Stories, Good and Bad

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Steve Almond’s latest book, Bad Stories: What the Hell Just Happened to Our Country, is the author’s attempt to sort through America’s flaws, as he perceives them, in order to explain the ascendency of President Donald Trump. The rock that gave credibility to his account — the Trump-Putin collusion — has now eroded to mere talus, and Almond’s book stands before the world as just another silly piece of business from the academic left.

Almond is enough of a socialist to recommend the nationalization of the football industry (and that’s going pretty far). In an interview in The Sun (September 2015) he was questioned about his recently published book, Against Football. At one point, the interviewer, David Cook, asks: “Is there anything that would make football worth watching again for you?” In his reply, Almond describes his “dream” of public ownership of the “football industry.” Thus: “The football industry could benefit our communities rather than billionaire owners and sponsors. What would it be like if the teams were publicly owned and the profits were funneled into the public coffers?” And he asks, “Is that such a crazy idea: that this game might help the people who need help the most?”

Almond’s book stands before the world as just another silly piece of business from the academic left.

Bad Stories is premised on the determinist idea that individual minds develop according to the stories to which they’re exposed. Furthermore, bad stories, the ones he sees as flawed or distorted, function to keep the good stories out of circulation. All this comes very close to the traditional socialist preference for a deterministic theory of human character and conduct. As Robert Owen put it, “A man’s character is created for him.” Owenite socialist experiments in America collapsed, one by one, and yet he kept on preaching the socialist faith, and many others have since joined him in resisting reality.

The Great Enlightenment of the 18th century, with its discovery that man, through reason and experiment, could identify chemical elements and synthesize molecules, led some thinkers to believe that they could, through reason, design an ideal society. Breathing this atmosphere, Owen concluded that the social order was all wrong, as did Fourier and such other extremists as Marx and Sorel. The main obstacle between them and the realization of their collectivist dreams was human experience, which included 35,000 years of trial and error. One product of the centuries of ebb and flow was the rise of Western civilization and its slow and costly march toward personal and economic freedom. And thus emerged free-market capitalism with its built-in pricing system, a wondrous instrument that adjusts production and distribution, according to demand. Under socialism, the free-moving pricing system is replaced by a governing bureaucracy — a nonaccountable realm, as James Q. Wilson described it. However much the socialist may rant about a just distribution of wealth, the pricing system carries with it a justice that sensible humans can truly understand — rewards based on the satisfaction of consumer demand.

It’s this form of justice that the socialist cannot abide, for he cannot control it — cannot channel its rewards to those that he, by heaven, believes are the most deserving. Hayek has warned us that personal freedom has never existed without economic freedom. “Fear not,” the socialist might say, “human nature is malleable. People will adjust to the imposed system.” But have they ever done so? And one might ask — if people are all that malleable, how did the socialists dream up socialism?

Owenite socialist experiments in America collapsed, one by one, and yet he kept on preaching the socialist faith, and many others have since joined him in resisting reality.

But here we have Steve Almond, feeling impelled to explain the rise of Donald Trump. He reveals the many reasons he divines, foremost among them being those “bad stories” that “distort our belief system.” Why does he neglect the individual’s reasoning process and the skepticism it can produce — especially in reflecting on political issues? Are individual Americans mere bots, driven now here, now there, by media prompts? The reasons he deduces for victorious Trumpism often involve a mass response to external influences, and these often trace back to capitalism. Consider this partial list: voter suppression, elections held on Tuesday, a disaffected electorate, hostile feelings for the other party, passions of a small minority, white privilege and the petty bourgeoisie, dehumanization, conservative paranoia, lying Rush Limbaugh and talk radio, thirst for entertainment, the sports brain, racism, opposition to social change, Trump’s unbridled aggression, television, the internet, Russian bots, lack of a Fairness Doctrine, the media’s right-wing conspiracy (a laugher), Vladimir Putin, Albanian hackers, and, of course, the Electoral College.

Almond criticizes the right and the alt-right for their paranoia, never showing, through example, how they demonstrate that quality. But his own apocalyptic predictions evince the paranoia he attributes to Trump supporters. One of his preferred literary works when seeking an analogy for Trumpism is Moby-Dick. The novel reeks with Significance. So great is the reek that I’ve wondered whether Melville was only kidding. One of my teachers in college, Professor E.H. Rosenberry, had similar thoughts — consider his book, Melville and the Comic Spirit.

But to Almond, Captain Ahab is “a parable about our national destiny in which the only bulwark against self-inflicted tyranny is the telling of a story.” (A bulwark? — how about the Constitution?) But Trump is more than an inchoate Ahab — he also resembles Kurtz, the antihero in Joseph Conrad’s Heart of Darkness. Conrad himself was a conservative, loyal to his adopted country, and, according to biographer Jeffrey Meyer, congenitally pessimistic. In Kurtz, we discover a smooth-talking reformer, who seeks to civilize a primitive African tribe. He dreams of a heroic reputation, but is drawn into the very culture he hopes to uplift. “The horror! The horror!” are his last words. Is it Almond, not Trump, who resembles Kurtz? But Almond ventures onward — Trump is also the golden calf prayed to by the Israelites. Indeed, he sees Trump as a packhorse for all the tyrannical vices — a bully, a bullshitter, a hollow entertainer who avoids the issues.

Why does he neglect the individual’s reasoning process and the skepticism it can produce — especially in reflecting on political issues?

What issues? Almond hardly mentions intellectual issues. He never details those Russian-hacker smears he complains of, though he spends a great deal of space on Hillary’s emails. When he does address policy issues, he bases his judgments on the immediate interests of his close acquaintances and a woman he found on Vox.com. He mentions the benefits they derived from Obamacare, for example, or from the Obama “stimulus package.” He overlooks the long-term effects of these “benefits” on the country. He believes the voters should worry more about their personal vulnerabilities than about their grievances. Were this a sound principle, the Pilgrims might have stayed home, along with others who sailed the seas to America. Aggrieved by oppression, they risked a long period of vulnerability at sea — for the promise of freedom.

As Almond sees it, Vladimir Putin is still fighting the Cold War. That we won that war is, to Almond, a bad story, even though the ultimate collapse of the Soviet empire is an established fact, and America can rightly claim to have carried the day. The author disparages Ronald Reagan as “the star of Bedtime for Bonzo napping in the Oval Office.” And yet, crucial steps toward Cold War victory were taken during the Reagan presidency. The Reagan-inspired arms race, Reagan’s frankly anti-Soviet stance, and his close alliance with the Thatcher government, all contributed to the economic failure of the Soviets and the eventual decision by Gorbachev to release the captive nations. At the time, George Kennan and his containment policy got much of the credit, though the policy had led to the squandering of blood and treasure in winless wars. But Reagan’s contribution was enormous. What was his approach to the Cold War? “We win, they lose,” he said — and we won.

Will Trump initiate a period of American decline? Putin hopes so, according to Almond. So far, Trump’s tax cuts have brought a period of prosperity to America and provided a clear lesson: as an economic stimulus, a tax-cut beats the federal printing press every time. Creating inflation to stimulate the economy is the equivalent of a lie — an economic falsehood. But Almond, the socialist, may well see prosperity as decline — as “late-model capitalism.” And consider this claim by the author: “When our president fumes about NFL player protests, or Confederate monuments, or gun rights, he isn’t just ‘shoring up his base.’ He’s doing Putin’s bidding.” This is fanciful nonsense.

Almond, the socialist, may well see prosperity as decline — as “late-model capitalism.”

Donald Trump is proving of little danger to America. And he will likely alert our people to a true danger — the swing among Democrats toward socialism, a system that has created a procession of disasters, especially during the 20th century. Its popularity on campuses is a monument to the corruption bred by left-academics, and the ignorance they cultivate. An extensive literature of liberty exists in the archives of America and the Western world. But one would hardly suspect its existence, if judged by the state of knowledge of the average college student of today. When colleges and universities accept an enormous tuition, yet keep students in ignorance to preserve their leftist sympathies, they perpetrate a fraud.

Almond’s political ideas are accompanied by a fashionable anti-patriotism. That America is a representative democracy is, to him, a “bad story.” But members of both houses of Congress are elected by the populations of entire states, or of districts within each state — hence we have representative democracy in the legislative branch. The president of the United States is, at present, chosen by electors in each state, the number of each state’s electors being the same as the number of members in its Congressional delegation. The Constitution doesn’t require a direct popular vote for these electors. The system was meant to protect the interests of the less populated states and to produce a careful choice for an office of great potential power. George Washington recognized this power and, after his second term in office, established a precedent by bidding it farewell.

There is something malodorous in the words, something that smacks of mere namecalling.

And yet, Almond views America as “borne [sic] of high ideals and low behaviors, the land of all men are created equal and slave labor. We’ve been engaged in a pitched battle ever since, between greed and generosity, between the comforts of ignorance and the burden of moral knowledge.” This quotation is taken from the final chapter of Bad Stories, one that particularly reveals Almond’s affliction with Trump Derangement. Here, anti-Trumpism reaches the brink of hysteria — environmental protection, civil rights, free trade, public education, health care, are “all heading for bankruptcy.” On the other hand, “the markets for white supremacy, mass shootings, corporate profiteering, and nuclear cataclysm are booming.” And worse, “[Trump’s] aides and allies are mortified by his cognitive deterioration, his inability to read, or concentrate. It becomes more and more obvious that he’s unfit for the office. And yet, the office belongs to him.”

Do Almond’s own words represent a bad story as he defines it — one flawed and distorted? There is something malodorous in the words, something that smacks of mere namecalling. He subjects the man who is now president to an incompetent psychological evaluation. Trump, it seems, “never experienced a sense of being unconditionally loved, what psychologists call attachment. The best he could hope for within his family of origin was to please his domineering father through aggression. Because he never developed an intrinsic sense of self-worth, he can’t protect himself from feelings of inadequacy.” Thus Trump “proved especially captivating to disaffected Americans.” Does this last follow? Or was his appeal simply his departure from the Republican nice-guy-loser pattern — the one pioneered by Tom Dewey and emulated by Messrs. Goldwater, Bush, Dole, McCain, and Romney?

Experience clearly indicates that free-market capitalism is a far more effective system than its rivals. It’s no contest.

Chapter 15 in Bad Stories is entitled “Give Us Your Tired, Your Poor, Your Huddled Masses.” This fragment Almond sees as a “bad story.” It’s taken from a sonnet, “The New Colossus,” by the poet Emma Lazarus (1849–1887), a gifted woman. Her poem has been used and abused in debates over immigration, in particular those involving the Hart-Celler Act of 1965. Mencken wrote that the poet doesn’t deal in truth, but rather “conjures up entrancing impossibilities.” Perhaps the Lazarus poem conjures up a beautiful dream, the kind that guides and inspires the living. It bears a touch of early feminism, which ought to fascinate the present-day advocates. But it also contains, not only an invitation to our shores, but the inspiration to seek freedom wherever it’s dreamed of.

Alas, Almond is an apostle of equal outcomes, rather than freedom. I’m amazed that socialism ended up, not as one of Almond’s bad stories, but as a resuscitated grand scheme, or better, a secular faith. The fall of the Soviets after decades of blood and slave labor — despite the cheerleading from Western intellectuals — the rejection of British socialism with its Control of Engagements Order, the move of Scandinavian countries toward a free-market economy, and, much earlier, the failure of virtually all socialist communities in America, all taken together, suggest that maybe socialism isn’t such a good idea. The mass murders in Cuba, the desperate exits of its citizens, and the impoverishment of Venezuela offer more evidence of its futility.

Have you ever seen a more hysterical sentence?

Still, Almond sees capitalism, personified by Donald Trump, as the great evil. It stands in the way of our solving “crises that are beyond empirical doubt.” In his view, these include “climate change, resource depletion, and inequalities of wealth and opportunity, all of which are triggering mass immigrations, political unrest, and violent extremism.” It follows — to him — that we must reject bad stories (which ones?) and place our faith in “reason and empiricism.” Empiricism? But empiricism is the doctrine that the source of all knowledge is experience. And experience clearly indicates that free-market capitalism is a far more effective system than its rivals. It’s no contest.

Resistance to Almond’s collectivist agenda is reflected not only in “a ruthless free market theology” but also in other reactionary attitudes — a “make believe retreat from globalism, a nostalgia for white hegemony.” Worse yet, “our culture lurches about within the shadow of its own extinction, yet lacks the moral imagination to change its moral destiny.” Still worse, “our style of capitalism has acted as a financial centrifuge, perhaps the most brutal aggregator of wealth in human history, built on a foundation of slave labor and fortified by plunder, imperial warfare, the decimation of the labor movement, the predation of Wall Street, [and] the steady subjugation of oversight to private gain.” Have you ever seen a more hysterical sentence? Or one requiring more determined efforts to trace empirical facts about the world’s greatest multiethnic middle-class society back to its supposed causes in plunder and brutality?All this “resistance,” Almond conjures up with little regard for the reason and empiricism he urges on the rest of us.

It seems fair to remind Almond and his admirers that in its two-and-a-half centuries of existence, the United States of America has freed more people from slavery than any country in history. It has taken in tens of millions of immigrants seeking a better life and, through trade and the simple giving of gifts, has spread its bounty around the world. It has lost hundreds of thousands of its bravest sons in battles against the forces of tyranny — and often restored the war-damaged lands.

It’s the very risks, the adventure, involved in living in a free society that fascinate those whose heroic qualities remain unsuppressed.

Perhaps a touch of the sportsmanship in a “sports-brain” would make Almond a better, more reflective writer, as would a closer look at that “ruthless free-market theology.” A “brutal aggregator of wealth” must operate in a system of voluntary exchange. He doesn’t hide his money in the bathtub. He adds it to the river of capital that flows into financing and investments — creating new businesses, new products, new homes, more jobs, and more opportunities for improving the human condition. Is everyone happy in a free-market economy? No, of course not. Would there be greater happiness under any other economic regime? No again. A system that rewards the takers by plundering the producers will only spread misery in the long term. Frédéric Bastiat understood this, and his plain words might well be put in the hands of college students everywhere. He spoke of the “instinctive struggle of all people toward liberty.” Yes, and the struggle reflects those heroic qualities, which, taken together, represent a wonder of this earth — it’s called the human spirit.

It’s the very risks, the adventure, involved in living in a free society that fascinate those whose heroic qualities remain unsuppressed. But will their spirit roam free, or will it suffocate under a system that forces them to abide by a bureaucratic plan? An enforced equality can only be achieved at the expense of the best — the most creative, the most productive, the most in need of liberty. I see nothing in this that shows “moral imagination,” or that will lead to an improved “moral destiny.” And it may place all of us nearer to extinction.

With the exception of Almond’s personal experiences, which might make a decent book, Bad Stories is of little value as a source of truth. But as an example of the fashionable nonsense that passes for truth among the academic Left, it may be very useful indeed — it may lead some heroic individuals to educate young minds properly.

Useful Reading


Editor's Note: Review of "Bad Stories: What the Hell Just Happened to Our Country," by Steve Almond. Red Hen Press, 2018, 257 pages.



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A Train to Nowhere

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The other day I watched Snowpiercer. I have a taste for post-apocalyptic science fiction, and also for stories that illustrate political ideas, and Snowpiercer is both of those. Co-written and directed by South Korean filmmaker Bong Joon Ho, the 2013 movie also has a strong flavor of anti-capitalism. Wondering who had picked up on that, I googled “Snowpiercer, Socialism,” then “Snowpiercer, anti-capitalism.”

The socialists had picked up on it. On a web page called Socialist Action (“In Solidarity with Workers and the Oppressed Everywhere”) writer Gaetana Caldwell-Smith calls Snowpiercer “an original, inventive, futuristic work” that pictures “what might happen in the future if the outmoded and anarchistic capitalist system goes on unchecked for much longer.”

On another socialist web page, Jacobin writer Peter Frase calls Snowpiercer an “action-movie spectacle” with “a message of class struggle” that “evokes some of the thorniest dilemmas of socialism and revolution, in the twentieth century and today.”

In an attempt to reverse global warming, humanity overdid it and froze the planet.

Your Film Professor, the highbrow lefty, praises Snowpiercer’s “incredible capacity to cuttingly capture — or ‘cognitively map’ — how our current and future dystopian milieu is informed by our (globalized) capitalism system. . . . The reason this film is just SO important is because it cuts through the fog of ideological distractions (e.g., consumerism, status quo/reformist [capitalistic] rhetoric, patriotism, nationalism, etc.) and didactically spells out the REAL of ruling class ideologies in a way that is to my mind almost miraculous.”

I don’t know about all that. It does tell you how some on the Left think (and write).

Snowpiercer is a science fiction story set on a frozen earth. In an attempt to reverse global warming, humanity overdid it and froze the planet. But a capitalist named Wilford, who was fascinated with model trains as a kid, had put his corporate fortune into a high-speed train with an enclosed ecosystem: tanks of fish, hooches of chickens, an engine to propel the train and keep the contents warm. For 17 years, Wilford’s shinkansen has been rushing over the world’s continents, one full loop each year, pushing through the wasteland of snow and frozen machines around it. Every human alive is a passenger on this train.

After the police-state cars with hooded goons wielding truncheons and automatic pistols come the lumpenproletariat at the tail end.

It doesn’t make a lot of sense — but cut some slack for surrealism. The story of Snowpiercer is from a graphic novel, in other words, a comic book. A French socialist comic book. The film is quite well made, and on the Internet Movie Database (imdb.com) is rated 7.1. That’s not quite up to the 8.2 rating of V for Vendetta, another political tale based on a comic book, but well above the 6.2 for Waterworld (1995).

Snowpiercer’s train comes with a recognizably Marxist class structure. Wilford, the egoistic owner played by Ed Harris, is the deity at the train’s head. Next in line are train cars of sybarites with their club music, dancing, and drug-fueled orgies, then the genteel with their classical music and handmade sushi, then the obedient workers tending the orange groves, tanks of fish, and hooches of chickens, and the smiling teacher (Allison Pill) in the grade-school car of fresh-looking kids. After the police-state cars with hooded goons wielding truncheons and automatic pistols come the lumpenproletariat at the tail end. In Marxist terms, you might think of them as “workers,” but they mostly just suffer. They live in rags and squalor and are terrorized by goons. For food they are issued “protein bars” made from pulverized cockroaches.

And they are the folks the movie is about.

Wilford’s mouthpiece to them is an unctuous woman played by Tilda Swinton, who was the White Witch in The Chronicles of Narnia: The Lion, The Witch and the Wardrobe (2005). Early in Snowpiercer she instructs the rabble in a style that parodies Margaret Thatcher. “Order is the barrier that holds back the frozen death,” she declares. “We must all of us, in this train of life, remain in our allotted station. We must each of us occupy our preordained particular position.”

The society around us has a “one percent,” but its membership is not fixed. People go in and out of the “one percent” all the time.

She holds a man’s shoe and puts it on the head of one of the proles. “A hat belongs to your head,” she bellows. “A shoe belongs to your foot. I am a hat. You are a shoe. I belong on the head. You belong on the foot.”

And again: “I belong to the front. You belong to the tail. When the foot seeks the place of the head, a sacred line is crossed. Know your place.”

Here is the message of the movie. Society — capitalist society — is a hierarchy of assigned privilege.

Well, the society around us is surely a hierarchy, just as its Canadian defender, Jordan Peterson, allows, though he calls it a hierarchy of competence. And it is mostly that, else today’s world would not work. It has a “one percent,” but its membership is not fixed. People go in and out of the “one percent” all the time. Margaret Thatcher was part of the political one percent, but she famously started out as a shopkeeper’s daughter, in what the Marxists call the petit bourgeoisie.

Capitalism is an economic system of private workers and owners who buy and sell in a market, making their own decisions. In Snowpiercer there is no market. Wilfred’s chickens produce eggs, and one of his men wheels them in a cart and gives them away. He doesn’t sell them. There is no buying or selling in Snowpiercer and no money. There is no property other than Wilford’s. The supposed “Wilford Industries” cannot buy or sell anything, because there is no other entity to sell to or buy from.

As an ideological venture, a kind of leftist "Anthem" or "Animal Farm," "Snowpiercer" does seem to be part of something.

Watching Snowpiercer, you can’t help but identify with the lumpen heroes (especially the characters played by John Hurt and Octavia Spencer) who disobey the faux Margaret Thatcher and refuse to remain “shoes” on the godhead’s foot.

But why care about a five-year-old movie that had only a limited release in the United States? Worldwide it did better; in its first year, Snowpiercer brought in $87 million, more than half of what V for Vendetta did. As a business venture Snowpiercer did all right. As an ideological venture, a kind of leftist Anthem or Animal Farm, it does seem to be part of something.

There has been a small upsurge of socialism in the United States. So far it is a pale image of the leftist tide of the 1930s, when private investment had collapsed and millions were out of work. Then it looked to many as if capitalism was finished. In the 1930s socialism was a relatively new thing, and intellectuals might be excused for not knowing what a defective product it was.

Now my hometown, Seattle, has a socialist on its city council. Her supporters are raucous and young, full of resentment of the billionaire rich. Maybe they believe because they read Karl Marx and Thomas Piketty, but more likely because they have imbibed their history and politics from left-wing teachers, or maybe from graphic novels and movies like Snowpiercer.

In the 1930s socialism was a relatively new thing, and intellectuals might be excused for not knowing what a defective product it was.

But socialism — really? Like Peterson, I want to yell at them: Did you miss the 20th century? And a lot of them did. They are that young.

I lived through the last third of that century as an adult. I saw socialism collapse in Europe, abandoned in China, and decaying in Cuba. Now it is collapsing again in Venezuela. It’s time for the socialists to give up.

All the Left’s bellowing about hierarchies and social classes makes me think of the guys I grew up with. The son of a small-town optometrist became an airline pilot. The son of an aerospace engineer became a sheet-metal worker, then lost it all when he married a crackhead. We are all of retirement age now, though some of us are still working and one, a teacher, has been retired on a fat pension for more than ten years. I have a grade-school friend who lived for years in a ruined trailer and a former colleague who lived for seven years in his truck. Both have now been put in decent housing, courtesy of the welfare state.

The kids I grew up with did not achieve equality, at least not as the Left defines it. They weren’t promised it, didn’t aim at it, and didn’t get it. They went in all different directions. None was assigned his position in life, and most of them, over time, changed what that position was. No doubt some of their paths were shaped by “power relations” under capitalism, and I know some were touched by luck. But where each one ended up depended mostly on the decisions he made, the sort of work he did and how diligently it was done, how much present satisfaction was sacrificed for the future, and, crucially, on whom he married.

Why would anyone think his world is like Snowpiercer?

A software man of the new generation predicted that robotics will extinguish so many jobs that the government will have to offer a universal guaranteed income.

I think back to when I was 20, and a student at the university. I used to go on long walks through a city neighborhood with big houses, many of them brick, built in the early 20th century. I was bunking in a rental house shared with other students, eating meals of hot dogs and ramen and working a part-time job for $1.75 an hour. That neighborhood of big homes was a foreign country to me. It would have been easy to think I was looking at the brick walls of an impenetrable class, and that I was doomed to a life of instant noodles. But I wasn’t.

There is another thought, which I heard recently from a software man of the new generation. Noting the divide in his fellows between those with brain work and those living in parents’ basements, he predicted that robotics will extinguish so many jobs that the government will have to offer a universal guaranteed income.

I do see the loss of jobs. My health clinic, which used to have a row of clerks checking in patients, has replaced them with touchscreens. The local superstore (which would have been called a department store, years ago) has replaced half of its checkers with touch screens. Several downtown parking garages that used to employ Ethiopians to collect the money have replaced them with card scanners.

Then again, three blocks from my house is a shop that concocts such fluffy desserts as Mexican chocolate pie. A pie from that shop costs $36; a slice, $6. That sort of pie was not available here two decades ago. Nor was nitrogen-infused ale. Or black sesame ice cream. My neighborhood now has artisan bread, artisan ice cream, artisan chocolate, artisan beer and, more recently, artisan spirits. Within a few miles are stores offering artisan cannabis.

A young man I know, the son of a bank vice president, has chosen to be an organic farmer. He shares in an old house on a muddy farm and produces organic vegetables and free-range, grass-fed beef. He sells his artisan hamburger for $6 a pound.

Capitalism can be about much more than efficiency.

A century ago, a middle-class family here might have a Swedish girl to cook, clean, tend the children, and mend the holes in socks. Now we have au pairs, housecleaning services, gardening services, and (I can hardly believe this) dog-walking services. I even know of a poop-removal service for people who keep dogs in backyards. In my neighborhood the environmentally sensitive no longer put in concrete walkways. They hire Mexican immigrants to put in brick walkways, carefully laying each brick by hand, using no mortar, so that rainwater can soak sustainably into the earth.

Back in the 1970s, my university professor of marketing predicted that the future of consumer products was Miller and Bud, two brands distinguishable only by labels and the ads on network television. All consumer markets were going to go that way, he said. I suppose it would have been the most efficient outcome. But look at the beer shelf at your grocery today. And what has happened to television? Capitalism can be about much more than efficiency.

The young man selling $6-a-pound hamburger makes far less money than a programmer at Amazon. Probably he officially qualifies as poor. But he is no serf. To him, the programmers working 60-hour weeks are the serfs.

Snowpiercer is, as the socialists say, “an original, inventive, futuristic work,” totally unlike the black-and-white TV westerns and World War II shows I grew up with. I enjoyed it. I cheered for the rebels at the back of the train along with everybody else. I just hope that most of those who saw the film took it as an artisan product of an affluent culture and not as any sort of wisdom on the world around them.




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The Choices of Jeff Bezos

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Amazon’s choice to expand in New York City and the Virginia suburbs of Washington DC reminded me of a story I did on the company in January 1999, when I was a business reporter for the Seattle Post-Intelligencer. Amazon was three and a half years old and was approaching $1 billion a year in revenue — an amount it does now in two days. Back then Amazon was operating out of an old building near the Pike Place Market above a cheap Indian restaurant and across the street from the Green Turtle youth hostel.

Its employees there worked from desks that were made from interior doors the company bought for $135 each and equipped with legs. “We have a carpenter who makes a hundred of these at a time,” Jeff Bezos told me. Bezos made a point of showing me his CEO’s desk was made from a door, too. It was a matter of priorities, he said. Amazon could not afford to piddle away its cash on fancy office furniture.

Bezos was 35 then. On paper he was worth $9 billion, though the company had not yet earned a nickel’s worth of profit.

Back then Amazon was operating out of an old building above a cheap Indian restaurant and across the street from the Green Turtle youth hostel.

In those days I wrote a lot of company features, which included an interview with the CEO and a walk around the plant. I always included the story of the founding, which in Amazon’s case was about how Bezos chose Seattle. Bezos wasn’t from here; he was from New York, where he’d been working on Wall Street. His idea for Amazon was an internet business to sell books, which were standard products, easy to handle, cheap to ship, and didn’t require after-market service. You might think such a business could be set up anywhere, but the location was important. It had to have good airline connections, for example.

The biggest thing, he told me, was the labor market. In order to grow, it had to have a deep pool of computer-savvy talent. The deepest pool on the West Coast was in Silicon Valley, but he avoided that place because the competition for talent was too fierce. He didn’t want to have to bid against Hewlett-Packard, Intel, and Apple. Microsoft had created its own talent pool in Seattle, and he was happy to dip into that.

When the movers came to his apartment in New York, he said, he still hadn’t decided where to start his company. He had narrowed it down to four Western cities: Boulder, Colorado; Reno, Nevada; Portland, Oregon; and Seattle. Portland and Reno, he decided, were too small; Boulder was near Denver, which was big enough. Well, he chose Seattle, which is now packed with 40,000 Amazon employees.

In order to grow, Amazon had to have a deep pool of computer-savvy talent.

Some commentators noticed that Bezos chose one of the seven states with no income tax, and suggested that when he went looking for “HQ2,” he would choose one of the others — Texas, maybe, perhaps Austin. If he had chosen Austin, the anti-income-tax people would have made hay over that.

A columnist in the Seattle Times, Danny Westneat, writes that by choosing New York City and suburban Washington DC, Amazon has thrown in with “two of the most expensive, high-tax environments in the nation,” places that have personal and corporate income taxes, including a city income tax in New York. Such a choice puts paid to the notion that a company like Amazon will go to the place with the best “tax climate.”

I have no objection to Amazon accepting subsidies—government’s offering them is another matter.

Was Amazon chasing subsidies? It was offered big ones by New York and by Virginia — but then, it was offered even bigger ones by other jurisdictions, and it turned them down. I have no objection to Amazon accepting subsidies (government’s offering them is another matter); Bezos owes it to his shareholders, including himself, to get the best deal he can. But he also owes them, and himself, the discipline not to be bribed into making a bad decision.

I note in the news reports that Amazon says it chose New York and metro Washington in search of the best pools of tech talent — which is the same thing Bezos told me about Seattle 20 years ago.

None of this is to say that a state’s tax and regulatory climates are not important. Texas has been growing faster than New York, and one of the obvious reasons is that Texas has fewer regulations and taxes. But to Bezos, that difference is not the most important one, and not enough to tip the balance in favor of Texas.

All of which assumes he is making a good decision.




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Hollywood Fights Market; Market Wins

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Money Monster isn’t billed as a comedy (in fact, it’s supposed to be a thriller), but it is still one of the silliest films I’ve seen in ages.

Lee Gates (George Clooney) is a cable TV investment personality of the Jim Cramer school, with a shtick that includes dancing girls, funny hats, crazy film clips, party noisemakers, and outlandish recommendations that often turn out to be profitable investments. He doesn’t think much about his viewers’ actual profits and losses because he never sees his viewers — that is, until Kyle Budwell (Jack O’Connell) shows up on the set with a figurative axe to grind and a literal gun in his pocket. He also has a funny explosive vest to go with Lee’s funny hat. He makes Lee wear it.

We are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes.

I’ll warn you here that this review is going to contain a few spoilers, but knowing some of the plot twists is not going to ruin the film for you; it’s pretty much ruined on its own, and these are mad meanderings, not genuine twists. Besides, I don’t recommend that you waste your money or your time on this monster of a movie, and revealing some of the plot is the only way I can demonstrate to you just how silly and unbelievable the premise is.

Hollywood will go to great lengths to cast aspersions on Wall Street, business, and the free market, even greenlighting a movie with a script with more holes than a Chuck E. Cheese Whack-A-Mole (and a lot less entertaining). First we are expected to believe that Budwell, the terrorist, would be able to wander onto a live set, simply because he is dressed like a deliveryman and carries a couple of cardboard boxes. Sorry, folks, the days of Cary Grant sneaking into the boss’s office carrying a florist’s bouquet are long gone, and security at a television station is much tighter than that.

Then we are expected to believe that the cameras would continue to roll and the signal would continue to be broadcast while a lunatic holds a gun to the head of a nationally known journalist — or anyone, for that matter. Regardless of what the terrorist (and the voyeuristic television consumer) might be demanding, someone — anyone — would have pulled that plug immediately.

We are also expected to believe that Kyle invested all his money — all his money — in a single hedge fund. The SEC has rules about that. Under the Dodd-Frank Act, “qualified investors” must have a net worth of at least a million dollars, not counting their personal residence, or an income of at least $200,000, in order to purchase shares in risky investment vehicles such as the one in the script. Kyle makes $14 an hour as a sanitation worker. He is not a qualified investor. The hedge fund would not have accepted Kyle’s money. George Clooney and Jodie Foster (the film’s director) probably don’t realize this because they have managers who invest their money for them. They’re qualified investors; they just aren’t qualified to play with investors in the movies.

Next is Lee Gates’ ridiculous solution to Kyle’s problem. It seems that Kyle invested his money in a hedge fund that Lee recommended a few weeks ago, and the fund’s price tanked, taking Kyle’s money with it. Lee turns to the camera and asks his viewers to start buying the stock in order to pump up the price for Kyle and his fellow losers. First, viewers would smell a rat if a showman like Gates made such an outlandish plea. Remember Soupy Sales? “Kids, take a dollar out of your mother’s purse and send it to Soupy at this address . . .”

Kyle's girlfriend bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy?

More importantly, Lee’s idea wouldn’t help Kyle or the others who have lost money, even if the stock did return to previous levels. Stock prices rise and fall as new buyers purchase shares from current owners. It’s the ultimate example of supply and demand. In this case, the people who sold on the way down don’t own any shares anymore, so they aren’t going to get their money back, even if prices climb to the sky. They’re just going to feel worse. The only people who could make money on Lee’s new deal are the ones who buy at the bottom and sell at the new top. And believe me, Lee Gates would be investigated for investment fraud after these shenanigans were over. (Assuming he made it out of the exploding vest in one piece.)

The cops are just as stupid. They bring Kyle’s girlfriend to the studio to talk some sense into him and calm him down, even though they know she’s fit to be tied about him. And she’s just as stupid. Instead of calming him down, she bawls him out and dares him to pull the trigger on the bomb — while she is in the studio. Who in the world would be that crazy? And then there is the usual Hollywood inanity of having SWAT teams or, in this case, bomb squads enter a highly volatile location without wearing helmets. I know, it’s a film technique considered necessary so that we (the audience) can see their pretty faces while they talk.

In such situations, we’re supposed to suspend our disbelief, and usually I do. But in this movie my disbelief was suspended so far above reality that I became positively giddy from lack of oxygen.

The denouement is just as ridiculous as the build-up. We are supposed to believe that the greedy director of the hedge fund has manipulated a mining strike in South Africa in order to buy low and then sell high when the strike is called off, but a glitch in his plan resulted in a loss of $800,000,000. That’s a lot of platinum for two weeks’ digging.

I’m sure that George Clooney, who produced the film as well as starred in it, thinks he’s doing the world a big favor by pointing out the evils of greed and investing, but all he did with Money Monster is point out his own monstrous ignorance. He still has the dark swoony eyes, though. Maybe he should leave the social justice films for a while and make a nice romantic comedy.


Editor's Note: Review of "Money Monster," directed by Jodie Foster. Tristar Pictures, 2016, 98 minutes.



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The Green, Green Cane of Cuba

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Cuba has garnered a reputation for, and has been touted as, a model of green, organic, non-GMO sustainable production and consumption. According to the Organic Consumers Association (quoting Cultivating Havana: Urban Agriculture and Food Security in the Years of Crisis, a study), many of the foods that people eat every day in Cuba are grown without synthetic fertilizers and toxic pesticides.

Some of this is true, but because the regimen has been adopted out of necessity and not out of ideology (unless you count the Communist ideology that brought this on in the first place), it is not rigorously adhered to in the way in which, for instance, an organic farmer in the US might adhere to it. It is expediency, with ideology added after the fact to capitalize on necessity.

At one time, killing what heretofore had been your own chicken but was now state property could land a campesino in jail.

As USA Today reported in March, “Cuba once focused on capital-intensive, industrialized agriculture on large state-run farms, but was forced to change after economic support from the Soviet Union evaporated. Beginning in 1990, Cuban food production fell precipitously. The country shifted to a low-input agricultural cooperative model. Even so, it suffered serious food shortages in 1994, which prompted further changes.” It might be added that, changes or not, sugar production has fallen by 60% over the past 30 years.

Unable to import industrial fertilizers and pesticides, Cuba resorted to using horse, cow, pig, chicken, and even human waste for soil nutrition. And it tried to become self-sufficient in food production. At one time, killing what heretofore had been your own chicken but was now state property could land a campesino in jail. And woe betide the gardener who broke a shovel — sabotage!

Into the breach stepped Uncle Sam, easing the embargo restrictions on exporting food and medicine to Cuba.

On my recent bike trip across Cuba, I was accompanied by a bourgeois socialist couple — retired on government pensions, upbeat about Castro’s “reforms,” berning-for-Bernie — who wanted to see the island before it was “ruined” by McDonalds, Walmarts, discount dollar stores, and other popular tendrils of free choice that might invade once the embargo is lifted. Fair-weather vegetarians (don’t mention bacon around them!), free-range egg fans, supplement-swallowing, sugar-hating, GMO-abjuring, organic-food faddists, they were also looking forward to eating “healthy” food in Cuba.

Well, Cubans don’t do vegetarianism. Castro pushed salads — mostly cabbage — on them during the “Special Period” in the ’90s; and, at least for tourists, greens remain a dependable staple, composed mostly of cabbage, tomatoes, beets, and cukes topped with canola oil and vinegar. But Cubans much prefer meat, beans, rice, and starchy veggies — yuca, malanga, and plantains, preferably fried — plus anything with sugar: rum (and any other alcoholic drink, such as the mojito, with an added dollop of sugar), guarapo (pure sugar cane juice), raw sugar cane, churros, cucurucho (a mixture of honey, nuts, coconut, and sugar), coffee brewed with sugar (traditional), malta (a thick, extremely sweet version of non-alcoholic malt stout), coke mixed with sweetened condensed milk, ice cream, and extra sweet pastries.

Our diet-conscious couple brought boxes of “natural” granola bars so as to avoid the pork. My wife and I brought a jar of peanut butter and a bottle of sriracha sauce to spice it up.

On our visit to Cuba, my wife and I saw chickens everywhere, scrawny but free range. Every evening when arriving at our lodging, our host would offer us dinner, an always preferable alternative to eating in a government restaurant. I’d ask what was available and, knowing Cuban cuisine, would decide for the group. Initially I’d lean toward chicken out of respect for my “vegetarian” companions. Invariably, the chicken portions would consist of a giant thigh and leg with meat so white one could have mistaken it for a breast.

Aside: contrary to popular US perception, Cuba does have a fast-food restaurant chain — El Rapido, a state-run enterprise. Guidebooks and trip accounts tout it as dependable, with food quality varying from passable to good, especially the chicken — again, a thigh and leg combo. We never ate at a Rapido — but not for lack of trying. The ones we stopped at were either out of meat or not serving food because something had malfunctioned, or something else had gone wrong — but still open, with full staff just sitting around.

Riding with me in a taxi one day, Melinda, one of my progressive companions, wondered how the chickens we were served were so big when the ones we saw roaming about were so rickety. So I asked our driver. He said Cubans don’t kill their chickens, they’re for eggs. Eatin’ chickens are stamped with madinusa. Not familiar with the term, I asked him what it meant. He looked wryly at me, sideways, and then I got it: Made in USA.

When I told Melinda she gulped and said, “You mean we’ve been eating Purdue chickens? From now on let’s ask for pork; at least it’s organic.”

Pork is the ubiquitous Cuban meat. The only available roadside lunch snacks were in-season fruit stands and roast pork sandwiches consisting solely of pork and bread. (Cuba grows no wheat; it’s all imported, some of it possibly GMO.) Our diet-conscious couple brought boxes of “natural” granola bars so as to avoid the pork. My wife and I brought a jar of peanut butter and a bottle of sriracha sauce to spice up the pork sandwiches (yes, it’s a strange combination, but delicious).

Beef was the least available meat, even though we saw lots of cattle in the central provinces. Apparently it’s reserved for the nomenclatura and tourists. Though not available in government ration stores, it can be obtained by anyone at convertible currency stores — if you have the money. At one B&B where the owner was tickled pink that I was a Cuban-American, it brought out her impish side. I requested ropa vieja, a traditional brisket or flank steak dish. She thought about it for a minute and said, “We can do that. And it’ll be the best ropa vieja you’ve ever had.”

I responded, “Remember, I had a Cuban mother.”

Without skipping a beat she retorted, “It’ll be the second-best ropa vieja you’ve ever had.” We both laughed.

Fish is widely available but of varying quality. Whenever it was offered as fresh and a good species, especially pargo, Cuban Red Snapper (nothing like it!), I opted for it. Yes, Cuba hasn’t overfished its stocks. But not for eco-ideological reasons; rather for “sugar cane-curtain” reasons: to limit small boat traffic along its shores, minimizing escape and infiltration attempts. Additionally, small-enterprise fishing businesses haven’t been allowed: the state will provide the fish. However, lobster is often available, and it is to die for — huge, cheap, and delicious.

Arguably, our best meal was at a paladar (private restaurant) in Playa Giron (aka Bay of Pigs). We were the only ones there. The menu, recited, not read, included a special trio of fresh fish, shrimp, and lobster, all for $15 each, including cheap imported Chilean wine and all the trimmings. When the waiter was through I asked him about caiman (the Cuban croc), which I’d heard was available for eating in the Zapata swamp area. He answered that yes, they served it but couldn’t announce it, as it was a protected species. Though I desperately wanted to try it and cock a snook at the Castro regime, we all opted for the special.

One of the worst personal and environmental assaults in Cuba is the air pollution. It’s not the brown clouds that bedevil Beijing — the source is nostril level and in-your-face.

One B&B owner, who’d been in the tourism business all through the Special Period, both legally and illegally (and had spent time in jail), elaborated on what food was like back then. He cooked us a typical dinner (as a side dish to the marlin and lobster he was serving us): boiled cabbage. I don’t know what he did to it, but it was surprisingly tasty. He added that breakfasts in the special period consisted of sugar water followed by labor in the cane fields — a dish he didn’t serve us.

You see a lot when you ride a bike through the countryside. At least once we saw someone spraying pesticides on crops. When I mentioned it to Melinda she despondently admitted that she too had seen it. But one of the worst personal and environmental assaults in Cuba is the air pollution. It’s not the brown clouds that bedevil Beijing — Cuba’s breezes dissipate that possibility, and there’s little heavy industry. The source is nostril level and in-your-face. All those old cars that look so charming have been retrofitted with diesel engines that have zero emission controls. Clouds of black smoke spew out of nearly every vehicle, to such a degree that one of our companions got sick. Riding for any length in one of those classic cars will make you sick. Floor holes funnel the poison into the cabs, which means that all windows must be open all the time. Our B&B in Havana closed all the windows facing the street, to keep the exhaust out. Though the problem is acute in cities and towns where traffic can be dense, even out on the highways we’d hold our breath and avoid in any way we could the passage of a bus or truck, the most common vehicles on highways.

Garbage, like many things in Cuba, is full of contradictions. Cubans are a very clean people. One informant told me that trash collectors are particularly well paid. In general, the streets are quite clean. But . . . every once in a while mounds of garbage dot cities, towns, and the countryside, almost as if they’ve been warehoused in discreet piles and then forgotten, only to make a sudden reappearance.

On the way to find my grandmother’s grave, I struck up a conversation with a street sweeper, about my age. He was pushing a two-binned pushcart and sweeping with a handmade broom. He had a very photogenic face and was smoking a cigar. Intermittently picking up trash — there wasn’t much — and sitting in the shade, he caught my eye. I asked if I could photograph him. He was proud to be so noticed. After some introductory remarks and typical Cuban give-and-take, he declared, “We want capitalism to come back.” I asked him to elaborate. He said things were much better before the Revolution; there was more opportunity, more dynamism, and more wealth.

According to one person I talked to, the only municipal potable tap water in Cuba is in Baracoa, in the Sierra Maestra mountains at the far east end of the island. And it is delicious. Cool, free-flowing rivers fill Baracoa’s reservoir. Elsewhere, municipal water is a mess. In Guantanamo and in Havana, where I actually watched the process of getting tap water (and likely in other places too), it runs like this: Early in the evening, the water mains fill up. In a couple of hours the water level in the pipes gets high enough to reach the house branches. At this point, my two B&B owners turned on an electric or gasoline pump to get water from the mains into a cistern. Another couple of hours goes by; then, around 11 pm, another pump moves the water from the cistern up to a rooftop tank. Voila! Domestic water! — though not provided in the greenest way. Rural areas depend on trucked water and cisterned rainwater. Potable, government bottled water is also widely available. It is definitely not delicious. Though it has no actual repellent taste or smell, I have never tasted worse purified water. The consumer cost of both water and electricity is trivial — again, hardly an efficient or green approach to conserving resources.

Cuba’s organic farm production and the Obama administration’s trade overtures have caused concern among Florida’s organic farm growers. The March 18 issue of USA Today reports that

Florida farmers say the Obama administration’s plan to allow Cuban imports threatens their $8 billion-a-year business. Florida’s larger organic growers, already struggling to remain profitable, may be particularly hard-hit because Cuba has developed a strong organic farming sector.

Initially, Cuba most likely would export many of the same products grown by Florida organic farms, and the communist nation would enjoy the advantage of lower wages, state subsidies, cheap transportation and the novelty appeal of Cuban products.

It’s not just the subsidized competition that is worrisome. One American farmer asks, “When you buy Cuban products, are you helping the Cuban farmer — or the Cuban government?” He goes on to note that he worries about diseases, pests, and invasive species. Two-thirds of Florida farmers are against any deal. Bell peppers, tomatoes, and cucumbers are the primary products of Cuban state farms, but avocados and more exotic produce such as guanabana (soursop) are in the running.

The street sweeper declared, “We want capitalism to come back.” Things were much better, he said, before the Revolution; there was more opportunity, more dynamism, and more wealth.

USA Today adds, “Eva Worden, a Cuban-American organic grower in Punta Gorda, Fla., supports a resumption of trade between the U.S. and Cuba but wants to be sure the fruit and vegetable needs of the Cuban people are met before encouraging exports.”

Natural, organic, and even “genetically modified” terms have always been a minefield of imprecision and ideology. When politics is added to the mix, it’s anyone’s guess what government policy might turn out to be. Best to let the consumer decide . . .




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Cuba, Obama, and Change

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Although Republicans and, no doubt, the Castro brothers perceive President Obama’s visit to Cuba on March 20 as American kowtowing, the perception on the Cuban street is entirely different.

To Cubans, the visit is an honor ranking right up there with the Pope’s visit, and one not vouchsafed to the island since President Coolidge’s visit in 1928. El mulato, as he’s informally referred to in the Cuban fashion of conferring nicknames on everyone, and his historic visit, bring the promise of hope and change to the island more concretely than any pronouncement ever made by the Castros.

I know. Three days ago I returned from a 30-day bike journey across the island, from Baracoa in the east to Havana. American flags were everywhere — in cars, taxis, horse- and pedal-drawn taxis, even clothing — even before the visit was announced. Warned by guidebooks and savants to minimize exchanges with uniformed personnel, and never to photograph any, I found the admonition accurate. These were all serious, unfriendly, incorruptible, suspicious, and averse to any sign of curiosity. But once the visit was announced, I decided to test the premises. Passing soldiers, policemen and God-knows-what functionaries, I’d yell, “We’re not enemies anymore!” and I’d add some typical Cuban sassy wordplay non-sequitur as a true native would. I managed to get a few smiles and even some playful responses. Things are changing.

The hustle, bustle, entrepreneurship, and raw energy that permeated every person was a far cry from the typical listless socialist citizen.

Back in March 2012, in a Liberty article entitled “The Metamorphosis,” I outlined the changes to the Cuban economy legislated by the Castro government (see also “Cuba: Change We Can Count On?”, Liberty, December 2010). The changes attempted to drop one-fifth of the workers from government jobs and make them self-employed — this in a country where everyone is employed by the government at pay scales of $1–2 per day. But the fine print indicated internal ideological conflicts. While dozens of job categories were authorized — from transportation to food, to lodging, to construction, to personal grooming (and many more) — permits, taxes, limits on employees and much red tape don’t make the goal easy to achieve.

Nonetheless, the hustle, bustle, entrepreneurship, and raw energy that permeated every person pursuing his hopes and dreams along miles of city streets and rural roads was a far cry from the typical listless socialist citizen. Ironically, even the poorest — those whom socialism is touted to help the most — were selling homemade sweets, cucuruchos, in the Sierra Maestra Mountains without permits! One told me he’d be fined $3,000 if caught. To a poor guajiro unable to pay such a fine, jail would await.

Seemingly everyone is trying to become independent of the government and develop self-employed income. One university economics grad student whose psychologist wife still works for the state now runs a B&B in Las Tunas, where I overnighted between Bayamo and Camagüey. Next year he plans on studying Milton Friedman and Frederick Hayek. I asked whether that was possible; he said definitely, in advanced academia. His study plan had already been approved.

Three blocks from the capitolio in Havana, along the Prado, I spotted a sandwich board advertising real estate. A university economics professor tended the spot. He had no office other than his board, his clipboard, and the built-in bench on the promenade. Though we’d seen many “For Sale” signs on many buildings, including the humblest of abodes, we saw no real estate offices. I excitedly elbowed my wife Tina, a realtor in Arizona, to engage her interest.

Bad move.

A middleman agent of finance — the epitome of freewheeling capitalism — just didn’t fit into her perception of a socialist economy. Either the man was deluded or he was a scammer (an unlikely scenario: the police are ruthless with physical and financial crimes). I insisted on us engaging the man. Immediately she blurted out, “How can you own property in Cuba when there are no property rights and the state can confiscate your property at any time for any reason?”

Seemingly everyone is trying to become independent of the government and develop self-employed income.

The poor man, without a vestige of the ingeniousness of an American used-car-salesman, took on a pained and thoughtful look. He didn’t know where to start, but he understood that Tina had zeroed in on the heart of the matter. Translating his response was an exercise in empathy. He told us of a building across the street from the capitolio whose residents had just been told by the government to move out: the government needed the space. He didn’t know whether compensation, alternative housing, or even a grace period had been granted. He was the first to admit that Cuba has no property rights and no judicial system to enforce them. Nonetheless, what was he to do? New laws, albeit extremely constricted, allowed for the buying and selling of cars and property. No mortgages are available; only cash transactions. Interest is still illegal. But someone was paying him four times the salary he’d made at the university. He had nothing but hope and an optimistic outlook: “This time the people will not let the changes be reversed.”

I reminded him of the roadside billboards that read, “The changes in progress are for MORE SOCIALISM” — a sure sign, he counterintuitively agreed, along with Obama’s visit, that the changes now have a better chance of sticking than any previous promises. Or as one informant put it, “Castro educated us; now we know what he’s up to.”




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The Big Short Finds Joy

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In 2008 the United States experienced the biggest collapse in the real estate market since the Great Depression of the 1930s. While many had been talking about the expanding bubble, no one really thought it would burst. Real estate was the one sure deal, the tangible investment that everyone needed and thus would never disappear. During the upward panic to get into the market before prices skyrocketed even further, buyers were snapping up houses within a matter of days after they were listed, often engaging in bidding wars that drove the sales price higher than the asking price. “What our houses are worth now” was the gleeful topic of every cocktail party in every neighborhood, whether you were interested in selling or not. Using easy credit made easier by the “no-doc” loans that guaranteed virtually everyone a mortgage, people who had no business buying houses got into the market, and people who already owned homes risked their solvency by taking out additional home-equity loans to use for other purposes. After all, real estate was too big to fail. Prices always go up.

Until they go down. In September 2008 the bubble burst, leaving overleveraged homeowners in precarious positions — unable to sell, unable to pay, unable to forestall foreclosure, and underwater with their mortgage-to-equity figures. The Big Short attempts to explain what happened, in a film that is sassy, quirky, glib, and sometimes even right.

After all, real estate was too big to fail. Prices always go up.

In the interest of telling a good tale, the filmmakers simplify it, presenting a small portion of the story as if it were the whole story. For example, they virtually ignore the Community Reinvestment Act, which was designed to make mortgage and investment money available in “underserved” (read: poverty stricken) areas. The Act was a noble goal, but it meant that people would be granted mortgages who really couldn’t afford them, and had no cushion whatsoever to deal with repairs, upkeep, or changes in employment (read: getting fired). These were called “subprime” loans officially, but “Ninja loans” derisively (No Income, No Job, Accept Anything). It also meant that the demand for homes increased dramatically, driving prices and new construction upward in response to this new bloc of buyers. By ignoring this Act, the filmmakers suggest that all of the blame lay in the private sector of investment funds and rating services.

Instead, this film focuses on the creation of mortgage-backed securities, which is an investment vehicle that spreads the risk of foreclosure by bundling many mortgages into a single security and then selling shares of that security to a number of investors. Everyone shares in the risk and the reward. And because of that, local bankers no longer keep the mortgages they grant to individuals in the community; as soon as the signatures are dry, the mortgages are bundled away onto the secondary market. In the interest of brevity and creating a single straw man, the film blames this on the mastermind behind the mortgage-backed security, Lewis Ranieri (Rudy Eisenzopf), but this is an oversimplification of what went wrong. Many factors were involved, including Federal Reserve policy on the national level and overproduction of building permits on the local level.

Let’s face it: life is not a screenplay. But that’s how this caper is presented. A few savvy investors notice the increase in late mortgage payments and foreclosures beginning around 2004, anticipate the collapse, and figure out a way to profit from it. All these characters are based on real people. One is Jared Vennett (Ryan Gosling), who breaks the fourth wall to narrate the film in a cool, hipster tone that draws us into the web. Others include the Silicon Valley-based eccentric Michael Burry (Christian Bale), the moralistic Mark Baum (Steve Carell), and two young founders of a trading fund called Brownfield Capital, Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock), who bring the also eccentric investment trader Ben Rickert (Brad Pitt) out of retirement and into their deal. Working independently from one another, these traders are convinced they can make a killing by shorting the real estate market (hence the title, The Big Short).

In order for our heroes to succeed in making their millions on short sales, the entire market had to collapse, with millions of Americans bearing the loss.

W.C. Fields made famous the idea that “you can’t cheat an honest man,” and the investment bankers at Goldman Sachs, J.P. Morgan, Bear Sterns, and Lehman Brothers personify that adage. They laugh conspiratorially behind the backs of these short sellers even as they take their money, so confident are they that real estate is “too big to fail.” Of course, we know that the last laugh will be on them. But the bankers will not go down without a fight. The film demonstrates the dubious shenanigans and downright manipulation they used to try to keep the market afloat and force the investors to close their short positions before they could exercise them.

If all this sounds a tad confusing, not to worry! The filmmakers explain such concepts as short selling, CDOs (Collateralized Debt Obligations), ISDAs (International Swaps and Derivatives), and other potentially dry, technical terminology, using the unlikeliest characters. A glamour girl lounges in a bubble bath, sipping champagne and explaining mortgage-backed securities, while the soap bubbles and the fizz bubbles provide a sleazy metaphor for the market bubble that is brewing. A chef chops up unsellable three-day-old fish to make a marketable stew as he explains the fishy rating system that kept these mortgage-backed securities at AAA status even when their defaults were ballooning. A stripper undulates on her pole as she explains yet another investment concept. Music videos appear unexpectedly to demonstrate the euphoria of various characters. These unexpected moments, coupled with a soundtrack reminiscent at times of an Ocean’s Eleven sting, keeps the film hopping and lively.

But this is not a fun topic, and the short-selling sting was not directed against a Las Vegas gangster who deserved his comeuppance. In order for our heroes to succeed in making their millions on short sales, the entire market had to collapse, with millions of Americans bearing the loss. And their brilliant scheme would deliver a double wallop to the already precarious investment banks. According to the film, six million lost their homes, and eight million lost their jobs. Rickert puts it into perspective when he reminds Charlie and Jamie, “If we make money, it’s because ordinary people lose homes, jobs, and lives.” Banks held the prices of their securities up as along as they could, hoping for a turnaround, but in the process they simply made things worse. Regulators were in bed with the companies they regulated, creating a false sense of protection that contributed even more to the disaster. The result was almost as devastating to employees of the major investment firms as the day the World Trade Center was attacked. In its scale, the personal devastation was worse.

The Big Short is not the whole story. It might not even be the true story. But it is an important portion of the story, told with an outstanding cast in an entertaining and engaging way. Surprisingly, it does not trash big business, even though it shows collusion, fraud and manipulation at many levels. Mostly it shows individuals putting their own needs first, protecting their own jobs and security and using their influence to manipulate the bond ratings and the markets to their advantage. No one is overtly evil in this film. It tells a very personal story, one that each of us might be drawn into on a smaller scale if we aren’t careful.

Joy, another film about business, opened the same week as The Big Short, focusing not on the big dealers but on the underserved. Both have been nominated for Golden Globe Awards and both are populated by an ensemble of AAA actors, including Melissa Rivers, who in Joy does a sharp but poignant turn as her mother, Joan Rivers, in her role as a QVC spokesperson. Both films rely on nonlinear storytelling, flashbacks, and dream sequences to make some of their points. This is especially effective in Joy, where disconnected, disorienting scenes demonstrate how seemingly disconnected ideas come together in the imagination to form something new and valuable.

Joy (Jennifer Lawrence) is a creative, bright, hardworking young mother of two and valedictorian of her high school class who has been held back from success by the emotional and physical demands of her eccentric family, most of whom live in her house. Her agoraphobic mother (Virginia Madsen) spends most of her days in bed, watching soap operas; Joy’s ex-husband Tony (Edgar Ramirez), a wannabe singer, lives in her basement and can’t keep a job; her philandering father Rudy (Robert De Niro) also lives in her basement when he’s between girlfriends; and her grandmother Mimi (Diane Ladd), who narrates the story, is the only person who believes in her.

Joy didn’t set out to make my life better, or anyone’s life better except her own. She needed to pay her mortgage, fix her plumbing, and put food on the table.

As a child Joy had big dreams of becoming an inventor, but her parents’ divorce drove her ambitions inside, much as a cicada (a recurring metaphor in the film) spends 17 years in unproductive safety underground. When she cuts her hands badly while sopping up the mess made by a broken wine glass, she figures out how to make a “wringless mop” and decides it’s time to reemerge into the light and dangers above ground to sell her invention to others.

I own this mop. I love it. It keeps my hands clean and dry while it makes my floor clean and sparkly. I also own the Huggable Hangers that the real Joy Mangano invented. They keep my silky shirts and dresses from falling onto the floor in my closet. I’m grateful that she had the spunk and tenacity to overcome all the obstacles she encountered on her way to success, and I’m glad her hundreds of household inventions have made her filthy rich, because her inventions make my life better. But she didn’t set out to make my life better, or anyone’s life better except her own. She needed to pay her mortgage, fix her plumbing, and put food on the table. And like so many other entrepreneurs, she did that by making other people’s lives better too. This is what I love most about this film.

To do it, she needed capital. She needed to conduct a patent search, apply for a patent, design molds to produce her mop, negotiate with manufacturers to make the mop, and market the mop to mass audiences. Capital is the lifeblood of entrepreneurship. Joy finally convinces her father’s latest girlfriend Trudy (Isabella Rossellini) to invest in manufacturing and marketing her invention. The rest of the film demonstrates both the elation and the devastation of entrepreneurship. Through it all, Joy never gives up — not on her invention, not on her family, and not on herself. Harry Browne fans will appreciate Joy’s advice to her young daughter: "Don't ever think that the world owes you anything, because it doesn't. The world doesn't owe you a thing.”

Eventually Joy creates a successful manufacturing and marketing empire that provides startup capital for other small entrepreneurs with an idea and a dream. Joy is a triumphant film about the power of persistence and innovation, desperation and conviction, and the possibility that a simple mop can change the world.


Editor's Note: Reviews of "The Big Short" directed by Adam McKay. Plan B, 2015, 130 minutes; and "Joy," directed by David O. Russell. Annapurna, 2015, 123 minutes.



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The Problem of Inequality

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Left unfettered, the capitalist system always has and always will produce a rising standard of living for the poor and the middle class, and for the people as a whole. It also produces a constant circulation of wealth among economic classes, ensuring that great capitalist enterprises will eventually be overwhelmed by competition, and great private fortunes will soon be dissipated by their heirs, who will be replaced in the economic hierarchy by nouveaux riches. Another way of putting this is that the poor will get richer and the rich will get poorer — but there will always be large differences of wealth between the people who are most successful at the moment and the people who aren’t.

If you don’t like that, you can consider what happens under the precapitalist system, which fools are always trying to revive — the system in which the state constantly tries to control economic differences by redistributing wealth, thereby destroying it. Isabel Paterson said it best: “Destitution is easily distributed. It’s the one thing political power can insure you.”

The poor will get richer and the rich will get poorer — but there will always be large differences of wealth between the people who are most successful at the moment and the people who aren’t.

Recently, after reading some of Hillary’s Clinton’s demagogic rants about “inequality,” I happened on some words that reminded me of the unfortunate fact that total ignorance of political economy is nothing new. The words are part of an essay, “The Absurd Effort to Make the World Over,” by the early sociologist William Graham Sumner. They were published in 1894, and they show how persistent economic fallacies, and their political exploitation, have been. They were chronic even in Sumner’s time, which was supposedly the great age of laissez-faire.

Sumner writes:

It is repeated until it has become a commonplace which people are afraid to question, that there is some social danger in the possession of large amounts of wealth by individuals. I ask, Why? I heard a lecture two years ago by a man who holds perhaps the first chair of political economy in the world. He said, among other things, that there was great danger in our day from great accumulations; that this danger ought to be met by taxation, and he referred to the fortune of the Rothschilds and to the great fortunes made in America to prove his point. He omitted, however, to state in what the danger consisted or to specify what harm has ever been done by the Rothschild fortunes or by the great fortunes accumulated in America. It seemed to me that the assertions he was making, and the measures he was recommending, ex-cathedra, were very serious to be thrown out so recklessly. It is hardly to be expected that novelists, popular magazinists, amateur economists, and politicians will be more responsible. It would be easy, however, to show what good is done by accumulations of capital in a few hands — that is, under close and direct management, permitting prompt and accurate application; also to tell what harm is done by loose and unfounded denunciations of any social component or any social group. In the recent debates on the income tax the assumption that great accumulations of wealth are socially harmful and ought to be broken down by taxation was treated as an axiom, and we had direct proof how dangerous it is to fit out the average politician with such unverified and unverifiable dogmas as his warrant for his modes of handling the direful tool of taxation.

Great figures are set out as to the magnitude of certain fortunes and the proportionate amount of the national wealth held by a fraction of the population, and eloquent exclamation points are set against them. If the figures were beyond criticism, what would they prove? Where is the rich man who is oppressing anybody? If there was one, the newspapers would ring with it. . . . Wealth, in itself considered, is only power, like steam, or electricity, or knowledge. The question of its good or ill turns on the question how it will be used. To prove any harm in aggregations of wealth it must be shown that great wealth is, as a rule, in the ordinary course of social affairs, put to a mischievous use. This cannot be shown beyond the very slightest degree, if at all.

I can think of only one exception to this line of argument, but the exception has become a mighty one. When people become convinced that wealth is indeed dangerous, and they create a political culture based on the fallacies Sumner reproved, they transform their fears into reality; they make wealth dangerous. Most rich people are politically harmless, but some act on the fallacies they have been taught, and try to better the country by political activism. The heirs of Ford, Rockefeller, Kennedy, and many others have done this. George Soros is doing it right now. Almost always, these people work toward constricting the capitalist system and therefore (strange, unanticipated, and unrecognized effect) toward freezing poor people in their poverty. And as government, under such influences, attains more power, it attains the power to generate fortunes directly. This, not the capitalist system, is the origin of the vast Clinton fortune, a fortune now being used, as was the fortune of Julius Caesar, the richest man in Rome, to devastate the republic in which it grew.

This, I believe, may be the great domestic political problem of our time. (We have a lot of others, I know.) How will libertarians address it?




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Cuba and the Yanqui Dollar

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Now that the United States has restored diplomatic relations with Cuba, the communist government is insisting that the US pay reparations for the gigantic economic losses allegedly caused by America’s long refusal to trade with the island state. Undoubtedly the Obama administration is hard at work figuring out how to provide disguised subsidies to the communist regime and to crony capitalists who would like to make money on “free trade” with the kleptocracy. “I feel very much at home here. . . . We wish each other well,” proclaimed John Kerry, at his August 14 lovefest in Havana. When American officials say things like that, communists and their capitalist shills hear cash registers starting to ring.

It’s highly unlikely that “reparations” will be openly paid. Nevertheless, the demand for reparations illustrates some of the global Left’s most mesmerizing fallacies. These fallacies have nothing to do with the interesting question of whether economic embargoes ever “work,” in the sense of penalizing those whom they’re supposed to penalize. That’s a matter for empirical research, which no ideologue can bear to do, except to “prove” some pre-existing notion. I’m talking about the perennial war of faith — faith in the state — against logic.

Of course, it’s always helpful to have someone else to blame for this morally stimulating poverty.

Every communist state has initially justified itself as an economic enterprise. That’s the point of communism, isn’t it? It’s an economic philosophy designed to deliver economic prosperity. Soon, however, there comes a surprise. Who woulda thunk it — communism turns out to be economically disastrous! But, this having been established, the communist state doesn’t slink off to the side and wither, demoralized by its failure to do what it proposed to do. Instead, it loudly justifies itself on opposite principles — heroic endurance of poverty, disdainful rejection of the good life, the prosperous society.

Of course, it’s always helpful to have someone else to blame for this morally stimulating poverty. For Cuban communists and their sympathizers around the world, and for many unthinking noncommunists as well, the United States is the one to blame. First the US was to blame for ruthlessly exploiting Cuba, by trading with it and investing in it; then, and still worse, the US was to blame for ruthlessly refusing to trade with it or invest in it.

It’s useless to say that you can’t have it both ways. Of course you can, if you refuse to think. In fact, if you’re an American leftist, you can even have it four ways: Cuba is prosperous; Cuba is impoverished; isolation from capitalism made Cuba prosperous; isolation from capitalism made Cuba poor. With these comforting thoughts packed away in all relevant heads, pity for Cuban communism and outrage over US imperialism can continue, with no reduction of self-righteousness. They will come in handy whenever the New York Times notices that post-embargo Cuba is cursed (like pre-embargo Cuba) with that worst of all evils, income Inequality. Again we will witness the catastrophic effects of exploitative free enterprise.




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What’s So Selfish About Capitalism?

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It is a mischaracterization of the free-market society that is as old as capitalism itself. One recent recycle comes from self-designated “libertarian socialist” and “anarchist” Noam Chomsky: “It’s just, I’m out for myself, nobody else — and that’s the way it ought to be” (Power Systems, p. 157).

Now it is absolutely true that laissez-faire capitalism allows someone to be “selfish” (in the most shallow sense), basically because such capitalism allows an individual to be any number of things. A man can spend every penny he has on trinkets (from which expanding circles of merchants and others will actually benefit), or he can donate all he owns to charity — or select among all the types of intermediate options. Freedom of property gives people these choices, in the same way as freedom of religion provides them with a smorgasbord of theisms, atheisms, and agnosticisms. The separation of state and religion doesn’t mean that everyone will embrace, say, Seventh-day Adventism, nor does it follow that the separation of state and economics means that everyone will embrace “selfishness” — or any one exclusive behavior.

The fear that freedom of charity — ending redistributive taxation, thereby completing the separation of state and charity — will mean not a diversification, but the utter death of charity, proceeds from the premise that the one thing everyone will do under capitalism is nothing — for or with anyone else. But this contention that individual liberty entails an abject disregard for others corresponds to no social reality. Does freedom of assembly mean that people will never assemble — in any way? Does freedom of trade mean that everybody will in fact stop trading? Does freedom of speech and of the press — an unregulated market in ideas — mean not that we will have a rich and engaging culture, but that nobody will exchange any ideas about anything?

Laissez-faire capitalism allows someone to be “selfish” because such capitalism allows an individual to be any number of things.

Consider freedom of sexuality. Now it is also absolutely true that capitalism allows someone to indulge in what was formerly euphemized as “self-abuse.” Does that mean that without government control of sex — without a nationalization of the means of reproduction — individuals will do nothing but lock themselves away in their rooms? That there will be no dating, no courting, no marriages? No births, no propagation of the species — is that how “rugged individualism” will “atomize” society? Will all of capitalism’s “sham-liberty” (Engels) degenerate us into an anti-civilization of hermits, morons, and masturbators? Is that the fate from which only coercion — by a hereditary monarch, a Putsch oligarchy, or the Election Day majority-plurality — can save us?

Forebodings of societal necrosis notwithstanding, there is no conflict between liberty and community — the former is each tree, the latter the forest. By allowing each adult to act on his own choices, liberty empowers consenting adults to interact in various ways within a multiplicity of modes: religious-philosophical, professional-economic, sexual-romantic, cultural-artistic, fraternal-humanitarian, and many more. Hence the profound error of thinking that capitalism — voluntarily funded government limited to the defense of person and property — has any one “way it ought to be” concerning socioeconomic matters (such as Chomsky’s “I’m out for myself, nobody else” burlesque). Its only commandment is political: the prohibition of the initiation of force or fraud — by either state or criminal agents. We may therefore confidently retire verso Engels’ and recto Thomas Carlyle’s “cash nexus” caricature of the open society. Whatever the skirmish, the conflict of freedom vs. control is that of diversity vs. conformity — the multifaceted, multihued consent nexus of capitalism vs. the flat, sanguineous coercion nexus of statisms left and right. When some lobbyist hands us the line “If government doesn’t do it, it doesn’t get done,” what he’s really telling us is: it doesn’t get done his way only.

Many of the giants of classical liberalism recognized the affinity of compulsion and conformity. Jefferson wondered: why subject opinion to coercion? His answer: “To produce uniformity.” And Ludwig von Mises, in a survey of paradoxical charges against the free market, observed: “The atheists make capitalism responsible for the survival of Christianity. But the papal encyclicals blame capitalism for the spread of irreligion. . . .” Irreligionists identify capitalism with religion because capitalism (unlike leftism) doesn’t suppress religion, while religionists identify capitalism with irreligion because capitalism (unlike rightism) doesn’t suppress that. Let us put aside the question of whether such behavior — the refusal to extend to others the protection of law that one demands for oneself — constitutes “selfishness” in the most destructive sense. What this example illustrates perfectly is the statist projection inherent in linking laissez faire, which neither suppresses nor subsidizes, to any homogenized culture. A “capitalist society” is no more synonymous with “selfish materialism” than with “selfless spirituality.” The only thing everyone in a libertarian political order does — with no one’s mind, body, and property but his own — is act, not for his exclusive “gratification” against any consideration for others, but on his own judgment protected against any violence from others.

With regard to the nature of civil liberties, the freedom to withhold one’s wealth from the state — apparently the gravamen of the charge of capitalist “selfishness” — is wholly like any other human right. The state has no more claim to the individual’s private property than to his private body or his private mind. (Indeed, what a person does with his own property or body is what he does with his own mind — all coercion is “thought control.”) If we do not grant government the ability to more wisely or morally use a citizen’s mind or body, we do not grant it the ability to more wisely or morally use his property. Yet that is exactly what the accusation of “selfishness” wants to guilt us into conceding: that the state (essentially a handful of guys with guns) will manage each and every person’s money “better” than these people (essentially the entirety of the population) will do themselves. Just who is manning this administration — mortals or gods?

Will all of capitalism’s “sham-liberty” degenerate us into an anti-civilization of hermits, morons, and masturbators?

The importance of private property to political dissent was memorably demonstrated by an unexpected but significant source. In response to President George W. Bush’s launching of the Iraq War, the National War Tax Resistance Coordinating Committee issued a public statement entitled “An Appeal to Conscience: In Support of Those Refusing to Pay for War on Iraq,” which upheld a citizen’s right not to pay “all or a portion of one’s federal taxes as a form of conscientious objection.” Among the signatories were many who proudly wore the label “socialist,” including . . . Noam Chomsky. Now here were outright collectivists defending the right of every individual to keep his money from the taxmen, for no reason other than to reflect his private conscience — that is, his personal disagreement with government policy, even when the government was enthroned by the Election Day majority-plurality. (And certainly Bush 2000 won a much greater percentage of the popular vote than Chile’s Allende, whose “democratically elected” credential is repeated by the Left as calculatingly as Castro’s dictator status is not.) The “Appeal to Conscience” didn’t even contain a little pledge that each tax resister would spend his withheld wealth on good things (e.g., children’s charities) and not on bad ones (hookers and heroin).

Since war is a government undertaking, we must note the converse in America today: almost every government project is conceived as some kind of “war” — hence a War on Poverty and a War on Drugs no less than a War in Iraq and a War on Terror. If, as a matter of principle, a citizen may stop giving money to the state as a practical expression of his “conscientious objection” to any particular war — if he can in that manner legitimately protest national security and other policies — we thereby recognize that private property is essential to freedom of conscience. What then is left of any variant of wealth seizure? What are we left with but capitalism in its purest form?

Yet that is the very politics denounced by the Left, including even its antiwar tax resisters, as “selfishness.” One cannot help recalling the scene in A Man for All Seasons where Sir Thomas More, accused of high treason, explains that his believing a “loyal subject is more bounden to be loyal to his conscience than to any other thing” is a matter of necessity “for respect of my own soul.” Thomas Cromwell, the state’s advocate and More’s antipode in this “debate” — a rigged trial in which the defendant’s life is in peril — tries to undermine this statement of conviction in a common manner, sneering, “Your own self, you mean!” More doesn’t deny it: “Yes, a man’s soul is his self!”

Possibly the “egalitarian” supporters of the “Appeal to Conscience” believed that its broad principles should apply to only specific people — namely, themselves and those sufficiently parallel. That returns to the fore the refusal to extend to others the protection of law that one demands for oneself. Said refusal is a good working definition of what many actually champion as the corrective to capitalist “selfishness”: the social-democratic “welfare” state — the mixed economy:

To be capitalist or to be socialist?— that is the question. Precisely what is the mix of the mixed economy? When is it capitalist and when is it socialist? When does it protect property and when does it confiscate it? When does it leave people alone and when does it coerce them? When does it adhere to the ethics of individualism and when does it obey the code of collectivism? And just which is the metaphysical primary — the individual or the collective (e.g., the nation, the race, the class)? The fundamental truth about the mixed economy is that mixed practices imply mixed principles, which in turn imply mixed premises — i.e., an incoherent grasp of reality. With socialism, the chaos was economic; with “social democracy,” it’s epistemological. Ultimately, the latter can no more generate rational policies than the former could generate rational prices. The mixed economy doesn’t present us with a mosaic portrait of the just society, but with a jigsaw of pieces taken from different puzzles.

Unable to provide any philosophically consistent answers, the mixed economy demonstrates that the question of which rights will be protected degenerates into a struggle over whose rights will be protected. One example that virtually suggests itself: while a myriad of voices clamor for censorship, who ever says, “There have to be some limits on free speech, and we should start with mine”? Concerning “economic” issues, do we ever hear, “Y’know what? Give the competition the subsidies. Me, I’ll bear the rigors of the market”? As for intellectual and moral integrity: do we see the National Organization for Women (NOW) and fellow “progressives” bring to other issues the laissez faire they demand for the abortion industry — a heresy that elicited a charge of “possessive individualism” from Christopher Hitchens when in office as socialist inquisitor — except, that is, when these “progressives” demand tax dollars for abortions (and deny reproductive rights, the putative sine qua non for gender equality, to males)? Do we see the National Rifle Association (NRA) and fellow “conservatives” bring to other issues the laissez faire they demand for the gun culture — a deviation that roused Robert Bork, majoritarian mongoose to any perceived libertarian snake, to attack the NRA via a comparison with the ACLU — except, that is, when these “conservatives” demand that private property owners be prohibited by law from refusing entry to persons carrying firearms?

Whatever the skirmish, the conflict of freedom vs. control is that of diversity vs. conformity.

No matter what combination of contradictory positions any particular avatar of the mixed economy advocates on any given day, he is always a libertarian with his own liberty and a capitalist with his own capital, but an authoritarian with the freedoms of others and a socialist with their property. Such is the “idealism” that distinguishes modern liberalism and its special-interest lobbies from the “selfishness” of classical liberalism and its establishment of the same rights for oneself and one’s neighbors.

With social diversity now multiplying the types of special interests in many social democracies, the resulting political conflicts cannot be dismissed, let alone defused — least of all by the bromide that “we all accept that our tax dollars go to things we disapprove of.” No one in fact accepts that. Even though taxation exists to separate people from control of their money, selective tax protests span the spectrum of otherwise pro-taxation pressure groups. We’ve seen collectivists — reputed foes of all private property — endorse antiwar protesters who demand as a matter of individual conscience their right not to pay taxes. Years ago in The Nation, an ad told readers that “your tax dollars” funded what it alleged was Israel’s mistreatment of the Palestinians. Public school supporters, who never voice concern over how many “Americans really want to give tax dollars” to that monopoly, suddenly claimed great concern with what “Americans really want” at the prospect of those dollars going to “school vouchers.” And among traditionalists, tax protests involve everything from abortion to art (if it offends them) to foreign aid (for the countries they don’t like) to free condoms and free needles. Under a system that denigrates the concept of equal rights for all, everyone wants to be exempt from paying taxes for the things he disapproves of, but no one wants — any guesses why? — his neighbors to be exempt from paying taxes for the things they disapprove of.

There’s not a mote of doubt as to what — with the double standard as its only standard — exposes itself as the inherent politics of “selfishness”: the hypocrisy of social democracy. All the warring camps of social democrats brazenly acknowledge that hypocrisy — in the other camps. A snowy day stuck indoors will pass much more tolerably with a back-and-forth Googling of “liberal hypocrisy” and “conservative hypocrisy.” (Each camp also detects tyranny — “fascism” — in only the others; compare Jonah Goldberg vs. Naomi Wolf.)

And what of social democracy’s central claim to “social justice”: its redistribution of wealth from the “most greedy” (richest? most materialistic? least philanthropic?) to the “most needy”? Consider one form of redistribution that no North American or European “welfare” state allows — or ever would allow. Let us stipulate that I have no problems with (a) the government’s taking a portion of my money for the purpose of tempering my “greed,” (b) the idea of those tax dollars going to the “most needy,” and (c) the percentage the state takes. But there is one thing: I don’t consider the current recipients to be anywhere near the “most needy.” My definition does not include my fellow Americans, who even at their poorest are richer than most people on the planet. To get right to it: I believe that the “most needy” — the “least of these” — are undeniably the starving children of the Third World, and I insist that my tax dollars all be sent to them.

The mixed economy demonstrates that the question of which rights will be protected degenerates into a struggle over whose rights will be protected.

Now why is that a problem? I am not declaring a right to withhold my taxes from the government, with no assurance about what I will do with the money — unlike the antiwar leftists who signed the “Appeal to Conscience.” Nor am I trying to control what others’ taxes pay for. All I’m asking is that my money go to those who my independent judgment and individual conscience tell me are the “most needy.” Why should I pay for full medical coverage for all Americans, when the Third World children don’t have any food? Why should I pay for textbooks for American children, when the Third World children don’t have any food? So, why can’tmy tax dollars go to them? Because the Election Day majority-plurality decides that “charity begins at home” (i.e., nationalism trumps humanitarianism)? If the neediest-recipient principle justifies my money’s transfer to my fellow Americans, why doesn’t it justify the money’s transfer from these Americans to the starving Third World children? Isn’t the principle violated by the dictionary “selfishness” of voting other people’s money into one’s own coffer (“tax booty for me, tax burden for thee”)?

The redistribution of wealth in a “welfare” state is not directed by a neediest-recipient or any other principle. It is purely a matter of power. With its rejection of consistent property rights, social democracy forces all people to throw all money onto the table (which some resist more successfully than others) and then allows them to take what they can (with some better able to take than others). That’s right: The money goes from those who are politically unable to hold on to their wealth, to those who are politically capable of grabbing on to that wealth. The former are no more guaranteed to be the “most greedy” than the latter are to be the “most needy.” It would be criminal not to cite Lord Bauer’s denuding of foreign aid: the “transferring [of] money from poor people in rich countries to rich people in poor countries.” And it would be downright felonious to omit business subsidies. Any redistribution of wealth operates in only one way: from each according to his ability to contract via civil society, to each according to his ability to coerce via the state — a feature applicable (by degree) to both socialist dictatorship and social democracy.

The confusion of limited government with “selfishness” is reflected in the socialistic thesis that such government comprises nothing but the “class self-interest” of the business (“capitalist”) class. This thesis implodes almost immediately when we begin to ask precisely what concrete policies manifest that specific “class self-interest.” If respect for everyone’s property rights actually favors “capitalists,” why do corporations seek subsidies and “eminent domain” confiscations? If unregulated commerce leads to monopolization by these “capitalists,” why do real-world businessmen look to state regulation to gift them with monopoly entitlements? And if free trade gives an advantage to this class, why do each country’s business — and union — leaders lobby for protectionism?

The classical liberals formulated their principles of private property, laissez faire, and free trade — rejected by “socialists of all parties” and big business alike — not against the yearning of the have-nots for a better life, but in opposition to policies that favored the few over the common good, that is, the routine of “merchants and industrialists . . . demanding and receiving special privileges for themselves” (in the words of Robert B. Downs). Free-market economics (The Wealth of Nations) and American nationhood both arose as part of the revolt against such mercantilism — corporatism, in today’s parlance. The American “welfare” state, in contrast, began as a neomercantilist reaction against that revolt. “The essential purpose and goal of any measure of importance in the Progressive Era was not merely endorsed by key representatives of businesses involved,” observed Gabriel Kolko; “rather such bills were first proposed by them.” Big business has never stopped being a major driver of big government. Would President Bush’s 2003 prescription drug bill (the “largest expansion of entitlements in nearly forty years,” according to Jonathan Chait) have gone anywhere without its hundreds of billions in industry subsidies? Would Obamacare even exist without the “advice” and approval of the health insurance cartel?

If respect for everyone’s property rights actually favors “capitalists,” why do corporations seek subsidies and “eminent domain” confiscations?

Corporate privilege is a raison d’être — not a corruption — of the “welfare” state (aka “corporate liberalism”). Charity is not the purpose of the “welfare” state, much less its innovation. Concern for “the poor and stranger” long preceded its birth and will long survive its death. Like family life or the division of labor, charity is (to quote Paine’s view of society vs. state) “part of that order which reigns among mankind [that] is not the effect of government. It had its origin in the principles of society and the natural constitution of man.” What had its origin in government is the swarm of anticompetitive measures benefitting “connected” entities — the fixed economy of the mixed economy. Without tariffs, for instance, how many people would always prefer to buy domestic goods? And how many would ever write out checks to a multinational conglomerate for nothing in return? Those are the “market failures” that the opponents of a free market fear.

Any state initiation of force exists not for a noble end (which, as Jefferson said of truth, requires no such coercion), but for a sordid one. Regarding military conscription, Ayn Rand pointed out that a “free (or even semi-free) country has never lacked volunteers in the face of foreign aggression.” However: “Not many men would volunteer for such wars as Korea or Vietnam.” Likewise, people will allocate money for the education of their children, sound retirement funds, the less fortunate, and especially the services of a limited government. What they won’t do is give it to “teachers” who can’t teach, Ponzi schemes, Boeing, or Chrysler — or the Taliban, which just a few months before 9/11 received from Uncle Sam a total of $43 million for its “help” in the victory-elusive War on Drugs (a sum that too obviously pales next to the multiple billions handed over to Vice President Cheney’s compadres for the purpose of building infrastructure — in Iraq). Only pursuits of folly and injustice seek the means of force or fraud.

Portraying laissez-faire capitalism as the tailored benefactor of big business is transparently a projection on the part of the mixed economy’s corporate liberals. The consistent socialists, on the other hand, care no more whether commerce is privileged or left alone by government than whether religion is privileged or left alone by government. They want the abolition of commerce, of religion, of a free market in anything, of any independent institution of civil society: the replication of totalitarian theory and history.

Will only the unfettered state stop the virulence of “selfishness”? Ideally yes, asserted Plato, for whom the “highest form of the state” was one “in whichthe private and individual is altogether banished from life, and things which are by nature private, such as eyes and ears and hands, have become common, and in some way see and hear and act in common, and all men express praise and blame and feel joy and sorrow on the same occasions. . . .” Reductio ad fundamentum: There will be no more “selfishness” when there are no more selves.

Capitalism is being condemned for not assenting to the proposition that money grows on trees.

The unfettered market boasts no ability to effect a change in “human nature” — in social reality. There will always be situations in which people compete to get or to keep one position, one prize. But while the market can do nothing about this conflicting “selfishness” (and will do nothing about different parties’ demands for a guarantee of monopoly), it commands the common self-interest that people have in all competition being governed by an equitable rule: a ban on the use of force or fraud by any rival, the only possible such rule. The analogue of the market is not the jungle, but the stadium — more broadly, a network of stadiums and other venues.

Capitalism’s multiplicity of open competitions enables each individual to find the field where he can succeed. The free market’s profit-and-loss dynamic (to quote Adam Smith) “encourages every man to apply himself to [the] particular occupation” most sought after by others. These interactions synthesize the most prosperous social order as defined by the participants themselves — all of them, as opposed to any one party’s wish for the “way it ought to be.” It is an ideal that has been realized to the degree thata market mechanism has been implemented. In contrast, socialism’s “equality” has meant nothing but poverty for all. And in a jarring echo of the Great Depression, the mixed economy’s regulatory sector in recent years orchestrated a general downturn in the US (where the crisis was Orwellianly blamed on “deregulation”) and in Europe (the “PIIGS”). State intervention in production (i.e., one party’s wish for the “way it ought to be”), once heralded as the alternative to the market’s alleged class conflicts, evidently produces only the “common ruin of the contending classes” — to redirect a phrase from The Communist Manifesto. When the prescribed cure for “selfishness” actually afflicts the common good, we must reexamine the diagnosis of the condition.

Preponderant among the essential criticisms of limited government has been the charge that it fails to recognize as natural rights such things as food, clothing, and shelter, to say nothing of education (“from pre-K to Ph.D.”), advanced medicine, and whatever else might be tacked on. The sober reply: these items are not natural rights because they are not natural produce. It costs a man nothing not to coerce his fellow citizens, thereby respecting their rights to worship, speak, etc. But how can he provide everyone’s “right” to all those scarce materials and services? And why should he, when he himself is promised a “right” to those things whether he does any work or not? Realistically speaking, capitalism is being condemned for not assenting to the proposition that money grows on trees. And the condemners are quite serious in that belief: “The world has enough for everyone’s need, but not enough for everyone’s greed.” Wealth simply exists, and only capitalist “selfishness” prevents its equal distribution to every soul on earth.

Ultimately, the free-market society is guilty only of affirming each individual’s right to control his own mind, body, and property, a conviction that calls for a single sentence: if that is “selfishness,” let us make the most of it.

Recommended Reading

  • Yaron Brook and Don Watkins, Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, 2012.
  • Nick Gillespie and Matt Welch, The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong with America, 2012.
  • David Kelley, Unrugged Individualism: The Selfish Basis of Benevolence, 2003.
  • Robert P. Murphy, The Politically Incorrect Guide to Capitalism, 2007.
  • Andrew P. Napolitano, It Is Dangerous to Be Right When the Government Is Wrong: The Case for Personal Freedom, 2011.
  • John Stossel, No, They Can’t: Why Government Fails — But Individuals Succeed, 2012.



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