Population Growth Made Simple-Minded

 | 

The "Population Bomb" is back. Progressives, including the climate change crowd, have recently rediscovered the looming global population crisis. Burgeoning humanity is the root cause of famine, pollution, resource depletion, stagnating wages, increasing inequality, decreasing dignity, and many other affronts to the liberal intellect, not least global warming. Indeed, human fertility is the greenhouse gas (GHG) of population growth, absorbing the earth's resources as CO2 molecules absorb heat. We must now brace ourselves for a relentless torrent of drivel — articulated with the silliest alarmist buzzwords, teased from the pious liberal vernacular of condescension and hyperbole — to support the simple-minded liberal idea that the world would be a better place without so many of us. It is a goal that is achievable, we are told, only through the simple-minded liberal solution of empowering women to have fewer children.

To this end, it is said, a strong global family planning program is needed for the many tens of millions of women who would voluntarily limit their childbearing, if only they had access to free, or affordable, contraceptives. In a population debate held by The Economist, advocates of the "earth would be better off with fewer people" position won, 80% to 20%. To achieve a world "with better choices and better outcomes," declared the winning side, "family planning represents a relatively small and very wise investment." For Catholics — following the admonition of Pope Francis, that it is irresponsible to breed like rabbits — the cost is minute, as they are advised to employ natural family planning methods. So that people canlearn the precise family size, education, it is presumed, must be provided for everyone. The total cost to investors (i.e., taxpayers residing in Western industrialized countries) has yet to be determined.

The benign and altruistic image of the Progressive family planning scheme may become tarnished, in practice.

Such an investment is needed for both the developed and the developing world. After all, "rapid population growth is leading to the destruction of forests, the spread of deserts, and the pollution and overfishing of waterways and oceans. In addition, it is one of the leading drivers of climate change." Besides, unintended pregnancies plague even the industrialized world (e.g., more than a third of US births are said to be unintended).

At current fertility rates, world population could reach 11 billion by 2050, an increase of more than 4 billion. Essentially all of the added population (97%) would be born in Africa, Asia, and Latin America, where economic depression, social unrest, and political instability are common. Most of this inordinate growth would occur in countries having a disproportionate percentage of young, so-called "youth bulges." Here are impoverished countries that are unable to meet the basic needs of their existing populations. According to the Council on Foreign Relations (The New Population Bomb),

most of the world's expected population growth will increasingly be concentrated in today's poorest, youngest, and most heavily Muslim countries, which have a dangerous lack of quality education, capital, and employment opportunities; and, for the first time in history, most of the world's population will become urbanized, with the largest urban centers being in the world's poorest countries, where policing, sanitation, and health care are often scarce.

In a five-part LA Times series (Beyond Seven Billion), Kenneth Weiss cites the "arc of instability" that spans Africa, the Middle East, and South Asia, with special note on the "youth bulges [that] have emerged in Iraq, Pakistan, Yemen, Sudan, Somalia and the Palestinian territories." The hope is that free condoms and birth control pills, tossed into the grateful clutches of childbearing women, will reduce this growth by 2 billion, shrinking mid-century population to a meager 9 billion, "the equivalent of adding another India and China to the world."

But the benign and altruistic image of the Progressive family planning scheme may become tarnished, in practice. It won't be global; it can't help but be intended for the childbearing women of the youth bulges. Nor is it likely to be voluntary. Some experts (mainly from the eco-socialist faction of Progressivism) believe that any meaningful reduction will involve mandatory abortion and sterilization — what they call "green racism," aka, eugenics disguised as environmentalism.

Yet even if the concern — that voluntary global family planning is a euphemism for Third World population control — is not raised, the challenges are formidable. Family planners from the developed world (home of the most egregious climate polluters) must explain to ordinary people in the developing world (home of the most egregious population breeders) that their sexual behavior is bad for the planet. Alternatively, family planners from wealthy, white-majority countries must explain to impoverished people of color that the world would be a better place with fewer of them.

The trick to quickly reducing population growth is to provide education and modern contraceptives to those beginning their reproductive years — just in time to plan a small family. For developing countries, this means a one-billion-strong youth bulge of "adolescents" who can find themselves in the throes of marital bliss by age ten, and whose ideas as to appropriate family size are largely shaped by parents and grandparents, who want large families to take care of them as they age. There are also significant religious and cultural pressures behind the tradition of large families. Moreover, to the leaders of many developing countries, high birthrate is thought to engender such benefits as economic, military, and political power.

Family planners from wealthy, white-majority countries must explain to impoverished people of color that the world would be a better place with fewer of them.

Most developing countries have no plans to reduce fertility rate. India, for example, boasts of its "ample human resources," happy with its poor, rapidly growing, working-age population, whose cheap labor provides a competitive edge. Why not? The US, through its immigration policy, is frantically enlarging its supply of poor, uneducated, low-wage labor. In 1970, its immigrant population was 9.6 million (4.7% of 200 million). Today, that number has grown to 40.3 million (13.1% of 318 million). Recent statistics show that, compared with existing American residents, immigrants are significantly less educated, have a significantly higher poverty rate and duration, and are significantly more dependent on welfare. And this ample human resource is more fertile.

According to Pew Research, US population will leap to 438 million by 2050, with 82% of that growth from recent immigrants and their descendents. Environmental ethicist Philip Cafaro wonders "what climate change mitigation measures . . . could possibly equal the increased greenhouse gas emissions" produced by such an influx. The sentiment among enlightened liberals such as Cafaro is that America can no longer afford massive immigration; it contradicts progressive ideals.

If world population increases to 11 billion by 2050, it will be "akin to adding three Chinas," says Weiss. What renowned biologist E.O. Wilson called “the raging monster upon the Earth”has already pushed earth beyond its carrying capacity. The Global Footprint Network tells us that "humanity uses the equivalent of 1.5 planets to provide the resources we use and absorb our waste" and that at current population and consumption rates, two earths will be required as early as 2030. For uneducated youth bulge readers, the authors took care to explain, "And of course, we only have one."

By 2050, three earths will be required, unless we "begin to make ecological limits central to our decision-making and use human ingenuity to find new ways to live, within the Earth’s bounds." This is the kind of thinking that excites Progressive family planners, for it leads to the "Double Whammy" of population growth. First, there is what demographers call population momentum. Then there is what cynics might call the "prosperity bulge" paradox. Both, naturally, demand additional, much more advanced, family planning, available only through a large, highly paid bureaucracy.

Could cattle ranches the size of Texas be in the cards?

Even when youth bulge females choose smaller family sizes (smaller still, after impoverished and illiterate females factor ecological limits into their decisions), the monster will rage on, because of the huge number of people still in their reproductive years. In China, for example, despite the remarkable success of family planning (forced abortions, sterilizations, and infanticide) that has eliminated over a half billion children, a current population of 1.3 billion continues to heave forward. As Reiss explains, "Think of population growth as a speeding train. When the engineer applies the brakes, the train doesn't stop immediately."

To date, not even China's mountains of garbage have slowed the population train. Nor have India's rivers of sewage, a "ticking health bomb," impeded its travel. Nevertheless, Progressives are optimistic that the smaller family sizes engendered by their program of education and contraception will eventually stop the train – one hopes before Mount Everest's "fecal time bomb" explodes.

As Third World fertility declines, however, smaller families will consume more of earth's resources, not to mention the additional pollution, waste, and GHG emissions that they will produce. And they will do so with wealth accumulated through becoming, in accordance with the Progressive family plan, happier, healthier, and more productive members of the global economy. Empowering women to have fewer children will turn youth bulges into prosperity bulges. Family planning in China alone has already helped lift more than 300 million from poverty to the middle class.

The earth, says Scientific American's David Biello, which annually supplies humanity with "60 billion metric tons of minerals, ores, fossil fuels and plant materials, such as crop plants and trees for timber or paper," will then have "to find more than 140 billion metric tons of such materials." Imagine the land area needed for sprawling new industrial parks and shopping malls — possibly the equivalent of an extra Alaska. And, as Weiss points out, "hundreds of millions of newly affluent people, mostly in Asia, will want to add dairy products and grain-fed beef and pork to their diets." Could cattle ranches the size of Texas be in the cards?

Such a paradox has already been encountered by climate change experts, who thought that only industrialized countries needed to cut GHG emissions to thwart global warming — that developing countries would not increase their consumption of fossil fuels, in an effort to become, well, industrialized. Population experts will face the vastly greater problem of persuading middle-class arrivals from developing countries that they should not consume humanity's production (from food and energy to luxury items such as household appliances and indoor plumbing) at the same rates as do industrialized countries.

Progressive thinking may send everything back to where it all started: a world in which billions of people live in squalor, except that they will be members of smaller families.

If technological advance ensures an abundant supply of cheap resources (as it has done exceedingly well since the beginning of the Industrial Revolution), then consumption by prosperity bulge families will increase. Thanks to family planning, they will have more money; thanks to technological innovation, prices will be less; more will be consumed. This prospect — an ever increasing demand for resources, at an ever increasing disregard for the environment — horrifies Progressives, to the point where they simply rule out its possibility.

Current Progressive thinking is that since humanity is already consuming 1.5 earths worth of resources (recall that we only have one earth), scientists and engineers (even our brightest) will be unable to figure out ways of boosting production from the 60 billion metric tons of resources that we currently consume to the 140 billion metric tons that will be needed. In this case, there will be rampant resource scarcity, which will cause dramatic price increases, which in turn will steal away the income gains of prosperity bulge families, thrusting them back into poverty — back to where it all started: a world in which billions of people live in squalor, except that they will be members of smaller families. Oops! Deeper liberal thought may be required here.

In summary, youth bulges and population momentum in the world's poorest and most uneducated countries will exacerbate the already raging monster upon the earth, a speeding runaway train overloaded with desperately hungry passengers who breed like rabbits, especially in the arcs of instability and double whammy regions that, by 2050, will add to the world’s population the equivalent of an India and a China, possibly the equivalent of three Chinas, which, for the most part, will be crammed into wretched, filthy, crime-ridden cities, and require for its support resources that are equivalent to three planet earths, unless Third World adolescent females are either cajoled with free fertility education and modern contraceptives or coerced through green racism to have smaller families.

At 7 billion people, humanity has already pushed earth beyond its carrying capacity, currently consuming 1.5 earths worth of resources. So it's not clear why the goal of Progressive family planners is to slow world population growth to only 9 billion by mid-century. Shouldn't they be shooting for 4.7 billion (the one planet resource equivalent)? What is clear, however, is that liberal population experts now believe that rampant population growth urgently needs a strong, global family planning program. And to be consistent with Progressive ideals, immigration into industrialized countries should be drastically reduced, or eliminated. Says Cafaro, “Immigrants are not coming to the United States to remain poor. Those hundreds of millions of new citizens will want to live as well and consume energy at the same rates as other Americans."

Also consistent with Progressive ideals, liberal populationists will want a new government agency to implement their grand family planning policy. Let's call it the Department of Population Engineering (DOPE). DOPE professionals will begin by empowering youth bulge women to have smaller families, thereby slowing the growth of a population that is polluting the planet, raising its temperature, and exhausting its resources. Next, they will concoct policies to keep the prosperity bulge from polluting the planet, raising its temperature, and exhausting its resources.

By 2050, DOPE will grow to a size akin to three EPAs, and each DOPE family planner will require a brain three times the size of a climate scientist's.




Share This


Why Libertarianism Will End Poverty

 | 

As a fan of Friedrich Nietzsche, I have a fondness for clever, memorable aphorisms, on the model of his “All that which does not kill me makes me stronger,” which is one of my personal mottos. Another such aphorism (though not by Nietzsche) is: “Socialists believe that no one should own anything; libertarians believe that everyone should own something.” What this gets at, among other things, is the idea that both socialists and libertarians have an answer to the problem of poverty, but our answer differs sharply from theirs. This is an important point to hammer home to voters.

The leftists and socialists say that they want to help the poor and that the libertarians and conservatives are the enemies of the working class and we don’t care about the poor. This naturally drives working class voters to vote Democrat when they should be voting Libertarian. I can’t speak for conservatives, and I can’t speak for other libertarians either. But, speaking for myself, I can say that I do care about the poor, and my brand of libertarianism, which comes from a liberal-tarian or neoliberal strain, is very intently focused upon ending poverty.

Both socialists and libertarians have an answer to the problem of poverty, but our answer differs sharply from theirs.

My idea is to tell voters that libertarianism will end world poverty. That is a bold claim, and I expect most voters will reply: “Why? And how?” One answer can be found in my own reinterpretation and application of the business management philosophy called Six Sigma.

Six Sigma is a technique developed in the manufacturing industry and is widely credited with the high quality of electronics devices that are manufactured today. A mathematical approach to business management and products manufacturing, its basic idea is that hard math and statistics should be used to manage a business and control the work product of a factory. The key mathematical equation used by Six Sigma practitioners, which I would like you to understand, is: Y = f(X) + e, where X represents input, f(X) represents the process that is applied to the input, Y represents the output, and e represents the errors and imperfections inherent in human existence.

The core teaching of Six Sigma is that most business processes are inefficient and wasteful, and that vast amounts of money can be saved by redesigning the process to eliminate waste. The Six Sigma method analyzes the X and the f(X) in order to find the most efficient method of achieving the desired Y. The method uses math and science to find the best process to achieve efficiency, quality, and success. Six Sigma assumes that with the same input X, e.g. with the same amount of work, labor, effort, and raw materials, the output Y can be very different — if the process, the f(X), is different. What matters is the f(X), not the X, because you need a good process to get the most output out of your input.

Six Sigma is not mere abstract theory. It has been used in practical reality, for example by Motorola, Bank of America, and major car manufacturers in Detroit. The data suggest that when a Fortune 500 company implements Six Sigma, and when it does so correctly, and especially when it uses it on manufacturing processes and factories, average net profits increase by as much as 1 billion dollars a year.

The lower class and middle class bear a tax burden far worse than the taxes actually paid by the rich.

Now, let me get to the main argument in this essay. We can consider a national economy to be akin to a business or a factory. The work that people do, and the natural resources and raw materials that go into their work, are the input. The money they make and the consumable goods and services they produce are the output. And the political system, be it libertarian capitalism or socialist left-liberalism, is the process that takes inputs and creates outputs. My argument is that the process of heavy government intervention in the economy, pioneered by the New Deal and implemented by Obama and the Democrats today, is very wasteful. If Motorola could save a billion dollars by more efficient processes, then the United States of America could probably save trillions of dollars by a more efficient politico-economic process. And the trillions of dollars of added wealth would end up in the hands of the people, of the working class. I fully believe that if all the economic waste were eliminated in the USA, and if the rest of the world implemented free market economics, then the added wealth would be enough to end poverty, so that the vast majority of humans would achieve a middle class or upper class standard of living.

Why would capitalism be a more efficient economic system than Democratic left-liberalism? The answer to that question lies beyond the scope of this article. In my recent nonfiction book Golden Rule Libertarianism, I take 100 pages to explain why a system of money and prices and free choices among competing businesses is the best way to coordinate the diverse economic activity of billions of different producers and consumers in a division of labor economy. The arguments in my book can be called the Hasanian answer. There is also the Randian answer, the Rothbardian answer, the Milton Friedman answer, etc. Let’s take the Hasanian answerfor granted, for the sake of my argument, and leave the details for a different discussion.

Why would libertarianism put money in the hands of the poor and middle-class, as opposed to the rich? As a factual matter, the government spends trillions of dollars taken from the taxpayers, so if you end the tax-and-spend leftist policies, then that money will remain in the taxpayers’ hands, to be spent by the people. Of course, leftists claim that the rich are the ones who pay taxes, and that tax-and-spend helps the poor. In fact, however, the lower class and middle class bear a tax burden far worse than the taxes actually paid by the rich. This is because of the low tax rates for long-term capital gains and dividends, where the rich get their money, and the ability of the rich to hold their money in offshore tax shelters, which enable them to avoid paying taxes; and also because of the many taxes that target the poor, such as the property tax and the sales tax, and social security withholding. The high tax brackets for middle-class salaries also hurt. One thousand dollars is a ton of money for a working-class person or a middle-class person, whereas 1 million dollars is meaningless to a billionaire. So taxes hit the lower class with an impact far greater, proportionately, than their impact on the upper class. Tax cuts help the working class and middle class and often have minimal direct benefits for the rich.

A libertarian Six Sigma approach would eliminate the waste in government spending, creating huge savings for the American people. Government in the United States, including federal, state, and local governments, is the biggest spender of the people’s money, and the examples of bureaucratic failure, waste, and incompetence in government spending are too many for anyone to list. There are bridges to nowhere, statues built for no reason, railroad lines that nobody wants to use . . . mountains of waste, range upon range, all costing the taxpayers trillions upon trillions. The government is necessarily inefficient, because the government does not need to compete against anyone, and people are forced to accept what the government does. By eliminating waste at all levels of government, we could probably save $4 trillion of Americans’ hard-earned money annually — one quarter of government expenditures. Then, if you let people be free to be productive, and you unlock the money-making potential of every worker, especially the highly intelligent and creative people, and if you give them broad freedom to trade with others without regulatory controls, I believe that another $4 trillion would be added to GDP. $4 trillion plus $4 trillion is $8 trillion.

The US GDP was $16 trillion in the most recent estimate, and it is plausible to think that if we replaced a flawed f(X) with an efficient, waste-free f(X), then Y could increase by 50%. This is in line with what Six Sigma improvements have achieved for businesses that replace bad processes with good processes. In terms of Six Sigma using math and science to discover the correct process for a business, which is a core tenet of Six Sigma, I think that the work done by Milton Friedman, who completed an exhaustive, thorough scientific research using hard data and statistical math to show that capitalist-leaning economies generate more wealth than socialist-leaning economies, is true to the Six Sigma approach of statistical analysis. So my application of Six Sigma would take it as a given, proven by the libertarian economists, that the libertarian process is the right one to use to redesign the economy.

Libertarians are not the enemies of the poor and the working class; we are their best friends, with their best interests at heart.

Let us consider the number I mentioned: $8 trillion recovered due to libertarian policies. America has about 300 million citizens. Let’s assume that the poorest 90% comprises 270 million people. If we eliminated economic waste and saved or created $8 trillion, and divided that among 270 million people, then each poor or middle-class person would get an additional $29,600 a year. That would give a reasonable amount of money, enough to live a decent, happy life. This distribution would not be accomplished by means of a welfare system but by the normal, efficient practices of a capitalist economy, including simply letting people keep the money they would otherwise pay in taxes. And if we eliminate most regulations on the economy, almost everything will be cheaper to buy, allowing poor people to achieve middle-class buying power. Our policies would create new wealth for the poor to claim as their own private property. In other words, we could end poverty by using reason and logic, instead of the mushy illogic of the Left.

I conclude by repeating the point with which I opened: libertarians are not the enemies of the poor and the working class; we are their best friends, with their best interests at heart. The leftist, Democratic poor don’t understand this, but we would be well advised to teach it to its natural audience, working class voters. Remember this aphorism: socialists believe that no one should own anything; libertarians believe that everyone should own something.




Share This


What Obamacare Did for Me

 | 

In January I was kicked off my health insurance and forced to buy an Obamacare plan through my state’s health insurance exchange. Let me tell you about it.

My monthly premium is now $315. I am poor and struggle to pay this bill. In fact, the $1,500 I have paid so far this year would torture the poor working class people Obama promised to help. My premium on my old health insurance was roughly the same. I thought the whole idea of Obamacare was that if everyone bought health insurance then premiums would go down. Why, then, is an Obamacare plan still so expensive?

Here it is worth noting that what I pay is $315 a month, but my premium is officially $385 per month, lessened by a $70 per month “tax credit” that the government pays because I bought an Obamacare plan. I would not complain if Obama gave me poor coverage but at least paid my premiums for me (although when I say this I choose not to engage my readers in the lengthy debate about whether fully socialized medicine would be even more horrible than Obamacare). But $70 is little enough, compared to what I pay each month. So I am still getting price-gouged and I don’t get free health coverage, either — when free healthcare is what the liberals and socialists thought Obamacare would lead to.

If I catch a cold, my health insurance is useful. If I get seriously sick, I am totally screwed.

Obamacare is actually the worst of both worlds, because meanwhile, I’m not getting the quality of service that would have come from a true free-market product. For my $315 monthly premium, I get a plan that has a deductible of $3,000 for in-network hospitals and $6,000 for out-of-network doctors and out-of-network hospitals. (The deductible for in-network doctors is also $3,000, but it’s waived for in-network doctor’s office visits, which require only a $30 copay. But see below.)

Which poor people have $3,000 or $6,000 to spare? I certainly don't. If I catch a cold, my health insurance is useful. If I get seriously sick, I am totally screwed.

In the interests of fair and balanced journalism, I will tell you that I had a respiratory infection in March for which I saw a doctor and took an antibiotic, and I guess my doctor's bills and medicine costs would have been much higher if not for Obamacare. This does not alter the fact that I now live in chronic fear of getting very sick. Nor does it alter the fact that if I had saved up my $1,500 of premium payments instead of paying it I might have been able to bear the cost myself.

My plan is with Anthem Blue Cross, the biggest Obamacare provider nationwide. When I call them I am kept on hold for over an hour. This has happened a dozen times.

When I bought this plan the policy disclosures said the deductible was waived for visits to certain types of specialists, so in those cases I would be liable only for a $30 copay. I saw such a specialist in February and promptly sent in a claim. I heard nothing for a month, called to follow up, and was told they had lost it. I resubmitted the claim. They lost it again. I followed up yet again, and was told that because my specialist is out-of-network, the deductible was not waived. This is not what the plan had said. But it turned out not to matter, because they rejected the claim anyway, because of my doctor's bad handwriting on an Anthem form.

Anthem has told me that I may resubmit my claim for the February office visit, but the hassle of dealing with them has scared me away. And I hesitate to bother, anyway, because if the claim is allowed the only result may be $150 going toward a $6,000 deductible. At some point I may try to submit the claim a fourth time, but I don’t expect anything good to come of it.

This is a true story.

I tell this to my liberal mother and she says all insurers are greedy.

The plan was designed by Obama. But for political partisans, blame is always better to give than receive.




Share This


Are Poor People Happier?

 | 

Some people believe that those living in utter poverty, in the wretched parts of the world, know best how to smile and enjoy life. “Poor people,” they say, “live simple, contented lives, with fewer worries and distractions.” Some of the best-known spiritual teachers — Stephen Covey, Wayne Dyer, etc. — have talked about greater happiness, deeper connections with the earth, and higher levels of spirituality among the poor societies they have visited. Many celebrities (John Lennon, Richard Gere, etc.) and business leaders (the late Steve Jobs, for example) spent extended time in India to seek spiritual enlightenment.

To a casual observer, all this may look very reasonable. But the reality is completely different. And we’re not talking about a minor, insignificant error: such beliefs seriously affect what we mean by progress (Is poverty better than prosperity?) as well as the public and financial-aid policies we adopt in relation to poorer societies, often with horrible consequences. Even within this strand of erroneous views there are two schools of thought. On one hand there are people who want to restrict all developments in “primitive” areas “to preserve their languages and cultures,” whether those societies want development or not; on the other there are people who want to impose democracy on these societies and flood their poor people with cash, because “they deserve a better material life, their fair share.”

So what is it about poor societies?

Some people living in big cities cherish a romantic notion about rural places within their own area. Romantic, and mistaken: it is often a huge error to presume that rural people believe in simple living, have a higher sense of community, are closer to nature, are friendlier and more compassionate, and are physically more active and healthier.

I have been to scores of the world’s poorest countries, and I have spent extended periods there. I have done several spiritual retreats in India. I have found poor people very hospitable and generous toward me. But one must live there long enough to understand what is behind the facade. One must ask whether poor people are, indeed, happy.

A wretched life is survivable only on the foundation of numbness. Early in life, very poor people learn to switch off feelings, to avoid sensing the nonstop pain of poverty and tyranny. Those in hunger lack an interest in philosophy, a sense of right and wrong, or an aspiration for higher meaning in life. Their lives are driven by expediency, not morality or reason. They relieve the stress of living under tyranny by passing it on to those more vulnerable. They have, quite rightly, one overpowering obsession: survival. Poor people process the world through dogmatic beliefs and faith.

To poor people, a visitor is a novelty, a reason for catharsis, a much needed escape from their mostly wretched existence. The visitor provides them with a sense of comfort, a tacit knowledge that they are not in competition with him for resources. But visitors (and readers of visitors’ reports), beware: it is hazardous to jump to any conclusions about the character of a poor society and its state of being, simply because of a short, smiley encounter. Anyone who calls poverty spiritual is misled, shallow-thinking, or condescending.

* * *

I must expect some readers to respond that I am “over-generalizing.” They fail to comprehend that we always generalize. Was Saddam Hussein a bad guy? Indeed he was. But that is a generalization. In parts of his life, he was a good guy. He was a hero for people from his community. We might say that politicians are corrupt or that bureaucrats are lazy. That does not mean that good politicians cannot exist or that you’ll never find an efficient bureaucrat. Similarly when I talk about poor people, I am referring to the average.

* * *

But aren’t people in poor counties free from the “depression” felt by people in the richer, developed world? Yes, but for a very wrong reason. Poor people just don’t have the time (or the future) in which to feel depressed. On the surface of their existence they create all possible noise, chaos, and smell to keep themselves distracted, to avoid examining their inner selves. If they did find a reason for self-examination, they would emerge extremely frustrated. History shows that a lot of social revolutions happen, ironically, as people emerge from hand-to-mouth existence — the inertia of pre-rational thinking does not necessarily change even after they have started becoming prosperous.

Creating policies based on erroneous assumptions, either to aid poor countries or to change their regimes forcefully, has had disastrous consequences. If we really want to be an impetus for change, we must accept facts as they are, objectively, even if they counter the instinctive sympathy we feel for the weak.

Are the meek inheriting the earth?

In today’s age of technology, poverty does not come easy. Most poor people are poor because that is what they deserve. It is a result of their spiritual poverty, of their failure to imagine abundance and a win-win society, of a sinful state of thinking and worldview in which envy, tribalism, irrationality, and fatalism dominate. It is with their mental paradigms that they elect their leaders. Those in positions of power indeed are tyrants, but see what happens when the underclass is suddenly elevated to higher positions. You should normally expect worse.

Why else did Iraqi institutions built at the cost of trillions of dollars (including the money spent removing a tyrant) collapse like a house of cards within months of being left to themselves? It is just very hard to change the human mind, and without changing that, there is no hope. The removal of Saddam Hussein was at best a result of extraordinarily naive thinking. There is no escape from drudgery until people individually wake up.

Poor people are very materialistic, if you understand that “materialism.” Material acquisition is their obsession, a result of their minds being tuned only to survival. Moreover, when they start earning a surplus — and when they become nouveau riche — their worldviews don’t change easily and may not for several generations. A volcano of crudeness and rudeness erupts. And why venture to exotic countries to understand this? Look into your own backyard. Have you ever wondered why some in the poorest communities in your area have the most expensive cars? Look for information about those who won hundreds of millions in lottery tickets. Most of them end up worse than where they started, with unpaid bank loans, drug addiction, and wrong company.

* * *

A lot of confusion is created by using terms improperly. Some people tend to use “capitalism” in place of “materialism.” While they are not parallel terms and hence not strictly comparable, in essence they are often antonymous. “Materialism” has its roots in addiction to material acquisition and “capitalism” in individual liberty. In my experience those who seek personal freedom often lack any obsession for material acquisition. And one can live in utter opulence and still not be materialistic, if material acquisition is not the driving force in one’s life.

* * *

In the South African capital of Johannesburg, one is awed by Lamborghinis, Jaguars, and other very expensive cars, mostly driven by those who were very poor not long before, but got easy access to cash because of redistribution policies. Those who thought that this money would have gone toward better purposes have been proven wrong.

In my backwater city in India, where cars and houses were traditionally modest, signs of prosperity are now the same as signs of bankruptcy: people buy Audis and BMWs on loans they cannot afford to pay. Alcoholism among women, slum-dwellers, and rural people is on the rise, rather rapidly. A culture of self-denial (owing to the socialistic past) has rapidly mutated into one of pleasure-centeredness. Ironically, the switch was easy; it merely required a change of rules — there was no time-consuming, painful critical evaluation, for such a concept does not exist in the culture.

* * *

One might ask where Indian spiritual teachers emerge from. The reality is that spirituality is a rare concept in Indian society. Religions teach fatalism, dogmas, and superstitions. Magical stories of kings and queens and the myths that go with them grip the mind very early in life and combine to cripple people from thinking rationally. There is too much of materialistic expectation in the concept of the afterlife developed from dogmatic religion, making indoctrinated individuals very resistant to change. The corrupt leaders and sociopaths who benefit have entrenched themselves extremely well, over hundreds of years; and this entrenchment is not going to go away easily, for the sufferer and the tyrant are often two sides of the same coin. In such an ecosystem, those with an interest in spirituality are outcast — J. Krishnamurti, for example — and hence tend to gravitate to certain pockets of protection or interest, mostly catering to American and other Western followers.

* * *

But aren’t Chinese and Indians thrifty? Don’t they have huge savings? Haven’t the Chinese provided trillions in credit to the developed world? Consumption of Louis Vuitton and other exotic luxury goods — brands that I cannot pronounce or remember — is exploding in China, Thailand, Malaysia, and so on. The Confucian culture of China, a culture that encourages saving, is mostly a myth that prevails among China bulls (and I am one, but for a different reason), a retrospective rationalization for China’s successes of the last three decades. Not too long back, the Chinese were seen as spendthrift, lazy, and unhygienic.

* * *

Macau today is a much bigger gambling and sin city than Las Vegas, and growing. An upcoming hotel will soon have the biggest fleet of Rolls-Royces anywhere in the world. The cost of a suite for one night will be $135,000. Each suite will have a private access, perhaps to provide the ultimate in hedonism. I don’t decide what people should do, but I do wish they used their newly minted money for better purposes. However, I have invested some of my money in these pleasure centers. I will leave the reader to worry if I am a hypocrite.

* * *

What does this mean for the future?

What will human society look like in the future, as it continues on the path of economic growth and technological revolution? If poor societies are not really spiritual and deep-thinking, the trajectory they will take and the influence they will have on the larger society as they become richer and more globalized will be very different from what it would have been if their poverty were a result of nothing but their political institutions.

For a long time, I thought — very erroneously — that poor societies would use their initial excess cash to invest and provide for personal development. I had made the same error that I now blame others for.

In reality, poverty would almost instantly disappear were the poor capable of strategizing their lives, of looking at life rationally with the long term in mind. A visit to malls in Asia convinces me that the growth of luxury goods and high-end services will continue to trend upward. As soon as people have enough to eat, they start to consume rotten junk food, and their brand consciousness kicks in, making them spend a disproportionate amount of money on status goods. They must own a Louis Vuitton bag or drive an expensive car, even if it means sharing a room with several other people.

I have devoured with great pleasure the books of Jared Diamond, in which he attributes the success of the West to “guns, germs, and steel” and those of Niall Ferguson, in which he argues that beginning in the 15th century, the West developed six powerful new concepts or “killer applications” — competition, science, the rule of law, modern medicine, consumerism, and the work ethic — allowing it to surge past all competitors in the East. But have all these concepts not been available to the rest of the world for at least the past two centuries?

Did Cambodia (where a large population was killed in the civil war), Mao’s China, and vast parts of Africa not use guns for self-defeating purposes? Despite the fact that these poor people had suffered from huge tyrannies, the first thing they did when given the power was set-up worse a tyranny. The truth is that the Renaissance, the Enlightenment, and the scientific revolution never really happened outside the West, and without those historical revolutions the “killer applications” may be copied but are not understood and do not stick. The guns and the steel have horrendous consequences. Societies outside the West, without an intellectual infrastructure of rationality and ethics, lack the eyes to understand what made the West great; and it isn’t clear that the West still remembers its own moral underpinnings.

You cannot help poor people by artificially giving them power or by merely bringing a regime change to democracy. You can have a hope only if you can inculcate the concept of critical and self-critical reason.

There is nothing glamorous about poverty. Poverty is mostly a reflection of inner emptiness, irrationality, and the paradigms of pre-rational days. Poor people not only have no clue what spirituality means, but lack the awareness, or even the time or patience, to understand it. Those who are keen on getting rid of poverty must do the emotionally hard work of understanding what lies at its roots.




Share This


The New Normal

 | 

Science is the inspiration of those techno-libertarians who hold that evolutions in technology will ultimately lead to revolutions in political freedom. A commitment to the virtues of small business and entrepreneurs is a major inspiration for the ideals of free market capitalism. So it is easy to think that libertarians might feel that our values were being mocked by two primetime comedies, The Big Bang Theory and Two Broke Girls — the first of which is about scientists and the second about two poor girls who start a business. Yet these sitcoms are deeply touching, hilarious, and also well-intentioned shows — because the audience laughs with the characters, not at them.

The Big Bang Theory, which premiered in 2007 and has now become ubiquitous, with reruns on TBS and new episodes on CBS, is the story of four scientists (two theoretical physicists, an astrophysicist, and an engineer) who work at Caltech. These four scientists are as close to the stereotypical nerd or geek as you can get. They constantly hang out at the local comic book store, play video games, enjoy Star Trek, can’t get girls to date them, and are beaten up by jocks. They constantly make reference to things that only scientists think about. One of them, for instance, dresses for Hallowe’en as the Doppler effect. The producers try to make the science on the show, of which there is a lot, completely accurate, and some episodes feature inside jokes that only scientists can understand.

The characters’ world is turned upside down when Penny (Kaley Cuoco) moves into the apartment down the hall. Penny is an attractive, normal, “popular” sort of girl, who works as a waitress but dreams of becoming an actress. Leonard (Johnny Galecki), the protagonist, instantly falls in love with her. Much of the comedy in the show’s early years focused on Leonard’s feelings for Penny, and the jokes frequently involved the science nerds being totally ignorant of what Penny takes for granted (e.g., the rules of football, the names of such popular bands as Radiohead), or Penny being ignorant of the world of science and geek culture (e.g., online role playing games, the Klingon language). Leonard eventually started dating Penny, and they had a cute, adorable romance for about one season. But their relationships was sundered by the scheming machinations of Star Trek actor Wil Wheaton (who plays an evil version of himself). Leonard and Penny just recently got back together, which makes the show more enjoyable.

The real comedic gold, however, comes from Leonard’s roommate Sheldon (Jim Parsons, who won an Emmy for the role), a brilliant, supremely arrogant physicist with strong doses of OCD and Asperger’s syndrome. Sheldon constantly, and hilariously, insults everyone around him; at the same time everyone else perpetually makes fun of his arrogance and total disconnect from reality. In one episode Leonard calls Sheldon a sphincter, to which Sheldon replies, “The sphincter? A much maligned muscle; did you know there are over twenty different sphincters in the human body?”, and illustrates with an anatomical drawing from the internet.

The writing is usually clever. An instance: Sheldon and Penny are having a fight. Sheldon (threateningly): “You’re playing with forces beyond your ken.” Penny: “Yeah? Well your Ken can kiss my Barbie!” I said “usually.” In a few episodes each season the writing falls flat. This was especially noticeable during the episodes that immediately followed the end of Penny and Leonard’s dating.

But the show is always light-hearted, never serious. It was introduced with the tag line “smart is the new sexy,” yet it never says anything serious about science, or politics, or anything else. The extent of the show’s commentary on religion is Sheldon’s disdain for his Texan Christian mother’s creationism, and Sheldon’s lecturing Penny on the origins of Christmas as a pagan holiday. But the love-hate relationship between Penny, who represents the “normal” popular world, and Leonard, who represents the nerd-geek-science world, is central to the show. Their romance is premised on the idea that the normal, ignorant masses might eventually be able to appreciate the true value of science and technology. The conflict is not precisely between religion and science. It is about the conflict between pop culture and geek culture.

Business doesn’t really look like old rich white men at a corporate board meeting; it looks like two young women in aprons struggling to build a career and reach the middle class.

And, yes, true to its tag line, “The Big Bang Theory” makes it cool to be a geek; it turns smart into sexy. Science has not gotten PR this good since the genre of science fiction was first invented. The show goes a long way toward teaching the public about the details of the type of thinking behind science and what scientists do, so that people won’t just see the magical moving pictures on television and may instead actually get a taste of where the wires and circuit boards inside the TV come from. If Leonard can get Penny to date him, even for a while, then there is hope that all the nerds out there (and the scientific attitude they embody) can find acceptance in this world.

Two Broke Girlsstarted this season, so there is less of a body of work by which to judge it, but every episode I have seen has been hilarious. This show is designed as a microcosm of the Great Recession. Caroline (Beth Behrs), a wealthy heiress and Wharton Business School graduate, is thrust into poverty when her father loses their fortune and goes to jail for running a Madoff-style Ponzi scheme. Caroline is hopelessly naïve about how to cope with low-income life. All she has left is her pet horse. Somehow a Wharton degree does not help her to get a white-collar job. She is taken in by Max (Kat Dennings), a young, snarky, sassy, wisecracking waitress who lives in Brooklyn. Caroline becomes Max’s roommate and gets a job as a waitress at the Brooklyn diner where Max works.

Poverty is the constant undercurrent in the show, which lists an update on the amount of money in the two girls’ bank account at the conclusion of each show (it fluctuates between $200 and $800). But the episodes help the audience, nervous about its own finances, laugh at life and not get beaten down by financial worries. After all, Max and Caroline always find a way to survive. The show is remarkably raunchy (one episode had a running joke about the diner’s horny, seedy chef asking the girls’ Polish friend [Jennifer Coolidge], who runs a cleaning business, to “come to my apartment to clean,” and her replying, “You cannot make me come, I will not come”). Max always has a wise-crack or an insult to shoot at someone. Both actresses are superb in their roles.

What do two broke girls do to cope with the Great Recession? One thing they don’t do is wait around for the welfare state to pay their bills. They start a small business instead. Max bakes cupcakes; Caroline sets up a cupcake business and promotes the sale of cupcakes. Much of the plot involves the girls’ desperate schemes to raise money to fund their cupcake website or find new places to sell their cupcakes. It is just good old-fashioned American effort — people trying to rise from poverty by being productive and selling a product to people who want it.

Unfortunately for the audience’s economic education, nowhere to be seen are New York City health inspectors grading their kitchen, or the IRS auditing their financial records, or any of the goon squad of federal, state, and city bureaucrats who in real life would try to regulate and tax the life out of their startup. The show is not political at all; aside from the implicit feminism of two single girls being very assertive and self-sufficient, it has no explicit message. But the simple yet touching portrayal of two tough, smart-alecky girls, who constantly poke fun at the people around them and use their sense of humor as a way to cope with the sorrows of economic disaster, is an inspiration that everyone stricken by the Great Recession can learn from.

A lot of people are talking about “the new normal” in connection with the Great Recession. But what do The Big Bang Theory and Two Broke Girls say about American mainstream culture? These shows are on CBS, which touts itself as “America’s most-watched network,” not a niche market like Fox Business Network. Both shows have consistently received high ratings (although Two Broke Girls had some unfavorable reviews). A show about nerds coping with the world of pop culture has become a symbol of the world of pop culture assimilating nerd culture. From World of Warcraft to urban fantasy novels such as Harry Potter and Twilight, to the popularization of social media on electronic devices, to the omnipresence of the internet, the technology-obsessed geek world of the techno-libertarian has become, well, how shall I say it . . . normal. And a realization that poverty is the new normal, but it is necessary to take a can-do attitude to rise out of it — that is also catching on.

The libertarian angle is clear: business doesn’t really look like old rich white men at a corporate board meeting; it looks like two young women in aprons struggling to build a career and reach the middle class. Inspired by these two shows, I dare to speculate that if technology continues to evolve and shape the world in which we live, and if prolonged financial desperation forces America to wake up to economic reality and embrace free market principles as the path to recovery, then maybe a few decades from now libertarianism will also be . . . dare I say it? the new normal.


Editor's Note: Review of "The Big Bang Theory," CBS, Thursday, 8:00pm; and "Two Broke Girls," CBS, Monday, 8:30pm.



Share This


Somebody’s Gonna Win

 | 

Our cleaning lady was smiling widely as she polished our dining room table. She was in such a good mood she didn’t drop or break a single goblet or plate on the granite kitchen counter — as was her custom, usually two a visit.

Had she finally found her Prince Charming? I impulsively asked Betty, let’s call her, “Why so happy?”

“I’m gonna win the Tennessee State Lottery,” she giggled, then uttered the declaration immortalized by losers: “Somebody’s gonna win — might as well be me.” The booty amounted to hundreds of millions, because counter to the mantra, nobody had won for eons. Today they’d pluck the lucky number out of a barrel. And Betty had 25 tickets. How could she lose? They only sold 100,000 or so.

Lotteries? A verification of Bastiat’s contention that the state’s one form of expertise is “plunder.” Whatta racket! Of course, you’ll find better odds at your local racetrack or casino. And to heighten the state’s hypocrisy: gambling is illegal in your own home. The letter of the law says you and your Wednesday night poker club can end up in jail, subsisting on grits and bread crusts.

It wouldn’t grate so badly on my sense of justice if the state solicited gambling gangs in a formal competition in which the main variable was payout vs. ticket income. As an 87% libertarian, I believe people should be allowed financial ruin if they so desire.

But it should not be sponsored by the same state that prohibits gambling. It prohibits theft, too, of course, but its main source of revenue is taxes — a euphanism for theft. Theft is theft, so what if they patch my street with tar every three years? They provide schools, too, but the real value of roads and schools and such services never quite equals the take from taxes. And you can’t sell hooch, either, but the state can.

By the way, I’m quite proud that my state, Alabama, amid flagrant corruption from the gambling lobby, rejected a lottery. It’s Tennessee that caved in. Coincidentally, the purchase of mansions, yachts, barrels of caviar, and Rolexes by state legislators skyrocketed. Supply and demand, you know. I’m waiting for the states to open up a string of escort services. Quite legal, if run by the state.




Share This


Hurting the Poor, Helping the Rich

 | 

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

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

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

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

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

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

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

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

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

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

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

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




Share This


Financial Responsibility

 | 

The recent recession, which some call the Great Recession, has been around for years, yet it simply refuses to go away. I believe that American business is strong enough that not even Obama’s socialist agenda can permanently destroy our prosperity. But even if a Republican is elected in 2012 and this recession ends, what is to prevent another one?

The question of what causes recessions is perhaps the single most important and most highly political question that the science of economics seeks to answer. The Keynesians and socialists have one answer, the Austrians have quite another. Perhaps the Federal Reserve’s manipulation of interest rates has caused or exacerbated the recession. However, I think that from an empirical, factual standpoint the linchpin of the Great Recession was the American public's financial irresponsibility, as manifested in the collapse of the real estate bubble. Many thousands of Americans irrationally believed that home prices could only go up, and they incurred real estate mortgage indebtedness far in excess of what a financially responsible person would incur. When real estate prices collapsed, very many mortgages went into default, which led to foreclosure sales, which further reduced home values, which triggered a downward spiral. It is probably true that government efforts to encourage low-income home ownership and government home mortgage guarantees contributed to inflating the real estate bubble. But the disaster would not have been so widespread if more home buyers had been committed to living within their means or had been more risk-averse.

This is the most dangerous matter, and also the easiest to correct. If the American public, especially the lower middle class, learned to understand the concept of “financial responsibility” then this syndrome would never happen again.

What precisely is financial responsibility? I think that the main point that people should understand is that money does not grow on trees, and there is no such thing as a free lunch or easy money, and that money is not magical and cannot be created by waving a magic wand. The great Randian contribution to economic theory is the idea that in a free market people trade value for value, and to “make money” is to create value. (Yes, Ayn Rand did not invent this idea, but she perfected it.) In order to make money you have to do work to produce the value; in other words, you need to make the money that you trade with others when you buy things from them. If you don’t produce value, then you have nothing to trade.

This not only means that people earn and deserve their salary by working at their job; it also means that people do not deserve to consume more value than what the other traders in the free market are willing to purchase in exchange for money. From each as he chooses, to each as he is chosen, to quote a Robert Nozick saying that captures this concept.

Financial responsibility is the understanding that you cannot spend more money than the amount you earned because of the work you did, unless someone gives you charity or you steal wealth from others, and that you cannot consume a value that has not been produced by someone. To use Rand’s old-fashioned phrasing, you can’t have your cake and eat it too, or as I would prefer to say, you can’t eat your cake before you bake it. Understand this, and you will probably not spend money that you don’t have or use borrowed money to buy stuff when you can’t repay your loans. If you want to buy something, then you will be more likely to do the work necessary to earn the money before trying to get what you want.

This understanding that money is finite and must be created before it can be spent is the essence of financial responsibility. Implicit in the concept, however, is the notion that charity and theft are exceptions, and the general rule is that you, and only you, must do what is necessary to make your own money and control your individual financial destiny.

But if you understand this principle then you will be very careful about economic risk, because you will understand that you will be required to assume responsibility if you make a mistake.  You will be on the hook for your losses and no government will bail you out. Financial responsibility means being held responsible, which means that you are held accountable and you will accept the rewards and punishments that result from your economic choices. Thus, you will not assume risks in excess of the amount of sweat or skill you are willing to put in to compensate for your mistakes. A person who is financially responsible would not assume a gigantic mortgage on real estate he had an annual income in the lower-middle class range, because he would understand that the debt would actually need to be repaid.

If the public were financially responsible, it would not put up with a government that steals money from others or borrows excessively and spends money that it does not have.

It seems to me that the solution to the problem is for high schools or colleges to incorporate personal finance management training into their liberal arts educations. Simply teaching people how to write up a personal budget that matches income and expenditures, sort of like a balance sheet, would go far toward creating the practical skills of financial responsibility. Some high schools have such classes, but they are treated like trivial afterthoughts compared to the more important subjects. Also, merely teaching students how to spend money is not enough; the financial responsibility class would somehow have to simulate earning income in proportion to productivity, possibly by tying fake money to GPA or class performance, to give students a feel for the fact that you cannot spend what you have not earned. The ideal personal finance class would teach career ambition, how to budget to spend within your means, and the crucial importance of saving money and not borrowing beyond your ability to repay.

One would expect the poor to appreciate the crucial importance of saving money. But it is precisely the low-income families that are most vulnerable to financial irresponsibility. The poor face a dark temptation to borrow beyond their ability to repay and not worry about repayment until it is too late, so that for a short time they can live a more affluent lifestyle before their debts catch up with them. The temptation to take shortcuts to one’s desires is deeply seductive even to rational, honest people. But people with no money to spare can least afford to make mistakes. Good finance classes in high school would help poor families budget properly, save for retirement, and avoid predatory lenders. This would help the poor much more than all the modern-liberal nonsense of entitlement spending, welfare, food stamps, etc.

Middle- and upper-income people could also benefit. A study cited on Yahoo claims that the average New Yorker is $200,000 in debt and the average Californian is $300,000 in debt. The American economic system encourages credit card debt, home mortgage debt, and student loan debt. I personally have struggled with handling my finances, which were recently made worse by roughly $90,000 in law school student loans that I needed to incur; and I wish that there had been a serious class in this subject that I could have taken, particularly in college where young people are supposed to learn how to live like adults.

If such classes were commonly available, the average American would actually be exposed to the concept of financial responsibility, and the odds of another recession happening would be greatly reduced. If it were customary for every American student to take a class in financial responsibility, it would be more likely for voters to vote for financially responsible fiscal policy. And if American politicians had taken such classes, they might have better training in the art of living within a budget and be more appreciative of a balanced budget and the dangers of excessive debt.

Of course, if the public were financially responsible, it would not put up with a government that steals money from others or borrows excessively and spends money that it does not have. So the leftists who control most colleges and the teachers' unions who control the high schools would fight to keep people from understanding the truth about financial responsibility and how to prevent another recession.  But while government is the primary source of economic problems, even in a libertarian anarchy they would still exist, if the majority of individuals were financially irresponsible.

Financial responsibility is the understanding that you cannot spend more money than the amount you earned because of the work you did, unless someone gives you charity or you steal wealth from others, and that you cannot consume a value that has not been produced by someone. To use Rand




Share This


Poverty and Crime

 | 

If you’re like me, you have been instructed, from your youth on up, that crime is caused by “conditions” — meaning economic conditions, meaning poverty. You’ve also been told that crime can be reduced, or even eliminated, by the abolition of poverty — which, of course, can come only by means of massive government action.

These were some of the ruling theses of President Lyndon Johnson’s War on Poverty, which continues in its thousand institutional forms unto this day, more than four decades after he declared it.

The theses were always vulnerable, on their face. What do you mean by “crime”? Do you mean a Hollywood producer’s rape of a female staffer, who is too afraid to report the crime? Do you mean a party in West LA, where rich people snort a barrel of coke, and are never caught? Or do you mean a guy who’s pushing weed in Fresno, or a girl who’s arrested for prostitution on the streets of Grand Rapids? Do you mean crime that’s successfully prosecuted, or do you include crime that never gets recorded?

And the thesis has long been vulnerable to the evidence. Johnson’s War on Poverty immediately preceded an enormous wave of crime. The hundreds of billions of dollars that American communities spend on welfare has not demonstrably reduced the incidence of crime, however you want to define that term. Most serious analysts believe those dollars have increased it, by fostering a culture in which principles of individual responsibility are no longer considered necessary.

But wait a minute: what is “poverty,” anyhow? What’s the standard? What’s the definition? Was “poverty” the welfareless condition of virtually all Americans in the 1920s? If so, was it the lack of government welfare that induced millions of people to violate the Prohibition laws, and some thousands of them to kill and maim their fellow-citizens in pursuit of profits from that violation? In a larger sense: isn’t poverty relative? The poor of the 1950s were much richer in absolute terms than the poor of the 1920s, yet fewer people were sent to prison in the 1950s. The poor of the 1980s and 1990s were richer still; yet a much larger proportion of the populace went up the river in the 1980s and 1990s than in the 1950s.

Now comes the following announcement from a website in my town (voiceofsandiego.org), about the FBI’s new report on crime in America during 2010, the year of a great depression, especially here in far southern California:

“In San Diego, the number of violent crimes — murder, rape, robbery and aggravated assault — dropped 5.3% from the previous year and the number of property crimes — burglary, theft and vehicle theft — dropped 4.6%. (Nationwide, violent crime dropped 5.5% and property crimes were down 2.8%.)”

The author adds a reference to the prevailing wisdom:

“Nationwide crime declines in recent years have continued to puzzle criminologists, who expected worsening economic conditions to lead to more crime.”

Experts might be puzzled, but no one with any sense, or historical perspective, would suffer their fate. Officially recorded crime went down during the 1930s — the time of the Great Depression. Why shouldn’t it go down in 2010?

We can’t quantify the sources of crime, but we should know this: crime, and the definition of crime, has less to do with “economic conditions” than with community mores, individual opportunities, and (in a reverse sense) government action. When the government declares alcohol or drugs to be illegal, “crime” automatically results. But when individuals and communities hunker down in order to get through a period of relative poverty, crime may well diminish. Only God knows the exact linkages, but it’s not puzzling that people whose families are making less money than before may respond by doing something legitimately and dependably profitable rather than something criminal.

Indeed, as William Blake commented two centuries ago, the idea that poverty causes crime is a slander on poor people. It ought to be resisted by every person of generous mind, and especially by all of us — and there are many, many of us — who have struggled to come out on the other side of bad “economic conditions.”




Share This


I Can’t Get a Job—I’d Lose My Benefits!

 | 

What are we learning from the recent census?

A headline in this Thursday’s Westchester County Journal News proclaims "Census: Density in Pockets." Well, duh. Just look around New York and you'll see high-rises and low-rises that house low-income families whose housing is subsidized by "Section 8" of the welfare code, which ties rents to a percentage of income. The more you earn, the more you pay. Conversely, if you don't earn anything, you'll pay almost nothing. I have a friend who pays $117 for a one-bedroom apartment on a tree-lined street in North Yonkers.

She's one of the lucky ones. I have other friends who live in a building in South Yonkers where a different drug king controls each floor. (That's how lucrative the drug trade is in these areas. After all, it's money off the books. It won't affect the rent.) Buildings are subdivided and subdivided again to provide housing for the burgeoning population of welfare recipients in these dense "pockets."

Another friend of mine teaches junior high in the Bronx. Recently she gave her students a typical assignment: what do you want to be when you grow up? One bright young seventh-grader wrote glowingly about his desire to go to college and become a lawyer. "I'll carry a briefcase to work and wear a charcoal gray suit," he wrote. "I'll drive a BMW and I'll help people with their problems." My friend cheered his enthusiasm as she read his dream. Then she reached his final paragraph: "But if I make too much money, I'll lose my benefits," he concluded. "Maybe I shouldn't go to college after all."

What a chilling message these children are learning from their parents. I hear it too, all the time. "I can't get a job. I'll lose my Medicaid." "I can't get a job. My rent will go up." So parents teach their children how to use the system — how to get on the Section 8 rolls, how to get more food stamps, how to get more welfare. Often for a girl, that means having babies outside of marriage. Children learn how to find jobs that are off the books, income that can go unreported. Their parents don't have the courage to say, "Get out of here! Go to college and fly far away!"

This is a Reflection full of storytelling, so I'm going to tell you one more story. My friend Kelly was a single welfare mom rearing two children, with another one on the way. She was living in a tiny, grungy apartment on one of the worst streets in Yonkers. When the father of the new baby left instead of marrying her, she knew she had to change her life. So she reached out for a different safety net from Section 8 or WIC (aid to Women, Infants, and Children) or Medicaid: she called her parents. Then she moved across the country to Sacramento, where her two older boys are now enrolled in better schools with better classmates. Her mother joyfully volunteered to take care of the baby while Kelly attended school herself. This month Kelly will graduate and become a dental hygienist. By the end of the summer she will be moving into her own apartment. I am so proud of her!

Government welfare always begins with good intentions. No one wants to see young mothers abandoned on the streets. No one wants to see children go hungry or uneducated. But these "pockets" of dense population are not what anyone intended. They are sad places, full of broken dreams and lost courage.

The War on Poverty was supposed to end this mess. It has only gotten worse, as any free marketeer could have predicted. Government needs to get out of the way and stop competing with free market housing, so that more people like Kelly can find the courage to leave the grungy pockets of Section 8 and move into wider, roomier pockets somewhere else — anywhere else! —  with better schools, better opportunities, and a better way of life.




Share This
Syndicate content

© Copyright 2017 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.