better be good.) But Lindbergh’s book was the story of his exploit, not the story of himself. Without the plane, he wouldn’t have had the exploit. His title showed appropriate courtesy to the plane.

Now imagine the effect if he had gone in the other way and called the book We, the American People. That wouldn’t have been discourteous. That would have been preposterous. It wasn’t the People who crossed the Atlantic. It was Lindbergh and his plane.

I’m not talking about metaphysical issues. I’m talking about literary effects. But there are certain large areas of American life in which neither metaphysics nor aesthetics are understood. The chief of these areas is politics. In this field, we is now one of the most common terms, and it is almost always misplaced — misplaced in a way that is shocking both to fact and to intellect.

As usual, President Obama provides the reductio ad absurdum. Here is what he said during his “give me money and I will create jobs” tour, on Sept. 22, in Cincinnati:

Now, we used to have the best infrastructure in the world here in America. We’re the country that built the Intercontinental Railroad, the Interstate Highway System. We built the Hoover Dam. We built the Grand Central Station.

So how can we now sit back and let China build the best railroads? And let Europe build the best highways? And have Singapore build a nicer airport?

Andrew Malcolm, reporting on the president’s speech (Los Angeles Times, Sept. 23), asked a “quick question”: “Has anyone ever heard any American express jealousy over Singapore's sweet airport?” That’s a good question, but it’s not the important one. The important question is, Who is this we, anyhow?

I don’t remember having built any dams or train stations, and I’ll bet you don’t either. Obama’s we is simply a way of inciting people’s emotions by confusing their ideas about how things get done. We the people don’t raise capital, draw up plans, and pour cement. We may pay taxes or buy train tickets, but we can’t take the credit if a train station turns out to be a work of art, or take the blame if an airline terminal looks like a prison, but without the charm.

It should be noted that “we” is not a term of agitation simply on the Left. It is also a weapon of the Corporate Power — you know, that “1% of the country that owns 99% of it.” This putative 1% appears to consist mainly of oil companies, and they are fighting back, in their feckless way, with commercials in which simulacra of ordinary people say obnoxious, accusatory things — things like, “The oil companies are making a lot of money. Where does it go?” — and then are answered by the unsurprising news that the companies invest the money they make, thereby creating jobs. But many of the obnoxious statements refer to the alleged energy shortage. These take the form of hysterical outbursts such as, “We have to do something about this!” or “We gotta get on this now!

But there are certain large areas of American life in which neither metaphysics nor aesthetics are understood. The chief of these areas is politics.

None of the average citizens whom Chevron depicts as looking up from their busy lives to demand that something be done is portrayed as having any professional qualification to do something himself. We the people aren’t up to that. So the greasy oil company spokesman is free to step in and proclaim that certain other we’s, we the energy experts, are indeed doing something with those invested profits, something to better the lives of everyone, etc. It’s a contest between one we and another, which puts it on a very high intellectual level indeed.

I find it painful even to notice nonsense like this, so I’ll be content with one more example. A big, thumping, classic example. A confused person named Julianne Malveaux (who used to be visible pretty frequently on television, when television was an entirely leftwing venue), once posted a favorable review of a popular book about religion and morality, in which she made these comments: “Still, I could not read the book without wondering how [the author] or anyone else would expect morality in a nation of thieves. How could we expect our political leaders to be honest when we stole from the Indians, enslaved the Africans, interred [sic] the Japanese, disenfranchised the Chinese, conscripted labor from the Mexicans and so on and so on and so on.”

Clearly, Dr. Malveaux does not consider herself a part of this nation of thieves, or she wouldn’t trust herself to discuss its morality. Yet somehow she can’t avoid using we and our, thereby confessing herself to be a dastardly American after all. Having seen this nice lady on TV, I can hardly picture her forcing Chinese (presumably Chinese Americans) away from the polls, persecuting Mexicans by “conscripting” their labor (huh? when did that happen?), or enslaving Africans — much less burying the Japanese. By her account, however, she has done all these things, and is also several hundreds of years old.

Silly as it is, this kind of rhetoric is increasing. It is growing even faster than the national debt — although formerly, even the worst orators tried to avoid its worst excesses. But whenever I say things like that, I try to check them against Lyndon Johnson’s inaugural address (1965), which I regard as a standard by which bad writing can be measured. Bad, worse, worst: this speech is one of the worst things ever written. (I’ve discussed a few of its features before, in "The Great Man Speaks," Liberty, April 2009. I haven’t talked about any of its good features, because there aren’t any. ) So how is we handled in Johnson’s speech?

Johnson makes some borderline uses of the first person plural — innocuous generalizations about “we” as “we” are today: “Under this [the exact referent isn’t clear, but it’s meant to be something that happened, or maybe didn’t happen, sometime in American history] covenant of justice, liberty, and union we have become a nation — prosperous, great, and mighty. And we have kept our freedom. But we have no promise from God that our greatness will endure. We have been allowed by Him to seek greatness with the sweat of our hands and the strength of our spirit.” Blah, blah, blah. Yes, we don’t know what God has in store for us. This is perfectly true and fully supported by fact. Most of Johnson’s other we statements, however fallible or flaky, are also observations about current reality, about what we supposedly see now:

For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest sleeping in the unplowed ground. Is our world gone? We say “Farewell.” Is a new world coming? We welcome it — and we will bend it to the hopes of man.

To this we can only respond, “When was it that we said farewell to our world?” I, for one, can’t recall any worlds disappearing. And I know I never contemplated bending a new world to the hopes of man. Sorry, can’t picture that. But even baloney like this isn’t as bad as the oil company ads, which insist that we actually start doing something to bend the world, or the Malveaux review, which insists that we (you and I!) once actuallydid something like that, but it didn’t turn out very well.

Nevertheless, there is a disturbing parallel between Johnson’s speech and the more modern remarks I’ve been analyzing. It comes in the following paragraph, where Johnson says:

No longer need capitalist and worker, farmer and clerk, city and countryside, struggle to divide our bounty. By working shoulder to shoulder, together we can increase the bounty of all. We have discovered that every child who learns, every man who finds work, every sick body that is made whole — like a candle added to an altar — brightens the hope of all the faithful.

The Simpsons has the First Church of Springfield. America at large has the First Church of All. One of its dogmas is that all of usare always learning helpful things about all of us. For example, we learned to work shoulder to shoulder (now there’s a fresh expression), because we discovered that competition (the “struggle to divide”) doesn’t “increase the bounty of all.”

This notion goes a long way toward explaining America’s melancholy political history from the 1960s until now. No politician ever opens his mouth to say that we were once taught to believe that we should work shoulder to shoulder, but that now we know we were wrong, because competition increases the bounty of all. But that’s the plain, though unutterable, truth.

Somehow Malveaux can’t avoid using “we” and “our,” thereby confessing herself to be a dastardly American after all.

One thing we plainly did not discover, because it is patently absurd, is that everyone benefits from everything good that happens to everyone else. If this is what every child who learns is learning (and I’m afraid it is), then we are in serious trouble. But in case you haven’t noticed, we are in serious trouble, and it’s because some people actually accept the ridiculous assumptions behind these ridiculous uses of every, all, and we.

I hate to say it, because it seems so fundamentalist, so retro-libertarian, but this also is true: what I’ve been discussing here is collectivism, pure and simple, and collectivism is a very bad thing. Not only is it economically harmful; it’s destructive of thought, and today it is more prominent than ever in America. There is nothing more common than the linguistic collectivism that was planted in President Johnson’s idiotic remarks about “the hope of all the faithful” and now blossoms in President Obama’s amazing idea that we (of course including he) somehow constructed the Hoover Dam and summoned Grand Central Station out of the primordial ooze. Yet on this false conception, this linguistic folly, has been erected the vast framework of modern socialism, the system of thought and action that is now imperiling the future of us all.




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Fiscal Sanity

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When the Tea Party took control of the House of Representatives in 2010, my worry was that they would sell out and become status quo conservatives — like most Republican politicians who have paid lip-service to laissez faire.  After the 2011 debt crisis, my fear is precisely the opposite.  The Tea Party House is too idealistic, too unwilling to compromise.

It seems to me that most Tea Party House members have been influenced (at some distance, granted) by Murray Rothbard, who suggested that you must insist upon total capitalist freedom right now. They have also been influenced by Ayn Rand, who likened compromise to poison. This must make a lot of libertarians happy, but it makes me both scared and happy. There are two reasons why I am scared, and one very different reason why I am happy.

First, as someone who believes in practical idealism, I believe that change must be enacted slowly or it will be doomed to long-term failure. The government has been quasi-socialist since the New Deal, and the American economic system has developed in such a way that it is designed for government to play a role. Simply eliminating all government intervention overnight instead of gradually phasing statism out would almost certainly harm the economy and worsen the recession, as the system would be unable to cope with the gaps in its structure.

Going from freezing to boiling instantly is a shock to any system, whereas increasing temperature gradually enables an organism to adjust and adapt. If the United States government shuts down before the free market has a chance to adapt and develop systems to replace government functions, the result will be chaos.

Second, if the Tea Party House refuses all compromise and continues to insist upon an idealism-or-nothing approach, the American public may become afraid of the dangers of radical change, and popular sentiment may easily turn against the Tea Party and libertarianism. The Tea Party and libertarianism are not identical, but the Tea Party movement is essentially a populist lowbrow form of libertarianism. If the Tea Party brand becomes unpopular it could set the libertarian movement back decades. The majority of the voting public can easily get scared by apparent extremists who threaten economic calamity in the name of abstract ideals.

This is so even though the Tea Party represents the very best ideals embodied in a long history of American patriotism dating back to the American Revolution. As a case in point, many Tea Party House idealists voted against the debt ceiling compromise, meaning that they wanted the government to default on its debt, which would have triggered a doomsday scenario for the American economy. I suspect that this scared many mainstream voters.

Nevertheless, and in spite of the above, I am actually happy as well as scared that the Tea Party House has taken such an insane approach. The Tea Partiers are crazy, but the modern liberals and conservatives are crazy too, and our insanity is better than theirs. A debt default would have been no more insane than ObamaCare or the war in Iraq. Trillions of dollars of unchecked growth in entitlement spending and more tax-and-spend Democratic budget deficits over the next decade would do more harm than a temporary government shutdown. Lofty idealism is a breath of fresh air, given the stagnant corruption that has emanated from Washington for the past century, and “much must be risked in war” (to quote The Return of the King).

I am happy with the Tea Party House’s strategy because the Tea Party could easily lose the House in 2012 and the movement might stall and dissolve, so this 2011–12 era may be our one and only opportunity to shrink government and restore fiscal sanity. Therefore the Tea Party should continue to fight to cut the government as much as possible, and make it difficult for future Congresses to undo its achievements, because the Tea Party may not last forever. The Tea Party House could be our one shot at saving America from an Obama-led collapse into socialism. In the context of my happiness over the Tea Party House’s unyielding idealism, a little bit of fear isn’t really such a bad thing after all.




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George Soros: Transparent Hypocrite

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George Soros is the notorious leftist billionaire who has spent lavishly to push this country (and others) in a statist direction. His preferred mechanism is quiet subversion: he funds front groups such as Media Matters (which aims at squelching speech by conservatives and libertarians on radio and television) and MoveOn.org (which aims at electing leftists to office). Ironically, he made a big chunk of his money collapsing the currency of a statist government (the UK) in 1992.

Well, he’s back in the news. He has now closed his hedge fund to outside investors. Why? Because of the new “transparency” financial regulations laid down by the SEC under the monstrosity that is Dodd-Frank. The new rules require that by early next year, large hedge funds (i.e., ones with asset bases over $150 million), such as his own, must register. Any large hedge fund will now have to disclose who invests in it, who works for it, whether it faces any conflicts of interest, and what it owns or invests in.

As the deputy chairmen of his fund (and, coincidentally, his sons), Jonathan and Robert Soros, so sadly put it, “An unfortunate consequence of these new circumstances is that we will no longer be able to manage assets for anyone other than a family client as defined under the regulations.” Accordingly, the fund will return all outside (non-family) capital to the investors — to the tune of $750 million.

Other hedge fund managers, such as Carl Icahn and Stanley Druckenmiller, have done the same with their funds. So why single Soros out for attention?

He deserves all the attention we can give him, because his megamillions helped elect the Red Congress that enacted Dodd-Frank, as well as the statist American president who pushed the bill and signed it into law. Soros wanted this country run by neo-socialists. He spent lavishly to ensure that it would be. But now he doesn’t want to have to live up to the spirit of the regulations this regime is inflicting upon the nation.

In short, Soros is a hypocrite. Not to mention a schmuck.




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Strauss-Kahn, Exemplar of Socialism

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The libertarian critique of socialism, or “social democracy,” has usually gone something like this:

The socialist program demands a planned economy. A planned economy can result only from plans. Plans must be made by a group of experts who are not subject to the vagaries of the electoral process. To form and implement their plans, the planner-kings must know everything crucial to the economy. They must know everything significant to their own plans, and be able to predict everything significant that may result from them.

But that is impossible.

This being true, the people who become planners will be those who are either stupid enough to believe that Plans can succeed or cynical enough to care only about the personal power that can be acquired by Planning.

The libertarian critique has a logic that no socialist program ever possessed.

Now we witness the reductio ad absurdum of the socialist idea: Dominique Strauss-Kahn, head of the International Monetary Fund, chief honcho of the French Socialist Party, and prospective president of France, who was arrested Saturday on charges of trying to force a maid in his $3,000 a night hotel suite to have sex with him.

Suppose that the charges turn out not to be true. Suppose that Strauss-Kahn’s nickname, “the great seducer,” means nothing. Suppose that consensual sex is nobody’s business but one’s own. Suppose all these things — the last of which is certainly true. The $3,000 a night hotel remains a problem.

As a self-chosen representative of socialism, and an anointed planner of the world's economy, Strauss-Kahn has supposedly devoted his life to the good of the people. How, then, $3,000 a night? On what premise must the people of the world pay for that?

I’ll tell you. The premise is that Strauss-Kahn, a product of those inner-circle French schools whose graduates automatically get high government jobs, deserves his perquisites of office, because he is somehow qualified to plan the world's economy.

Is he?

No. And anyone who thinks that he himself is so qualified, and uses that idea to justify his perquisites of office, is likely to present a strange moral profile.

World economic planning is allegedly justified on humanitarian and charitable grounds. Planners, allegedly, exist to help people, especially the deserving poor. Planners are supposed to be performing an altruistic work, the modern form of a religious mission. Yet among these managers of the world economy there is a strange absence of people who live in modest circumstances, practice some kind of religious or ethical discipline, or have anything to do with normal human beings, except when the maid arrives a few minutes early in their $3,000 a night hotel suite.

There are plenty of smart people in this world. Many modest people, skeptical of their own conclusions because they are actually in touch with their fellow citizens and knowledgeable about their lives, are also smart people. Strangely, many of these smart people are socialists, but their ambition is not to become world socialist leaders.

Why?

Because the idea that a small group of people is smart enough and knowledgeable enough to plan the financial lives — in fact, the lives — of six billion people is an idea that no one with any ethical understanding would apply to himself. An ordinary moralist would ask, “Who am I to do that? I don’t know enough. I could never know enough.”

Strauss-Kahn presents little evidence of any such moral or practical reflection. But what he did with his life was predictable, under the modern socialist system. A beneficiary of unmerited advancement, he did his best to “stabilize” the world’s economy by using political means to get the productive countries to support the spendthrift countries. He who wasn't producing anything himself.

I don’t presume that an alcoholic is incapable of becoming a good author. Faulkner did. Hemingway did. And I don’t presume that a “great seducer” is incapable of becoming a great thinker. Plenty of examples argue otherwise. But I do not presume that a drunk will be good at running an airline. I do not presume that a person who lacks discretion even about consensual sex affairs will have enough discretion to plan the future of six billion humble families.

To put this in another way: how did someone as stupid as Dominique Strauss-Kahn become one of the small group of people appointed to oversee the fiscal life of planet earth?

The answer is: the logical necessities of the socialist idea. If you want socialism, you are voting for fools like Dominique Strauss-Kahn. You may not know it, but you are. Otherwise — I’m sorry, you can’t have socialism on any other terms. The fact that Strauss-Kahn rose to the top is only a sign that the rest of the candidates were actually less competent than he.

To conclude: if you want someone running your life, and the life of the world, you can be assured that it will be someone like Dominique Strauss-Kahn — and if not him, then worse.




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Is Europe Liberal?

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The EC became the EU in 1992. I lived there at the time, and I wondered if, in socialist Europe, the EU would have a liberal or an illiberal influence. Trade liberalization was an important part of the EC from the beginning, and its successor is still mostly liberal on trade. But then there's everything else, mostly illiberal. And as the EU's powers expand, so does its illiberalism. Although on trade the EU is more liberal than its members, its many new powers are exercised in the interest of the state and its dependents, not in the interest of individual freedoms.

So where does the EU stand on balance? For a long time I wasn't sure. Now I am.

The March 19, 2011 issue of The Economist says that the Euro-zone countries are increasing their bailout of the Euro-basketcase countries, including Ireland and Greece. They lowered the interest rate that they charge to Greece, the country that is most deeply sunk in the basket. But Ireland "received no such concession because it insisted on keeping its low corporate-tax rate." That's right. We are not just a trade union, we are a monetary union; so raise your taxes or suffer the consequences.

On balance, the EU now has an illiberal, anti-libertarian, statist influence on its member states. Taxation and monetary policy are only two examples. There are many more. That little squib in The Economist tipped the scales for me.




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