CAPITALISM COMPILATION

Capitalism,

a term of disparagement coined by socialists in the mid-

nineteenth century, is a misnomer for economic individualism, which ADAM SMITHearlier called the obvious and simple system of natural liberty (Wealth of Nations). Economic individualisms basic premise is that the pursuit of selfinterest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and PROFITS; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international markets. The emergence of capitalism is often mistakenly linked to a Puritan work ethic. German sociologist MAX WEBER, writing in 1903, stated that the catalyst for capitalism was in seventeenth-century England, where members of a religious sect, the Puritans, under the sway of John Calvins doctrine of predestination, channeled their energies into hard work, reinvestment, and modest living, and then carried these attitudes to New England. Webers thesis breaks down, however. The same attitudes toward work and SAVINGs are exhibited by Jews and Japanese, whose value systems contain no Calvinist component. Moreover, Scotland in the seventeenth century was simultaneously orthodox Calvinist and economically stagnant. A better explanation of the Puritans diligence is that by refusing to swear allegiance to the established Church of England, they were barred from activities and professions to which they otherwise might have been drawnlandownership, law, the military, civil service, universities and so they focused on trade and commerce. A similar pattern of exclusion or ostracism explains why Jews and other racial and religious minorities in other countries and later centuries tended to concentrate on retail businesses and money lending. In early-nineteenth-century England the most visible face of capitalism was the textile factories that hired women and children. Critics (Richard Oastler and Robert Southey, among others) denounced the mill owners as heartless exploiters and described the working conditionslong hours, low pay, monotonous routineas if they were unprecedented. Believing that poverty was new, not merely more visible in crowded towns and villages, critics compared contemporary times unfavorably with earlier centuries. Their claims of increasing

misery, however, were based on ignorance of how squalid life actually had been earlier. Before children began earning money working in factories, they had been sent to live in parish poorhouses; apprenticed as unpaid household servants; rented out for backbreaking agricultural labor; or became beggars, vagrants, thieves, and prostitutes. The precapitalist good old days simply never existed (seeINDUSTRIAL REVOLUTION AND THE STANDARD OF LIVING). Nonetheless, by the 1820s and 1830s the growing specter of child labor and dark Satanic mills (poet William Blakes memorable phrase) generated vocal opposition to these unbridled examples of self-interest and the pursuit of profit. Some critics urged legislative REGULATION of wages and hours, compulsory EDUCATION, and minimum age limits for laborers. Others offered more radical alternatives. The most vociferous were the socialists, who aimed to eradicate individualism, the name that preceded capitalism. Socialist theorists repudiated individualisms leading tenets: that individuals possess inalienable rights, that government should not restrain individuals from pursuing their own happiness, and that economic activity should not be regulated by government. Instead, they proclaimed an organic conception of society. They stressed ideals such as brotherhood, community, and social solidarity and set forth detailed blueprints for model utopian colonies in which collectivist values would be institutionalized. The short life span of these utopian societies acted as a brake on the appeal of SOCIALISM. But its ranks swelled afterKARL MARX offered a new scientific version, proclaiming that he had discovered the laws of history and that socialism inevitably would replace capitalism. Beyond offering sweeping promises that socialism would create economic equality, eradicate poverty, end specialization, and abolish money, Marx supplied no details at all about how a future socialist society would be structured or would operate. Even nineteenth-century economistsin England, America, and Western Europewho were supposedly capitalisms defenders did not defend capitalism effectively because they did not understand it. They came to believe that the most defensible economic system was one of perfect or pureCOMPETITION. Under perfect competition all firms are small scale, products in each industry are homogeneous, consumers are perfectly informed about what is for sale and at what price, and all sellers are what economists call price takers (i.e., they have to take the market price and cannot charge a higher one for their goods).

Clearly, these assumptions were at odds with both common sense and the reality of market conditions. Under real competition, which is what capitalism delivered, companies are rivals for sales and profits. This rivalry leads them to innovate in product design and performance, to introduce cost-cutting technology, and to use packaging to make products more attractive or convenient for customers. Unbridled rivalry encourages companies to offer assurances of security to imperfectly informed consumers, by means such as money-back guarantees or product warranties and by building customer loyalty through investing in their brand names and reputations (see ADVERTISING, BRAND NAMES, andCONSUMER
PROTECTION).

Companies that successfully adopted these techniques of rivalry were the ones that grew, and some came to dominate their industries, though usually only for a few years until other firms found superior methods of satisfying consumer demands. Neither rivalry nor product differentiation occurs under perfect competition, but they happen constantly under real flesh-and-blood capitalism. The leading American industrialists of the late nineteenth century were aggressive competitors and innovators. To cut costs and thereby reduce prices and win a larger market share, Andrew Carnegie eagerly scrapped his huge investment in Bessemer furnaces and adopted the open-hearth system for making steel rails. In the oil-refining industry, John D. Rockefeller embraced cost cutting by building his own pipeline network; manufacturing his own barrels; and hiring chemists to remove the vile odor from abundant, low-cost crude oil. Gustavus Swift challenged the existing network of local butchers when he created assembly-line meatpacking facilities in Chicago and built his own fleet of refrigerated railroad cars to deliver low-price beef to distant markets. Local merchants also were challenged by Chicago-based Sears Roebuck and Montgomery Ward, which pioneered mail-order sales on a money-back, satisfaction-guaranteed basis. Small-scale producers denounced these innovators as robber barons, accused them of monopolistic practices, and appealed to Congress for relief from relentless competition. Beginning with the Sherman Act (1890), Congress enacted antitrust laws that were often used to suppress cost cutting and price slashing, based on acceptance of the idea that an economy of numerous smallscale firms was superior to one dominated by a few large, highly efficient companies operating in national markets (see ANTITRUST).

Despite these constraints, which worked sporadically and unpredictably, the benefits of capitalism were widely diffused. Luxuries quickly were transformed into necessities. At first, the luxuries were cheap cotton clothes, fresh meat, and white bread; then sewing machines, bicycles, sporting goods, and musical instruments; then automobiles, washing machines, clothes dryers, and refrigerators; then telephones, radios, televisions, air conditioners, and freezers; and most recently, TiVos, digital cameras, DVD players, and cell phones. That these amenities had become available to most people did not cause capitalisms critics to recant, or even to relent. Instead, they ingeniously reversed themselves. Marxist philosopher Herbert Marcuse proclaimed that the real evil of capitalism is prosperity, because it seduces workers away from their historic missionthe revolutionary overthrow of capitalismby supplying them with cars and household appliances, which he called tools of enslavement.1 Some critics reject capitalism by extolling the simple life and labeling prosperity mindless materialism. In the 1950s, critics such as JOHN KENNETH GALBRAITH and Vance Packard attacked the legitimacy of consumer demand, asserting that if goods had to be advertised in order to sell, they could not be serving any authentic human needs.2 They charged that consumers are brainwashed by Madison Avenue and crave whatever the giant corporations choose to produce and advertise, and complained that the public sector is starved while frivolous private desires are being satisfied. And having seen that capitalism reduced poverty instead of intensifying it, critics such as Gar Alperovitz and Michael Harrington proclaimed equality the highest moral value, calling for higher taxes on incomes and inheritances to massively redistribute wealth, not only nationally but also internationally.3 Capitalism is not a cure for every defect in human affairs or for eradicating all inequalities, but who ever said it was? It holds out the promise of what Adam Smith called universal opulence. Those who demand more are likely to be using higher expectations as a weapon of criticism. For example, British economist Richard Layard recently attracted headlines and airtime with a startling revelation: money cannot buy happiness (a clich of song lyrics and church sermons).4 He laments that economic individualism fails to ensure the emotional satisfactions that are essential to life, including family ties, financial security, meaningful work, friendship, and good health. Instead, a capitalist society supplies new gadgets, appliances, and luxuries that arouse envy in those who cannot afford them and that inspire a ceaseless obsession with securing more among those who already own too much. Layards long-range solutions include a

revival of religion to topple the secularism that capitalism fosters, altruism to obliterate selfishness, and communitarianism to supercede individualism. He stresses the need, near-term, for robust governmental efforts to promote happiness instead of the minimalist night-watchman state that libertarian defenders of capitalism favor. He argues that low taxes are harmful to the poor because they give government inadequate revenue to provide essential services to the poor. Higher taxes really would not harm the well-to-do, he says, because money and material possessions are subject to diminishing marginal utility. If such claims have a familiar ring, it is because Galbraith made the same points fifty years ago. Virtually all the new criticisms of capitalism are old ones repackaged as stunning new insights. One example is the attack on globalization (the outsourcing of service, manufacturing, and assembly jobs to foreign sites where costs are cheaper). It has been denounced as union busting, exploitative, and destructive of foreign cultures, and is damned for the loss of domestic jobs and the resulting erosion of local tax revenues. Identical complaints were voiced two generations ago when jobs began flowing from unionized New England textile factories to nonunionized southern textile mills, and then to offshore sites such as Puerto Rico. Another new line of attack on capitalism has been launched by law professors Cass Sunstein and Liam Murphy and philosophers Stephen Holmes, Thomas Nagel, and Peter Singer.5 They lament that in societies based on self-interest and private property, wealth earners oppose rising taxes, preferring to spend their money on themselves and leave inheritances for their children. This selfish bias leads to an impoverished public sector and to inadequate tax revenues. To justify governmental claims for higher taxes, these writers have revived an argument attacking the legitimacy of private property and inheritancethat was advanced by institutionalist economists during the New Deal era. Government, they assert, is the ultimate source of all wealth, and so it should have first claim on wealth and earnings. Is it really your money? Singer asks, citing economist HERBERT SIMONs estimate that a flat income tax of 90 percent would be reasonable because individuals derive most of their income from the social capital provided by technology and by protections such as patents and copyrights, and by the physical security afforded by police, courts, and armies rather than from anything they personally do. If the fruits of capitalism are merely a gift of government, it is an argument that proves too much. By the same logic, individuals might be enslaved if they were not protected by government,

soCONSCRIPTION (servitude for a brief period) would be entirely unobjectionable, as would the seizure of privately owned land to turn it over to new owners if their uses would yield higher tax revenuesexactly the basis of a 2005 Supreme Court ruling on eminent domain. Another persistent criticism of capitalismthe attack on corporationsharkens back to the 1930s. Critics like Ralph Nader, Mark Green, Charles Lindblom, and Robert Dahl focus their fire on giant corporations, charging that they are illegitimate institutions because they do not conform to the model of small-scale, owner-managed firms that Adam Smith extolled in 1776.6 In fact, giant corporations are fully consistent with capitalism, which does not imply any particular configuration of firms in terms of size or legal form. They attract capital from thousands (sometimes millions) of investors who are strangers to each other and who entrust their savings to the managerial expertise of others in exchange for a share of the resulting profits. In an influential 1932 book, The Modern Corporation and Private Property, Adolf A. Berle Jr. coined the phrase splitting of the atom of ownership to lament the fact that investment and management had become two distinct elements. In fact, the process is merely an example of the specialization of function or division of labor that occurs so often under capitalism. Far from being an abuse or defect, giant corporations are an eloquent testimonial to the ability of individuals to engage in large-scale, long-range cooperation for their mutual benefit and enrichment (see CORPORATIONS). As noted earlier, the freedoms to invest, to decide what to produce, and to decide what to charge have always been restricted. A fully free economy, true laissez-faire, never has existed, but governmental authority over economic activity has sharply increased since the eighteenth century, and especially since the GREAT DEPRESSION. Originally, local authorities fixed the prices of necessities such as bread and ale, bridge and ferry tolls, or fees at inns and mills, but most products and services were unregulated. By the late nineteenth century governments were setting railroad freight rates and the prices charged by grain elevator operators, because these businesses had become affected with a public purpose. By the 1930s the same criterion was invoked to justify PRICE
CONTROLS

over milk, ice, and theater tickets. One piece of good news, though, is

that a spate of deregulation in the late 1970s and the 1980s eliminated price controls on airline travel, trucking, railroad freight rates, natural gas, oil, and some TELECOMMUNICATIONS rates.

Simultaneously, from the eighteenth century on, government began to play a more active, interventionist role in offering benefits to business, such as tax exemptions, bounties or subsidies to grow certain crops, and tariff protection so domestic firms would devote capital to manufacturing goods that otherwise had to be imported. Special favors became entrenched and hard to repeal because the recipients were organized while consumers, who bore the burden of higher prices, were not. Once safe from foreign competition behind these barriers toFREE TRADE, some U.S. producerssteel and auto manufacturers, for examplestagnated. They failed to adopt new technologies or to cut costs until low-cost, low-price overseas rivalsthe Japanese, especiallychallenged them for their customers. They responded initially by asking Congress for new favorshigher tariffs, import quotas, and loan guaranteesand pleading with consumers to buy American and thereby save domestic jobs. Slowly, but inevitably, they began the expensive process of catching up with foreign companies so they could try to recapture their domestic customers. Today, the United States, once the citadel of capitalism, is a mixed economy in which government bestows favors and imposes restrictions with no clear or consistent principles in mind. As the formerly communist countries of Eastern Europe struggle to embrace free-market ideas and institutions, they can learn from the American (and British) experience about not only the benefits that flowed from economic individualism, but also the burden of regulations that became impossible to repeal and trade barriers that were hard to dismantle. If the history of capitalism proves one thing, it is that the process of competition does not stop at national borders. As long as individuals anywhere perceive a potential for profits, they will amass the capital, produce the product, and circumvent the cultural and political barriers that interfere with their objectives.

About the Author

Robert Hessen, a specialist in business and economic history, is a senior research fellow at Stanford Universitys Hoover Institution.

Further Reading

Berger, Peter. The Capitalist Revolution. New York: Basic Books, 1986.

De Soto, Hernando. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books, 2000. Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. New York: Random House, 2003. Folsom, Burton W. Jr. The Myth of the Robber Barons: A New Look at the Rise of Big Business in America. 3d ed. Herndon, Va.: Young Americas Foundation, 1996. Hayek, F. A., ed. Capitalism and the Historians. Chicago: University of Chicago Press, 1953. Hessen, Robert. In Defense of the Corporation. Stanford: Hoover Institution Press, 1979. Landes, David S. The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor. New York: Norton, 1999. McCraw, Thomas K. Creating Modern Capitalism. Cambridge: Harvard University Press, 1997. Mises, Ludwig von. The Anti-capitalistic Mentality. Princeton: Van Nostrand, 1956. Mueller, John. Capitalism, Democracy, and Ralphs Pretty Good Grocery. Princeton: Princeton University Press, 2001. Norberg, Johan. In Defense of Global Capitalism. Washington, D.C.: Cato Institute, 2003. Pipes, Richard. Property and Freedom. New York: Alfred A. Knopf, 2000. Rand, Ayn. Capitalism: The Unknown Ideal. New York: New American Library, 1966. Reisman, George. Capitalism. Ottawa, Ill.: Jameson Books, 1996. Rosenberg, Nathan, and L. E. Birdzell Jr. How the West Grew Rich: The Economic Transformation of the Industrial World. New York: Basic Books, 1987. Seldon, Arthur. The Virtues of Capitalism. Indianapolis: Liberty Fund, 2004.

Footnotes
1. Herbert Marcuse, Repressive Tolerance, in Robert Paul Wolff, Barrington Moore Jr., and Marcuse, A Critique of Pure Tolerance(Boston: Beacon Press, 1969).

2. John Kenneth Galbraith, The Affluent Society (Boston: Houghton Mifflin, 1958); Vance Packard, The Hidden Persuaders (New York: D. McKay, 1957).

3. Gar Alperovitz, Notes Toward a Pluralist Commonwealth, in Staughton Lynd and Alperovitz, Strategy and Program: Two Essays Toward a New American Socialism (Boston: Beacon Press, 1971); Michael Harrington, Socialism Past and Future (Boston: Little, Brown, 1989).

4. Richard Layard, Happiness: Lessons from a New Science (New York: Penguin Press, 2005).

5. Stephen Holmes and Cass Sunstein, The Cost of Rights (New York: Norton, 1999); Liam Murphy and Thomas Nagel, The Myth of Ownership (New York: Oxford University Press, 2002); Peter Singer,The President of Good and Evil (New York: Dutton, 2004).

6. Ralph Nader and Mark Green, Taming the Giant Corporation (New York: Norton, 1976); Charles Lindblom, Politics and Markets (New York: Basic Books, 1977); Robert Dahl, A Preface to Economic Democracy (Berkeley: University of California Press, 1985).

ARCHIVE | CAPITALISM
What is capitalism?
When I say capitalism, I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism with a separation of state and economics, in the same way and for the same reasons as the separation of state and church. AYN RAND

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion. Capitalism is the system of laissez faire. It is the system of political freedom. 8 Comments | capitalism

What is the purpose of government under capitalism?

It is to protect rights that governments are instituted. A proper governments only responsibility is to protect the rights of the individual, by banning the initiation of force, thus making all relations between men peaceful, i.e., free from the threat of violence and fraud. In a political context, freedom has only one specific meaning freedom from the initiation of force by other men. By initiation I mean those who start the use of force to achieve their ends, i.e., a bank robber. Only the initiation of force against a man can stop his mind, thus rendering it useless as a means of survival. Only by the initiation of force can a man be: prevented from speaking, or robbed of his possessions, or murdered. Only through the initiation of force can a mans rights be violated.

Suggested Reading: The Nature of Government by Ayn Rand 0 Comments | capitalism, government

What is a capitalist?
An advocate of laissez-faire is known as a capitalist, e.g., novelist Ayn Rand is a capitalist; e.g., thougheconomically Engels came from a wealthy background, politically he is recognized as a socialist/communist because of his ideas; e.g., billionaire Warren Buffet and George Soros are not capitalists as they do not advocate capitalism, but variants of statism. Soros like Ted Turner is a socialist at heart. 0 Comments | capitalism

What is the foundation of capitalism?

Politics is not a primary. Politics is the application of ethics to social issues. Ones politics depends on ones ethics; and ones ethics depends on ones metaphysics (studies the nature of reality) and epistemology (studies the nature of grasping reality). In other words ones view of what is the proper social

system for men to live together in, depends on how one views man, and the world he lives in that is ones view of politics is shaped by ones underlying philosophy. Capitalism is a political system that if based upon the wrong philosophical base, is like a towering skyscraper, built on quicksand. A philosophy today that provides a proper foundation for capitalism is Ayn Rands philosophy: Objectivism. Suggested Reading: What Philosophy Is, and How to Study It by Leonard Peikoff 1 Comment | capitalism, foundation

Historically, has a pure capitalist society ever existed?

No. A pure laissez-faire capitalist society has never existed. The closest any country has come to pure capitalism is 19th century America. Twentieth century America is not a pure capitalist country, but is a mixed economy: a mixture of freedom and controls. i.e., crippled capitalism, i.e., a hampered market economy. 1 Comment | capitalism, history, society

Isnt capitalism utopian (unpractical)?

Capitalism is not utopian, but it is entirely practical theory. A utopia is some ideal which cannot ever exist in reality, i.e., it is too good to be true. Capitalism is not a utopia it is entirely something of this world, based on facts observable in this world. The fact that 100% laissez faire capitalism has never existed, does not mean it cannot exist, or that it will not exist in the future; laissez faire capitalism is a definite metaphysical possibility. 2 Comments | capitalism, history

Isnt Capitalism a bad theory, that works in practice?

Capitalism is the best the ideal theory, because to the extent that it is allowed to work, it always works in practice. 0 Comments | capitalism, history

Isnt Capitalism responsible for children working in factories?

Children working in factories was only a transitory stage between early feudalism and capitalism. Prior to working in factories, before capitalism, many of children (and their parents) used to die and starve, as evidenced by the high infant mortality statistics before capitalism. Observe that is was not until families left the country and went into the cities that they were able to produce enough food to eat. The clearest

evidence of this is population and infant mortality statistics: population did not go up, and infant mortality did not go down, until the Industrial Revolution. If life was so great before capitalism in the country, why was infant mortality so high and population numbers considerably lower before capitalism? Answer: because life was not so great until Capitalism. Throughout history the parents of most families could not produce enough to support their families without having their children work also (such was the case of my father in India). It was the accumulation capital by the industrialists that made the labor of parents more productive, that children had to stop working in fields or factories. In poor non-capitalist countries they are still working in fields and factories. Contrary to leftist rhetoric passing child labor laws in these countries will not solve the problem, but will only lead to mass starvation which is why the poor themselves resist such laws (it is only to the benefit of the leftist rich humanitarians who cry out for them). 2 Comments | capitalism, children, history

Isnt capitalism, which is based on individualism, opposed to man living in society?

Individualism is not opposed to a man living in society, so long as he is free from the initiation of force by others. Individualism is only opposed to man living in society as a non-individual amorphous member of a collective, i.e., a slave. Individualism holds that it is much better for man to live on a deserted island, than to live in a society where he is nothing more than a pawn ready to be sacrificed to the altar of the public good. 3 Comments | capitalism, society

Why is capitalism so despised, maligned, and misrepresented by the intellectuals in our universities?
The intellectuals despise Capitalism because it is completely in opposition to their basic, philosophical principles. Capitalism is the system of individual rights; the intellectuals on all sides are for some form of collectivism. Capitalism is the system of individualism, self-interest and happiness; the intellectuals are for altruism, self-sacrifice, and misery. Capitalism is pro-reason; the intellectuals are steeped in mysticism and subjectivism. Capitalism is is a social system for living in reality; a reality which the intellectuals despise, or whose existence they deny. No wonder the bulk of the intellectuals who infect todays universities are against Capitalism it represents the antithesis of everything they stand for. How could they not be?

ARCHIVE | CAPITALISM
Is capitalism for isolationism or imperialism?
Isolationist is a smear term, used against countries who dont wish to interfere in other countries. If the country does interfere it is called Imperialist. Either way the country America is condemned. Whether America sends its young boys to die off in other countries, or not, should be solely based on Americas own self interest and the interests of those who are risking their lives. In the Middle East America has a selfish interest: oil. In Kosovo, it has no interest. America does have the moral right to overthrow the present government of Bosnia, as it is not a sovereign nation, as its citizens are not sovereign, i.e., their rights are violated by their own government. However, America has no obligation to overthrow such governments. (As for your views on Hitler, a good argument can be made that America should have let the Nazis and the Soviets go at it, so that the two great slave states of the 20th century would wipe each other out, or at least the victor of this war between Germany and Russia would be so weak as to be easily defeated by the U.S.). In terms, of improving the situation of countries, like Bosnia, that is primarily a philosophical issue (those countries need a culture founded on individualism, as opposed to a culture founded on collectivism/racism). Sadly, on this issue, America is intellectually bankrupt, as the ideas it exports to other countries tend to be anti-American, Leftist ones, i.e., collectivist ideas that lead to global balkanization.

0 Comments | capitalism, isolationism, war

Isnt capitalism immoral?

No. Capitalism is the moral system, since it is the only system that allows man to be virtuous to pursue the good by leaving him free to act by the use of his reason. Freedom to act is a precondition of morality. This is Capitalisms moral justification. 3 Comments | capitalism, morality

Isnt capitalism justified by the fact it serves the public good?

No. As a secondary effect of allowing the creators and innovators of society freedom to create and produce, laissez-faire results in a society where progress is the norm, and the standard of living continuously rises. That capitalism serves the public good (properly defined as the sum of the good of all individuals) is true, though this is not its moral justification but is merely an effect of its cause: freeing the individual from the mediocrity of the collective, to live his own life as an end to himself. 0 Comments | capitalism, morality

Isnt capitalism opposed to progress?

Capitalism is the only progressive system, in the proper meaning of the term. The historical evidence to support this thesis is irrefutable. Capitalism is the only system that led to the freedom of slaves, the end of feudalism, the equal rights of all individuals, regardless of race, color, sex, etc. Capitalism is the system of laissez faire the system of freedom the system that frees mans mind by allowing him to act by it the source of all progress. 2 Comments | capitalism, culture, history

Isnt capitalism founded upon the evil of selfishness?

Yes and no. Yes, capitalism enshrines rational self-interest. No, you are completely off the mark when you claim that to act in ones own benefit, that is to act selfishly, is evil. 2 Comments | capitalism, morality, selfishness

How does capitalism differ from statism?

Only capitalism declares that each and every man, may live his own life for his own happiness, as an end to himself, not by permission of others, but by right, and that governments sole responsibility is to protect those rights, and never violate them, because they are inalienable. 2 Comments | capitalism, statism

ARCHIVE | RIGHTS
What are rights?
Rights are a moral conceptthe concept that provides a logical transition from the principles guiding an individuals actions to the principles guiding his relationship with othersthe concept that preserves and protects individual morality in a social contextthe link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law. AYN RAND To live rationally by ones reason in society, man needs only one thing from his fellow men: freedom of action. He requires rights to those actions necessary to support his own life, the most fundamental right being the right to life, from which all other rights, including the right to liberty, property, and the pursuit of happiness derive. Suggested Reading: Mans Rights by Ayn Rand 0 Comments | freedom, rights, society

What do you mean by freedom of action?

Freedom of action does not mean freedom to act by permission, which may be revoked at any dictatorial tyrants, or democratic mobs whim, but freedom to act as an absolute by right. 0 Comments | freedom, rights

How are rights moral principles?

Rights are not merely political principles, but they are principles that form the bridge between individual morality (ethics) and the moral principles governing society (politics). Rights say that morally certain actions are right, and all other actions that forcibly interfere with those actions are wrong. 0 Comments | morality, rights, society

How are rights violated?

Rights may be violated in only one way by the initiation of physical force. 0 Comments | force, rights

Are rights inalienable?

Rights are inalienable within a mans sphere of action they are absolute.2 By inalienable, I mean that they may not be alienated from the person who possesses them, i.e., they may not be given or taken away, i.e., they may not be morally infringed upon. For example, a man may violate your right to your property by taking it away from you, but your right to that property has not been alienated, i.e., you are in the right and the robber is in the wrong. 0 Comments | rights

What is the fundamental right?

There is only one fundamental right the right to life from which all other rights, including the right to liberty, the right to property and the right to pursue ones own happiness derive. Are these other rights competing and contradictory with the right to life? No, as these rights are corollaries of the right to life, they do not contradict the right to life, or each other, but form a single integrated whole. All other rights are simply the right to life applied to different contexts. 0 Comments | rights

Are rights guarantees to the success of actions?

All rights are rights to freedom of action. That is, the right to those actions necessary to support ones life so long as they do not violate the rights of others. Keep in mind that rights are not guarantees that those actions will always be successful. Thus, the right to pursue happiness, does not necessarily mean achievement it only means one is free to pursue what one thinks will make one happy. Pursuit does not mean attainment, though it is a necessary precondition to attaining it. Similarly the right to life, is the right to take those actions necessary to survive, free from the physical compulsion and interference of other men. The right to life does not mean that one can force others to support ones life against their will. [what rights do guarantee is that if your actions are successful, no one may rob your of the results of those actions]. 0 Comments | force, freedom, rights

How does one delimit ones rights from that of another?

Observe the principle in delineating ones right from the rights of another: no right (properly defined) violates the rights of another. If it does, it is not a right. Or, any action that involves the initiation of force, cannot be a right action: it is always wrong. 0 Comments | force, rights

ARCHIVE | INTELLECTUALS
Why is capitalism so despised, maligned, and misrepresented by the intellectuals in our universities?
The intellectuals despise Capitalism because it is completely in opposition to their basic, philosophical principles. Capitalism is the system of individual rights; the intellectuals on all sides are for some form of collectivism. Capitalism is the system of individualism, self-interest and happiness; the intellectuals are for altruism, self-sacrifice, and misery. Capitalism is pro-reason; the intellectuals are steeped in mysticism and subjectivism. Capitalism is is a social system for living in reality; a reality which the intellectuals despise, or whose existence they deny. No wonder the bulk of the intellectuals who infect todays universities are against Capitalism it represents the antithesis of everything they stand for. How could they not be?

ARCHIVE | GOVERNMENT
What is the purpose of government under capitalism?
It is to protect rights that governments are instituted. A proper governments only responsibility is to protect the rights of the individual, by banning the initiation of force, thus making all relations between men peaceful, i.e., free from the threat of violence and fraud. In a political context, freedom has only one specific meaning freedom from the initiation of force by other men. By initiation I mean those who start the use of force to achieve their ends, i.e., a bank robber. Only the initiation of force against a man can stop his mind, thus rendering it useless as a means of survival. Only by the initiation of force can a man be: prevented from speaking, or robbed of his possessions, or murdered. Only through the initiation of force can a mans rights be violated.

Suggested Reading: The Nature of Government by Ayn Rand 0 Comments | capitalism, government

What do you mean by the initiation of force?

In a political context, freedom has only one specific meaning freedom from the initiation of force by other men. By initiation of force I mean those who start the use of force to achieve their ends, i.e., a bank robber. Only the initiation of force against a man can stop his mind, thus rendering it useless as a means of survival. Only by the initiation of force can a man be prevented from speaking, or robbed of his possessions, or murdered. Only through the initiation of force can a mans rights be violated. 0 Comments | force, government

Can citizens delegate the right to initiate force to government?

Citizens may not delegate the right to initiate force to government, as they do not possess the right to start force to begin with. As Ayn Rand has commented there is no such thing as the right to enslave. As no individual in his private capacity, as a citizen, may initiate force against others, neither may he in his public capacity as a state official start force either. 0 Comments | force, government

What do individuals delegate to government?

In order to place the retaliatory use of force under objective legal control that is, under clearly defined laws that are logically deduced from the principle of rights those who make up society delegate their right to retaliate against those who initiate force, to government. 0 Comments | government

What is the purpose of the constitution?

To ensure no despot whether that despot be a single dictator, an elite political pressure-group, or the befuddled democratic majority of the moment may usurp the powers of government, and turn its machinery upon its citizens, each and every aspect of government action is codified, and carried out, according to objectively defined laws. The supreme legal document of a proper society is the constitution a citizens protection not only against private criminals, but public ones also. 0 Comments | constitution, government

What is the purpose of law?

In a free society each and every man lives under a rule of law, as opposed to a whim-ridden rule of men. Such a rule of law has only one purpose: to protect the rights of the smallest minority that has ever existed the individual. Such laws form a non-contradictory body of principled legislation, which hold a man innocent until he can be proven guilty according to an objective standard, as opposed to a plethora of regulations which hold a man guilty until he can somehow prove himself innocent, to the gratification of a bureaucrat able to gain a foothold in public office. In a free society it is the actions of government and not the actions of citizens that are regulated. 0 Comments | government, law

Does governments monopoly on the use of force give it the right to initiate (start) force against others?
Under no conditions may government violate anyones rights, by initiating force against others. A proper government is permitted to use force to retaliate against a thief who has initiated force against someone (in the act of robbing them). However, a proper government is not permitted to copy the means of private criminals by initiating force against its citizens. The government is not even permitted to rob them of their wealtheven, or rather especially, if the stolen loot is to be used for so called noble purposes, such as for the sick and poor. No end (even for the poor) ever justifies an illegitimate means (the initiation of force). Any man who initiates force against others is a dictator, and should be treated as such, to the extent he initiates force. 1 Comment | force, government

How does government carry out its duties in practice?

To protect rights, government require essentially three things: an army to protect against foreign invaders, a police force to protect against domestic criminals, and a court system to settle honest disputes that arise, and to punish criminals according to objectively predefined laws. 0 Comments | government

What would a society be without government, i.e., without the delegation of the use of force?
Mans state in nature, where every man is allowed complete discretion in the retaliatory use of force, according to the laws of the jungle, is nothing more than a state of anarchy perpetual civil war and gang warfare. If there were no legal agency to carry out such a task, each man would be forced to carry out retaliation at his own discretion, i.e., anarchy. A modern day example of such a situation is Bosnia, where two gangs, or competing governments the Croats and the Serbs are competing with each other in the same geographical area. 0 Comments | government

What is political power?

The power of a bureaucrat of a statist society is the power of fear the power to initiate force. He can force you to do his bidding by legally threatening your life and freedom. Such power is derived by destroying, or threatening to destroy values such as when your local IRS man confiscates your home for not paying your taxes, or the DOJ threatens you with a jail sentence for being too successful.

ARCHIVE | GOVERNMENT
How is government supported under capitalism?
A government is supported under capitalism through voluntary financing methods.

ARCHIVE | SOCIETY
Why does man need freedom?
To live rationally by ones reason in society, man needs only one thing from his fellow men: freedom. The freedom to live for oneself, neither sacrificing oneself to others, nor sacrificing others to oneself the freedom to pursue ones own happiness. It is this freedom that unleashes the creative potential of mans mind, resulting in a society of nationwide peace, continuous progress and boundless prosperity. To live in society, man requires freedom of action. Freedom of action does not mean freedom to act by permission, which may be revoked at any dictatorial tyrants, or democratic mobs whim, but freedom to act as an absolute by right. 0 Comments | freedom, society

Historically, has a pure capitalist society ever existed?

No. A pure laissez-faire capitalist society has never existed. The closest any country has come to pure capitalism is 19th century America. Twentieth century America is not a pure capitalist country, but is a mixed economy: a mixture of freedom and controls. i.e., crippled capitalism, i.e., a hampered market economy. 1 Comment | capitalism, history, society

Isnt capitalism, which is based on individualism, opposed to man living in society?

Individualism is not opposed to a man living in society, so long as he is free from the initiation of force by others. Individualism is only opposed to man living in society as a non-individual amorphous member of a collective, i.e., a slave. Individualism holds that it is much better for man to live on a deserted island, than to live in a society where he is nothing more than a pawn ready to be sacrificed to the altar of the public good. 3 Comments | capitalism, society

What are rights?

Rights are a moral conceptthe concept that provides a logical transition from the principles guiding an individuals actions to the principles guiding his relationship with othersthe concept that preserves and protects individual morality in a social contextthe link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law. AYN RAND To live rationally by ones reason in society, man needs only one thing from his fellow men: freedom of action.

He requires rights to those actions necessary to support his own life, the most fundamental right being the right to life, from which all other rights, including the right to liberty, property, and the pursuit of happiness derive. Suggested Reading: Mans Rights by Ayn Rand 0 Comments | freedom, rights, society

How are rights moral principles?

Rights are not merely political principles, but they are principles that form the bridge between individual morality (ethics) and the moral principles governing society (politics). Rights say that morally certain actions are right, and all other actions that forcibly interfere with those actions are wrong. 0 Comments | morality, rights, society

Isnt capitalism, which is based on individualism, opposed to man living in society?

Capitalism is not opposed to an individual living in a society, so long as he is free from the initiation of force by others. 0 Comments | selfishness, society

To what kind of society is capitalism opposed?

Capitalism is opposed to slave states. Capitalism is only opposed to man living in society as a nonindividual amorphous member of a collective, i.e. as a slave. Individualism holds that it is much better for man to live on a deserted island, than to live in a society where he is nothing more than a pawn ready to be sacrificed to the altar of the public good. 1 Comment | society

What is a proper society?

Man can gain immense values (such as knowledge and trade) by living with other men in society, if that society is a proper society. A proper society is one where each and every man holds as an absolute the fact that every man is an end to himself, and that other men are not his pawns, nor is he theirs, or in the famous words of the hero of Atlas Shrugged, John Galt, I swear by my life and by my love of it that I will never live for the sake of another man, nor ask another man to live for mine. Such is the credo of the individualist the independent mind that recognizes no authority higher than its own judgment of the truth. Since capitalism is based upon the only system that leaves each and every man free to act independently by his own mind it is the only moral system.

ARCHIVE | STATISM
What is statism?
Under statism, government is no longer a policeman, but a gang of thugs with the legal power to initiate force in any manner they please against a legally disarmed citizen. 0 Comments | statism

What are some examples of statism?

Variants of statism include: socialism, nazism (national socialism), theocracy, [pure] democracy, communism, fascism, tribalism, etc. 0 Comments | statism

What is the key principle underlying statism?

In form many of these systems differ, in theory and blood stained practice they all unite upon the same fundamental collectivist ethical principle: man is not an end to himself, but is only a tool to serve the ends of others. Whether those others are a dictators gang, the nation, society, the race, (the) god(s), the majority, the community, the tribe, etc., is irrelevant the point is that man in principle must be sacrificed to others. 0 Comments | statism

How does capitalism differ from statism?

Only capitalism declares that each and every man, may live his own life for his own happiness, as an end to himself, not by permission of others, but by right, and that governments sole responsibility is to protect those rights, and never violate them, because they are inalienable.

ARCHIVE | COLLECTIVISM
What is the key principle underlying collectivism?
The theory of collectivism (in all its variants) holds that man is not an end to himself, but is only a tool to serve the ends of others. Collectivism, unlike individualism, holds the group as the primary, and the standard of moral value. Whether that group is a dictators gang, the nation, society, the race, (the) god(s), the majority, the community, the tribe, etc., is irrelevant the point is that man in principle is a sacrificial victim, whose only value is his ability to sacrifice his happiness for the will of the group. 0 Comments | collectivism

What is the opposite of collectivism?

The opposite of collectivism is individualism. Individualism declares that each and every man, may live his own life for his own happiness, as an end to himself. Politically, the result of such as principle is capitalism: a social system where the individual does not live by permission of others, but by inalienable right.

ARCHIVE | ANARCHISM
What is anarchism?
Anarchism is not a form of capitalism; anarchism is a form of collectivism, where individual rights are subject to the rule of competing gangs. 4 Comments | anarchism

Under capitalism wouldnt corporate organizations be able to provide all of the physical protection necessary for their customers and or employees, making government unnecessary?
Whatever you are proposing it is not capitalism. The proper name for what you purpose is not corporations, but street gangs, who fund their business through extortion of their victims (which you would call customers). Government is an agency with a monopoly on the power to legally use force in a specific geographic area. What you purpose are multiple agencies (what you incorrectly accuse to be private corporations) in the same geographic area, that have the power to use force subject to no rule of law: anarchism. 0 Comments | anarchism

Why cant corporations exist without government?

Under capitalism, corporations are the result of a specific contractual legal framework (provided by government), based on the principle of individual rights. Without government, the distinction between public (state owned) and private no longer exists. Corporations cannot exist without individual rights, and governments to protect those individual rights. [However, keep in mind that corporations are not creatures of the state, no more then individuals are.] 0 Comments | anarchism, corporation

Why is anarcho-capitalism a contradiction in terms?

Those who attempt to combine anarchism with capitalism, make the error of confusing the peaceful form of competition of capitalism trade, ideas, and dollars with the brutal jungle form of competition of anarchism brutality, whims, and bombs. Have you ever thought what happens when one corporate protection agency disagrees with another? By what method do they solve their dispute? They do it by competition not with dollars, but with guns. They seek to solve their dispute by resorting to force against each other, i.e., a perpetual state of civil war. Under such a system, which gang wins? The one that is the most brutal.

Anarchism is not a form of capitalism; anarchism is a form of collectivism, where individual rights are subject to the rule of competing gangs. Under such a system, any individual would beg to be placed in the relative safety of a dictatorship. 1 Comment | anarchism

What is the solution to anarchism?

The only peaceful solution to such disputes is to have one agency with the power to settle those disagreements, according to one set of objectively defined laws a government. This is what corporations do under capitalism, when they have a dispute with each other they go to court (government). 0 Comments | anarchism

What about the competing-governments concept of anarcho-capitalists?

Those who advocate anarchism seek to replace a rule of law, with a rule of the jungle. The kind of corporations they envision are not corporations like those under capitalism (which have no power to resort to force), but outlaw competing governments, i.e., gangs. 1 Comment | anarchism

What are some modern day examples of anarchism?

For those who want an illustration of what happens when two competing-governments are arguing with each other in the same geographical area, see: Bosnia. This is the result of the anarcho-capitalists illthought out nightmare: a species of collectivism, where one is subject to the whims of the tribe or gang in power. On a micro-level one can observe anarchism in black markets, where drug dealers compete with each other on the same turf to protect their interests. It is to subject might to right, that one requires rights, and that one requires a government to protect those rights.

ARCHIVE | DEMOCRACY
What is the relation of Capitalism to democratic principles?
Pure democracy is collectivist mob-rule . Under capitalism no individual, nor any group of individuals, whether they be a minority or a majority, can violate the inalienable rights of any other minority, including the most oppressed minority that has ever existed the individual. Capitalism limits the democracy the majority of the moment to a useful purpose: the electing of various individuals to various positions of public office. Other then this limited aspect, the power of the majority is severely limited. Capitalism in this sense only supports a limited democracy, but not a pure unlimited one. In the sense, commonly used, that democracy means egalitarianism the equality of results (wealth), by an unequal protection (violation) of rights capitalism is entirely opposed to it. 0 Comments | democracy

What did the founding fathers of America have to say about democracy?
To quote The Federalist, on democracies: it may be concluded that a pure democracycan admit of no cure for the mischiefs of faction[as] there is nothing to check the inducements to sacrifice the weaker party or an obnoxious individual. Hence it is that such democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths. 0 Comments | democracy

Politically, in todays context, what is a capitalist system?

A capitalist system is a republic and not a [pure] democracy. It is a system of checks and balances so ordered to protect the rights of the individual, from criminals and most importantly from the democratically elected voices who claim to speak for the public good. It is a limited democracy. For those who are confused by the issue, the essential point is this: is it right for another man to rape, rob and murder another? Capitalism says never; democracy says yes if the majority wills it.

ARCHIVE FINANCING
What is campaign finance reform?
public officials. 0 Comments | campaign financing, lobbying

CAMPAIGN

Campaign finance reform is censorship masquerading as a solution for the problem of extortion by

What is the essential argument made by advocates of campaign finance reform?

Noble politicians are corrupted by special interests who seek to buy favors through lobbying and providing campaign financing. Government should restrict or eliminate such financing, and the state should finance all campaigns. 0 Comments | campaign financing, lobbying

What is the problem with these so-called campaign finance reforms?

The so-called campaign finance reforms rather then removing the cause of the problem of the buying and selling of political favors actually magnify the problem, by expanding the politicians powers to control its citizens. These so-called reforms will reinforce the real cause of the problemthe power of politicians to grant favorsby giving government officials increased powers, which it should not posses: such as censorship of speech (by controlling where private citizens can spend their money), by preventing citizens from spending their own money to support causes they believe in (by calling such money advertising, etc.), and possiblyif Bill Bradley has his waygive politicians the power to use tax funds to pay for their own campaigns! That is, take money from citizenswho would not give it to them voluntarilyto finance their bid to stay in government office! 0 Comments | campaign financing, lobbying

What is the real cause of the buying and selling of favors by government officials?
The real problem is not businessmen bribing government officials. The real cause of the problem is that businessmen, and other interest groups, are forced to pay extortion money to government officials, i.e., blood money in the literal sense of the term, as these same politicians control the police through the creation of rules and regulations. Private citizens are forced to do this by virtue of the bureaucrats power to control, run, and even destroy his business by the passing of nonobjective laws that violate his inalienable rights, i.e. by closing entry or exit to markets thus violating his right to liberty, i.e. increasing or decreasing taxes to specific individuals (but not to others) violating the right to equal treatment by government, i.e. preventing him from selling to willing consumers by failing to grant him a permit, and/or granting a monopoly to his competitor, i.e. punishing for being too competitive and successful by claiming he is a monopoly through making the best product, etc.

The problem is that even legitimate businesses have to purchase their freedom through sucking up and kissing ass to little Caesars who hold a noose of non-objective laws and regulations around their necks. That is, the problem is that government vampires have a power that they can sella power that they should not possess in the first placethe power to bleed private citizens dry. 0 Comments | campaign financing, lobbying

What is the real solution to the buying and selling of political favors?
Government should not decide what services and products businesses can offer and what markets can enter. These decisions should solely left to producers and buyers. Under laissez-faire there would be no buying of politicians, because politicians would not have the power to extort money. All these laws would be impossible under capitalism, since each one of them is a violation of individual rights, i.e., preventing a group of businessmen to enter a market violates their right to liberty, i.e., taxing one business more then another violates the principle of equal treatment under government, i.e. subsidizing one businesswith the tax money taken from the otheris a violation of the seconds right to property, etc. Under capitalism the only laws that a politician may pass are those that equally protect the rights of all its citizens, i.e. without violating the rights of any of them. 0 Comments | campaign financing, lobbying

Who will look after the public interest?

The only common interests amongst all men is the equal protection of individual rights, i.e. all rational men do wish not to be murdered, i.e. all rational men wish to be left free to enter and compete in any market they choose to, i.e. all men wish to not have their property looted from them, etc. This is the only proper meaning of the public interest. This is not what is meant by those who claim to support the public interest; what they do subscribe to is the unequal protection of rights, by granting government privileges to one group (who is certified as the public) at the expense of another group (who is not the public). The so-called public interest is a myth, there are only the differing, often contradictory, interests of various individuals. Any attempt by the government to implement a public interest can be but arbitrary, leading to a civil-war of lobbying pressure groups.

ARCHIVE | LOBBYING
What is campaign finance reform?
Campaign finance reform is censorship masquerading as a solution for the problem of extortion by public officials. 0 Comments | campaign financing, lobbying

What is the essential argument made by advocates of campaign finance reform?

Noble politicians are corrupted by special interests who seek to buy favors through lobbying and providing campaign financing. Government should restrict or eliminate such financing, and the state should finance all campaigns. 0 Comments | campaign financing, lobbying

What is the problem with these so-called campaign finance reforms?

The so-called campaign finance reforms rather then removing the cause of the problem of the buying and selling of political favors actually magnify the problem, by expanding the politicians powers to control its citizens. These so-called reforms will reinforce the real cause of the problemthe power of politicians to grant favorsby giving government officials increased powers, which it should not posses: such as censorship of speech (by controlling where private citizens can spend their money), by preventing citizens from spending their own money to support causes they believe in (by calling such money advertising, etc.), and possiblyif Bill Bradley has his waygive politicians the power to use tax funds to pay for their own campaigns! That is, take money from citizenswho would not give it to them voluntarilyto finance their bid to stay in government office! 0 Comments | campaign financing, lobbying

What is the real cause of the buying and selling of favors by government officials?
The real problem is not businessmen bribing government officials. The real cause of the problem is that businessmen, and other interest groups, are forced to pay extortion money to government officials, i.e., blood money in the literal sense of the term, as these same politicians control the police through the creation of rules and regulations. Private citizens are forced to do this by virtue of the bureaucrats power to control, run, and even destroy his business by the passing of nonobjective laws that violate his inalienable rights, i.e. by closing entry or exit to markets thus violating his right to liberty, i.e. increasing or decreasing taxes to specific individuals (but not to others) violating the right to equal treatment by government, i.e. preventing him from selling to willing consumers by failing to grant him a permit, and/or granting a monopoly to his competitor, i.e. punishing for being too competitive and successful by claiming he is a monopoly through making the best product, etc.

The problem is that even legitimate businesses have to purchase their freedom through sucking up and kissing ass to little Caesars who hold a noose of non-objective laws and regulations around their necks. That is, the problem is that government vampires have a power that they can sella power that they should not possess in the first placethe power to bleed private citizens dry. 0 Comments | campaign financing, lobbying

What is the real solution to the buying and selling of political favors?
Government should not decide what services and products businesses can offer and what markets can enter. These decisions should solely left to producers and buyers. Under laissez-faire there would be no buying of politicians, because politicians would not have the power to extort money. All these laws would be impossible under capitalism, since each one of them is a violation of individual rights, i.e., preventing a group of businessmen to enter a market violates their right to liberty, i.e., taxing one business more then another violates the principle of equal treatment under government, i.e. subsidizing one businesswith the tax money taken from the otheris a violation of the seconds right to property, etc. Under capitalism the only laws that a politician may pass are those that equally protect the rights of all its citizens, i.e. without violating the rights of any of them. 0 Comments | campaign financing, lobbying

Who will look after the public interest?

The only common interests amongst all men is the equal protection of individual rights, i.e. all rational men do wish not to be murdered, i.e. all rational men wish to be left free to enter and compete in any market they choose to, i.e. all men wish to not have their property looted from them, etc. This is the only proper meaning of the public interest. This is not what is meant by those who claim to support the public interest; what they do subscribe to is the unequal protection of rights, by granting government privileges to one group (who is certified as the public) at the expense of another group (who is not the public). The so-called public interest is a myth, there are only the differing, often contradictory, interests of various individuals. Any attempt by the government to implement a public interest can be but arbitrary, leading to a civil-war of lobbying pressure groups.

ARCHIVE | ANTITRUST
What is antitrust?
Anti-trust are those set of laws which punish successful businesses (or trusts) for being successful, i.e., dominant. To quote philosopher Ayn Rand writing in Antitrust: The Rule of Unreason Voice of Reason, The alleged purpose of the Antitrust laws was to protect competition; that purpose was based on the socialistic fallacy that a free, unregulated market will inevitably lead to the establishment of coercive monopolies. But, in fact, no coercive monopoly has ever been or ever can be established by means of free trade on a free market. Every coercive monopoly was created by government intervention into the economy: by special privileges, such as franchises or subsidies, which closed the entry of competitors into a given field, by legislative actionThe Antitrust laws were the classic example of a moral inversion prevalent in the history: an example of the victims, the businessmen, taking the blame for the evils caused by government, and the government using its own guilt as a justification for acquiring wider powers, on the pretext of correcting the evils. 0 Comments | antitrust

What about Rockefellers Standard Oil?

Standard Oil was punished for dropping the price of oil more then half, by buying up competitors in order to gain greater economies of scale as their market grew they were able to achieve greater economies of scale, and thus lower their production costs, and thus lower their prices, while increasing their profits. Of course, by taking over inefficient refineries and charging lower prices, their inefficient competitors were unable to compete successfully (i.e., they were free to enter the market and compete, but because they were not as productive they could not win), and so under antitrust Standard Oil was punished for being too successful. Writes Dominick Armentano [professor of economics at the University of Hartford], The little-known truth is that when the government took Standard Oil to court in 1907, Standard Oils market share had been declining for a decade. Far from being a monopoly, Standards share of petroleum refining was approximately 64% at the time of trial. Moreover, there were at least 147 other domestic oil-refining competitors in the market and some of these were large, vertically integrated firms such as Texaco, Gulf Oil, and Sun. Kerosene outputs had expanded enormously (contrary to usual monopolistic conduct); and prices for kerosene had fallen from more than $2 per gallon in the early 1860s to approximately six cents per gallon at the time of the trial. So much for the myth of the Standard Oil monopoly. 0 Comments | antitrust

What is the base of the antitrust laws?

The philosophical foundation of the antitrust laws is the Marxist myth that a free-market will result in the formation of coercive monopolies. Eventually through historical necessity they will form one big business which the proletariat will take over with the establishment of communism.

0 Comments | antitrust

Dont the antitrust laws stop monopolistic practices?

Absolutely not. Harmful monopolies from the old AT&T monopoly (created by government regulations), to the U.S. Post Office monopoly were created by the state. The U.S. Post Office, for example, maintains its monopoly on the lucrative first class mail market by having the state outlaw its competition. Take for example Judge Learned Hands indictment of ALCOA. What crimes was ALCOA punished for? To
quote Hand:

It was not inevitable that it should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every new- comer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel. [Alan Greenspan, "Antitrust" published in Ayn Rand's Capitalism: The Unknown Ideal] In other words ALCOA was being punished for being too good a company, too competent in its management, in other words Alcoas crime is that it is too competitive. 0 Comments | antitrust

Regarding the Antitrust Microsoft case, dont consumers have a right to Windows without Explorer? Does not Microsofts bundling of their products (i.e. Microsoft Internet Explorer and Microsoft Windows) into one package disrupt a persons right to only have to pay for products he wishes to buy?
No one has a right to buy whatever they wish, one only has the right to buy what others choose to sell to them. The terms of any trade must be agreeable to the buyer and the seller, or a sale does not take place. If you dont like Microsofts terms, then you are free to go somewhere else (like I did when I bought an Apple Macintosh and a UNIX server). There is no right to force Microsoft to create, or sell, a product called Windows without Explorer if Microsoft does not want to. The key right in this case is the right to property which is a legitimate right. The property rights to Windows and Explorer belongs solely to Microsoft and not to potential buyers, and certainly not to the U.S. Department of Justice. That Microsoft does not want to sell the product Windows without Explorer does not violate your rights one iota. There is no such thing as your right to Microsofts property. There is only the right to buy products that others wish to sell to you. If they dont wish to sell you them in the first place, then you have no right to buy them.

ARCHIVE | CONSTITUTION
What is the purpose of the constitution?
To ensure no despot whether that despot be a single dictator, an elite political pressure-group, or the befuddled democratic majority of the moment may usurp the powers of government, and turn its machinery upon its citizens, each and every aspect of government action is codified, and carried out, according to objectively defined laws. The supreme legal document of a proper society is the constitution a citizens protection not only against private criminals, but public ones also.

ARCHIVE | CORPORATION
Why cant corporations exist without government?
Under capitalism, corporations are the result of a specific contractual legal framework (provided by government), based on the principle of individual rights. Without government, the distinction between public (state owned) and private no longer exists. Corporations cannot exist without individual rights, and governments to protect those individual rights. [However, keep in mind that corporations are not creatures of the state, no more then individuals are.] 0 Comments | anarchism, corporation

What is a corporation?
Under capitalism: a corporation is a group of individuals organized in a specific legal form, just like a society is nothing more then a sum of individuals organized in a specific form, or a marriage is a group of individuals (a man and a woman) organized in a specific form. A marriage may have a legal framework behind it: this does not make it fictional. The same applies to the concept society. The same goes for a corporation where real individuals organize together under a fictional (i.e. made up name). 0 Comments | corporation

Isnt a corporation a legal fiction created by government?

That depends on what you mean by legal fiction; as typically used the claim that a corporation is a legal fiction is itself a fiction. As the term is conventionally used, it is construed to mean that the owners and managers of a corporation become rightless serfs once they have assumed corporate status. 0 Comments | corporation

How are the laws governing corporations formed under capitalism?

The laws underlying corporations are based on objective facts. That is, the basis of a corporation are the rights of the individuals who form it. Rights are not fictional; and neither are the laws that a corporation must abide by. These laws are neither intrinsic in reality, nor are they subjective and a matter of whim: they are objective facts that must be discovered (deduced from the basic principles while inducing the new relevant facts) within a framework of rights. The laws governing a corporation are simply the standardization and explicit recognition of the application of individual rights by the government, i.e. the laws protecting the right to free speech are not legal fictions created by the government, but are laws based on the this right. For example, if I can sell you a good, under the condition of limited liability well so can a corporation. If it is illegal for me to pollute your home (pollution being a violation of rights), then so it it illegal for the corporation. 0 Comments | corporation

Isnt the right to form a corporation, really a privilege that can be revoked at whim by the state?
The basis of treating a group of individuals who form a corporation as a single entity are the rights of the individuals who make up the corporation, i.e. the rights of the shareholders, the rights of the corporate officers, the rights of the employees (management, etc.), and the rights of all individuals who choose to trade with that corporation under the terms of the corporate agreement. The right to form a corporation is not a privilege as socialists allege, but is an inalienable right. The definition of a corporation as An artificial person or legal entity created by or under the authority of the laws of a state (Blacks Law Dictionary) is only valid when one understands that the laws of any proper state are based on the principle of rights. The point is that the state has no authority to violate rights. 0 Comments | corporation

But how can you treat a group of producers and traders as a single entity?
The same way you treat a husband and wife as a single entity, as in a marriage. Or, the same way that you can treat a group of men (gender neutral usage) as a single entity called society. The point to keep in mind is that all laws under capitalism are the application of the principle of individual rights to various circumstances (see Dr. Harry Binswangers article on Objective Law). 0 Comments | corporation

What is the foundation of a corporation?

The foundation of a corporation are the rights of its members: specifically, the right to state that one is entering trade agreements under the presumption of limited liability (for the shareholders), and under a fictional corporate assumed name. All the rights of a corporation are derived from those of its individual members; as such an individual neither gains nor loses rights in their capacity as members of a corporation. 0 Comments | corporation

What is governments role in regards to corporations?

Governments job is not to regulate corporations and manage their affairs, but to protect their rights, just as they would any other member of society. Governments job is to treat a corporation no different than any other citizen, granting it no special favors (corporate welfare is just as wrong as non-corporate welfare). 0 Comments | corporation

My concern, loudly echoed by the left, is that limiting liability is to limit responsibility?
The limits of liability are to not hold shareholders (who have no control over the actions of the company) liable for acts of company employees other then for what they invested into the company. Limited liability means that only the assets of the corporation are held up as collateral for its liabilities. It would be ludicrous to hold all the savings of an 80 year grand mother who invested $100 in a badly run corporation-which would be the case if she were in a partnership. Limited liability means that only that $100 of the grandmother is liable; and all her other assets not invested in that corporation qua shareholder are not held liable.

Limited liability means that the shareholders are not responsible for the decisions that they do not make only corporate officers, managers, and employees are liable to the extent that they make them. 0 Comments | corporation

What are the problems in the legal framework of todays corporations?

There are some problems with corporations the idea that they are government created fictional entities (as opposed to the application of individual rights to an agreement between a group of individuals who decide to do business as a single entity, i.e. trust in the personal realm of affairs this is what a marriage is). Essentially the problem like everything else is the philosophical foundation underlying corporations. Corporations are privately created entities.

ARCHIVE | PROFIT
Dont laborers have a right to a share of the capitalists profits, in addition to their wages?
Why are the laborers who demand a share in the capitalists profits, silent in demanding their share when he incurs losses? Why dont they cry out and demand that they get to receive a share in those losses? If labor is the sole cause of all profit, then is it not also the sole cause of all losses? A moments reflection will point out that laborers are only responsible for their job description they are not directly responsible for the losses of a business and that the cause of an enterprises losses lies essentially with the owner, as do the profits. That a businessmen pays a worker less wages than the worker feels he deserves is not exploitation, as the worker is free to leave his job and look elsewhere for a higher paying one, if he thinks that someone can give him a better job for a better wage. Let any worker in Soviet Russia, Nazi Germany, or Communist China try to attempt such a feat as leaving his job without permission of the state, and he will soon find what exploitation really means. 0 Comments | exploitation, labor, profit

What happens when a company starts to make a higher profit in its industry, in comparison to other industries?
If any company is a single seller in any industry and starts making profits higher than other industries, due to high prices; it will attract competition into its industry, as other capitalists move their capital from less profitable markets to more profitable ones. If the profits are due to lower production costs, which other companies are unable to match, then the company deserves its profit. 0 Comments | competition, monopolies, profit

Is there such a thing as an excessive profit?

There is no such thing as a profit that is too high or too low. That is, there is no such thing as an excessive profit. There is only the profit that men earn. 0 Comments | monopolies, profit

What is profit?
When a man enters any productive endeavor he starts with a given sum of capital (unspent wealth). If after a period of time he is left with more than he started, he has earned a profit. If he is left with less then he started, he has incurred a loss. 0 Comments | profit

Isnt the profit motive evil?

No. The profit motive is the pursuit of making a profit from ones production. The opposite is the loss motive to pursue a loss. Now tell me, which is evil? Obviously not the first, and only the latter. The pursuit of profit is the moral right to pursue ones happiness applied to the ones economic endeavors. 0 Comments | profit

How is a profit made?

Profit is not made by conning others, but by creating something of value that did not exist before. As wealth is required to support ones life, the increase in wealth through production and trade the creation of a profit adds to ones life. How can the pursuit of wealth, the support of ones life, be considered evil? In reason, it cannot. 0 Comments | profit, trade

What is not profit?

Stealing wealth from others, through fraud or force, is not profit, but theft (an initiation of force). Whether that theft is called a mugging, welfare, or voluntary taxation [a contradiction in terms], it is still theft and is always evil. Theft, like loss, is destruction; trade, like profit, is creation. To pursue profit is to pursue creation. It is an act of virtue and not a vice. Your profit is the symbol and reward for the value of your creation, as judged by the minds of others who have freely-given given their wealth to you in exchange for it. Do not let the leftist intellectuals who infect our universities persuade you from thinking otherwise. In truth, it is those altruists who condemn the profit motive, who are guilty of evil.

ARCHIVE | COMPETITION
What is free competition?
Free-competition means freedom from the initiation of physical force. Free competition is the freedom to produce, and the freedom to trade what one has produced, for ones own self-interest, i.e., in the pursuit of ones own happiness.

0 Comments | competition

What is the foundation of free-competition?

Politically, free-competition is a consequence of the political right to life, liberty, property and the pursuit of happiness applied to the economic sphere of production and trade. Morally, competition among producers is founded not on service to consumers which is a result; but, upon the pursuit of rational self-interest, i.e. the profit motive. Economically, its result is a free-market, i.e. free trade. Observe that free-market competition presupposes a social system based on individual rights and cannot exist without the protection of rights by government, e.g. what good is the right to produce (right to liberty) if one does not have the right to keep what one has created (right to property), the right to advertise what one has produced (right to free speech), the right to trade ones goods one ones own terms (right to property) and the right to benefit from what one has produced (right to the pursuit of happiness)? Free-competition without individual rights is a contradiction in terms, it is an oxymoron. Of course, if one is a communist, fascist or socialist (all are different forms of a single evil principle: collectivism) and does not believe in individual rights then competition has an entirely different meaning. 0 Comments | competition

What is the difference between competition under capitalism and competition under collectivist societies?
All social systems have competition, the only difference is that in capitalism, all such competition for economic power results in the creation of wealth, whereas in collectivist societies such competition for political power results in the destruction of wealth. Under capitalism, competition is an economic process where men do not compete to put down others, but to raise their self up by creating values which are potentially unlimited, and raising their competitors up in the process.

Under all collectivist systems competition is a political process where men compete not to create values, but to lobby or kill for positions of political power which they can use to legally extort the wealth of their fellow men. 0 Comments | competition

What is the key to the success of Capitalist competition?

The key to the success of capitalist competition is that it limits competition to the economic sphere of production, and removes it completely from the political arena of compulsion. Where capitalist competition leads to a free market; political competition leads to a mixed economy of warring pressure groups and if continued for long a dictatorship. 0 Comments | competition

Are not competition and cooperation opposites?

Contrary to those who prattle about competition versus cooperation, capitalism is the only system where voluntary cooperation can actually exist, as it banishes force from all relationships, making all exchanges voluntary. Contrast this with the cooperation of collectivist societies, where one man must cooperate with another, lest he desires to be fined, thrown in prison, or have a lead bullet pumped into his skull. Capitalist competition is the one of the most economically practical forms of social cooperation, where every producer competes to see who can best cooperate with each other, and with the consumer. Such is the nature of capitalist competition. 0 Comments | competition

Do individuals lose their rights once they become businessman?

Ones rights do not disappear when one becomes a successful businessmen. Ones rights are still inalienable. One does not gain rights by being successful, one does not lose them by becoming rich. Before the law all men are to be held equal in rights. 0 Comments | competition

How does one determine if a given action is anti-competitive or not?

As competition is simply the application of the principle of individual rights to the economic sphere of production and trade, its is the principle of rights that determines if any action is anti-competitive or not. If no rights rights are being violated, then neither is the principle of competition. Free-competition only has a single requirement: the protection of individual rights. 0 Comments | competition

Do consumers have extra consumer rights in additional to individual rights?

No. One does not gain or lose rights by becoming the member of a group. One does not lose ones rights when one becomes a producer; one does not gain rights by becoming a consumer. The only right the consumer has is the freedom to refuse or accept what producers offer them. The consumer has no right to

force the producer to sell something, no more then the producer has the right to force the consumer to buy something. Only when the two mutually agree does an exchange take place. Neither party has to make a deal if they do not like their terms, they are free to go elsewhere. As the consumer sets the terms on how his money is spent (i.e., on how his property is sold), as does the producer set terms on how his property is bought/sold. The producers job is not to serve the consumers interests, no more then it is the consumers job to serve the producers interests, both must serve their own interests. It is only when their interests coincide that a trade a voluntary exchange of a value for value takes place. 0 Comments | competition

Doesnt competition mean an equal playing field?

Competition does not mean equal ability (just like the right to life does not mean you will live as long or as prosperously as your neighbor). When any company uses its property in a way that does not benefit its competitors, it is not being anti-competitive. Competition does not mean that you do things to promote your competitors, but that you do things to improve your own position if necessary at your rivals market share; but never by violating your rivals, or anyone elses, rights. Equality under free- competition only means an equal protection of rights. 0 Comments | competition

What sets prices of labor under capitalism?

The same system that sets prices. Not any particular businessman, but the free-market. It is competition between businesses for labor that pushes wages up; it is competition between laborers that pushes wages down (to reduce this competition between laborers unions create union shops which prevent non-union members from competing with them, by banning non-union members from working in the unionized field).

ARCHIVE | COMPETITION
What happens when a company starts to make a higher profit in its industry, in comparison to other industries?
If any company is a single seller in any industry and starts making profits higher than other industries, due to high prices; it will attract competition into its industry, as other capitalists move their capital from less profitable markets to more profitable ones. If the profits are due to lower production costs, which other companies are unable to match, then the company deserves its profit. 0 Comments | competition, monopolies, profit

What happens if a business attempts to charge prices higher than its competitors (exploiting)?
If any business attempts to charge prices higher than the market will bear, he will lose all his business to his competition, since he cannot force his competition out of business. The businessmans power is dollars not guns. 0 Comments | competition, monopolies

What happens if a business attempts to charge prices lower than his competitors (dumping)?
If a business attempts to corner the market by charging prices that are too low (i.e., below its variable costs of production), the business may drive competitors out of the market temporarily (at the price of eating up its financial capital and eroding its profits); but, as soon as the business raises its prices (in order to reap profits in order to build back the capital it has given away by selling products below their variable cost), new competitors will enter the market. The only way a company can gain profitably gain market share by lowering its prices, is if it can lower its costs of production. If a business can charge the lowest price because it has figured out how to build a better mousetrap (i.e., produce more for less), then it deserves whatever market share it can obtain. 0 Comments | competition, monopolies

How does free trade give rise to free competition?

It is this freedom to produce and trade free from the threat of physical violence by private members, or public officials that gives rise to capitalist free competition, as sellers compete with other sellers to exchange their goods for the buyers money; and buyers compete with other buyers to trade their money for the sellers goods. 0 Comments | competition, trade

What is the meaning of competition under capitalism?

Competition under capitalism, is simply the right to life, liberty and property applied to the sphere of production and trade; free competition means that one is free to take an any action, unmolested by others, which does not violate the rights of others. This is the meaning of competition. In observing what competition is, please observe what it is not. It is this free-competition that gives rise to capitalisms freemarket.

ARCHIVE | MONEY
What is money?
Money is a tool of exchange that allows men to indirectly trade goods and services that they have produced in a market economy. In a laissez-faire society, uncrippled by government bureaucrats, money is a symbol of mans unspent production, that has yet to be consumed. When money has been earned (as opposed to looted, stolen, and begged) it is a sign of material and spiritual greatness. 0 Comments | money, trade

When is money a sign of greatness?

Observe that being rich is not a sign of greatness, if one has not earned it to assume otherwise is to reverse cause and effect, as those men who achieve their wealth by plunder and political pull (government favors) attempt to do. 0 Comments | money, morality

What is money a symbol of when it has been earned?

Money is the physical symbol of mans successful use of his mind in the area of production whose success is essential to the support of his life. How can this be the root of evil? It cannot. In truth, money is not the root of all evil, but when honesty earned is a sign of good.

ARCHIVE | FREE TRADE

What was the Smoot-Hawley Tariff Act of 1930?
The Tariff Act of 1930 signed into law by U.S. President Herbert Hoover on 17 June 1930 were duties (taxes) placed on over 20,000 imported goods. Its political intent was to preserve American jobs, particularly in the agricultural sector, by discouraging foreign imports. Quoting the US Dept of State on the origin of the Act: During the 1928 election campaign, Republican presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups, and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history. Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations. 0 Comments | free trade

What was the end-result of the Smoot-Hawley Tariff Act?

As other countries placed tariffs on American exports in retaliation, these tariffs actually led to the reduction of American exports and thus jobs: U.S. imports from Europe declined from a 1929 high of $1334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2341 million in 1929 to $784 million in 1932. Overall, world trade declined by 66% between 1929 and 1934. [US Dept of State] With the reduction of American exports came also the destruction of American jobs, as unemployment levels which were 6.3% (June 1930) jumped to 11.6% a few months later (November 1930). As farmers were unable to pay back their loans to banks, their loan defaults led to increasing bank crashes, particularly in the West and Mid-West.

ARCHIVE | INFLATION
Doesnt capitalism cause the inflation of prices?
No. Under Capitalism, the prices of particular goods can fluctuate over time, but the general price level of most goods decrease over time due to capitalisms limitless progress. 0 Comments | inflation

What is inflation?
Inflation is the general increase in prices on a nationwide scale and can only be caused by an agency that has the power to act on a national scale. That agency is the government. Inflation is the increase in prices caused by the government inflating the money supply with fiat dollars. 0 Comments | inflation

What causes inflation?

Inflation is the result of state intervention into the free market for money specifically the government counterfeiting of dollars (also fiat dollars) which compete with your earned dollars for goods and services. As the amount of paper money bidding for goods increases and the amount of goods supplied stays relatively the same, the prices of all goods increase. Inflation is like a secret tax that robs you of the value of your money before you have a chance to spend it.

Case Study: Inflation in Hitlers Germany A historical example of the effects of inflation is Hitlers Germany, where the price of the German dollar would decrease to half of what it was worth, before people could have a chance to spend it. Let us suppose a loaf of bread cost $10 on Monday. You contract with a man to do a weeks work for $100, which you will be paid on Friday, so you can buy ten loaves of bread.

Table 1. Monday

Price of Bread

Salary in dollars (nominal)

Salary in bread (real)

$10

$100

10 loaves ($100/$10=10)

Unfortunately, the government spent most of the week printing and spending new bills, so that it doubled

the amount of money in circulation, so that when you were paid your $100 salary on Friday, the price of the loaf of bread had risen to $20. Thus, in terms of Mondays dollars you were only paid half as much, i.e., you could only buy half as much bread on Friday with you income as you could have on Monday. This doubling in the price of bread, was caused by the doubling of the supply of money. Since your salary did not double in nominal terms as the money supply doubled, you were paid in real terms only half of what you contracted for. This is illustrated in Table 2 below.

Table 2. Friday

Price of Bread

Salary in dollars (nominal)

Salary in bread (real)

$20

$100

5 loaves ($100/$20=5)

Observe that the value of your dollars is not the number of dollars you have (nominal value), but how much you can buy with them (real value). Thus, a man who earns $1, but can buy bread for a $1 a loaf, is richer in terms of bread, then a man who earns a $1000 a day, but has to pay $10,000 for a loaf of bread. The above is in fact what happened in Hitlers Germany. In an attempt to counteract the effects of the states expanding of the money supply, people were paid at the end of the day, rather then the end of the week. They did this because if they waited until the end of the week, they would have lost a half or more of their income to inflation the legal counterfeiting of money by the government. 0 Comments | inflation

What is the solution to inflation?

To free our money supply from government mismanagement in the interim is best achieved by establishing free-banking. One possible option might be a gold standard, since unlike paper dollars, gold cannot be counterfeited, by private or public agencies. Under a capitalist system, there would be no legal tender laws to force citizens to use any kind of currency, rather each citizen would have the freedom to use what good, he chooses to use as money most likely this choice would be gold. Quoting Richard Salsman, in his excellent book Breaking the Banks, Central banking has failed to improve upon what Nobel economist Friedrich Hayek called the spontaneous social order of free banking, a failure that can be seen as a special case of the general failure of central economic planning. More precisely, it is the difference between private planning based on economic profit and bureaucratic planning based on political expediency. The money and banking system is too important to our freedom and our economic prosperity to be left to political manipulation. The system should be placed on an objective foundation of free-market principles and removed from the

subjective quicksands of political manipulation. It should be governed by the rule of law and contract, not by the arbitrary rule of men. We know this has been the most useful approach in every other branch of industry. It is time to discover it in money and banking. Free banking offers an exciting, innovative, and prudent alternative to the central banking system that has destroyed sound money and sound banking.

ARCHIVE | DEPRESSIONS
Doesnt capitalism cause depressions?
No. The nationwide cycle of booms (major bull markets) followed by busts (major depressions), are the result of the only agency that has the power to act on a nationwide scale: the government. 1 Comment | depressions

What is a depression?
A depression is a major nationwide decline in production, and is the result of capital mal-investments into unprofitable industries on a major scale. 0 Comments | depressions

What causes capital malinvestments?

These capital mal-investments can occur on such a large nationwide scale only by the government overriding the checks and balances provided by the free market, i.e., making money cheap (forcing banks to lower the rate of interest) by expanding the money supply. This cheap money results in irrational investment into industries that would appear unprofitable if the government did not intervene into the money supply. 0 Comments | depressions

What happens when capital malinvestments are discovered?

Once these mal-investments are discovered, the result is a bust (depression) as the market begins the process of recovering from these mal-investments of capital. 0 Comments | depressions

How does one prevent depressions form occurring in the first place?
To prevent such a depression from occurring only one action is required: keep government out of the money supply and marketplace, by establishing a free-market for money (other variations on this theme are possible, this is only one such alternative), repeal of all irrational regulation, and the installment into law of objective legislation (where it does not already exist). 0 Comments | depressions

What was the Stock Market Crash of 1929?

Black Tuesday took place on October 29, 1929. It was characterized by a depression with increasing unemployment (but still under 10%). During the stock market crash of 1929 unemployment peaked at 9 percent, and then drifted downwards until it reached 6.3% in June 1930. 0 Comments | depressions

What was the cause of the Stock Market Crash of 1929?

The Stock Market Crash was caused fundamentally by the the FEDs policies of inflation (increasing the money supply with decreasing interest rates) that lead to a speculative boom and a then to a bust once the inflation ended.

0 Comments | depressions

What was the Great Depression of the 1930s?

The Great Depression was a prolonged depression from 1930s until the early 1940s. It was characterized with unemployment levels of up to 25%, mass bank and mass business failures. 0 Comments | depressions

What was the cause of the Great Depression of the 1930s?

Anti-capitalist economists and historians claim the crash was the trigger of the great Depression of the 1930s. The Great Depression of the 1930s was caused by the governments intervention into the economy. The recession of 1929/1930 became great and prolonged by the governments interventionist policies from the Smoot-Hawley Tariffs to The New Deal that prevented the market from restoring normalcy. Observe that in the 1920s and 1987 Stock Market crashes there was no great depression, but minor recessions, because there was no great intervention. 0 Comments | depressions

What was the New Deal?

The New Deal was an attempt by Roosevelt to use the crisis surrounding the recession following the Stock Market Crash of 1929 as an excuse to intervene in the economy. Interventions of the New Deal included: the National Industrial Recovery Act (1933) which controlled industrial prices and wages; the Agricultural Adjustment Act (1933) to control agricultural prices and output (paying farmers not to produce); the National Labor Relations Act (1935) to control wage prices by forcing employers to negotiate with government empowered unions; the Glass-Steagall Act which created the FDIC, federally insuring deposits; and many others. In addition FDR made thousands of executive orders which created further uncertainty and disruption of the economy. Uncertainty led to people to hold onto their money (hoarding) as opposed to investing it as they were waiting to see what the government would do next.

ARCHIVE | DEPRESSIONS
Wasnt President Hoover a non-interventionist President for Laissez-faire?
President Herbert Hoover was not a do-nothing President, but was in fact was an interventionist who created stimulus programs which Roosevelt later amplified (as a parallel Obama amplification of Bush Ws stimulus programs). 0 Comments | depressions

Did not Franklin D. Roosevelts New Deal put an end to the Great Depression?
In the U.S. it became worse thanks to Franklin Delano Roosevelt (elected 1932) governments intervention through a variety of interventionist policies into the economy such as the The New Deal. 0 Comments | depressions

Didnt World War II end the Great Depression and help the economy?
What World War II did end were the regulations of the New Deal that crippled the economy. Wars, though sometimes necessary, are negative on an economy in the sense that capital that could be allocated to productive uses for creating wealth used toward creating weapons for war.

ARCHIVE | EXPLOITATION
Isnt capitalism a system of exploitation?
If exploitation means increasing the standard of living of the masses, tripling the life span of the average man, and bringing wealth and prosperity to all those who live under it, then capitalism is a system of exploitation. If exploitation means making the masses slaves then I refer one to Nazi Germany, the Soviet Union and Communist China. If capitalists exploited the masses by stealing their surplus, as the Marxists allege, where was this surplus before capitalists existed? If not for capitalism, many of the masses you cry about would not exist capitalism did not create poverty it inherited it. 0 Comments | exploitation

What social system exploit its members?

In the proper sense of the term, the only social system that exploits its members are statist/collectivist societies that view its members as tools to be exploited for the race, the fatherland, the public good and the community. 1 Comment | exploitation

What is Capitalisms stance towards exploitation?

Capitalism is the only system that bans all forms of coercion (i.e., slavery and dictatorship) for anyone or by anyone, since it regards each and every man as an end to himself, and not as a tool to be enslaved by others. How does capitalism do this? It accomplishes this by banning the initiation of force from all relationships. Under Capitalism no businessmen can lawfully force a worker to do something against his will (and vice-versa). Capitalism is not a system of exploitation, but is the system of laissez faire freedom. 1 Comment | exploitation

What is the source of the capitalists profits?

The profits of capitalists are not the surpluses extorted from labor, but are the result of the proper use of ones capital, as losses are the result of the improper use of capital. 0 Comments | exploitation

Dont laborers have a right to a share of the capitalists profits, in addition to their wages?
Why are the laborers who demand a share in the capitalists profits, silent in demanding their share when he incurs losses? Why dont they cry out and demand that they get to receive a share in those losses? If labor is the sole cause of all profit, then is it not also the sole cause of all losses? A moments reflection will

point out that laborers are only responsible for their job description they are not directly responsible for the losses of a business and that the cause of an enterprises losses lies essentially with the owner, as do the profits. That a businessmen pays a worker less wages than the worker feels he deserves is not exploitation, as the worker is free to leave his job and look elsewhere for a higher paying one, if he thinks that someone can give him a better job for a better wage. Let any worker in Soviet Russia, Nazi Germany, or Communist China try to attempt such a feat as leaving his job without permission of the state, and he will soon find what exploitation really means. 0 Comments | exploitation

Dont laborers have a right to a share of the capitalists profits, in addition to their wages?
Why are the laborers who demand a share in the capitalists profits, silent in demanding their share when he incurs losses? Why dont they cry out and demand that they get to receive a share in those losses? If labor is the sole cause of all profit, then is it not also the sole cause of all losses? A moments reflection will point out that laborers are only responsible for their job description they are not directly responsible for the losses of a business and that the cause of an enterprises losses lies essentially with the owner, as do the profits. That a businessmen pays a worker less wages than the worker feels he deserves is not exploitation, as the worker is free to leave his job and look elsewhere for a higher paying one, if he thinks that someone can give him a better job for a better wage. Let any worker in Soviet Russia, Nazi Germany, or Communist China try to attempt such a feat as leaving his job without permission of the state, and he will soon find what exploitation really means.

ARCHIVE | MONOPOLIES
What is a monopoly?
Today, a monopoly is defined as a single seller in a given industry (appropriately defined). There are massive problems with this definition which I will comment on below. 0 Comments | monopolies

Are not all monopolies harmful?

Being a single seller, by itself, is not good, nor evil it depends on how one obtained that single-seller status. Did one obtain a monopoly by economic competition in the marketplace, or did one obtain it by political pull, i.e., lobbying? If such status is gained by competition in the free-market then the monopoly the successful business is good. If such status is gained by using the government, or Mafia, to force ones competition out of business, then the monopoly is evil. As all political intervention (initiation of force) in the marketplace is outlawed under capitalism, a harmful monopoly under capitalism is impossible. If one considers a monopoly by definition as intrinsically evil, then only businesses that obtain their market share by having their competition outlawed (as the U.S. Post Office does) can be called a monopoly. 0 Comments | monopolies

What is the key to a proper discussion of monopoly?

The key is to discontinue the equivocation of the term monopolythat is to use the term monopoly to refer to two mutually exclusive concepts: a company formed by economic power vs. a company formed by political power. There are two different concepts denoted by the term monopoly: (1) a company that hasearned 100% share of a given market (i.e., Microsoft) or (2) a company that has not earned its 100% market-share, but instead had the government outlaw its competition (i.e., US Post Office). The first should morally be praisedand the second should morally be condemned. By equivocating on the term monopoly and keeping it ambiguous it becomes an anti-concept so that: a company that has earned 100% share of a given market (actually Microsoft does not have 100% of the O/S/ market but has over 90%) is morally condemned. Such are the dangers of confusing economic power (Microsofts power of production) with political power (the Post Offices power derived from coercion). 0 Comments | monopolies

How does one judge a monopoly, or non-monopoly?

Observe what is evil here: the act of using the government to outlaw ones competition. It does not matter whether the government uses its power to outlaw competition to protect a single business, or to benefit a group of one hundred companies from a single superior competitor. Whenever the government outlaws an individual from entering and competing in any given industry it is evil and wrong. The criterion of judgment is: is competition (the freedom to produce and trade) outlawed in some respect (that is regulated) or not.

0 Comments | monopolies

What happens when a company starts to make a higher profit in its industry, in comparison to other industries?
If any company is a single seller in any industry and starts making profits higher than other industries, due to high prices; it will attract competition into its industry, as other capitalists move their capital from less profitable markets to more profitable ones. If the profits are due to lower production costs, which other companies are unable to match, then the company deserves its profit. 0 Comments | competition, monopolies, profit

What happens if a business attempts to charge prices higher than its competitors (exploiting)?
If any business attempts to charge prices higher than the market will bear, he will lose all his business to his competition, since he cannot force his competition out of business. The businessmans power is dollars not guns. 0 Comments | competition, monopolies

What happens if a business attempts to charge prices lower than his competitors (dumping)?
If a business attempts to corner the market by charging prices that are too low (i.e., below its variable costs of production), the business may drive competitors out of the market temporarily (at the price of eating up its financial capital and eroding its profits); but, as soon as the business raises its prices (in order to reap profits in order to build back the capital it has given away by selling products below their variable cost), new competitors will enter the market. The only way a company can gain profitably gain market share by lowering its prices, is if it can lower its costs of production. If a business can charge the lowest price because it has figured out how to build a better mousetrap (i.e., produce more for less), then it deserves whatever market share it can obtain. 0 Comments | competition, monopolies

How are all harmful monopolies created?

The sole source of harmful monopolies is the government, which is the only agency that has the power to physically force competitors out of business, i.e., it is the only agency that has the power to outlaw (i.e., regulate) competition. As evidence, witness the United States Post Office, which makes it illegal for anyone to charge less than 34 for first class mail (one entrepreneur attempted to compete by charging 5 he did not get far). Other examples include the East India Company of the 17th and 18th centuries, the American Pacific Railroads of the 19th century, and the AMAs monopoly over the prescription of medicine in the 20th century. Only the government can physically force its competitors out of markets, or establish harmful monopolies through the granting of state franchises. This is, of course, a clear violation of individual rights, since such state franchises prevent those who do not have political pull to enter the state regulated industry. In essence the state franchise is an insurmountable barrier to entryand entry created by the the men in

government. No businessmen (or government) can do this under capitalism only is such a feat possible in a mixed economy, or totalitarian economy. The only force a capitalist can use to put his competitors out of business, is the force of providing a better product at a lower price as judged by those who purchase his products such is the power of the businessmen. If this is how he achieves his monopoly, then it is in no way harmful. Just because something is a monopoly a single agent in a specified area does not make it evil. A proper government has a monopoly on the use of force, and it is an essential good to capitalism. 0 Comments | monopolies

Are monopolies intrinsically evil?

As the term is used here, monopolies are not intrinsically evil (big is not inherently evil), nor are monopolies subjectively evil (good or evil judged by public vote, or polls); monopolies are good or evil depending on how they are formed. If formed according to the laws of the free market capitalism they are objectively good. If formed through irrational political policies they are objectively evil. 0 Comments | monopolies

Is there such a thing as an excessive profit?

There is no such thing as a profit that is too high or too low. That is, there is no such thing as an excessive profit. There is only the profit that men earn.

ARCHIVE | TAXATION
How is government supported under capitalism?
A government is supported under capitalism through voluntary financing methods. 0 Comments | government, taxation

How will one support government without taxation?

The removal of all taxation would be the last step to implement in the transition to a free capitalist society. The costs of a proper government with an army (engaged only in self-defense and not imperialism), a court system, and a police force are very small, and easily paid for by voluntary financing methods, such as insurance on contracts. Other methods are used by nonprofit agencies, like churches, to raise billions of dollars. Observe how one know nothing capitalist Ted Turner recently gave a billion dollars to a useless, anti-capitalist organization like the United Nations. Comments Ayn Rand in Government Financing in a Free Society: Any program of voluntary government financing has to be regarded as a goal for a distant future. What the advocates of a fully free society have to know, at present, is only the principle by which that goal can be achieved. The principle of voluntary government financing rests on the following premises: that the government isnot the owner of the citizens income and, therefore, cannot hold a blank check on that incomethat the nature of the proper governmental services must be constitutionally defined and delimited, leaving the government no power to enlarge the scope of its services at its own arbitrary discretion. Consequently, the principle of voluntary government financing regards the government as the servant, not the ruler, of the citizensas an agent who must be paid for his services, not as a benefactor whose services are gratuitous, who dispenses something for nothing. [The Virtue of Selfishness] 0 Comments | taxation

Why would voluntary methods fail to work under our present system?
Only if one wants to turn government into an engine of the welfare state/new world-order (one country, with one big leash tied around its neck, with the untouchable bureaucrats of the United Nations holding the leash), do voluntary methods fail to work. Most people (not all) would voluntarily give 5 or 10% of their income to support a government that protects rights; practically no one would give 50% to 90% of their income to support a mixed economy/welfare state, which is why the government threatens the use of force to physically take your wealth away from you. Who would want to voluntarily pay for that? Perhaps a few people would, but they are the ones who think that they will get to hold onto the leash.

0 Comments | taxation

What about the Fair Tax?

A heavy progressive or graduated income tax. Plank 2 of the Communist Manifesto It must be remembered, that the rich are people as well as the poor; that they have rights as well as others;that they have as clear and as sacred a right to their large property as others have to theirs which is smaller; that oppression to them is as possible and as wicked as to others. John Adams

Fairness, as used in todays political discourse, is an unfair word that can have many contradictory meanings. The proper meaning of fairness is the application of justice. Justice is not what advocates of fair taxation are asking for. What they are asking for is not equal treatment under the law for all individuals, regardless of race, gender or income. What they are asking for is unequal treatment before the law. They are asking for the state to violate the inalienable rights of some individuals, to discriminate against them, because they are rich. What so-called progressives mean by fairness is a form of injustice known as egalitarianism. According to egalitarians, it is unfair that some people are richer than others regardless of whether that person honestly earned their wealth through hard work and industry, or whether they robbed a bank; whether they obtained their wealth through economic production or political graft. This does not matter. The fact that some people are richer than others is proof of unfairness, since in their view everyone should be equal not politically, but existentially. Equal, that is, not in their right to life, liberty and property; but equal in results. As people are not of equal ability some are more intelligent, some are more ambitious, and some are more hard-working than others under a system of equal rights and equal freedom capitalism some people will become more wealthy than others. According to progressives, it is the governments job to remedy this defect. Or, in the words of Karl Marx and Frederick Engels: From each according to his abilities, to each according to his needs. In practice, this means in todays mixed economy a progressive governments job is to redistribute the wealth of those with ability to those who can garner enough votes. A progressive fair tax is nothing more than Jim Crow reasoning applied to wealth creation. It discriminates and punishes an individual, by treating people differently not based on the color of their skin, race or religion, but based on how much money they make. It is thus a clear violation of their property rights. Or, in the words of American Founding Father, John Adams: It must be remembered, that the rich are people as well as the poor; that they have rights as well as others; that they have as clear and as sacred a right to their large property as others have to theirs which is smaller; that oppression to them is as possible and as wicked as to others. Yet it is the principle of equal treatment under the law that a progressive fair income tax violates. WritesArthur Mode,

Most Americans accept the idea that if two men commit the same crime, they should receive the same punishment. Equal treatment under the law for criminal offenses is considered just. If a Congressman were to propose that, for the same offense, Hispanics should be given longer jail terms, or that Catholics should never be subjected to capital punishment, he would be hooted down. When the subject changes from criminal to tax law, the concept of equal treatment under the law suddenly goes halfway out the window. Halfway, because there would be no support for taxing somegroups differentially, e.g., higher rates for certain religious groups, racial groups, or genders. Such unequal treatment is still viewed as wrong. But equal treatment does go out the window when one group is mentioned: the rich. The graduated fair tax is in fact an envy tax, not motivated by love for the poor, but for hatred of those who are not. Or, in philosopher Ayn Rands words, hatred of the good for being the good. If progressives were truly concerned with the poor they would cry out for more freedom. Instead what they have created is a spoils system where pressure groups battle politically to decide what to do with other peoples money. One feasible alternative tax system, in todays intellectual climate, is a just tax. A more just income tax system would not be a progressive discriminatory tax, but proportional, i.e., a flat tax. Under such a system, a wealthy man would pay the same percentage as a man less wealthy man. Now in total amount the rich man would pay more, i.e., at 10% tax rates a millionaire would pay $100,000, whereas an unemployed person would pay nothing, but both would be treated equal under the law.

ARCHIVE | WEALTH
Doesnt capitalism distribute wealth unfairly?
No. Capitalism distributes wealth justly, i.e. to those who earned it, in proportion to how much they produced. 0 Comments | wealth

Whom does our nations wealth belong to?

Wealth is not a collective resource to be distributed by some totalitarian or his cronies, but is produced by individuals. Wealth belongs to the individual who produced it. It is not an amorphous public good to be distributed by looters for the aid of moochers. 0 Comments | wealth

What is wealth a product of?

Fundamentally, wealth is the product of mans mind and belongs to each man to the extent that he created it. 0 Comments | wealth

In a joint venture how does one determine ones share of wealth?

If many individuals took part in that production, each deserves his share in accordance to how much of it they produced as mutually agreed upon amongst themselves by their own free-will. The principle in such instances being: those who produced less, receive less, those who produced more, receive more. A man can neither demand more then he deserves because he is full of greed, or demand more then he deserves, because he feels need. All he can demand is what the market the uncoerced judgment of others will offer him. What is the name of such a principle? It is justice the judge in all such cases being the marketplace. 0 Comments | wealth

What about production for use?

What those who demand production for use as opposed to production for profit mean is the forced expropriation of the production of some (who are said to have greed) for the use of others (who are either unwilling or unable to produce it) who are said to have need. The proper name for this is theft, or slavery. 0 Comments | wealth

Are there any limits to wealth?

Wealth, like its corollary knowledge, is not a static quantity, but is potentially limitless. The only limit to ones wealth, in a capitalist society, is the power of ones ability to think and produce and the ability of those around him to think and produce. If one wishes for the wealth of all men to increase only one requirement is necessary freedom. 0 Comments | wealth

Doesnt capitalism centralize wealth via inheritance?

As wealth is not a static quantity, to be looted and stolen, the wealth that you can earn is not affected by how much wealth someone else has, creates, or inherits. Since wealth is the result of mans mind, as long as someone has a mind, and is left free to use it, wealth is his to create. As the creation of wealth is not automatic, those who cannot manage their wealth, will soon lose it. As evidence of this fact witness what happens when a rich man passes on his money to a worthless heir the heir soon loses it. Such is the meaning behind the popular American saying, from shirtsleeves to shirtsleeves in three generations. 0 Comments | inheritance, wealth

What is the source of all wealth?

Wealth is the result of mans ability to think applied to the sphere of production and trade. Reason, ultimately, is the source of all wealth. As capitalism is the only social system that on principle leaves man free to think, capitalism is only system of wealth creation. 1 Comment | wealth

Whats the difference between paper wealth and real wealth?

Paper wealth is only of value if it can be used to purchase real wealth. Real wealth is something of value that helps you support your life, i.e., food, housing, Atlas Shrugged, etc.

Feminisms War on Objectivity

PETER SCHWARTZ (1991.12.28 )

While feminists claim to be pursuing justice for women, it is becoming ever more apparent that their actual goal is the obliteration of justice. More precisely, their aim is to eliminate that which makes justice possible: objective standards. Instead of urging employers, for example, to adopt objective standards of merit in hiring and to apply them consistently to all candidates, irrespective of the (irrelevant) fact of gender, feminists call for the very opposite. They demand the lowering or the suspension of standards, in order to accommodate certain women. They no longer argue that women who meet objective qualifications ought not to be rejected solely on account of their sex (an argument which would merit moral, though not legislative, backing); rather, they declare that females who fail to qualify should be accepted solely on account of their sex. When faced with the fact that most female applicants were unable to meet the New York City Fire Departments strength requirements, feminists successfully sued to have the standards changed so that a sufficient number of women could pass. They did not care that there is an objective need for stringent physical standards for firefighters. To feminists, gender transcends everything, including reality and logic. This attitude is evident in the response of womens groups to two rece nt news events. Feminists championed the just-enacted Civil Rights Act of 1991. This law creates a legal presumption of wrongdoing whenever a companys practicessuch as employment testshave a disparate impact by sex (or race or other collectivist criteria). Thus, if proportionately fewer women than men pass a truck-driving test (or if fewer Eskimos than non-Eskimos meet a high school diploma requirement), the employer can be charged with discrimination. And while the legislation nominally exempts practices that are job-related, this amounts to mere lip-service. For how many employers would risk the time and money to mount a defense, when the legal burden is on them to prove non-discriminationto prove it, that is, to the satisfaction of the same mentality that considers it unjust discrimination to test a prospective firefighters ability to lift heavy weights? A similar disregard for objective standards was manifested during the Anita HillClarence Thomas confrontation. There, feminists instantly flocked to Hills side, accepting her testimony as undeniably true and condemning those who subjected her to cross-examination in a quest for facts. The feminist complaint was not that Hill was being judged by different stndards than men arebut that she wasnt, i.e., that

because she was a woman accusing a man of an archetypically male -chauvinist crime, her veracity should have been indisputable. These feminists are indifferent to the principle that a process of justice requires objective judicial standards; positive evidence supporting the charges must exist even before the convening of any hearing or trial; the burden of proof must lie with the accuser, since a negative cannot be proved; the accused must be considered inocent unless proven guilty; and the accuser must consequently be intensely scrutinized, doubted and challenged. But feminists maintain that objective standards are immaterial, and objective facts non-existent. To them, the respective genders of accuser and accused in this case reveal who is the victimizer and who is the victim. This approach represents not a search for better standards, but a jettisoning of standards as suchand of objectivity. According to Marxist ideology, there is no objectivity in human reasoning, but only proletarian logic and bourgeois logic, with ones economic class determining the contents of ones mind. Feminism likewise contends that objectivity is impossible. Feminists believe that standards in jurisprudence, in employment, in any sphereare the products of a male power structure. They maintain that the class interests of men compel them to perceive reality from a distorted, prejudiced perspectivethat men, by biological necessity, just dont get it. If there is no objectivity, then the basis for deciding who is entitled to what is not the standards of justice, but the whims of any collective (enforced by the politics of pressure-group warfare). This is why feminists do not insist that one hire a female worker who deserves the job, or believe a female witness because she has earned credibility, or include in a universitys curriculum a female author whose works merit study. Feminisms essential messagea message demeaning to all rational, conscientious women is that the female gender needs to be granted the unearned. Justice is the objective evaluation of individuals. By embracing the non-objective, feminism can pursue nothing but the unjust.

Egalitarianism: The New Torture Rack

GARY HULL (1997.04.23 )

Imagine the following Academy Award ceremony. There are no awards for best picture or best actor. Instead, every picture gets a certificate and every actor receives a prize. That is not an awards ceremony, you say? So it isnt. But it is an egalitarians dreamand an achievers torment. An egalitarian wants equality, not under the law, but in all practical consequences: equality of income, of praise and blame, of rewards and punishments. He derides, as elitist and individualistic, all rankings, evaluations, competitions. Said Richard Rodzinski, executive director of the Van Cliburn Piano Competition: We must stamp out the concept of better. It should always be understood that were not saying number one is better than number two. At the Iowa State Fair this year, the 4-H Club gave 3,500 competitors identical multicolored ribbons, in lieu of first-, second- and third-place ribbons. Why? Because it didnt want to single out any one entrant as more deserving than anothe r. That some people are exceptionalthat some have more intelligence, are more beautiful or work harder than othersis a threat to egalitarians. Talent and ability create inequality. To rectify this supposed injustice, we are told to sacrifice the able to the unable. Egalitarianism demands the punishment and envy of anyone who is better than someone else at anything. We must tear down the competent and the strongraze them to the level of the incompetent and the weak. We must worship a zero and sneer at a creator. Feminists thus smear fashion models for being more beautiful than ordinary women. Liberal commentators chastise Americans for being proud that our Olympic athletes won more medals than did other athletes. Industrial giants, such as Bill Gates, are vilified for making too much money. And Americas greatest companies are persecuted by the Justice Departments Antitrust Division for having better management, and thereby a larger market share, than does the competition. The egalitarians hatred of excellence has metastasized throughout the culture. In order to level everyone down to the lowest common denominator, egalitarians sacrifice the achiever. Nowhere is this more dramaticand tragicthan in education. In the past, educators nurtured students of high intelligence. Such students were showered with magnet schools, accelerated curricula, individual attention and

academic merits. Now, though, the entire focus has shifted. Education today cripples the bright and inquisitive child by ignoring himby not spending time and money developing his superior ability. In the name of not rewarding brains, the attention is now on students who are unable or unwilling to learn. For example, the state of New York spends one-quarter of its budget on slow learners. To accommodate the slowest learners, the entire K-12 curriculum has been dumbed down. And high schools on both coasts are dispensing with awards honoring top seniors. They dont select the most likely to succeed or the most talented. These schools no longer offer class rankings, nor do they select a class valedictorian. In todays age of achievement-hatred, it is okay to spend millions on playground psychopaths. But it is considered morally low to honor a bright student. If you have ever wondered why the number of great artists, intellects and achievers has dwindled, you should blame egalitarianism. And you should seek out a curea view of justice which tells you to evaluate and reward a man based on his talents. Yes it is true that some people are born with greater natural endowments. But it is also true that it requires choices, effort and thinking to develop endowments into talents. Michael Jordan was born with fabulous athletic potential. But it took years of excruciating effort to hone that potential into masterful skills. Thomas Edison was born with great native intelligence. But the knowledge required to create unprecedented inventions was the result of his heroic mental effort. Other inventors gave up when problems became intractable. But Edison developed the courage and pit-bull determination to persevere. What would happen to a Thomas Edison today? If he survived school with his mind intact, he would be shackled by government regulators. His wealth would be confiscated by the IRS. He would be accused of unfair competition for inventing so many more products than his competitors. And university professors would get tenure arguing that a wino is his moral equivalent. Is it any mystery why there isnt more talent in the world today?

Economics 101
WALTER WILLIAMS (1997.04.02 )

Many people think economics is about businesses and financial institutions but economics is much broader than that. Economic theory makes a valuable contribution whenever there are costs and benefits of any human action. Take dating. Suppose you see a fat, old, ugly, cigar-smoking man dating a beautiful young lady. What prediction would you make about that mans income? Id guess th at youd say its pretty high. Why? Essentially what the man tells the beautiful young lady is, Look, I cant compete for your hand on the basis of a guy like Williams; so Im going to offset my disadvantages by offering you greater splendor. Thats what economists call a compensating difference. Suppose do-gooders come along and claim that it is unfair for beautiful young ladies to charge fat, old, ugly, cigar-smoking men higher prices than handsome men. They get a law passed forbidding beautiful young ladies from demanding more from fat, old ugly cigarsmoking men than handsome men. What then happens to the probability of fat, old, ugly cigar-smoking men of dating beautiful young ladies? If you said zilch, go to the head of the class. Such a law would deny them their most effective means of competing with handsome men, namely offering a higher price. The same principle applies to any less-preferred person or good. Most people prefer filet mignon to chuck steak. The reason chuck steak sells is because it offers a compensating difference, it sells for a lower price. If we made a law saying that chuck steak had to be sold for the same price as filet mignon, chuck steak wouldnt sell. It couldnt offset its perceived quality differences by offering a lower price. I do speaking engagements for which I am paid. So does Nobel Laureate Milton Friedman for handsome fees as high as $30,000 which I dont get. In the interest of fairness, suppose a law is passed saying that people had to pay me the same as they paid Friedman, what do you think would happen to the probability of my being hired. Right. Its just like the fat, old, ugly cigar-smoking man; it would go to zilch. The reason I have speaking engagements is because I am free to say, Im not as good as Friedman, but Im not as expensive either. What about the minimum wage? Thats a law that says no matter whom you hire, you must pay them a minimum of $5.15 an hour. That produces effects not dissimilar from any of the above examples. A person perceived to be worth only $3, in terms of productive output, just wont be hired though he would be hired if it were legal for him

to offer a compensating difference as I do when competing with Friedman. Thus, one of the effects of the minimum wage, though not its intention, is to reduce employment opportunities for low skilled people. The lesson here is that economic theory, like any other good theory such as Galileo law of falling objects is perfectly general. Some people may object saying, Williams, were dealing with humans not inanimate objects! No problem. The law of gravity says that the independent influence of gravity is to cause a falling body to accelerate at 32 feet per second per second. It matters none whether that falling object is a brick or a human. Its the same with economic theory whether were talking about fat, old ugly cigar-smoking men, chuck steak, speaking honoraria or a low skilled worker. When prices are controlled, the less-preferred are always handicapped.

Public Service and Private Misery

DAVID HARRIMAN (1997.07.01 )

Jonas Salk once named the ambition that guided his career: I wanted to do independent work and I wanted to do it my way. His ideas were opposed by the scientific establishment, but he persevered, holding nothing above the verdict of his own mind. The result of his fierce independence was the first effective polio vaccine. We benefit more from Salks work that from ten thousand Americorps volunteers working slavishly to serve others. If Salk had accepted their altruistic premise and therefore placed the judgments and desires of others above his own many of these volunteers would be in wheelchairs. Unfortunately, politicians today are demanding such selflessness of young people. Liberals and conservatives alike have embraced the view that individuals have a moral duty to serve society. President Clinton describes this as an American idea. The higher interests involved in the life of the whole must set the limits and lay down the duties of the interests of the individual, says one advocate of selfless service to society. An opponent declares: Nothing could so completely divest us of liberty as the establishment of the opinion that the state has a perpetual right to the services of all its members Public service and private misery [are] inseparably linked together. Does it give no one pause to learn that the exponent of the American idea is Adolf Hitler and his opponent is Thomas Jefferson? Citizen service is a repudiation of the principle upon which our country was based: each individual is an end in himself, not a means to the ends of society, and his highest purpose is the pursuit of his own happiness. The benefits we enjoy in America today were created by individuals selfishly pursuing their own profit. Our windfall is a secondary consequence, not their goal. The Founding Fathers have been often accused of wanting to protect their property, as if this were an evil motive. They were concerned with protecting their property, and the result of their efforts was the creation of a country where everyone has property rights. What sort of country would have resulted if they had renounced property rights as selfish and advocated communal ownership?

Without Thomas Edison we would have no light bulbs, recorded music, or hundreds of other inventions. Yet his goal was not to sacrifice for others, but to pursue and prove his passionately held ideas, no matter what others wanted of him. Do we really wish that he had dedicated himself to citizen service, perhaps by collecting donations to buy candles for the poor? What about Henry Ford, who pioneered the assembly line? His motive was to profit from the mass production of cars; and, as a consequence, he made cheap and easy travel available to all. Should he instead have served others by cleaning up after horses in the slums? We should be grateful that the geniuses who created the computer industry men such as Bill Gates of Microsoft and Steve Jobs of Apple pursued their own dreams. If they had accepted the idea of citizen service, they might be teaching indigent children how to use an abacus. This list could be extended indefinitely: from Andrew Carnegie to J. P. Morgan to the Wright Brothers all are men who made America great, and they did so by pursuing their own selfish, creative ends. If virtue consists of service to others, then such men are ignoble. Thus Gen. Colin Powell, who heads the campaign for community service, has stated: This is about getting Americans off the sidelines and getting on the playing field. The playing field is the realm of moral action, which allegedly consists not in creating values, but in redistributing them, not in achieving your own happiness, but in sacrificing it to the happiness of others. So the creator is on the sidelines; he would be worthy of our admiration only if he renounced his selfish pursuits and did volunteer work in a soup kitchen. Powell has it backwards. The selfish creators the Edisons, the Salks, the Gateses are heroes, while those who seek only to serve others are self-made slaves. Jefferson was right public service and private misery are inseparably linked. So are private profit and happiness.

Health Care Is Not A Right

LEONARD PEIKOFF (1998.01.23 )

Delivered at a Town Hall Meeting on the Clinton Health Plan Red Lion Hotel, Costa Mesa CA December 11, 1993 Good morning, ladies and gentlemen: Most people who oppose socialized medicine do so on the grounds that it is moral and well-intentioned, but impractical; i.e., it is a noble idea which just somehow does not work. I do not agree that socialized medicine is moral and well-intentioned, but impractical. Of course, it is impractical it does not work but I hold that it is impractical because it is immoral. This is not a case of noble in theory but a failure in practice; it is a case of vicious in theory and therefore a disaster in practice. So Im going to leave it to other speakers to concentrate on the practical flaws in the Clinton health plan. I want to focus on the moral issue at stake. So long as people believe that socialized medicine is a noble plan, there is no way to fight it. You cannot stop a noble plan not if it really is noble. The only way you can defeat it is to unmask it to show that it is the very opposite of noble. Then at least you have a fighting chance. What is morality in this context? The American concept of it is officially stated in the Declaration of Independence. It upholds mans unalienable, individual rights. The term rights, note, is a moral (not just a political) term; it tells us that a certain course of behavior is right, sanctioned, proper, a prerogative to be respected by others, not interfered with and that anyone who violates a mans rights is: wrong, morally wrong, unsanctioned, evil. Now our only rights, the American viewpoint continues, are the rights to life, liberty, property, and the pursuit of happiness. Thats all. According to the Founding Fathers, we are not born with a right to a trip to Disneyland, or a meal at Mcdonalds, or a kidney dialysis (nor with the 18th-century equivalent of these things). We have certain specific rights and only these. Why only these? Observe that all legitimate rights have one thing in common: they are rights to action, not to rewards from other people. The American rights impose no obligations on other people, merely the negative obligation to leave you alone. The system guarantees you the chance to work for what you want not to be given it without effort by somebody else. The right to life, e.g., does not mean that your neighbors have to feed and clothe you; it means you have the right to earn your food and clothes yourself, if necessary by a hard struggle, and that no one can forcibly stop your struggle for these things or steal

them from you if and when you have achieved them. In other words: you have the right to act, and to keep the results of your actions, the products you make, to keep them or to trade them with others, if you wish. But you have no right to the actions or products of others, except on terms to which they voluntarily agree. To take one more example: the right to the pursuit of happiness is precisely that: the right to the pursuit to a certain type of action on your part and its result not to any guarantee that other people will make you happy or even try to do so. Otherwise, there would be no liberty in the country: if your mere desire for something, anything, imposes a duty on other people to satisfy you, then they have no choice in their lives, no say in what they do, they have no liberty, they cannot pursue their happiness. Your right to happiness at their expense means that they become rightless serfs, i.e., your slaves. Your right to anything at others expense means that they become rightless. That is why the U.S. system defines rights as it does, strictly as the rights to action. This was the approach that made the U.S. the first truly free country in all world history and, soon afterwards, as a result, the greatest country in history, the richest and the most powerful. It became the most powerful because its view of rights made it the most moral. It was the country of individualism and personal independence. Today, however, we are seeing the rise of principled immoralityin this country. We are seeing a total abandonment by the intellectuals and the politicians of the moral principles on which the U.S. was founded. We are seeing the complete destruction of the concept of rights. The original American idea has been virtually wiped out, ignored as if it had never existed. The rule now is for politicians to ignore and violate mens actual rights, while arguing about a whole list of rights never dreamed of in this countrys founding documents rights which require no earning, no effort, no action at all on the part of the recipient. You are entitled to something, the politicians say, simply because it exists and you want or need it period. You are entitled to be given it by the government. Where does the government get it from? What does the government have to do to private citizens to their individual rights to their real rights in order to carry out the promise of showering free services on the people? The answers are obvious. The newfangled rights wipe out real rights and turn the people who actually create the goods and services involved into servants of the state. The Russians tried this exact system for many decades. Unfortunately, we have not learned from their experience. Yet the meaning of socialism (this is the right name for Clintons medical plan) is clearly evident in any field at all you dont need

to think of health care as a special case; it is just as apparent if the government were to proclaim a universal right to food, or to a vacation, or to a haircut. I mean: a right in the new sense: not that you are free to earn these things by your own effort and trade, but that you have a moral claim to be given these things free of charge, with no action on your part, simply as handouts from a benevolent government. How would these alleged new rights be fulfilled? Take the simplest case: you are born with a moral right to hair care, let us say, provided by a loving government free of charge to all who want or need it. What would happen under such a moral theory? Haircuts are free, like the air we breathe, so some people show up every day for an expensive new styling, the government pays out more and more, barbers revel in their huge new incomes, and the profession starts to grow ravenously, bald men start to come in droves for free hair implantations, a school of fancy, specialized eyebrow pluckers develops its all free, the government pays. The dishonest barbers are having a field day, of course but so are the honest ones; they are working and spending like mad, trying to give every customer his hearts desire, which is a millionaires worth of special hair care and services the government starts to scream, the budget is out of control. Suddenly directives erupt: we must limit the number of barbers, we must limit the time spent on haircuts, we must limit the permissible type of hair styles; bureaucrats begin to split hairs about how many hairs a barber should be allowed to split. A new computerized office of records filled with inspectors and red tape shoots up; some barbers, it seems, are still getting too rich, they must be getting more than their fair share of the national hair, so barbers have to start applying for Certificates of Need in order to buy razors, while peer review boards are established to assess every stylists work, both the dishonest and the overly honest alike, to make sure that no one is too bad or too good or too busy or too unbusy. Etc. In the end, there are lines of wretched customers waiting for their chance to be routinely scalped by bored, hog-tied haircutters some of whom remember dreamily the old days when somehow everything was so much better. Do you think the situation would be improved by having hair-care cooperatives organized by the government? having them engage in managed competition, managed by the government, in order to buy haircut insurance from companies controlled by the government? If this is what would happen under government-managed hair care, what else can possibly happen it is already starting to happen under the idea of health care

as a right? Health care in the modern world is a complex, scientific, technological service. How can anybody be born with a right to such a thing? Under the American system you have a right to health care if you can pay for it, i.e., if you can earn it by your own action and effort. But nobody has the right to the services of any professional individual or group simply because he wants them and desperately needs them. The very fact that he needs these services so desperately is the proof that he had better respect the freedom, the integrity, and the rights of the people who provide them. You have a right to work, not to rob others of the fruits of their work, not to turn others into sacrificial, rightless animals laboring to fulfill your needs. Some of you may ask here: But can people afford health care on their own? Even leaving aside the present government-inflated medical prices, the answer is: Certainly people can afford it. Where do you think the money is coming from right now to pay for it all where does the government get its fabled unlimited money? Government is not a productive organization; it has no source of wealth other than confiscation of the citizens wealth, through taxation, deficit financing or the like. But, you may say, isnt it the rich who are really paying the costs of medical care now the rich, not the broad bulk of the people? As has been proved time and again, there are not enough rich anywhere to make a dent in the governments costs; it is the vast middle class in the U.S. that is the only source of the kind of money that national programs like government health care require. A simple example of this is the fact that the Clinton Administrations new program rests squarely on the backs not of Big Business, but of small businessmen who are struggling in todays economy merely to stay alive and in existence. Under any socialized program, it is the little people who do most of the paying for it under the senseless pretext that the people cant afford such and such, so the government must take over. If the people of a country truly couldnt afford a certain service as e.g. in Somalia neither, for that very reason, could any government in that country afford it, either. Some people cant afford medical care in the U.S. But they are necessarily a small minority in a free or even semi-free country. If they were the majority, the country would be an utter bankrupt and could not even think of a national medical program. As to this small minority, in a free country they have to rely solely on private, voluntary charity. Yes, charity, the kindness of the doctors or of the better off charity, not right, i.e. not their right to the lives or work of others. And such charity, I may say, was always forthcoming in the past in America. The advocates of Medicaid and Medicare under LBJ did not claim that the poor or old in the 60s got bad care; they claimed that it was an affront for anyone to have to depend on charity.

But the fact is: You dont abolish charity by calling it something else. If a person is getting health care for nothing, simply because he is breathing, he is still getting charity, whether or not President Clinton calls it a right. To call it a Right when the recipient did not earn it is merely to compound the evil. It is charity still though now extorted by criminal tactics of force, while hiding under a dishonest name. As with any good or service that is provided by some specific group of men, if you try to make its possession by all a right, you thereby enslave the providers of the service, wreck the service, and end up depriving the very consumers you are supposed to be helping. To call medical care a right will merely enslave the doctors and thus destroy the quality of medical care in this country, as socialized medicine has done around the world, wherever it has been tried, including Canada (I was born in Canada and I know a bit about that system first hand). I would like to clarify the point about socialized medicine enslaving the doctors. Let me quote here from an article I wrote a few years ago: Medicine: The Death of a Profession. [The Voice of Reason: Essays in Objectivist Thought, NAL Books, c 1988 by the Estate of Ayn Rand and Leonard Peikoff.] In medicine, above all, the mind must be left free. Medical treatment involves countless variables and options that must be taken into account, weighed, and summed up by the doctors mind and subconscious. Your life depends on the private, inner essence of the doctors function: it depends on the input that enters his brain, and on the processing such input receives from him. What is being thrust now into the equation? It is not only objective medical facts any longer. Today, in one form or another, the following also has to enter that brain: The DRG administrator [in effect, the hospital or HMO man trying to control costs] will raise hell if I operate, but the malpractice attorney will have a field day if I dont and my rival down the street, who heads the local PRO [Peer Review Organization], favors a CAT scan in these cases, I cant afford to antagonize him, but the CON boys disagree and they wont authorize a CAT scanner for our hospital and besides the FDA prohibits the drug I should be prescribing, even though it is widely used in Europe, and the IRS might not allow the patient a tax deduction for it, anyhow, and I cant get a specialists advice because the latest Medicare rules prohibit a consultation with this diagnosis, and maybe I shouldnt even take this patient, hes so sick after all, some doctors are manipulating their slate of patients, they accept only the healthiest ones, so their average costs are coming in lower than mine, and it looks bad for my staff privileges. Would you like your case to be treated this way by a doctor who takes into account your objective medical needs and the contradictory, unintelligible demands of some ninety different state and Federal government agencies? If you were a doctor could you comply with all of it? Could you plan or work around or deal with the

unknowable? But how could you not? Those agencies are real and they are rapidly gaining total power over you and your mind and your patients. In this kind of nightmare world, if and when it takes hold fully, thought is helpless; no one can decide by rational means what to do. A doctor either obeys the loudest authority or he tries to sneak by unnoticed, bootlegging some good health care occasionally or, as so many are doing now, he simply gives up and quits the field. The Clinton plan will finish off quality medicine in this country because it will finish off the medical profession. It will deliver doctors bound hands and feet to the mercies of the bureaucracy. The only hope for the doctors, for their patients, for all of us is for the doctors to assert a moral principle. I mean: to assert their own personal individual rights their real rights in this issue their right to their lives, their liberty, their property, theirpursuit of happiness. The Declaration of Independence applies to the medical profession too. We must reject the idea that doctors are slaves destined to serve others at the behest of the state. Id like to conclude with a sentence from Ayn Rand. Doctors, she wrote, are not servants of their patients. They are traders, like everyone else in a free society, and they should bear that title proudly, considering the crucial importance of the services they offer. The battle against the Clinton plan, in my opinion, depends on the doctors speaking out against the plan but not only on practical grounds rather, first of all, on moral grounds. The doctors must defend themselves and their own interests as a matter of solemn justice, upholding a moral principle, the first moral principle: selfpreservation. If they can do it, all of us will still have a chance. I hope it is not already too late. Thank you. Copies of this address in pamphlet form are available from:Americans for Free Choice in Medicine. Almost ten years ago, Leonard Peikoff predicted that our medical system would be dismantled. Looking at the young people in the crowd, he remarked: If you are looking for a crusade, there is none that is more idealistic or more practical. This one is devoted to protecting some of the greatest [men] in the history of this country. And it is also, literally, a matter of life and death -YOUR LIFE, and that of anyone you love. Dont let it go without a fight! From Medicine: The Death of a Profession by Leonard Peikoff from concluding remarks from 1985 presentation with Dr. Michael Peikoff.

A Supreme Court Overview: Our Pragmatic Court Does Not Protect Individual Rights
THOMAS A. BOWDEN (1998.01.11 )

In Sunset Boulevard, silent-screen star Norma Desmond listens as a young admirer tactlessly recalls her faded glory. You used to be in pictures, says the fan. You used to be big. I am big, replies Norma, her voice dripping with contempt. Its the pictures that got small. If only our fading Constitution could speak, it would summon all the grandeur of its illustrious past and say, echoing Norma Desmond, I am big. Its the Supreme Court that got small. As the Supreme Court begins its new term, have you found yourself wondering why the Courts docket always seems to be littered with arcane issues of little consequence, while our vital liberties are being continually eroded by government? You will not find the answer in a typical microscopic analysis of changes in the Courts thinking from session to session. Only a wider historical perspective, one that penetrates to philosophic fundamentals, will detect the seismic shift that has led the Court to forsake its essential judicial function. Americas Founding Fathers swept away centuries of tradition in which the individual had been subservient to the collective to family, community or nation. The Founders held that to protect human life and human progress in society, the individual must be sovereign. They held that each individual has an objective right to his own life and his own happiness including the right to his property, without which no other rights are possible. They held that individual rights are inalienable, that is, that no force on earth no monarch, no parliament, no mob or legislative majority could rightfully violate them. The Supreme Court was designed to protect these sacred rights against incursion by government. If Congress or any state enacted a law that infringed upon rights, the Court, under the power of judicial review, was to strike it down. The Court was to be the individuals last line of defense against tyranny the tyranny of unlimited majority rule.

But todays leaders have embraced pragmatism, the philosophy that claims there are no absolutes and no principles, only subjective opinions guided by expediency. The only way, therefore, to prevent society from degenerating into anarchy the pragmatists concluded is by enshrining unrestrained majority rule. According to this view, the individual citizen lives, not by right, but by societys permission for which the majority can set whatever conditions it wishes. As a chilling example, consider that almost a century ago the grandfather of Supreme Court pragmatism, Justice Oliver Wendell Holmes, characterized the First Amendments guarantee of freedom of speech as nothing but an arbitrary experiment which, if the citizens tire of it, may be repealed tomorrow with impunity. Without the unyielding principle of individual rights as the moral yardstick for judging the acts of legislatures and executives, the Supreme Court is impotent to engage in proper judicial review. As a result, government routinely violates individual rights while the Court stands idly by. Businessmen suffered first, and most, from this dereliction, as the Court permitted once-sacrosanct property rights, such as freedom of contract, to be crushed by majority rule. Few people remember that the Supreme Court once protected property rights, e.g., a companys right to pay workers any wage they voluntarily accept, or its right to function without a state license even though they are not concretely listed in the Constitution. The Court used to understand the principle of individual rights. Now, however, the Court allows lawmakers to exercise virtually unlimited power over production, employment and trade. Because businesses know the Court will not protect them, they see no choice but to compromise when their rights are threatened. For example, the tobacco industry would never have agreed to the unprecedented controls over its right to free trade the massive fines, the debilitating regulations, the authoritarian censorship were it not for the Courts abject surrender of its Constitutional mission. Other rights have fared no better. Recall what happened in 1986, in Bowers v. Hardwick, when the Court ruled that a homosexual has no right to pursue sexual pleasure in the privacy of his home, if the majority vote of a legislature has prohibited it. And earlier this year, in Washington v. Glucksberg, the Court declared that a terminally ill individual has no right to assisted suicide if a majority of society refuses to allow it.

Indeed, it is only a matter of time before a womans right to choose an abortion sinks under this pragmatist/collectivist tide, as the Court permits the gradual demise of Roe v. Wade the last surviving example of proper judicial review. Only a philosophical renaissance restoring individual rights to their place of honor in our Constitutional republic will enable the Supreme Court to reclaim its vital role as defender of the individual against the collective.

Ten Things Everyone Ought To Know About Global Warming

FRED SINGER (1998.01.11 )

With all the hype about global warming and climate disasters filling the journals and air waves, here are some facts that need to be more widely known:
1. The climate is never just average; it changes all the time, from season to season, year to year, and over the millennia. And that includes not only temperature, but rain, snow, droughts, storms, and every conceivable feature of the weather. So watch out when you read about the hottest year, longest drought, or biggest hurricane. 2. Is it getting warmer or is it getting colder? The correct answer is: Yes. It all depends on the time scale you choose. The global climate has warmed over the last 100 years, but not appreciably over the last 50 years. And it is colder now than it was 1000 years ago. And did you know that over the last 50 years the frequency of hurricanes has been dropping? 3. Are human activities influencing climate? Yes, of course. The rise of agriculture and the growth of cities have changed the local climate significantly. With rising populations and rising industrial activity there have also been some worldwide changes: Temperature extremes have softened, the stratosphere is cooling, the frequency of hurricanes has been diminishing all of these are thought to be human influences on the atmosphere. But this does not mean that there will be a catastrophic or even a substantial warming of the climate in the next century. 4. Isnt there climate warming already because of the increased burning of fossil fuels oil, gas, and coal that creates more carbon dioxide in the atmosphere? True, carbon dioxide (CO2) levels are rising, but the climate seems not to be warming. It did warm greatly between 1880 and 1940 long before CO2 increased significantly. But since 1940, weather satellites, tree ring data, and corrected thermometer readings all agree that climate has not warmed even though CO2 levels rose. 5. Why hasnt climate warmed, when theory clearly expects this to happen? The answer must be that even our best current models of the atmosphere are incomplete and leave out important features. Only in the last few years have modelers started to include ocean currents, atmospheric aerosol particles and dust into climate models. Most now suspect that clouds are the reason why models and observations do not agree. 6. What about climate calamities, like sea-level rise and the spread of tropical diseases? Well, since the climate is not warming, there is no immediate reason for concern. Diseases are not just spread by mosquitoes, but nowadays more by human contacts which have been increasing markedly with the tremendous rise in global transportation. Many scientists predict that sea level will drop if oceans warm; the evaporated moisture may simply turn to snow and increase the thickness of the Greenland and Antarctic ice caps. 7. Would a global warming be good or bad? Probably both, but warming is definitely better than cooling. It is certainly better for agriculture and therefore for basic human existence. All historical evidence shows that during the warm periods of the Middle Ages people were better off than during the hard times of the Little Ice Age (1650-1850) when crops failed and people starved. 8. What can we do about climate warming? We can do little about the climate itself, but we could try to stop the increase of atmospheric CO2. Even that task is daunting; it requires that we cut emissions worldwide by 60 to 80 percent. In effect, this means cutting energy consumption by comparable amounts including all transportation, heating, air conditioning, and electricity use. It would have an enormous negative impact on peoples welfare particularly for the poor and those in developing countries. 9. How would one reduce energy consumption by 60 to 80 percent? There are basically two ways, short of drastically reducing population itself: energy rationing or energy taxes. Rationing means a

political allocation, with governments and bureaucrats deciding who may use energy and who may not. Energy taxes are almost as unpalatable; just try to picture $3-per-gallon gasoline. 10. Should we ruin our economies and cause tremendous hardship for people to counter a phantom threat? Thats a leading question; climate warming does indeed seem far away and a minor problem at that. There is a sure threat to human existence, however, and that is the near-certainty of a coming ice age. Geologists tell us that the present interglacial warm period will soon come to an end. Perhaps greenhouse warming can save us from an icy fate.

Confuse Robber Barons with Capitalists No More

JOSEPH KELLARD (1998.04.08 )

A Book Review of Robert W. Folsom, Jr.s Empire Builders During the early nineteenth century, buying land in Michigan, a cold, remote, swampy area, was widely regarded as a bad investment. James Monroe once told Thomas Jefferson that Michigan will never contain a sufficient number of inhabitants to entitle them to membership in the confederacy. Since it has become one of Americas most prosperous states, with Flint at one time being the fastest growing city in America, how did Michigan attained certain attributes unexpected of it? Empire Builders, a new book by Burton W. Folsom, Jr., a senior fellow in economic education with the Mackinac Center for Public Policy, answers that question by recounting why Michiganites choose capitalism over governments intrusion into their economy, and what were the accomplishments of their entrepreneurs. Between 1850 to 1930, Michigan contributed considerably to Americas development from a second-rate economic power to the leader in most crucial industries. Thanks to entrepreneurs such as Henry Crapo, Herbert Dow, and Henry Ford, the state became a major producer of lumber, chemicals, and automobiles. Like the other entrepreneurs whose lives Folsom recounts, they overcame many obstacles, particularly by risking their time and money, and they offered people the highest quality products at the lowest prices. What in part distinguished them from their Rockefeller and Carnegie-like peers was their inventiveness in their industries, and that they were among Americas most independent entrepreneurs. As college U.S. history textbooks reveal, many people evade what Michigans entrepreneurs proved about free markets, and blame them not government for causing Americas economic problems. Empire Builders provides an objective account of their lives which dispels the myths that smear them as robber barons who, as one historian wrote, held the nation for ransom to amass their great fortunes. The primary confusion in this robber baron view of history, Folsom writes , is that it fails to separate market entrepreneurs, who tried to succeed by creating and marketing a superior product at a low cost, and political entrepreneurs, who tried to succeed by using government to give them an advantage. Fulsome begins his separation of these opposite entrepreneurs with John Jacob Astors privately-run American Fur Company. In 1795, Congress, knowing the economic importance of the fur industry then, expropriated thousands of dollars for

government-run fur factories. However, they were so poorly run that the Indians, the expert fur trappers, refused to trade with them. In 1816, President Monroe appointed Thomas McKenney to head the Office of Indian Affairs and to expand the factories business. Because private traders had to respect Indians as consumers or lose money, Astor offered them the best of the goods they desired (axes, kettles, muskets) at competitive rates of exchange. McKenney, by contrast, was funded regularly by government despite his volume of trade; thus, he squandered government resources on materials the Indians refused to buy. Devoid of an incentive to alter his unprofitable practices, McKenney, unlike Astor, failed to study prices, trends and foreign markets. Furthermore, McKenney and his staff received a standard salary from Congress, with no bonuses given in profitable years, nor cuts given when trade fell. Astor outmaneuvered McKenney with his merit system that rewarded his top producers good salaries. By 1818, McKenney conclude that the best way to beat Astor was to influence Congress to ban private fur traders. Two years later the Senate enacted a bill that forced them to post a $10,000 bond-from the previous $5-for the right to trade. Faced with this government coercion, Astor needed to become involved politically to survive. Folsom thus demonstrates how men envious of their competitors free -market success had lobbied government to forcibly hamper or halt them, which provoked the successful entrepreneurs need to court government protection to counter such coercive monopolists. Astor nevertheless prevailed and made millions of dollars; the government fur factories lost thousands. A Congress-appointed committee investigated this outcome. It concluded that the factory system just failed, but that it needed to be studied for the lesson it The primary confusion in this robber baron view of history, Folsom writes, teaches to is that it fails to separate market entrepreneurs, who tried to succeed by succeeding creating and marketing a superior product at a low cost, and political legislators.
advantage. By recounting Stevens T. Masons governership, Folsom shows how this lesson was not immediately learned. The success of New Yorks Erie Canal was interpreted by Mason to mean that state governments must tax their residents to build vital transportation networks. Maybe states could be creators, at least in the area of transportation, Folsom writes, as if recording Masons thoughts. And after all it was states, not the federal government,

entrepreneurs, who tried to succeed by using government to give them an

which were building these canals. Many Michiganites would learn that this theory was erroneous; that irregardless of which government, whether federal, state, or local, or which commodity were involved, government-run businesses are considerably less efficient and prosperous than their free-market counterparts. What taught them this lesson? In 1837, Mason passed a law that allowed Michigans government to undertake internal improvements. Thereafter the state then subsidized two railroads, the Michigan Central and the Michigan Southern. But since no one had a financial interest in building them efficiently, they both had tracks that were too fragile to support heavy loads, and each had other major flaws the proved to be dangerous and costly. Levi Humphrey, a Mason appointee to the Board of Internal Improvements, had manipulated the results of the bids to construct the Southern so that his friends would win the contracts. They then charged three to four times the market price for supplies. The Boards records were falsified to cover that their budget was overspent; these poorly built railroads quickly went bankrupt. Folsom thereby demonstrates how inefficient, unprofitable, corrupt monopolies are engendered by government intruding on free markets and barring competition.
Dow showed how a small company could beat the large monopolist.

Eventually, in 1850, Mason

replaced his laws with a new provision in Michigans constitution: The [s]tate shall not subscribe to or be interested in the stock of any company, association, or corporation, nor shall it be a party to or interested in any work of internal improvement, nor engage in carrying on any such work. It created a state favorable for entrepreneurship, with its low taxes, limited regulations, prohibitions on government competition and on special subsidies to some at the expense of others. Lumberman Henry Crapo was the first entrepreneur to capitalize on the states separation from economics. During the 1850s, the federal government made available millions of acres of Michigan land that was abundant with forestry. First, Crapo harvested the best product at the lowest price possible; then he reached markets nationwide with his lumber. Since his reputation for quality had spread throughout eastern Michigan, he was able to expanded his business in Flint and open a large lumberyard in Detroit. The lumber industry was Michigans first test in its commitment to separation of state and economics, and Crapos work elevated Michigan to the nations leading producer of wood from the Civil war to the 1900s. If it be so unwise a thing on the part of the [s]tate at large, thus to engage in or aid uncertain enterprises, it must be vastly more unwise and perilous, for the feebler

townships and cities, thus toexpose to serious hazards, their more limited credits. Folsom offers this quote from Crapo to demonstrate how unlike Mason, he had learned the universal principle that free market economics must be upheld at different levels of government.
At one point [Ford] slashed the price of his cheap, safe Model T so

Stronger than Crapo in advocating smaller

significantly that he risked taking losses, but found that every time he reduced the price by one dollar, thousands of new cars were sold.

government was private chemical maker Herbert Dow. He entered his industry facing large, government-backed European chemical makers. After he failed in his first business ventures during the early 1890s, Dow entered the bleach business and immediately faced a dominant British company that cut its price for bleach in half. Eventually, through his optimistic tenacity and inventiveness, Dow became the first American to significantly challenge the Europeans in the markets they dominated, such as bleach, bromides, and indigo, primarily by discovering what people wanted and by controlling prices to produce chemicals more cheaply than others. If a corporation is big enough, it can cut prices below cost, drive out its small competitors, and then raise prices to whatever it wants to charge, writes Folsom, describing how many people before Dow could argue against any dominant company, whether self-made or government-created. Therefore, we need government regulation, antitrust laws perhaps, to control greedy corporations. Dow showed how a small company could beat the large monopolist. For example, when the Germans sold the chemical bromine in the U.S. far below costs of production and sought to offset their American loses with a high world price, Dow undercut this government-backed price-fixing when he discretely bought thousands of pounds of their bromine at their 15-cents prices; then repackaged and sold it in Europe at 27 cents. As Dow constantly sought to improve products and find new markets for his chemicals, the Germans continued to use government regulations to fix prices and control markets.
In 1914, Ford doubled his minimum wage to five dollars per day and he cut daily working hours from nine to eight. Such an experiment caught the industrial world by surprise. His competitors were startled; his workers were

energized; and Ford himself was ecstatic.

Empire

Builders culminates with automobile maker Henry Ford. According to Folsom, Fords greatest ability was to cut the prices of his automobiles while he continuously improved their quality. At one point Ford slashed the price of his cheap, safe Model T so significantly that he risked taking losses, but found that every time he reduced the price by one dollar, thousands of new cars were sold. Ford sold millions of high quality automobiles because he made them increasingly affordable to successive layers of Americans. He achieved this in part by expertly adapting the assembly line to automobile making, which cut the amount of time required to complete each car by approximately eleven hours. Assembly line work, however, was tedious and partly resulted in high rates of turnover and absenteeism. Fulsome describes how these problems were resolved: In 1914, [Ford] doubled his minimum wage to five dollars per day and he cut daily working hours from nine to eight. Such an experiment caught the industrial world by surprise. His competitors were startled; his workers were energized; and Ford himself was ecstatic. Some of the most talented workers in Detroit lined up by the thousands to apply for jobs with Ford. He couldnt hire as many as he would have liked because turnover and absenteeism almost disappeared overnight. No one wanted to lose his job. As a result, production surged and profits skyrocketed. Ford happily paid the higher wages and also cut the price of the Model T over 10 percent in 1914, 1915, and again in 1916. With each cut, more and more of his workers could afford to buy the cars they were making.
Folsom provides other coercive measures used by government, such as the

To continue this production, wherein he

Wealth Tax of 1935, which established an inheritance tax of 70 percent on large estates. This made it impossible for Ford to give his company to his

only child or grandchildren. In a real sense, Folsom writes, citing a made high historian, Henry Fords factory, his fortune, his life-work, had been quality cars, socialized. sold them to millions at affordable prices, and created tens of thousands of jobs with goods wages and shorter work days, Ford simply wanted the freedom to rise or fall by his own best decisions on who to hire, what salaries to pay employees, what automobiles to make and what prices to charge for them. Enter the government-created Great Depression and the

socialist-based policies of Franklin Roosevelts administration, as with the enactment in 1933 of his National Industrial Recovery Act, which established the National Recovery Administration (NRA). Whereas General Motors, Chrysler, and the smaller independents willingly signed the NRAs Blue Eagle codes that, under the threat of fine or imprisonment, regulated their production, wages, prices, and hours of work, Ford refused to comply. Hed already set the standard for all these long before the 1930s, so, Ford wondered, why should a government agency do it. Ford also argued that government-backed unions corrupted the whole process of his operation. For example, wage hikes beyond what the market demanded translated into consumers losing their cheap automobiles. Folsom provides other coercive measures used by government, such as the Wealth Tax of 1935, which established an inheritance tax of 70 percent on large estates. This made it impossible for Ford to give his company to his only child or grandchildren. Since gifts to foundations were tax deductible, he set up the Ford Foundation, where he placed his fortune. This move also preserved family control of his company, but it froze his capital there, away from investment. In a real sense, Folsom writes, citing a historian, Henry Fords factory, his fortune, his life-work, had been socialized. Unfortunately, although capital, was valued by these entrepreneurs not as an end but as a means to Fulsome offers create an economic empire, he never states explicitly the rational selfsuch interest that was at least part of their moral basis. Instead, he reverts to the statements as equivocal claim of their service to others as being more primary. Money, or capital, was valued by these entrepreneurs not as an end but as a means to create an economic empire, he never states explicitly the rational self - interest that was at least part of their moral basis. Instead, he reverts to the equivocal claim of their service to others
Unfortunately, although Fulsome offers such statements as Money, or

as being more primary. This flaw, however, fails to detract considerably from his overall work. In Empire Builders, Folsom offers an economical, logically structured book that clearly untangles the confusions over free market entrepreneurs and their government-backed counterparts by successfully raising and objectively demonstrating the relevant facts that certain historians either evade or manipulate. He ultimately demonstrates the universal, timeless lesson of how business operates best when government is separate from economics; relegated to its only proper

function of leaving men free to create and trade according to their own abilities and choices.

Protection of Individual Rights is Good Government

GLENN WOICESHYN (1998.04.05 )

Good government? Isnt that an oxymoron? Many today believe so. Who can blame them? Our political system has increasingly become a chaotic jungle driven by competing pressure groups (special interests) seeking special favours and handouts from government. Politicians are generally distrusted and despised for their broken promises, flip-flops on issues, empty rhetoric and pork-barreling. Bad government undermines prosperity and peaceful coexistence, which undermines personal development, achievement and enjoyment of life. But bad government is not an inevitable condition of social existence its root cause is the failure to uphold and protect individual rights. Individual rights are rarely discussed by mainstream intellectuals, who are busy promoting some version of so-called collective rights all of which involve sacrificing the individual to some group, be it the needy, the majority, ones tribe, the public, or whatever. Consequently, most people do not understand what individual rights mean, what they rest on, or what they lead to. What they lead to is good government, prosperity and peaceful coexistence. To best understand why and how, consider a hypothetical situation involving the person you know best yourself.
Individual rights are rarely discussed by mainstream intellectuals, who are busy promoting some version of so-called collective rights all of which involve sacrificing the individual to some group, be it the needy, the majority, ones tribe, the public, or whatever. Consequently, most people

Imagine escaping alone from a

tyrannical country and do not understand what individual rights mean, what they rest on, or what becoming they lead to. shipwrecked on a desert island. All you have are some fruit and vegetable seeds in your pocket. You are young and intelligent, but without special skills.

To stay alive, you must obtain food and fresh water, and maintain a fire for warmth and cooking, which initially consumes all your time. You soon figure out how to produce your basic survival needs more efficiently by constructing fish traps, farming tools, an irrigation system thus allowing you to accumulate savings, which buys you time and affords you insurance against unforseen setbacks, such as storms, injuries, illness. With the time saved, you discover how to produce other goods, such as clothes, tools, a shelter, furniture, etc., for enhancing your life. You enjoy inventing new technology to increase your production, but find yourself quite limited, not to mention lonely, on your own. Hurray! Others become shipwrecked. Each person, rather than produce all his own needs himself, focuses on producing one item efficiently, then trades his surplus production at the market for the produced goods of others. You marvel at the production efficiency of the division of labour, and the corresponding enhancement of everyones life, especially when you now have tools, engines, machines, electricity, etc., to enhance production. Consequently, life is more safe, secure, comfortable and enjoyable. Prosperity keeps rising. When someone makes a breakthrough discovery boosting his productivity, he benefits significantly and so do the rest of you because he has more goods to trade for yours. You recall being told that one mans gain is another mans loss, and that peaceful coexistence is impossible in our dog-eat-dog world. That seemed true in your old country, but here people respect each others freedom a nd property, and are generally cheerful and benevolent. You conclude that living in the right kind of society can enhance your life tremendously. You had specialized in petroleum production but some clever upstart competes with you and produces oil much more efficiently; so you switch to farming. You tell yourself that your desire to produce oil isnt a rational reason to despise or block someones superior ability. Such reactions would not be in your rational self -interest, let alone anyone elses. Many more become shipwrecked and specialize in various productive endeavors, thus yielding a greater quantity, variety and quality of goods and services on the market. Immigration is good, you conclude.

Some have specialized in music, theater, painting, sculptu re, etc., for peoples pure enjoyment or spiritual sustenance; some have specialized in services such as health care, education, engineering design and scientific research. The more wealth you create, the more future-oriented you become. When petroleum reserves start to decline you decide after careful planning to use your savings, plus a loan from a banker/investor, to hire the brightest people by offering top salaries to conduct scientific research to discover a cheaper energy alternative. After several arduous yet exhilarating years, the researchers succeed, thus making you (and the shareholders) extremely wealthy, which allows you to purchase the best products and services available. You feel on top of the world. You recall being told that wealth is a sign of selfishness and that selfishness is evil, but you now realize that true selfishness means using your mind to create and achieve values, thereby enhancing your life and happiness. While most understand that one must earn what one gets, some How could that unfortunately do not. Some observe the surplus wealth and, evading its be evil?
cause, choose to seize it by force.

Besides, everyones life is enhanced by your success because cheaper energy improves everyones production efficiency. In your old country you would have been condemned as a robber baron on the absurd premise that all wealth is stolen from somebody, somehow. But here you are praised for your success by those who know first-hand that wealth must be created, and therefore rightfully belongs to the creator. Other long-range entrepreneurs make similar breakthroughs in areas such as medicine, transportation, communications, etc. At this point you induce an enlightening principle regarding human nature and human survival. Whether alone or in society, the root of mans survivability is his reasoning mind and the sky is the limit. If man acquires knowledge of the world by focused observation, careful experimentation and rigorous logic, he can guide his actions efficaciously to secure and enhance his life. The emotional reward is happiness. While most understand that one must earn what one gets, some unfortunately do not. Some observe the surplus wealth and, evading its cause, choose to seize it by force.

The appearance of criminals necessitated common sense laws prohibiting murder, assault, theft, fraud, etc., police to enforce these laws, and courts of

The

appearance of criminals justice to prosecute criminals objectively. Letting individuals retaliate against necessitated criminals on their own proved destructive because it fostered lynch mobs common and mafia-style policing, all leading to anarchy. sense laws prohibiting murder, assault, theft, fraud, etc., police to enforce these laws, and courts of justice to prosecute criminals objectively. Letting individuals retaliate against criminals on their own proved destructive because it fostered lynch mobs and mafia-style policing, all leading to anarchy. Also, you discovered that law courts are valuable for settling contractual disputes objectively, in case the parties involved have different interpretations (innocently enough) of their contract. Furthermore, it was learned from new immigrants that your old country plans to conquer your new country because their social system has left them poor and miserable, although heavily armed. So you established a voluntary army for self defence. In your old country people feared and hated their government, but you have come to realize the crucial value of government in preserving creativity, prosperity and peaceful coexistence. Unfortunately, some businessmen saw government power as a means of gaining economic power, and lobbied politicians for special handouts and legislation that in the name of fair competition effectively cripple successful competitors. Labour leaders followed suit by securing special laws that in the name of workers rights effectively force employers to heed to the dictates of union bosses, who prefer that workers be rewarded for their loyalty to unions, not for performance.
Overall, the incentive to think and produce has been replaced by the incentive to lie, lobby, rule and loot.

In the name of economic stability the government took control of the monetary system from private banks, which had used gold as the standard of money. The

government abandoned the gold standard in order to freely print paper money to cover its expenses and stimulate economic growth. But the net effect was to dilute the purchasing power of everyones savings because more money c hasing the same goods raises prices. The rapid expansion of money and credit in the economy did stimulate economic activity, as would any counterfeit operation, but was quickly followed by rising prices. When hyperinflation ensued, the government jacked up interest rates, thus plunging the economy into a depression. The depression got blamed on greed and the unplanned, unbridled nature of a free economy. This led to a major expansion of government power and spending in the name of economic planning, social justice and the public welfare. Things improved somewhat and the government took full credit for the improvement. Now taxes keep rising to cover growing government expenses. With expanded government power came the formation of more and more pressure groups or special interests which lobbied government for handouts, special favours and more laws all in the name of public interest.
And whenever somebody advocates slowing down the growth of government, the humanitarians scream that such actions attack the

You used to

enjoy thinking about your needy. Sacrificing the haves to the have nots has become a moral next move to absolute few dare challenge. boost productivity and market share, but now your mind keeps banging into roadbloc ks called red tape and disincentives called taxes. Whats the use? you now repeatedly tell yourself. Unemployment has risen dramatically. Punitive labour and tax laws have eroded the incentive to hire people while generous government welfare and unemployment insurance schemes have eroded the incentive to work. The high unemployment rate is blamed on private corporations for not sacrificing themselves to the public good. Overall, the incentive to think and produce has been replaced by the incentive to lie, lobby, rule and loot. Productivity keeps declining as government keeps expanding. More and more people become dependent on government assistance. In the past there were people who

needed help due to some handicap or unforseen mishap, but their numbers were small; and voluntary charity took good care of them. Now, the needy are numerous, loud and mostly irresponsible. Nobody can plan for the future because nobody can predict what government will do next. Besides, savings the key to future planning have been sacrificed by governments to consumption in the name of jobs, jobs, jobs. Private scientific research has dwindled while government science keeps proving that bigger government is needed to secure our future. And whenever somebody advocates slowing down the growth of government, the humanitarians scream that such actions attack the needy. Sacrificing the haves to the have nots has become a moral absolute few dare challenge. People who were once responsible, cheerful, honest, and benevolent have become irresponsible, cynical, untrustworthy and even malevolent. Respect for individual liberty and admiration for success have been replaced by power lust, envy and hatred of the successful.
Finally, you realize that the government has become a massive agent of

Finally, you

realize that the the leading agent of criminal action. government has become a massive agent of destruction. Instead of protecting ones freedom to think, create values and enjoy ones creations freedom from the coercion of others the government has become a massive agent of coercion, sacrificing the individual to the desires and demands of others. Instead of protecting individuals from criminals, it has become the leading agent of criminal action. You realize that the only way to make government contribute positively to human life to actually do good and be good is to severely restrict its power to that of protecting each individuals right to his life, liberty, property and the pursuit of happiness. You have thus discovered the life and death importance of protecting individual rights. Whats needed now is a constitution that bars the government from criminal behaviour, but hands government a monopoly to retaliate, according to clearly defined rules, against those who violate legitimate individual rights.

destruction. Instead of protecting individuals from criminals, it has become

You realize that the only way to make government contribute positively to human life to actually do good and be good is to severely restrict its power to that of protecting each individuals right to his life, liberty, property and the pursuit of happiness.

The name of this social system is capitalism laissez-faire capitalism.

Individual rights protect mans freedom freedom from the coercion of others to pursue his life and happiness in the only way he can, by following reason. Initiating force against another, by its vary nature, is anti-reason and therefore anti-life. This is what our mainstream intellectuals and politicians obscure, evade and oppose when they advocate the violation of individual rights. When a collectivist claims that individual rights must be subordinated to the public good, his concept of public is divorced from individuals, and his concept of good is divorced from reason, freedom and justice. His claim amounts to: The needs or desires of some necessitate the enslavement and destruction of others. When a collectivist (qua altruist) claims that the needy will perish without sacrificing the haves to the have nots, he obliterates the distinction between the truly needy and those generated by collectivist policies. The truly needy are far better off on private charity under laissez-faire capitalism. What the collectivist is actually advocating in practice is destruction of When a collectivist claims that individual rights must be subordinated to the the able for the public good, his concept of public is divorced from individuals, and his sake of concept of good is divorced from reason, freedom and justice. His claim destruction. When a professor
destruction of others.

amounts to: The needs or desires of some necessitate the enslavement and

teaches unwary students that individual rights breed poverty and social strife, whereas collective rights breed prosperity and social harmony, he does not know that he is talking about. Prior to the 19th Century, when individuals were at the mercy of tribal chiefs, roaming Attilas, religious dictators, feudal lords and the Divine Right of Kings, economic

progress was slow with several severe setbacks, such as the Dark Ages and human life was, in the words of Thomas Hobbes, solitary, nasty, brutish and short. Thanks to the growing respect for individual freedom during the late Renaissance (rebirth of reason) and Enlightenment, culminating in the birth of the United States and its Bill of Rights, the 19th century (1815-1914) was unprecedented in rising prosperity and peace. (Note that the U.S. Civil War resulted from the Founding Fathers single failure, in the spirit of compromise to Southerners, to abolish slavery a collectivist doctrine that blatantly violates individual rights.)
Although there recently has been some movement away from statism and towards capitalism or globalization, many intellectuals and politicians are

People fled

from their suffocating and desperately trying to stop and reverse this trend by obscuring the meaning tyrannical of individual rights and its foundation in reason and rational self-interest. homelands to enter the land of the free, and home of the brave in order to breath, think, produce and prosper. Statism the politics of concentrating power in the state at the expense of individual liberty returned with a vengeance in Europe during the 20th century (via Communism in Russia, Fascism in Italy, and Nazism in Germany), making it the bloodiest century in history. Freedom did not disappear in Canada or the U.S., but freedom has been significantly eroded as our governments expanded their powers at the expense of individual rights. The result has predictably been pressure-group warfare, economic decline, political chaos and widespread national disunity. Although there recently has been some movement away from statism and towards capitalism or globalization, many intellectuals and politicians are desperately trying to stop and reverse this trend by obscuring the meaning of individual rights and its foundation in reason and rational self-interest. Understanding what individual rights mean, what they lead to, and what they are based on is the first crucial step towards getting us back on the road to rising prosperity, national unity and good government.

Lessons from the Great Ice Storm: Individualism vs Collectivism

GLENN WOICESHYN (1998.03.07 )

The Great Ice Storm of 1998 caught Canadians in Quebec and neighboring provinces totally off guard. Montreal, the hardest hit, looked as if it were bombed by ice. Millions suffered days to weeks of sub-freezing temperatures without electricity and heating. At least 25 people are dead, and the damage toll of this freak storm is over $2 billion. During this emergency, the media provided many stories of generosity and community spirit, as countless people helped others to cope and survive. The media also reported people exploiting the emergency by looting others or price gouging on badly-needed supplies and services. Many journalists and commentators seemed eager to have us interpret the good will as demonstrating the virtue of altruism-collectivism, and the bad will as demonstrating the vice of selfishness individualism. Jeffrey Simpson, the Globe and Mails lead columnist, righteously asserted that rights yield to responsibility as community trumps individualism. (Globe column Jan. 15, 1998.) Contrary to what leftists want us to believe, individualism does not mean But the ice others. storm taught the opposite lesson. To combat emergencies, people need more individualism, not less.
looting others to satisfy ones desires. Nor does it mean unconcern for

Mr. Simpsons false conclusion flows from a straw man called individualism. Contrary to what leftists want us to believe, individualism does not mean looting others to satisfy ones desires. Nor does it mean unconcern for others. Individualism is rooted in the fact that, unlike animals, man must think if he wants to live. By following reason, man acquires the knowledge and skills needed to create the values food, shelter, medicine, fuel, electric generators, ambulances that promote his survival and happiness. Regardless of how much an individual collaborates with others, thinking occurs in individuals there is no community brain. Mans basic social requirement is th at he be left free free from coercion by others to acquire knowledge, invent technology, create wealth and trade, all of which are crucial in preventing and

combating emergency situations. Politically, individualism means that each persons life is his own that each person has the inalienable right to life, liberty, property and the pursuit of happiness. Looting others is not compatible with individualism. Helping loved ones in emergencies is.
Politically, individualism means that each persons life is his own that each person has the inalienable right to life, liberty, property and the pursuit of happiness. Looting others is not compatible with individualism.

What about helping neighbors or strangers? One byproduct

of individualism is benevolence a general attitude of good will towards ones neighbors and fellow human beings. Benevolence is impossible in a society where people violate each others rights. If an emergency arises, its benevolence that motivates a person to help victims get back on their feet. And its individualism that makes a person capable of helping others. Thankfully, emergencies are not the norm, and so helping others is a marginal issue in life, not the standard of morality. If morality is a guide to successful living, then individualistic traits such as ambition, rationality, self-reliance and productiveness not charity or generosity are precious moral virtues. If I were handicapped and thus dependent on the generosity of others, I would much prefer living in a society that embraces individualism. Why? The more technology and wealth people create the less generosity it would take to address my needs, and more than enough generosity would be available. A persons moral worth is judged by how much he sacrifices himself to the The antipode of individualism is
group. [Under collectivism] the more emergencies (and victims) the better, because they provide more opportunity for virtue.

collectivism, which subordinates the individual to the group be it the community, the tribe, the race, the proletariat, etc. A persons moral worth is judged by how much he sacrifices himself to the group. [Under collectivism] the more emergencies (and victims) the better, because they provide more opportunity for virtue. In practice, collectivism renders the individual as sacrificial fodder for whoever seizes political power. (Ask the Russians.) History has amply demonstrated that ingenuity and productivity get squashed in collectivist societies. People are punished for ability.

Money is stolen from Peter to pay Paul, or to waste on the projects of those who hold political power. Under collectivism, everyone has a potential claim on everyone else, which generates distrust and animosity not community spirit. The net result: a society wreaking in malevolence and poverty, and thus poorly prepared to deal with emergencies. Under collectivism, life becomes one continuous emergency. Consider the former Soviet Union where animosity was rampant and millions starved from famine. Or consider North Korea today. Ironically, the scapegoat is years of continuous bad weather. What the victims of the generates distrust and animosity not community spirit. Great Ice Storm needed was more individualism, not less. Had it not been for the collectivist policies adopted by Canada, particularly during the past three decades, Canadians would be more innovative, more self-reliant, and wealthier hence more prepared to deal with emergency situations. Even Quebec separatism, a blatant waste of time and money, is driven by collectivism and political power lust, not individualism.
Under collectivism, everyone has a potential claim on everyone else, which

Its time for people like Jeffrey Simpson to abandon their emotional attachment to collectivism and open their minds to the virtue of individualism otherwise Canada might someday become one continuous emergency.

Anti-Discrimination Laws Destroy Human Rights and Institutionalize Bigotry

GLENN WOICESHYN (1998.05.10 )

In 1991, Delwin Vriend was fired from his job as a lab co-ordinator at a private Christian college in Edmonton, Alberta, for being an active homosexual, a lifestyle choice that contravened the colleges moral code. Vriend took the Government of Alberta to court for not explicitly outlawing sexual orientation discrimination in its Individual Rights Protection Act (IRPA), an Act which explicitly outlaws discrimination on grounds of race, religiou s belief, colour, gender, physical disability, mental disability, age, ancestry, place of origin, marital status, source of income and family status. (What else is missing? Ugliness? Obesity? Low IQ?) Vriends case reached the Supreme Court of Canada which ruled (on April 2nd, 1998) that discrimination against gays violated Canadas Constitution, specifically its Charter of Rights and Freedoms, and that Alberta must henceforth read sexual orientation into its IRPA. While the ruling outraged some people, primarily certain religious people who regard gay sex as immoral, many Canadians hailed the ruling as a victory for human rights over bigotry, and dismissed all opposition to it as motivated by bigotry. But the truth is that anti-discrimination laws destroy the fundamental rights of all citizens (including gays) thus paving the way for institutionalized bigotry and other evils. The source of todays rapidly expanding anti-discrimination laws in Canada which currently extend outside of government institutions to private employers, landlords and beyond is Section 15 of the Charter, under equality rights, which states: Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination. To interpret this as applicable to anyone other than government law agents involves a massive evasion of all that precedes it in the Charter. According to Section 2: freedom of conscience, freedom of thought, belief, opinion and freedom of association are fundamental freedoms for every individual. It

doesnt say freedom to think only what the government regards as true and good, for that would entail censorship. If one is not free to regard gay sex as immoral (I dont!), then by what right can a homosexual or anyone regard bigotry as immoral? Furthermore, Section 2 guarantees each individual (including gays) the right to not associate with which means to discriminate against anyone he or she regards, rightly or wrongly, as immoral. Denying these rights to some individuals, such as bigots, necessarily undermines these rights for everyone. Section 7 of the Charter, under legal rights, stipulates: Everyone has the right to life, liberty and security of the person. This means, and can only mean, that there is no right to a job (or guaranteed income), even if someone needs it, for that would violate the legal rights of those forced to provide it a policy consistent with slavery, not liberty. Although property rights are not mentioned explicitly in the Charter, they are logically implicit in these basic rights. It would be absurd to tell a person that he has the right to his life and liberty but that the government (or anyone) can seize or destroy his property, or, as under fascism, dictate what he can do with it. Without private property rights, all other rights are empty verbiage, and there is nothing in principle to stop governments from committing or legalizing theft. Since the employer pays the wages he should be free to set the terms of employment, including moral conduct. The employee is free to either agree or look elsewhere for a job. If the employer is not free to fire an employee for violating the terms of employment, the employer essentially has no right to his own property and, by implication, neither does anyone else, including gays. (The same is true for landlords.) The alternative is for government to dictate the terms of employment, a practice consistent with fascism and communism. Todays anti-discrimination laws are a direct assault on private property rights, which necessarily undermines all legitimate rights, including the Charters basic freedoms and legal rights. The Charters purpose is neither to control thought, nor legislate morality, nor destroy property rights. Its purpose, properly, is to protect each individuals legitimate right to his own life, liberty and property from anyone who chooses to initiate physical force. The proper standard of criminal action is coercion. Laws protecting gays (or other targets of bigotry) from murder, assault, theft, fraud, physical threats or harassment,

etc. regardless of motive already existed long before anti-discrimination laws appeared. The essential gimmick behind any anti-discrimination law is to smuggle in a new right the right not to experience discrimination which necessarily destroys all legitimate rights. This gimmick involves shifting the criteria of criminal action from physical coercion to motive. Before anti-discrimination laws, physical assault was a crime because it involves the initiation of physical force. What anti-discrimination laws effectively do is make discrimination a crime regardless of whether or not physical coercion is involved, i.e., whether or not anyones legitim ate rights are violated. The net effect is to hand government the ominous power to proscribe ideas and morality at the expense of basic individual rights. To defend this in the name of fighting bigotry is an intellectual obscenity because it permits whoever seizes this political power the freedom to (among other evils) force irrational/immoral ideas, including bigotry, onto others. In fact, todays anti-discrimination laws are achieving just that. They are not aimed at fighting bigotry but at achieving the leftist/collectivist goal of subordinating individual rights to so-called group rights. Their weapon is Section 15.2 of the Charter (a monstrous clause that contravenes everything that precedes it in the Charter) which effectively permits government-enforced bigotry if it involves any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. Hence, if a group is deemed disadvantaged by those in power regardless of who or what is responsible then that fact entitles the government to sacrifice individuals to that group, even if it involves bigotry. For example, employment equity (or affirmative action) programs, an offshoot of anti-discrimination laws, institutionalize bigotry because they force employers to hire people on the basis of skin colour (or sex, or whatever). This involves punishing individuals for having white skin regardless of whether or not they personally committed acts of bigotry a blatant policy of injustice and racism. Also, efforts are now underway to outlaw discrimination on the basis of poverty. (Not income, for that would prevent legalized looting.) According to Michelle Falardeau-Ramsey, chief commissioner of the Canadian Human Rights Commission:

Poverty is a serious breach of equality rights which I believe has no place in a country as prosperous as ours. So if someone wants to rent an apartment but cant pay for it, the owner must not discriminate even if it harms him. Rather, its the government that must discriminate against the haves by sacrificing them to the have nots, a practice consistent with communism. Todays anti-discrimination laws are motivated not by anti-bigotry but by the morality underlying communism altruism. According to altruism, the individual has no right to exist for his own sake, that self-sacrifice to others particularly to those who need (or lack) something is the only justification of his existence, and his highest moral duty. As Ayn Rand wrote on altruism: A morality that holds need as a claim holds emptiness non-existence as its standard of value; it rewards an absence, a defect: weakness, inability, incompetence, suffering, disease, disaster, the lack, the fault, the flaw the zero. This altruist morality is evident in the current trend of anti-discrimination laws. For example, dentists are being forced to treat AIDS patients despite their concern of getting infected. Landlords are forced to house mentally ill people who disturb other tenants with loud noises and even threats. (Keeping them in mental institutions constitutes discrimination!) Cases exist where the physical strength requirements for firefighting have been reduced in the name of equality of the sexes and antibigotry so that women who are physically unable to carry adults from burning buildings can become firefighters. (Who cares if the victims burn?) Whats next? Mentally disabled airline pilots? Politically, altruism serves as a perfect rationalization for power lusters to destroy individual rights, seize dictatorial power, and thereby rule, loot and destroy us as they wish. To push altruism in the name of anti-bigotry is worse than intellectually obscene. The worlds most notorious bigot, Adolph Hitler, was a staunch champion of altruism. According to Hitler: It is thus necessary that the individual should finally come to realize that his own ego is of no importance in comparison with the existence of his nation; that the position of the individual ego is conditioned solely by the interests of the nation as a whole. Once individual rights are destroyed via altruism, anti-discrimination laws, or whatever there is nothing to stop power lusters from seizing power and institutionalizing bigotry and other evils.

Those who want to fight the bigotry that still exists today must first realize that the essence of bigotry is not discrimination as such but irrational discrimination. For example, racism, the most noncontroversial form of bigotry, involves making a moral evaluation of an individual not on grounds of his chosen, self-made, individual characteristics, but according to his skin colour an unchosen, non-essential, collective characteristic. If an employer fires a good worker because of skin colour, the employer first and foremost harms himself. If morality is ones guide to success in life, then racism is immoral because it is irrational and self-destructive. But people cannot be forced to be rational. The government can force a man to hire a homosexual but it cannot make him believe its right. What the government can do positively to fight bigotry is to leave those who are rational free from those who are not via full protection of individual rights. Rational people have a very powerful weapon against real bigotry rational persuasion. And for those bigots who refuse to be rational moral condemnation and voluntary economic boycotts. In this way the legitimate rights of all individuals are not destroyed under the guise of anti-bigotry or any other alleged do-good intention.

Collectivisms Education
GLENN WOICESHYN (1998.04.14 )

Sacred

Cow:

Public

When I need to purchase a new computer (or software program), I know that computer entrepreneurs are free to innovate and compete for my money, and I am free to choose the best offer in terms of Am I free to purchase the best education value that a free market would performance, offer? No. Public education that sacred cow blocks such freedom. quality and price. When I find the best deal, a wonderful event occurs: I reward the company for their superlative performance, and I reward myself for getting the best product at the best price. Whatever I save on computers can go towards my other values and needs. This free market in computers has delivered continuously better products at ever lower prices (not to mention the enormous boost in economic prosperity due to overall productive efficiency). Who can predict what radically new innovation will take place in a mere decade, or how much greater value the same $ 3000 will buy then? I value my computer, but not nearly as much as I value my children. I understand the crucial importance of education to their well being. I know that if they acquire a solid foundation in factual knowledge and efficacious thinking skills they will be equipped to live an exciting, healthy, prosperous and happy life.
If a computer supplier offers politically correct computers that dont perform well, I dont have to spend precious time arguing with management, or organizing a public protest, or competing with various

But are education entrepreneurs

free to innovate and money and go to another supplier. compete for my money? Am I free to purchase the best education value that a free market would offer? No.
pressure groups for the Minister of Computers attention I simply take my

Public education that sacred cow blocks such freedom. If the governmentbacked education bureaucracy decides to adopt an education pedagogy that I regard as inadequate and even harmful to my children, such as one that places

socialization and political correctness above factual knowledge and independent, efficacious thinking a Progressive philosophy that says to hell with precision in spelling, grammar and math, or phonics in reading, or principles in science, or objective truth in history, or logic in thinking Im forced to pay for it. If a computer supplier offers politically correct computers that dont perform well, I dont have to spend precious time arguing with management, or organizing a public protest, or competing with various pressure groups for the Minister of Computers attention I simply take my money and go to another supplier. Not so with public education. Its no use telling me that the solution is to make public education more accountable to parents. There is no real incentive for the bloated education bureaucracy to be more accountable. We are rendered virtually impotent by the fact that we are forced to pay for it. Its no use telling me that the solution is to make public education more Oh sure, I can put my children in private schools and
accountable to parents. There is no real incentive for the bloated education bureaucracy to be more accountable. We are rendered virtually impotent by the fact that we are forced to pay for it.

pay the tuition, over and above what Im forced to pay for public education. But that doesnt justify public education. If the government formed a computer company and taxed everyone to provide free computers to all, the benefits of a free market would be greatly diminished, especially if the government dictated computer standards and who can be allowed to produce computers. But thats just the practical-economic argument. Why should the government stop education entrepreneurs from freely offering me their products and services, and why should I be forced to fund a public education system I dont use, especially when I know it stifles education? By what moral right? The real reason, an old one, reared its ugly head recently when the Alberta government announced a 20 % increase in government f or private schools, which brings the total spending to around 1% of the $3.3 billion currently spent on public schools. Leaving aside the fact that the extra money will go only to governmentapproved private schools with strings attached a far cry from free enterprise the move was assailed by critics as elitist.

I should be denied the benefits of privatized education because those parents who are the most ambitious, productive and successful and

According to

Dale Wallace, spokesman for consequently earn much money would be able to buy better education for the Association their children. for Supervision and Curriculum Development, an advocacy group for public schools and their teachers, such funding promotes segregating kids based on family income. Now we are giving some of the richest people in the province more money to send their kids to private schools. In other words, I should be denied the benefits of privatized education because those parents who are the most ambitious, productive and successful and consequently earn much money would be able to buy better education for their children. Does this sound familiar? Its the basic ethical doctrine underlying socialism the belief that it is immoral for an individual to personally benefit from his own success. Ones mind, life and property belong to society. The government must bulldoze everyone down to the equality line because equality not freedom or individual rights is good for society. Nowadays, most Canadians can afford a powerful computer with incredible software while the wealthy minority can afford super computers. Had the socialist equality doctrine been applied to computers (and everything else) twenty years ago, all Canadians today would have the same Does this sound familiar? Its the basic ethical doctrine underlying socialism products the belief that it is immoral for an individual to personally benefit from his ones that dont own success. Ones mind, life and property belong to society. do very much. Thanks to public education, our schools today dont do very much either. Who knows what new innovations we could have had today in terms of teaching methods, motivational techniques and curriculum design if schools were private? Instead of asking today why Johnny cant spell, read, write, calculate, concentrate or think we adults could have been enjoying the sight of a Johnny who is more knowledgeable, literate, ambitious, inquisitive, efficacious in thought, and radiantly alive than we were at his age.

Why is it immoral for education entrepreneurs to be free to innovate and compete for my education dollars? By what moral right does the government tell me how to educate my children and where to spend my education dollars? If morality is ones guide to successful living, then public education is immoral which is precisely why it is impractical.

The Meaning of Independence Day

JOSEPH KELLARD (1998.07.04 )

In 1776 Thomas Jefferson courageously offered in his Declaration of Independence certain fundamental, timeless principles regarding all men and their coexistence with one another: each individuals inalienable right to his own life, to his own liberty, and to the pursuit of his own happiness. This historically unprecedented declaration inspired the establishment of a nation based on the recognition of individual rights and, as their necessary corollary, property rights, wherein property is privately owned. Tragically, many of Mr. Jeffersons successors have ignored that an individuals rights are inalienable that is, that nothing in the universe ever supersedes them. These successors individuals rights are inalienable that is, that nothing in the universe ever helped supersedes them. inculcate in Americans and enact into their government an anti-rights philosophy. One that regards the individuals liberty as not a birthright nor inalienable, but that which government permits him to possess and which he must dutifully give recompense for through his
Tragically, many of Mr. Jeffersons successors have ignored that an

sacrificial service to others. Allegedly, his life belongs to his community, society, America anyone but himself. It is this morality of self-sacrifice that tribal chiefs, kings, religionists, philosophers, and dictators demanded of people, from the dawn of man to the Pharaohs to Attila to King George III to Stalin, Hitler, Mao and to those who rule today in Bosnia. It is the enshrinment of this morality that is the fundamental cause of all the injustices and horrors committed by these and lesser power-lusters, and of the erosion of Americas liberties. And you too sanction this morality whenever you explicitly or implicitly uphold that Americans must give something back to their communities, to society, to America, for the privilege of liberty and the opportunities it has created. In other words, individuals must sacrifice for others as payment for liberty and the opportunities made possible by whom? By Americas producers; by the money government taxed, i.e., coerced, from them.

Americans

These successors helped inculcate in Americans and enact into their

must government an anti-rights philosophy. understand that each individuals life, liberty and property are that which no other person has any moral claim on. When government uses its legal monopoly on coercion to force individuals to be a means to the ends of others, whether it be for children, the poor, embryos and fetuses, businessmen, religionists, farmers, the environment, minorities, majorities, or any other group or entity, that then violates the inalienable individual rights of all Americans in favor of a slave system. Liberty is each individuals right; a necessity to life that is inborn not a privilege permitted to him by an allegedly benevolent government. Liberty is that which a proper government must protect and secure not force individuals to sacrifice for in order to keep. Governments only proper, objective function is to protect each individual from physical force or fraud, so that they are secure to *pursue* their lifes requirements. It is not to be the initiator of these injustices, as when it forces some to pursue and provide the happiness of others. Liberty doesnt grow on trees, nor is it to be taken for granted. Its price is to learn, uphold and practice consistently the universal, timeless principles that form and strengthen it: individual rights, individualism, and rational self-interest. Even trees rot and die if theyre not properly kept; thus, these essential, priceless nutrients of liberty must never be mixed with the poisons of sacrifice and statism.
Liberty is each individuals right; a necessity to life that is inborn not a privilege permitted to him by an allegedly benevolent government.

Independence Day must henceforth be the primary

day to demand a return to Americas original, fundamental principles. Within such an individual rights- respecting nation I have a rational self-interest in voluntarily financing the military, the police, and courts that uphold objective laws, with their purposes being to protect my rights from foreign and domestic initiators of physical force and from defrauders and violators of contracts. Government services such as roads, libraries, parks, post offices, for example, must all become privately owned and subject to the laws of supply and demand, i.e., laissez faire capitalism. Thereafter, I will voluntarily pay for services I need and be free from the government coercion that forces me to finance those that are useless to me. All Americans will be

free of any legal duty to finance what others value and be free to voluntarily trade with (or give their property to) whomever and/or whatever they value. Every individuals life, liberty and property belong to themselves; no one has a moral claim on them. Our government must reestablish this philosophy. America is perishing from an orgy of self-sacrificing.

Pay Equity is a Bigoted Assault on Human Rights

GLENN WOICESHYN (1998.08.12 )

The Canadian Human Rights Tribunal recently ruled that the Canadian Government must pay roughly 200,000 former and current civil servants, mostly women, up to 13 years in back-pay because of alleged discrimination against female-dominated job classifications. Taxpayers could be robbed of 7$ billion for this pay equity settlement. This money grab by a large special-interest group was heralded by many as a victory for social justiceand human rightsover bigotry. Really? This ruling stems from the 1977 Canadian Human Rights Act (CHRA) which states: It is a discriminatory practice for an employer to establish or maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value. So if an employer pays a man more than a woman for work the Tribunal not the employer deems of equal value, it automatically constitutes bigotry and a violation of a womans right to pay equity. Pay equity is just one branch of the right to be free from discrimination embodied in the CHRA. (Although the CHRA doesnt yet apply to all employers, Canada is rapidly moving in that direction.) Are these legitimate rights? How do anti-discrimination laws like pay equity affect the basic rights of a free society, such as the right to liberty, freedom of thought and private property? The money to be used to pay the employees salary is the legitimate property of the employer (or its individual shareholders in the case of a corporation, or the individual taxpayers in the case of the government). Employee Jane is not physically forced into accepting a salary offer she is free to seek employment elsewhere. If Jane has a right to more than employer Sam wants to pay then Sam has no right to his property. (And if not, then how can Jane have a right to Sams property?) Pay equity is an assault on private property rights. What about the right to liberty? The employer must weigh many factors into a wage offer, such as the employees performance, character, dependability and the value of

the work to the employer. If Sam deems John to be worth more than Jane for a same-class job, pay equity prohibits Sam from paying John more. Sams mind and liberty are subordinated to the dictates of the Tribunal. (And John is denied being justly rewarded for merit.) Liberty pertains to thought and action. Aside from the fact that governments should not outlaw thoughts, governments cant read minds they can at most infer thoughts and motives from speech or other actions, which is unreliable. According to pay equity, if Sam pays John more than Jane for the same job classification then he is presumed guilty of bigotry (with no way of proving innocence) regardless of whether he was solely motivated to reward merit. (Social justice?) This hands government the power not only to proscribe thought but also to falsely accuse people of ideas/motives the government deems immoral. In essence, pay equity hands government the ominous and omnipotent power to violate an individuals right to liberty, freedom of thought, and private property which is essentially the power of a dictatorship. (Human rights?) The defenders of pay equity claim that it combats bigotry. Even if true, a dictatorship free of bigotry never heard of and quite unlikely is still a dictatorship. However, its not true pay equity institutionalizes bigotry by forcing an employer to evaluate a person not according to self-made individual characteristics, such as ambition and competence, but unchosen group characteristics such as skin colour or sex. It forces employer Sam not only to irrationally discriminate against John for being a man, but also against Jane for being a woman. Janes individual identity is dissolved by her group identity (her sex) as she gets treated as interchangeable with all other women. Bigoted discrimination is irrational and immoral but not a violation of anyones basic rights. If Sam refuses to pay Jane, a good worker, an adequate salary because shes a woman, he doesnt violate her property rights; Sam owns the money. Nor does he violate her liberty; Jane is free to seek employment elsewhere. (Sam is the loser!) The proper criteria for rights violation is physical coercion not wrong thoughts. (Theft involves physical coercion with respect to ones property, and fraud is an indirect form of theft). If Sam robs or assaults Jane, he violated her rights because of

the coercion which can be established objectively not his motive. A government that attempts to outlaw motives is a government seeking thought control. The basic gimmick behind anti-discrimination laws like pay equity is to smuggle in a new right freedom from discrimination which shifts the criteria of criminal action from coercion to motive from action to thought. Anti-discrimination laws effectively make discrimination (thought) a crime regardless of whether or not physical coercion (action) is involved, i.e., whether or not basic rights are violated. The net result is to annul all individual rights. The immediate effect is to invite pressure groups, such as those seeking the 7$ billion, to claim discrimination and use government to sacrifice the rights of others to their desires. This invites other pressure groups to form and do the same as the country descends into bankruptcy and all out pressure-group warfare. It is an intellectual and moral obscenity to use the term human rights to refer to the sacrifice of some individuals to the demands of others. The only legitimate human rights are individual rights. The Canadian Government should not pay the 7$ billion not only on legal grounds (the Tribunal has no constitutional status to do so, only the law courts have) but also on moral grounds. Furthermore, it should rescind pay equity laws and all antidiscrimination laws and do so in the name of social justice and human rights.

Is Capitalism Under Threat?

GLENN WOICESHYN (1998.11.18 )

A BBC website forum asked the question Is Capitalism Under Threat?. Here is CMs answer. To answer Is capitalism under threat? one must first know what capitalism is. Granted that George Soros has made billions buying and selling currencies, he has never given any indication that he understands what capitalism is. Capitalism is the social system based on the protection of individual rights, including property rights, where all property is privately owned. The opposite is statism (e.g., communism, fascism) where the individual is the property of the state to be sacrificed as the states leaders decree. Capitalism involves a complete separation of government and the economy, including private money issued by private banks. The sole functions of government under capitalism are the police, the military and the law courts to protect people against those who initiate force (including theft and fraud). Otherwise, the government leaves people free to produce, associate and trade on a voluntary basis. While corruption can exist under capitalism, the perpetrators, once exposed, get quickly punished for it. Only governments statist governments have the power to sustain corruption and create a major economic disaster by inflating currencies, or funding projects that private investors would normally avoid, or re-distributing wealth from the productive to the non-productive. What we have today are individual countries with varying mixtures of capitalism and statism, but not pure capitalism. (Just as a mixture of nutritious food and poison is no longer nutritious food a mixture of capitalism and statism is no longer capitalism. The country with the highest degree of capitalism today is the U.S., which is why it is the wealthiest and considered the safest haven of money in times of economic crises.) The root cause of the Asian (and Russian) crisis is the statist policies of Asian countries, which are exacerbated by the IMF a socialist institution that bleeds wealth from the productive countries to the non-productive countries. Its not so much that capitalism is under threat its that we individuals are under threat to the extent we dont have capitalism. And we wont have it as long as George Soros and modern intellectuals obscure its meaning and blame it for the problems caused by statism. Thankfully, we have the writings of Ayn Rand (Atlas Shrugged,

Capitalism: The Unknown Ideal) the worlds greatest champion of capitalism and so capitalisms meaning wont be obscured for long.

Stock Manipulation and Inflated Prices

ANDREW WEST (1998.11.11 )

Q: Under capitalism, cant a group of a few wealthy individuals acting as a fund manipulate a stock, causing unaware investors to buy the stocks at inflated prices, where then wealthy individuals would dump the stocks, causing prices to collapse? Would this count as fraud even though it is technically legal under the laizzez-faire capitalism? If government had to step in to regulate things, wouldnt it violate the system? A. People do indeed occasionally try this strategy, particularly in regards to small, illiquid stocks, often trading outside of the U.S. The situation described didnt constitute fraud, however. If a few people agressively bought stock to drive up the price, there can have no certainty that others will follow them and buy enough to drive the price high enough for the original buyers to sell profitably. Such a strategy sounds risky, and would likely be a losing strategy by itself. There is no such thing as an inflated price by the way. Prices are only determined by those willing to buy and sell. If a person believes the price that others pay is higher than what he believes it should be, he can sell or sell short that inflated stock. A person who buys a stock merely because it has gone up is pretty foolish and has little basis to complain about the actions of others. If enough people have enough money, they can increase a stock price by buying heavily, faster than sellers are easily willing to accomodate. But remember, unless fools rush in afterwards with even more zeal than the original group, the original group will be the ones who lose money, as the stock would tend to settle back down afterwards, all other things being equal. The situation which happens more often, and is more serious, is for people to buy up a stock, and then make false statements about the prospects of the company or stock, soliciting others to buy it. While this is immoral, it would probably not be illegal if these people were just private individuals exaggerating the quality of a stock. T hats why one should take free investment advice with a grain of salt, and carefully judge its source and quality. If on the other hand, such false statements were intentionally made by (for example) a stockbroker to clients, then this would simply be fraud, and would be punishable as such. Neither of these situations pose a threat to capitalism. All business is subject to risks, and all business requires one to use good judgement.

Republican and Democratic The Identical Party? The Two Major Parties Are Becoming Dangerously Alike in Their Opposition to Individual Rights
ANDREW BERNSTEIN (1998.11.06 )

As analysts debate whether the elections resulted in a net benefit to the Republicans or the Democrats, there is a far more fruitful question to ask: Does it really matter? The debate over the elections assumes that there is still some substantive distinction between the two parties. But is there? A recent New York Times article on the Senate race in that state observed that the two candidates Republican Alfonse DAmato and Democrat Charles Schumer are not nearly so opposed on political ideology as is generally thought. On such questions as immigration and gay rights issues on which liberals and conservatives have traditionally disagreed the two are in surprising accord. Both support strict limits on immigration, and both voted for legislation that would ban discrimination against homosexuals. The burgeoning similarity between Republicans and Democrats extends much further. It goes beyond the fact of George Pataki, Republican governor of New York, endorsing environmentalist policies, or of blue-collar Democrats agreeing with Pat Buchanan on protectionism and on the need to Buy American. The full nature and spirit of this new coalition is best demonstrated in the joint assault on the First Amendment. Consider, for example, that such feminist writer as Catherine MacKinnon and Andrea Dworkin regard the publication of erotic material as an act of violence against women, which ought to be banned by law (a goal they actually achieved, briefly, in Indianapolis). Consider the oppressive speech codes and thought police now pervading our university campuses. Consider the growing support by liberals for punishing hate crimes i.e., for punishing someone not simply for criminal action, but for the criminal ideas behind that action. Similarly, Robert Bork judge, legal philosopher, respected intellectual spokesman for the conservative movement favors censorship of material that Christians

consider obscene. Replying to a hypothetical question about whether he endorsed censorship, Bork said that the questioner would probably argue,

What Trustbusters and Marxists Have in Common: Equating Economic and Political Power
RICHARD M SALSMAN (1998.11.01 )

Part 2of 6 in a Series of articles on Capitalism, Free-competition, Antitrust, and Microsoft

Just as Marxists do, the proponents of antitrust lawsa century ago and today actively seek to obscure the crucial distinction between economic power and political power. They insist, against all evidence, that productive giants such as Andrew Carnegie, John D. Rockefeller, J.P. Morgan, Henry Ford, Mike Milken and Bill Gates are every bit as powerful, especially if left free to reign, as Europes kings and feudal land barons; that these business creators are every bit is dangerous as tyrants like Napoleon and Hitler. Big government is bad, but so is big business, they claim. Both can oppress us all the same. When the difference between political and economic power is obscured, its easily claimed that big business consists of an army of ruthless Robber Barons, bent on destruction unless theyre stopped, so as to reduce their power (their ability to produce), take their weapons (their products), disperse their conscripted troops (their employees), attack their supply routes (customer contracts), rout their divisions (their corporate divisions), and destroy their command structures (their executive suites, trust holdings). I dont use these war-like terms to exaggerate my point. Read any textbook on the great industrialists and financiers of historyor any antitrust article from long ago or todayand youll see such terms tossed around as if there was no question that economic power is essentially equivalent to political or military power. There are repeated references to allegedly predatory behavior, to the grabbing of market share, to dog-eat-dog or else cut-throat competition, to zero-sum games, hostile takeovers, price-gouging, bullying tactics, insurmountable barriers to entry, corporate raiders, headhunting, poison pills, and greenmail. Do such terms describe voluntary production and trade? No, they do not. And such terms are used in describing business activity precisely because the distinction between political power and economic power is being obscured.

When Microsoft issued Windows 95 in the spring of that year, it did so with a new feature, a web browser called Explorer. And it freely signed contracts with personal computers makers such as Dell and Compaq to include the browser, along with many other applications it had added to the Windows platform over the years, when the hardware box-makers installed Windows software. Microsoft charged nothing extra for this Windows upgrade and this new featurein fact, the entire Windows platform with applications in word processing, spreadsheets, databases, desk-top publishing, office networks and browsersrepresents only 5% of the cost of a personal computer system. A rival browser made by Netscape was losing market share to Microsoft. Netscape and others rivals ganged up on Microsoft, not by offering a better product or better terms, but by running to Washington and getting trustbusters to launch an attack and incorporate their grievances. This is nothing new: 80% of all antitrust cases are initiated and sustained in just this wayby disgruntled rivals using coercion to secure what they cant achieve voluntarily on a free market. The Ayn Rand Institute, a sponsor of this talk, makes the point dramatically. Recall the Olympics in which top figure skater Nancy Kerrigan was assaulted by the thug friend of a trailing competitorTonya Harding. Microsofts competitors, says an Institute press release, those unable to gain profits by voluntary meanshave resorted to the Tonya Harding approach: if you cant win fairly, they physically cripple your opponent. [iv] Why is it that most people properly despise Harding and sympathize with Kerrigan yet despise Bill Gates while sympathizing with laggards? Antitrust laws dont merely sympathize with economic laggardsthey subsidize them. An allegedly damaged party gets treble damages under antitrustthat is, he gets three times the alleged financial harm shown. Thus, if Microsoft is alleged to cost a rival $100 million in profits, the aggrieved firm gets a $300 million reward. Do you see the motive for initiating an antitrust case? The fact is, when firms like Microsoft sell a winning product there are no victimsnot among suppliers or customers. There are only eclipsed rivals. Victimization occurs only when rivals attempt to gain by coercion what they couldnt gain by voluntary trade. The plaintiffs are the real robber barons in the realm of antitrust. At a press conference in the spring of 1995 Janet Reno, head of the U.S. Justice Department, announced she would fine Microsoft $1MM per day unless it unbundled its browser from Windows 95. Microsoft argued, correctly, that one of the virtues of its platform is that its integratedthe pieces are intended to work together for maximum performance. Its irrelevant whether there are bugs in the platform or that

its integration is less than perfectsurely Microsoft had the right to offer its platform to buyers, in the way it designed it, letting the best platform win. No chance, said Reno. She accused Microsoft of coercion and told reporters: forcing PC manufacturers to take one of Microsofts product as a condition of buying a monopoly product like Windows 95 is . . . plain wrong. We wont tolerate any coercion by dominant companies in any way that distorts competition. What an obscene travesty. Microsoft, a leading producer using voluntary cooperation is called a coercive thug; its puny rivals- puny because they had difficulty selling their inferior products are permitted to wield actual coercive power, with the full backing of the worlds most powerful governmentworse, from its Justice Department. Lets make even clearer whats been obscured. Economic power is the power to create and produce. Political power is the power to coerce and punish. Economic power entails intellectual achievement; political power entails physical aggrandizement. Economic power involves voluntary trade to mutual advantage. Political power involves involuntary subjugation to the state, which has sole discretion over the use of force. Remember this key fact: government is the only social institution having a legal monopoly on the use of force. No other party can use force with impunity. We lodge our natural right of self-defense in an agent called government. Its the opposite of gang warfare and vigilantism. But what if government offers weapons to gangs, whether gangs on streets or in business? In a free society government may only use its power in just retaliation against those who initiate force or fraud. Unless it seeks tyranny, no government may use such power to itself initiate force or fraud against innocent parties. To the extent it does, government acts as a robber or a gangbut far worse: a robber or gang with no higher, legal authority above, controlling it. When a government initiates force, not just occasionally, but continually, as a matter of principle and policy, when it lords itself over the entire domain of big business and the economy, dictating, at will, who shall do what and get what and howas it does in most cabinet agencies and under the antitrust lawsthen the government is a Robber Baron. Its a government in possession, not merely of a legal monopoly on the legitimate use of retaliatory force, but in possession of a legal, unchecked monopoly on the initiation of force against otherwise defenseless innocents. Economic power is wholly innocent of any hint of the initiation of force or even of retaliatory force. Productive giants such as Carnegie, Ford and Gates dont just have less power than politicians or pose less danger than tyrantsthey have no political power at all and present no danger whatsoever. Unlike political power, which entails

fear and punishment, economic power entails incentives and rewards. Should a businessman initiate force, he is, precisely to that extent, a criminal, not some economic power-lord. Should a criminal take some time out to earn some wealth instead of stealing it, to that extent he is in business, working in a creative role. Economic power means the power of a dollarhow many you earn and how many you can spend determines the extent of your power. Economic power involves trading benefits with whomever you choose to deal and with whoever chooses to deal with you. That is, it involves the power to harm no one. Political power is the power of a gunof police, the military, the taxman and the jailer. Should you flout the law, whether a just law or an antitrust law, you must submit. No one must submit to a business propositionnot even from Bill Gates. If people value his products and services, theyll freely contract with him for them. The fact that someone might possess more economic power or resources than another may effect the terms of a deal, but it doesnt alter the fact that the deal is entirely economic, a completely voluntary trade. For those of you still unclear about these distinctions, let me suggest an experiment. After you graduate from Harvard, during your first year in the workforce, dont buy or use any of Microsofts products. That is, send the alleged Robber Baron no money. At the same time, send the government no money. That is, dont pay your taxes. Then wait. Watch who comes after you for your money and how and with what weapons. Endnotes [iv] The Ayn Rand Institute, Antitrust Assault on Microsoft is Immoral: Tanya Hardin g Approach to Competition is Anti-American, Press Release, May 22, 1998. [v] Frank Knight, Risk, Opportunity and Profit (Chicago: University of Chicago Press, 1921).

Bank Mergers vs. Public Interest

GLENN WOICESHYN (1998.11.01 )

In Canada, two big banks the Royal Bank and Bank of Montreal want to merge. They mutually concluded that it would serve their long-term interests, such as make them more competitive internationally. Ditto for two other big banks the Toronto Dominion Bank and the Canadian Imperial Bank of Commerce. But they are not free to merge. Instead, they are forced to spend their creative energies in a lengthy and costly process of proving to the Canadian government that the mergers serve that amorphous thing called public interest. After that, Finance Minister Paul Martin will decide their fate. What is public interest? Its a term people are quick to utter but reluctant to define as if defining it would unveil some hidden, demoniacal purpose. Observe that a bank is owned by individual shareholders. It hires individuals to run its operations. It offers services and products to individuals and companies (which are owned by individuals) with diverse needs. It must make the offers attractive to win customers from competitors. Which individuals constitute the public? Shareholders? Employees? Customers? Competitors? A banks shareholders want to maximize the return on their investmen t (and should want to!). All customers want low service charges but their other interests vary: depositors want high interest rates, borrowers want low-interest loans, some customers want more local branches and more tellers, while others want more bank machines and Internet banking. Some employees prefer to work for bigger banks with international operations. Observe that these interests vary and even clash. Hence, blocking mergers in the name of public interest can only mean that the interests (and righ ts) of some members of the public are sacrificed to the interests of others. Whoever the government includes in the public, it certainly wont be the banks shareholders. They are the ones whose investment capital their property! makes possible the jobs, services and products that the public wants. And because of that fact *their* interests, decisions, and property rights are sacrificed by government decree. Arent they part of the public too?

If not, then the the public stands for whichever group or faction happens to wield political pull, leaving the rest of the public outside the public. Observe that countless pressure groups have vigorously lobbied the government to either block the mergers or at least secure special caveats for their constituents. According to Macleans magazine (Sept. 21), Paul Martin wont allow the mergers unless the banks commit to zero reductions in job numbers, special loan deals for small businesses, and more services outside big cities. To hell with the rights of shareholders. Consider the ominous implications. If banks are treated as public property in the name of public interest, what is to stop the government from treating other businesses, such as newspapers, as public property? Certain pressure groups might convince the government that editorials defending private property, free speech, free trade, or other individual rights, do not serve public interest. Whenever individual rights are subordinated to public interest, the government is handed the ominous power to sacrifice the interests and rights of some individuals to the demands of others. This automatically invites hordes of pressure groups to instead of engaging in productive work expend time and money lobbying governments for special favors and handouts at others expense, all in the name of public interest. The inevitable result is political chaos and economic ruin. Under true free enterprise (laissez-faire capitalism!) the governments job is to protect the legitimate rights of each and every member of the public, including shareholders. This means protecting individuals from physical coercion (including theft and fraud) while otherwise leaving them free to offer their products and services to others on a voluntary non-coercive basis. It is in everybodys rational self-interest not to be assaulted , robbed or enslaved, but rather to be left free to produce, trade and enjoy ones existence. Under true capitalism, nobody (not even insurance companies and foreign banks) is forcibly barred from competing against the banks nobody is forced to work for a specific bank or deal with it and no pressure group can use government to force a bank (or any business) to serve its so-called interests. By barring the initiation of force, including the threat thereof, capitalism rewards companies for being creative, productive and efficient. Consequently, the individual qua consumer is offered ever-better products and services at ever-lower prices. This harmony of peoples rational self-interest stands in stark contrast to the false and destructive view that ones interests lie in enslaving and looting others.

To conceive of ones interests as requiring the violation of other peoples rights is irrational. First, it invites others to violate ones own rights. Second, as under socialism, it punishes ambition, creativity and productiveness thereby denying oneself the benefits of living in a society where such virtues (and their products) flourish. If the public means the sum of its individuals not my gang or some super organism as per communism and fascism then clearly the violation of anybodys legitimate rights can never be in the public interest. Contrary to what many believe, bank mergers under true capitalism do not thwart competition. If, after the mergers, opportunities emerge to profit by offering consumers better products and services at lower prices, existing banks and profitseeking investors will seize them. It is only when people treat others (particularly those others who have most to offer and lose) as sacrificial fodder that entrepreneurs flee for freer-greener pastures, as they should. Each of the four big banks has determined that merging serves its own interests. Nobodys legitimate rights neither the employees (there is no right to force others to employ you) nor consumers are violated by such mergers. It is immoral and destructive for the government to force these banks to waste their money and creative energies on the ridiculous task of proving that mergers serve public interest. Furthermore, it invites the government to do so elsewhere. If a government truly wants to protect the interests of all its citizens, it should protect individuals from those who conceive of their interests in terms of enslaving others. The Canadian government can start by stop behaving like economic dictators and leave banks free to merge. It can then begin de-regulating the financial industry (and other industries!) so that we can all reap the benefits that true capitalism offers.

Hatred of Ability Masked as Concern for the Poor

GLENN WOICESHYN (1999.01.01 )

Capitalism to the extent that it has existed has demonstrated to be phenomenal at raising peoples standard of living in terms of food production, housing, transportation, communication, medicine, exciting careers opportunities, leisure time, recreation, longevity, etc. This becomes blatantly obvious when considering the stark prosperity-poverty contrast between the United States vs. Russia (or any of todays Third World countries), or South vs. North Korea, or West vs. East Berlin (before 1989). Yet todays self-proclaimed enemies of world poverty are often the most ardent opponents of capitalism. What explains this? Maude Barlow, a well-known left-wing activist in Canada, has revealed some disturbing answers in her recent attack on attempts by entrepreneurs to commercially export fresh water from Canada. (Our Water: Not For Sale, National Post, 8 Dec 98) Canada has 20% of the worlds fresh water a renewable and continuously replenished resource. Foreign countries want to buy some; Canadian entrepreneurs want to sell it; but Maude Barlow said: Water must never be regarded as a commodity for exchange in the international marketplace. Why not? First: Water is a public trust. An adequate supply is best protected by maintaining control of water in the public sector. Even if adequate supply were an issue, experience shows that t he private sector would be far more innovative at finding a cost-effective solution. But supply is a nonissue. Commercial projects proposed to date would export a negligible fraction of the waterlost to oceans via Canadian rivers roughly three trillion cubic meters per year (cmpy). For example, one venture proposed to export via tankers 0.6 million cmpy to Asia from Lake Superior, a rate equivalent to 0.005 percent (50 parts per million) of Superiors natural outflow. Another venture proposed to export to California 0.002 percent of what flows into the ocean from British Columbia. Concern about adequate supply cant possibly be Barlows motive. Her other, and most revealing, objection is that selling water allegedly harms the poor, particularly in developing countries. How? According to Barlow:

Exporting water to the elites who could afford it would reduce the urgency of finding real, sustainable, and equitable solutions to water problems in the developing world. In other words, foreigners eager to buy fresh water that would otherwise disappear into oceans are forbidden to do so in the name of finding an egalitarian solution to their countrys water problem. Those who are not poor are being harmed simply for not being poor. But Barlow wants us to believe that socialism qua egalitarianism not capitalism is the solution to a scarcity of resources. Under capitalism, the combination of high demand and low supply can initially generate high prices which only those most able and successful at making money can afford. This encourages entrepreneurs to generate more supply at lower cost (or else find a substitute product), which lowers prices and boosts sales. For example, when the computer first became commercial, computing power was scarce and pricy, and only the elites could afford it. Now, computing power is plentiful and dirt cheap, and virtually everyone can afford it thanks to free enterprise. (Or, consider petroleum where proven reserves keep rising while price keeps falling.) Under socialism, government would control computing power and distribute what little (if any) it could generate to everyoneequally leaving everyone computationally impoverished. Likewise, forcing developing countries to waste time and money on socialist solutions to their scarce-water problems harms everyone involved, including the poor. Given that shortages are commonplace under socialism, what if developing countries experience a water shortage crisis? Barlows solution is for Canada to supply them water for free, i.e., at the expense of Canadian taxpayers. Thus, she doesnt want the poor to help themselves via capitalism, she wants to use the poor as hostages for harming those who arent poor: foreigners who want to buy the water they need, Canadian entrepreneurs who want to earn money supplying it, and Canadian taxpayers who are already taxed to death. Barlows alleged concern about adequate supply and the poor is merely a smokescreen for destroying capitalism and anyone who is ambitious, productive and self-reliant. This is what Ayn Rand called hatred of ability or hatred of the good for being the good. Unfortunately, many today fall for this deadly smokescreen. Why? Because many today (though not I!) believe that selfless sacrifice to the needy, i.e., altruism, is the standard of moral virtue. (Many may not practice it faithfully, but most people believe it!) Mother Theresa is widely held as the moral ideal whereas the creative,

productive and successful business entrepreneur is generally regarded as amoral or immoral. And, if one shrinks ones awareness sufficiently evading who (i.e., productive achievers) and what (i.e., reason, rational self-interest, political-economic freedom) make prosperity possible one might disastrously conclude that the way to help the have-nots is to simply steal wealth from the haves and give it to them. But this merely penalizes those who are ambitious, creative and productive in order to reward those who are not a monstrous injustice and a perfect recipe for universal poverty, as communism has amply demonstrated. And, as our own experience in semi-capitalist countries has shown, making welfare a right (as opposed to private-voluntary charity) merely entices people into dependency and misery rather than self-reliance and self-esteem. Such is the nature of altruism and socialism. While helping the poor is not nor should be the moral justification for capitalism, the poor fair infinitely better under capitalism than under socialism, because capitalism provides more opportunities for them. Capitalism does this indirectly by protecting each individuals right to benefit from his (or her) creative thought, productive work, voluntary associations and freedom to trade. Rational self-interest combined with political-economic freedom (freedom from those who loot and enslave) is why prosperity rises under capitalism, and why scarce resources either quickly become plentiful or else a substitute is quickly found. Barlow and her ilk actively seek to destroy capitalism for no positive, pro-human reason whatsoever, so lets stop pretending that any higher motives are involved and start giving them the moral condemnation they truly deserve. Canada has plenty of fresh water so let the commercial exports begin. The only scarcity threatening Canada (and the world) is the scarcity of reason, rational selfinterest and laissez-faire capitalism.

Collectivism by Default in Canada: The Right Adopts Leftist Principles

GLENN WOICESHYN (1999.03.19 )

The stated purpose the United Alternative initiative spawned by Preston Manning, leader of Reform Party of Canada is to create a new party to defeat the Liberals in the next election. Unfortunately, Mannings approach forebodes failure. His strategy involves inviting non-Liberals together to debate a platform of principles fiscal responsibility, social responsibility, democratic accountability, re-balancing, and equality in the federation that are so vague and elastic that communists could accept them. For example, fiscal responsibility could be achieved whether the government extorts 1% or 99% of our income. Social responsibility could be stretched to mean forced equalization of everyones wealth, etc. The essence of this strategy is to eschew basic right-wing principles such as individual rights (including property rights) and free enterprise in the name of attracting the anti-Liberal vote. Manning himself declared that the right-left distinction in politics is outdated, and hes willing to sacrifice his right-wing principles for a broad consensus. But if Liberal policies are bad (and they certainly are), then its because they are based on bad ideas or principles. The proper strategy for a good alternative to Liberals would be to first clearly identify and explain to Canadians why Liberal principles are bad. (The remaining steps would involve clearly defining good principles and policies, and then rationally persuading Canadians of their merit.) For example, consider an issue Canadians are deeply concerned about: health care. Liberals champion socialist medicine, which means government as a monopoly provider of free health care paid for by money extorted via progressive taxation. The principle underlying this Liberal policy is Karl Marxs dictum: from each according to ability, to each according to need. Or, as Finance Minister Paul Martin stated it proudly: Our health care system is blind to income so that its eyes can focus on need. Its the morality of altruism the belief that one has a moral duty to sacrifice oneself to others, to the collective.

Implication? To the extent one is ambitious, creative and productive and thereby earns much money is the extent to which one is robbed to pay for the health care of those who (for whatever reason) earn less. Also, those who take good care of their health are forced to pay for those who dont. The overall effect is to discourage productiveness and responsibility while encouraging laziness and irresponsibility. But thats not all. Under free-market medicine (i.e., the true right-wing alternative ), health-care providers compete for a patients money by offering the best value for it, thereby making providers directly accountable to patients, thereby encouraging innovation and cost-efficiency. Under socialized medicine, providers are accountable to governments, which extort money virtually at will from individuals regardless of whether the individual approves of the quality. Hence, the incentive to offer patients higher quality at lower prices is replaced by the incentive to appease bureaucrats and politicians whose objectives typically include appeasing pressure groups and expanding government size and power at the expense of individual liberty. The outcome is predictable first costs rise (without a corresponding rise in quality) until governments can no longer get away with borrowing or raising taxes; then governments attempt to control costs by enslaving doctors and reducing services; then lineups grow for special services while the better doctors flee to freer, greener pastures. This predictable outcome is now history costs have soared, people are dying in long lineups and many good doctors have fled. The Liberals rather than being champions of health care are actually enemies of health care. (This principled approach would yield similar conclusions regarding education, jobs, old-age security, etc.) But does Manning champion health care by rejecting the destructive left-wing principle underlying socialist medicine and defending a right-wing alternative? No! He has embraced socialized medicine and routinely chastises Liberals for not throwing more money down its drain. (Liberals frequently point out to him that he cant have his cake lower taxes and eat it too.) Why? Because Manning _feels_ that a majority of Canadians will never vote for a party that opposes socialized medicine. In other words, the benefit or destructiveness of a policy or principle is irrelevant to Manning all that matters is whatever he thinks the majority happens to believe right now.

The first casualty of Mannings pragmatist philosophy is a real alternative to Liberal policies. By eschewing principles, Manning is reduced to copying whatever the Liberals do on the premise that thats what got them elected. The second casualty is unity. Only rational principles and logical persuasion can unite people to a common and noble purpose. Asking them to blindly eschew their principles be they true or false in the name of unity can only beget frustration, bitter power struggles and despair, i.e., disunity (as our experience with Quebec separatism has demonstrated). A truly United Alternative party would debunk and reject the Liberals philosophy of altruism-collectivism-statism, which is ruining Canada, and rationally and proudly defend the opposite philosophy: rational self-interest, individual rights and laissezfaire capitalism.

Mixed Economy Pragmatism versus Capitalist Principles in England

ANDREW WEST (1999.04.27 )

Englands Tories, following the dubious example set by their US Republican counterparts, seem to have also concluded that standing on principle is politically inexpedient. The Tories recently chose to celebrate the twentieth anniversary of Margaret Thatchers first election victory by betraying the very ideas for which she stood. On April 20th, Peter Lilley, the Tories deputy leader, set defacto limits on the role of free market in his country. He not only ruled out privatizing health and education, but worse, committed his party to spending even more public money on them! As Prime Minister, Margaret Thatcher was unashamedly pro-capitalist. She took decided measures to diminish the welfare state by reducing the size and scope of government and by privatizing numerous state-controlled sectors of the economy. But how easily the course is reversed by same-party politicians willing to sacrifice conviction in exchange for some hope of political advancement. US Republicans have also shied away from a number of important ideas in their never-ending but flagging quest to boost their ratings in the polls. Real tax cuts and meaningful tax reforms have been almost entirely abandoned; socialized medicine, packaged with reams of red tape, is creeping progressively into our system; and the idea of denationalizing the educational system is rarely and only halfheartedly tossed around anymore. The partys last two presidential candidates promised little more than efficient administration of the ever expanding welfare state, embracing the welfare state in principle. Pandering to the center was supposed to boost their political fortunes, as it had for Bill Clinton. But instead of rising in the polls, the opposite has happened: Republicans have continued to sink further and further in popularity as they have undermined their identity and their ability to lead. Apparently not learning from Americas recent history, Englands Tories have followed this dismal example. In both countries, as the Right drops their ideas while the left tempers theirs, making differences in the two parties increasingly difficult to discern. In the short run, all of this will probably have little effect on the markets. After all, the US stock market has done just fine under Clinton. But the picture is far more troubling in the long run, given that ideas ultimately shape history. Case in point: In 1979, the US and UK economies were stagnating under the cumulative weight of more than a decade of anti-capitalist policy choices made by the Johnson, Nixon, Ford, and

Carter administrations in the US, and by a long string of Socialists in the UK. In 1999, with the US economy sailing, a great deal of the global competitiveness is a lingering result of what were once considered radical pro-capitalist policy choices made in the early years of the Reagan administration. (Similarly, England owes much of its economic advantage over continental Europe to Margaret Thatchers radical promarket ideas.) The strongest politicians are involved in government because they want to see their country move in a direction consistent with their ideals. When the polls are against such politicians, they become even more determined to champion their ideas in order to persuade others to rethink their choices. Unfortunately, we seem to be entering a time when no significant politician is willing to stand on principle in favor of free markets and against growing government and socialism. Todays politicians are chameleons; when they sense the polls are against them, they rush to edit their beliefs. With world economic issues far from resolved, great courage and political leadership is needed to guide history in the right direction. Thatchers achievements in promoting economic freedom will last only as long as there are people who will wage the war of ideas against a resurgent, subtler, yet perhaps more dangerous Left. Unfortunately, the traditional promoters of capitalism seem to have decided to unilaterally disarm. One is left to ponder what type of celebrations will be held twenty years from now.

A Statement: Communism, Free-Speech, and Naming Names

ELIA KAZAN (1999.04.19 )

The following statement originally appeared as an advertisement, placed by Elia Kazan in the New York Times, April 12, 1952. In the past weeks intolerable rumors about my political position have been circulating in New York and Hollywood. I want to make my stand clear: I believe that Communist activities confront the people of this country with an unprecedented and exceptionally tough problem. That is, how to protect ourselves from a dangerous and alien conspiracy and still keep the free, open, healthy ways of life that gives us self-respect. I believe that the American people can solve this problem wisely only if they have the facts about Communism. All the facts. Now I believe that any American who is in possession of such facts has the obligation to make them known, either to the public or to the appropriate Government agency. Whatever hysteria exists and there is some, particularly in Hollywood is inflamed by mystery, suspicion and secrecy. Hard and exact facts will cool it. The facts I have are sixteen years out of date, but they supply a small piece of background to the graver picture of communism today. I have placed these facts before the House Committee on Un-American Activities without reserve and I now place them before the public and before my co-workers in motion pictures and in the theatre. Seventeen and a half years ago I was a twenty-four-year old stage manager and bit actor, making $40 a week, when I worked. At that time nearly all of us felt menaced by two things: The depression and the ever growing power of Hitler. The streets were full of unemployed and shaken men. I was taken in by the Hard Times version of what might be called the Communists advertising or recruiting technique. They claimed to have a cure for depressions and a cure for Naziism and Fascism. I joined the Communist Party late in the summer of 1934. I got out a year and a half later.

I have no spy stories to tell, because I saw no spies. Nor did I understand, at that time, any opposition between American and Russian national interest. It was not even clear to me in 1936, that the American Communist Party was abjectly taking its orders from the Kremlin. What I learned was the minimum that anyone must learn who puts his head into the noose of party discipline. The Communists automatically violated the daily practices of democracy to which I was accustomed. They attempted to control thought and to suppress personal opinion. They tried to dictate personal conduct. They habitually distorted and disregarded and violated the truth. All this was crudely opposite of their claims of democracy and the scientific approach. To be a member of the Communist Party is to have a taste of the police state. It is a diluted taste but it is bitter and unforgettable. It is diluted because you can walk out. I got out in the spring of 1936. The question will be asked why I did not tell this story sooner. I was held back, primarily, by concern for the reputations and employment of people who may, like myself, have left the party many years ago. I was held back by a piece of specious reasoning which has silenced many liberals. It goes like this: You may hate the Communists, but you must not attack or expose them, because if you do you are attacking the right to hold unpopular opinions and you are joining the people who attack civil liberties. I have thought soberly about this. It is, simply, a lie. Secrecy serves the Communists. At the other pole, it serves those who are interested in silencing liberal voices. The employment of a lot of good liberals is threatened because they have allowed themselves to become associated with or silenced by the Communists. Liberals must speak out. I think it is useful that certain of us had this kind of experience with the Communists, for if we had not we should not know them so well. Today, when all the world fears war and they scream peace, we know how much their professions are worth. We know tomorrow they will have a new slogan.

Firsthand experience of dictatorship and thought control left me with an abiding hatred of these. It left me with an abiding hatred of Communist philosophy and methods and the conviction that these must be resisted always. It also left me with the passionate conviction that we must never let the Communists get away with the pretense that they stand for the very things which they kill in their own countries. I am talking about free speech, a free press, the rights of property, the rights of labor, racial equality and, above all, individual rights. I value these things. I take them seriously. I value peace, too, when it is not bought at the price of fundamental decencies. I believe these things must be fought for wherever they are not fully honored and protected whenever they are threatened. The motion pictures I have made and the plays I have chosen to direct represent my convictions. I expect to continue to make the same kinds of pictures and to direct the same kinds of plays. ELIA KAZAN

End the Fraudulent Social Security Program Now

JACK LETOURNEAU (1999.04.14 )

Since 1935, the United States government has been operating a program that would be illegal if run by a private citizen or company tarred as a fraudulent Ponzi scheme. Social Security, a scheme both impractical and immoral, is a smear on Americas principles of free enterprise. To defend the liberties which have enabled our country to prosper, we Americans must unite with a clear voice and end Social Security. In 1920, Charles Ponzi devised a scheme by which he promised to return a fiftypercent profit on investors money in forty-five days. Of course, this was not actually possible, and the returns on investments came from money Ponzi was receiving from new clients. It was an obvious con game, and his scheme eventually landed Ponzi in jail. The idea has borne his name ever since. Franklin Delano Roosevelt started a similar program in 1935; he called it Social Security. Most people do not realize this because of the common misconception that a persons Social Security taxes go directly into his or her own retirement fund. The truth is that Social Security is a pay as you go system, i.e., the benefits paid to retirees from the program come directly from taxes collected that same year. Any surplus funds are disbursed as a government slush fund. The U.S. government took Ponzis plan, magnified it, and backed it with the muscle of law: just as Ponzi paid old investors with the money coming from new investors, the government pays off retired workers with money taxed from young workers. As a Ponzi scheme, Social Security cannot last forever. When it finally does selfdestruct, all the money paid in taxes will be lost. Around 2010, the Baby Boom generation will begin to retire and the working population will be shrinking. The program will be in the red by 2025, still supporting millions of boomers and putting an intolerable strain on those of us who are still working. People starting their careers now have no hope of collecting the money they will pay in Social Security taxes. The program will accumulate a deficit of $3.1 trillion over the following seventy years, crashing under the weight of its own fraudulent nature. Baby boomers children will then be cut off from their past contributions to the program. This program would be contemptible if it was privately run and participation was voluntary. How much worse is it, then, as a government project in which tax money is collected under threat of force?

More importantly, as a Ponzi scheme forced upon the people it defrauds, Social Security violates every Americans property rights. Tax payment is certainly not optional; a jail sentence is the stick the government wields to force remittance from the person refusing to surrender his money to the income tax collector. This is an initiation of force, a fact that cannot be washed away regardless of what the government does with the stolen money. A thug who mugs people in the park but then gives his loot to the poor is still a thief violating peoples rights. No matter what sound bites or false claims the government uses to rationalize Social Security, its essential nature remains unchanged. It is a fraudulent Ponzi scheme that is coercively imposed on all of its victims. Social Security has been a leech on the wallets of Americans for over sixty years. As citizens of the freest nation on Earth, we should be outraged that we have been defrauded for so long. To defend the freedoms guaranteed to us by the Founding Fathers, we must raise our voices to those who lead us: End Social Security now!

Slavery By Taxation
GLENN WOICESHYN (1999.04.01 )

How can you spot Canadians? They have Tax me! stamped on their foreheads. Well, not true but it might as well be true. According to Alexandra Lopez-Pacheco, Canadians are hit with the highest incomeand profit-tax rates in the industrialized world as a percentage of GDP.1 When one takes into account all the increases in personal income tax, goods and services, property and hidden taxes, Canadians now work six months a year to fill government coffers a 55-day jump since 1961. (And you thought slavery was banned!) However, according to news reports, Canadas Finance Minister Paul Martin is reluctant to cut taxes. Why? Because tax cuts would sacrifice key programs and we would feel the pain from not investing in the infrastructure of the new economy. Tragically, many Canadians believe that government spending on economic-social programs health care, education, old-age security, unemployment insurance, utilities, welfare, etc. constitutes a good investment. In truth, such spending is an assault on individual liberty, prosperity, health care, education, etc., and more. (In contrast, and leaving aside how the funds should be raised, government spending on the police, military, and justice system is necessary for individual liberty and prosperity.) When the government extorts your money to spend on health care, education, etc., dear taxpayer, it deprives you of making spendinginvestment decisions with your money.
When the government extorts your money to spend on health care, education, etc., dear taxpayer, it deprives you of making spendinginvestment decisions with your money.

When you control your money your property in a free market economy, companies compete to provide you with the best products and services at the lowest price. The provider you choose is directly accountable to you not the government. Whatever money you save on one service is available to invest in your other needs and interests. This entices you to be more productive, responsible and knowledgeable, and entices providers to be more creative, cost-efficient and customer-oriented.

When the government controls your money, factors other than your rational judgement and interests will dictate its spending decisions, such as appeasing various pressure groups, expanding its power, etc. When the government can extort your money virtually at will, and the service provider is directly accountable to it not you, no real incentive exists to provide you with the best value for your money. Its no accident that costs for public education, health care, etc., rose dramatically while quality sunk. Imagine how morally outraged youd feel if a private company forced you to purchase its inferior services. A government that forces you to pay for its dumbed-down education system, or that pyramid (or Ponzi) scheme called the Canada Pension Plan, is no less immoral. It amounts to supplying you with a value while rendering impotent your basic means of identifying and achieving your values your independent, rational judgement. Granted, economic-social spending by the government is not justified solely in terms of serving your interests. Much of it is justified in terms of redistributing wealth from the haves to the have-nots (or what Martin calls equalization). Even services like health care operate according to Marxs dictum: from each according to ability to each according to need. In essence, forced redistribution of wealth punishes those who are ambitious, productive, successful and self-responsible, while rewarding the opposite an utter perversion of justice. This naturally entices people to be nonproductive and irresponsible; and its no accident that welfare schemes have generated a growing class of whining, miserable and seemingly helpless dependents who are now your masters. Under voluntary charity, those who are truly in need through no fault of their own a relatively small minority would be well taken care of by the generosity of a free and prosperous majority. (Interestingly, the same leftists who declare Canada to be a compassionate, generous nation would object to this claim most vociferously.) Morally, there is no difference between a man who robs you on the street because you have what he needs or wants, and a government that accomplishes the same thing. So, gentle taxpayer, the real reason Paul Martin wont cut your taxes is that you have no right to your own money; and not only are you incompetent to make investment decisions in your best interest your interests are subordinate to the needs and

desires of others; you are effectively a slave to the collective, which, in practice, means that you are a slave to those who rule the collective. So if you passively accept Martins (implicit) view of you, then you des erve to be heavily taxed (and to even have Tax me! stamped on your forehead) only dont pretend that it constitutes a good investment or fulfils some noble purpose. References: 1. Taxed to Death, The Financial Post Magazine, February 1999

The Modernists Embrace Normality

JOSEPH KELLARD (1999.05.12 )

The art of Norman Rockwell is experiencing a revival in popularity, having been exhibited lately in many museums. A noteworthy cause of this revival has been the praisers of modern art. That ilk of critics and college professors who had always regarded Rockwell as an inferior artists but now celebrate him. While these modernists had relegated Rockwells work to the art worlds basement, on its main floor they displayed everything from the distorted faces of Pablo Picassos portraits to Marcel Duchamps urinal to Jackson Pollacks paint-splattered canvases. And as if Pollack hadnt already plumbed the depths of modern art, along came those who dipped worms into colored paint and had them wriggle on a canvas to produce a painting; or simply covered a canvas in black paint alone1; or dotted a painting with blobs of elephant dung.2 The former two paintings won thousand dollar prizes at art shows; the latter won the Turner Prize, Britains top art award. The praisers of such art used language that is equally incomprehensible to describe it. A critic once said that a canvas messed with smears of paint had plastic disintegration of rhythmic essence. A painting that had the technical skill of a child was praised as having a phenomenal degree of micro-cosmic synthesis of threedimensional entity.3 Although the practitioners and praisers of modern art have posed as individualists, the nonconformity they embody is as socially-oriented as any conformist. Just as the conformist accepts the standards of others as his own without validating them rationally against realitys facts, so does the modernist operate b y the standards of others the opposite of anything others uphold as poetic, beautiful, melodic, logical. Because they opposed objectivity, the modernists could preach that there are to be no objective standards in art, such as comprehensible representations or clarity. By opposing definitions and standards as restrictive, they could preach that the artists must be free to create anything he desires. These falsehoods remain their primary means of destroying art, and thereby makes their deliberately nonrepresentational, incomprehensible art anti-art. A tactic they used to manipulate people into believing that what they upheld was art was to evaluate it as worthy of comparison and inclusion in museums with the work of masters, such as Da Vinci or Rembrandt. Thus, Jackson Pollacks paint-splatters

are now largely accepted as art alongside Da Vincis Mona Lisa. Yet although at a certain level Rockwells work is as technically skillful and comprehensible as that of the masters, the modernists regarded it as unworthy of display in museums alongside the work of their ilk. The modernists certainly opposed Rockwell for creating intelligible subjects with great clarity that is, practicing objective standards in art, as did the masters. What they primarily rejected in Rockwell, and that was absent in the work of the masters, was his square American subjects and sentimental themes, such as a family gathering happily around a table for Thanksgiving dinner. But if the intent of the art of yesterdays modernists was meant to both destroy objective standards in art and promote their bleak view of the real world, dominated by cynicism, angst, nausea, pain, and suffering, why then are their successors celebrating Rockwell? Writes art critic Deborah Solomon: By now, avant-garde art is so accepted that even Duchamps urinal looks classical, which helps explain why nothing seems more outrageous than middlebrow art and the sort of pictures your grandmother savored the art, in short, of 100 percent normal Norman Rockwell.4 The modernists modus operandi of upholding anything as art is now pass

The Hydra of Protectionism!

ANDREW WEST (1999.05.07 )

This quarter the Clinton administration played the good cop/bad cop game. US chief trade representative, Charlene Barshefsky, was the bad cop, menacing Japanese steel producers with threats of punitive measures for dumping. Robert Rubin played good cop, publicly denouncing protectionism as a culprit of inflation, higher interest rates, and a lower standard of living. (Rubin must have gotten this from Alan Greenspan, because I cant believe hed espouse this wisdom on his own.) Of course, the media made much of Rubins public clash with Barshefsky. But, just a few days later (good soldier that he is), Rubin went on record to say he had no disagreement with Barshefsky, and that the whole Clinton administration was one big happy unified family. He proceeded to refuse further comment on the whole steel dumping issue. DUMPING Dumping is defined as selling product below cost and is promoted as devilish trickery by foreign competition. The whole concept is nonsense, created by ivory-tower economists and wielded by pressure groups formed to attack foreign competitors. The loopholes in GATT anti-dumping provisions are large enough to drive a truck though. Virtually any influential group can use it to erect global trade barriers. Selling product below cost is a component of basic retailing strategy used to build market share or move overstocked inventory. It is done regularly in the United States in a variety of industries. Amazon.com loses money on every order it fills. Ever been to a going out of business sale? Saks Fifth Avenue occasionally sells clothing at regular retail prices in New York City but dumps merchandise in Florida. As a consumer, I have no problem with this. (As a matter of fact, I would love Sony to dump some big-screen televisions in time for my birthday.) But if NY and FL were two GATT countries, Floridas retailers could retaliate. Were in a global economy now; get used to the idea of foreign companies occasionally selling products below cost. FERRETING OUT PROTECTIONISM First of all, very few protectionists come out and say that theyre against free trade. So it is important to listen carefully. When you hear words like fair trade or when trade is blended with tangential issues (like the environment or labor) take note. Protectionism can result from a number of policies, the most obvious of which are tariffs. Less obvious forms of protectionism (employing GATT loopholes) are

quotas, licensing requirements, unreasonably strict product codes, and even customs service corruption. But the most stealthy form of protectionism lies in any type of currency manipulation. CURRENCY MANIPULATION Through currency devaluation, for instance, governments try to boost their exporters by cheapening their currency. Though nonsensical and self-defeating, devaluation appears to be in vogue. Take Brazil, for instance. If the chairman of a big Brazilian exporter convinced politicians to hike taxes by 25% and channel the proceeds to his company, one could expect riots. But the same end has been attempted through devaluation Newly impoverished Brazilian consumers can no longer afford imported goods. Citizens of Brazil will only gradually notice that their standard of living has declined. Export employers will pay workers less (owing to the devalued currency) while they maintain their own hard currency revenues. Of course, eventually, exporters profits in Brazil will return to normal. Workers will need to be paid more in light of inflation, or export revenue will fall. Sustainable economic growth can only result from innovation and production, not monetary chicanery. (Most frustrating, perhaps, is the US Treasurys take on Brazil. According to Larry Summers, The US continues to be prepared to support Brazil as it carries forward with a strong policy program. How depressing.) PROMOTING FREE TRADE Protectionism is a form of corruption, favoring certain groups at the expense of the greater population. It is about safekeeping inefficiency from the ravages of progress. It hurts foreign companies from which consumers wish to buy, and hands the business to inferior local competitors. Ominously, the trend seems to be away from free trade. Inevitably, when times get tough, protectionism becomes increasingly tempting. In the early 1930s, with the worlds economy already ravaged, protectionist measures (like the Smoot-Hawley Act) shattered what was left of the worlds economic integration, making matters worse. Keep in mind that the US is among the worlds greatest beneficiaries of free trade. The US is the worlds largest exporter, and its an even larger importer. Americans have the knowledge and technology to manage and exploit economic resources around the world. As such, we have a great deal to lose from protectionism and everything to gain from free trade. The onus is on us to consistently battle the hydra.

Get Government Out of Social Security

RICHARD M SALSMAN (1999.04.29 )

In response to the growing recognition of the systemic problems with Social Security, President Clinton has suggested strengthening the program by investing over $700 billion of projected surpluses in the stock market. His plan, however along with similar Republican ones rests on two false premises. The first is that Social Security is a savings system; the second, that government can be a successful investor. When Social Security was launched in 1935, its backers promised a fully-funded pension system. The promise was soon breached. The money taken in was used to finance other government expenditures. Ever since, rising payroll taxes have been paid out immediately to an expanding retiree base. In 1945, 20 workers funded each retiree, and the payroll tax rate was 3%; today, there are only 3 workers per retiree, and the tax is at 12.4%. Demographic trends guarantee higher taxes and lower benefits and eventual bankruptcy. Social Security is essentially a welfare program, deceptively packaged as an investment plan. Unlike private pension plans, the retirement benefits do not come from money previously saved and invested. Rather, the government simply confiscates a current workers earnings in exchange for a promise to repay him with more money taken from a future worker. Over $5 trillion in payroll taxes have gone to the Social Security Administration not a dollar of it saved. (Had a private pension operated such a pay-as-you-go pyramid scheme, its executives would have been jailed for fraud.) As a result, workers do not get a market return on their investment; they may even get lessmoney than they paid in. The unsustainability of Social Security comes from the fact that it is a political, not a financial, program. It is an arm of the government which openly confesses to the systems non-value by legally coercing its citizens to participate in it. Yet rather than phasing in a private, voluntary and actuarially sound investment program to replace the present, fraudulent scheme Clinton wants to enlarge the governments power. Under his plan, Washington would on average own 5% of the stock of major companies more than enough to exert significant control. Corporate decisions will then be made not by objective business criteria, but through political horse-trading. Imagine the lobbying that will take place as Washington accommodates a vast range of activists from anti-trade protectionists and anti-abortion religionists, to antitechnology environmentalists and anti-business Naderites seeking to shape a corporations policies.

This is not hypothetical. Many of todays state-run pension funds deliberately take large positions in particular companies in order to influence their decisions. The clearest example is the biggest such system, Californias CaLPERS. Its corporate guidelines, for example, insist on greater diversity among board members. It urges firms to focus on non-financial considerations, rather than on maximizing profits. Its statement on social responsibility declares that actions taken by [CaLPERS] as a share-owner can be instrumental in encouraging action as a responsible corporate citizen by the companies in which [CaLPERS] has invested. This socially responsible investing translates into politically correct investing which means: investing to achieve political, not business, ends. The inevitable effect of this politicization is to undermine investment returns. And, contrary to various self-serving interpretations of investment studies, calculations of total returns for pension funds show that most state-run systems under-perform private ones. This is the effect Clintons plan would produce magnified many times, once the federal government was in charge of selecting your investment portfolio. Your retirement can become only lesssecure if Washington is picking the stocks, and influencing corporate board decisions, not by the standard of profitability, but by the standard of political acceptability. Many commentators endorse Clintons proposal as being pro -market. It is exactly the opposite. It entrenches the very source of Social Securitys insolvency: government control of our savings. By expanding the role of government, Clinton is taking a bad investment and making it even worse. The stock market is not a means of rescuing Social Security. The fraud of a Ponzi savings plan cannot be mitigated by the added fraud of government-directed investment scheme. Instead, we should demand that Washington return to us, via tax cuts, any temporary surpluses, so that we can save and invest our own incomes. Then, we should insist that this dishonest system known as Social Security be gradually dismantled. This is the 65th working year of Social Security; its mandatory retirement is wholly justified.

Statism: The Cause Political Problems

LARRY ELDER (1999.06.25 )

of

Americas

Last week, I attended a memorial service for a 19-year-old girl shot in what appears to be a random, gang-related attack. The world may watch and fret over Columbine, but what I just described happens far, far more often. As the Democrats and the Republicans debate what should be done, two answers emerge, both stupid. The Democrats blame guns. The Republicans blame the Creator (or rather, the lack thereof). The silly season is on. Democrats huffed when Republicans thwarted their push for more stringent gun control. While the House passed a bill that would require background checks for all purchasers of guns at gun shows, they voted to limit the background waiting period to 24 hours. Foul! cried gun-control advocates. A seller cannot conduct a thorough check in 24 hours, they say, and the longer the background check, the calmer the purchaser. Never mind that John Lott, the author of More Guns, Less Crime, demonstrates the relative ineffectiveness of waiting periods and background checks. Bad guys find a way to get guns, leaving the rest of us inconvenienced. Now, on the Republican side of the aisle, we have Romper Room II. The House passed a GOP-sponsored bill to allow states to post the Ten Commandments in public schools and public buildings. Sure, the Supreme Court will slam-dunk it as unconstitutional. But Republicans did something! You know, like Messrs. Klebold and Harris of Columbine High would have said, Hey, look at this. Better put away those pipe bombs. Says here were not supposed to kill. See, Republicans think that for our kids, the Creator is AWOL. But 96 percent of Americans believe in the Creator , and 90 percent pray regularly. As a percentage more Americans today attend a house of worship than in the 40s and 50s. Neither Republicans nor Democrats seem willing to even consider a third culprit government. Americans must work longer than ever to pay state, local and federal taxes, as well as indirect taxes like mandates. This means that many Americans spend less time with their families simply to satisfy the governments appetite. Polls show that most Americans still believe in a stay-at- home mom, if possible. But, to

pay taxes, and to live in a safe area with decent schools, both spouses must often work outside the home. Had the tax rate remained at the 1950 level, the average American family would have hundreds of thousands of dollars more in net worth. The government refuses to allow citizens to invest their own Social Security funds. Simply investing a portion of the funds in the stock market over the course of a working life could net the retiree hundreds of thousands of dollars more than the current system allows. What about the money and benefits paid to unwed mothers simply because they are unwed mothers? This also allows men to abandon their financial and moral responsibilities, while encouraging girls and young ladies to be less discriminating about their partners. A Heritage Foundation study shows that families that refuse to go on welfare, although eligible, saw less illegitimacy, higher rates of high school graduation and fewer criminal records. Welfare generosity makes it easier for fathers to bug out on their children. A Los Angeles Times poll showed that poor people, more than non-poor people, believe that some welfare mothers have additional children in order to get additional benefits. Government also stops willing employers from paying willing, prospective employees less than the state-mandated minimum wage. Minimum wage laws destroy entrylevel jobs for unskilled workers. And then theres public housing and rent control. Rent-control laws create a disincentive to build apartments, reducing the supply of low-cost housing. Government public housing crowds hundreds of thousands of low- income Americans into projects, by subsidizing their housing. This discourages poor people from acquiring the skills necessary to earn their way, and it steals business from momand-pop real-estate investors. A criminal element plagues many public-housing complexes, creating a value system that discourages academics and emphasizes fast times and games. And dont forget the government monopoly on schools. Authorities refuse to let parents choose their kids schools, confining many inner-city kids to schools with low academic expectations and poor teachers and principals. Government involvement in the medical industry makes health care more expensive and less available. Regulations preventing nurses, physicians assistants, midwives and others from competing in the health-care market drives costs up. Regulation

discourages the construction of for-profit medical schools, decreasing the supply of doctors while keeping current doctors incomes up. And so it goes. Congress passes more laws and regulations, which require more laws and regulations to undo the damage caused by the earlier batch of laws and regulations. Meanwhile, the Chicago City Council holds hearings on Jerry Springer. Pass the Advil, please.

How Advertising Laws Are Established

CLAUDE C. HOPKINS (1999.06.18 )

The time has come when advertising has in some hands reached the status of a science. It is based on fixed principles and is reasonably exact. The causes and effects have been analyzed until they are well understood. The correct method of procedure have been proved and established. We know what is most effective, and we act on basic law. Advertising, once a gamble, has thus become, under able direction, one of the safest business ventures. PRINCIPLES BASED ON OBSERVATION The present status of advertising is due to many reasons. Much national advertising has long been handled by large organizations known as advertising agencies. Some of these agencies, in their hundreds of campaigns, have tested and compared the thousands of plans and ideas. The results have been watched and recorded, so no lessons have been lost. Such agencies employ a high grade of talent. None but able and experienced men can meet the requirements in national advertising. Working in co-operation, learning from each other and from each new undertaking, some of these men develop into masters. Individuals may come and go, but they leave their records and ideas behind them. These become a part of the organizations equipment, and a guide to all who follow. Thus, in the course of decades, such agencies become storehouses of advertising experiences, proved principles, and methods. The larger agencies also come into intimate contact with experts in every department of business. Their clients are usually dominating concerns. So they see the results of countless methods and polices. They become a clearing house for every thing pertaining to merchandising. Nearly every selling question which arises in business is accurately answered by many experiences. Under these conditions, where they long exist, advertising and merchandising become exact sciences. Every course is charted. The compass of accurate knowledge directs the shortest, safest, cheapest course to any destination. ADVERTISINGS SECRET WEAPON We learn the principles and prove them by repeated tests. This is done through keyed advertising, by traced returns, largely by the use of coupons. We compare one

way with many others, backward and forward, and record the results. When one method invariably proves best, that method becomes a fixed principle. Mail order advertising is traced down to the fraction of a penny. The cost per reply and cost per dollar of sale show up with utter exactness. One ad is compared with another, one method with another. Headlines, settings, sizes, arguments and pictures are compared. To reduce the cost of results even one per cent means much in some mail order advertising. So no guesswork is permitted. One must know what is best. Thus mail order advertising first established many of our basic laws. In lines where direct returns are impossible we compare one town with another. Scores of methods may be compared in this way, measured by cost of sales. But the most common way is by use of the coupon. We offer a sample, a book, a free package, or something to induce direct replies. Thus we learn the amount of action which each ad engenders. But those figures are not final. One ad may bring too many worthless replies, another replies that are valuable. So our final conclusions are always based on cost per customer or cost per dollar of sale. In a large ad agency coupon returns are watched and recorded on hundreds of different lines. In a single line they are sometimes recorded on thousands of separate ads. Thus we test everything pertaining to advertising. We answer nearly every possible question by multitudinous traced returns. Some things we learn in this way apply only to particular lines. But even those supply basic principles for analogous undertakings. Others apply to all lines. They become fundamentals for advertising in general. They are universally applied. No wise advertiser will ever depart from those unvarying laws. THE IMPORTANCE OF FUNDAMENTALS There is that technique in advertising, as in all art, science and mechanics. And it is, as in all lines, a basic essential.

The lack of those fundamentals has been the main trouble with advertising of the past. Each worker was a law unto himself. All previous knowledge, all progress in the line, was a closed book to him. It was like a man trying to build a modern locomotive without first ascertaining what others had done. It was like a Columbus starting out to find an undiscovered land. Men were guided by whims and fancies vagrant, changing breezes. They rarely arrived at their port. When they did, quite by accident, it was by a long roundabout course. Each early mariner in this sea mapped his own separate course. There were no charts to guide him. Not a lighthouse marked a harbor, not a buoy showed a reef. The wrecks were unrecorded, so countless ventures came to grief on the same rocks and shoals. Advertising was a gamble, a speculation of the rashest sort. One mans guess on the proper course was as likely to be as good as anothers. There were no safe pilots, because few sailed the same course twice. The condition has been corrected. Now the only uncertainties pertain to people and to products, not to methods. It is hard to measure human idiosyncrasies, the preferences and prejudices, the likes and dislikes that exist. We cannot say that an article will be popular, but we know how to sell it in the most effective way. Ventures may fail, but the failures are not disasters. Losses, when they occur, are but trifling. And the causes are factors which has nothing to do with the advertising. Advertising has flourished under these new conditions. It has multiplied in volume, in prestige and respect. The perils have increased many fold. Just because the gamble has become a science, the speculation is still a very conservative business. My main purpose here is to set down those laws, and to tell you how to prove them for yourself. After them come a myriad of variations. No two advertising campaigns are ever conducted on lines that are identical. Individuality is an essential. Imitation is a reproach. But those variable things which depend on ingenuity have no place in a text book on advertising. This is for groundwork only. My hope is to foster advertising through a better understanding. To place it on a business basis. To have it recognized as among the safest, surest ventures which lead to large returns. Thousand of conspicuous successes show its possibilities. Their variety points out its almost unlimited scope. Yet thousands who need it, who

can never attain their deserts without it, still look upon its accomplishments as somewhat accidental. That was so, but it is not so now. The above was adapted from Scientific Advertising by Claude C. Hopkins, and has been edited for Capitalism Magazine. Available from Amzon.com by clicking here.

What Young People Really Need: Not Volunteerism but Happiness and Heroes
ANDREW BERNSTEIN (1999.08.12 )

The volunteerism campaign of President Clinton, George Bush and Colin Powell marks its first anniversary last April. Volunteerism holds that service to the needy is good for young persons, that it will inspire and motivate them and fill their lives with meaning. We want to spark a renewed sense of obligation, a new sense of duty, and a new season of service all across our nation, says the President. But is volunteerism actually good? Is service in slums and nursing homes a proper moral ideal that will galvanize the young, adding value and significance to their lives? The answer is: no. Teaching college ethics courses for the past eighteen years has taught me that the best American students and immigrants, even more so, desire one thing: freedom to pursue their own happiness. They are not excited by the prospect of selfless service at a homeless shelter; they are motivated by budding careers in such areas as business, law, medicine and computer science. And what young people need to inspire them in their careers and lives is not Bill Clinton pushing them toward community service, but a vision of man the hero, of man the bold individual, who holds his own values, sets his own goals and pursues his own happiness. Human beings need heroes to emulate and the young need them most of all. Ironically, General Powell himself is an example of this not in his function as a cultural figure pushing self-sacrifice, but as a hero who rose out of Harlem and the South Bronx by his own effort. It is as a heroic achiever, not as an advocate of duty, that Colin Powell will motivate others. Bill Gatess extraordinary achievements in the field of compute rs has inspired a generation; and the same can be seen in Martha Stewart, whose tireless productive energy has created an enormous business empire and has inspired millions to seek improvement in their lives. As one of her many admirers puts it: She motivates me when I watch her I feel invigorated and encouraged, and I want to hurry and make my life better.

This inspiration is of special importance to the poor, the handicapped and the immigrants, for they face the greatest obstacles to achieving personal success. They, above all others, need a picture of man the hero, man the achiever, man the noble creator of values. It is a sight such as Oprah Winfrey rising from poverty, succeeding by her own effort and becoming the wealthiest woman in America that will offer courage and hope to young people growing up in the slums (or anywhere). What Bill Clinton gives them, instead, is man the indentured servant. There is nothing wrong with an individual doing charity work, if it is not a sacrifice for him. But charity is not a moral ideal, nor does human life depend on it. Achievement is the moral ideal because mans life does depend on it. If you live by this code of achievement, and struggle for your own values and attain happiness, then, as a by-product, your life will serve as an inspiration to others, showing them how much is possible, giving them courage to struggle for their own achievements. Michael Jordan, for example, has been termed a know-nothing capitalist by those who, like the President, hold that goodness consists of taking poor children to the zoo on a summer day. But a question needs to be raised to the advocates of volunteerism. What do you think young people find more inspiring: the sight of Jimmy Carter building churches in the jungles of Guatemala, or the vision of Michael Jordan soaring through the air, winning championships and earning millions, then flashing his joyous, brilliant, life-giving smile? The truth is that Michael Jordans extraordinary success has inspired far more young people, poor, middle-class or rich, black, white or Asian, to strive for their own dreams than an army of social workers could ever think possible. As Ayn Rand puts it in Atlas Shrugged, The sight of an achievement is the greatest gift that a human being could offer to others. This editorial is copyrighted by the Ayn Rand Institute and reproduced here with permission. Visit their MediaLink athttp://www.aynrand.org/medialink/.

Whats So Bad About Being Selfish?

MICHAEL J HURD (1999.09.23 )

Most of us assume that selfishness is both wrong and unhealthy. But is this true? Selfishness means acting in ones rational self-interest. Contrary to popular opinion, all healthy individuals are selfish. Choosing to pursue the career of your choice is selfish. Choosing to have childrenor not to have childrenis selfish. Insisting on freedom and individual rights, rather than living under a dictatorship, is selfish. Indeed, even ordinary behaviors such as breathing, eating and avoiding an oncoming car when crossing the street are selfish acts. Without selfishness, none o f us would survive the daymuch less a lifetime. Selfishness does not mean self-destructive behavior. In other words, a car thief is not selfish. He has to run from the law constantly, something most car owners never have to do. Even if he escapes the law, he will not experience as much pleasure from possessing the car as would an honest person. Lying to your spouse, or any loved one, is not selfish. The psychological stress of trying to live the lie of an extramarital affairor any major secretis enormous. A selfish person understands that honesty is the best policy and the least painful, in the long run. The opposite of selfishness is self-sacrifice. Self-sacrifice means giving up a greater value for a lesser value. Consider the example of a battered wife, who is married to an alcoholic husband who refuses to seek help. She stays with him for reasons o f security and family stability. Yet in the process she sacrifices her self -esteem and physical safety (greater values) to the irrational whims of her husband (lesser values). Consider the example of the hard-working student who allows a friend to copy his answers on an examination. The student is sacrificing both his integrity and his efforts (greater values) to the laziness and low self-esteem of his friend (le sser values). Or, consider the envious individual who tries to get you to feel guilty for your hardearned success. You are lucky to have done so well, the envious person says. Now you have a duty to share some of your success with others. Ce rtainly, a selfish person wants to share his success with those he genuinely cares abouthis

family, friends, or children (greater values). But why should he make sacrifices to individuals he does not know or care about (lesser values)? Selfish individuals give to charityif and when they choose. A selfish person is not stingy. He simply values the use of his own judgment in making decisions about how to spend his money, and when to give it away. Most of us assume that some selfishness is healthy, but too much selfishness will lead to loneliness and despair. This idea rests on an incorrect definition of selfishness. Selfishness means acting in ones rational self -interest. By rational I mean that one can logically prove that an action is in ones self -interestin the long run as well as the short run. For instance, Mr. Jones might think that it is in his self-interest to cheat on his wife, in the short run. But if he considers the long-term, he will understand that he loses her either way by lying to her. If he really loves his wife, he will feel te rrible if he lies to her. If he no longer loves his wife, it is senseless to continue living with her and conducting an affair in secret. A selfish individual does not like to lie, because he sees that it does not bring him long-term happiness. Most of us assume that we cannot be both selfish and kind to others. This is simply not true. If a mother loves her son, it makes her happy to give up some of her money to buy him a bicycle. It is not a sacrificeit is a supremely selfish act. Both mother and son benefit. Similarly, the owner of a popular restaurant is not dutifully serving the public. He provides good food and a nice atmosphere so that he can make a profit and beat the competition. Both owner and diners benefit. A physician does not provide quality treatment for altruistic reasons. He provides it because he is financially and emotionally rewarded for being competent and caring. Otherwise, he quite appropriately loses his patients. Both patient and doctor benef it from selfishness. In a rational society, selfishness is encouraged. A rational society is one where individuals are left free to pursue their self-interest. In the process, everyone benefits. Rational selfishness means acting in your self-interestand accepting responsibility for determining what truly serves your long-term interest. It is a nice alternative to a life filled with duty, drudgery and disillusionment.

We live in a world which does not even recognize the option of rational selfishness. We are taught, from childhood, that we must be either self-sacrificing or thoughtlessly selfish. I maintain that this is a false alternative. Rational selfishness, if practiced consistently, is the means of living both a moral and psychologically healthy life. If you choose to recognize this alternative, such a life can be yours.

The Importance of Principles in Foreign Policy, the Economy, and Political Change
JOSEPH KELLARD (1999.09.19 )

Joseph Kellard for Capitalism Magazine: What is your assessment of President Clintons foreign policy in the Balkans? Tracinski: Well, to start with, I think his so-called victory in the recent Kosovo conflict is really an unmitigated disaster. First, we ended up agreeing to all of the demands Milosevic made to NATO before the bombing began. At a conference in Rambouillet, France before the bombings Milosevic said he would agree to a peacekeeping force if it were led by the United Nations and not NATO. He also refused to agree to a referendum on autonomy for Kosovo. The ostensible purpose of this bombing was to get him to bend on those demands. But it was NATO that ultimately bent, and Milosevic has gotten exactly the deal he demanded at Rambouillet. Meanwhile, the Serbs have displaced and murdered countless Albanians in Kosovo and Clinton has put thousands of U.S. soldiers and pilots in harms way, all to accomplish precisely nothing. But its even worse than just a waste of time, money, and lives. The worst and longest-lasting consequences of this mission probably wont be in the Balkans. Rather, they will come from Clintons weakness in dealing with the Russians and the Chinese. Clinton not only allowed the Russianswho were openly pro-Serb and antiAmericanto serve as our intermediaries with Milosevic. He also allowed them to make a mockery of the peace deal by coming into Kosovo before NATO and seizing the airport we had intended to use as our headquarters. The symbolism was very clear, too. The Russians came into Kosovo by way of Belgrade. Its obvious that theyre in Kosovo to protect Serb interests against NATO. And yet were billed as all being members of the same U.N. peacekeeping operation! This is a potentially dangerous situation. What happens if the Serbs dont hold up their end of the agreement, or if new fighting breaks out and the peacekeepers are called on to take action against Serbia? There the Russian troops will be with their mission to protect Serbia. Clinton says we have to send troops to the Balkans

because thats where previous World Wars started. But hes doing everything he can to ensure that the next one will start there, too. Finally, there is the whole debacle of our bombing of the Chinese embassy. Its not the bombing itself that is the problemits our constant, mealy-mouthed apologizing for it. Heres a country that routinely murders, enslaves, and tortures its own citizens, and here we are apologizing for what was obviously an accidental bombing of their embassy. The only proper way to apologize to Chinas dictators would be to say: Were sorry we killed your people before you could get around to killing them yourselves. But Clinton has allowed China to take the moral high ground. And remember that this was on the eve of the 10th anniversary of Tiananmen Square. America ought to have the moral high ground against China, without question; but Clinton gave that up long agoespecially in his last visit to China. Capitalism Magazine: In the May 1999 issue of The Intellectual Activist (TIA) you wrote how President Clinton claims that a civil war in the tiny nation of Serbiawith no weapons of mass destruction, an army of only 90,000 men, and no ability to attack our alliesis, in some unspecified way, a threat to American interests. He then claims that Chinaa nation with nuclear missiles targeted at the US, armed with secretes stolen from our military laboratories, a nation that sells weapons technology to Islamic terrorists and openly intimidates our allies, such as Taiwan, South Korea, and Japanis not a threat to American interests. What is at the root of Clintons foreign policy that makes him reach these conclusions? Tracinski: Well first of all, I dont think Clinton really believes the Balkan conflict is a threat to U.S. interests. Or, rather, he believes it in the same way he believes anythingthe same way he believes he didnt really have sex with Monica Lewinsky. He believes it as a set of sounds to mouth at and for this particular moment. But at root, I dont think Clinton is really interested at all in Americas interests. In fact, I think the opposite is true: Hes hostile to American interests. This is the only thing that brings any unity or logic to Clintons policies. It explains why he condemns Milosevic yet apologizes to the Chinese. It explains why he bombs Baghdad for two days but bombs Belgrade for two months. Every time there is a need for America to assert itself, to stand up righteously for its own interests, Clinton does the opposite, whether its against China or North Korea or Iraq. But anywhere that some insignificant little tribe asks for help in an obscure

conflict, that is considered an important claim on U.S. military might, whether its in Somalia or Haiti or Zaire or Bosnia. This inversion was made totally clear at the end of the Gulf War. Back then, the left condemned the war against Iraq because it was fought over oil which means that it was just in Americas self-interest. But they then added: If only this tremendous military might could be used for good, by which they meant, for self-sacrifice. George Bush got the ball rolling by sending troops to Somalia. He wanted to show that all the altruist claptrap he used to justify the Gulf Warobedience to U.N. mandates and the likewas really sincere. He wanted to show that America wasnt really motivated by selfishness, that we were willing to sacrifice our soldiers and resources. Clinton has followed that leadonly hes been more consistent. His policy is all sacrifice and no self-interest. So Clintons claims about Kosovo being in Americas interests are just meaningless lip-flapping. Their purpose is to cover up the real hostility to U.S. interests that actually motivates his foreign policy. Capitalism Magazine: Yet before Clinton bombed Iraq, after years of appeasing Saddam Hussein, you criticized him for not bombing that nation. Now you criticize him for bombing Iraq for two days. If Clinton, as you claim, is hostile to Americas interest and his foreign policy is all self-sacrifice, how was this true when he finally bombed Iraq when he did? Tracinski: Well, the point of my criticism is that he bombed Iraq for only two days, which is a contrast to his statements about how he was going to bomb Serbia for as long as it took. Moreover, my broader criticism of Clinton is not about Did he bomb or didnt he. A bombing by itself cant accomplish muchas the bombing of Iraq demonstrated. As I argued in the February 1999 issue of TIA, for any military action to be effective, it has to be part of a long-term policy. We would have to establish in words and actions that we are serious about the threats we make, that we believe we are morally entitled to defend ourselves, and that we are willing to do whatever is necessary to achieve that end. Without that context, a few days of military action is just helpless flailing. And, unfortunately, thats what most of Clintons foreign policy has been about. Capitalism Magazine: What factors do you attribute to the largely sound and prosperous economy that has materialized during Clintons term as president?

And to what degree, if any, did his policies contribute or actually harm this economy? Tracinski: What has helped the economy is the fact that Clinton doesnt really have any policiesnot in any serious sense, at least. In the first two years of his administration, Clinton tried all of his major statist initiativesraising taxes, nationalizing medicine, banning guns. Some of them were passed, but the most ambitious failed. And what was even more devastating for him, the Republicans were rewarded for opposing these policiesthey swept the Congressional elections in 1994. Since then, Clinton has retreated to being much more of a compromiser, accepting some conservative measures like welfare reform and putting forward only a series of small statist proposals. And, as weak as the Republicans are, the House still manages to stop some of the worst items. So Clinton has helped the economy by doing very little. And the biggest part of our prosperity comes from the fact that, for the first time in a very long while, the government has managed to restrain itself from inflating the currency. The stable monetary environment, and the lower interest rates it supports, have probably been the biggest factors in enabling the economy to grow. The biggest danger Clinton poses to the economy are in areas where hes not dependent on Congress, where he can, to some extent at least, act without restraint. The first is antitrust enforcement, which has skyrocketed during his administration. If Clinton succeeds in hobbling corporations like Microsoftand in protecting entrenched businesses against innovators in every other field, from bookstores to airlinesthen that will have a very serious effect on the economy. Also, there is the Kyoto Protocol and Al Gores whole environmentalist agenda, which threatens to destroy economic growth on principle. And finally, there is the regulatory assault, especially in the area of disabilities law. Clinton has taken these laws to their final reductio ad absurdum: You cant discriminate against employees on the grounds of competence or ability. Capitalism Magazine: If the biggest factor for Americas current economic prosperity is governments restraint from inflating the economy and lower interest rates, what stops politicians and bureaucrats at the Federal Reserve Board, such as Alan Greenspan, from making this a consistent policy for economic growth?

Tracinski: Well, they have made it a consistent policy to some extent. But this system is inherently uncertain precisely because it depends on the politicians and bureaucrats at the Federal Reserve to keep it going. If they decide that it is more expedient for the moment to inflate the currency, or if Greenspan thinks that irrational exuberance requires him to raise interest rates, or if they just plain make a mistakeI hear that Greenspan looks at hundreds of statistics to try to decide whether to raise or lower interest ratesthen they can cause a great deal of harm to the economy. The only way to really secure a stable currency, over the long run, is to adopt a gold standard. That would take the decision out of the hands of bureaucrats and base the value of our currency on the objective value of a real commodity. Capitalism Magazine: Can you explain what the promoters of the newest political categories of centrism and Third Way want Americans to believe they represent, and what do you think they represent? Tracinski: Well, I think this ruse of the Third Way provides a lot of the answer to why Bill Clinton hasnt been able to accomplish much. Its important to remember that the Third Way is really the fourth way. It used to be that the Third Way or Middle Way was a compromise between capitalism and communism. The original Third Way was a Swedish-style democratic socialist welfare state. The new Third Way is really a compromise on the compromiseits a middle way between the socialist welfare state and capitalism. So the compromise is trending in the capitalist direction, which I suppose is a good sign. And thats part of the reason why Clinton has been largely impotent to create any major new attacks or controls on the economy.But the purpose of the Third Way compromise is just as vicious as it was back with the original Third Way. Its purpose is to dissolve the moral issues involvedto break down the difference between capitalism and socialism, on the grounds that we shouldnt go to extremesand use the resulting fog as an excuse to move incrementally toward socialism. And as I said above, Clinton has been partly successful in this regard. He cant get any major new statist initiatives approved by Congressbut he has destroyed any strong Republican resistance to a whole string of small statist measures, because theyre afraid of being seen as mean or as defenders of selfishness.

Capitalism Magazine: At this time, it appears that during the presidential election in 2000, Americans will have as their main choices only Al Gore, whose policies will largely mirror those of Bill Clintons, and George W. Bush, whose compassionate conservatism some political observers regard as liberalism in disguise. How has liberalism survived this long as a political force in America, and how much is conservatism to blame for its survival? Tracinski: Liberalismthat is, statismhas survived because it faces no moral opposition. And this is where the responsibility of the conservatives comes in. The conservatives dont challenge the idea that the haves must be sacrificed to the have notsthat the producers must be sacrificed to the parasites. They dont question the idea that selfishness is eviland as a result, they cant argue against the idea that capitalism is evil. Right now, conservatism is splitting into two camps. On the one side are the pro-free-market libertarian conservativeswho are generally pragmatists, who champion free markets only because they are efficient. On the other side are the religious conservatives, who want to use the state to impose personal morality and ban such things as violence in films. These people have actually come out against too much advocacy of the free market. So you can see that there is no moral opposition to the left. At the same time, however, the moral basis of the left has to a large extent collapsed, and has been collapsing ever since the late 1970s. No one believes any more in the great socialist idealno one believes any more in this idea of a prosperous, benevolent state in which the whole economy would be scientifically managed by bureaucrats. So instead everyone is converging toward the middle. Their morality moves them toward more government control since they believe that altruism and sacrifice are good. But they sense that at the end of this road lies slavery and destruction. So they cling to a pragmatic Third Way, of which Clinton and George W. are virtually indistinguishable examples. By the way, I regard Gore as worse than both Clinton and Bush, and I would vote for practically any Republican instead of him. (The only exceptions are Gary Bauer and Pat Buchananin which case, I wouldnt vote.) Unlike Clinton, Gore has a real ideological commitment: He is against industry, technology, progress, and he seriously thinks that we have to strike a moral balance between sacrificing people vs. cutting down trees. And in foreign policy he has been consistently pro-China. I expect Bush to betray capitalism, but I doubt he could possibly cause more damage than Gore.

Capitalism Magazine: Does your opposition to Gary Bauer and Pat Buchanan imply that conservatives of the religious variety are somehow worse than the pragmatic, pro-free market variety? Tracinski: Yes, definitely. The pragmatist are just impotent; they are buffeted about by events and can exert no leadership because they have no ideas. The religious and, in Buchanans case, quasi-fascist conservatives are worse because they do have ideas. They are dedicated to principles, and their principles are completely opposed to freedom and individual rights. So thats why I wouldnt vote if Bauer and Buchanan were pitted against Gore (which is, thankfully, unlikely). It would be a choice between two brands of principled antiindividualist. Capitalism Magazine: Why do you believe the Libertarian Party is not a proper alternative to the Democrat-and-Republican status quo, even though many Libertarians allege that their partys platform is compatible with Objectivist politics? Tracinski: The answer is contained in what I said above. The only way to stop the trend toward greater government control is to offer better ideas. But the Libertarian Party is founded on the idea that fundamental ideas are irrelevant to political activism. Their whole idea is that people can get together to work for freedom regardless of their underlying philosophy. But that is exactly the opposite of the truth. There is no way to work for freedomor even to define freedom correctlywithout a proper underlying philosophy. Thats why The Intellectual Activist has the name it does. We realize that we have to be activists in the realm of philosophy first, with political activism following from that. Thats also why Nick Provenzo and I call our new organization the Center for the Moral Defense of Capitalism. We realize that the real battleground is not politics but morality and everything it depends on. Capitalism Magazine: Where does Ayn Rands philosophy of Objectivism stand as an influence in American culture and politics today, and what do you believe it will take for the movement behind it to dramatically increase its influence? Tracinski: I think that her philosophy has more influence than most of us realize. I am constantly amazed to discover Objectivist sympathizers all over the place. This includes everyone from my accountant to waiters at restaurantsand even people in positions of significant authority: congressmen, judges, even a university administrator. Many of these people are not Objectivists, but they have read and been influenced by Ayn Rand in some way.And this can certainly be seen in the political debate in all sorts of indirect ways. In antitrust, for example, I have seen that defenders of the antitrust laws increasingly feel the need to defend themselves from the charge that they are trying to punish

achievement. But who is it who made that charge? Ayn Rand. Heres another aspect of that. Three decades ago, the U.S. government arrested the top executives of General Electric, led them into court in handcuffs, and threatened them with criminal antitrust charges. Today, even though civil antitrust charges are skyrocketing, the Department of Justice has practically eliminated the use of criminal charges. I think that this really reflects a change in the political environment. I think they sense that the sight of Bill Gates in handcuffs would enrage and offend the public and would expose antitrust as an assault on ability and intelligence. Whereas they werent afraid to do that to General Electric years ago.This is part of the reason why I think the time is right for Objectivist political activism. Some of Ayn Rands ideas are already making it into the debate implicitly, or in some watered-down form. Its time to bring her ideas into the debate fully and explicitly. As I said above, statism still survives and grows because it has moral authority, the authority of altruism. Its time to start drawing on the moral authority of the proselfishness, pro-capitalism side. The Objectivist movement is already making a good start. What we need first of all is more Objectivist writers and intellectualswhose numbers have already increased enormously since I became an Objectivist twelve years ago. We need to train these intellectuals and to transmit to them the knowledge gained by the older generation people like Harry Binswanger and Peter Schwartz. With the Objectivist Graduate Center, we now have that. The final thing that we need is more institutions to help create an environment in which these intellectuals can reach the media and work at spreading Objectivist ideas full-time. And with the Ayn Rand Institute and now the Center for the Moral Defense of Capitalism, were beginning to have that. So I am very optimistic about the future of the Objectivist movement and about our ability to have an increasing effect on the cultural and political debate in this country.

Labor Day: Time to Celebrate Mans Mind

FREDRIC HAMBER (1999.09.15 )

It is fitting that the most productive nation on earth should have a holiday to honor its work. The high standard of living that Americans enjoy is hard-earned and welldeserved. But the term Labor Day is a misnomer. What we should celebrate is not sweat and toil, but the power of mans mind to reason, invent and create. Several centuries ago, providing the basic necessities for ones survival was a matter of daily drudgery for most people. But Americans today enjoy conveniences undreamed of by medieval kings. Every day brings some new useful household gadget, or a new software system to increase our productivity, or a breakthrough in biotechnology. So, it is worth asking: Why do Americans have no unique holiday to celebrate the creators, inventors, and entrepreneurs who have made all of this wealth possible the men of the mind? The answer lies in the dominant intellectual view of the nature of work. Most of todays intellectuals, influenced by several generations of Marxist political philosophy, still believe that wealth is created by sheer physical toil. But the high standard of living we enjoy today is not due to our musculature and physical stamina. Many animals have been much stronger. We owe our relative affluence not to muscle power, but to brain power. Brain power is given a left-handed acknowledgement in todays fashionable aphorism that we are living in an information age in which education and knowledge are the keys to economic success. The implication of this idea, however, is that prior to the invention of the silicon chip, humans were able to flourish as brainless automatons. The importance of knowledge to progress is not some recent trend, but a metaphysical fact of human nature. Mans mind is his tool of survival and the source of every advance in material well-being throughout history, from the harnessing of fire, to the invention of the plough, to the discovery of electricity, to the invention of the latest anti-cancer drug. Contrary to the Marxist premise that wealth is created by laborers and exploited by those at the top of the pyramid of ability, it is those at the top, the best and the

brightest, who increase the value of the labor of those at the bottom. Under capitalism, even a man who has nothing to trade but physical labor gains a huge advantage by leveraging the fruits of minds more creative than his. The labor of a construction worker, for example, is made more productive and valuable by the inventors of the jackhammer and the steam shovel, and by the farsighted entrepreneurs who market and sell such tools to his employer. The work of an office clerk, as another example, is made more efficient by the men who invented copiers and fax machines. By applying human ingenuity to serve mens needs, the result is that physical labor is made less laborious and more productive. An apt symbol of the theory that sweat and muscle are the creators of economic value can be seen in those Soviet-era propaganda posters depicting man as a mindless muscular robot with an expressionless, cookie-cutter face. In practice, that theory led to chronic famines in a society unable to produce even the most basic necessities. A culture thrives to the extent that it is governed by reason and science, and stagnates to the extent that it is governed by brute force. But the importance of the mind in human progress has been evaded by most of this centurys intellectuals. Observe, for example, George Orwells novel 1984, which depicts a totalitarian state that still, somehow, is a fully advanced technological society. Orwell projects the impossible: technology without the minds to produce it. The best and brightest minds are always the first to either flee a dictatorship in a brain drain or to cease their creative efforts. A totalitarian regime can force some men to perform muscular labor; it cannot force a genius to create, nor force a businessman to make rational decisions. A slave owner can force a man to pick peanuts; only under freedom would a George Washington Carver discover ways to increase crop yields. What Americans should celebrate is the spark of genius in the scientist who first identifies a law of physics, in the inventor who uses that knowledge to create a new engine or telephonic device, and in the businessmen who daily translate their ideas into tangible wealth. On Labor Day, let us honor the true root of production and wealth: the human mind.

The Basis of Good Government: The Protection of Individual Rights

GLENN WOICESHYN (1999.10.17 )

Good government? Isnt that an oxymoron? Many today believe so. Who can blame them? Our political system has increasingly become a chaotic jungle driven by competing pressure groups (special interests) seeking special favours and handouts from government. Politicians are generally distrusted and despised for their broken promises, flip-flops on issues, empty rhetoric and pork-barreling. Bad government undermines prosperity and peaceful coexistence, which undermines personal development, achievement and enjoyment of life. But bad government is not an inevitable condition of social existence its root cause is the failure to uphold and protect individual rights. Individual rights are rarely discussed by mainstream intellectuals, who are busy promoting some version of so-called collective rights all of which involve sacrificing the individual to some group, be it the needy, the majority, ones tribe, the public, or whatever. Consequently, most people do not understand what individual rights mean, what they rest on, or what they lead to. What they lead to is good government, prosperity and peaceful coexistence. To best understand why and how, consider a hypothetical situation involving the person you know best yourself. Imagine escaping alone from a tyrannical country and becoming shipwrecked on a desert island. All you have are some fruit and vegetable seeds in your pocket. You are young and intelligent, but without special skills. To stay alive, you must obtain food and fresh water, and maintain a fire for warmth and cooking, which initially consumes all your time. You soon figure out how to produce your basic survival needs more efficiently by constructing fish traps, farming tools, an irrigation system thus allowing you to accumulate savings, which buys you time and affords you insurance against unforseen setbacks, such as storms, injuries, illness.

With the time saved, you discover how to produce other goods, such as clothes, tools, a shelter, furniture, etc., for enhancing your life. You enjoy inventing new technology to increase your production, but find yourself quite limited, not to mention lonely, on your own. Hurray! Others become shipwrecked. Each person, rather than produce all his own needs himself, focuses on producing one item efficiently, then trades his surplus production at the market for the produced goods of others. You marvel at the production efficiency of the division of labour, and the corresponding enhancement of everyones life, especially when you now have tools, engines, machines, electricity, etc., to enhance production. Consequently, life is more safe, secure, comfortable and enjoyable. Prosperity keeps rising. When someone makes a breakthrough discovery boosting his productivity, he benefits significantly and so do the rest of you because he has more goods to trade for yours. You recall being told that one mans gain is another mans loss, and that peaceful coexistence is impossible in our dog-eat-dog world. That seemed true in your old country, but here people respect each others freedom and property, and are generally cheerful and benevolent. You conclude that living in the right kind of society can enhance your life tremendously. You had specialized in petroleum production but some clever upstart competes with you and produces oil much more efficiently; so you switch to farming. You tell yourself that your desire to produce oil isnt a rational reason to despise or block someones superior ability. Such reactions would not be in your rational self -interest, let alone anyone elses. Many more become shipwrecked and specialize in various productive endeavors, thus yielding a greater quantity, variety and quality of goods and services on the market. Immigration is good, you conclude. Some have specialized in music, theater, painting, sculpture, etc., for peoples pure enjoyment or spiritual sustenance; some have specialized in services such as health care, education, engineering design and scientific research. The more wealth you create, the more future-oriented you become. When petroleum reserves start to decline you decide after careful planning to use your savings,

plus a loan from a banker/investor, to hire the brightest people by offering top salaries to conduct scientific research to discover a cheaper energy alternative. After several arduous yet exhilarating years, the researchers succeed, thus making you (and the shareholders) extremely wealthy, which allows you to purchase the best products and services available. You feel on top of the world. You recall being told that wealth is a sign of selfishness and that selfishness is evil, but you now realize that true selfishness means using your mind to create and achieve values, thereby enhancing your life and happiness. How could that be evil? Besides, everyones life is enhanced by your success because cheaper energy improves everyones production efficiency. In your old country you would have been condemned as a robber baron on the absurd premise that all wealth is stolen from somebody, somehow. But here you are praised for your success by those who know first-hand that wealth must be created, and therefore rightfully belongs to the creator. Other long-range entrepreneurs make similar breakthroughs in areas such as medicine, transportation, communications, etc. At this point you induce an enlightening principle regarding human nature and human survival. Whether alone or in society, the root of mans survivability is his reasoning mind and the sky is the limit. If man acquires knowledge of the world by focused observation, careful experimentation and rigorous logic, he can guide his actions efficaciously to secure and enhance his life. The emotional reward is happiness. While most understand that one must earn what one gets, some unfortunately do not. Some observe the surplus wealth and, evading its cause, choose to seize it by force. The appearance of criminals necessitated common sense laws prohibiting murder, assault, theft, fraud, etc., police to enforce these laws, and courts of justice to prosecute criminals objectively. Letting individuals retaliate against criminals on their own proved destructive because it fostered lynch mobs and mafia-style policing, all leading to anarchy. Also, you discovered that law courts are valuable for settling contractual disputes objectively, in case the parties involved have different interpretations (innocently enough) of their contract. Furthermore, it was learned from new immigrants that your old country plans to conquer your new country because their social system has left them poor and

miserable, although heavily armed. So you established a voluntary army for selfdefence. In your old country people feared and hated their government, but you have come to realize the crucial value of government in preserving creativity, prosperity and peaceful coexistence. Unfortunately, some businessmen saw government power as a means of gaining economic power, and lobbied politicians for special handouts and legislation that in the name of fair competition effectively cripple successful competitors. Labour leaders followed suit by securing special laws that in the name of workers rights effectively force employers to heed to the dictates of union bosses, who prefer that workers be rewarded for their loyalty to unions, not for performance. In the name of economic stability the government took control of the monetary system from private banks, which had used gold as the standard of money. The government abandoned the gold standard in order to freely print paper money to cover its expenses and stimulate economic growth. But the net effect was to dilute the purchasing power of everyones savings because more money chasing the same goods raises prices. The rapid expansion of money and credit in the economy did stimulate economic activity, as would any counterfeit operation, but was quickly followed by rising prices. When hyperinflation ensued, the government jacked up interest rates, thus plunging the economy into a depression. The depression got blamed on greed and the unplanned, unbridled nature of a free economy. This led to a major expansion of governm ent power and spending in the name of economic planning, social justice and the public welfare. Things improved somewhat and the government took full credit for the improvement. Now taxes keep rising to cover growing government expenses. With expanded government power came the formation of more and more pressure groups or special interests which lobbied government for handouts, special favours and more laws all in the name of public interest. You used to enjoy thinking about your next move to boost productivity and market share, but now your mind keeps banging into roadblocks called red tape and disincentives called taxes. Whats the use? you now repeatedly tell yourself.

Unemployment has risen dramatically. Punitive labour and tax laws have eroded the incentive to hire people while generous government welfare and unemployment insurance schemes have eroded the incentive to work. The high unemployment rate is blamed on private corporations for not sacrificing themselves to the public good. Overall, the incentive to think and produce has been replaced by the incentive to lie, lobby, rule and loot. Productivity keeps declining as government keeps expanding. More and more people become dependent on government assistance. In the past there were people who needed help due to some handicap or unforseen mishap, but their numbers were small; and voluntary charity took good care of them. Now, the needy are numerous, loud and mostly irresponsible. Nobody can plan for the future because nobody can predict what government will do next. Besides, savings the key to future planning have been sacrificed by governments to consumption in the name of jobs, jobs, jobs. Private scientific research has dwindled while government science keeps proving that bigger government is needed to secure our future. And whenever somebody advocates slowing down the growth of government, the humanitarians scream that such actions attack the needy. Sacrificing the haves to the have nots has become a moral absolute few dare challenge. People who were once responsible, cheerful, honest, and benevolent have become irresponsible, cynical, untrustworthy and even malevolent. Respect for individual liberty and admiration for success have been replaced by power lust, envy and hatred of the successful. Finally, you realize that the government has become a massive agent of destruction. Instead of protecting ones freedom to think, create values and enjoy ones creations freedom from the coercion of others the government has become a massive agent of coercion, sacrificing the individual to the desires and demands of others. Instead of protecting individuals from criminals, it has become the leading agent of criminal action. You realize that the only way to make government contribute positively to human life to actually do good and be good is to severely restrict its power to that of protecting each individuals right to his life, liberty, property and the pursuit of happiness.

You have thus discovered the life and death importance of protecting individual rights. Whats needed now is a constitution that bars the government from criminal behaviour, but hands government a monopoly to retaliate, according to clearly defined rules, against those who violate legitimate individual rights. The name of this social system is capitalism laissez-faire capitalism. Individual rights protect mans freedom freedom from the coercion of others to pursue his life and happiness in the only way he can, by following reason. Initiating force against another, by its vary nature, is anti-reason and therefore anti-life. This is what our mainstream intellectuals and politicians obscure, evade and oppose when they advocate the violation of individual rights. When a collectivist claims that individual rights must be subordinated to the public good, his concept of public is divorced from individuals, and his concept of good is divorced from reason, freedom and justice. His claim amounts to: The needs or desires of some necessitate the enslavement and destruction of others. When a collectivist (qua altruist) claims that the needy will perish without sacrificing the haves to the have nots, he obliterates the distinction between the truly needy and those generated by collectivist policies. The truly needy are far better off on private charity under laissez-faire capitalism. What the collectivist is actually advocating in practice is destruction of the able for the sake of destruction. When a professor teaches unwary students that individual rights breed poverty and social strife, whereas collective rights breed prosperity and social harmony, he does not know that he is talking about. Prior to the 19th Century, when individuals were at the mercy of tribal chiefs, roaming Attilas, religious dictators, feudal lords and the Divine Right of Kings, economic progress was slow with several severe setbacks, such as the Dark Ages and human life was, in the words of Thomas Hobbes, solitary, nasty, brutish and short. Thanks to the growing respect for individual freedom during the late Renaissance (rebirth of reason) and Enlightenment, culminating in the birth of the United States and its Bill of Rights, the 19th century (1815-1914) was unprecedented in rising prosperity and peace. (Note that the U.S. Civil War resulted from the Founding Fathers single failure, in the spirit of compromise to Southerners, to abolish slavery a collectivist doctrine that blatantly violates individual rights.)

People fled from their suffocating and tyrannical homelands to enter the land of the free, and home of the brave in order to breath, think, produce and prosper. Statism the politics of concentrating power in the state at the expense of individual liberty returned with a vengeance in Europe during the 20th century (via Communism in Russia, Fascism in Italy, and Nazism in Germany), making it the bloodiest century in history. Freedom did not disappear in Canada or the U.S., but freedom has been significantly eroded as our governments expanded their powers at the expense of individual rights. The result has predictably been pressure-group warfare, economic decline, political chaos and widespread national disunity. Although there recently has been some movement away from statism and towards capitalism or globalization, many intellectuals and politicians are desperately trying to stop and reverse this trend by obscuring the meaning of individual rights and its foundation in reason and rational self-interest. Understanding what individual rights mean, what they lead to, and what they are based on is the first crucial step towards getting us back on the road to rising prosperity, national unity and good government.

How to Achieve Real Campaign Finance Reform: Have a Government That Cant Sell Public Interest Favors
EDWIN A LOCKE (1999.10.11 )

Congress is once again addressing the issue of campaign finance reform and no wonder. The American public has become increasingly disgusted by the unprincipled manner in which our legislative process is conducted. The process, in essence, consists of swarms of lobbyists descending like locusts on Washington, demanding special favors in return for campaign contributions. Wealthy special-interest groups, and the money they wield, are accused of being the ultimate culprits in this mess, and, it is asserted, Congress must rein them in. Such reform cannot and will not work, because it targets the wrong culprit. Moneyed interests are not the real problem; they are only symptoms of a deeper cause. The corruption is caused not by material wealth but by spiritual poverty. The root cause is not bad money but a bad idea, namely the concept of the public interest. Let us see how the premise of the public interest operates in practice. Imagine that you are an honest, idealistic congressman just elected to office. On your first day, you are accosted by four lobbyists. The first demands a tariff increase on certain imports to protect his groups industry which, he claims, serves the public. The second lobbyist asserts that it will benefit the public if his group gets a subsidy to help its members survive in a brutally competitive market. The third insists that it will he lp the public if members of his group are given license to be the exclusive providers of a certain service. The fourth says the public will be better off if unions are made illegal in his industry. The next day, a new group of lobbyists asks you for favors. These often conflict with those demanded by the first group, but are just as fervently presented as being in the public interest. How then do you decide what to do? If an auto-industry spokesman argues for import tariffs on cars to protect the jobs of hundreds of thousands of workers, and an autodealer association argues for no tariffs in order to give hundreds of thousands of buyers lower prices, which group, in this case, is the public? Both and neither. You realize that the public is not an actual entity but only a collection of individuals. So which individuals, in any given case, should get what they want and at whose expense? There is no way to tell anyone can claim to be the public on any issue. In dismay you recognize that the public interest has no objective meaning. It is empty rhetoric.

Politics abhors a vacuum and when there are no coherent principles to guide action the void is filled by pressure-group warfare. The winner of any given battle is decided by such arbitrary factors as which group is bigger, richer, better connected (e.g., to the White House), or more attuned to the latest media hype or political tide. In practice, the principle of the public interest leads to a political war of all against all in which some individuals are sacrificed for the benefit of others. This mess is known as the mixed economy. (There are, of course, some principled lobbyists who seek, not special privileges, but simply the right to be left alone but their pleas fall on unprincipled ears.) All this leads to widespread cynicism and demands for campaign finance reform reforms which cannot work. To think that you can eliminate the problem (the buying and selling of favors) by controlling its effects (limiting the size of contributions) is like trying to eradicate mental illness by limiting the number of beds in mental hospitals. Real campaign finance reform requires philosophical reform. We must discard the notion of the public interest and replace it with the proper principle: individual righ ts, which means the freedom of each individual to pursue his own interests as long as he does not coerce or defraud others. This means: replace the mixed economy with real capitalism no tariffs, no subsidies, no protection from competition, no favors. Only when Congressmen have no special favors to sell will lobbyists stop trying to buy their votes and their souls. Property rights should have the same sacrosanct status as freedom of speech. If a modern lobbyist went to a Congressman and demanded that he get a law passed preventing people from publicly criticizing his organization, he would be laughed out of Washington. The same fate should befall lobbyists who want to limit how people use their property and for the same fundamental reason: an individuals right to his life.

The Conservative-Marxist Origins of Antitrust

RICHARD M SALSMAN (1999.10.01 )

Part 1 of 6 in a Series of articles on Capitalism, Free-competition, Antitrust, and Microsoft The following article is an adaptation of a lecture Mr. Salsman gave at Harvard University, in May of 1999. The print version has been edited lightly in order to retain its spontaneous quality. Mr. Salsman has not reviewed the edited version. Good evening. Picture for a moment the following setting. Youre in the Deep South. Seated at a bar. Surrounded by friends. Having fun. Youre college educatedyoure intelligent, worldly, enlightened. But you ARE in the Deep South. And its 1952. The word on everyones lips is not Y2Kbut KKK. Suddenly theres a commotion. People are rushing out of the bar. You learn someones being lynched. He didnt do anything wrong; he was just born with black skin. He is hated. He is despised. He is being lynched. For no other reason. What will you do? Now, come back to Cambridge. Its the late 1990s. Youre college educated. Youre even more enlightened. The whole world is open to you. You own a personal computer, purchased at a fraction of the cost of a 1952 IBM mainframe and with substantially more power and ease of use. With a few simple key strokes you can write papers, send e-mails, access the Internet, do budgets, start your own business. You can be all that you can be. Youre content. Suddenly, theres a commotion. It seems nasty. You see it among professors and some of your friends, in the news and on the Web. People are rushing around, angry, agitated and vengeful. You sense that someones being lynchedbut youre not sure, because thats not how its described. Like the black man, the local victim didnt do anything wrong; on the contrary, he seems to have done everything just right. And not because he was born to, but because he learned to. Still, he is hated. He is despised. He is being lynched. For no other reason. What will you do? Americas biggest, most profitable, most successful, most widely-recognized companya firm whose products are more widely and more productively used, in every line of business, than any other; a firm whose chairman left Harvard early out of boredom and became a multi-billionaire in his 30s; a firm which has spawned thousands of millionaires among its programmers and salesmen; a firm whose stock has soared hundreds of percentage points and fattened the pensions of countless

investorsthis is the firm thats been the target of a long, vicious and calculated assaultfrom academia, from the media, from 19 state Attorneys General, and from antitrust prosecutors in Washington. The assault has been in progress since 1990; it sped up in 1990; it was intensified in a Federal trial beginning last fall. The title of my talk tonight refers to a high-tech lynching. Why do I call it a lynching? After all, arent the proceedings taking place in Americas hallowed halls of justice? In October the firm will face a final verdict and if found guilty itll face sentencing. Already its enemies have pronounced it guilty before the verdict, just as they did in 1990; just as was done in the Deep South. Fortune magazine, hardly a left-wing rag, says the firms CEO is the information economys equivalent of a

Capitalists Celebrate 50 Years of Communism in China

ANDREW WEST (1999.12.05 )

Ive seen numerous broadcasts of news programs on CCTV (the Chinese State controlled TV channel) via satellite transmission. Even without the benefit of English translation, it is obvious that many of the news shows are little more than propagandapieces deployed to boost the credibility of the Communist Party. For example, one recurring feature involves a Chinese Communist Party (CCP) leader giving a speech. The camera frequently cuts to a captivated audience, fervently writing down the speakers brilliant insights. (Apparently the text of the speech isnt distributed.) The piece generally climaxes with a pan shot of the audiences mandatory standing ovation at the end of the speech. Just as such propaganda devices have begun to lose their impact on Chinese viewers (who rightfully have come to see them as staged events with ersatz audiences), along comes a bunch of capitalists to save the day. The Fortune Global Forum, arranged by Fortune Magazine, convened in Shanghai last week providing the CCP exactly the kind of propaganda opportunity it loves. The Forum brought together more than 300 heads of multinational companies, plus more than 200 Chinese government leaders and heads of major Chinese enterprises. In return for kowtowing to Jiang Zemin and helping the CCP celebrate 50-years of oppressing the Chinese people, company heads were given a chance to invest yet more money in China and make connections with the CCP bureaucrats who will determine their business success or failure. The Forum provided CCTV with the opportunity to portray the CCPs interpretation of history: China was a backward nation before the Communist Party took control and liberated the Chinese people (gloriously advancing the country ever since). According to the CCP, before the Communists liberated Shanghai, foreign businessmen treated the Chinese people like they were not human. Today, CCTV cameras show how CCP head Jiang Zemin has turned the tables, keeping foreign billionaires at his heel, licking his boots, and taking his orders. And boot-lick they did. Viacoms chairman lectured attendees that journalistic integrity must be exercised in a way not unnecessarily offensive to the countries in which you operate. Time Warners chairman made sure the latest issues of Time Magazine were confiscated (lest someone be offended), then introduced the head of the CCP as my good friend Jiang Zemin.

AIGs chairman Maurice Greenburg touted the party line that The leaderships first priority is to feed and shelter 1.2 billion people (implying that prioritizing individual rights would somehow be detrimental to Chinese nutrition). Ted Turner then won the contest for servility [and stupidity] by announcing himself a socialist at heart. And of course, everyone applauded Jiang Zemins lecture, which included a reminder that China wouldnt rule out using military force against Taiwan. The event was topped off with Arthur Anderson setting off a bunch of rockets in a symbolic fireworks display. What a revolting performance. The businessmen who helped China publicly celebrate 50 years of Communism are a disgrace. The Fortune Forum was carefully manipulated to maximize its propaganda value within China. These businessmen provided the CCP with a public moral sanction, a seal of approval to be televised to the Chinese people. Has everyone forgotten that the CCP has oppressed and impoverished the Chinese people? That tens of millions were systematically starved to death during the CCPs worst days? The reality is that the CCP still views Chinas citizens not as sovereign individuals with rights, but as dispensable servants of the state. The growth of the Chinese economy during the past 20 years is testament to the perseverance of the Chinese people in spite of the CCP. In recent years, the only possible positive the CCP has done is to partially remove some of the obstacles they created for the economy in the first place. In my mind, a man unjustly imprisoned for 50 years should not have to thank his jailers for being allowed into a work-parole program. And it goes without saying that billionaires shouldnt be making deals and posing for pictures with the prison leader.

Coming soon: The Fat Tax

LARRY ELDER (1999.11.09 )

Its on. The Centers for Disease Control and Prevention just released a new study. Americans, say the CDC, face a new epidemic fat people. The CDC calls nearly 18 percent of Americans obese, meaning that nearly one in five of us weighs more than 30 percent above the ideal. From 1991 to 1998, says Dr. Jeffrey P. Koplan, director of the CDC, We had a 50 percent increase in obesity in all age groups and in all ethnic groups. Weve had a steady increase throughout the 20th century, but this is a remarkably quick upturn We dont have a simple answer why. Gee, I dunno, maybe people are, like, eating a lot. But if one defines fat as being above the ideal, but less than 30 percent overweight, this expands the fat pool considerably. Under this more generous definition of overweight, a Tufts University study found 63 percent of men and 55 percent of women fat. Shocking! One newspaper editorial, calling the results a public health crisis, condescendingly said, So, as soon as you finish this paper, lace up your shoes and go out there and walk as if your life depended on it. It does. Does this pattern sound familiar? First, we call something in which Americans voluntarily engage, whether smoking cigarettes or purchasing handguns, a public health crisis. Then, Congress holds hearings to explore alternatives or solutions. Next, we get regulation. Finally, Clinton declares Halloween trick-or-treating a national disaster, triggering the release of FEMA funds to distressed neighborhoods. Dont laugh. Yale University Professor Kelly D. Brownell suggests taxing unhealthful foods. According to Brownell, Americans are being seduced by our toxic food environment, which offers up a diet that is high in fat, high in calories, delicious, widely available and low in cost. He recommends policies that would subsidize healthy foods like fruits and vegetables, while taxing unhealthy foods such as those high in fat and cholesterol. [Editor's Note: How about just removing price and quantity controls on healthy foods (like oranges), and stop subsidizing unhealthy ones?] He proposed channeling the proceeds into nutrition education and public exercise programs. A Twinkie tax, says Brownell, would encourage people to make healthier eating choices. As a culture, we get upset about Joe Camel, yet we tolerate our children

seeing 10,000 commercials a year that promote foods that are every bit as unhealthy. Hey, why not? After all, the government tells us that nearly 400,000 people die prematurely from cigarette smoking. To get this number, the government simply credits cigarettes with a death if the deceased smoked, no matter the decedents age, weight, or lifestyle. So if a 97-year-old guy dies in his sleep, but paramedics find a pack of Winstons on the night stand, make it 400,001. Now the CDC tells us that almost as many die from heart disease, a condition caused or exacerbated by an unhealthful diet. In short, McDonalds, Burger King, and Wendys kill. So attorneys general, start your lawsuits! Why not a class action lawsuit against C&H Pure Cane Sugar? After all, these manufacturers probably knew that sugar rots teeth and provides little nutritional value, yet they nevertheless continued distributing the product without warning labels. Evil personified! Oh, sure, some killjoy will remind us that Americans live longer and better than ever, and that, sooner or later, people die. From something. But such cynicism cannot stop the tofu-eating, tree-hugging, anti-smoking, I-can-look-out-for-your-health-better-thanyou-can zealots who now have a new freedom-eroding cause slimming down fat people. Somewhere, actor-director Rob Reiner trembles. He, after all, spearheaded a California proposition that placed a 50-cent tax on cigarettes. The portly Reiner, who seems quite capable of getting the best table at Fatburgers, could face a serious tax liability. But will Reiner, a rich man, suffer? No, a fat-tax, like the one on cigarettes, would fall directly on the shoulders of those least capable of affording it poor people. Studies show the poor more likely than the rich to eat an unhealthful diet, and therefore, they comprise a disproportionate number of the obese. But, then, this is for their own good, right? Hillary Clinton tells us it takes a village. President Clinton, however, recently lectured those who dislike him, and thus refuse to support Al Gore for President. I dont think mature people, said Clinton, hold one person responsible for another persons conduct, do you? Well, yes. For mature people hold gun manufacturers responsible for the thug who kills, and hold cigarette manufacturers responsible for those who smoke despite warning labels. And now, mature people assault the eating habits of others. Is obesity harmless? Obviously not. But do we ask too much by allowing people to govern their own behavior?

So the it takes a village people carry on, with attorneys general, politicians, academics, and regulators happily marching along. As somebody once put it, You can fool some of the people all of the time, and all of the people some of the time. And thats sufficient.

Clintons Place: Taxation and Home Ownership

ANDREW LEWIS (1999.10.28 )

Last week, the New York Times covered two recent purchases that demonstrate new lows in the realm of political real estate. One year ago, former Ukrainian Prime Minister, Pavlo Lazarenko, paid $6.75 million in cash for Eddie Murphys 41 -room mansion in Marin County, California. Last week, President Clinton entered into a contract for a $1.7 million home in Chappaqua, New York. No one believes that Lazarenko earned $6.75 million as Prime Minister of a former Soviet republic, and Federal authorities have detained him while Swiss and Ukrainian officials investigate charges of embezzlement and money-laundering. Equally, it is transparent that the Chappaqua house is beyond the Clintons financial means; his Presidential salary is insufficient even were they not carrying $5.5 million in legal debt. The house is being guaranteed by Terry McAuliffes $1.35 million assurance in a deal the the New York Times (9/4) described as a clever and unusual piece of financial engineering designed to avoid various tax and other pitfalls. Neither of these men know or care the first thing about the fiscal responsibility required to buy an honest piece of property. They use the currency of the day: political pull, sacrificing their citizens rights to feather their own nests. Nowhere is this more blatant than the Presidents intent to veto the Republican Partys proposed tax cuts. Chappaqua is a brazen insult to every honest citizen who is paying off a mortgage or saving desperately to buy a home. Chappaqua is beyond the wildest dreams of many Americans, primarily because the so-called progressive tax system which is really a punishment for your success makes it increasingly difficult to save money as you improve your lot. Offered a minor tax cut by the Republicans, hard-working Americans will continue to toil under our burdensome taxes at the vicious whim of someone who has never worked an honest day in his life, nor paid for his own home, and is likely never to do so. By all accounts, Lazarenko is a crook: he has broken laws and will likely suffer some petty rebuke. He, at least, has the decency to have concealed actions he knew were criminal. Clinton, however, blusters his way through front pages and government ethics technicalities as though he is an average citizen. His morally criminal link to Lazarenko is that same idea that ties him to dictators throughout the centuries: one law for the ruled and none for the rulers.

Perhaps the most frightening fact is our citizens complacency at his actions and his policies, the many Americans who, according to so many opinion polls, apparently believe Clintons rhetoric that we dont need a tax cut. It is our responsibility to censure him and his tax-and-spend cronies, and to demand what is morally ours: a massive tax cut accompanied by the necessary reduction and end of government welfare programs and the return of wealth to those who have earned it. Unless we do, the American dream of home ownership will dwindle away to nothing more than a political perk.

Individual Rights and the Essential Nature of Capitalism

RICHARD M SALSMAN (1999.12.22 )

Part 3 of 6 in a Series of articles on Capitalism, Free-competition, Antitrust, and Microsoft The following article is an adaptation of a lecture Mr. Salsman gave at Harvard University, in May of 1999. The print version has been edited lightly in order to retain its spontaneous quality. Mr. Salsman has not reviewed the edited version. The essential feature of a capitalist system is not that it has capital, nor even competitionthese are corollaries, or manifestations, of capitalism. Capitalism, as Ayn Rand properly defines it in her book, Capitalism: The Unknown Ideal, is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. It is true that such a system, protecting freedom as it does so well, will also be the most productive systemthat it will generate huge sums of wealththat a small minority of productive geniuses and giants who generate the wealth will be the rightful owners of itthat these creators will also be the rightful administrators of the companies that help create itthat ever higher living standards will be achieved by an ever-widening middle classthat the system will serve as an open invitation to any and all to participate and compete, with a better idea or mousetrapthat its capital markets will be open and deep enough to fund new ideas and products if theyre commercially viable. But capitalism is not a system that permits the violation of individual rights should any of these specific, derivative features fail to emerge or if they emerge, but not exactly in the way an envious competitor or bureaucrat subjectively feels is preferable. Like a perpetual Olympics of the productive spirit, capitalism is replete with active competitions which companies actually win. The winners strike gold, in effect, while others earn merely bronze, or a ribbon, or something less. But unlike the Olympics, capitalism has no fixed program of events, or industries, within which to compete. It burdens no participants with a static quantity of opportunities or a single pot of treasures or an inelastic market from which all must grab their market share. Capitalism competition is not some zero-sum game in which one mans gain is anothers loss; nor is it some dog-eat-dog battle to the death; nor is it cut-throat. Capitalist competition entails not the brutality of animals fighting over a fixed hunk of meat but the vigorous and peaceful exchanges of rational, productive creators of wealth. The freedom and economic power inherent in the Olympics of capitalism

encourage the creation of new events and expanded programs of new material creations, new products and new industries. Capitalism is not a system of anarchy, as libertarians claim. Its a system of objective laws, laws that are just, clearly defined and known in advance, laws that protect individual rightsthe only kind of rights that existincluding rights to private property. That means the right to your property, to the property youve earnednot some alleged right to the property of others, involuntarily surrendered. There are no rights that entail the obliteration of the rights of others. Objective laws are just laws, laws that punish evil and protect the good. They do not presume that wealth even vast wealthis evil. Indeed they presume innocence, not guilt. Justice applies to and protects individuals and the associations they form, including economic associations called corporations or trusts. Ive said economic power is the power to produceand without question, this power can be enhanced by joining with other producers and investors. Sometimes, two heads are better than onebut that shouldnt make such combinations illegal. Nor should combining or segregating ones assets. A trust, after all, is nothing more or less than a means of holding assets, be they stocks, bonds, patents or copyrights. Today theyre called holding companies. A trust is an efficient vehicle for holding and organizing ones property, especially if its massive and complex. This form of ownership permits persons and businesses to expand beyond self-financed proprietorships to corporate forms, so as to attract the capital investment of others typically required to finance large-scale enterprise. Under the U.S. Constitutionand in any capitalist systemproperty is private-held and protected by law against assaults from the initiation of force or fraud. Under this system, you dont lose your right to your property simply because you elect to hold it in a more complex or efficient form. Nor do you lose the right to your property simply because you create more property. That right is violated by a system of graduated income taxesand most certainly by antitrust laws. Because trusts are what they are, the antitrust laws are, in essence, anti-property, anti-large-scale enterprise, anticorporate, anti-wealth and anti-American. Whats more, the antitrust laws are blatantly unconstitutional. And a trustbuster, in essence, is a state bureaucrat devoted to busting up property, wealth, large corporations, American values and constitutional protections. He is a lawless wielder of political power, not with the aim of protecting private property, but of destroying it.

Here is the height of injustice: when the U.S. Justice Department attacks Window, a product delivering expanded applications and integrated functions at an ever-cheaper price to millions of satisfied users, at a satisfactory rate of profit to Microsoftand when the so-called Justice Department assumes PC makers are subjected to force, when in fact it was Netscape, the maker of the inferior browsernot Microsoft or its customers, Dell or Compaqwho used force. This is injustice: an attack on freedom of contract for the sake of sheer political power. Proper laws protect voluntary trades or contractsfrom force or fraud. Unjust laws sabotage voluntary agreements at the expense of a wealthier party, because hes wealthier. Unjust laws penalize, not broken contracts, but earned wealth. They penalize successnot success achieved by force, but by production and trade. Unjust laws penalize success for the sole sake of penalizing success. They codify envy. In her 1957 novel, Atlas Shrugged, Ayn Rand dramatizes, often humorously, the utter absurdity and illogic of preserving capitalism by means of antitrust laws. The novel tells of the passage of various antitrust style lawsthe Anti-Dog-Eat-Dog Rule, the Equalization of Opportunity Law and the Preservation of Livelihood Law. Supporters of the laws are overheard pontificating at a cocktail party. One argues that Competition is essential to society and it is societys duty to see that no competitor ever rises beyond the range of anybody who wanted to compete with him. (page 130). A second insists that Theres nothing more destructive than a monopoly, except, adds a third, except the blight of unbridled competition. The proper course is always the middle. It is the duty of society to snip the extremes. A fourth advocate offers the following peculiar logic, a logic not unlike the kind one might see being used in Congress today: A free economy cannot exist without competition. Therefore men must be forced to compete. Therefore, we must control men in order to force them to be free. Isnt that just it, Senator Hatch?

Power vs. Rights

STEVEN BROCKERMAN (2003.07.07 )

Political philosophies, if one looks at history, have been formulated to achieve one of two mutually exclusive goals: either the perpetuation of political power or the establishment of political rights. If a nations government has been formu lated on the political philosophy whose goal is the former, that government exists to rule, exists as an end in itself. The powers of such a government are intentionally vague; consequently, its laws are ambiguous and, ultimately, obliqueas were the laws of the government of Nazi Germany (Shirer 105-8 passim). The better to rule, of course. If, on the other hand, a nations government has been established on the political philosophy whose goal is the latter, liberty becomes an end in itself; and, in accordance with that end, such a political system seeks to perpetuate, not the power of government, but the rights of the governed. Under such a government, political power is precisely enumerated so that all powers not delegated to [such a government] are reserved to the [individual] (Cunningham 51). In other words, this political philosophy recognizes that [a] private individual may do anything except that which is legally forbidden; a governmentmay do nothing except that which is legally permitted (Rand 109). In this way political power is subordinated to individual rights, i.e., might is subordinated to right (Ibid). Therein lies the essential difference between Alexander Hamilton and Thomas JeffersonHamilton sought the former goal: power; Jefferson, the latter: rights. Hamilton sought the perpetuation and expansion of the power of the United States government. He was in love with theidea of creating a vigorous, expanding nation by creating a dynamic and expanding federal government (Malone 21-2). Put more frankly, Hamilton lusted for personal as well as national power (Mitchell 206 -7). For Hamilton, that was natural. After all, he declaredin his response to both the New Jersey and Virginia Plans set before the Constitutional Convention of 1787 Men love power. Certainly that is so. But some men love liberty more. Thomas Jefferson was such a man. Thus he became a true and pure symbol of the rights of man. (Ibid) At every turn, where Hamilton sought to expand the power of the United States government, Jefferson sought to expand liberty. Where Hamilton sought a loose construction of the Constitution, Jefferson opposed him by pointing

out the precisely enumerated powers permitted the government under the Constitution, reasoning correctly that the Constitution must be rigidly interpreted (Cunningham 51). Hamilton sought to stretch the meaning of the Constitution as far as possible, lending to the government vague, oblique powers that Hamilton called, implied. Under the guise of loose constructionism, Hamilton sought personal power by means of the expansion of national power. As Treasury Secretary, Mr. Hamilton, in support of his bill for the establishment of a national bankwhich his department would oversee sought to justify this expansion of power by means of obfuscating the definition of sovereign powers. A Government is in its nature sovereign, and includes by force of the term, a right to employ all the means requisite, and fairly applicable to the attainment of the ends of such power; and which are not precluded by restrictions & exceptions specified in the constitution; or not immoral, or not contrary to the essential ends of a political society [Italics in original quote] (Cunningham 55). In other words, according to Hamilton, the government may do anything to achieve its ends except that which is specifically forbidden by restrictions and exceptions in the constitution. Seems Hamilton could be as strict a constructionist as Mr. Jefferson. The difference is that Jeffersons constructionism strictly limited the power of the government in the name of liberty. Hamiltons strictly limited the rights of the individual in the name of government sovereignty. He did so by granting to the government that which only individuals could possess: rights the right to employ all the means requisite, and fairly applicable to the attainment of the ends of such power. In so doing Hamilton made the United States government an end in itself. Hamiltons project to vigorously expand the power of the governmentthrough a national bank, through government support of economic development by means of bounties, i.e., subsidies, i.e., socialism, etc.properly displayed him at his best as an economic planner (Cunningham 68). Indeed, John Maynard Keynes (as wel l as any modern 20th Century statist from Lenin to Stalin, FDR to Johnson, Hoover to Bush) would have been proud. Unfortunately, instead of pointing out that, as there was a separation of church and state in America, there ought to be also a separation of money and state in America and for the same reasonsThomas Jeffersons response was to offer, as an

alternative, an agrarian society, whose members labour (sic) in the earth[and are] the chosen people of God. (Cunningham 67). Thus, Jefferson, despite his principled and committed support of the rights of man, failed to grasp that political freedom is not possible without economic freedom; and that a government economic planner is as deadly a tyrant as any monarch (or dictator). However, despite his errors, Jefferson sought to limit government power by explicitly defining its sovereignty. Hamilton sought to strictly limit the limits on government power by implicitly, i.e., vaguely and obliquely, defining its sovereignty. If most today seem to have no conception of what is a constitutionally limited (by rights), democratic republic, one may thank, at least in part, Alexander Hamilton. To the extent that people do know, one must thank Thomas Jefferson. WORKS CITED LIST
1. Cunningham, Noble E. Jefferson vs. Hamilton: Confrontations That Shaped a Nation. New York: Bedford/St. Martins Press, 2000. 2. Malone, Dumas. Jefferson and the Rights of Man, vol. 2 ofJefferson and His Time. Boston: Little, Brown, 1948-81. 3. Mitchell, Broadus. Alexander Hamilton: The National Adventure, 1788-1804. New York: Macmillan, 1962. 4. Rand, Ayn. The Nature of Government The Virtue of Selfishness. New York: New American Library, 1961. 5. Shirer, William L. The Rise and Fall of the Third Reich. New York: MJF Books, 1959.

Supreme Court Defends Racism in America's Universities

JEFF JACOBY (2003.07.05 )

Last weeks Supreme Court rulings in the University of Michigan cases set a modern record for shamelessess. State universities are not barred by the Constitution from engaging in racial discrimination, five justices decided. They are only prohibited from doing so blatantly. The court had the opportunity to declare, once and for all, that penalizing or rewarding people on the basis of skin color is repugnant to the Constitution. It declared instead that when racial preferences march under the banner of diversity, the Constitution winks and looks the other way. And so another generation is condemned to the racial obsessiveness that now permeates American campuses.

Cartoon: Cox and Forkum Justice Sandra Day OConnor wrote in her majority opinion that there is a compelling state interest in racial and ethnic diversity in academia, because it promotes crossracial understanding among students and helps to break down racial stereotypes. But that is at best a debatable proposition. As The Washington Post reported last month, the data show that students are no more likely to engage one another across racial lines when they finish college than when they arrive.

Far from turning universities into gardens of racial harmony and understanding, the diversity fetish has left them racially wary and balkanized. If OConnor had been in Ann Arbor earlier this spring, for example, she might have encountered Black Celebratory 2003, the blacks-only graduation ceremony the University of Michigan hosts each year. Such segregated events are not unique to Michigan. They take place at many schools, including Vanderbilt, Washington University, Stanford, Berkeley, and the University of Pennsylvania. But the separatism begins long before graduation. On many campuses, minority students begin their freshman year by attending racially separate orientations. They frequently go on to live in racially separate dorms, get counseling and other assistance at racially separate resource centers, eat at racially separate dining tables, review their notes in racially separate study groups, and socialize at racially separate fraternities and sororities. Once, this ugly isolation of people by race was called Jim Crow. Today it is called diversity. Defenders of this self-segregation say it helps minorities surmount the difficulties of attending a largely white university. Our students need the support they get from one another, Patricia Williams, dean of the black dormitory at Penn, has said. Often, they dont receive the same recognition and psychological support as other students at the university. But black students would not need so much support if they werent attending colleges and universities at which so many of them are academically outmatched. In that sense, students who take part in segregated graduation galas do indeed have something to celebrate. Unlike many of their racial peers, theyre actually graduating. But to point that out is to commit the social faux pas of noticing the elephant in the affirmative-action living room: the failure of far too many black students to finish college. Nearly half of all black Americans between 25 and 29 have been to college, Stephan and Abigail Thernstrom wrote in their sweeping 1997 book, America in Black and White, but only 15 percent managed to earn a bachelors degree. The Journal of Blacks in Higher Education said in 1994 that the black college dropout rate was disastrous. It still is. This is the unfortunate and unavoidable result of race-based admissions. To achieve a racially balanced student body, universities lower the acadmic standard black and Hispanic applicants must meet. That enables the schools to avoid the embarrassment of an insufficiently diverse entering class. But it also condemns the

racially preferred minorities to an academic environment in which they are consistently outperformed. That embarrassment, apparently, the schools dont mind. The educational benefits that diversity is designed to produce, OConnors opinion asserts, are substantial. Those benefits include pervasive racial separatism, markedly lower black grade-point averages, and a black dropout rate that is a national disgrace. Affirmative action is not about educational benefits. It is about aesthetics about ensuring that students matriculate according to a politically correct color scheme: so and so many whites, so and so many blacks, so and so many browns and yellows and reds. The law school is not looking for those students who, despite a lower LSAT score or undergraduate grade point average, will suceed in the study of law, wrote Justice Clarence Thomas in his coldly furious dissent. The law school seeks only a facade it is sufficient that the class looks right, even if it does not perform right. American universities will never perform right until the day they stop judging people by the color of their skin. Thanks to five Supreme Court justices, that day is farther off than ever.

Our Semi-Capitalist Economy, Semi-Socialist Government

ALAN CARUBA (2003.07.03 )

Our

It is a bitter irony that, as we prepare to celebrate Independence Day, this nation has embraced socialism for a government designed by its Founding Fathers to permit the greatest amount of freedom to individuals to govern their own affairs and prosper. That original concept, intention, and dream is dead. In short, whats needed is a coherent left presence in American political life. Nor is this pure pie in the sky. There already is a left presence in Congress, in the form of the progressive and black caucuses, that expresses traditional socialist principles, says James Weinstein. Weinstein, the author of The Long Detour: The History and Future of the American Left, might have added that the entire Democrat Party represents a Social ist presence in Congress. Anyone listening to its current crop of presidential candidates would have to conclude that the answer to Americas problems is more and higher taxes, special privileges for minorities, more government control of the nations educational system, more environmental regulation, the expansion of Medicare, and more government programs. Weinstein has written an interesting book. A dedicated Socialist and one-time Communist, the author is an enthusiastic supporter of capitalism so long as it underwrites socialist programs. Corporations may be evil exploiters of the working class, but, by golly, they do generate a lot of wealth (and employment!). Weinstein devotes a lot of energy to attacking the Soviet form of socialism, denouncing it in no uncertain terms as just an extension of the dictatorship formerly exercised by the czars. Weinstein provides the reader with a look at the failure of the Socialist Party in America to gain any foothold among voters. By 1936 the parties were over. American Socialists and Communists in the United States had each failed to develop a substantial popular following, and neither had any prospect of doing so. However, many socialist objectives have been put into place and, for that, we can mostly thank the Democrat Party. New Deal reforms created a government that is now responsible for 45 percent of national spending. Weinstein cites various programs, noting accurately that the US is now more than half socialist today

because more than half of the total output of the country is being distributed in a way that is determined by the government. To the astonishment of conservatives and libertarians, these days it is Republicans who are carrying on the tradition of enlarging the role of government in every aspect of the economy and control over our lives. The Socialist Party advocated the eight-hour workday, womens suffrage, unemployment insurance, workmens compensation, Social Security, legal protect of unions right to organize, a progressive income tax, prohibition of child labor, the legal right to advocate birth control were all being partially adopted by Congress or granted by the courts. Weinstein, of course, sees the world through a socialist perspective. Thus, he writes, When the Cold War ended and the United States emerged as the worlds last superpower, a new excuse for militarization was required. The Clinton administration came up with the ludicrous idea that we were threatened by rogue states, epitomized by North Korea and its one or two long-range missiles, or by an essentially demilitarized Iraq. Of course, some might suggest that letting rogue nations continue their mischief can only inevitably lead to worse troubles. In the end, it is hard to reconcile Weinsteins love of capitalism with his support of socialism. The introduction of individualism as a social principle was one of capitalisms great virtues, he writes, adding The utopians simply hated capitalism. But Weinstein remains a utopian, advocating a worldwide program of demilitarization, led by the United States and the removal of the profit motive in arms production by nationalizing all military production except small arms. Naturally, he sees the United Nations and World Court as the ultimate arbiter for the future of the US and all other nations. It is a wonder that Americans embraced Ronald Reagans conservatism in the 1980s and returned to George W. Bushs compassionate version of it in 2000. It is a wonder that conservative radio talk show personalities are so popular. It is a wonder that there is still a debate over cutting taxes. It is a wonder that the federal government remains everyones answer to all problems. To Weinstein and others, it seems obvious that, in the last century, Americans concluded the federal government should be involved in everything from education to local zoning. The Socialists have won.

Media Ignorance
WALTER WILLIAMS (2003.07.08 )

People in the major news media have come in for considerable and sometimes bitter criticism. Theyve been charged with anti-Americanism, leftism, bias and just plain lying, as in the cases of former New York Times reporter Jayson Blair, The Associated Press Washington reporter Christopher Newton and The New Republics associate editor Stephen Glass. My assessment is much kinder. Yes, a few are scoundrels with devious hidden agendas, but for the most part theyre nice people with little understanding. Brit Hume, Fox News anchorman a notable exception delivered a speech at Hillsdale College last April highlighting grossly erroneous predictions by some of his colleagues. In the days before the Iraq War, NBCs Chris Matthews predicted, (It) will join the Bay of Pigs, Vietnam, Desert One, Beirut and Somalia in the history of military catastrophes. NBC military analyst Gen. Barry McCaffrey warned that if there were to be a battle for Baghdad, the United States could take a couple to three thousand casualties. In the wars early stages, Merissa Marr of Reuters said: As the dream of a quick clean war and cheering Iraqis evaporated last week, America and its allies have been furiously tweaking their media strategy. But how can they hope to gain the upper hand? The history of events has proven these know-it-alls dead wrong. Why arent these people ashamed to show their faces? But more importantly, why do we even listen to them? Maybe we arent. That might explain why alternative news sources such as Fox News, Drudge Report and talk radio are capturing larger and larger audiences. On NBCs June 15 edition of Meet the Press, Tim Russert interviewed retired Gen. Wesley Clark, who might be a presidential candidate in 2004. Clark criticized President Bushs tax cuts. Thats OK, but Clark demonstrated gross ignorance when he said, I thought this country was founded on a principle of progressive taxation. In other words, its not only that the more you make, the more you give. Tim Russert, just as ignorant, passed over the statement. The fact of the matter is that the Framers of our Constitution so feared the imposition of direct taxes, such as an income tax, that Article I, Section 9 of the Constitution says,

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken. It was not until the Abraham Lincoln administration that an income tax was imposed on Americans. Its stated purpose was to finance the war, but it took until 1872 for it to be repealed. During the Grover Cleveland administration, Congress enacted the Income Tax Act of 1894. The U.S. Supreme Court ruled it unconstitutional in 1895. It took the Sixteenth Amendment (1913) to make permanent what the Framers feared todays income tax. When we had warm winters and oppressively hot and dry summers, one could hardly turn on the television without hearing some politician or reporter whining about global warming and our need to sign the Kyoto agreement. Winter 2002-2003 saw extreme cold conditions. In the Midwest, the daily temperature was 4 degrees Fahrenheit cooler relative to the 10-year average, the Northeast and Mid-Atlantic roughly 3 degrees cooler. I wonder why reporters arent tracking down Bill Clinton, Al Gore and the environmental wacko brigade to query them about global warming this winter and spring. Maybe theyre appearing on Western television news, since the Pacific Northwest average winter temperatures have been the secondwarmest in the last 30 years in the region. Many media people have been journalism and/or communication majors. Most of these programs have little analytical rigor. Along with departments of education, they are a dumping ground for the most ill-prepared students. That might explain a lot.

Whos Rich?
THOMAS SOWELL (2003.07.15 )

Congressman Patrick Kennedy, a Rhode Island Democrat, recently declared to fellow party members at a Washington night spot, I dont need Bushs tax cut and added that he had never worked a day in his life. A number of other rich people have at various times likewise declared that they do not need what are called tax cuts for the rich. But, whatever political points such rhetoric may score, it confuses issues that are long overdue to be clarified. One of the most basic confusions is between income and wealth. You can have high income and low wealth or vice versa. We have all heard of athletes and entertainers who have earned millions and yet ended up broke. There are also people of relatively modest incomes who have saved and invested enough over the years to leave surprisingly large amounts of wealth to their heirs. Income tax cuts apply to income, not wealth. So the fact that some rich people say that they do not need a tax cut means nothing because they are not getting a tax cut on their wealth, since their wealth is not being taxed anyway. Looked at differently, high tax rates hit people who are currently earning high incomes usually late in life, after having worked their way up in their professions over a period of decades. Genuinely rich people who have never had to work a day in their lives people like Congressman Kennedy are unaffected by income taxes, except on what they are currently earning, which may be a tiny fraction of what they own. In other words, soak-the-rich tax rates do not in fact soak the rich. They soak people who are currently earning the rewards of having contributed to the economy. High income taxes punish people for becoming prosperous, not for having been born rich. Even estate taxes can be minimized by hiring ingenious lawyers and accountants. But people who have had to work all their lives may not be nearly as able to afford such expensive ingenuity. Someone who eventually works his way up to $100,000 a year will qualify as rich in liberal rhetoric but, by the time you reach that level, you may have a child in college and need to put some money aside for your retirement years. You are very unlikely to be able to afford a yacht.

Another fundamental confusion over tax cuts is confusing lower tax rates with reductions in tax revenues collected by the government. One of the enduring political myths of our generation has been the claim that the rise of federal deficits during the 1980s resulted from President Ronald Reagans tax cuts for the rich. Tax rates were cut. Tax revenues were not. More tax revenue was collected during every year of the two Reagan administrations than had ever been collected in any previous year in the history of the country. Nor was this experience unique. When John F. Kennedy cut tax rates during the 1960s, tax revenues went up. The whole point was and is to encourage more economic activity, and more activity generates more tax revenues, even at lower rates. The same thing happened back in the 1920s. Why then were there federal deficits during the Reagan administration? Because Congress spent even more money than the rising tax revenues brought in. There is no amount of money that Congress cannot outspend. Although these were christened the Reagan deficits, all spending bills originate in the House of Representatives and Ronald Reagan was never a member of the House of Representatives. Indeed, the Republicans never controlled the House of Representatives during either of the Reagan administrations. Only after the Republicans gained control of the House in 1994 were there budget surpluses for which Bill Clinton took credit, even though he too had never been a member of Congress. It is fascinating to see Congressional Democrats, who have for decades been spending the country into growing deficits, suddenly expressing shock at the current deficits that have occurred while George W. Bush was in the White House and the country was at war. How serious are these deficits? As with all debts, the burden depends on what your income is. As a percentage of national income, todays deficits and national debt are far below what they were when Democrats were doing the spending.

Economics Lesson in a Kit

WAYNE DUNN (2003.07.21 )

Whod have thought an inanimate object could teach a lesson in economics? Yet thats exactly what a first-aid kit did. Several kits, actually, wall-mounted cabinets in the buildings where I work. Now were not just talking Band-Aids and iodine here. No, these babies had extrastrength aspirin, cough medicines, antacids sort of a mini-pharmacy for employees needs, free for the taking. And take people did. They took and took and took some more. Heck, even the lady who comes to fill our soft drink machines was sighted helping herself to the throat lozenges. Seems free stuff has a certain attraction. Of course, the kits always needed restocking. Popular items added one day would be gone the next. Our little system was rife with abuse. So controls were established. On top of other duties, supervisors had to monitor those darned kits, to scrutinize users, ration a bit. But that didnt do the tric k. Why would it? No one there had to personally foot the bill. Bottom line, the companys first-aid budget was hemorrhaging, so management applied a tourniquet. Now theres only basics gauze, peroxide, things for emergencies. Of course, some workers cried foul. Poor souls had contracted entitlement pox, a handout-related disease. Too bad theres no cure in the kit for that. Certainly the companys little medicine cabinet problem pales alongside other issues managers deal with. Still, it made me think. It struck me that the situation wouldnt have played out much differently if instead of free supplies in a first -aid kit, the freebies had been the inventory of a whole pharmacy or, for that matter, free access to the equipment and talents of an entire hospital and staff. Free goods find no shortage of takers. The takers, however, soon find a shortage of such goods. Enter budget overruns, red tape, and steadily declining services. What happened with the first aid kits is a microcosm of what happens under socialized medicine (or socialized anything), albeit with a vital distinction: A company

(or individual) has every right to be as free-wheeling or as tight as it chooses with its own resources. But government, by contrast, possesses no resources that aren t first expropriated from peoples earnings. Such is the nature of its generosity. Take Mexico, for instance. It has free health care. So free it cost my wife, born there, $65 a month, six percent of an already meager and heavily taxed salary. Whatd it all buy? Well, when she was taken to a public hospital after being badly jarred in a car accident, for example, the doctor merely examined her paperwork (not her person) and sent her away with some aspirin. (She then went to a private hospital and bought proper treatment.) That story is not unique. Mexico abounds with such accounts. But as shoddy as their health care system is, citizens cant opt out of paying taxes for it. (That, see, would be a selfish no-no.) Yet if it werent for such taxes, many would be able to afford their own private insurance policies. Socialism forces people to pay for what it causes not to work. Therefore its both immoral and impractical. Immoral because its force. Impractical because it flops. Indeed, the outcome of socialization is exactly opposite the alleged intent. Chides Croatian author Slavenka Drakulic after communisms fall in the former Yugoslavia: Dental care has been free for over forty years with the result that the whole nation had bad teeth. Free health coverage in America what were stumbling toward would convert the worlds best health care system into the nationwide equivalent of an expensive but sparsely stocked first-aid kit. Aspirin and a toothless grin, anyone?

Deficits, Fiscal Policy, Tax Cuts, and Inflation

BRUCE BARTLETT (2003.07.18 )

Last weeks announcement that the federal budget deficit will reach $455 billion this fiscal year (which ends on Sept. 30) brought predictable denunciations from the Democratic side of the aisle. Its not so much that Democrats care about deficits after all, they are the party that invented deficit spending they just want to score points against the Republicans. I dont blame them. In their shoes, I would do the same thing. I wrote many a press statement denouncing Democratic deficits during the Carter administration, when I was a young Republican staffer on Capitol Hill. Although I never thought deficits mattered very much, I knew that there were many people out there who did. So, lacking anything else to say, we Republicans attacked Carters deficits. The problem was that although most people think deficits are terrible, they are even more opposed to any measure that will actually eliminate them. Huge majorities were against tax increases or any particular cuts in spending to bring deficits down. Thus, while Republicans felt good about themselves for being fiscally responsible, they gained no electoral advantage whatsoever. It wasnt until 1980, when inflation and interest rates both reached double -digit levels, that the deficit issue had any electoral potency whatsoever. That is because there was a plausible case to be made that deficits were inflationary, as well as raising interest rates by crowding out private borrowers from the market. The problem is that it just wasnt true. Inflation is exclusively a monetary phenomenon. It results when the Federal Reserve creates too much money. That is the one and only cause of inflation meaning a sustained rise in the general price level. Individual prices go up and down continuously. But the overall level of prices cannot rise unless initiated or accommodated by the Fed. Inflation was also the principal cause of higher interest rates at that time. Borrowers knew full well that the debt repayments they received in the future would be reduced, in real terms, by inflation, so they demanded an inflation premium in interest rates as compensation. Long-term rates in particular rose percentage point for percentage

point with inflationary expectations. Thus, if a mortgage rate would have been 4 percent with zero inflation, it would be 12 percent if 8 percent inflation were expected. Therefore, both inflation and high interest rates resulted from the same basic cause: Federal Reserve policy. Whatever impact deficits may have had was very small by comparison. Some argued that deficits were inflationary because the Fed was monetizing the debt in effect, paying it off with printed money. If so, this was a counterproductive strategy, because interest rates rose faster than the deficit. The inflation resulting from faster money supply growth raised interest rates, rather than lowering them, by raising inflationary expectations. Higher interest rates raised the Treasurys borrowing costs, which made the deficit worse. Thus, except in the very short run, printing money to pay off national debts just doesnt work. Of course, some countries do resort to the printing press to pay their debts, and in such cases deficits are inflationary. But the Federal Reserve is an independent institution that operates as it pleases. Administrations can influence it, but they cant control it. Consequently, there is no direct linkage between deficits and inflation in the United States. The notion that deficits raise interest rates is more plausible, but the evidence doesnt support it. Since 2000, the budget has gone from substantial surplus to substantial deficit, yet interest rates have fallen steadily over that period. The reason is that whatever impact deficits may have on interest rates is small relative to the impact of other factors, such as the business cycle, Fed policy and exchange rates. Politically, the main importance of the deficit is that it undermines the case for tax cuts. Indeed, every Democrat running for president next year would reverse already enacted tax cuts, at least in part. They want the higher revenues to pay for increased spending, rather than deficit reduction. But higher deficits make their case easier. One problem is that current deficits have very little to do with tax cuts. If all the tax cuts over the last 3 years were magically rescinded, we would still have a deficit of almost $300 billion, due to the economic recession and higher spending for national security. Moreover, economic growth would be slower and unemployment would be higher substantially so according to a Treasury Department study. In the end, the deficit is more of a metaphor than something real. Republicans use it as a shorthand way of saying spending should be lower, while Democrats use it to

imply that taxes should be higher. Ones preferences in this regard will largely determine ones perception about the importance of deficits at any given time. Chart data: Evolution of the 2003 Deficit (billions of dollars) April 2001 estimate - +334 (surplus) Economic recession - -418 Higher spending - -193 Tax cuts - - -177 Current estimate - -455 Source: Office of Management and Budget

Early Birds Get Returns

JAMES K GLASSMAN (2003.07.27 )

To invest is to defer. When you buy a companys stock or a government agencys bonds, you decide not to consume your cash today but to entrust it to an institution that, you hope, will produce rewards for you in the future. History shows that, if you make your choices with modesty, discipline and good sense, the rewards arrive. And the longer your money is at work in an investment, the more youll make-by a huge margin. Albert Einstein, who knew about such things, called compound interest the most powerful force in the universe. When you make interest on interest, or dividends on dividends, or capital gains on capital gains, the numbers mount fantastically over time. For example, an investment of $100, compounded at 10 percent a year, becomes $259, not $200, over 10 years. And theres a bonus: The volatility of stocks-the extremes of their ups and downs-declines over long periods. Whats the point? Start early. When? At birth would be nice. Imagine you are born on Jan. 1, 1947 (as it happens, my birthday), and on that date a rich uncle (that part I am making up) puts $5,000 on your behalf into stocks representing the Standard & Poors 500 index, a good reflection of the market as a whole. At the end of last year, your stock account, exclusive of taxes and expenses, would be worth $2,435,449. Now, imagine you are a parent. You buy your 8-year-old daughter $1,000 worth of stock. Over the first 10 years, if her shares perform at the average rate for equities, they will grow in value by $1,600. Over the next 10, by $4,100. Over the next 10, by $10,700. Over the next 10, by $27,800. You get the picture. Finally, imagine you are the target audience for todays column: in your twenties or early thirties. You regularly invest $200 a month in an all-stock tax-deferred account such as an IRA or a 401(k) plan. If your fund returns an annual average of 10 percent-which is about what you should expect over long periods in an index mutual fund that reflects the market-you will have $48,300 at the end of 10 years. After 20 years, youll have $167,352; after 40 years, $1.3 million; after 50 years, $3.4 million.

In the past, I have told the story of Anne Scheiber, who retired as a government lawyer in 1944 at age 50 and turned her life savings of $5,000 into a stock portfolio worth $22 million by the time she died-at age 101. But starting when you are 50 is risky, and its harder to enjoy the fruits of your denial when you reach triple digits. Its better to begin at 20 or 30. So here are seven rules for investing young-to absorb for yourself or to pass along to your children or grandchildren or pals: 1. Time is money. Its the single most important factor in investing-more important than the stocks or the bonds you pick, or your cleverness in buying or selling at just the right moment. The stock market will suffer bad stretches, but if you start early you can ride them out. Research by Jeremy J. Siegel of theWharton School at the University of Pennsylvania found that since 1802, a broad market-mimicking portfolio of U.S. stocks has never lost money-even after inflation-in any period longer than 17 years. 2. Stick with stocks. Forget bonds if you are a young investor with a long time horizon. Stocks have vastly outperformed bonds, returning 10.3 percent a year, on average, compared with 5.5 percent for Treasurys over the past three-quarters of a century (after inflation, the differences are even more striking: about 7 percent for stocks, a little over 2 percent for bonds). In addition, stocks have produced remarkably consistent returns over long periods; in Siegels judgment, they are no more risky than bonds after inflation. Looking at research by Ibbotson Associates covering every 20-year period since 1926 (1926-45, 1927-46, etc.), I found that the worst such period for large-cap stocks produced average annual real returns of 1.3 percent; the best, 13.9 percent. For long-term Treasury bonds, the worst period showed an average annual loss of 3.2 percent; the best, a gain of 8.4 percent. In fact, long-term T-bonds have suffered real losses in the majority of the 20-year periods since 1926. 3. Diversify. Dont try to guess which sectors, or which individual stocks, will do best. Instead, make a single prediction: that theU.S. economy will continue to grow at roughly the same rate it has grown during the past century or so. The easiest way to put that prediction into practice is to buy a broadly diversified mutual fund-either an index fund that tracks the S&P 500 or the broader Wilshire 5000, or a fund managed by an actual human being that has a crack at beating the index. Or, if you have the time and inclination, put your own portfolio together, with representative companies from at least a dozen sectors (such as health care, energy or retail). To get enough

diversification to dampen risk sufficiently, recent academic study shows you need to own 30 to 50 stocks. If youre busy building a life, be happy that mutual fu nds were invented. 4. Keep costs low. The average stock mutual fund charges 1.4 percent per year in expenses (and some charge a load, or upfront fee, in addition). As an article in the new issue of AAII Journal, the publication of the American Association of Individual Investors, puts it, Extremely high expense ratios are a negative, and very low expense ratios are a long-term positive. With mutual funds, you dont necessarily get what you pay for. In the same issue, the association identified the five large-cap stock mutual funds with the best returns for the five years ending in 2002 and found that all of them had significantly below-average expenses. Only three of the five are open now to new investors: Clipper Fund (CFIMX), which returned an annual average of 10.8 percent, beating the typical fund in its category by nearly 12 percentage points a year; Mairs and Power Growth (MPGFX), with a return of 7.8 percent; and Fidelity Export and Multinational (FEXPX), also 7.8 percent. Clipper carries an expense ratio of 1.1 percent; Mairs and Power and the Fidelity fund are both 0.8 percent. In addition, Clipper and Mairs and Power have each been run by the same manager for at least 20 years, and each has been significantly less risky than the market as a whole. Vanguard, which specializes in index funds, charges expenses of only 0.2 percent for its Index 500 (VFINX), which tracks the S&P, and Total Stock Market Index (VTSMX), which tracks the Wilshire. Dozens of other firms offer similar index funds, most with fees that are a little higher. Another good choice is Schwab 1000 (SNXFX), which owns the same stocks as the S&P plus 500 smaller ones and charges expenses of 0.5 percent. If you choose to manage your own portfolio, be careful of commissions but dont obsess over a few bucks. If you buy stocks with the intention of owning them for a long time-as you should-then, amortized over the life of your shareholding, the difference between a broker that charges $10 a trade and one that charges $50 is inconsequential. Taxes, of course, are another cost. If you buy and hold stocks in a taxable account, youll only pay the tax (now reduced to 15 percent) on dividend income. Index funds change only about 5 percent of their holdings annually, but the turnover is far greater (about 100 percent, on average) for managed funds, which can rack up sizable capital gains. That tax liability gets passed straight to you each year.

5. Marginalize your gambling. Many young investors think theyre such terrific stock pickers or market timers that they can whip the averages. That is a dubious proposition, but I would never deny anyone the pleasure of trying it out. If you want to wheel and deal in stocks, trading shares daily or weekly or monthly, then isolate your gambling (thats what it is) by setting up a separate Fun & Games Account. It should be small, representing no more than 10 percent of the total money you devote to stocks, and it should be walled off from your main investment account. It serves three purposes: to satisfy unquenchable urges, to provide some exciting entertainment and to offer a way to learn. Over time, its unlikely that your F&GA will beat your diversified buy-and-hold account. If Im wrong, youre either lucky or talented. But dont jump to conclusions for about 10 years. 6. Keep paying off your college loans. If your college loans carry an exceptionally high interest rate, pay them off as quickly as you can. If you cant, then the best strategy is to retire the debt slowly and start an investment account, even if it is a tiny one, at the same time. Its important to get into the habit of saving and investing. Also, if the future is like the past, stocks should return around 10 percent annually for the next decade, or about 7 percent after taxes. As long as your loan rate is less, youre better off in stocks. Still, get out from under your debt. And, certainly, taking on more debt to buy stocks-called buying on margin-is a foolishly risky practice. 7. Start now. Say that your goal is to accumulate $1 million by the time you are 55. If you start at 24 and invest $5,000 a year at an expected-though never guaranteedreturn of 10 percent annually, you will reach your goal. But if wait until you are 34 to begin, youll accumulate just $300,000 by age 55. Here is an even more dramatic example of the importance of starting early. One investor decides to begin investing at age 25. She puts $2,000 a year into a portfolio of stocks that returns 10 percent a year. At age 35, after investing a total of $20,000, she stops and never adds another penny to her account. But the value of her fund keeps growing, and by the time she is 65, she has $546,197. A second investor waits until hes 35 to begin. He, too, invests $2,000 a year at the same rate. But he invests for a full 30 years-a total of $60,000. How much does he have at age 65? Just $328,988. Theres no excuse for not opening an account. If you cant make up your mind where to invest, then simply call a mutual fund house and put your money into an index fund. Then ask your bank to make regular transfers to the account, monthly or quarterly. Or call a broker and purchase Spiders, or Standard & Poors Depositary

Receipts (SPDRs, with the symbol SPY), which are individual shares, again with low expenses, that make up the entire S&P 500 index, roughly the 500 largest listed U.S. companies. A similar choice is Diamonds (DIA), which track the 30 large -cap stocks of the Dow Jones industrial average. You can buy as little as a single share (SPY and DIA each trade around $100 these days) if you want; by contrast, the minimum investment for Vanguard 500 Index is $3,000. Clipper, unfortunately, requires $25,000 for starters; Mairs and Power Growth, a more typical $2,500. Exploit your advantage. You young people have something us old guys will never have again: youth. Its the best investment strategy of all.

How Did We Ever Make It Before Nanny Government?

WALTER WILLIAMS (2003.07.23 )

Whenever someone says that this or that government program is absolutely necessary, I always wonder, What did people do and how did they survive before the program? If someone says food stamps are absolutely necessary for poor peoples survival, I wonder how Americas millions of poor immigrants made it. Unless I missed something, mass starvation is not a part of our history. Was there a stealth food stamp program during the 1700s and 1800s? Then theres the question: How did we manage to build the worlds greatest cities without the help of the 1965-created U.S. Department of Housing and Urban Development? Did cities become worse off or better off afterward? Or, how did we manage to produce energy to fuel the worlds richest economy before the 1977 creation of the Department of Energy? Recently, I received an email titled, We Made It. It had to do with the federal safety edicts of agencies like the U.S. Product Safety Commission, established in 1972, and the U.S. Department of Transportation, established in 1966. Congress created these and other agencies to protect the public against unreasonable risks of injuries and deaths. Thats how toys, cribs, child car seats and childproof medicine bottles came to be regulated. Considering we were a nation for nearly 200 years before Congress started protecting us against unreasonable risks of injuries and deaths, a natural question is how we managed to survive and grow from a population of 4 million to the 280 million of us today. According to my emails author, if we listen to Washington, those of us still around who were children during the 40s, 50s and 60s probably should be dead. Nonetheless, there are 58 million of us born in 1945 or earlier who are still kicking. Our parents allowed us to sleep in cribs beautified with lead-based paint. They drove us around in cars that had neither seatbelts nor airbags. They permitted us to ride our bicycles without helmets, just as adults rode motorcycles without helmets. And, horror of horrors, there were no childproof medicine bottles that, by the way, are sometimes so difficult to open that some people summon their children to open them.

The fact that these safety edicts saved some lives and prevented some injuries doesnt provide justification for them anymore than mandating that, because some Americans have headaches, aspirin be put in the water supply. In a free society, government has the responsibility of protecting us from others, but not from ourselves. Before government got into the business of protecting us from ourselves, we did have a greater measure of protection from others. Yesteryears children rode their bikes or walked to a friends house, knocked on the door and let themselves in. Many families didnt lock doors until the last family member was home for the evening, and they did that in poor neighborhoods like the one I grew up in. Yesteryear, when we went off to school, parents might have worried about our crossing streets safely. Todays parents have a different set of worries, such as whether their child will be shot, stabbed, robbed, raped or given drugs in school. During the pre-1960 years, neighborhoods including poor neighborhoods were safe enough for women to walk the streets after dark. In fact, in places like Harlem, N.Y., hot, humid nights saw children and adults sleeping on fire escapes and rooftops. Doing the same today might lead to arrest for attempted suicide. Speaking of crime, if children did have a scrape with the law, our parents sided with the police. Dont you wonder how so many Americans made it without todays oppressive, caring, nanny government?

Rational Selfishness Wealth Creator

EDWIN A LOCKE (2003.07.22 )

and

the

Great

True egoists are not narcissists; they are not preoccupied with grandiose fantasies or obsessed with being the center of attention and getting constant approval. They are not concerned with self-inflation because they are secure within themselves and confident of their own value. They do not feel they have to disprove an inner sense of worthlessness. Their primary focus is not inward on their inner feelings, but outward on reality. True egoists take the actions needed to succeed on the job. They look at the facts and use reason, not whim, to make decisions. They think and plan long-range. They learn what is going on and persuade others through two-way communication. Egoists spend their time learning about the business and about competitors; they learn from others but always use their independent judgment. They crave people of ability and strive to give them as much responsibility as they can handle. They reward people fairly and do not take moreor less-than they deserve. Egoists practice the virtues of honesty and integrity because they know that trust is critical for business success. True egoists possess what Geneen calls normal or healthy self-esteem and self-confidence that are based on making decisions in accordance with the facts and the knowledge that they are continually learning and improving their knowledge and skills. Mark Fraga of the Wharton School puts the issue as follows: The person with the genuinely big ego is committed to the venture and will do whatever it takes to succeed. His attitude is, Im here world. Im going to (turn air into gold metaphor,) I am going to make the impossible mundane Ego is essential to commitment. Venture capitalist Audrey MacLean explains: Starting a company is like going to war. You cant do anything else but be fully engaged. You have to be insanely, passionately, nothing-can-stop-me committed. People are most often confused by executives who seem to share attributes of both the inflated and the genuine egoist. These are usually people of genuine ability who are independent in their work but who are dependent outside it, as shown by their cravings for attention and publicity. For example, in reviewing a book about Oracle

Corp. CEO Larry Ellison, reporter Steve Hamm writes, Ellison is a larger-than-life personality who wants desperately to be admired-and believes in nothing but himself. Observe the contradiction here: If Ellison really believed fully in himself, he would not be desperate for the attention of others. There are a number of great wealth producers who are independent in their work and dependent outside of work, but allowing themselves to hold such contradictory premises is a dangerous indulgence. It is easy (and not uncommon) for such people to begin to neglect their work in favor of the limelight and also to let the secondhander attitude begin to affect the way they make work decisions. Many such people lose their effectiveness over time. The alleged alternative or antidote to an inflated ego is no ego. Management gurus urge leaders to take the ego out of leadership. The new catchword in leadership today is servant leadership. Servant leaders, it is claimed, want nothing for themselves and only work altruistically for their employees, their customers, and the Public. This, of course, is utter nonsense. I am not being cynical here; I am not saying that wealth creators are not morally good enough to practice such an (allegedly) noble moral code. I am saying that they are too good to practice such an ignoble moral code (i.e., self-immolation). No self-respecting person would want to be a leader if all it meant was being a slave to the wants of others. No one could endure the stress, the long hours, the worry the exhaustion, the risk and uncertainty, the endless problem solving, the frustrations and failures, the relentless pressures and demands that are the price of success in business-motivated by a selfless concern for the welfare of everyone but oneself. I do not know of a single wealth creator in history who was so motivated. A selfless person the sick like Mother Teresa might have been able to minister to the sick and dying, using money donated by people who have earned it, but she would have been unable to create the wealth that made her work possible or to move an industrial civilization forward. True egoists have strong passions based on their personal values but operate on the premise of reality and reason first. They do not sacrifice their own long-term interests to spur-of-the-moment whims. Nor do they sacrifice others by deceiving or defrauding them. True egoists treat other people with respect and trade with them honestly. They decide what they want to achieve, decide objectively on the proper means to achieve it, and ad accordingly.The proper antidote to counterfeit egoism is not altruism but genuine-rational-egoism. Management guru Lanny Goodman has this to say about the proper motivation of owner-entrepreneurs: Conventional wisdom would have us believe that a Company has a life of its own and were all there to serve it. . . . Were taught to be good soldiers, to serve others and

sacrifice ourselves. I say, poppycock. . . . The founders first obligation is to himself. If that obligation isnt satisfied, none of the others (to employees, customers, etc.) can be satisfied, either. Goodman advocates creative selfishness, by which he means the owner should pursue his or her legitimate interests and figure out how to make these interests converge with those of his or her employees and customers. Business, he says, is a bilateral process (i.e., a process of trade). Focusing now on the motivational aspect of egoism, I believe the real key to the wealth creators motivation is, surprisingly, lovenot selfless love for others, but a profoundly personal, selfishlove of the work, the product, the process of creation, growth, success, and the rewards earned through success. The old songwriters were right-in the wrong way: Love does make the world go round, but it is not romantic love (as wonderful and precious as that is) that produces the worlds goods. It is lo ve of achievement. Chryslers Bob Lutz agrees with Tom Peters that the greatest breakthrough products are made by people who do it for the sheer joy of creating for themselves. It is worth asking whether Prime Movers value the work more than the money or the money more than the work. My research indicates that they love both, but the work is more fundamental. A true egoist will not want to spend time and effort doing something he or she does not enjoy just for an extrinsic reward. Prime Movers love the process of making money as well as the money. Some consider it chic to say, I really did not do it for the money, but somehow one never observes these people working for free. What they really mean by such a statement is that the work was their primary focus. Prime Movers, however, understand the causal relationship between work and money. If businessmen are good at their work, the money follows. Under capitalism, the two are inseparable. Unless the producer does good work and makes money, he or she will not be able to continue working; the money he or she makes is not only a way to keep score and a source of pleasure but also fuel to expand the business. In view of this, it may seem puzzling that biographer Matthew Josephson seemed to worship Thomas Edison, a very successful businessman as well as inventor, at the same time that he disparaged other nineteenth-century capitalists, whom he called robber barrons. I believe the reason for this is that Edison claimed that he made money in order to invent (create), while the so-called robber barons created so that they could make money. To Josephson, Edisons motivation must have seemed more intellectual and pure and the robber barons motivation more earthly and

materialistic. But this Platonic splitting off of mans faculties into higher and lower types is fallacious. Creation and moneymaking are reciprocally related: Each makes the other possible. The creation of wealth is a result of the creative use of ones mind; wealth, in turn, makes further creative efforts possible. Adapted by Capitalism Magazine from Dr. Lockes The Prime Movers: Traits of the Great Wealth Creators.

Slavery in Our Time

KIMBERLEY JANE WILSON (2003.07.31 )

If you went to public school any time in the last 20 years, you can be forgiven if you think slavery is a uniquely American and Southern experience. That belief, fueled by the political correctness movement, is dead wrong. The evil system we call slavery existed long before the United States was ever thought of, and occurred everywhere in the world. The ancient Greeks and Romans had slaves as did the Aztecs and the Incas. The Bible tells us that the Hebrews were held in Egyptian bondage for 400 years. India had slaves (an ugly form of indentured servitude still exists there), and so did China. Slavery was thriving in Africa well before the first Portuguese, Spanish, English and Frenchmen showed up on the coastline. When whites did appear, they came with gold. Greed for this gold led African chieftains and warlords to enter into constant wars to acquire captives to sell into slavery. This activity came at a high price. If you are continually at war with your neighbors, you cannot advance economically, socially and technologically. If you sell off massive numbers of young men and women, you will have a physical drain and a brain drain. Eventually, a weakened Africa found itself easy pickings for European colonization. The horror of American slavery began in 1619 when a group of Africans were brought to Jamestown, Virginia. Although Spanish priests and later the Quakers condemned the practice, slavery became entrenched in the colonies and not just in the South. The first American ships to get into the slave trade came from Massachusetts. In the early days of slavery there were thriving slave trade centers in Rhode Island, New York and in Pennsylvania. After centuries of festering in America like an open sore, slavery was finally ended by the Emancipation Proclamation. Today, black Americans are the richest and best educated members of the African Diaspora. Weve accomplished amazing things in the last 30 years alone, and weve been able to reach back to offer a helping hand to Africa and our cousins in the rest of the Diaspora. Whether its protesting apartheid in South Africa or the treatment of Haitians by our immigration laws, black Americans have been at the forefront on almost all issues. All but one: Slavery. You may not want to read this, but slavery still exists in Africa. In the Sudan, millions of Africans whether they are Christian, Moslem or animist have been forced into chattel slavery. The present Sudanese government came into power as the result of a 1989 coup by the National Islamic Front. Government militias

routinely raid villages, killing the men and carrying off the women and children. The boys will be circumcised and set to harsh manual labor. The females become household drudges and concubines. Rape is common and so is genital mutilation. Punishments for slaves who break the masters rules are incredible. Among other things, a slave in Sudan faces branding, castration or hobbling by having the Achilles tendon cut. In the small country of Mauritania, a former French possession, things are little better. Its estimated that one million Africans are in bondage there. Slavery has endured in Mauritania for 700 years, and only officially ended in 1980. Privately, the business of buying, selling and breeding slaves goes on there just as it always has. Racial hatred leads the slave owners to treat any infraction on their rules with truly unspeakable cruelty. Most of these punishments are disturbing to read about and cant be explicitly described in a newspaper. The reaction of the world to these horrors has been pathetic. The United Nations has been fairly useless. Multinational oil companies have done well in oil-rich Sudan and dont care to upset the profitable relationship. African-American leaders have been strangely silent. Instead of a decrying black slavery in Africa, our leaders have busied themselves with the defense of young hoods in Decatur, Illinois or in counting the number of black actors on TV. The NAACP did pass an anti-slavery resolution in 1995, but hasnt had much to say since. The information is readily available. The American Anti-Slavery Society in Boston and the Coalition Against Slavery in Mauritania and Sudan in New York City have long been crying out against this great crime. Will anybody listen?

Activists More to Fear than Pesticides

ANGELA LOGOMASINI (2003.08.11 )

As public health officials consider spraying pesticides to control the mosquito-borne West Nile virus, anti-pesticide activists claim that spraying devastates birds and other wildlife. But such claims should be viewed with skepticism. It seems that West Nile virus and other natural factors may pose much greater threats than spraying. The Centers for Disease Control reports that West Nile has killed birds from at least 138 bird species, including some endangered species. In the Midwest last year, 400 great-horned owls were found dead from West Nile. Researchers estimate that for each dead bird reported, there are probably 100 to 1,000 unreported cases, which means there could have been as many as 40,000 to 400,000 great-horned owl deaths from West Nile last year. Still, environmentalists claim that there is clear evidence that the pesticides are a far greater risk to birds. They claimed back in 2001 that data from New York State showed that more birds were dying from toxins like pesticides than from West Nile. But science writer Steven Milloy obtained state data in 2001 that showed the toxins that affected the birds in this sample were mostly naturally occurring. According to Milloy, the New York State analysis of 3,216 dead birds found that natural diseases and toxins caused the majority of the bird deaths (1,263 from West Nile virus and 1,100 from botulinum). Meanwhile, the data included 219 pesticide-related bird deaths, of which 30 were from intentional poisonings of pest birds and 100 were from illegal use of pesticides for intentional killing of birds. Twenty-seven bird deaths resulted from lawn care products. More recently, the Audubon Society says that data collected by New York State in subsequent years from a sample of 80,000 dead birds shows that pesticides, primarily lawn products, are killing the majority of birds. Yet New York has not released the data in any report, nor has anything been peer-reviewed. This majority of such toxin-related deaths may again include natural toxins, like botulinum, and it is not clear that the data they obtained was for all 80,000 birds. Unfortunately, the data on bird deaths from all sources isnt particularly clear, despite Audubons suggestions to the contrary. The researcher who conducts New York bird

pathology (who reportedly gave the data to the Audubon Society) has told the press that he doubts spraying will do much harm to birdsat least not as much as does the virus. The U.S. Environmental Protection Agency asserts that spraying poses a negligible risk to birds. In addition to birds, activists also say that aquatic life is at grave risk. When a massive lobster die-off occurred in Long Island Sound in 1999, environmentalists and lobstermen claimed that New York Citys malathion spraying had reached the waters and caused the die-off. Yet the die-off began before New York State sprayed, and several years of federally- funded research hasnt found a definitive link to the pesticides. The University of Connecticuts Dr. Richard French explained in a 2001 report: There is no quantitative evidence of pesticide toxicity All the indications based on pathological evaluation of the American Lobster in LIS (Long Island Sound), suggest that the mass mortality of lobsters in 1999 was the effect of a natural disease. Long Island comprises some of the farthest southern reaches for these lobsters, and unusually warm waters in years leading up to and into 1999 seem to have created natural environmental stresses that make the shellfish more susceptible to parasites and other diseases. In any case, New Yorks regional problem has not stopped the industry from growing. According to figures from the National Marine Fisheries Service, the biggest national lobster catch occurred in 1999the year New York suffered its massive die-off. The data show that since 1950, the lobster catch has increased through the decades, with some years dipping only to be followed by the continued march upward. New Yorks lobster population is more variable. Before the 1990s, average annual lobster catch for all the years between 1950 and 1989 totaled less than a million pounds a year. The number of lobsters caught ballooned in the 1990s, amounting to more than three million pounds by 1992 and then reaching a pinnacle of nearly nine and a half million pounds in 1996. The yields for 1999 (seven million pounds) and 2000 (three million) are still higher than any year before 1990. Debates about pesticide spraying arent going away, and anti -pesticide activists will continue to make unsupported claims to advance their cause. But much of what they say isnt verified by the facts.

Say No to the Self-Esteem Pushers

ONKAR GHATE (2003.09.01 )

The beginning of a school year is an appropriate time to question how our schools propose to teach our children. Todays educators, observing widespread self -doubt and despair among the young, believe that the way to get a student to learn is to inflate his self-image. They believe that the curriculum should be designed, in the words of a resolution from the National Education Association, to foster positive self -esteem. There is indeed a lack of self-esteem among our students. The real tragedy, though, is that the educators irrational view of positive self-esteem not only prevents a solution to this problem but is itself the very cause. Educators believe that self-esteem can be achieved by simply encouraging a child to feel good about himself. They continually exhort students to p raise themselves to praise themselves causelessly by such means as chanting in class: I am me and I am enough. The objective reality of the childs life the choices he makes, the thinking he engages in, the effort he exerts, the actions he takes is disregarded. As one guidebook on self-esteem explains: Children have the right to feel good about themselves exactly as they are. . . . A childs value is unconditional. Nothing the child does, says or chooses can change it. Genuine self-esteem, however, consists not of causeless feelings, but of certain knowledge about yourself. It rests on the conviction that you by your choices, effort and actions have made yourself into the kind of person able to deal with reality. It is the conviction based on the evidence of your own volitional functioning that you are fundamentally able to succeed in life and, therefore, are deserving of that success. Since it is only through rational thought and action that one develops the ability to cope with reality, self-esteem results from an individuals commitment to reason. A rational, productive person will possess self-esteem; a drug-addicted bum will not. But in the view of our Dewey-inspired educators, logic is a straitjacket. Students are taught by progressive educators that there are no rigid principles in life, and that emotion, not reason, is ones link to reality. Thus, if a child is somehow made to feel

good about himself, he is good irrespective of whether there exists any objective basis for that conclusion. Of course this approach cannot work. A child who makes bad choices who does not think but drifts in class, who shuts down his mind at the first sign of difficulty, who heads for the mall instead of exerting the effort that learning requires will not acquire self-esteem. Constantly getting the answers wrong in class and feeling bewildered by the world outside, such a child experiences only uncertainty, helplessness and self-doubt. How then will educators make him feel good about himself? By attempting to obliterate any facts that lead him to a negative estimate of himself. Accordingly, they teach him that there are never any wrong answers. This is what gives rise to such nightmarish phenomena as inventive spelling, whereby a fourth-grader who spells favorite as fffifit is lauded by the teacher for expressing a creative feeling. This viewpoint infects even the most objective of disciplines, mathematics. One educator explains the root of a girls errors in mathematics: She was trying to get these problems right. The alternative was to get them wrong. . . . So this is a situation within the win-lose world in which theres no way the child can feel good about the assignment. Erase the concept of truth these educators maintain and a child will never discover that he is thinking or acting wrongly. If he is taught that anything he does is right because he feels it, he will always feel good about himself. For this reason a Minnesota Education Associations guide to self -esteem tells students: Express your beliefs . . . as your point of view not as the

Keep the Death Tax Dead

EDWIN FEULNER (2005.09.09 )

In Washington, nothings certain except death, taxes and special-interest lobbying groups. So it makes sense that the death tax has its own lobbyists. Thats right. Americans for a Fair Estate Tax knows a Senate vote is coming soon, and theyre hard at work. Their Web site describes the group as a coalition fighting to preserve a fair estate tax. Of course, the name of the group is itself misleading. Theres nothing fair about the estate tax, or as some of us prefer to call it, the death tax. It hits people at the worst possible time. Just as theyre dealing with the passing of a loved one, they must settle an estate with the IRS, a process that can be costly. Many families have been forced to sell their land or shutter the family business just to pay the death tax, which can seize up to half of a dead persons assets. Congress has taken sensible steps to phase out the death tax. Its scheduled to decline every year until 2010, when it will finally disappear. But unless lawmakers act to make that permanent, the death tax will return in 2011 at the same high rates that existed in 2002. So, why would anyone want to protect a measure that makes even dying a taxable event? Americans for a Fair Estate Tax explains in a set of handy talking points, available on its Web page. For one thing, it claims the federal government cant afford to cut the death tax. We are facing deficits as far as the eye can see, and Congress will vote this year on cuts in important programs, the group insists. Well, Congress often votes on spending cuts. The problem is, it seldom approves the cuts. Over the last five years, federal spending has increased 33 percent. So when you get right down to it, the budget could stand a little cutting. Besides, the death tax itself carries hidden costs. Heritage Foundation economist William Beach estimates that the federal estate tax alone costs the U.S. between 170,000 and 250,000 potential jobs each year. These jobs never materialize because the investments that would have created them arent made. By repealing the death tax, wed allow the economy to create even more jobs, which would make all of us better off.

The pro-death tax lobbyists also claim, Repeal or bad reform of the estate tax would have a damaging effect on the nations charities. But this doesnt pan out, either. The Congressional Joint Economic Committee reports that charitable bequests in 2003 reached a record $21.6 billion a 25 percent increase from 1999. And thats with the death-tax rate declining and set to go even lower in years to come. If anything, the death tax crowds out charitable giving: The larger the share of an estate the government seizes, the less money remains for survivors to support worthy causes. Finally, the group claims, A fair estate tax supports the underlying values of the American dream. Not really. Americans have always understood the danger of overtaxation and fought against it. This country was born out of a tax revolt. In our earliest days, the Boston Tea Party and the slogan No taxation without representation symbolized our avers ion to taxes. Today, even low-wage earners are willing to hire a tax preparer to make sure they pay as little as possible. So its difficult to believe that Americans support a policy that takes from the dead to feed the federal coffers. When the Senate returns, its expected to consider a measure that would permanently repeal the death tax. The House has already passed a similar bill. Senators should do the right thing and put both Americans for a Fair Estate Tax and the death tax itself out of business for good.

Global Capitalism: The Solution to World Oppression and Poverty (Part 1 of 3)

ANDREW BERNSTEIN (2005.09.28 )

A proper understanding of capitalism is sorely lacking today. In order to gain such understanding, it is best to start with a true story that captures the spirit and sense of life of capitalism. Then it is possible to extract the deeper principles it embodies and the intellectual causes that give rise to it. In the early 19th century, Robert Fulton, the inventor of the steamboat, held a monopoly granted by the state of New York to run all steamboat traffic in that state. The state-franchised monopoly legally prevented competition from entering the field, thereby keeping prices artificially high to the detriment of the customers, who detested the monopoly. But in early 19th century America, men believed in their inalienable rights as free U.S. citizens, and did not bow compliantly to arbitrary government authority. In 1817, a New Jersey businessman hired 23 year old Cornelius Vanderbilt to ferry passengers between New Jersey and New York City in a direct challenge to the monopolys power. For the next six years, a cat-and-mouse game ensued between the monopoly and its challenger, with the young Vanderbilt at the epicenter of the struggle. Vanderbilt hoisted a flag on the masthead of his boat, the Bellona, reading: New Jersey must be free! and for sixty consecutive days eluded capture by a uthorities who sought to arrest him and confiscate his vessel. To the delight of the passengers who loved his lower-priced service, he used every possible trick or subterfuge to avoid capture. He hid near the gangplank, then scurried off when police officers boarded so their papers could not be served. He constructed a secret closet in which to hide, so when law officers boarded him in the bay they found only a young woman steering the boat, whom they questioned to the taunts and derision of the other passengers. The upshot was that in 1824, the Supreme Court

Global Capitalism: The Solution to World Oppression and Poverty (Part 2 of 3)

ANDREW BERNSTEIN (2005.09.29 )

To fully understand capitalism its nature and genesis it is necessary to know the source of its fundamental principles. Where did the ideals of individual rights and political-economic freedom originate? The principle of individual rights

Global Capitalism: The Solution to World Oppression and Poverty (Part 3 of 3)

ANDREW BERNSTEIN (2005.09.30 )

The freedom of the capitalist countries has created the most upwardly mobile societies of history, with hundreds of millions of human beings currently enjoying middle class comforts people whose ancestors were poor just one or two centuries ago, or, in some cases, just decades ago. Further, according to the U.S. government, the poverty threshold for a family of four in 1997 was an annual income of roughly $16,400, i.e., at or below a per capita income of $4,100 per year. This certainly constitutes poverty by the standards of capitalist nations. But what are the standards of non-capitalist nations? 12

What are the conditions of the non-capitalist countries? The first issue to be examined is a societys attitude toward the underlying cause of wealth the Enlightenment principles of respect for the mind, individual rights and politicaleconomic freedom. The second is the economic results of those attitudes. In feudal Europe, prior to the capitalist revolution of the late 18th century, serfdom and its legacy dominated. Peasants were often legally tied to the land and possessed few rights. Commoners, more broadly, were subordinated to the king, aristocrats and Church, and free thought was punished. Voltaire, for example, was imprisoned for his revolutionary ideas, as was Diderot. DAlembert, the great French scientist and writer, was intimidated by the authorities into temporarily severing his association with the Encyclopedie. Galileo was threatened with torture and Giordano Bruno burned at the stake for supporting scientific theories that clashed with the teachings of the Church. Feudalism the dictatorship of the aristocracy suppressed the mind, abrogated individual rights and denied political-economic freedom. With the minds and actions of commoners the overwhelming preponderance of men severely circumscribed, the results were predictable. Poverty, famine and disease were endemic during the feudal era. For example, the bubonic plague wiped out almost one-third of Europes population in the 14th century, and recurred incessantly into the 18th. Famine, too, was widespread in Europe until the 18th century, killing sizable portions of the population in Scotland, Finland, Ireland and

causing misery and death even in such relatively prosperous countries as England and France. Regarding living standards, one expert, Angus Maddison, states that economic growth during the centuries 500-1500 was non-existent; and that per capita income rose by merely 0.1 percent per year in the years 1500-1700. In 1500, Maddison claims, the European per capita GDP was roughly $215 per year; in 1700, roughly $265. Contrast such economic stagnation with the capitalist epoch, the years 1820 to the present, in which Western Europe and the worlds other freest nations total economic output increased sixty times, and per capita income grew to be 13 times what it had been previously. The European population roughly tripled during the 19th century while per capita living standards steadily rose. 13 Cures for disease, economic growth, agricultural and industrial revolutions the means by which human beings rise above deprivation and misery are products of the rational mind operating under conditions of political-economic freedom. Capitalism provides those conditions; feudalism did not. But today, despite the lessons of the past, political dictatorships even worse than those of feudal Europe proliferate across the globe. For example, though Communism today may be in its death throes, it butchered 100 million innocent victims in 80 years and still enslaves and murders innocent men in China, in Cuba and in North Korea. More broadly, statism the subjugation of the individual by the state exists everywhere. Brutal theocracies and military dictatorships in the Middle East murder their own citizens, and sponsor terrorist attacks against the worlds freest country, the United States. In Africa, individual rights and liberty are nonexistent the continent bristles with military and/or tribal dictatorships. For too long the situation was no different in Haiti and only slightly better throughout Latin and South America, where sundry tin pot dictators were and remain the rule. Today, more than 225 years after the American Revolution, freedom is virtually unknown around the globe In North Korea, Communist oppression is unspeakable. As merely one example, political prisoners are enslaved, starved and used for target practice by guards and troops. In Iraq, under Saddam Hussein, the torture and execution of political prisoners was routine. In Afganistan, the Taliban denied the right to an independent life to the entire female gender, oppressing by that policy alone one/half of the countrys population. Further, to be brutally honest, any degree of freedom is virtually unknown on the African continent.14

One example is Sudan. Its dictator, Omar Hassan Ahmed al-Bashir, continued the policies of one of his predecessors, Jaafar Nimeri, persecuting the non-Muslim and black population of the countrys south. Human Rights Watch Africa labeled Sudans record on rights abysmal, and reported that all forms of political opposition were banned, both legally and by means of systematic terror. The war against blacks and Christians in the south continued, including the bombing of villages. As part of the ongoing war, the ancient practice of slavery was revived th ere, as well. Slavery in the Sudan is in part a result of a 15-year war by the Muslim north against the black Christian and animist south. Arab militias, armed by the Khartoum government, raid villages, mostly of the Dinka tribe. They shoot the men and enslave the women and children. Women and children are kept as personal property or theyre taken north and auctioned offIn Sudanese slave markets, a woman or a child can be purchased for $90. Such U.S. organizations as the American Anti-Slavery Group have a stopgap mission of buying, at a cost of $85 each, black women and children whom the Sudanese Muslims capture, enslave and torture. The purchase made by these groups emancipate the slaves. 15 In Rwanda in 1994, Hutu tribesmen slaughtered hundreds of thousands of innocent victims, mostly members of the Tutsi tribe, hacking them to pieces with machetes, then stacking the corpses in piles like so much cordwood. The Hutus butchered 800,000 men, women and children in 100 days, averaging 8,000 murders per day in the fastest, most efficient killing spree of the twentieth century. 16 The non-capitalist nations of the Communist and 3rd Worlds are brutal dictatorships, often wracked by bloody, internecine tribal warfare, in which the principles of individual rights and liberty are utterly unknown. Crucially, the rational mind is repudiated in these societies in favor of tribalism, faith and unremitting brute force. It should, therefore, come as no surprise that millions of individuals subsist in the most abysmal poverty in these countries a destitution undreamed of in the capitalist world for almost 2 centuries. In Sudan, for example, per capita GDP is $296.00 per year; in Rwanda, it is $227.00; in Communist North Korea, where nighttime satellite photographs reveal utter darkness because the country lacks electricity, conditions are just as grim. Despite massive aid from the capitalist West, tens of thousands of human beings, by conservative estimate, starved to death there in recent years. By contrast, the freer, semi-capitalist South Korea enjoys living standards more than 30 times those of the North and is perpetually free of famine. Similarly, the per capita standard of living for Cuban-Americans in Miami is roughly 20 times what it is for those trapped in the

prison of Castros Cuba. In Communist Vietnam, per capita GDP is $331 and the economy is stagnating, while its freer, semi-capitalist neighbor, Thailand, enjoys a per capita GDP 8 times that and growing. Just as there is a stunning correlation in the world between freedom and prosperity, so there is an equally stunning correlation between statism and destitution. By the standards of capitalist America, poverty is reached when one descends to the threshold of $4,000.00 per year an income 10 or 12 or 15 times the average figure in non-capitalist countries of both the past and the present. 17 The non-capitalist nations of the world today are more brutally repressed even than those of feudal Europe, which explains why, despite the global diffusion of American technology, their living standards are virtually identical to that earlier era. When the mind is suppressed, technological, industrial and agricultural development the achievements of the mind are stifled. Capitalism protects the inalienable rights of the individual and is, therefore, the only moral system. Because it respects the minds and rights of all individuals, it thereby creates vast wealth, and is the only practical system. By contrast, statism systematically violates the rights of individuals and is, therefore, immoral. Because it suppresses the mind and violates mens rights, it thereby causes abysmal poverty and is utterly impractical. Mens choice today is stark: freedom and prosperity or statism and misery. Capitalism, and the Enlightenment principles upon which it rests, if and when chosen, will bring freedom and prosperity to the oppressed masses of the 3rd World in the exact manner it did to the oppressed masses of feudal Europe. Examples of this can be seen in the Communist dictatorships of Asia. During the blood-drenched rule of Mao tse Tung, the regimes atrocities were unspeakable; at least 65 million innocent individuals were butchered by the Communists during that 30 year reign of terror. Nobody knows how many of that total died when Mao forcibly attempted to collectivize the peasants during the ill-named Great Leap Forward estimates range from 20 million to 43 million dead for the years 1959-1961Mao and the system that he created were directly responsible for what wasthe most murderous famine of all time, anywhere in the world. 18 To speak exactly, there were no living standards under Mao; there were only dying standards. Conditions only began to improve under the slightly less brutal regime of Deng Xioping. Beginning in the late 1970s, Deng permitted some elements of private

ownership and profit seeking. Farmers could consume or sell for profit whatever they produced above state quotas. The result was that agricultural production increased by more than 50 percent in just 16 years. Deng further permitted the establishment of Special Enterprise Zones (SEZs) with some elements of free enterprise. Guangdong, one such zone, showed an economic growth rate of almost 14 percent, significantly above the national average. The province, possessing a fraction of Chinas total population and resources, produced 30 percent of the countrys exports. Even these limited capitalist elements produced dramatic results. When Deng came to power in 1978, the country was desperately poor: 60 percent of its population subsisted on less than a dollar a day. The new elements of free enterprise caused the countrys per capita income to double between 1978 and 1987, and then to double again between 1987 and 1996. Today, China s per capita GDP is $727, vastly below neighboring Taiwans figure of $12,461, but an enormous leap above the less-than-$200 total it was under undiluted Communism. 19 China remains a brutal dictatorship, and as such it can never equal vastly freer, semicapitalist Taiwans living standards. But the creative abilities of rational men are such that even minimal amounts of freedom enable them to dramatically raise living standards in an otherwise destitute statist regime. The situation is similar in Communist Vietnam. There, the minimum wage averages out to $134 annually; but Nike, who owns Vietnamese factories misleadingly dubbed sweatshops by anti-capitalist ideologues pays an average salary of $670, a sum that is double the countrys per capita GDP. In the poorest developing countries, someone working for an American employer draws no less than eight times the average national wage. Further, Western companies in the poorest countries pay their workers, on average, twice what the corresponding native firms pay. 20 The difference is the technology made affordable by the greater capital accumulated and invested by American and other Western firms. In general, white collar workers using personal computers, the Internet, fax machines and global conference calling capabilities can be far more productive than ones lacking these advances and working on old-fashioned typewriters. Similarly, blue collar workers using steam shovels, cranes and power tools can be far more productive than ones relying merely on shovels and pick axes. Based on the subsequent vastly increased output of labor, the workers effort is worth more to the company, which can then afford to pay higher

wages. It is the advanced technology and more modern plants that Nike deploys that enables it to pay destitute 3rd World workers significantly higher wages. Technological and industrial advances the achievements of the minds of men operating under conditions of political-economic freedom are raising living standards in 21st century Asia just as they did in 18th century Europe. The real problem in 3rd World countries is not that Western companies exploit their workers they do not; it is that indigenous dictatorial regimes whether communist, socialist, theocratic, feudal or military oppress their own citizens. The moral imperative is not to pressure Nike, et. al., into better treatment of its employees; it is to overthrow the communist, theocratic or military despots and establish capitalism, the only system that respects the minds and the rights of the individual. Capitalism is freedom and freedom leads to prosperity. The moral is the practical. On the other hand, statism is oppression and oppression leads to destitution. The immoral is the impractical. After two centuries of capitalism, 80 years of socialism and centuries of feudalism, the scores are on the board and the contest is over. The alternatives open to human beings are stark: freedom and prosperity or statism and misery. Men have only to make their choices. References 12. Robert Rector, The Myth of Widespread American Poverty, www.heritage.org 13. Angus Maddison, Phases of Capitalist Development (New York: Oxford University Press, 1982), pp. 4-7. 14. Stephane Courtois, et. al., The Black Book of Communism (Cambridge, Mass.: Harvard University Press, 1999), pp. 547-564. 15. Ronald Segal, Islams Black Slaves: The Other Black Diaspora (New York: Farrar, Straus and Giroux), pp. 199-223. See also the American Anti-Slavery Groups website: www.anti-slavery.org 16. Samantha Power, Bystanders to Genocide, The Atlantic Monthly, September 2001. 17. Gerald ODriscoll, The 2001 Index of Economic Freedom, op. cit., pp. 143 -144, 229-232, 317-318, 341-342, 357-358, 387-389. Peter Brimelow, The High Cost of Castro, Hoover Digest 1998 No. 3. William Ratliff, Cuba: Semper Fidel, Hoover

Digest 2001 No. 4. Robert Levine and Moises Asis, Cuban Miami (New Brunswick, NJ: Rutgers University Press, 2000), pp. 3-6, 93-105. Carlos Seiglie, Cubas Road to Serfdom, The Cato Journal, Vol. 20, No. 3. Miguel Faria, M.D., Cuba in Revolution (Macon, Georgia: Hacienda Publishing, 2002), pp. 177-194 and passim. 18. Stephane Courtois, The Black Book of Communism, op. cit., pp. 487-496. 19. Daniel Yergin and Joseph Stanislaw, The Commanding Heights (New York: Simon and Schuster, 1998), pp. 194-216. Gerald ODriscoll, 2001 Index of Economic Freedom, op. cit., pp. 127-132. 20. Johan Norberg, In Defense of Global Capitalism (Stockholm: Timbro, 2001), pp. 202-205.

The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire
LISA DOBY (2005.10.28 )

Did J.P. Morgan, John D. Rockefeller and Andrew Carnegie really make their fortunes as Robber Barons exploiting the common man? Was the Great Depression really caused by greedy businessmen and investors? Did the socialist Soviet Union actually surpass Americas scientific and technological achievements? Today, with Western Civilization under attack by an alliance of Middle Eastern Islamists and Western leftists, there has never been a more critical time for everyone to learn the truth about the political-economic systemcapitalismresponsible for the greatest freedom and prosperity of mankinds history. If you think you understand the capitalist system or believe it doesnt impact your daily life, you need to think again. In his new book, The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire, Dr. Andrew Bernstein reveals that our common views of capitalism are often egregiously divergent from the truth. He weaves principles from history, economics and philosophy into an engaging chronicle that, like a well-plotted thriller, presents the inspiring story of many of historys most accomplished heroes. He shows that few scientific or technological advances were made in the centuries leading up to the 1700s. People suffered interminably through incessant wars, famines, plagues and crushing poverty. In the 18th century, most societies were ruled by monarchies and brutal tyrannies similar to those of current Third World nations. But mankind made immense progress during the 18th century Enlightenment. The great thinkers of that era recognized that when men were free to think and act in their own interesti.e., when freedom and capitalism prevailedthey were able to use their minds to bring staggering, unprecedented advance. From the steam engine to the principles of the U.S. Constitution to the ensuing electric light and telephone, the liberated human brain power made possible by the freedom of the capitalist system transformed mens lives. It was this ideology of individual rights that was responsible for creating the British Industrial Revolution. According to Dr. Bernsteins extensive research, this era has long been mischaracterized as a time when people were forced to leave their idyllic cottage lives to work in the de-humanizing factories. Although the work may have

been grueling compared to todays standards, it was the factories enormous productivity that enabled millions of ordinary human beings, for the first time in history, to achieve vastly higher living standards. Predictably, such rising standards of living led to diminishing mortality rates, increasing life expectancies, and a 19th century tripling of the population. Americas Founding Fathers, influenced by Enlightenment ideals, created historys first system of individual rights, limited Constitutional government and politicaleconomic liberty. The resulting freedom of the American system led to an explosion of technological advance in the 19th century. In order to accurately characterize the essence of the 19th centurys second half, Dr. Bernstein has jettisoned the misconceived Gilded Age designation. Reflecting the technological advance wrought by such monumental geniuses as Edison, Bell and the Wright brothersand the industrial output created by such productive giants as Carnegie, Rockefeller and Morganhe has re-dubbed the era: the Inventive Period. Drawing from the unprecedented freedom and scientific/technological advance delivered by capitalism, Bernstein identifies for the first time the root explanatory principle: capitalism is the system of the mind.

What Causes Unemployment?

THOMAS SOWELL (2005.11.14 )

Many people are blaming the riots in France on the high unemployment rate among young Muslim men living in the ghettoes around Paris and elsewhere. Some are blaming both the unemployment and the ghettoization on discrimination by the French. Plausible as these explanations may sound, they ignore economics, among other things. Let us go back a few generations in the United States. We need not speculate about racial discrimination because it was openly spelled out in laws in the Southern states, where most blacks lived, and was not unknown in the North. Yet in the late 1940s, the unemployment rate among young black men was not only far lower than it is today but was not very different from unemployment rates among young whites the same ages. Every census from 1890 through 1930 showed labor force participation rates for blacks to be as high as, or higher than, labor force participation rates among whites. Why are things so different today in the United States and so different among Muslim young men in France? That is where economics comes in. People who are less in demand whether because of inexperience, lower skills, or race are just as employable at lower pay rates as people who are in high demand are at higher pay rates. That is why blacks were just as able to find jobs as whites were, prior to the decade of the 1930s and why a serious gap in unemployment between black teenagers and white teenagers opened up only after 1950. Prior to the decade of the 1930s, the wages of inexperienced and unskilled labor were determined by supply and demand. There was no federal minimum wage law and labor unions did not usually organize inexperienced and unskilled workers. That is why such workers were able to find jobs, just like everyone else, even when these were black workers in an era of open discrimination. The first federal minimum wage law, the Davis-Bacon Act of 1931, was passed in part explicitly to prevent black construction workers from taking jobs from white construction workers by working for lower wages. It was not meant to protect black workers from exploitation but to protect white workers from competition.

Even aside from a racial context, minimum wage laws in countries around the world protect higher-paid workers from the competition of lower paid workers. Often the higher-paid workers are older, more experienced, more skilled or more unionized. But many goods and services can be produced with either many lower skilled workers or fewer higher skilled workers, as well as with more capital and less labor or vice-versa. Employers choices depend on the relative costs. The net economic effect of minimum wage laws is to make less skilled, less experienced, or otherwise less desired workers more expensive thereby pricing many of them out of jobs. Large disparities in unemployment rates between the young and the mature, the skilled and the unskilled, and between different racial groups have been common consequences of minimum wage laws. That is their effect whether the particular minimum wage law applies to one sector of the economy like the Davis-Bacon Act, to the whole economy like the Fair Labor Standards Act of 1938 or to particular local communities like so-called living wage laws and policies today. The full effect of the Fair Labor Standards Act of 1938 was postponed by the wartime inflation of the 1940s, which raised wages above the level specified in the Act. Amendments to raise the minimum wage began in 1950 and so did the widening racial differential in unemployment, especially for young black men. Where minimum wage rates are higher and accompanied by other worker benefits mandated by government to be paid by employers, as in France, unemployment rates are higher and differences in unemployment rates between the young and the mature, or between different racial or ethnic groups, are greater. Frances unemployment rate is roughly double that of the United States and people who are unemployed stay unemployed much longer in France. Unemployment rates among young Frenchmen are about 20 percent and among young Muslim men about 40 percent. There is no free lunch, least of all for the disadvantaged.

How To Cure Inflation

WALTER WILLIAMS (2005.11.19 )

Last month, President Bush nominated Dr. Ben S. Bernanke, currently chairman of the Presidents Council of Economic Advisors, as chairman of Federal Reserve Board to replace the retiring Alan Greenspan. Alan Greenspans replacement comes at a time of heightened fears of inflation resulting from the recent spike in oil prices. First, lets decide what is and what is not inflation. One price or several prices rising is not inflation. When theres a general increase in prices, or alternatively, a reduction in the purchasing power of money, theres inflation. But just as in the case of diseases, describing a symptom doesnt necessarily give us a clue to a cause. Nobel Laureate and professor Milton Friedman says, [I]nflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output. Increases in money supply are what constitute inflation, and a general rise in prices is the symptom. Lets look at that with a simple example. Pretend several of us gather to play a standard Monopoly game that contains $15,140 worth of money. The player who owns Boardwalk or any other property is free to sell it for any price he wishes. Given the money supply in the game, a general price level will emerge for all trades. If some property prices rise, others will fall, thereby maintaining that level. Suppose unbeknownst to other players, I counterfeit $5,000 and introduce it into the game. Initially, that gives me tremendous purchasing power, whereby I can bid up property prices. After my $5,000 has circulated through the game, there will be a general rise in the prices something that would have been impossible before I slipped money into the game. My example is a highly simplistic example of a real economy, but it permits us to make some basic assessments of inflation. First, lets not let politicians deceive us, and escape culpability, by defining inflation as rising prices, which would allow them to make the pretense that inflation is caused by greedy businessmen, rapacious unions or Arab sheiks. Increases in money supply are what constitute inflation, and the general rise in the price level is the result. Whos in charge of the money supply? Its the government operating through the Federal Reserve.

Theres another inflation result that bears acknowledgment. Printing new money to introduce into the game makes me a thief. Ive obtained objects of value for nothing in return. My actions also lower the purchasing power of every dollar in the game. Ive often suggested that if a person is ever charged with counterfeiting, he should tell the judge he was engaging in monetary policy. When inflation is unanticipated, as it so often is, theres a redistribution of wealth from creditors to debtors. If you lend me $100, and over the term of the loan the Federal Reserve increases the money supply in a way that causes inflation, I pay you back with dollars with reduced purchasing power. Since inflation redistributes (steals) wealth from creditors to debtors, it helps us identify inflations primary beneficiary. That identification is easy if you ask: Who is the nations largest debtor? If you said, Its the U.S. government, go to the head of the class. So what about the presidents nomination of Ben S. Bernanke as Alan Greenspans replacement? I know little or nothing about the man. What I do know is that its not wise for one person, or group of persons, to have so much power over our economy. Heres my recommendation for reducing that power: Repeal legal tender laws and eliminate all taxes on gold, silver and platinum transactions. That way, Americans could write contracts in precious metals and thereby reduce the ability of government to steal from us.

How To Prevent Confiscatory Taxation: Cut Spending to Save Needed Tax Cuts
EDWIN FEULNER (2005.12.03 )

If you say, I have good news and bad news, people usually ask for the good news first. So heres the good news: Our economy is growing, easily outpacing the tepid performance of other industrialized nations. Unemployment, according to the Labor Department payroll survey, holds low and steady near 5 percent. Even Hurricane Katrina, which shut entire industries for a month, drove up the unemployment rate only by a miniscule .02 percentage point. The economy is hovering near what economists call full employment, where most everyone who wants a job can get one. Over the last year, 2.2 million new payroll jobs have been created. Add in farm employment and net job creation totals 2.4 million. The United States has more workers than ever, remarkably low unemployment and low inflation. What explains this superior economic performance? Excellent tax policy plays a large part. Since President Bush took office in 2001, the government has cut taxes three times. And the most recent round included true supply side cuts such as marginal tax rate reductions and lower tax rates on dividends and capital gains the ones that actually generate greater economic growth. Almost everyone is enjoying lower tax rates, so theres more incentive for people and companies to save and invest. Its no mere coincidence that five million more Americans were employed in August 2005 than in May 2003, when the latest round of tax cuts took effect. Now the bad news: Unless Congress gets spending under control, these tax cuts and the economic growth we now take for granted will vanish. Heres the problem: The federal government is about 33 percent larger today than it was in 2001 and spends some $22,000 per household. And regardless of how this spending is financed, either with taxes or borrowing, the economy will suffer since resources will be transferred from the productive sector to the government. Some of our political leaders are in denial. A recent memo by a senior economic aide to Senate Majority Leader Bill Frist claimed we were actually in good economic

shape, since no other industrial nations centralized government spends less than the United States measured as a share of their economy. Alas, Were in better shape than France and Germany isnt much of a reason to brag. And even that modest boast wont last long. If we dont make changes, Social Security, Medicare and Medicaid obligations will push U.S. government spending to western European levels in just one generation. Such spendthrift ways, unchecked, will have severe consequences. Todays tax rates would have to double to cover Washingtons promised entitlements. A taxpayer now in the 25 percent tax bracket would face a marginal tax rate of more than 50 percent, while a taxpayer now paying the top rate of 35 percent would get bumped to a 70 percent tax rate a confiscatory rate even the French government would be reluctant to impose! Such European-level taxation would bring European-level jobless numbers. Frances unemployment rate last year was 10.1 percent double ours. Germany came in at 10.6 percent. Theres little doubt the same thing would happen here if we doubled tax rates. The burden of government is already heavier than some suspect. Total spending by U.S. governments federal, state and local reached 35.9 percent of GDP in 2005. Thats more than Australia (35.5 percent), Ireland (35.2 percent) and New Zealand (35.1 percent). Those countries should be our long-term models. After all, Australias unemployment rate last year was 5.1 percent, while Ireland was at 4.3 percent and New Zealand an amazing 4.2 percent. Less spending means fewer taxes and lower unemployment. The real lesson to learn from this is the need to control both discretionary spending and entitlement spending. Heritage Foundation economic models predict that making the Bush tax cuts permanent would create 430,000 additional jobs nationally in 2006 and an average of 624,000 per year over the next decade. Thats tremendous growth, but it can happen only if we bring spending down. Sadly, theres still more bad news. Next week well take a closer look at the commitments Washington is making through its generous entitlement programs commitments we cant possibly afford to keep.

First appeared in Investors Business Daily

Imposing Your Preferences On Others Through Government

WALTER WILLIAMS (2005.12.28 )

Philosopher David Hume warned that, It is seldom that liberty of any kind is lost all at once. Thats why we should guard against any encroachme nt on liberty, no matter how small. Lets look at a couple of instances where, at our peril, weve failed to do so. The Christmas season reminds many Americans of the attack on religion. A number of stores have caved in to pressures to ban Christmas celebrations, greetings and symbols, among them: Target, Home Depot, Wal-Mart, Kmart, Sears, Costco, Kohls, Barnes & Noble, Toys R Us, and Walgreens. Cities have banned nativity scenes. Some schools have banned the singing of Christmas carols. Much of the attack on religion had its birth with the 1963 Supreme Court decision in Murray vs. Curlett, which banned organized school prayers. For a moment, lets ignore the debate on whether that decision was right or wrong and instead focus on tactics. Suppose, in 1963, Americas atheists had revealed and demanded their complete agenda: elimination of religious Christmas symbols in public places, elimination of the words under God in our Pledge of Allegiance, elimination of In God We Trust from our currency and elimination of caroling in public schools. There would have been so much resistance that they wouldnt have achieved any of their agenda, including the ban on prayers in school. Given our weak resistance, you can bet the day will come when the attack on religion will include demands that crosses be removed from Arlington and Normandy cemeteries and bans on religious television or radio broadcasts. While many Americans are disturbed by the ongoing attack on religion, they applauded the identical strategy when it was the attack on cigarette smokers. In the 1960s, when the anti-tobacco zealots started out, they only demanded reasonable things like no smoking sections on airplanes. Suppose they started out revealing their complete agenda: no smoking in airports, restaurants, places of employment and parks, confiscatory taxes on tobacco products, and multibillion-dollar suits against tobacco companies. There would have been so much resistance that the antitobacco zealots wouldnt have succeeded with no smoking sections on airplanes. The institution of private property offers the liberty-oriented solutions to both the school prayer and the smoking issues. I believe its a parental right to be able to decide whether ones child will, or will not, say a morning prayer. Conflict emerges

because of government-produced education. While there might be an argument for government financing of education, theres absolutely no argument for government production of education. Therefore, if each parent were given an education voucher to pay for education [or, even better--a tax credit], those parents wishing prayers, or those against prayers in school, could enroll their children in the school that meets their preference. Thus, conflict would be eliminated. Of course, a superior solution would be getting government entirely out of education. Private property would solve the smoking issue. Suppose you owned a restaurant, and you didnt wish to permit smoking. How would you like it if people used the political system to enact laws that forced you to permit smoking? Im sure youd consider it tyranny, and Id agree. But theres symmetry. Its just as much tyranny to use the political system to enact laws to force a restaurant owner who wished to permit smoking to ban smoking. The liberty-oriented solution might be to post a sign saying you dont permit smoking, and customers wishing otherwise wouldnt enter. The same principle would apply to restaurant owners who wished to permit smoking. I fear that too many Americans have contempt for the principles of liberty and opt for solutions that employ the political arena to forcibly impose their wills on others. If thats the preferred game, then those Americans shouldnt whine when others employ the same tactic to impose their wills.

The Limitations of the Marxist Approach to Writing History: David R. Roedigers The Wages of Whiteness
ALEXANDER MARRIOTT (2005.12.23 )

Ever since Karl Marx wrote about communism as the end of history,[1] there have been historians fascinated by his suggestions on how they should be working towards that end. Many have studied and taken up his methods of looking at the past, implicitly accepting (perhaps unwittingly or even unwillingly) the underlying point that, as Keith Windschuttle has put it, Under Marxism, history would end with the achievement of a universal, communist society that would finally abolish the class distinctions that had themselves driven the historical process.[2] An interesting progression in the Marxist historical approach has been forwarded by historian David R. Roediger in his book, The Wages of Whiteness, in which he applies Marxist methods to the study of the concept of whiteness among the working classes of American cities in the nineteenth century. Despite an interesting thesis, the weaknesses of his Marxist method ultimately and fatally cripple his argument in a number of ways. The most obvious flaw, which Roediger does not even attempt to hide, is that he explicitly states his motivation for writing the book as being drawn from contemporary political events and a desire to effect some sort of contemporary political change. This is hardly the kind of inspiration one should want to see for an attempt at serious historical scholarship. Another problem with his argument is his recurring attempt to castigate the historical actors he is examining for not living up to Marxist ideals, much the same way Marxists had castigated workers in World War I for being blinded by nationalism, but in Roedigers case the phantom menace is race. Lastly, the fundamental flaw of Roedigers efforts is the logical flaws within Marxist historical theory itself, making the entire endeavor an exercise in futility. Roediger starts The Wages of Whiteness innocuously enough, alluding to his animating impetus as an historian as an effort to combine commitment, principle, and scholarship.[3] The full meaning of this phrase becomes clearer when one reads the book, but one need not rely on inference to get at why Roediger wrote it or why he takes the positions he does, because he is quite upfront and honest about it. He says in his afterword to the revised edition that, Almost all of the much -heralded recent outpouring of historical writing on whiteness in the US has come from activist scholars deeply indebted to Marxism and committed to seeing workers as central to progressive political change. This is true of Saxton, Allen, Ignatiev, Lott, Karen

Brodkin, George Lipsitz and myself.[4] Even more enlightening and, perhaps, more shocking is his subsequent affirmation that he had, Written in reaction to the appalling extent to which white male workers voted for Reaganism in the 1980s.[5] Regardless of what one thinks of Reaganism, it is highly problematic that an historian would write a book partly out of his negative reaction to how he thinks people should have acted towards contemporary political figures. This is no surprise by the end of the book however, for his argument is interspersed with the exact same negative reactions to how workers in the nineteenth century actually acted. The reason for this disappointment has two probable causes, the first being the most obvious, that workers in the nineteenth century acted in a shameful manner in issues concerning race. The second cause for his negative reaction is his disenchantment with the inability of the workers, white and black, to unite in a common front against the dictatorial powers[6] of capitalists. The theme, which is common throughout the work, that conceptions of race, particularly whiteness, prevented labor unity is itself common to Marxists, though often in regard to a wider gamut of dividing lines among workers like nationality, religion, etc. This disappointment in his subjects, the white workers of nineteenth century America, leads Roediger to conclude rather anti-climactically that the whole concept of whiteness is a bad idea.[7] This familiar frustration of Marxists harkens back famously to World War I, when workers of different nations did not unite as Marx and Engels suggested they do in The Communist Manifesto, but instead went to war with each other under the banners of their respective homelands. Roediger brings up an earlier American Marxist, W.E.B. Du Bois, in order to illustrate this point further, Du Bois argued that white supremacy undermined not just working class unity but the very vision of many white workers. He connected racism among whites with a disdain for hard work itself, a seeking of satisfaction off the job and a desire to evade rather than confront exploitation. Du Bois held that this would have been a better and more class-conscious nation and world had the heritage of slavery and racism not led the working class to prize whiteness.[8] Roediger then finishes up the point by stating that he plans to present this failure of the working class in a way more tragicthan angry.[9] [Italics mine] The question arises; why is this dichotomy presented? Why should the failure of workers to do something together against any perceived wrongs be viewed first and foremost by the historian as a tragedy or something to be upset about (as if the historian can correct any perceived historical wrongs at all, let alone by writing angry history)? The answer is quite simple in Roedigers case; his Marxism requires disappointment and lamentation over this missed opportunity for proletarian unity. Examples of this

dismay crop up throughout, for instance he concludes one chapter by saying, Only with Black emancipation could a more straightforward critique of wage slavery, and a fierce battle over the meaning of free labor; develop. By that time, the importance of a sense of whiteness to the white US worker was a long-established fact, not only politically but culturally as well.[10] This conclusion assumes many things that Roediger never establishes, such as the existence, not to mention a coherent definition, of wage slavery. The fact that workers in the nineteenth century and in the 1980s did not react to events and figures the way Roediger thinks they should have acted according to his own appraisal of their interests is irrelevant to anything he is writing about as an historian. The fact that he keeps bringing it up only serves to demonstrate the weakness of the Marxist approach in its fixation on how things should have happened as opposed to how they did happen. Finally, there are the underlying assumptions of Marxist historical theory and their logical incongruence which makes Roedigers efforts nearly fated for failure. David Hackett Fischer, in his book Historians Fallacies, captures something of the essence of where Roediger goes wrong when he writes, The pragmatic fallacy selects useful factsimmediately and directly useful factsin the service of a social cause. Most historians hope their work is, or will be, useful to somebody, somewhere, someday.

Universal Freedom: The Only Hope for Health Care

RICHARD E. RALSTON (2005.12.20 )

Universal Health Care is the increasing drumbeat of advocates who want Americans to place all responsibility for their health care in the hands of government. They say health care needs require us to put aside such considerations as personal choice and individual freedom as outmoded ideology that should be dispensed with. First drop the context of individual rights, private property, and privacythen the government is liberated to micro-manage every detail of the medical treatment you are allowed to have. The loss of freedom may be unfortunate in this view, but is necessary because most Americans cannot afford to pay for health care, or even for a significant fraction of the cost. Of course if that were true, the government could not afford health care for everyone regardless of cost either. However those who might be relieved to learn that they are not responsible for the cost of their own health care would soon discover that they have become responsible for the cost of everyone elses. There is a much higher price than that: a government that pays for all of our health care would inevitably come to think and act as if it owns our bodies. That is a big bill to pay to avoid the difficulty of paying insurance premiums. The talk about a right to health care really means that no one should have the right to any health care at all except through the government. Many of us find paying for health care challenging. Many more have difficulty making it a priority in our spendingoften because we think it should be someone elses responsibility. Some who sincerely make the effort cant pay for eve rything they need. Others, especially the young who know they will live forever, choose not to make provision for their health care even if they can afford it. That does not mean we should resort to the government to force others to provide it, or that everyone in the country should be herded into the gray and barren landscape of a compulsory government medical system. The fact that some people are hungry does not mean that everyone should be forced to obtain their food from the government, and be taxed to pay for it. The existence of the homeless should not mean that everyone be forced to find shelter only through the auspices of the Department of Housing and Urban Development. We are told that because we all need health care so badly, considerations such as individual freedom and especially the rights of medical professionals must be over-

ridden, even if all physicians must be drafted into government service as if they were propertyso their practices can be micro-managed by the medical police. But it is precisely because our health care is so important to each of us that we need to be especially careful to preserve and protect the rights of physicians and other health care providers. One rationalization of advocates for Universal Health Care is that insurance companies are wasteful and bloated corporate bureaucracies with high administrative costs, but that government health care like Medicare and Medicaid are models of administrative efficiency. This ignores the cost of the more than 100,000 I.R.S. employees who collect Medicare taxes, as well as the tremendous administrative burden to providers of trying to understand and comply with 130,000 pages of Medicare regulations. Yet those regulations have not been effective in preventing billions of dollars in fraudulent payments, as documented in New York Medicaid by several New York newspapers this year. You can save a lot on overhead if you dont mind pumping out billions of dollars without oversight. The administrative cost of burning money can be quite low. It is not explained how the efficiency of government works for health care and not for the post office. Markets work better than Socialism. One wonders if any of the current health care collectivists noticed the twentieth century as it was going by. Universal Freedom is the only proper moral and political foundation for health care policy. Universal Health Care must be rejected as a government threat to our liberty. American health care must be based on American values.

Criminalizing Profit: Why Sachs is Not the Real Enemy

AARON SCHAVEY (2010.04.29 )

Goldman

The SEC alleges that Goldman Sachs misled its customers as to how a synthetic collateralized debt obligation was created. They do not argue that Goldman Sachs lied about the value or nature of the deal, but instead, that it had omitted and misstated facts in its disclosure documents. You would be forgiven for not knowing the specific nature of the charge had you followed the story on cable news. The coverage I have seen, both in print and televised media, has focused on Goldman Sachs decision to bet against the housing market by helping a hedge fund profit on the other side of a CDO deal. The recent show trial before a senate committee reinforced the notion that Goldman Sachs real crime was not taking a sufficient hit when the rug was pulled out from under the housing bubble back in 2008. Nevermind that Goldman Sachs lost $90 million on the deal. Whatever comes of the particular punishable charge by the SEC, make no mistake that Goldman Sachs is being attacked because it had the audacity to avoid calamity and be profitable at a time when others lost money. The implication is that the moral thing for Goldman Sachs to do would have been to lose more money. Had the firm eaten a billion dollars in losses, no representative would have thought to drag them before congress and charge them with gross negligence in the loss of their clients and shareholders money. But because Goldman Sachs was savvy enough to see the crisis on the horizon, they are smeared as fat cats and robber barons. Consider the ethical premise behind that. Carl Levinsdemagoguery is not merely meant to inspire envy of Goldman Sachs wealth (though that is part of the issue), but rather an attack on the right of financial companies to mitigate losses during a recession. Note that in the senators opening statement, he did not ask about the legality of Goldman Sachs conduct, but whether or not it was appropriate. It is akin to condemning the man who took the precaution of being vaccinated and is healthy during an influenza pandemic. Morally, one should applaud his foresight, which enables him to be productive and not a parasite during a time of crisis. What would you say about the character of a village that hauls that man in for questioning and asks whether or not it was appropriate for him to get an inoculation during a time of mass sickness? We would do well to remember that the victims in this case are not mom and pop investors putting their life savings on the line a la Enron or Bernie Madoff. Rather

they are large European banks with an understanding of the complexity and risk of CDOs and the subprime market comparable to that of Goldman Sachs. Note that in the two years following the crash of the housing market, neither of the two banks involved filed a complaint against Goldman Sachs. Rather it was the SEC that found it necessary to file charges at a politically convenient time when the current administration is lacking in popularity and seeking to pass a major financial industry reform bill. Since that bill and the Goldman Sachs case are related, I should clarify a few points. For one, I do not take a position in defense of Wall Street reflexively. If Goldman Sachs is found to have deliberately misled anyone then it should be penalized accordingly. There is much to criticize about the conduct of not only Goldman Sachs, but many large investment banks and firms, particularly those tied to the federal government. People forget how much the current administration and ruling political party are in the pocket of these very same companies, and we should feel revulsion at the incestuous relationship between Wall Street and Washington. Too big to fail, the fascist concept that incentivizes irrational risk-taking on the part of private companies provided they are big enough to drag innocent people down with them, is the sole prerogative of politicians. As much as Wall Street benefits from government intervention, it cannot take the lions share of the blame, as it is congress that appropriates and doles out our money to the unscrupulous. This point cannot be overstated: The housing crisis of 2008 and the recession are products of political mismanagement, not Wall Street fat cats. It was government that coerced banks into loaning billions in the form of mortgages to unstable home-buyers whom no lender would have touched with a 39 and a half foot pole otherwise. It was government that, through the federal reserve, manipulated interest rates throughout the 90s and 00s to keep the housing orgy swinging. It was government that spent away the wealth of the internet age on unsustainable entitlements, bungled adventures in the Middle East, and Alaskan bridges to nowhere. It is government that is spending still more on the harebrained stimulus package, bailouts for GM and Chrysler (the former recently demonstrating mind-boggling cynicism with the lie that it has paid back the American people) and ObamaCare. And it is government that will bankrupt this country once socialized healthcare takes full effect, entitlements devour trillions each year, and the private sector is bled dry of every last job by a VAT, regulations, mandates, and progressive taxation. But even more fundamentally, the blame lies with us, the American people. Congress didnt come to power via coup detat; they were duly elected by us. We slept at the wheel as they raided entitlements and spent away our childrens and grandchildrens futures. We created the irrational pie-in-the-sky culture that treats credit and debt like

free money, demands everyone and anyone ought to have a two-story house in the suburbs, and treats the real estate market like a slot machine complete with HGTV shows about flipping homes for fun and profit. In short, we wanted to have our cake and eat it too, only now all we have are crumbs and a lot of empty bellies. When we wake up and realize that making a scapegoat of Goldman Sachs will not solve any of our problems, we may finally be on the right track. Unfortunately the class warfare card is a favorite of democrats because it works so well, and aside from the glimmer of hope that is the Tea Party, too many regular Americans have tried and convicted Wall Street out of envy and frustration.

The Liberal/Left's Ventriloquist Dummy

EDWARD CLINE (2010.04.29 )

Former President Bill Clinton revealed his totalitarian bent during an interview with ABCs Jake Tapper on April 17, when he linked Timothy McVeigh and the Oklahoma City bombing of a federal building in 1995 with current anti-government rhetoric, rallies and demonstrations by Tea Partiers. It is almost surreal, listening to this vile, hypocritical, amoral person pontificating on the necessity for civil debate. His language was banal, but in its banality, lurked evil. One cant decide if Clinton was speaking ad libitum or reciting a memorized lesson. It sounded like a rehearsed spiel. Perhaps it was a teleprompter he was reading over Tappers shoulder, out of camera shot. His focus was on demonization he said can motivate people to commit atrocious crimes. He is a product of the Frankfurt social engineering school of politics: men have no real volition, they are just products of their social and economic environment, and not really responsible for their values or actions until, mysteriously, a force compels them to make a choice and turn to violence or to utter nasty things about their perceived oppressors. Except, of course, if they happen to be leftists, Democratic flunkies, the Students for a Democratic Society, Bill Ayers, Reverend Jeremiah Wright, and a large company of enemies of capitalism, individual rights, limited government, and civil debate. Then, violence is okay. Theyre on the side of the totalitarians and social engineers in government. Their demonization and careless language are forgiven when by chance theyre remembered. The Frankfurt School, as readers might remember, was an institution that promoted communism and socialism and heavily influenced especially American academia in virtually all the humanities. Banned in Germany by Hitler, it moved to the U.S. and established the New School for Social Research in New York. It reestablished itself in Germany after the war. If the Frankfurt School acted as the theoretical arm of socialist/fascist advocacy, Saul Alinsky, Hillary Clintons mentor in political action, was its most prominent field agent. Clinton himself was the Progressive heir to John F. Kennedy. I have kept for years a New York Times full-page photo of 17-year-old Bill Clinton, then a member of the American Legion Boys Club,shaking hands with JFK in the White House Rose Garden in July 1963. I dubbed the photo Passing the Torch of Fascism. I kept it to remind me of the link between Clintons polices and JFKs and how those policies, if not questioned and throttled, would continue to be implemented and expanded under Republicans and Democrats alike in the future. During his two terms as president, Clinton and his wife worked to advance statism. According to one fawning article:

Clinton was one of the first in line to shake President Kennedys hand in the Rose Garden. That event was one of the most important experiences of his youth. After that, he knew he wanted to make a difference in the lives of the people of America by becoming President of the United States Again, listening to Clinton ramble on about the consequences of violence -provoking rhetoric like a cracker-barrel yahoo in the backwaters of Arkansas, one cannot believe this person is emblematic of the forces that have been working to convert the vestiges of a constitutional republic into a European style socialist republic governed by an elective and appointive political elite. However, a scrutiny of the moral and intellectual depths and make-up of most of our current political leaders including Republicans, but especially of the ones in power now, the Democrats leaves one the poorer for the effort. They are neither sinister nor brilliant; they exhibit no evidence of being evil geniuses. They are ordinary in the sense that they are non-intellectual opportunists taking advantage of an absence of reason in politics, a phenomenon of which they are not aware. They are the cockroaches, poisonous centipedes, and maggots who can infest an unoccupied house. There. Ive demonizedPelosi, Frank, Reid and many more. So, sue me, Bill. In answer to Tappers question about Rush Limbaughs charge that, because of a speech Clinton gave about the 15th anniversary of the Oklahoma City bombing by McVeigh, Clinton would be responsible for future violence, Clinton answered: The only point I tried to make is that when I went back and started preparing for the 15th anniversary of Oklahoma City, I realized that there were a lot of parallels between the early 90s and now, both in the feeling of economic dislocation, and the level of uncertainty people felt. The rise of kind of identity politics. The rise of the militia movements and the right wing talk radio with a lot of whats going on in the blogosphere now. That was his opening remark. What an invitation to regulate the Internet. And in the right wing media, and with Oath Keepers, the 3 percenters, the all these people, you know, who are saying things like, If Idaho wants to succeed from the union, the militia group out there says, you know, Well back them. One leader of one of these groups said that all politics was just a prelude to civil war. And then the politicians of course have not been that serious, but a lot of the things that have been said, they they create a climate in which people who are vulnerable to violence because they are disoriented like Timothy McVeigh was are more likely to act.

And the only point I tried to make was that we ought to have a lot of political dissent a lot of political argument. Nobody is right all the time. But we also have to take responsibility for the possible consequences of what we say. And we shouldnt demonize the government or its public employees or its elected officials. We can disagree with them. We can harshly criticize them. But when we turn them into an object of demonization, you know, you you increase the number of threats. But I worry about these threats against the president and the Congress. And I worry about more careless language even against some of which weve seen against the Republican governor in New Jersey, Governor Christie. As Tony Blankley in Real Clear Politics and Philip Klein in American Spectator note in their incisive articles, this is the same old, same old from Clintons Alinskyite playbook: check anyone who voices anti-big-government ideas and criticisms by demonizing them in return with suggestions of probable violence, sedition, insurrection, or otherwise disturbing the public peace. Bethania Assy, in her essay on Hannah Arendts book, Eichmann in Jerusalem, reports on Arendts surprise by how innocuous Adolf Eichmann looked. Hannah Arendts first reaction to Eichmann, the man in the glass booth, was nicht einmal unheimlich not even sinister. She argues that The deeds were monstrous, but the doer was quite ordinary, commonplace, and neither demonic nor monstrous. Arendts perception that Eichmann seemed to be a common man, evidenced in his transparent superficiality and mediocrity, left her astonished in measuring the unaccounted evil committed by him, that is, organizing the deportation of millions of Jews to the concentration camps. Actually, what Arendt had detected in Eichmann was not even stupidity, in her words, he portrayed something entirely negative, it was thoughtlessness. Eichmanns ordinariness implied in an incapacity for independent critical thought: the only specific characteristic one could detect in his past as well as in his behavior during the trial and the preceding police examination was something entirely negative: it was not stupidity but a curious, quite authentic inability to think. This is not to suggest that Clinton is or could have become another Eichmann; rather, it is to know that Clintons banality and that of countless other ordinary individuals who have never had an original thought in their entire lives and dont intend to makes possible the kinds of crimes a demonic or monstrous Eichmann could commit. Think of all the political non-entities in Weimar and Nazi Germany whose public pronouncements on politics are forgotten, but whose words helped to move countless thoughtless Germans in the direction of the Third Reich. Clinton, as contemptuous of America as his current successor in office, simply repeated the smear against opposition to Obamas policies launched by the left and the

Democrats. It was indeed a thoughtless iteration of the same charge, solicited by Tapper, a journalist far down in the ranks of those who want to believe, rather than think. Thoughtless? Yes, to the extent that Clinton did not need to remember anything but what he has been told, taught, and was expected to repeat all his life and has never questioned. In this instance, on cue from Tapper, he merely weaved the same old bromides and catch phrases of the left into his homey delivery of an answer. He did not need and certainly didnt feel the need to to look reflective and check his words, and reply something to the effect: Well, you know, all the bad things being said about the Tea Party and Americans being worried about the government, thats unfair, because none of the people I saw on TV looked like they were about to blow up buildings like Timothy McVeigh did in Oklahoma City, I dont think these people are disturbed in the way McVeigh was. I think thats a disgraceful accusation and someone ought to apologize for it. They looked like ordinary, angry Americans who think theyre getting a raw deal from the government, so, who can blame them? I dont agree with anything theyve said, but they should be allowed to say it without being called racists or bigots or Nazis. Thats what Clinton could have said. But didnt. And couldnt. He has been credited with being a shrewd politician, able to play sides against each other and come out the winner. But, is that thought, or is it merely the feral instincts of a predator, who thinks in terms of pressure points, favors, slander, extortion, arm-twisting, personalities, deceit, fraud, and gaming a corrupt system? Why was Clinton asked for his thoughts? Because the Left has been searching desperately for an official sanction of their unrelenting smear campaign against Americans who oppose the take-over of their lives and wealth by Obama and Congress. And they chose, not so ironically, Grand Old Man Bill Clinton, a creature only a little less vile, hypocritical, amoral, power-lusting, and slickly dissimulating than his current successor in the Oval Office. Or, rather, they didnt choose him; he simply fell into line, as did Tapper. Birds of a feather. Was Tapper part of a conspiracy? Was he asked to solicit Clintons all-toopredictable opinion? No. It was just part of the liberal political culture in which Tapper resides. It was as natural for him to pose the question to Clinton as it would be for a priest to query the Pope on a theological matter.

Clinton represents the Lefts conception of a respectable, disinterested third-party concurring in his own distinctive style with the notion that angry rhetoric and careless language pose a threat of violence, and with Obamas growl that Tea Party dissension should be toned down. The hypocrisy of Clinton, the Democrats, and the Left is the least serious charge one could lay on them. Clintons political record is so rife with corruption and underhanded political manipulation it doesnt need recounting here. I suspect that he deliberately sabotaged his wifes bid for the Democratic nomination in hopes of foisting Obama on the country; I refuse to believe he is so stupid and gauche to say the things he said during her campaign without meaning his statements to have some consequence. Perhaps that was his vengeance on her and on the country that nominally rejected his and her socialist policies when Al Gores bid for power went down in flames in 2000. The Clinton marriage has always been one of political convenience; I do not think they see each other much, with Bill traveling hither and yon collecting munificent speaking fees and playing the humanitarian, and Hillary globe-trotting doing Obamas bidding to betray our allies and make friends of tin pot tyrants. Thats her vengeance on the country that rejected her. I believe this conjecture is valid, founded on the characters and whorish behavior of both Clintons in their quest for power. It is unfortunate that the Democrats and leftists have appropriated the term demonization. But, I refuse to argue the issue on the enemys terms. A demon, after all, is either an evil spirit intent on causing mischief, or its a tormenting anxiety ab out something. Americans certainly see the Obama agenda as inherently evil and promising nothing but mischief, and theyre right to be anxious to the point of torment that the agenda means them no good. Minnesota representative Michele Bachmann, to whom Clinton referred when he remarked that some politicians create a climate in which people who are vulnerable to violence are disoriented, for example, did not demonize the Obama administration and Congress by calling it a gangster government. She characterized it, by correctly identifying the key features and consequences of legislative fraud (and gave columnist Michael Barone credit for coining the term; has any Democrat or administration official given Saul Alinsky credit for the smear tactic? They dont dare.). Then, it was merely the consequences of the government take over of General Motors. As it is clear now to anyone with two eyes and a functioning mind a mind that is willing to see the ample evidence and is wiling to think the term can be applied to the whole of Obamas administration. Bill Clinton is a minor but prominent player in the ongoing debacle. His words on the Tea Party and talk radio and Timothy McVeigh were intended to elevate a disgusting

smear campaign from blatantly obvious turpitude to the level of righteous moral concern. He opened his mouth and scurrilous words came from it. We have heard all he said before from President Barack Obama, from Nancy Pelosi, from Harry Reid, from Barney Frank, from the New York Times and the Washington Post, and the MSM and those are the voices we heard when Bill Clinton spoke. He sits on the liberal/left lap, and others move his mouth. Mortimer Snerd, anyone?

Profits Are for People

RICHARD E. RALSTON (2010.05.25 )

Those who advocate for government controls in medicine cry, People, not profits. They say profits are unacceptable in medicine because our health is so important. But it is precisely because our health is so important that profits must be vigorously defended. If quality health care disappears for Americans, it will have been killed by the perverse morality of those who want to destroy profits and replace them with government force. All free enterprise is considered an enemy of the people because it is based on the pursuit of individual happiness. If profits disappear from medicine, they will eventually be forced out of all aspects of the economy. For example, the President of the American Jewish World Service recently wrote in the New York Times to advocate for government control of world food production and distribution: Food is a human right, yet we allow those in power to treat it as a commodity to be bought and sold by profiteers, interested in a quick buck. Our model for abundant food must therefore be North Korea or Stalins collectivization of agriculture. This has always resulted in mass starvation, but power elites feel morally superior because they have eliminated profits. Such horrors are possible because the political and journalistic conventional wisdom is that profits are evil for everyone (except, of course, for law firms, lobbyists and Hollywood producers). Unprofitable firms are condemned and bailed out. Profitable firms are just condemned. Acceptance of an anti-profit morality will have the same devastating effects on medical care as it has on the diet of North Koreans. Life-saving new drugs and medical equipment will be forbidden if anyone is allowed a return on investments in them. Allowing patients to die while on waiting lists becomes morally superior to making a profit by saving a life. After all, wanting to save your own life or health is the ultimate selfish act. More opportunities for profits will bring down the cost of health care. Unlike government programs such as Medicare and Medicaid, free-market enterprises, in their need for profits, ultimately reduce fraud and waste. As Wal-Mart and its competitors have shown by reducing drug prices and providing affordable walk-in clinics, better and more affordable health care rests on it being profitable. Competitionwhen the government does not forbid itpromotes better and more responsive care of patients, and the need for profits encourages savings.

Can the government do better? The Department of Motor Vehicles and the U.S. Postal Service are not examples that suggest government will provide more comforting health services. A Gallup poll on ethics in November 2009 indicated that Americans trust members of Congress less than they trust car sales people. A CNN poll this year indicated that 86 percent of Americans think that government is broken. While Americans might think health care is brokenalthough many like their own caredo they think a broken government can fix health care? A front-page story in USA Today in December 2009 reported that fast-food chains have better food safety standards than school lunchrooms. Restaurants more vigorously test for and cook out bacteria and pathogens in beef and chicken than do public schools. Of course, school lunchrooms do not need to make a profit. Can government really be expected to do a better job with health care? Profits are an important American value without which life, liberty and the pursuit of happiness are impossible. Forbidding profit in medical care replaces life with death, liberty with force, and the pursuit of happiness with self-sacrifice. Lets not kill health care and our freedom at the same time.

No Friend of Freedom: Obama

EDWARD CLINE (2010.05.18 )

What is the problem that so many liberal/left MSM pundits and columnists have with identifying the moral, political, and judicial philosophy of President Barack Obamas latest nominee for the Supreme Court, Solicitor General Elena Kagan? Fox Nationreports that: In a 1996 paper [in the University of Chicago Law Review] Private Speech, Public Purpose: The Role of Governmental Motive in First Amendment Doctrine, Kagan argued it may be proper to suppress speech because it is offensive to society or to the government. That paper asserted First Amendment doctrine is comprised of motives and actions infested with them and she goes so far as to claim that First Amendment law is best understood and most readily explained as a kind of motive-hunting. Kagans name was also on a brief, United States V. Stevens, dug up by the Washington Examiner, stating: Whether a given category of speech enjoys First Amendment protection depends upon a categorical balancing of the value of the speech against its societal costs. In short, the government may elect to censor or not to censor, depending on a juggling act between the value of speech and its potential societal costs, performed by a government official whose decision is completely arbitrary and governed by his motives, which a court may or may not decide are appropriate. And from where does the government derive its balancing powers? Not the Constitution. Who knows? Kagan may actually respect the First Amendment. In which case, she would gladly approve of the executive branch abridging it by decree, but not Congress. It is a measure of the recidivist character of the mainstream media that it absolutely refuses to identify the political suasion of Kagan, except to vociferously deny that suasion when it is identified outside the MSM. Instead, the left/liberal pundits and columnists dwell on her feistiness, her devotion to her career, her allegedly indeterminate political leanings, and so forth, in a campaign of ambiguity and puffery. Her suasion is their suasion. Dont expect the Democrats or their allies in the MSM to ever admit they comprise a collective Freddy Krueger. In the heavily made-up and lavishly garbed image reflected in their mirror, they see Jane Addams.

The MSM chooses to not reach the conclusion because a socialist selected Kagan. She is in line to sit permanently on the Court where she can help mete unconscionable damage to the republic and the freedom of its citizens. They refuse to entertain the question: Why would Obama choose anyone else but a fellow advocate of hope and change? The MSM does not accept the designation of Obama and his administration as socialist; they agree with Obama that the term is vile and demonizing. Ergo, it cant be true, and anyone who says otherwise is guilty of character assassination. It would be impractical to discuss all of Kagans positions and utterances here without endeavoring to write a book. The New York Times, bless its liberal/left heart, however, has provided a handy reference guide to Kagans positions and views, a guide that substantiates any and all charges against the Court nominee that she would be a leftist judicial activist on the bench. Kagans record shouldnt deceive or confuse anyone. After all, Lenin was also a pragmatist. He and his fellow communists proclaimed the New Economic Policy that was intended to rescue the Russian economy from communist depredations. As soon as that relaxation of controls put two or three crumbs of bread on Russian dinner plates instead of one, down came the controls again. It is easy to identify Kagans political suasion because all of her positions are, if not overtly socialist, then pragmatically statist. She is for disarming Americans, she is for selective censorship, and she worked with the Clinton administration on the first round of attempted socialized medicine, she probably helped to craft the master agreement that put the tobacco companies under a special federal thumb. She is no friend of freedom. The first step is to accept the premise that Obama would not have nominated anyone who advocated freedom of speech, individual rights, the sanctity of property, and limited government. Thats a given. He would nominate someone amenable to his statist agenda and at the same time present that person as not radical. She is a rationalizing pragmatist who also advocates the expansion of executive powers. Reading her papers on cases and issues (especially the one on government motivation), one cant immediately determine what her philosophy of law is, or where she stands on individual rights or on the Constitution. Its much like trying to zero in on a target when it keeps moving in concentric circles. But there are key statements in her academic papers, and which she made throughout her career, that can simplify the task. That task is necessary, even though it means reading large chunks of her academic and career statements.

By way of exhibiting her pretzel-like thinking and expository style, try digesting this chunk from her Law Review article, Private Speech, Public Purpose: The Role of Governmental Motive in First Amendment Doctrine. In a seemingly endless screed on whether or not government may censor out of perceived or potential causes of harm or if it seeks to advantage or disadvantage the subjects or expressers of speech, she writes: The narrower (speech-related) principle inheres in the broader; both are aspects, so the argument goes, of the appropriate relationship between the government and individuals within a liberal society. The second kind of nonconsequentialist account for the prohibition of ideological motive relates more exclusively to expression, emphasizing the place of such activity in a democracy. On this view, the prohibition of ideological motive, and its concomitant principle of equality, lies at the core of the First Amendment because it lies at the core of democratic self-government. The democratic project is one of constant collective self-determination; expressive activity is the vehicle through which a sovereign citizenry engages in this process by mediating diverse views on the appropriate nature of the community. Were the government to limit speech based on its sense of which ideas have merit, it would expropriate an authority not intended for it and negate a critical aspect of self-government. Democracy demands that sovereign citizens, through each generation, retain authority to evaluate competing visions and their adherents-to decide which ideas and officials merit approval. Hence democracy bars the government from restricting speech (as it also bars the government from limiting the franchise) on the ground that such activity will challenge reigning beliefs or incumbent officials. The government must treat all ideas as contingent, because subject to never-ending popular scrutiny. On this view, the prohibition of certain motives again serves as a way to delineate the proper sphere of authority, hereby preventing a democratic state from contravening key principles of self-government and thereby undermining its foundation. This is as bad as reading Stanley Fish, a professor of law at Florida International University, excoriate the First Amendment with his verbal embroidery, or Laurence Tribe, a confessed plagiarist and professor of law at Harvard, pronounce on the fluxing value of freedom of speech. One of Tribes best students happened to be Barack Obama. Leftists Tribe and Cass Sunstein, who now heads the Office of Information and Regulatory Affairs, not only vetted her Law Review article, but are cited numerous times by Kagan throughout as authorities on constitutional interpretation.

Readers may have read of deconstructionism in literature, in which texts are explored for their tensions and contradictions, apart from their literal meaning. The patron saint of this school of literary analysis is Jacques Derrida. Kagans paper is an example of deconstructionism in law. Its patron saint is Oliver Wendell Holmes, Jr., of shouting fire in a theater fame. What difference is there between a Holmesian clear and present danger in someones exercise of freedom of a speech that may lead to a harm forbidden by Congress, and the value of a speech as opposed to its societal costs? Kagan cites Holmes occasionally in her paper, in an appea rance of amused dissension. But note 257 of her paper is in tandem with Holmes thinking: As I explain, the distinction between motive-based analysis and effects-based analysis remains all-important for purposes of constructing (and explaining) First Amendment doctrine. Holmes himself was a judicial that was then, this is now pragmatist who was against a strict interpretation of the Constitution. Holmes declared that the law should develop along with society and that the 14th Amendment did not deny states a right to experiment with social legislation. He also argued for judicial restraint, asserting that the Court should not interpret the Constitution according to its own social philosophy. As long ago as 1881, Holmes wrote in The Common Law: The life of the law has not been logic; it has been experience. The felt necessities of the time, the prevalent moral and political theories, intuitions of public policy, avowed or unconscious, and even the prejudices which judges share with their fellow-men, have had a good deal more to do than syllogism in determining the rules by which men should be governed. The law embodies the story of a nations development through many centuries, and it cannot be dealt with as if it contained only the axioms and corollaries of a book of mathematics. Fundamental ideas are out, no longer relevant to the necessities of the time or the prevalent moral and political theories. Kagan certainly possesses, toget her with her gang, an intuition of public policy, which is unbridled statism. Kagan is an advocate of racial and gender equality (of the legislative kind), and writes that she would be elated if speech that allegedly perpetuated their inequality disappeared. Kagan is in solid with Obama, with the Democrats, and with the extreme left-wing of the Democrats. She taught law at the University of Chicago with Barack Obama, and

has been his long-time collaborator and political supporter. Her donations to Obama and his party are public record. It is reported that between 2000 and 2008, Kagan contributed $12,550 to Democrats, more than half of it going to Obamas various campaigns. She contributed to Rahm Emanuels run for the Senate. The Weekly Standard, a conservative magazine, found (as I was not able to) a copy of Kagans senior year Princeton Universitythesis, To the Final Conflict: Socialism in New York City, 1900-1933, in which she laments the ineptitude of the Socialist Party in New York politics. An excerpt goes: In our own times, a coherent socialist movement is nowhere to be found in the United States. Americans are more likely to speak of a golden past than of a golden future, of capitalisms glories than of socialisms greatness. Conformity overrides dissent; the desire to conserve has overwhelmed the urge to alter. Such a state of affairs cries out for explanation. Why, in a society by no means perfect, has a radical party never attained the status of a major political force? Why, in particular, did the socialist movement never become an alternative to the nations established parties? She concludes: The story is a sad but also a chastening one for those who, more than half a century after socialisms decline, still wish to change America. Radicals have often succumbed to the devastating bane of sectarianism; it is easier, after all, to fight ones fellows than it is to battle an entrenched and powerful foe. Yet if the history of Local New York shows anything, it is that American radicals cannot afford to become their own worst enemies. In unity lies their only hope. Michael Goldfarb, author of the article, remarks: Obviously, one imagines that Kagans views have evolved significantly over the last three decades, but given Obamas stated aversion to radicalism, its certainly worth noting the radical roots of the nations top lawyer. Obviously, her views have not so much evolved significantly as expanded to encompass the whole Alinskyite/Obama policy of hope for change. They certainly have not mellowed and become less strident. The socialist radicals have moved from New York City to Washington. Kagans roots have only grown d eeper, and are part of a vast interlocking root system that includes those of Bill Ayers, David Axelrod, Cass Sunstein.and Barack Obama.

Motivation and Education

LISA VANDAMME (2010.06.10 )

The following is from an article featured in the education section of USA Today on January 28, 2008: Teachers have long said that success is its own reward. But these days, some students are finding that good grades can bring them cash and luxury gifts. In at least a dozen states this school year, students who bring home top marks can expect more than just gratitude. Examples:

Baltimore schools chief Andres Alonso last week promised to spend more than $935,000 to give high school students as much as $110 each to improve their scores on state graduation exams. In New York City, about 9,000 fourth- and seventh-graders in 60 schools are eligible to win as much as $500 for improving their scores on the citys English and math tests, given throughout the school year. In suburban Atlanta, a pair of schools last week kicked off a program that will pay 8th- and 11thgrade students $8 an hour for a 15-week Learn & Earn after-school study program (the federal minimum wage is currently $5.85).

This article, which understandably makes many parents and educators bristle, raises a real and important question: How do we motivate our children to learn? In my lecture Motivation in Education, I addressed the cash for grades and other desperately misguided attempts at motivation. I boiled the motivation theorists down to three essential categories, which I will explain over the next few weeks. The first category includes those who attempt to create motivated students by allowing them to engage in activities of their choice, activities that are inherently enjoyable given their juvenile desires. The Waldorf Schools, for example, say that until the age of seven, children should be taught no academic skills, including reading or writing. Instead, they are encouraged to participate in activities believed to be natural to their stage of development, such as finger-knitting, storytelling, and movement games. The FAQ section of a Waldorf charter school says that at Waldorf Schools abstraction and conceptual teaching are kept to a minimum, especially with younger children. In this way children become more personally engaged in whatever they are learning. (emphasis added) An Atlantic Monthly article praising the virtues of the Waldorf method describes the activities of a dozen fourth graders in the original Waldorf school. The class was finishing a year-long project: making mallets for wood carving out of stubborn pieces of hardwood, which they were patiently filing and sanding by hand. One boy, who had finished his mallet, was making a knife out of teak, and regularly paused to feel its smoothness on his cheek. The author also respectfully describes the enthusiasm

of a 12-year-old Waldorf student in a depressed California town, saying, [He] sat with me after school, regaling me, in enthusiastic detail, with a creative mixture of Greek and Roman history. The boy could barely read, but hed been inspired by the oral storytelling that Waldorf teachers emphasize. These children are-in a sense-motivated, but motivated to do what? To say that a person is motivated is to say that he has some drive or desire that incites action. For the purposes of a rational discussion of education, that drive or desire must incite theambition to learn. It must incite the drive to acquire knowledgeand not just any knowledge, but that knowledge necessary for life as an adult human being. Motivation cannot be confused with any feeling of eagerness, enthusiasm, or joy independent of the focus of those feelings of the purpose of the action they incite. The manager of a company would not describe his employees as motivated if they were eager and excited to come to work every day so that they could play basketball in the company gym or spread gossip in the break room. A motivated employee is one who is inspired to action consistent with the central goal of his job. Similarly, it is not relevant to a meaningful discussion of motivation in education to discuss the suggestion that the problem of motivation be solved by offering children a program of all-day recess. This is not a solution to the problem; it is an evasion of the problem.

The intrinsicists answer to the question of motivation The all day recess approach of Waldorf-type schools to the issue of motivation which have children engaging in wood carving, finger-knitting, and movement games rather than learning to read or write because they find the former activities more personally engaging is akin to a mother motivating her picky eater by letting him eat cookies. This approach is irrelevant to a meaningful discussion of motivation. These educators are not solving the problem of motivation; they are evading it by pandering to the spontaneous impulses of the child. The real issue of motivation is: how do we inspire children with the ambition to master real academic content, to acquire the knowledge and skills necessary for mature life? How do we help them to develop a deep and lasting interest the subjects they must study if they are to become informed, intelligent, efficacious adults? How do we encourage in them a love of math and history and literature and English and science?

To this question, todays educators offer two basic answers. The first is the one put forth, implicitly or explicitly, by advocates of classical or traditional education. And their answer as to how you motivate children to master the academic curriculum is, in essence: you cant. The classical educators regard learning as a noble, lofty pursuit that appeals to mans higher nature. It does not appeal to his desires and interests, which are this-worldly and base, but to his intellect, which is above selfish and material concerns. Because the idea of motivation is that the child must be given a personal reason for putting forth the effort to learn, because it suggests that there must be something in it for him, the very concept of motivation would be regarded by such educators as a selfish concept, and as such, at odds with the purpose of education. The spirit of the traditional, classical movement in education is one of duty. The student is bound by obligation, to his community, his country or God, to develop his character and intellect through the study of mankinds accumulated wisdom. His goal in becoming educated is not a personal, selfish one; on the contrary, the very purpose of education is to help him rise above his childish selfish impulses. In Norms and Nobility, by David Hicks, a popular treatise on classical education, Hicks condemns modern public schooling, saying, In its utilitarian haste, the state often peddles preparation for the practical life to our young as the glittering door to the life of pleasure; but by encouraging this selfish approach to learning, the state sows a bitter fruit against that day when the community depends on its younger members to perform charitable acts and to consider arguments above selfish interest. By contrast, classical education, he says, aims to satisfy mans deepest longings to belong, to transcend his disconcerting self-centeredness, to serve the whole, and to know his purposes and meaning within the context of the whole. It is this spirit of duty that yields as the image of traditional, classical education the military taskmaster or the nun with a ruler. This view of education falls in the intrinsicist tradition. Education, like all other values, is not a value to an individual fora certain purpose, but is intrinsically good-good in itself. Values are severed from reason and from reality, so the child can be given no explanation as to why he should develop his intellect, no this-worldly purpose for doing so. Education is simply a moral obligation detached from his life and his interests. The subjectivists answer to the question of motivation Most educators of the classical or traditional education tradition appeal to duty, and not to the interests of the child, as the source of motivation. The child is to rise above his own interests, and fulfill his moral obligation to learn.

There is another school of thought that advocates appealing to the childs interestshis fleeting, short-range, childish interests. To the extent that there remains any real academic content in todays schools, I would say this is the primary form of motivation offered. This is the view, in essence, that to make the drudgery and labor of learning palatable to a child, you must offer him immediate rewards for enduring the process. These rewards must tap into his current interests, his childish values, so that he has a clear and present reason for doing the tasks he is assigned. A wildly popular example of this approach is the Book It! program established by Pizza Hut in 1985 and promoted in teachers colleges to this day. This program, which has been used in 900,000 classrooms by 22 million students, offers children certificates for a personal pan pizza in exchange for meeting a monthly reading goal. In 1992, The Wall Street Journal reported a growing number of such incentive programs in an article titled For Some Students, the Value of Learning is Measured in Pizzas and Parking Passes. The article quotes a New Mexico English teacher, who says, Its a terrific idea. Those students who wouldnt ordinarily work for academic achievement are now getting something tangible to work for. It describes the array of reward programs, which offer students everything from a day off, to free food, to orthodontic discounts, to cash. A 2005 Associated Press article reported a shocking example of this approach, of tapping into teenage values to motivate learning. According to the article, school officials in Baltimore spent $2 million developing a reading program called Studio Course, which uses teen magazines, places grammar on the back burner and lets students write about whatever they want. The curriculum includes a teen magazine that defines a noun as stuff and a verb as what stuff does, as well as Cosmo Girl, which at the time when the article was written featured such articles as Five Hot New Kisses and Flirt Better. This approach, of indulging a childs immediate desires in orde r to get him to perform academically, falls in the subjectivist tradition. The message sent to children about why they should succeed in school is that it is entirely subjective-that it will get you what you happen to want right now, whatever that may be, whether pizza, video games, money, or lessons on kissing. So, in education today, there are: first, the Waldorf types who evade the problem of motivation because they evade the responsibility of education; second, the Catholic school types who proclaim education a moral duty; and third, the public school types who think gold stars and pizza provide the only compelling reasons to learn. The principles that define a proper approach to motivation

What are the principles that define a proper approach to motivation? The first of these principles is that before a teacher can motivate the material of his subject, he must first carefully and explicitly identify the value of his subject. He must know, clearly and consciously, why a study of his subject is crucial to the childs life. This task is neglected for a variety of reasons. As I indicated in a past newsletter, the intrinsicist teacher does not regard his subject as having any value to the childs life; it is a duty imposed upon him, and the answer to why he sh ould learn it begins, Thou shalt The subjectivist teacher can offer no principled, absolute statement of a subjects value; value is relative, and depends on a variety of subjectively-defined, concrete goals, goals that change rapidly with the educational fashion. Even those with a more objective view of their subjects value rarely identify that value in terms so explicit that they can use it as an absolute standard guiding the approach of the course and can communicate that value explicitly to the students. The VanDamme Academy brochure and website state concisely the essential value of each of the core subjects. On more than one occasion, a parent coming into the school has commented to me that until reading our website, he had never considered whyeach of these subjects is crucial. But the why-a statement of the indispensable value of this material to a persons life-is a prerequisite of a proper curriculum and of proper motivation; it should dictate the whole content and method of the course, and as I will explain, it must serve as the basic means of motivating the students. The next important principle is that the purpose of the course must set the standard for the selection of its content. In literature, the purpose of teaching the child to experience literature as an art form sets the standard for the selection of works; the course must include those novels, plays, and stories that can achieve this purpose. If the purpose of reading is loosely defined in the teachers mind as a way to expand the students vocabulary, develop their ability to identify the main point of a given paragraph, and learn factual information in a fictional setting, then any textbook reader will do. If the purpose is a political agenda, of exposing students to other cultures, teaching them tolerance, and shattering the belief that great literature is the province of dead white males, then any modern, PC novel, no matter the quality of its writing or depth of its theme (or even whether it has a theme) will do. A proper literature curriculum must be made up of literary classics for children and adults, classics that have endured because of the timelessness of their themes and the eloquence of their presentation. Exposed to great art from an early age, students become sophisticated and impassioned readers. The essential principle to proper motivation

In order for a teacher to properly motivate his students, he must really know the purpose of teaching his subject, and that purpose must set the standard for selection of the subjects content. Let me now add that the content selected must also be hierarchically appropriate if the purpose is to be achievable. In a literature course, for example, the works selected for a given group of students must contain characters and themes to which they can relate. They must contain abstract material that the students are capable of grasping and can connect to their own lives. I once gave a workshop on hierarchy in education to the Maryland Homeschoolers Association. In the discussion, I threw out, as a contrived example of the violation of hierarchy, the absurdity of reading Tom Sawyer to your toddler in the name of getting a jump on the classics. A parent approached me after the talk, thanked me for it, and confessed, his head low, that he had been reading none other than Tom Sawyer to his 2 and 5-year-olds, with what he had regarded as inexplicably disastrous results. It is not inexplicable-the works introduced to a child must not just be meaningful, they must be meaningful to him. The value of the subject must also set the standard for the methodof the course. Every exercise must be purposeful; it must be carefully selected to further the ultimate goal of the course. The method by which we achieve the purpose in literature is to have daily discussions of the reading, and daily writing assignments, that are integrated around the central value of the work-discussions that help the students to gain an understanding of the plot, of the characterization, and of the theme, so that they gain, over time, a deep appreciation for the story and for its meaning. Key to this method must also be active integration of the material to the rest of the childs knowledge, including his knowledge of other subjects and the experiences of his life. He must not view the knowledge he gains as isolated, free-floating items of information, but as part of a whole, connected body of knowledge that he is working to master because of the guidance it will offer him in the pursuit of a fulfilled, happy life. Each subject has profound value-real, practical, selfish value-and the teacher must make a purpose of conveying this fact through connections to real life. The final and most important principle of motivation is that the teacher must identify, explicitly and abstractly, the value of the subject to the students livesMotivation is fundamentally cognitive; it is knowledge itself-knowledge of the value of the material he is learning.. He must explain, as an important and recurring theme through every course, why the student is learning this, and whatis the benefit to him. Andrew Lewis once gave a presentation to the VanDamme Academy parents about his method of teaching history. He said that the subject of history, as taught by most

history teachers, answers five questions: Who?, What?, When?, Where? , and How? He then explained that a proper history course absolutely must answer two more questions: Why? , and the one most relevant to my purpose here, So what? This question must be answered not just in history, but in every subject. The basic principles of motivation are really quite simple: the teacher must identify the value of his course, design the curriculum accordingly, and name the value explicitly. If he does this properly, he can dispose of the pizzas, gold stars, and rulers, and enjoy the radiantly eager response of children who really grasp what they are learning and why.

First Step: Lower Taxes

JOSHUA LIPANA (2010.07.14 )

There are a lot of developing countries who are looking for an answer to their woes. The biggest question on their mind is How do we become a 1st world country? A great first step for them would be; lower taxes. Lower it as much as possible. Almost all countries that took this first step towards greater freedom and capitalism reaped immediate benefits. To name a few, there are former communist states like Estonia, Poland, Russia. And there is Ireland, which was considered the Sick Man of Europe but has since transformed into the Celtic Tiger. Each and everyone of these states have found a greater degree of prosperity. This is because a low tax rate increases foreign investment, creates more jobs, lessens the governments wasteful spending(usually), encourages businesses to expand and most of all it allows people to keep more of what is rightfully theirs; the fruits of their labour. Unfortunately, the economics of high taxes is still pretty much alive today. Countries at the cusp of making it, destroy all their potential growth by confiscating more and more of its citizens hard earned money. There is a mistaken view in economics that somehow higher taxes can result in a better country. The view is usually, to put it simply; Its okay if the government raises taxes, so long as Im getting good services out of it. The problem is, with the exception of the Military, the Police department, and the Courts, government has never done anything so well that the private sector cant do it better and cheaper. If one needs a historical example, one simply needs to look at the now defunct Soviet Union. There the government sought to provide its people free education, free healthcare, free housing and free everything. The result was poverty, stagnation and misery. Not to mention the countless deaths resulting from such a Totalitarian government. And such results are shared by all nations who have chosen to make their government the great provider. In addition, raising taxes is usually thought of as necessary to fix the deficit of a country. There is a better solution to such a problem and that is to cut spending. Raising taxes hurts the economy which means such a policy would be more disastrous than helpful. Plus there have been many occasions where government revenue has actually increased after lowering taxes, this is due to the increased economic growth and productivity resulting from such a policy

So for a nation to progress, to prosper, to be a better country over all, the first step should be clear. Lower taxes.

Political Agnosticism
SYLVIA BOKOR (2010.07.13 )

Several months ago, I paused to admire a lovely neighborhood. A man and his wife approached and asked if I was putting up flyers on the wall. No, I replied. How about this one, the man asked pointing at the shreds of a yellow flyer on a utility box. Perhaps he asked the question because I was standing near that utility box? I explained that it was thought members of Organizing for America had done that and that Tea Party supporters had removed it. The man asked, Are you one of them? Of whom? The Tea Party? Yes, I am. But I am an Objectivist, not a Conservative. No one in the Tea Party is OFA. He said, Youre merely the other extreme. Youre all the same. I was taken aback. In todays clear-cut struggle between individual rights on the one hand and statism on the other, I had never met anyone who considered both as anathema. If he were a centrist, he would advocate features of both sides. But he had not. He considered both sides extreme and the same. Did he genuinely believe that both the advocacy of individual rights and governments violation of them were equally reprehensible? What sort of government was he for? I did not discover the answer to my question until a couple of days ago. I had a telephone conversation with a woman who is an officer of an organization allegedly devoted to advancing Albuquerque businesses. I thought an interview with her might be interesting for a radio show Im helping to produce for the Patriot Activist Network. After explaining why I had called, she asked, What is your agenda? Thinking that she meant what was my political perspective, I answered, I dont like whats happening to my country. I want to help businessmen understand that government should be limited, and that markets should be free.

Are you connected with the Tea Party? Yes. PAN is a branch of the Albuquerque Tea Party, I said. I am tired of anti-everything, she said, implying that Tea Parties are anti-everything. I do not denigrate the President. I am not anti-anything. She continued in this vein for quite a while. Eventually, she began to tell me about what she undoubtedly considered her accomplishments. She had been interviewed on an Albuquerque public television program, she said. Also the United Nations had hired her to go to China to teach technology. She had worked in Russia, too, doing the same thing. She wanted to be for things, she said, repeating again that she was not anti anything. She ended by declaring that she was for populism and worked to develop and promote populism as the basis of a safe and strong society. Now, populism is the doctrine that arose in 1891-1904 as a political party advocating among other things, public ownership of utilities, an income tax and government support of unions and agriculture. It is a variant of statism. Her claim that she was not anti anything means she is not anti our governments infringement of individual rights, not anti Russias slaughter of millions of peasants, not anti Chinas ruthless suppression of student protests and Tibetan priests, not anti the removal of the clitoris of Islamic women, not anti the Talibans bombing of the World Trade Center, and so forth. Like the man I had previously met, she was a political agnostic. Not being against anything means not taking sides. What is it about taking sides that the political agnostic abhors? Many people avoid passing negative judgments openly. In personal relationships they might be sweet to ones face but scathingly critical behind ones back. In political matters, however, the same people can take a specific stand and loudly protest in defense of it. The political agnostic takes the opposite tact. He will tell you to your face face that you are wrong, but he is loath to criticize the government. Both the man and the woman referred to above told me, respectively explicitly and implicitly, that I was wrong to be involved with the Tea Party, wrong to criticize the government or denigrate the president. They claimed that they were not anti anything but in fact they were anti taking sides against the government.

The political agnostic is an authoritarian. He is comfortable taking orders. But only from authority figures. He feels safe to be told what to do. He resents those who question authority. He feels such questioning is a slur on his own self-image of a good person cooperating with those who know best. Safety to the political agnostic means the absence of public dissent. He does not say, a plague on both your houses. He says, Let there be only one house, the central government that tells everyone what to do. The political agnostic does not say, I dont want to be bothered with politics. He says, Let a leader decide, which we will all obey. By advocating a central government he feels secure from that constantly moving ocean of different types of individuals, different premises, different tastes, likes, dislikes, opinions, desires, goals, and choices. In that continually teeming roar of ebb and flow, of striving toward different goals that is society, he believes that only a centralized authority will guarantee him safetythe safety of the straight-jacket and a strong societythe strength of a prisons iron bars. He evades recognizing that men of wisdom, integrity and benevolence are not interested in controlling others and consequently are not attracted to offices of omnipotent government. But vicious, fear-infested, manipulative and shrewdly malevolent men are. As has been seen countless times in an abundance of ghastly actsthe Nazis, the Communists, the Taliban, the Khmer Rougethe bloodlust of totalitarianism does not stop with the abuse of men, women, children and animals but goes on to erupt in torturing, dismembering, starving and slaughtering all that lives. The political agnostics role in this mayhem is seen in those who stood by and did not protest the rise of Adolph Hitler and his Final Solution. It was revealed during the 1920s and for decades following, by those who celebrated the noble experiment of Soviet Communism in which countless millions were slaughtered outright or were driven to despair, mental paralysis and starvation by government policies. It is expressed in the intellectual distortions of those who deal commercially with Communist China providing them with western technology, know-how and world wide instant communication. It is seen in the empty-headed shortsightedness of those who declare, Ill take anyones money: Im a businessman. By refusing to take sides, the political agnostic shuns the virtue of justice and damns the good.

No one can justly stand on the sidelines and refuse to take sides at any time. Today, no one who makes the effort to arrive at an objective evaluation of the Obama Administration and Congress can justly conclude that Americans are not being railroaded into socialism against our will. And no one can rationally come to the decision that in such circumstances, one should do nothing. The lives and thought of John Locke and the Founding Fathers resulted in the creation of the United States, the freest nation on earth and in history. For a while. To regain the republic they created, one must take sides. Nothing short of that will regain our freedoms and restore our individual rights. And it will not end in November. That is only the beginning.

Obamanomics vs. Economics

RALPH R. REILAND (2010.07.12 )

With job creation in the private sector basically dead and a growing number of jobless workers ceasing to even look for work any longer, the number of people officially counted as part of the U.S. labor force shrank by 652,000 in June.

That was more than double the 322,000 drop in the size of the labor force in May.

And from the White House, with people giving up and dropping out at a quickening rate, with nearly a million people vanishing from the U.S. labor force within just the past two months, President Obama declared the June jobs report to be good news. Were headed in the right direction, he said.

If thats the administrations definition of the right direction, doubling the shrinkage of the labor force each month, I guess well see even bigger smiles and more hot air at the White House if an additional million workers drop out in July, and even greater numbers disappear from jobless statistics next year as the administrations laundry list of new taxes, costly mandates and federal regulations kicks in.

These unemployed workers whove quit looking for jobs are officially labeled as discouraged by the government. Theyre not part of the labor force, not counted as employed or unemployed.

The gone-missing status of these jobless workers has the effect of lowering the official unemployment rate in the headlines, such as with the decline in the jobless rate from 9.7 percent in May to 9.5 percent in June, even while the job creation picture was growing darker.

Put these million jobless and uncounted workers back in the governments labor reports and the current unemployment rate jumps to 10.1 percent, back to where we started in this recession before all the clunker deals, subsidized caulking and trillions in non-stimulating pork.

In addition to this persistent joblessness, average hourly earnings and average hours worked per week have both declined for those whove managed to keep their jobs.

The bad news is that Obamas agenda of higher taxes, h igher deficits, and more red tape, mandates and regulatory hurdles for U.S. businesses is exactly the opposite of whats required for an economic recovery and new job creation.

The Obama economic team ignored past history, asserted Carnegie Mellon University economics professor Allan H. Meltzer in his recent Why Obamanomics Has Failed analysis in The Wall Street Journal. The two most successful fiscal stimulus programs since World War II under Kennedy-Johnson and Reagan took the form of permanent reductions in corporate and marginal tax rates.

Similarly, a recent editorial in The Wall Street Journal, Private Jobs Strike, points to the destructive impact on job creation and new investment of the administrations drive for higher taxes, bigger government, more debt and more regulations: Private employers appear to be in a holding pattern, waiting on hiring decisions until they see how much more the political class will raise their costs.

GE Chief Executive Officer Jeff Immelt purportedly told a group of top Italian business leaders at a recent dinner meeting with GE executives, as reported by the Financial Times, that business did not like the U.S. president and the president did not like business.

The United States needs to reclaim its position as an industrial powerhouse again, Immelt is quoted as saying, but you dont do this when government and entrepreneurs are not in synch.

Worse than being out of synch with Americas entrepreneurs, Obama is out of synch with reality in terms of what works, out of synch with the fact that capitalism has been more successful than any other system in delivering widespread prosperity and freedom to mankind.

Moral codes for a fighting man

(2010.07.08 )

When discussing the morality of peace and war one must understand the difference between the two. Morality of a rational man is a practical vehicle to live the most productive and fulfilling lives with other rational men. However, having identified a mortal enemy, he must understand that he is at war with the enemy. The enemy doesnt respect our values, our rights or our lives. Unilaterally following our peaceful moral codes means that we are making the assumption that our enemy is our friend. This is clearly wrong and not a suitable way for a rational man to wage a war. Having identified his enemy rational man will not abandon his morality. He understands that morality for peace doesnt apply to his enemy. It will apply to his friends and allies. To fight his enemies he will draw up a plan, a doctrine to wage war on his enemy in most productive and successful way. Minimizing his losses and maximizing his success in battlefield he will use the best methods and weapons available. He will use all forms of aggression and deception if necessary to pursue his ultimate goal of a decisive victory. A moral man will have no regrets for fighting the best war he can fight because he knows that he has the right to life and liberty and the right to defend those rights.

You Don't Own Me

EDWARD CLINE (2010.07.26 )

Just as the country that sent those 4.7 million young men off to the Great War disrupted or ended those young lives for a larger purpose, today, the country that is America must decide whether it is prepared to disrupt or end young lives for another, greater, purpose. No, that was not President Barack Obama reading from the Progressivism hymnal to underscore his collectivist agenda. It was Tony Blankley, prominent conservative columnist, pleading for the return of the military draft. In November of 2003, Nick Provenzo, host of the Center for the Advancement of Capitalism and Rule of Reason, argued in a hard-hitting article that the draft was an anathema to human liberty. He was answering a Washington Times column by Blankley, who claimed that because the country was now at war with the scourge of terrorism, and that it was likely our volunteer forces would be stretched to the limit to fight it, it was incumbent on President George W. Bush to substantially increase the size of our military by calling for the reintroduction of the military draft. Blankley and Provenzo were writing after the initial invasion of Iraq in the spring of 2003. In January of the same year, New York congressman Charles Rangel introduced a bill in the House to reinstate the military draft. Those who could not serve in the military because of a physical or mental disability, would be required to perform community service. Noting in the beginning that, as of the time of his writing, only forty-four doughboys were alive of the 4.7 million sent to fight in Europe during World War I, Blankley ended his paean to self-sacrifice and duty with: Several decades from now, when our childrens generation is all dust, save 44 old men, will their grandchildren think as kindly on us as we do on those surviving 44 Doughboys (and their millions of comrades) who left us a richer clay from which to be born? Nick Provenzo addresses the question of why many conservatives, who even today claim they are for liberty, free enterprise, freedom of speech, and other liberties, are in agreement with their alleged political rivals, the liberal/leftists, that Americans should give back to the country that bestowed those liberties on them.

If the war against militant Islam is the preeminent crisis of our day, why call on the draft to fight it? Why frame the issue as a question of whether America is willing to disrupt or end the lives of its young people? If militant Islamists threaten our lives, freedom and prosperity, defending against them is not a sacrifice for the greater good. What good could be greater than defending ones own life and happiness? Why does Tony Blankley ignore ones selfish interest in defending ones freedom? Why? Because Mr. Blankley, like many conservatives, considers selflessness and not selfish interest to be the moral ideal. Even though America is a nation dedicated to protecting the life, liberty and happiness of the individual, conservatives are forever conflicted by the problem of the greater good and how best to sacrifice the inalienable rights of the individual to it. Fast forward to July, 2010. It is nearly amusing that Charles Rangel, who has introduced his draft bill in the House repeatedly since 2003, and has again this year, has been charged by the House Ethics Committee with ethics violations and may stand House trial in September. The charges range from his not declaring assets of nearly $1 million on his Congressional disclosure form, to using his Congressional letterhead to promote a private center at the City College of New York that would bear his name, to taking corporate lobbyist-paid junkets to the Caribbean. The longtime Democratic congressman from Harlem has failed to report at least $75,000 in rental income from a luxury beachfront villa he owns in the Dominican Republic. Evidently this is because Rangel, chairman of the House Ways and Means Committee and the chief tax writer for the United States, doesnt know that money derived from an asset is called income. The byzantine and wholly arbitrary strictures and definitions, and the confiscatory nature of the U.S. tax code, are not the subject here. If Congress had any sense of value of individual rights, this kind of issue would never arise. Someone like Rangel would be charged instead with advocating the usurpation of the Constitution and the violation of individual rights, and with violating his oath of office. But Congress could hardly throw the first stone at Rangel or anyone else charged with violation of House or Senate ethics rules, when both chambers and the White House regard the private sector the only realm that gives value to anything as their private preserve to loot, game, and control. Obamacare, the nationalization of the car industry, Fannie Mae and Freddie Mac, the financial reform legislation all the socialist/fascist law that has ever passed and been signed in the Oval Office

originated in the House, and were approved with pointlessly finicky amendments by the Senate, often with Republication abetting. While the notion of compulsory military and civilian service is repugnant to the American sense of freedom, no matter who proposes it, what sets Rangels apart is that it is founded on the ugly phenomenon of envy and class hatred. This is in character with the Obama agenda of leveling everything with the demolition ball of expropriatory legislation, of wealth and of liberty. When he first introduced his bill, Rangel made sure that its purpose was not primarily to swell the ranks of the military, but to collar the offspring of the rich and wealthy. I truly believe that those who make the decision and those who support the United States going into war would feel more readily the pain thats involved, the sacrifice thats involved, if they thought that the fighting force would include the affluent and those who historically have avoided this great responsibility, Rangel said. Those who love this country have a patriotic obligation to defend this country, Rangel said. For those who say the poor fight better, I say give the rich a chance. According to Rangels office, minorities comprise more than 30 percen t of the nations military. Under his bill, the draft would apply to men and women ages 18 to 26; exemptions would be granted to allow people to graduate from high school, but college students would have to serve. In November of 2006, Rangel again introduced his bill, amending it to include a big proportion of the working population, upping the service age to 42. And again, his Marxist malice was transparent. Rep. Charles Rangel, D-N.Y., said Sunday he sees his idea as a way to deter politicians from launching wars. Theres no question in my mind that this president and this administration would never have invaded Iraq, especially on the flimsy evidence that was presented to the Congress, if indeed we had a draft and members of Congress and the administration thought that their kids from their communities would be placed in harms way, Rangel said. Rangel, the next chairman of the House tax-writing committee, said he worried the military was being strained by its overseas commitments.

If were going to challenge Iran and challenge North Korea and then, as some people have asked, to send more troops to Iraq, we cant do that without a draft, Rangel said. He said having a draft would not necessarily mean everyone called to duty would have to serve. Instead, young people (would) commit themselves to a couple of years in service to this great republic, whether its our seaports, our airports, in schools, in hospitals, with a promise of educational benefits at the end of service. We havent challenged Iran, North Korea thumbs its nose at us, and the principal combat venue has switched from Iraq to Afghanistan. These are all excuses, however, which Rangel and his supporters use to argue for a permanent, peacetime draft that would expropriate the lives of millions of Americans to serve what Blankley claimed in 2003 and very likely would still claim is a another, greater purpose. Now, in 2010, Rangel still harps on the alleged class inequities of fighting a war. What troubles me most about the wars in Iraq and Afghanistan is the total indifference to the suffering and loss of life among our brave young soldiers on the battlefield, Congressman Rangel said. The reason is that so few families have a stake in the war which is being fought by other peoples children. The test for Congress, particularly for those members who support the war, is to require all who enjoy the benefits of our democracy to contribute to the defense of the country. All of Americas children should share the risk of being placed in harms way. In other words, if you support the war, you should support a compulsory military draft, Congressman Rangel said. Briefly, Rangel subscribes to the collectivist notion that Americans should give back to the country that has provided them the benefits of living in a (semi-free) country. What benefits are those? Blank out. Is it a republic, as he described it in 2006, or a democracy, as he called it on July 15? It is doubtful he or anyone else in Congress knows the difference, but we can let that pass for the moment. Mandatory national service would, of course, certainly realize the political dream of full employment. Aside from the evil of claiming the lives of Americans to serve a purpose greater than living their own lives the emphasis here on the fact that individuals literally own their lives, not the government or democratic mob that is alleged to bestow benefits on them there is in the bill a dangerous provision that grants the president certain discretionary, arguably tyrannical powers.

1(3) The term national service means military service or service in a civilian capacity that, as determined by the President, promotes the national defense, including national or community service and service related to homeland security. And, if not in a military capacity, Americans would be ordered to serve (2) in a civilian capacity that, as determined by the President, promotes the national defense, including national or community service and service related to homeland security. And, (c).When the induction of persons for military service is authorized by subsection (b), the President shall determine the number of persons described in section 102(a) whose national service obligation is to be satisfied through military service. Section 105 of Rangels bill, Implementation by the President, gives the president virtually unlimited powers over American lives. At his discretion, he may declare a national emergency at any time for any reason he chooses. One can imagine Barack Obama and his ilk in Congress and in the various czardoms drooling at the prospect of remaking America as a virtual, full employment penal colony. To effectively combat the idea of national service, Americans must grasp two critica l points: that as individuals, they do indeedown their lives; and that their lives, liberties, property, and their pursuits of happiness are inviolate and integral in their nature and existence as individuals, and are not benefits or privileges or stewardships granted them by a supernatural deity or by society. They must muster the courage and pride to tell the Obamas, the Rangels, the Pelosis, and all their ilk in and out of government: You dont own me! As beings of volitional consciousnesses, Americans can choose to take one political path or another: the one leading to glorious freedom, or the one to ignominious servitude. Time will tell which path they will ultimately take. The Tea Party movement and the general disgust with government and the Democrats are heartening. But, to paraphrase an Army recruiting slogan, it is not all that it can be.

Atlas Shrugged and Ayn Rand's Morality of Egoism (Part 1 of 3)

CRAIG BIDDLE (2010.08.13 )

The following is an expanded version of a talk Ive delivered on various college campuses over the past few years. CB Because of its prophetic nature with respect to current events, Ayn Rands 1957 novel Atlas Shrugged is receiving more attention today than it did when it was first published fifty-two years ago. The book is currently number nineteen on Amazon.coms Bestsellers list, number one on the Literature & Fiction list, and number one on the Classics list. If sales are an indication, Atlas Shrugged is one of the most popular books in America todayand thats a good thing, because the ideas set forth in Atlas are crucial to personal happiness, social harmony, and political freedom. Atlas Shrugged is first and foremost a brilliant suspense story about a man who said he would stop the motor of the world and did. But the book is much more than a great novel. Integrated into the story is a revolutionary philosophya philosophy not for piein-the-sky debates or academic word games or preparing for an afterlife, but for understanding reality, achieving values, and living on earth. Rands philosophy, which she named Objectivism, includes a view of the nature of reality, of mans means of knowledge, of mans nature and means of survival, of a proper morality, of a proper social system, and of the nature and value of art. It is a comprehensive philosophy, which, after writing Atlas Shrugged, Rand elaborated in several nonfiction books. But it all came together initially in Atlas, in which Rand dramatized her philosophyalong with the ideas that oppose it. While writing Atlas, Rand made a journal entry in which she said, My most important job is the formulation of a rational morality of and for man, of and for his life, of and for this earth.1She proceeded to formulate just such a morality, and to show what it means in practice. Tonight, were going to focus on the morality presented in Atlas Shrugged, but I want to do so without spoiling the novel for those of you who havent yet read it. And since it is impossible to say much of substance about Atlas without giving away key elements of its plot and the mystery of the novel, Im going to limit my discussion of the book to a brief indication of its plotwithout giving away anything pivotalafter which Ill discuss Rands morality of egoism directly. Atlas Shrugged is a story about a future world in which the entire globe, with the exception of America, has fallen under the rule of various Peoples States or dictatorships. America, the only country that is not yet fully socialized, is sliding

rapidly in that direction, as it increasingly accepts the ideas that lead to dictatorship, ideas such as self-sacrifice is noble, self-interest is evil, and greedy producers and businessmen have a moral obligation to serve the greater good of society. Given this cultural climate, the economy becomes increasingly regulated by the government, and the country slides further and further into economic chaos: Factories shut down, trains stop running, businesses close their doors, people starvejust what you would expect if the U.S. government started acting like the government of the USSR. But then, something strange starts happening. Americas top producersvarious scientists, inventors, businessmen, and artistsstart to disappear. One by one, they simply vanish. And no one knows where theyve gone or why. Consequently, the supply of goods and servicesfrom scientific discoveries to copper to wheat to automobiles to oil to medicine to entertainment reduces to a trickle and eventually comes to a halt. Life as Americans once knew it ceases to exist. The country is in ruins. Where did the producers go and why? Were they killed? Were they kidnapped? Do they return? How is this resolved? Read the book. Youll be riveted. As I said, I dont want to give away the story, but I will mention its theme. The theme of Atlas Shrugged is the role of the mind in mans existence. The novel dramatizes the fact that the reasoning mind is the basic source of the values on which human life depends. And this is not only the theme of Atlas; it is also the essence of Rands philosophy of Objectivism: Reasonthe faculty that operates by means of observation, concepts, and logicis the source of all knowledge, values, and prosperity. In this same vein, the theme of my talk tonight is the role of the mind specifically your mindin understanding, evaluating, and embracing a moral code. Suppose you are offered two moral codes from which to chooseand whichever one you choose, you have to live by it for the rest of your life. The first code tells you that your life is supremely importantthat it is properly the single most important thing in the world to you. This code says that you should live a wonderful, joy-filled life, and it provides an abundance of guidance about how to do so: how to make your life great; how to choose your goals, organize your values, and prioritize the things that are important to you; how to succeed in school, in friendships, and in romance; how to

choose a career that youll love and how to succeed in it. And so on. In short, this first moral code provides you guidance for achieving a lifetime of happiness and prosperity. The second moral code offers an entirely different kind of guidance. It tells you not that you should live a wonderful life, notthat you should pursue and achieve your goals and valuesbut, rather, that your life is unimportant, that you should sacrificeyour values, that you should give them up for the sake of others, that you should abandon the pursuit of personal happiness and accept the kind of life that results from doing so. Thats it. Thats the guidance provided by the second code. All else being equal, which moral code would you chooseand why? I suspect that, on serious reflection, you would choose the first code. I further suspect that your reasoning would be something on the order of: Were talking about my life here. If its true that embracing the first code will make my life wonderful, and embracing the second will make it miserable, then this is a no-brainer. I think thats good reasoning. Lets see if it holds up under scrutiny as we flesh out the respective natures and implications of these two codes. The first code is Rands morality of rational egoism, which lies at the heart of Atlas Shrugged and is the centerpiece of Objectivism. The second code is the traditional ethics of altruismwhich is the cause of all the trouble in Atlas Shrugged and is the ethics on which we all were raised. In order to be clear about what Rands egoism is, I want to compare and contrast it with altruism. This will serve to highlight the value of Rands ideas and help to dispel potential misconceptions about her views. It will also show how destructive altruism is and why we desperately need to replace it with rational egoismboth personally and culturally. (I will be using the terms egoism and rational egoism interchangeably for reasons that will become clear as we pr oceed.) Let me stress that I cannot present the whole of Rands morality in one eveningthat would be impossible. What Im going to do is just indicate its essence, by discussing a few of its key principles. My aim is to show you that there is something enormously important heresomething important to your life and happinessand to inspire you to look further into the subject on your own. To begin, observe that each of you brought a morality with you tonight. It is right there in your headwhether you are conscious of it or not. Each of you has a set of ideas about what is good and bad, right and wrongabout what you should and shouldnt do. And you refer to these ideas, implicitly or explicitly, when making choices and taking actions in your daily life. Should I study for the test, or cheat on it, or not worry

about it? What career should I chooseand how should I choose it? Is environmentalism a good movement or a bad one? What should I do this weekend? How should I spend my time? Whom should I befriend? Whom can I trust? Is homosexuality wrong? Does a fetus have rights? What is the proper way to deal with terrorists? The answers one gives to such questions depend on ones morality. This is what a morality is: a set of ideas and principles to guide ones choices, evaluations, and actions. Because as human beings we have to make choicesbecause we have free willa morality of some kind is unavoidable to us. Morality is truly inescapable. Our only choice in this regard is whether we acquire our morality through conscious deliberationor by default, through social osmosis. If we acquire our morality by default, we will most likely accept the dominant morality in the culture today: altruismthe idea that being moral consists in being selfless. Dont be selfish!Put others first!It is more blessed to give than to receive.Ask not what your country can do for you; ask what you can do for your country. Volunteer to serve in your community.Sacrifice for the greater good. And so on. This is the morality that surrounded all of us growing upand that still surrounds us today. It is the morality taught in church, synagogue, and schooloffered in books, movies, and on TVand encouraged by most parents. Interestingly, however, although our culture is steeped in this morality, the actual meaning of altruism, in the minds of most people, is quite vague. Is a doctor acting altruistically when he cares for his patients? Or is he seeking to gain from doing so? Are parents being altruistic when they pay for their childrens education? Or is it in their best interest to do so? Are American soldiers acting altruistically when they defend our freedom? Or is defending our freedom in their self-interest? Are you acting altruistically when you throw a birthday party for your best friend? Or do you do so because he or she is a great value to youand thus, something is in it for you? What exactly is the difference between self-less action and self-interested action? What is the difference between altruism and egoism? To understand how each differs from the other, we need to understand the basic theory of each code and what each calls for in practice. To begin clarifying this issue, let us turn first to altruism. Altruism is the morality that holds self-sacrificial service as the standard of moral value and as the sole justification for ones existence. Here, in the words of altruistic

philosopher W. G. Maclagan, is the basic principle: According to altruism, the moral importance of being alive lies in its constituting the condition of our ability to serve ends that are not reducible to our personal satisfactions.2 This means that the moral importance of your life corresponds to your acts of selflessnessacts that do not satisfy your personal needs. Insofar as you do not act selflessly, your life has no moral significance. Quoting Maclagan again, altruism holds that we have a duty to relieve the stress and promote the happiness of our fellows. . . . [We] should discount altogether [our] own pleasure or happiness as such when . . . deciding what course of action to pursue. . . . [Our] own happiness is, as such, a matter of no moral concern to [us] whatsoever.3 Ayn Rand was not exaggerating when she said, The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue, and value.4 That is the theoretical meaning of altruism. And the altruistic philosophers know itand state it forthrightly. (Well hear from more of them a little later.) Now, what does altruism mean in practice? Suppose a person accepts altruism as true and strives to practice it consistently. What will become of his life? A widely-used college philosophy text gives us a good indication. As I read this passage, bear in mind that this is not someone speaking for or against altruism. This is just a textbook writers depiction of what altruism means in practice. A pure altruist doesnt consider her own welfare at all but only that of others. If she had a choice between an action that would produce a great benefit for herself (such as enabling her to go to college) and an action that would produce no benefit for herself but a small benefit for someone else (such as enabling him to go to a concert this evening), she should do the second. She should be selfless, considering herself not at all: she should face death rather than subject another person to a minor discomfort. She is committed to serving others only and to pass up any benefits to herself.5 That illustrates the practical meaning of altruismand indicates why no one practices it consistently. Observe, however, that whether practiced consistently or inconsistently, the basic principle of altruism remains the same: The only moral justification of your existence is self-sacrificial service to others. That some people subscribe to altruism but fail to uphold it consistently does not make their moral code different in kind from that of a person who practices it consistently; the difference is only one of degree.

The consistent altruist is acting with a bizarre form of integritythe kind of integrity that leads to his suffering and death. The inconsistent altruist is acting with plain-old hypocrisyalbeit a necessary hypocrisy given his moral code. And not only is the altruists morality the same in kind; theconsequences of accepting it are the same in kind, too. To the extent that a person acts selflessly, he thereby thwarts his life and happiness. He might not die because of it, but he certainly will not live fully; he will not make the most of his life; he will not achieve the kind of happiness that is possible to him. Have you accepted the principle of altruism? If so, how is it affecting your life? Have you ever done something for the sake of othersat the expense of what you really thought was best for your own life? For instance: Have you ever accepted an invitation to dine with someone whose company you do not enjoybecause you didnt want to hurt his or her feelings? Have you ever skipped an event such as a ski trip or a weekend at the beach with your friendsin order to spend time with family members youd really rather not see? Have you ever remained in a relationship that you know is not in your best interestbecause you think that he or she couldnt handle the breakup? Conversely, have you ever felt guilty for not sacrificing for others? Have you ever felt ashamed for doing something that was in your own best interest? For instance, have you felt guilty for not giving change to a beggar on a street corner? Or guilty for pursuing a degree in business or art or something you loverather than doing something allegedly noble, such as joining the Peace Corps? These are just some of the consequences of accepting the morality of altruism. Altruism is not good for your life: If you practice it consistently, it leads to death. Thats what Jesus did. If you accept it and practice it inconsistently, it retards your life and leads to guilt. This is what most altruists do. Rational egoism, as the name suggests, and as we will see, is good for your life. It says that you should pursue your life-serving values and should not sacrifice yourself for the sake of others. Practiced consistently, it leads to a life of happiness. Practiced inconsistentlywell, why be inconsistent here? Why not live a life of happiness? Why sacrifice at all? What reason is there to do so? (We will address the profound lack of an answer to this question later.) At this point, we can begin to see why Rand called altruism The Morality of Death. To fully grasp why it is the morality of death, however, we must understand that the essence of altruism is not serving others but self-sacrifice. So I want to reiterate this point with emphasis.

Altruism does not call merely for serving others; it calls for self-sacrificially serving others. Otherwise, Michael Dell would have to be considered more altruistic than Mother Teresa. Why? Because Michael Dell serves millions more people than Mother Teresa ever did. There is a difference, of course, in the way he serves people. Whereas Mother Teresa served people by exchanging her time and effort for nothing, Michael Dell serves people by trading with themby exchanging value for value to mutual advantagean exchange in which both sides gain. Trading value for value is not the same thing as giving up values for nothing. There is a black-and-white difference between pursuing values and giving them up between achieving values and relinquishing thembetween exchanging a lesser value for agreater oneand vice versa. In an effort to make their creed seem more palatable, pushers of altruism will try to blur this distinction in your mind. It is important not to let them get away with it. Dont be duped! Altruists claim, for instance, that parents sacrifice when they pay for their children to attend college. But this is ridiculous: Presumably, parents value their childrens education more than they value the money they spend on it. If so, then the sacrifice would be for them to forgo their childrens education and spend the money on a lesser valuesuch as a Ferrari. Altruists also claim that romantic love requires sacrifices. But this is ridiculous, too: Honey, Id really rather be with another woman, but here I am sacrificially spending my time with you. Or: Id really rather have spent this money on a new set of golf clubs, but instead I sacrificially bought you this necklace for your birthday. Or: Its our anniversaryso Im fixing you your favorite dish for a candlelit dinnereven though Id rather be playing poker with the guys. Is that love? Only if love is sacrificial. Altruists also claim that American soldiers sacrifice by serving in the military. Not so. Our non-drafted soldiers serve for a number of self-interested reasons. Here are three: (1) They serve for the same reason that the Founding Fathers formed this countrybecause they value liberty, because they realize that liberty is a requirement of human life, which is the reason why Patrick Henry ended his famous speech with Give me Liberty or give me Death! His was not an ode to sacrifice; it was an ode to life, liberty, and the pursuit of happiness. (2) Our soldiers serve in exchange for payment and educationwhich are clearly in their self-interest. (3) They serve

because they are fascinated by military science and want to make a career of it another selfish motive. Do some of these soldiers die in battle? Unfortunately, yes. Theirs is a dangerous job. But American soldiers dont willfully give up their lives: They dont walk out on the battlefield and say, Shoot me! Nor do they strap bombs to their bodies and detonate themselves in enemy camps. On the contrary, they do everything they can to beat the enemy, win the war, and remain aliveeven when the Bush and Obama administrations tie their hands with altruistic restrictions on how they can fight. The point is that a sacrifice is not any choice or action that precludes some other choice or action. A sacrifice is not any old exchange. A sacrifice is, as Rand put it, the surrender of a greater value for the sake of a lesser one or of a non -value.6 Whether or not one is committing a sacrifice depends on what ismore important and what is less important to ones life. To make this determination, of course, one must know the relative importance of ones values in regard to ones life. But if one does establish this hierarchy, one can proceed non-sacrificiallyand consistently so. For example, if you know that your education is more important to your life than is, say, a night on the town with your friends, then if you stay home in order to study for a crucial examrather than going out with your buddiesthat is not a sacrifice. The sacrifice would be to hit the town and botch the exam. Life requires that we regularly forgo lesser values for the sake of greater ones. But these are gains, not sacrifices. A sacrifice consists in giving up something that is more important for the sake of something that is less important; thus, it results in a net loss. Altruism, the morality of self-sacrifice, is the morality of personal lossand it does not countenance personal gain. This is not a caricature of altruism; it is the essence of the morality. As arch-altruist Peter Singer (the famed utilitarian philosopher at Princeton University) explains, to the extent that [people] are motivated by the prospect of obtaining a reward or avoiding a punishment, they are not acting altruistically. . . .7 Arch-altruist Thomas Nagel (a philosophy professor at New York University) concurs: Altruism entails a willingness to act in consideration of the interests of other persons, without the need of ulterior motivesulterior motives meaning, of course, personal gains.8 To understand the difference between egoistic action and altruistic action, we must grasp the difference between a trade and a sacrificebetween a gain and a lossand we must not allow altruists to blur this distinction in our mind. Egoism, as we will see, calls for personal gains. Altruism, as we have seen, calls for personal losses.

Endnotes
1 Journals of Ayn Rand, edited by David Harriman (New York: Dutton, 1997), p. 610. 2 W. G. Maclagan, Self and Others: A Defense of Altruism, The Philosophical Quarterly, vol. 4, no. 15 (April 1954): p. 122. Maclagan was an early 20th-century Scottish philosopher who taught at the University of Glasgow and was an ardent advocate of altruism. 3 Ibid., pp. 109111. 4 Ayn Rand, Philosophy: Who Needs It (New York: Penguin, 1984), p. 61. 5 John Hospers, Philosophical Analysis (Upper Saddle River, NJ: Prentice-Hall, 1997), p. 259. 6 Ayn Rand, The Virtue of Selfishness (New York: Signet, 1962), p. 50. 7 Peter Singer, A Darwinian Left (New Haven, CT: Yale University Press, 1999), p. 56. 8 Thomas Nagel, The Possibility of Altruism (Princeton, NJ: Princeton University Press, 1978), p. 79.

Atlas Shrugged and Ayn Rand's Morality of Egoism (Part 2 of 3)

CRAIG BIDDLE (2010.08.14 )

Now, despite its destructive nature, altruism is accepted to some extent by almost everyone today. Of course, no one upholds itconsistentlyat least not for long. Rather, most people accept it as trueand then cheat on it. All the major religionsChristianity, Judaism, Islamadvocate altruism; their holy books demand it. All so-called secular humanist philosophiesutilitarianism, postmodernism, egalitarianismcall for altruism as well. (Note that secular humanists do not call themselves secular egoists or secular individualists.) Alter is Latin for other; altruism means other-ism; it holds that you should sacrifice for others. From the Christian, Jewish, and Muslim points of view, the significant others are God and the poor; in the Old Testament, for instance, God says: I command you to be openhanded toward your brothers and toward the poor and needy in your land (Deuteronomy 15:11). From the utilitarian point of view, the other is everyone in general; the utilitarian principle is the greatest good for the greatest number. From the postmodern and egalitarian points of view, the other is anyone with less wealth or opportunity than you have; in other words, the better off you are, the more you should sacrifice for othersthe worse off you are, the more others should sacrifice for you. Sacrifice. Sacrifice. Sacrifice. Everyone believes it is the moral thing to do. And no philosopher has been willing to challenge this idea. Except Ayn Rand: [T]here is one worda single wordwhich can blast the morality of altruism out of existence and which it cannot withstandthe word: Why? Why must man live for the sake of others? Why must he be a sacrificial animal? Whyis that the good? There is no earthly reason for itand, ladies and gentlemen, in the whole history of philosophy no earthly reason has ever been given.9 On examination, this is true. No reason has ever been given as to why people should sacrifice for others. Of course, alleged reasons have been given, but not legitimate ones. So lets consider the alleged reasonsof which there are approximately six each of which involves a logical fallacy.

1. You should sacrifice because God (or some other voice from another dimension) says so. This is not a reasoncertainly not an earthly one. At best, it is an appeal to authoritythat is, to the authorities who claim to speak for God. Just because a preacher or a book makes a claim does not mean the claim is true. The Bible claims, among other things, that a bush spoke. More fundamentally, this non-reason is an arbitrary claim because there is no evidence for the existence of a god. But even those who believe in a god can recognize the fallacy of appealing to an authority. 2. You should sacrifice because thats the general consensus. This is not a reason but an appeal to the masses. Matters of truth and morality are not determined by consensus. That slavery should be legal used to be the general consensus in America, and is still the consensus in parts of Africa. That did not and does not make it so. Nor does consensus legitimize the notion that you or anyone else should sacrifice or be sacrificed. 3. You should sacrifice because other people need the benefit of your sacrifice. This is an appeal to pity. Even if other people did need the benefit of your sacrifice, it would not follow that this is a reason to sacrifice. More importantly, however, the notion that people need the benefit of your sacrifice is false. What people need is to produce values and to trade them with others who produce values. And to do so, they and others must be free to produce and trade according to their own judgment. This, not human sacrifice, is what human life requires. (Ill touch on the relationship between freedom and egoism a little later.) 4. You should sacrifice because if you dont, you will be beaten, or fined, or thrown in jail, or in some other way physically assaulted.The threat of force is not a reason; it is the opposite of a reason. If the force wielders could offer a reason why you should sacrifice, then they would not have to use force; they could use persuasion instead of coercion. 5. You should sacrifice because, well, when you grow up or wise up youll see that you should. This is not a reason, but a personal attack and an insult. It says, in effect, If you dont see the virtue of sacrifice, then youre childish or stupidas if demanding a reason in support of a moral conviction could indicate a lack of maturity or intelligence. 6. You should sacrifice because only a miscreant or a scoundrel would challenge this established fact. This kind of claim assumes that you regard others opinions of you as more important than your own judgment of truth. It is also an example of what Ayn Rand called The Argument from Intimidation: the attempt to substitute psychological pressure for rational argument. Like the personal attack, it is an attempt to avoid having to present a rational case for a position for which no rational case can be made.

Thats it. Such are the reasons offered in support of the claim that you should sacrifice. Dont take my word for it; ask around. Ask your philosophy professors. Ask a priest or rabbi. You will find that all the reasons offered are variants of theseeach of which, so far from being a reason, is a textbook logical fallacy. (Most even have fancy Latin names.) Ayn Rand demanded reasons for her convictions. So should we. She set out to discover a rational moralityone based on observable facts and logic. Rather than starting with the question Which of the existing codes of value should I accept?she began with the question, What are values and why does man need them? This question pointed her away from the established viewsand toward the facts of reality. Looking at reality, Rand observed that a value is that which one acts to gain or keep. You can see the truth of this in your own life: You act to gain and keep money; you value it. You act to gain and keep good grades; you value them. You act to choose and develop a fulfilling career. You seek to meet the right guy or girl and build a wonderful relationship. And so on. Looking at reality, Rand also saw that only living organisms take self-generated, goaldirected action. Trees, tigers, and people take actions toward goals. Rocks, rivers, and hammers do not. Trees, for example, extend their roots into the ground and their branches and leaves toward the sky; they value nutrients and sunlight. Tigers hunt antelope, and nap under trees; they value food and shade. And people act to gain their values, such as nutrition, education, a career, romance, and so on. Further, Rand saw that the ultimate reason living organisms take such actions is to further their life. She discovered that an organisms life is its ultimate goal and standard of valueand thatmans life is the standard of moral value: the standard by which one judges what is good and what is evil. Mans lifemeaning: that which is required to sustain and further the life of a human beingconstitutes the standard of moral value. Now, the validation of the principle that life is the standard of value has a number of aspects, and we dont have time to consider all of them tonight. For our purposes here, I want to focus briefly on just a few. By pursuing the question Why does man need values?Ayn Rand kept her thinking fact-oriented. If man needs values, then the reason he needs them will go a long way toward establishing which values are legitimate and which are not. If man doesnt need values, well, then, he doesnt need themand there is no point in pursuing the issue at all. What Rand discovered is that man does need valuesand

the reason he needs them is in order to live. Life, she discovered, is the ultimate goal of our actions; life is the final end toward which all our other values are properly the means. Granted, because we have free will we can take antilife actionsand, as we have seen, altruism senselessly calls for us to do just that. But the point is that we dont need to take antilife actions, unless we want to diein which case, we dont really need to take any action at all. We dont need to do anything in order to die; if thats what we want, we can simply stop acting altogether and we will soon wither away. If we want to live, however, we must pursue life-serving valuesand we must do so by choice. Free will enables us to choose our values. This is what gives rise to the field of morality. Morality is the realm of chosen values. But whatever our choices, these facts remain: The only reason we canpursue values is because we are alive, and the only reason weneed to pursue values is in order to live. This two-pronged principle of Rands philosophy is essential to understanding how the Objectivist morality is grounded in the immutable facts of reality: (1) Only life makes values possiblesince nonliving things cannot pursue values; and (2) only life makes values necessarysince only living things need to pursue values. Observing reality, we can see that this is true: A rock doesnt have values. It cant act to gain or keep things; it just stays stillunless some outside force, such as a wave or a hammer, hits and moves it. And it doesnt need to gain or keep things, because its continued existence is unconditional. A rock can change formsfor instance, it can be crushed and turned to sand, or melted and turned to liquid but it cannot go out of existence. The continued existence of a living organism, however, is conditionaland this is what gives rise to the possibility and need of values. A tree must achieve certain endsor else it will die. Its chemical elements will remain, but its life will go out of existence. A tiger must achieve certain ends, too, or it will meet the same fate. And a personif he is to remain alivemust achieve certain ends as well. The Objectivist ethicsrecognizing all of thisholds human life as the standard of moral value. It holds that acting in accordance with the requirements of human life is moral, and acting in contradiction to those requirements is immoral. It is a fact-based, black-and-white ethics. Now, combining the principle that human life is the standard of moral value with the observable fact that people are individualseach with his own body, his own mind, his own lifewe reach another principle of the Objectivist ethics: Each individuals ownlife is his own ultimate value. This means that each individual ismorally an end in himselfnot a means to the ends of others. Accordingly, he has

no moral duty to sacrifice himself for the sake of others. Nor does he have a moral right to sacrifice others for his own sake. On principle, neither self -sacrifice nor the sacrifice of others is moral, because, on principle, human sacrifice as such is immoral. Human life does not require people to sacrifice themselves for the sake of others; nor does it require people to sacrifice others for their own sake. Human life simply does not require human sacrifice; people can live without giving up their minds, their values, their lives; people can live without killing, beating, robbing, or defrauding one another. Moreover, human sacrifice cannot promote human life and happiness; it can lead only to suffering and death. If people want to live and be happy they must neither sacrifice themselves nor sacrifice others; rather, they must pursue life-serving values and respect the rights of others to do the same. And, given the role of morality in human life, in order to do so, they must accept the morality that advocates doing so. In a sentence, the Objectivist ethics holds that human sacrificeis immoral and that each person should pursue his own life-serving values and respect the rights of others to do the same. This is the basic principle of rational egoism. And the reason it sounds so good is because it is good; it is right; it is true. This principle is derived from the observable facts of reality and the demonstrable requirements of human life. Where else could valid moral principles come from? And what other purpose could they serve? We can now see why Ayn Rand said, The purpose of morality is to teach you, not to suffer and die, but to enjoy yourself and live. Morality, properly conceived, is not a hindrance to a life of happiness; rather, it is the means to such a life. So let us turn to the question of how to enjoy yourself and live. If that is the right thing to do, then whataccording to the Objectivist ethicsis the means to that end? First and foremost, in order to live and achieve happiness, we have to use reason. Hence the technically redundant word rational in rational egoism. Reason is our means of understanding the world, ourselves, and our needs. It is the faculty that operates by means of perceptual observation and conceptual abstraction by means of our five senses and our ability to think logically, to make causal connections, and to form principles. It is by means of reason that we identify what things are, what properties they have, and how we can use them for our life-serving purposes. For example, it is by the use of reason that we learn about plants, soil, the principles of agriculture, and how to produce food. It is by means of reason that we learn about wool, silk, and how to make looms and produce clothing. It is by means of reason that we learn the principles of chemistry and biology and how to produce medicine and perform

surgery; the principles of engineering and how to build homes and skyscrapers; the principles of aerodynamics and how to make and fly jumbo jets; the principles of physics and how to produce and control nuclear energy. And so on. On a more personal level, it is by means of reason that we are able to develop fulfilling careers, to engage in rewarding hobbies, and to establish and maintain good friendships. And it is by means of reason that we are able to achieve success in romance. Since this last is perhaps less obvious than the others, lets focus on it for a minute. To establish and maintain a good romantic relationship, you have to take into account all the relevant facts pertaining to that goal. To begin with, you have to know what kind of relationship will actually be good for your life; you were not born with this knowledge, nor do you gain it automatically. To acquire it, you have to observe reality and think logically. Further, you have to find someone who suits your needs and lives up to your standards. To do so, you have to judge peoples characters and qualities accuratelywhich requires reason. Once found, you have to treat the person justlyas he or she deserves to be treated. To do this, you have to understand and apply the principle of justice (which we will discuss shortly). Your means of understanding and applying it is reason. To succeed in romance, you have to discover and act in accordance with a lot of facts and principles. You must think and act rationally. If you choose a lover irrationally, or treat your lover irrationally, then your love life will be doomed. Im sure you all know of people who approach relationships irrationallyand what the results are. The Objectivist ethics recognizes that reason is our basic means of living and achieving happiness. Thus, it upholds reason as our guide in all areas of life: material, spiritual, personal, social, sexual, professional, recreationalyou name it. Now, what about emotions? Where do they fit into the picture? The Objectivist ethics recognizes and upholds the crucial role of emotions in human life and happiness. Emotions are our psychological means of enjoying lifewhich is the whole purpose of living. But, toward that end, it is important to treat emotions for what they are and not to expect them to be what they are not. What exactly are emotions? They are automatic consequences of our value judgments. They arise from our evaluations of the things, people, and events in our lives. For instance, if you apply for a job that you consider ideal for your career path,

and you get it, you will experience positive, joyful emotions. If you dont get it, you will experience feelings of frustration or disappointment. Similarly, if you have not seen your good friend for a long time and you run into him in a restaurant, you will be thrilled to see him. If, however, he informs you that he has joined the Church of Scientology, you will become highly upset. If he later tells you he was kidding, you will feel somewhat relieved. Likewise, if your favorite team wins a big game, you will react one way. If your team loses, you will react another wayespecially if you bet a lot of money on the game. Your emotions reflect what is important to you; they are, as Rand put it, lightning-like estimates of the things around you, calculated according to your values. As such, they are crucial to your life. If you did not experience the emotion of desire, you would have no motivation to take any actions at alland you would soon die. If you never experienced joy, you would have no reason to remain alive; a life devoid of joy is not a life worth living. We need emotions. But emotions are not our means of knowledge. They cannot tell us which berries are edible or how to build a hut, how to perform heart surgery or how to make an iPod, who is honest or who has a right to do what, what to do about terrorism or what will make us happy. Only reason can tell us such things. Thus, rational egoism holds that we should respect each of our mental faculties for what it is. Unlike emotionalist moralitieswhich treat emotions as if they can tell us what is true and what is good and what is rightthe Objectivist morality recognizes emotions for exactly what they are and treats them accordingly. To expect emotions to be what they are notor to do what they cannotis to misuse them. Just as we do not call child-abusers pro-child, so we should not call emotion-abusers proemotion. They are not. The Objectivist ethics is pro-emotionand it is the only moral code that is so. It is both 100 percent pro-reasonand 100 percent pro-emotion. It calls for the proper use of each mental faculty at all times on the grounds that human life and happiness depend on their proper use. Reason is our only means of knowledgeand thus our basic means of living. Emotions are automatic consequences of our value judgments and thus our psychological means of enjoying life. Properly understood, reason and emotions are not warring aspects of human nature; rather, they are a harmonious, life-serving team. The Objectivist ethics holds that you should pursue your life-serving values with the whole of your life in mind, including all of your needsphysical, intellectual, and emotionalover your entire life span. Your basic means of doing so is reason.

Thus, egoism does not call for doing whatever one pleases or doing whatever one feels like doing or stabbing others in the back to get what one wants. Those are caricatures of egoism perpetrated by pushers of altruism who seek to equate egoism with hedonism, subjectivism, and predation. Again, dont be duped! Egoism is not hedonism; it does not say: Do whatever gives you pleasure regardless of its effects on your life. Egoism isnot subjectivism; it does not say: Do whatever you feel like doing regardless of the consequences. And egoism is not predation; it not only denies that you should achieve values by abusing others; it fundamentally denies that you even can achieve life-serving values through dishonesty, injustice, or coercion. Egoism does not hold pleasure or feelings or conquest as the standard of value. It holds life as the standard of valueand reason as your basic means of living. Thus, an egoist strives always to act in his long-term best interestas judged by his use of reason. In other words, an egoist is rationally goal-oriented, which brings us to another key aspect of Rands morality: the value of purpose. A purpose is a conscious, intentional goal. A person acting purposefully is after somethingas against meandering or wandering aimlessly. The rational pursuit of life-serving goals is the essence of good living; purpose is a hallmark of self-interest. If we want to make the most of our days and yearsif we want to be fully selfishwe have to be consciously goal-directed in every area of our life where choice applies. For instance, we have to choose a career that we will love. We have to think rationally about how to succeed in it. We need to plan long range and work hard to achieve excellence and happiness in our chosen field. We also have to choose and pursue interesting hobbies and recreational activities that will bring us great joy whether making music or riding horses or surfing or blogging or the like. And, as mentioned earlier, we have to pursue friendships and romance. Such purposes are essential to a life of happiness. Our purposes in life, according to the Objectivist ethics, are what make life meaningful. They are what fill our lives with intensity and subtlety and joy. They are the stuff of good living. And if our purposes are to serve their purpose, they must be chosen and pursued rationally. Reason and purpose go hand in hand. Having rational purposes is essential to our life and happiness. Another value Rand identified as crucial to human life and happiness is self-esteem the conviction that one is able to live and worthy of happiness. I wont say much about this, since it is a relatively obvious requirement of life and happiness. Suffice it here to say that we are not born with self-esteem; we have to earnit. And the only way to earn it is by thinking rationally and acting purposefully.

These three valuesreason, purpose, and self-esteemare, as Rand put it, the three values which, together, are the means to and the realization of ones ultimate value, ones own life.10 To live as human beings we have to think (reason); we have to choose and pursue life-promoting goals (purpose); and we have to achieve and maintain the conviction that we are able to live and worthy of happiness (selfesteem). All three are necessary for success in each area of our life. Building on these basic values, lets turn to some key socialprinciples Ayn Rand identified. We will look first at the Objectivist principle of justice. Justice, writes Rand, is the recognition of the fact that you cannot fake the character of men as you cannot fake the character of nature. . . . 11 Because people have free will, a persons character is what he chooses to make it. We can either recognize this fact or fail to do sobut, either way, the fact remains. A person has the character he has; he is responsible for it; and his character, whether good or bad, can affect our life accordingly. A person of good character can generate good ideas, create life-serving products, provide friendship or romance, become an honest politician, or in some other way have a positive impact on our life. A person of bad character can generate evil ideas, destroy life-serving values, deceive us, assault us, steal our property, push for life-thwarting laws, or even murder us. Justice is the virtue of judging people rationallyaccording to the available and relevant factsand treating them accordinglyas they deserve to be treated. This is the basic principle of selfish human interaction. In order to live, to protect our rights, and to achieve happiness, we have to judge people. The precept: Judge not, that ye be not judged, writes Ayn Rand, is an abdication of moral responsibility. . . . The moral principle to adopt in this issue, is: Judge, and be prepared to be judged. Quoting Rand further: Nothing can corrupt and disintegrate a culture or a mans character as thoroughly as does the precept of moral agnosticism, the idea that one must never pass moral judgment on others, that one must be morally tolerant of anything, that the good consists of never distinguishing good from evil. It is obvious who profits and who loses by such a precept. It is not justice or equal treatment that you grant to men when you abstain equally from praising mens virtues and from condemning mens vices. When your impartial attitude declares, in effect, that neither the good nor the evil may expect anything from you whom do you betray and whom do you encourage?12 Only one kind of person has anything to fear from moral judgment; the rest of us can only benefit from it. Being just consists in acknowledging this fact and acting accordingly.

To live successfully, happily, and freely, we have to judge our friends, our parents, our employers and employees, our professors, and our politicians. We have to judge everyone who has an impact on our life. We have to judge them rationallyand treat them accordingly. In a sense, this is so obvious that it seems silly to have to say it. But given the commonly accepted views on moralityfrom the biblical tenet: Judge not that ye be not judged to the relativist mantra: Who are you to judge?not only does it have to be mentioned; it has to be stressed. Judging people rationally and treating them accordingly is a requirement of human life. While those who do not care about human life might be indifferent to this fact, those of us who want to live need to take it very seriously. We need to uphold and advocate the principle of justice, and not only when it comes to condemning those who are evil, but also, and more importantly, when it comes to praising, rewarding, and defending those who are goodthose who think rationally and produce the values on which human life depends: scientists who discover the laws of nature, inventors who create new life-promoting devices and medicines, businessmen who produce and market life-promoting goods and services, artists who create spiritual values that fuel our souls and bring us joy, and so on. Justice demands that we recognize such people asgoodgood because they self-interestedly use reason and produce life-serving values. By studying Ayn Rands ethicsin addition to learning a great deal more about her ideas on reason, purpose, self-esteem, and justiceyou will discover the objective meaning and selfish necessity of the virtues of honesty, integrity, productiveness, and pride. In each case, Rand points to the facts that give rise to the need of such virtues; she shows why your life and happiness depend on them; and she provides an integrated philosophical system for guiding your actions accordingly. Ive merely indicated the kind of guidance offered by egoism. But in light of what weve seen so far, consider for a moment how it compares to the guidance offered by altruism. Given the many values on which human life and happiness dependfrom material values, such as food, shelter, clothing, medical care, automobiles, and computers; to spiritual values, such as knowledge, self-esteem, art, friendship, and romantic lovewe need a great deal of guidance in making choices and taking actions. We need moral principles that are conducive to the goal of living fully and happily over the course of years and decades. In answer to this need, egoism provides a whole system of integrated, noncontradictory principles, the sole purpose of which is to teach us how to live and enjoy life. In answer to this same need, altruism says: Dont be selfish; sacrifice your values; give up your dreams.

If we want to live and be happy, only one of these moralities will do. And just as egoism is the only morality that provides proper guidance for our personal lives, so it is the only morality that provides a proper foundation for a civilized society. Let us turn briefly to the politics implied by egoism. Originally published as a special online article at The Objective Standard. 2009 Craig Biddle. Related Articles in this three part series:

Atlas Shrugged and Ayn Rands Morality of Egoism (Part 1 of 3) Atlas Shrugged and Ayn Rands Morality of Egoism (Part 2 of 3) Atlas Shrugged and Ayn Rands Morality of Egoism (Part 3 of 3)

Endnotes
9 Rand, Philosophy: Who Needs It, pp. 6162. 10 Rand, Virtue of Selfishness, p. 27. 11 Ayn Rand, For the New Intellectual (New York: Signet, 1963), p. 129. 12 Rand, Virtue of Selfishness, pp. 8283.

Atlas Shrugged and Ayn Rand's Morality of Egoism (Part 3 of 3)

CRAIG BIDDLE (2010.08.15 )

Like every ethical code, egoism has definite political implications. Just as the morality of self-sacrifice lays the groundwork for a particular kind of political system one in which the government forces people to sacrifice (e.g., socialism, communism, fascism, theocracy)so the morality of self-interest lays the groundwork for a certain kind of political systemone in which the government plays an entirely different role. The basic question in politics is: What are the requirements of human life in a social context? What, in principle, must people door refrain from doingin order to live together in a civilized manner? Here, Ayn Rand makes another crucial identification. Since we need to think rationally and act accordingly in order to live, we need to be able to act on our judgment. The only thing that can stop us from acting on our judgment is other people. And the only way they can stop us is by means of physical force. Quoting Rand: It is only by means of physical force that one man can deprive another of his life, or enslave him, or rob him, or prevent him from pursuing his own goals, or compel him to act against his own rational judgment. The precondition of a civilized society is the barring of physical force from social relationshipsthus establishing the principle that if men wish to deal with one another, they may do so only by means of reason: by discussion, persuasion and voluntary, uncoerced agreement.13 If someone puts a gun to your head and tells you what to do, you cannot act on your judgment. The threat of death makes your judgment irrelevant; you now have to act on the gunmans judgment. If he says, Give me your wallet, you have to give him your wallet. If he says, Take off your clothes, you have to do that. If he says, Dont object to my decrees, you must not object. You have to do whatever he says, or youll get shot in the head. Your own judgmentyour basic means of survivalhas been overridden and is now useless. And it makes no difference whether the gunman is a lone thug, or a group of thugs, or the KBG, or the senators and president of our rapidly deteriorating America. Whenever and to whatever extent physical force is used against you or me or anyone, the victim cannot act on his judgment, his basic means of living; thus, he

cannot live fully as a human being. This is why rational egoism holds that the initiation of force against people is evil. It is evil because it is antilife. On the basis of this identification, Rand established the objective case for individual rights. Since physical force used against a person is factually contrary to the requirements of his lifeand since life is the standard of valuewe need a moral principle to protect us from those who attempt to use force against us. That principle involves the concept of rights. Quoting Rand: Rights are a moral conceptthe concept that provides a logical transition from the principles guiding an individuals actions to the principles guiding his relationship with othersthe concept that preserves and protects individual morality in a social contextthe link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law. . . . A right is a moral principle defining and sanctioning a mans freedom of action in a social context.14 The key word here is action. Just as life is the standard of value and requires goaldirected action, so the right to life is the basic right and pertains to freedom of action. The right to life is the right to act as ones life requireswhich means, according to ones basic means of survivalwhich means, on the judgment of ones own mind. All other rights are derivatives of this fundamental right: The right to liberty is the right to be free from coercive interference by others. The right to property is the right to keep, use, and dispose of the product of ones effort. The right to the pursuit of happinessis the right to seek the goals and values of ones choice. The right to freedom of speech is the right to express ones views regardless of what others think of them. And because a right is a sanction to action, it is not a sanction to be given goods or services. There can be no such thing as a right to be given goods or services. If a person had a right to be given food, or a house, or medical care, or an education, what would this imply with regard to other people? It would imply that others have to be forced to provide him with these goods or services. It would imply that some people must produce while others dispose of their product. As Rand put it: The man who produces while others dispose of his product is a slave. If some men are entitled by right to the products of the work of others, it means that those others are deprived of rights and condemned to slave labor. Any alleged right of one man which necessitates the violation of the rights of another, is not and cannot be a right. No man can have a right to impose an unchosen obligation, an unwarranted duty or an involuntary servitude on another man. There can be no such thing as the right to enslave.15

The North fought (and thankfully won) a legitimate war against the South on the principle that there can be no right to enslave. Rand made explicit the fundamental reason this principle is true. The reason each individuals life should legally belong to him is that each individuals life does in fact morally belong to him. Each individual is morally an end in himselfnot a means to the ends of others. Each individual has a moral right to act on his own judgment for his own sakeand to keep, use, and dispose of the product of his effortso long as he respects the same right of others. The Objectivist ethics recognizes that to live as civilized beingsrather than as masters and slaveswe need a social system that protects each individuals rights to his life, liberty, property, and the pursuit of happiness. The only social system that does soconsistently and on principleis laissez-faire capitalism. Quoting Rand: [Laissez-faire capitalism] is a system where men deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit. It is a system where no man may obtain any values from others by resorting to physical force, and no man may initiate the use of physical force against others.16 The only function of the government, in such a society, is the task of protecting mans rights, i.e., the task of protecting him from physical force; the government acts as the agent of mans right of self-defense, and may use force only in retaliation and only against those who initiate its use.17 The citizens of a laissez-faire society delegate the use of retaliatory force to the government and thus make domestic peace possible. Of course, in an emergency situation, or when the police are not available, or when there is no time to rely on the government, citizens are morally and legally justified in using retaliatory force as necessary. (If someone comes running at you with a bowie knife, you are morally and legally justified in shooting him.) But in order to live together as civilized beings, rather than as feuding hillbillies, people must leave such force to the government whenever possible. As Rand put it, The government is the means of placing the retaliatory use of force underobjective control.18 In a capitalist society, if someone physically harms a person or damages his property or threatens to do eitherand if this can be demonstrated by means of evidencethen the victim has grounds for legal recourse and, when appropriate, compensation. For instance, if someone defrauds a man, or threatens to murder him, or dumps trash in his yard, or poisons his water supply, or infringes on his patentor in any other way causes him or his property specific harmthen the perpetrator has violated the mans rights. And if the man (or an agent on his behalf) can demonstrate that the perpetrator has done so, then he has a case against the rights violator and can seek justice in a court of law.

Properly understood, capitalism is all about enabling people to act on their own judgment, and to keep, use, and dispose of the product of their effort. It is all about stopping people from physically harming others or their property. It is all about recognizing and respecting individual rights. In other words, it is all about the requirements of human life in a social context. Capitalism is the only social system that permits everyone to act fully according to his own judgment and thus to live fully as a human being. No other social system on earth does this. Thus, if human life is the standard of moral value, capitalism is the only moral social system. Whereas rational egoism guides our choices and actions in pursuit of our life-serving goals and long-term happiness, laissez-faire capitalism protects individual rights by banning the initiation of physical force from social relationships. The two go hand in hand. Egoism makes human existence possible; capitalism makes human coexistence possible. Quoting Ayn Rand: What greater virtue can one ascribe to a social system than the fact that it leaves no possibility for any man to serve his own interests by enslaving other men? What nobler system could be desired by anyone whose goal is mans well-being?19 Rand has much more to say about individual rights and capitalism; I have just touched on her revolutionary principles in this regard. Atlas Shrugged is a hymn to capitalism and the moral foundations on which it depends. And Rands book Capitalism: The Unknown Ideal is a series of essays demonstrating the vital nature of the social system, and blasting common fallacies about it. For a good understanding of the principles of capitalism, I highly recommend both books. Reflecting on what weve discussed so far, Rands morality of selfishness holds that, in order to live as human beings, we must pursue our life-serving values and respect the rights of others to do the same. Put negatively: We must neither sacrifice ourselves to othersnor sacrifice others to ourselves. One of the heroes inAtlas Shrugged put it in the form of an oath: I swearby my life and my love of itthat I will never live for the sake of another man, nor ask anoth er man to live for mine. That is an oath we can all live by. But to do so, we have to repudiate the morality of sacrifice. Rands morality of selfishness is all about living and loving life. It is the morality of pursuing values and refusing to surrender a greater value for a lesser one. It is the morality of non-sacrifice. There is no reason to act in a self-sacrificial manner, which is why no one has ever given a reason to do so. Nor is there any rational justification for sacrificing others, which is why no one has ever offered one of these, either. But there is a reason to act in a self-interested manner: Your life and happiness depend on it.

Since we necessarily operate on a code of values of some kind while making choices in lifesince morality is inescapablehere is the alternative that we all face in this regard: We can passively accept a morality through social osmosisor we can think the matter through for ourselves and decide what makes sense given the observable facts. We can accept appeals to authority, tradition, popular opinion, intimidation, and the likeor we can insist on reasons in support of the morality we choose to accept. In other words, we can rely on the views and opinions of othersor we can rely on the judgment of our own mind. This brings us to the final point I want to make tonightand to what I regard as the single most important aspect of the Objectivist ethics: the principle that you should rely on your own observations and your own use of logic, the principle that you should not accept ideas just because others accept them, the principle that you should think for yourself. Since your mind is your only means of knowledge and your basic means of achieving your goals and values, rational egoism says thatif you want to live and be happy you must never surrender your mind. You must never sacrifice your judgment to anyone or anythingneither to faith, nor feelings, nor friends, nor parents, nor professors, nor Ayn Rand. And no one is more adamant about this than Rand. As she put it, The most selfish of all things is the independent mind that recognizes no authority higher than its own and no value higher than its judgment of truth. 20 This is the Objectivist principle of independence. An independent thinker relies on his own judgment to determine what is true or false, good or bad, right or wrong. He does not turn to others to see what he should believe or value. He may learn from othersif they are rational and have something to teach him. He may take their adviceif it makes sense to him. And he may listen to their argumentsso long as they present evidence for their claims and proceed logically. But he always makes the final judgment by means of his own thinking. In regard to any important issue, he asks himself: What are the facts? What does the evidence say? What do I think? His primary orientation is not toward other peoplenot toward his peers or his parents or his professorsbut toward reality. And his means of assessing reality is his own use of reason. Because rational egoism recognizes that the individuals mind is his basic means of living, it holds rational, independent thinking as the essence of being moral. Unlike altruism, it does not call for you to accept its principles on faith or because others say so. Rational egoism is not a dogma. It is not a set of commandments or categorical imperatives from on high for you to obey. In one of Rands essays, she tells a story of an old black woman who, in answer to a man who was telling her that shes got to do something or other, says, Mister,

theres nothing Ive got to do except die.21 Rational egoism does not say that anyone has got to do anything. It says only that if you want to live and achieve happinessthen you must observe facts, use your mind, pursue your goals, not sacrifice greater values for the sake of lesser ones, uphold the principle of individual rights, and so on. That is not dogma. It is logic. It is recognition of the law of cause and effect. And just as Rands ethics is not dogmaticso it is not relativistic. It is absolute. It is absolute because it is based on and derived from realityfrom observable facts, from the laws of nature, from the requirements of human life. Rand exposed the false alternative of dogmatism vs. relativism. In the light of her philosophy, we are no longer faced with the ugly option of Jerry Falwells morality vs. Jerry Springersor that of Bill Bennett vs. that of Bill Clinton. We now know of an objectiveethics: one that is secular, observation-based, demonstrably trueand, best of all, good for you. If you want to live a wonderful, value-laden life, you need a morality that supports that goal and guides you to act accordingly. You need a morality that upholds the value of rational, self-interested, purposeful action. Rational egoism is the only morality that does so. If you want to live in a society in which you are free to lead your life as you see fita society in which no one, including the government, may force you to act against your own judgmentyou need a morality that is conducive to that goal. You need a morality that provides a foundation for the principle of individual rights. The only morality that does so is the Objectivist ethics. The moral code you accept underlies and shapes everything you do in life. It determines whether you live a richly meaningful, truly happy life or something less. And it determines whether you advocate a fully free, civilized societyor some other kind of society. I have given you just a brief sketch of Rands ethics. There is a great deal more to it. Hopefully, I have inspired you to look further into the subject on your own. I urge you to take a closer look at the morality that says you should live your life to the fullest and achieve the greatest happiness possible. Use your own judgment in assessing it. See if it makes sense to you. Read Atlas Shrugged, which is a spellbinding mystery at the heart of which is the conflict between altruism and egoism. Not only will you discover what happened to the earlier-mentioned disappearing producers; youll also see Ayn Rands ethics dramatized in ways that today will cause a feeling of dj vu. Or, for a nonfiction introduction to rational egoism, read Rands book The Virtue of Selfishness, which is a series of essays elaborating the groundbreaking principles of the Objectivist ethicsor my book Loving

Life: The Morality of Self-Interest and the Facts that Support It, which is a systematic introduction to the ethics. If you are not rationally convinced by the arguments, then do not accept them. To sacrifice your own judgment would be the most selfless thing you could do. I would never advocate such a thingand neither would Ayn Rand. You should accept only those ideas that make sense to you. But if you read up on this issue and are convincedas I think you will bethen you can start living your life fully in accordance with the only moral code that is conducive to that goal: rational egoismthe morality Ayn Rand so appropriately called The Morality of Life. Thank you.

Originally published as a special online article at The Objective Standard. 2009 Craig Biddle. Related Articles in this three part series:

Atlas Shrugged and Ayn Rands Morality of Egoism (Part 1 of 3) Atlas Shrugged and Ayn Rands Morality of Egoism (Part 2 of 3) Atlas Shrugged and Ayn Rands Morality of Egoism (Part 3 of 3)

Endnotes
13 Ibid., p. 126. 14 Ibid., pp. 108110. 15 Ibid., pp. 110113. 16 Ayn Rand, The Voice of Reason (New York: Meridian, 1989), p. 4. 17 Ayn Rand, Capitalism: The Unknown Ideal (New York: Signet, 1967), p. 19. 18 Ibid., p. 19. 19 Ibid., p. 136. 20 Rand, For the New Intellectual, p. 142. 21 Rand, Philosophy: Who Needs It, p. 99.

Why Positive Rights Are Not Rights

(2010.08.08 )

Why Positive Rights Are Not Rights There presently exists a great delusion regarding the subject of rights. The great strides regarding natural rights that have been achieved by the likes of Locke have now been cast aside, in a modern era of entitlement; in an era, indeed, of childish unrealism, and certainly an era of delusion and ignorance. Man has thrown away the idea of inherent rights in order to replace it with the insidious concept that government is that which may grant rights, and in so doing, man has made a grevious mistake, because after all, He who giveth, may taketh away. Now one could easily declare that all things, including rights, are mere constructs of the mind that are meaningless in the objective sense. And such a statement may be true, but if this is the attitude we are to take, then why bother with anything at all? Yes, perhaps all things, including rights, are subjective, but that is no reason to avoid their discussion. And surely rights, of all things, are important to discuss. And while it may be that the premise for all rights is subjective, there is certainly an ability for man, as a rational being, to use logic after the given and come up with the appropriate rights that follow. And this given that we will use must be the principle of self-ownership. Self-ownership is the guiding principle behind all natural rights. It is the basic premise from which natural rights build up, and to deny self-ownership is to advocate slavery, or at least to say that slavery is acceptable. And surely, this is not the case; thus it follows that all individuals own themselves. Now we can accept this as a given, or we may proceed to question why it is a given and attempt to find proof. Indeed, proof for this sort of thing is difficult to come by, because it is a philosophical concept that cannot be proven. However, logic may be used, and conventional morality declares slavery immoral anyway, and hopefully, not too many people do believe that slavery is anything but immoral. It may or may not be a subjective given, but if liberty must be the outcome, then self-ownership must be the guiding principle. Therefore we must accept that self-ownership is a valid and moral principle, and from this guiding principle, our natural rights arise. Our natural rights to life, liberty, and the pursuit of happiness; and our natural rights, therefore, to free speech, freedom of assembly, freedom of movement, and freedom of action, in so far as we do not violate the rights of others. Because self-ownership is the principle, and an individual has natural rights, we are able to conclude that any action which violates the rights of

others is not a moral action; in this way we are able to determine right from wrong. Thus murder is wrong, because you violate the natural rights of another human being in killing them; you violate their right to life. Why does the right to life arise from the principle of self-ownership? The answer is simple, but first, it requires an understanding of what the right to life actually means. The right to life means that your life is your own possession, and that therefore, no man may take your life away from you (it cannot mean, however, that you have the right to the necessities of life, for reasons that shall be revealed later on). This is the sum of your right to life; and it follows that you have a right to life because you own yourself, and as your own property, only you have the authority to end your own life. No other man owns your life in order to take it away from you. Since you have selfownership, you have the authority over yourself, including over your life, and speech and action, in so far as you do not infringe upon the authority of other individuals over their person. It is truly that simple. How can another man take your life when he does not own it? He cannot, without violating your rights. As a conscious, self-aware entity, you own your own mind and person, and by the virtue of that ownership, only you have the authority over your life. Now by the virtue of owning your self, you own your labor, and the fruits of your labor; if another human being owned your labor, then you are a slave, and you do not own yourself, for you have no choice in the matter of your own work and actions. Therefore it must follow that you own your labor, and the fruits of your labor are your property. Now we must determine the conditions that make a right legitimate. The very first question to ask, then, is this: are rights given, or are they inherent? Now since we have established self-ownership, it must follow that rights are inherent. There is no other conclusion to be made without violating self-ownership. If rights are given to you, then they are privileges, as they may be taken away; if rights are given to you, then another human being has the authority over your life as to determine your own rights. This explicitly shows that, if rights are given, men are slaves. Of course, if all men are slaves, we must ask, who is the slave-owner? There can be no answer, and there is no logic with the premise rights are given, so it must follow, by the most simple logic, that rights are inherent. This is the only conclusion consistent with the principle of self-ownership. And one may say oh, but didnt the government give women and slaves rights?. And the answer is no. Government recognized the inherent natural rights of women and slaves; it did not magically endow upon them more humanity, and suddenly bestow rights. Government may not give rights; it can

only protect them, or violate them. Rights must be inherent, if we are to support the principle of self-ownership. Therefore we have established the first condition of a right: all rights are inherent, and are not given or taken. Now this one condition alone is argument enough against positive rights and in favor of negative rights, but for the sake of the argument, more conditions can be delineated. We have already determined that man, as a self-owned being, has the rights to everything in so far as he does not violate the rights of others, as a virtue of his authority over himself (self-ownership). As such, man has the right to speak and think freely, and to act freely (without violating the rights of others, since that would violate self-ownership), and to acquire property as the fruit of his labor, which he owns. The individual alone may determine what the individual will do, again, in so far as he does not violate the rights of others. This, then, is a necessary condition for a right, for nothing may be a right which imposes obligations onto others. This is what separates the right to think and speak freely, which requires nothing from others, and the right to food, which requires an entitlement to the labor of others and obligates them to produce regardless of their personal choice (if they refuse to, they deny you your rights). Furthermore, it logically follows that not only must they produce against their will, but they must do so free of charge; if you pay them, you are paying for a right, and if you pay for a right then it is not a right as it is based upon the condition of payment. Furthermore, the final nail in the coffin is this: we have already established that anything which must be given by others is not a right, for all rights are inherent; thus food, by default, may not be considered a right, and neither can health care or housing or any sort of thing which depends upon production. Rights to goods and services necessarily impose obligations onto others to produce, free of charge, against their will; and this is slavery. And your rights end when they violate the rights of others. If you have the right to the labor of others and thus own others, you are violating their self-ownership. Therefore we have established the second condition of a right: rights must not impose obligations onto others, or require any sort of action on their part, because to require such things violates their rights. Now we must determine the final, and third, condition that is relevant to the subject of rights, and that is, are rights subject to scarcity? It does not follow that anything which

may be rationed, and may be in overabundance or in short supply, should be a right. If rights are rights, all individuals must have them regardless, and thus rationing of rights is simply not possible. It cannot be done, for a right, by its very nature, is not something subject to scarcity in order to be rationed in the first place. And surely, payment for a right is unfair; one shouldnt have to pay for ones rights, either directly or through tax dollars. Thus a right must transcend material goods and services and must be free; otherwise, it is either not a right, or you are proposing that rights may be rationed, and that is a self-evidently absurd proposal. Therefore we have established the third condition of a right: rights must not be dependent upon production, and must not be subject to scarcity. In reality, all of these conditions only support the others; for instance, to say that rights are inherent already implies that they are not subject to scarcity, and require no input from others. However, it is still important to delineate every condition, in order that no collectivist can still argue for positive rights. Negative rights are inherent, natural rights; and real liberty requires only that nobody else violate your rights, and that you live and let live. This is the logical outcome of the principle of selfownership. Positive rights, on the other hand, are not rights at all. Let us use the example of food, although you may substitute any other good or service you deem necessary; anybody who argues that positive rights are legitimate rights must demonstrate a) food is inherent (otherwise you violate the self-ownership principle) b) food requires nothing from others (if it does, you violate their rights by obligating them to work against their will free of charge) c) food is not subject to scarcity (otherwise your rights may be rationed, and this is self-evidently absurd) All proper rights are inherent, and therefore require nothing from others and are not subject to scarcity. Self-ownership, or the authority over yourself as your own property, allows us to figure out what our natural rights are, which no legal right may supercede without violating. Legal rights must protect natural rights, for natural rights must be the moral principles which allow us to differentiate between right and wrong. Live and let live. Now, there are some who will point to the Second Amendment and say But, guns are scarce and must be produced, and arent inherent. This is flawed thinking: the Second Amendment is the right to bear arms. Bearing is an action. The Second

Amendment does not guarantee you a gun at no cost as a birthright; it simply allows you to bear a weapon if you so choose. While the Second Amendment is proper and important, it is questionable whether or not it is necessary. Every individual has the right to acquire property in general, and guns are property; thus, it follows that every individual has the right to own a gun. The distinction for firearms is arbitrary, and the general right to acquire property is enough. In conclusion, rights must be those things which are yours by birth; inherent, and not given; liberty is not given. Liberty arises from the respect of your natural rights, and your natural rights arise from self-ownership. Positive rights are not rights at all, as they are not inherent, and do not respect the rights of others. Therefore, by logic, positive rights cannot be rights. One may argue in the favor of public services, but to call them rights is to cross the line.

Tax Cuts Won't Cut It

PETER SCHIFF (2010.10.18 )

Congressional Republicans and Democrats are engaged in a heated debate over which Americans deserve not to have their taxes raised, with both claiming that some form of tax cut will stimulate the economy. The primary point of divergence is what type of cuts will be most likely to get Americans spending, and whether the wealthy will wastefully save their extra cash or use it to create jobs. This debate is academic. If a stronger economy (rather than pre-election posturing) is really the goal, then tax cuts alone will fail. The real impediment to economic growth is not taxes, but the government spending that makes high taxes necessary in the first place. Given the widespread, but erroneous, belief that spending is the root cause of economic growth (rather than saving and investment), it may shock many to know, especially my fellow Republicans, that of all the three means to finance government taxation, borrowing, and money creation taxation is the least destructive over the long term. I will discuss this topic in depth tonight on the debut broadcast of The Peter Schiff Show, my new weekday radio show on WSTC in Norwalk, CT. Stream it over the Internet from 6pm-8pm Eastern time, every weeknight at www.schiffradio.com. Despite the visceral sting on April 15th, taxes have the virtue of being honest, direct, and most importantly, visible. By transferring purchasing power from one group to another, taxes take a pie that has already been baked and change how it is sliced. But taxes do create dangerous disincentives if they are abused. Raise taxes high enough and societys most productive individuals may stop working; keep raising them, and the public may riot. As a result, a government that relies primarily on taxes tends to be one that lives within its means. Government borrowing, in contrast, doesnt just move money around from one spender to the next; rather, it taps into societys limited store of savings and directs funds away from private investment and towards the public sector. Decreases in the availability of private investment capital, which is where economic growth really comes from, can be extremely destructive over time. Borrowing also adds another cost that taxation doesnt: interest charges. Just as it costs less to buy something with cash than it does to buy it on credit, it costs society less to pay for its government upfront.

Printing is even more insidious. By creating money out of thin air, government debases the currency, stealing from savers and depriving the economy of a stable unit of account. The inflation that results from an expanding money supply distorts all economic activity and discourages the accumulation of future investment capital. However, borrowing and printing have one huge advantage over taxation: they make it much easier to disguise the true cost of government while surreptitiously pushing the burden onto future generations. So while taxes are political poison, borrowing and printing have always been preferred by Washington. Make no mistake, I am against raising taxes. I would prefer cuts in government spending. Yet, after years of lowering taxes, with the illusory hope that one day spending cuts would follow, I think its time we tried another tack. Instead of starving government, which has proven to be a disaster, we should look to transfer more of the current cost of government to taxation, which might finally create the political will to actually cut spending. To really make this strategy fly, we should revise our abominable tax code in a way that is less destructive to the economy. In particular, taxes should not: discourage hard work and risk taking, impede capital formation, impose high costs for computation and enforcement, favor particular groups or activities, or intrude on individual liberty any more than is absolutely necessary. Given these preconditions, I believe a national sales tax would be ideal. If Congress insists on taxing income, then a flat tax (whereby all taxpayers pay the same rate with no special deductions or credits for politically favored expenses) would be best. Unfortunately, we are stuck with the most harmful system of all: a complex, progressive income tax, with lots of politically motivated loopholes, deductions, and credits, that encourages a raft of unproductive activities, and supports an entire class of unneeded service providers to calculate. By failing to address the spending side of the equation, neither the Democrats nor the Republicans current proposals will provide any genuine stimulus. The Presidents version will temporarily increase the purchasing power of the middle class, but the gains will come at the price of larger deficits, bringing larger tax increases down the road. By bringing down savings, which President Obama ironically touts as a benefit, the plan will diminish private investment, thereby slowing job growth. While the Republicans distaste for high taxes is admirable, they fail to see how

increased borrowing or printing is worse. Unfortunately, after having been in the majority for twelve years with nothing to show on the cost-cutting side, those Republicans who do advocate for fiscal prudence have little credibility with the voters. Without corresponding cuts in spending, the full benefits of lower taxes particularly as they apply to the rich will never be realized. In the current environment, extra savings accumulated by the rich are largely invested in government securities rather than private sector ventures. Throwing more money into a government abyss cant help economic growth. Rather than trying to disguise another misguided round of stimulus in the cloak of a tax cut, we should deliver what the economy really needs genuinely smaller government. However, to accomplish this, we need leaders who not only understand economics but have the political will to level with the American people about how much government we can really afford.

You Are Not That Good Why Business Leaders Need Pride, not Humility
JAANA WOICESHYN (2013.07.16 )

Recently I heard a successful CEO tell about an event where he was given an award for his significant accomplishments in business. When the award was being presented to him, his wife who was there next to him, leaned in and said: You are not that good. The CEO thought that this was appropriate, as you should remember where you came from and remain humble. As you can guess if you have been following my blog, I was horrified by the wifes remark at many levels, but lets focus here on why it was morally repugnant and should be dismissed by this and other successful business leaders. What is the premise behind the you are not that good comment when made in the context of recognizing and celebrating someones achievement? It is the belief that we should not feel proud of our accomplishmentsbecause we are really not that good, and it was merely luck or other peoples contributions that got the job done, such as developing a brilliant new product, or turning a company around and generating significant returns to its owners. This premise is of course wrong, and it is particularly hazardous in business. Nothing gets accomplished by mere luck or by some unorganized collective effort. To build and run a successful businessone that produces material valuesrequires leadership. Someone has to take the initiative and the responsibility for getting that job done, and it cannot get done by adhering to the principle of humility. If a leader questions and belittles his own capacity to think, to decide, to delegate, and to get things doneWho am I to know? Who am I to decide? Who am I to tell others what to do?he will not take initiative and make decisions: nothing will get achieved, produced, and traded. Instead of humility that the you are not that good remark is trying to admonish, an effective business leader needs to embrace the moral principle of pride: the policy of doing ones best. The principle of pride counsels moral ambitiousness, applying your mind to its fullest to whichever task or project you take on. It means constantly seeking better ways of doing things, both in lowering costs and in improving product or service quality. Pride as a motivational force and a driver of innovation is required,

not just of leaders but of everyone working in business from the CEO to the mail room clerk, to succeed in the face of competition. But practicing pride is particularly important to those at the top of companies. They are the ones that set the tone and culture of their organizations, affecting the motivation and achievement of all who work for them. Practicing pride provides a psychological reward: self-esteembecause you know you are doing your best. Striving to do your best, you are confident in your minds ability to deal with whatever problems may come and motivated by achieving your values (a successful business, a productive career, or any other accomplishment). This leads to a virtuous circle of continuous pursuit of your best, self-esteem as its reward, and the pursuit of further improvement. Applying the virtue of pride does not mean boastfulness or not acknowledging or claiming credit for other peoples achievements. But pride requires rejecting untrue put-downs such as you are not that good and concluding: I am doing my bestI am good. That is the best way for leaders and those working for them to make their businesses thrive.

Why Are the Intellectuals Views on Self-Interest Wrong?

JAANA WOICESHYN (2013.07.14 )

I have been reading articles about business ethics lately, and to my dismay discovered a common feature: a lack of understanding of self-interest. This is not surprising, given that altruism, the moral code advocating self-sacrifice, dominates the culture. Still, I was hoping that at least some intellectuals writing today would acknowledge alternatives to altruism, such as the common sense view of ethics accepted by most people (those not writing articles about ethics ). The common sense view is that we should live by pursuing our own interests, without hurting others, by physical force or fraud. Most people recognize that if we dont pursue our valuessuch as food, shelter, health, work, recreationwe cannot survive and be happy. The authors of the several articles I read ignored this. Instead, upholding altruism as the moral ideal, they set up self-interest as a straw man. In their view, self-interest means exploiting others, based on the assumption that peoples interests automatically conflict. For example, a CEOs interest to maximize his compensation, the employees interest to maximize theirs, and the shareholders interest to maximize the return on their investment allegedly conflict. Because of this perceived conflict, achieving ones self-interest supposedly requires exploiting others, such as the CEO deceiving the shareholders, or the employees shirking their responsibilities, or the shareholders manipulating the CEO. If peoples interests unavoidably conflict, then pursuing self -interest automatically harms others. The authors of one article went as far as arguing that self-interest that is harmonious with the interests of others is logically impossible. By their logic, giving a raise to an employee is not in the self-interest of a manager (presumably because that will mean less money available to compensate himself). By the same logic, the manager getting a bonus conflicts with the interests of his employees. Not only do intellectuals embrace the straw man view of self-interest; they also evade the true nature of altruism. Instead of recognizing it for what it is (as intended by that codes developers such as August Comte): self -sacrifice for the sake of others as a principle, they promote putting others interests ahead of our own as noble. Never do these intellectuals tell us why it is moral to help others to achieve their values but immoral to pursue our own. Why are the intellectuals views wrong? The idea that peoples interests automatically conflict and that pursuing self-interest means exploiting others is truly a straw man. It

completely misses what self-interest actually means: pursuing ones valuesvalues that meet the requirements of human survival and flourishing. Pursuing self-interest is absolutely necessary if we want to survive and flourish, and most people know that simply from observation. Exploiting others through force or fraud is not in our self-interest. Such action would invite others to do the same or get justice through the legal system, thus jeopardizing our values. Even if we derived some temporary gain, say, from deceiving others, such a gain would not be sustainable, as any pyramid investment schemer or other fraudsters eventually learn. As shown by Ayn Rand, peoples rational interests do no not conflict. Giving a raise to a productive employee does not conflict with the interests of the manager or the shareholders. Quite the contrary, it benefits them if the raise keeps the employee motivated and deters him from joining a competitor. As a consequence, the company will create more value, making possible a bonus to the manager and dividends to the shareholders. A bonus to a deserving manager would similarly promote the interests of the other parties. Also, only by evading the self-sacrificial nature of altruism can anyone embrace it as the moral ideal. It is altruism not egoism that is destructive. By advocating putting others interests always first, it prevents us from achieving our self-interest: well-being and happiness. Despite the common sense view of ethics, many people do not question what the intellectuals, including religious leaders, teach and end up feeling guilty because they are not able to put others ahead of themselves on principle. Nobody can live by the opposite principles of the common-sense morality and of altruism. Ironically, it is not altruism but the morality of self-interest that makes genuine benevolence and kindness possible. Only when people are free and their rights are protected against exploiters, can they seek their own interests and flourish and thus be able to help those deserving help when the need sometimes arises. If we want to survive and flourish, we must reject altruism and study, understand, and adopt self-interest instead.

Bit by Bit Strategy

WALTER WILLIAMS (2013.07.07 )

Theres a move on to prohibit Washingtons football team from calling itself Redskins, even though a 2009 U.S. Supreme Court decision said that it has that right. Now the name change advocates are turning to the political arena and intimidation. The NCAA has already banned the University of North Dakota from calling its football team the Fighting Sioux. This is the classic method of busybodies and tyrants; they start out with something trivial or small and then magnify and extend it. If these people are successful in banning the use of Indian names for football teams, you can bet the rent money that wont end their agenda. Our military has a number of fighting aircraft named with what busybodies and tyrants might consider racial slights, such as the Apache, Iroquois, Kiowa, Lakota and Mescalero. We also have military aircraft named after animals, such as the Eagle, Falcon, Raptor, Cobra and Dolphin. The people fighting against the Redskins name might form a coalition with the PETA animal rights kooks to ban the use of animal names. Another example of the strategy of starting out small is that of the tobacco zealots. In 1965, in the name of health, tobacco zealots successfully got Congress to enact the Cigarette Labeling and Advertising Act. A few years later, they were successful in getting a complete smoking ban on planes, and that success emboldened them to seek many other bans. The issue here is not smoking but tyrant strategy. Suppose that in 1965, the tobacco tyrants demanded that Congress enact a law banning smoking in bars, in workplaces, in restaurants, in apartments, within 25 feet of entrances, in ballparks, on beaches, on sidewalks and in other places. Had they revealed and demanded their full agenda back in 1965, there would have been so much resistance that they wouldnt have gotten anything. By the way, m uch of their later success was a result of a bogus Environmental Protection Agency study on secondhand smoke. Id like to hear whether EPA scientists are willing to declare that people can die from secondhand smoke at a beach, on a sidewalk, in a park or within 25 feet of a building. During the legislative and subsequent state ratification debates over the 16th Amendment which established the income tax the political task of overturning the Constitutions prohibition of such tax was considerably eased b y political promises that any income tax levied would fall upon only the wealthiest 3 to 5 percent of the population. Most Americans paid no federal income tax, and those earning

$500,000 or more paid only 7 percent. In 1913, only 358,000 Americans filed 1040 forms, compared with todays 140 million. Thats the rope -a-dope strategy. To get the votes of the masses, politicians start out small and exploit the politics of envy by promising that only the rich will be taxed. In 1898, Congress imposed a temporary federal excise tax on telephones as a revenue measure during the Spanish-American War. At that time, only the rich owned phones. Soon nearly all Americans owned phones. Both the rich and the poor paid the telephone excise tax. Congress repealed this temporary Spanish-American War tax in 2006. Nobel laureate Milton Friedman had it right when he said, Nothing is so permanent as a temporary government program. The Tax Reform Act of 1969, called the alternative minimum tax, was created to raise revenue from 155 rich Americans who legally avoided federal income taxes by buying tax-free municipal bonds. Today more than 4 million Americans are hit by the AMT, and most of them hardly qualify as rich. Heres another rope-a-dope just beginning. The National Transportation Safety Board recently recommended that states reduce the allowable blood alcohol content by more than a third to 0.05 percent, as opposed to todays 0.08 percent. The NTSB is calling it a recommendation just to test the waters. If the board d oesnt see resistance, its next move will be to threaten noncomplying states with a cutoff of highway construction funds. Setting the legal limit at 0.05 percent is not these peoples end objective. Their end objective is to outlaw any amount of alcohol in the blood while one is driving.

Distrusting Government
WALTER WILLIAMS (2013.07.05 )

Recent opinion polls demonstrate a deepening distrust of the federal government. Thats not an altogether bad thing. Our nations founders recognized that most human abuses are the result of government. As Thomas Paine said, government, even in its best state, is but a necessary evil. Because of their fear of abuse, the Constitutions framers sought to keep the federal government limited in its power. Their distrust of Congress is seen in the governing rules and language used throughout our Constitution. The Bill of Rights is explicit in that distrust, using language such as Congress shall not abridge, shall not infringe and shall not deny and other shall-nots, such as disparage, violate and deny. If the framers did not believe that Congress would abuse our God-given, or natural, rights, they would not have provided those protections. Ive always suggested that if we see anything like the Bill of Rights at our next destination after we die, well know that were in hell. A perceived need for such protection in heaven would be an affront to God. It would be the same as saying we cant trust him. Other framer protections from government are found in the Constitutions separation of powers, checks and balances, and several anti-majoritarian provisions, such as the Electoral College, the two-thirds vote to override a veto and that two-thirds of state legislatures can call for reconvening the constitutional convention, with the requirement that three-quarters of state legislatures ratify changes to the Constitution. The heartening news for us is that state legislatures are beginning to awaken to their duty to protect their citizens from unconstitutional acts by the Congress, the White House and a derelict Supreme Court. According to an Associated Press story, about four-fifths of the states now have local laws that reject or ignore federal laws on marijuana use, gun control, health insurance requirements and identification standards for drivers licenses. Kansas Gov. Sam Brownback recently signed a measure threatening felony charges against federal agents who enforce certain firearms laws in his state. Missouri legislators recently enacted the Second Amendment Preservation Act, which in part reads that not only is it the right of the state Legislature to check federal overreaching but that the Missouri general assembly is duty-bound to watch over and oppose every infraction of those principles which constitute the basis of the Union of the States, because only a faithful observance of those principles can

secure the nations existence and the public happiness. The bill further declar es that the Missouri General Assembly is firmly resolved to support and defend the United States Constitution against every aggression, either foreign or domestic. The legislation awaits Gov. Jay Nixons signature or veto. Both lower houses of the South Carolina and Oklahoma legislatures enacted measures nullifying Obamacare on the grounds that it is an unconstitutional intrusion and violation of the 10th Amendment. You might say, Williams, the U.S. Supreme Court has ruled Obamacare constitutional, and that settles it. Federal law is supreme. Its worth heeding this warning from Thomas Jefferson: To consider the judges as the ultimate arbiters of all constitutional questions (is) a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Jefferson and James Madison, in 1798 and 1799 in the Kentucky and Virginia Resolutions, said, Resolved, That the several States composing, the United States of America, are not united on the principle of unlimited submission to their general government and whensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and of no force. In other words, heed the 10th Amendment to our Constitution, which reads, The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. Thats the message state legislatures should send to Washington during this years celebration of our Declaration of Independence.

End Compulsory Education

EDWARD CLINE (2013.07.19 )

My formal education effectively ended in the eighth grade. I attended a Catholic parochial school for eight years. I do retain memories of that experience, some of them not so fondly but now recalled with humor. One is of a nun aptly named Sister Barbarossa, of the order of St. Joseph, a six-foot-plus ogre tough enough to beat up the schools football players, and with a permanently red face that reflected a high blood pressure problem, congenital anger, or constant inebriation. She would persecute the disobedient and dream up unusual punishments. She often whacked my knuckles with a wooden ruler for doodling instead of studying, and many times made me sit in the leg space beneath her desk and kicked me with her brogans. Another nun, Sister Angela, one day decided to introduce the notion of government to our seventh grade class. We would elect a class president by secret ballot. I thought so little of the idea I couldnt imagine what benefit there was in having a pretend president that on my ballot I entered the name of a classmate who was as dumb as a doorknob (I dont think he could even read) and given to epileptic fits and whom wed been instructed to be kind to. When he had a seizure, he would foam at the mouth and it would take six of us to hold him down because he would acquire the strength of two Sister Barbarossas. In any event, Sister Angela grew red in the face when she read my ballot. Who, she demanded, put Roberts name on this ballot??? The class gasped as one. Robert, who as a rule sat like a vegetable at his desk, seemed to smile. But, then, he always seemed to be smiling. Without a tinge of guilt, I raised my hand. Sister Angela chewed me out, and subsequently informed my parents of my act of cruelty. My parents chewed me out, and sent me to my room without dinner. (Steadfast Catholics, in a later year they burned my small library after I declared my atheism, but thats another story.) Still, for all that, I learned how to read, write and cipher (that is, do math). I learned something of American history, world geography, absorbed dollops of science, and I excelled in art. I was drawing three-dimensional human objects when everyone else was stuck on stick figures. However, I remember nothing of the mandatory religious instruction, except that it employed rote memorization, which I was never good at. The money set aside to send me to a Catholic boys high school was eaten up by hospital expenses for my grandparents after they were in a car accident. I dont know if I should be grateful for that accident, to judge by stories Ive heard about such

schools. But not attending school was not an option. Parents were obliged to send their kids to some school, regardless of its quality or reputation. So I wound up going to two free albeit taxpayer supported public high schools, where I effectively learned nothing of value but gained a distaste for public schools which I have since honed into utter contempt. Memories? Among many others, my U.S. history teacher would hold bull sessions to ponder hypothetical questions such as: If all the guns fired during World War II were fired simultaneously in the same direction, would it alter the rotation of the earth? My world history teacher would have the class dress in the national costume of a country and sample its cuisine, with a desultory mention of the countrys history. My English teacher would lecture the class on sentence structure, grammar, and parsing in such an incomprehensible and drill sergeant manner that Im still recovering. My chemistry teacher would chalk equations on the blackboard to solve as homework, but then talk to us about honesty, ethics, and how great a man was Franklin D. Roosevelt, without once instructing us on what the symbols and numbers meant. My high school years spanned the early 1960s. As I later learned, John Dewey was the principal-at-large in both schools and his anti-intellectual, anti-mind pedagogical philosophy reigned supreme and unopposed even then. I shudder to think what public high school students must endure today. If Americans acquire any real-world smarts, it is only after they have left school and escaped the brow-beating cajolings and ministrations of teachers dedicated to indoctrinating students to become selfless, tolerant, non-judgmental, and self-sacrificial good citizens. On July 12th, State Senator Aaron Osmond of Utah called for the end of compulsory education. The idea of forcing children to attend school is outdated and should be scrapped in favor of a system that encourages learning by choice, state Sen. Aaron Osmond said in calling for an end to compulsory education in Utah. Some parents act as if the responsibility to educate, and even care for their child, is primarily the responsibility of the public school system, the South Jordan Republican first wrote on a state Senate blog on Friday. Moreover, Osmond noted that: As a result, our teachers and schools have been forced to become surrogate parents, expected to do everything from behavioral counseling, to providing adequate

nutrition, to teaching sex education, as well as ensuring full college and career readiness. Opposition to the idea was immediately voiced by a state educator: State School Board member Leslie Castle said she agrees that schools have become burdened with nonacademic responsibilities, like daily nutrition, basic health screenings and behavioral counseling. But the reality of Utahs increasingly diverse population is that many children require those services. She said because of compulsory education, teachers and educators are typically the first to see evidence of trouble at home, from abuse to malnourishment. Without the requirement to attend school, or if nonacademic services were removed from the public education system, it would be necessary for the state to create some other form of publicly funded service to fill that role. I had to laugh when I read that teachers and educators are typically the first to see evidence of trouble at home. Trayvon Martin, the child shot by George Zimmerman in self-defense, was trouble looking for punching bag, preferably a human one. What did his public school or his parents do about his nonacademic problems? School suspensions, slaps on wrists, behavioral counseling, and impotent finger-wagging. Senator Osmonds position on compulsory education is laudable. But it fails to address the issue of why schooling is compulsory. What, after all, is the premise behind the forced education of children? Are children wards or the responsibility of the state (or of society), or are they the responsibility of their parents. In short: Who owns them? Logically, no one, not even the parents. But parents are responsible for bringing a child into existence, and for its education. They are responsible for preparing their children to live as rational, responsible adults. Public school educators could make that same claim, citing the need for a civil society of a population of rational, responsible adults and that compulsory schooling was the best answer to that need, because the state had the facilities and resources to address a multitude of issues. And Ive never read of any public school advocate say that without qualifying the claim by including some form of collectivist virtue that should be imbued in children as well as in the parents. And where do those facilities and resources come from? From taxpaying parents, and also from taxpaying individuals who have no children to send to any school, public or private. Individuals produce children. Governments do not. There is no such

thing as a government-run stud farm (or a Huxleyian Brave New Worldhatchery) that produces children who automatically become the responsibility of the state, which nominally owns them after parents waive custody of their offspring. Governments do not even produce children in the most collectivist, totalitarian countries. Parents do. All the state can do, whether it is totalitarian or democratic in nature, is appropriate children for the states purposes. Whether or not those purposes are benign or malign, is irrelevant. Nor do state-run orphanages own the children in them. Such institutions are inappropriately charged with the responsibility of sheltering and feeding children left parentless. State-run orphanages and state-run educational systems grew and spread in direct proportion to the growth and scale of taxation and expropriated private wealth. Privately owned orphanages, run as voluntary charities, and private schooling, have diminished in direct proportion to state interference and state intervention in the private sector. Together with public school teachers unions and our left -leaning news media, the state is a natural enemy of private education, and especially of homeschooling, because children being educated by their parents are removed from the states power to mold and shape children according to its collectivist notion of a good citizen. In April, Melissa Harris-Perry of MSNBC expressed that idea in a controversial commercial: MSNBC host Melissa Harris-Perry recorded a commercial for the network in which she stated that children do not belong to their parents, but are instead the responsibility of the members of their community. We have never invested as much in public education as we should have because weve always had kind of a private notion of children. Your kid is yours and totally your responsibility. We havent had a very collective notion of these are our children, she says in a spot for the networks Lean Forward campaign. So part of it is we have to break through our kind of private idea that kids belong to their parents, or kids belong to their families, and recognize that kids belong to whole communities. Harris-Perry ropes everyone into a community organizinggestalt to overcome that private idea and bolster the collective notion of mutual responsibility for children between parents, the state, and the community. Harris -Perrys notion is frankly Nazi in essence and in practice.

The travails of a homeschooling German family who applied for asylum in the U.S. to escape the punitive measures of a government aggressively hostile to homeschooling, are a case in point. The government, specifically Attorney General Eric Holder, opposed granting the family asylum because the benefits to society of public education trump individual rights and parental controls, values and discretion. The family is evangelical Christian and the parents wish to imbue their children with Christian values, but that is irrelevant. Holder and the Justice Department would oppose, for the same reasons, the homeschooling of children by their atheist parents, as well. In May the family lost an appeal to remain in the U.S. The Justice Department said German laws outlawing homeschooling do not constitute persecution and they want a German homeschooling family kicked out of the United States, according to a briefing filed in a high profile asylum case. The goal in Germany is for an open, pluralistic society, the Justice Department brief states in their battle against the Romeike family. Teaching tolerance to children of all backgrounds helps to develop the ability to interact as a fully functioning citizen in Germany.Germany has a national law requiring children to either attend public school or a government-approved private school. The Romeikes had already been fined and German police once forcibly escorted their five children to school. They were notified that they could ultimately lose custody if they continued to home school. Persecution by the German government in the form of fines, jail, and loss of custody of the children by the parents, was not reason enough to grant the Romeikes permanent asylum, the court decided. The Romeikes fled Germany in 2008 when they were subjected to criminal prosecution for homeschooling, which is largely illegal in their country. In 2010, however, the family was granted asylum by Immigration Judge Lawrence O. Burman, whose decision was overturned by the Board of Immigration Appeals in 2012. A three-judge panel of the Sixth Circuit heard the Romeikes appeal on April 23rd and issued a unanimous decision against the family. In its decision, the court said that the Romeikes had not made a sufficient case and that the United States has not opened its doors to every victim of unfair treatment. While the court acknowledged that the U.S. Constitution recognizes the rights of parents to direct the education and upbringing of their children, it refused to concede that the threats of heavy fines or loss of custody of their children by German

authorities if the Romeikes refused to send their children to government schools were enough to classify them as a persecuted group and warrant asylum in the United States. Petitions to the White House to allow the Romeikes to remain in the land of the free will undoubtedly be ignored. Since when did President Obama care about individual rights? Hed look at a child and say to the parents, You didnt build that. Todd Starnes of Fox News reveals the collectivist alliance between our Justice Department, our courts, and the German courts. In their latest court briefing, the Justice Department referenced international court rulings that held parents could not refuse the right to education of a child on the basis of the parents convictions, because the child has an independent right to education. They [the court] also referenced a German court ruling that states the general public has a justified interest in counteracting the development of religiously or philosophically motivated parallel societies and in integrating minorities in this area. Of course the German government is against the development of philosophically motivated parallel societies except for the viral Islamic one that is growing right under its nose, complete with its own philosophical motive of imposing Sharia law on all Germans. Daniel Greenfield in his Front Page article cites the Justice Departments collectivist position: The goal in Germany is for an open, pluralistic society, the Justice Department brief states in their battle against the Romeike family. Teaching tolerance to children of all backgrounds helps to develop the ability to interact as a fully functioning citizen [ sic] in Germany. Except when the fully functioning citizen (whatever that might mean in Germany) is being harassed and raped by Muslims and taxed by the government to support statesupported Muslims-only schools and cultural programs. Here in the U.S., to teach tolerance to the plane loads of intolerant Muslims being imported into the U.S. by President Obama and his cronies (as refugees seeking asylum from their Islamic hellholes) would be deemed racial or religious profiling and highly offensive to Muslim convictions, and that wouldnt be, well, tolerated, either. The best solution will go Senator Osmond one better: Get the government out of education altogether, repeal all compulsory education laws, auction off all state or

government schools (including universities), and return the educational custody and responsibility where they belong morally and politically: to parents.

Make Me Comfortable
MICHAEL J HURD (2013.08.14 )

Socialism needs democracy like the human body needs oxygen, said the famous Marxist, Leon Trotsky. Trotsky was right. Although democratic vote (in a republic) does not necessarily have to mean socialism, socialismby definitionfeeds off the mob rule of the majority. Weve seen it throughout world history, and we now see it has happened to the United States, as well. A majority of people will always say they want freedom. However, the way most people conceive of freedom is not what freedom actually is. Most people see freedom as a kind of comfort. If I dont have all the things I basical ly want and needwell, Im not free. This is a reflection of how most people feel, and probably what most people would say, explicitly, is true. But comfort is not freedom. A guarantee of comfort requires someone else to do something for you. Why? Because theres simply no other way to guarantee comfort, if youre not going to do it yourself. In a democracy, the majority of people vote for what makes them most comfortable. If a majority decide they want to be guaranteed health care, then they will vote for a right to health care. Granted, Obamacare isnt very popular, because people perceive it as bringing some discomfort. But theres no question that the overall thrust of Obamacarehealth care is a right, and everyone is entitled to it, no matter whatis something the majority will vote for, every time its offered. Opponents of Obamacare dont say, You have no right to health care. Having a right to health care means youre coercing someone else to pay for it; that coercion violates their rights and freedom. This is something youll never, ever hear. Instead, you only hear, Obamacare is bad because it makes you uncomfortable. The implication is that you have a right to comfort, but Obamacare is not the way to go about it.

Ditto with any other right which is manufactured first by socialist intellectuals, and then by politicians who get elected on the premise that their job is to make people comfortable. Confusing comfort with rights is what socialism doesand what democracy makes possible. People will generally resist socialist dictators imposing their own good on them. Thats why Nazism (i.e. National Socialism) and ultimately even Communism collapsed. These were forms of socialism imposed from above. People loved and still lovewhat they thought were socialist ideals, but dictatorship proved too high a price. At the core, I dont think most people wantor ever wanteddictatorship. Theyd rather impose dictatorship on each otherwithout having to call it dictatorship. Thats where democracy comes in. Democracy allows the voters to utilize some segment of the population to make life comfortable for them. Why? Because theyre entitled to that comfort. How so? Because some are perceived as more comfortable than they are; and the role of government is to make things equal, right? Thats not what freedom is. Thats not what liberty is. Liberty refers to a state in which youre free to do whatever you wish, so long as you leave others alone. Leaving others alone means never imposing coercion (including fraud) on another. At that point government must step in, but only at that point. That was the standard of the original American republic. Americas founders actually took it for granted as the standard, and hoped it would be the standard going forward. You can see that in their writings. Unfortunately, that standard is long gone. If you told the average voter todayeven the average RepublicanYou have no right to anything, other than to be left aloneyoud be greeted with a blank, if not hostile, expression. In the hearts of most people, liberty and individual rights are dead. This is because the concept does not even exist in most peoples minds. Depressing? Yes, in a way. But if you actually have a concept of what freedom and liberty are, never fear. They are powerful concepts, because they are true. The more human beings move away from those concepts completely, the less comfortable their lives will become.

Were already seeing that happen. Witness the lack of economic growth and the troubling national debt. Witness Obamacare. Witness rising taxes and regulations leading businesses not to hire. Watch how little innovation we see as freedom rationally definedbecomes scarcer. People are going to miss these things. Therein lies the opportunity to demonstrate the power of freedom and liberty. You want those things back? You want life as your parents knew it? With innovation and change for the better every single decade? Youll have to understand what freedom really is. Capitalism, profit, technology, individualism, individual rights, private property it may be fashionable to hate these things (at least in front of your friends), but in reality you need them more than you know. Nothing speaks more powerfully than the absence of something valuable. Those of you who keep voting for comfort disguised as freedom watch and learn.

The Immorality of the Nanny State

JAANA WOICESHYN (2013.08.07 )

When we hear about yet another intrusion of government in our livessuch as the regulation of food trucks in Canadian citieswe often just shrug and dismiss the regulation of the nanny state as an inconvenience or an annoyance. But the nanny state is not merely posing an inconvenience with its regulations based on the logic that the government knows best. The nanny state regulations violate our right to choose how to live our lives; therefore, they are immoral. Take the example of the food truck industry in Canada. City governments control it, and in many places the consumers have been protected against food trucks until recently. For example, in Montreal they were banned altogether for more than 60 years and are operating there now on a pilot basis. The city government appointed a committee to determine which trucks would be licensed, on the criterion of reflecting Montreals gourmet image and of added value to existing supply. A city councilor was quoted as saying: We dont want traditional pretzels, with onion rings, hot dogs, hamburgers and chicken wings. We want something more refined. One coffee truck was denied a license on the grounds of not being gourmet enough and of the abundance of coffee shops downtown. One objector to food trucks, a representative of the restaurant industry in the city, argued that people should buy their food and coffee from existing restaurants. Besides deciding who gets a food truck license, the city governments also regulate where the trucks can operate, when they must close, what type of food they must serve, and even from what part of the truck to serve. In Toronto, new trucks are only allowed to operate in a few parks, so as not to pose competition to existing restaurants. In Vancouver, the city hall dictates that food truck fare must be nutritionally balancedfor example, fish and chips must be served with a saladand must approve any major menu changes. The city council has also determined that Vancouvers downtown is saturated, and all new trucks are sent to outlying areas. Presumably, all these regulations of the food truck industryor any other industry (for another incredible example, see the story about hair salon regulations in Quebec)are put in place by the government as the concerned nanny who wants to protect everyone. The consumers are allegedly protected against unrefined and nutritionally unbalanced foods such as hot dogs and onion rings, and restaurants and food trucks are protected against too much competition. However, such protection is immoral because it violates citizens individual rights. For us to survive and flourishto live the best possible, happiest life we canwe must be free to

choose our own values. If we cannot choose a career we want, to run a business we want, to sell and buy foods we want because of government regulations, we are not achieving our values. The pre-requisite of achieving values and happiness is freedom. It is the governments jobits only proper functionto protect that freedom by recognizing and enforcing individual rights. By adopting the role of the nanny, it is doing exactly the opposite. We do not need protection against our own choices or competition. The best regulation of business and the best protector of consumers is t he free market. The rejected coffee truck applicant in Montreal, Chrissy Durcak summed it up in her comment (quoted in the National Post article in the link above): The market will regulate itself. If there is a good food truck, there will be lineups no matter where it is. People will find it The city shouldnt be trying to mandate what is gourmet or not. The free market, in which the governments only role is to protect individual rights against force or fraud, is also the best protector against unscrupulous businesses that are trying to sell subpar or tainted goods. Such companies will either fail to get customers or be prosecuted for fraud by the government, or both, and go out business. The free market encourages competition, which gives consumers the most choice. Competing companies keep innovating, and both consumers and business benefit from the value being created. To make markets free, we must fire the immoral nanny state and restore the only proper role of the government: protection of individual rights.

Would They Be Proud? No Need For a Conversation with Whites on Race

WALTER WILLIAMS (2013.08.06 )

One cant imagine the fear in the hearts of the parents of those nine black students who walked past shouting placard-carrying mobs as they entered Little Rock Central High School in 1957. Each day, they were greeted with angry shouts of Two, four, six, eight, we dont want to integrate. In some rural and urban areas, during the school desegregation era, parents escorted their 5- and 6-year-old children past crowds shouting threats and screaming racial epithets. Often there were Ku Klux Klan marches and cross burnings. Much of this protest was in the South, but Northern cities were by no means exempt from the turmoil and violence of school desegregation. Most of the parents and civil rights leaders whose sacrifices and courage made todays educational opportunities possible are no longer with us. My question is: If they could know what many of todays black youngsters have done with the fruits of their sacrifice, would they be proud? Most schools identified as persistently dangerous are predominantly black schools. To have a modicum of safety, many schools are equipped with walk-through metal detectors, security cameras and conveyor belt X-ray machines that scan book bags and purses. Nationally, the black four-year high-school graduation rate is 52 percent. In some cities, such as Detroit and Philadelphia, its considerably lower 20 percent and 24 percent, respectively. In Rochester, N.Y., its 9 percent. What black politicians, parents, teachers and students have created is nothing less than a gross betrayal and squandering of the struggle paid in blood, sweat and tears by previous generations to make possible the educational opportunities that were denied to blacks for so long. Born in 1936, Ive lived during some of our racially discriminatory history. I recall being chased out of Fishtown and Grays Ferry, two predominantly Irish Philadelphia neighborhoods, with my cousin in the 1940s and not stopping until we reached a predominantly black North Philly or South Philly neighborhood. Today that might be different. A black person seeking safety might run from a black neighborhood to a white neighborhood. On top of that, today whites are likely to be victims of blacks. According to the Bureau of Justice Statistics 2008 National Crime Victimization Survey, in instances of

interracial crimes of violence, 83 percent of the time, a black person was the perpetrator and a white person was the victim. Most interracial assaults are committed by blacks. Whats worse is therere blacks still alive such as older members of the Congressional Black Caucus, NAACP and National Urban League who lived through the times of lynching, Jim Crow and open racism and who remain silent in the face of the current situation. After the George Zimmerman trial, in cities such as Baltimore, Los Angeles, Milwaukee, Chicago and New York, there have been a number of brutal revenge attacks on whites in the name of justice for Trayvon. Over the past few years, there have been many episodes of unprovoked attacks by black gangs against white people at beaches, in shopping malls, on public conveyances and in other public places in cities such as Denver, Chicago, Philadelphia, New York, Washington and Los Angeles. Theres no widespread condemnation, plus most of the time, the race of the attackers was not reported, even though media leftists and their allies are experts in reporting racial differences in everything else. Would those black Americans who fought tooth and nail against Jim Crow, segregation, lynching and racism be proud of the findings of a recent Rasmussen poll in which 31 percent of blacks think that most blacks are racists and 24 percent of blacks think that most whites are racists? Among whites, in the same Rasmussen poll, 38 percent consider most blacks racist, and 10 percent consider most whites racist. Black people dont need to have a conversation with white people on matters of race. One first step would be to develop a zero tolerance for criminal and disruptive school behavior, as well as a zero tolerance for criminal behavior in neighborhoods. If city authorities cannot or will not provide protection, then law-abiding black people should find a way to provide that protection themselves.

Ending Poverty
JAANA WOICESHYN (2013.08.03 )

In a recent column Andrew Coyne reported on a newly released statistic: Canadas poverty rate had almost halved in 15 years since 1996, suggesting that such news would be a cause for celebration. However, this drop in poverty is not good enough for the anti-poverty NGOs. In published commentary and letters to the editor, their members demanded commitment and concrete action by the federal government to end poverty, now, for the four million Canadians who according to these writers are afflicted by it. Without getting into the definition of the poverty line (there seems to be a whole industry focused on it), lets ask: how can we end poverty, not just in Canada, a relatively wealthy industrialized country, but anywhere in the world? While recognizing that there is no magic wand to wipe out poverty overnight, I will argue that it is possible to end poverty and increase prosperity for everyone. It will indeed require commitment by the governmentalbeit undoubtedly a very different kind from what the anti-poverty activists envision. To end poverty, we must first ask what it takes to create wealth. Wealth does not grow on trees, nor can governments create it by printing money. Wealth is created through production and trade of goods and services by business firms: the Apples, the Samsungs, the Mercks, the Wal-Marts, the Ryanairs, the Hyundais of the world as well as by millions of other, less known companies. The single most important requirement of wealth creation is freedom. For efficient wealth creation, companies need free markets without government interference. If the government imposes a multitude of regulations even before a business can be started (try starting a restaurant anywhere in Canada today), restricts who it can hire, how it can finance itself, and what, where and when to sell its products and services, and engages in cronyism, wealth creation is hampered and poverty perpetuated. If, on the other hand, businesses are free to produce, trade and compete, they come up with innovative new products, services and processes (think smart phones, tablets, 3-D printers, life-saving medicines, time-saving software apps, streamlined supply chains, value co-creation with suppliers and customers)and create wealth for their owners. This wealth gets invested, either in growing the business or other businesses, thus creating opportunities for others, in the form of jobs, better and cheaper products, start-up capital, etc. Everybody is better off, as these opportunities multiply and the standard of living increasesand poverty decreases.

Making wealth creation and poverty reduction possible requires a specific commitment from governments: they must grant individuals and markets freedom. In Canada, like in most welfare states today, this requires concrete action: the dismantling of the elaborate system of business regulations, subsidies, and cronyism. This is a significant task and has not been pursued by the current conservative government, despite of original election promises. However, it is possible (many of the Nordic countries and New Zealand are positive examples of the right direction), and necessaryif ending poverty is the goal. (Under a capitalist system of freedom, governments would retain one crucial role: the protection of individual rights against the initiation of physical force and fraud. This is necessary for peaceful, just functioning of free markets.) The anti-poverty crusaders would not be satisfied with such a free-market solution to ending poverty. They do not just want to end poverty; they demand income equality. (Click here for a post on income inequality.) Their preferred solution is to redistribute income (by force, through progressive income taxes) from those who create wealth to those who dont. However, such a method will not end poverty. Why? People have different levels of ability, intelligence, and most importantly, motivation. They will make different choices. Even if all the currently existing wealth was divided evenly among the people of the world today, it would not remain even for long; some people would soon be wealthier and some poorer. If we want to end poverty, we must not punish the producersthe wealth creatorsthrough various redistribution schemes. Instead, we must encourage them by making them free to produce and trade. A system of freedom, capitalism, will end poverty and benefit everyone, even the least productive.

The Half Full Economy

PETER SCHIFF (2013.08.17 )

The marginal economic strength that was described in the most recent GDP release from Washington has caused many to double down on their belief that the Federal Reserve will begin tapering Quantitative Easing sometime later this year. While I believe that is a fantasy given our economys extreme dependence on QE, market observers should have learned long ago that the Bureau of Economic Analysis (BEA) initial GDP estimates cant be trusted. A perusal of their subsequent GDP revisions in the last five years reveals a clear trend: They are almost twice as likely to revise initial estimates down rather than up, and the downward adjustments have been much larger on average. As a result of this phenomenon, an overall optimism has pervaded the economic discussion that has consistently been unfulfilled by actual performance. The government is continuously over promising and under delivering. Unfortunately, no one seems to care. Measuring the size of the economy accurately in anything close to real time is difficult, inexact, and messy. That is why the BEA has long pursued a policy of initial quarterly estimates (known as the advanced estimate), followed by two or three subsequent revisions as more thorough analysis comes to bear. The first estimates come out about a month after the conclusion of a particular quarter. The second and third revisions then come in monthly intervals thereafter. But in the minds of the media, the public and the politicians, the initial report carries much more weight than the revisions. It is the initial report that attracts the screaming headlines and sets the tone. The revisions are typically buried and ignored. This creates an unfortunate situation where the initial estimates are both the most important and the least reliable. However, logic would dictate that revisions would fall equally in the up and down categories. After all, government bean counters are expected to report objectively, not to create a narrative or manage expectations. If anything, I believe that the public would be better served if they would adhere to the conservative playbook of under promising. That is exactly what they seemed to be doing before the economic crash of 2008. From 2002 to mid-summer 2008, the BEA revised initial GDP estimates a total of 25 times, 80% of which (20 revisions) were higher than their initial estimate. However, the average amplitude of the upward and downward revisions were equal at .5%. The difference may have been a function of the relatively strong economy

that the nation saw over that time (which I believe was a result of the unsustainable and artificial housing boom). See the chart below. But since mid-2008 we have seen a very different story. 67% of the revisions (12 of 18) have been downward, and those adjustments have been, on average, 50% larger than the upward revisions (.75% vs. .5%). Heres another way of looking at it: Since mid-2008, revisions have shaved a total of 6 points of growth off the initial estimates. This works out to be an average of 1.3 points of growth per year that some may have expected but that never actually happened. The pattern of early optimism may stem from the lack of understanding in Washington about how monetary stimulus actually retards economic growth. Many of the statisticians may be former academics who take it as gospel that government spending and money printing create growth. As a result, they expect the initial boost created by stimulus to be sustainable. The evidence suggests that it is not. But there can be little doubt that these overly optimistic projections have worked wonders on the public relations front. The big Wall Street firms and the talking heads on financial TV set the tone by jumping on the new releases and ignoring the revisions to prior releases. That is precisely what happened last week when the better than expected 1.7% growth in 2nd quarter GDP overshadowed the .7% downward revision to 1st quarter GDP from 1.8% to 1.1%. The initial estimate for 1st quarter GDP, released back in April, was 2.5%. Since the consensus expectation for 2nd quarter GDP was just 1%, the media jumped all over the good news, while ignoring the revisions to the prior quarter, and discounting the strong likelihood that Q2 GDP will be revised downward. The nature of our short-term 24-hour news cycle is a big factor in this. Reporters are always looking for the big story of the day, not the minutia of last month. The lack of critical thinking and economic understanding also play a role.
Of course even if you have the discipline to focus on the final estimates, you still arent getting the real story. All GDP estimates are based on imperfect inflation measurement tools, which I believe are designed to under report inflation and over report growth. The most recent GDP projection used an annualized .71% inflation deflator to arrive at 1.7% growth. Anyone who believes that inflation is currently running below 1% has simply no grasp of our current economy. Look for more analysis of this topic in my upcoming columns. In the meantime, dont get excited by initial reports of a healthy recovery. The reality is likely to be more sobering.

Censorship by Fear
EDWARD CLINE (2013.09.04 )

Joseph Conrad, the writer, was astonished to learn early in the 20th century that Britain, his adopted country, had a Censor of Plays. In a 1907 essay* he wrote about the character of an individual who would assume the power and harbor the hubris as the supreme arbiter of what appeared on the British stage. Needless to say, he does not appreciate the existence of a censor: I have come to the conclusion in the security of my heart and the peace of my conscience that he must be either an extreme megalomaniac or an utterly unconscious being. He must be unconscious. It is one of the qualifications for his magistracy. Other qualifications are equally easy. He must have done nothing, expressed nothing, imagined nothing. He must be obscure, insignificant and mediocre in thought, act, speech and sympathy. He must know nothing of art, of life and of himself. For if he did he would not dare to be what he is. While the Church had been censoring written and spoken speech for centuries, government censorship of plays in Britain began in earnest with the Stage Licensing Act of 1737, to protect then Prime Minister Robert Walpole from criticism by satire and mockery on the stage, and ended with the Theatres Act of 1968. But other forms of censorship subsequently were enacted in Britain, many conforming to the legislative censorship of the European Union, rendering freedom of speech in Britain contingent on those laws, which amounts to a byzantine maze of negatives. Article Ten of the European Convention reads: 1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises. 2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.

Given the woozy state of any definition of freedom of speech today, or even its practice, in virtually any country, Article Ten not so much guarantees freedom of speech, but wraps it in a Rubiks Cube-like conceptual straightjacket which only a puzzle-master or a consummate politically correct judge would be able to grasp. It is burdened with so many qualifications and exceptions it may as well de cree: We will let you know when you are free to say anything. Until then, be quiet, or its a fine and the lockup for you. For example, a Swedish man has been charged with intentionally disrupting a religious or spiritual ceremony, in this instance, the Friday call to prayers outside a Stockholm mosque, by honking his car horn. This is an example of Swedens fatal dhimmitude and deference to its growing Muslim population. But, I am betting that no one has ever been charged with the same offense for honking a horn outside a church while its bells were ringing. Of course, the local Swedish law must conform to the European Convention one, or at least not conflict with it. But, how does one categorize horn honking as unprotected speech? Does it encourage disorder or crime? Does it violate the rights of others? Is it a dereliction of ones alleged duty and responsibility? How does one reconcile the right not to hear a honking horn and the right, if you are not a Muslim, not to hear some talentless muezzin screeching and wailing for between three to five minutes every Friday afternoon? Well, you dont reconcile them, because these are not rights. On the one hand, the government frowns on literal horn honking if it bothers Muslims. On the other, it protects the equivalent of malicious horn honking, that is, the loud call to prayers. The call to prayers is spiritual; horn honking is not. So says fiat, non -objective jurisprudence. While the Swedish man denies he deliberately honked his horn to disturb the congregated Muslims we cannot know the contents of his mind, that is, what he intended it would not have mattered had he confessed that this was his intention. He is still liable under the citys municipal code. He disturbed the peace of the faithful. Period. In Austria, a man was charged with ridiculing or disparaging Muslim beliefs by yodeling and mowing his lawn at the same time while his Muslim neighbors were trying to lift their arses and bang their heads on the floor of their home in prayer. Again, local Austrian law must conform to EU law, or not contradict it, and doubtless a European Union judge would concur with the Austrian courts decision to fine the man. His neighbors claimed that his yodeling was a satirical attempt to copy the wails of amuezzin. (Personally, I find both a call to prayers and yodeling esthetically

abominable. I would be a harsh judge if a muezzinand a yodeler ever appeared on Austrias Got Talent.) In Rennes, France, a butcher was driven out of business because local Muslims, objecting to his selling of pork, repeatedly threatened him and vandalized his shop. Did Article Ten protect the butcher? No. Because some freedom of speech is more equal than others, particularly if it is a Muslims freedom of speech. The Muslims spoke; the butcher left the building. In this country, singer Miley Cyrus ignited a controversy with her super-vulgar performance during a Brooklyn concert. Conservatives were up in arms. Breitbart News sort of condemned her cacophonous gyrations: The former teen stars sexualized romp might have made Madonna blushwith envy. There is nothing intrinsically wrong with a sexualized romp. It can be vulgar, or it can be tastefully stimulating. There is a difference between a sexualized romp and the simulated pornography exhibited by Cyrus. Sexualized romps have been around at least as long as the live stage. But, I dare anyone to compare Cyruss performance, or Lady Gagas, or Madonnas, with, say, Rita Hayworths performance of The Heat is On, and claim they are all on the same level. They are not. Aside from the fact that neither Cyrus, nor Gaga, nor Madonna ever had a thimbleful of Hayworths talent, Hayworth is esthetically appealing, as well. Rita Hayworth sizzles. Miley Cyrus? Yawn. Someone might object: But how can such outrageous performances as Miley Cyruss be protected as freedom of speech or freedom of expression? Easily. Dont watch them. Dont patronize the likes of Cyrus. Thats their protection. Entertainers such as Miley Cyrus can degrade themselves as much as they wish, but one has the choice of not rewarding them for it. One has the freedom to avert ones eyes and stuff ones ears when Rita Hayworth is performing, as well. One may even wish to criticize such behavior, but one hasnt the right to stop it, unless one wishes to resort to force. Resorting to force as a means of surcease in the realm of speech has always been a governments tyrannical prerogative. A more fundamental objection would focus, instead, on the state of a culture that would generate and encourage such crude performances as Cyruss as entertainment values, entertainment which appeals to the mindless, prurient hedonism and tasteless interests of countless esthetic illiterates. Artists with nothing to say usually resort to gross behavior and call it novel or ground-breaking. In the musical, literary, and visual realms, they are the avant-garde of nihilism. Miley Cyrus has joined a populous club that includes such notables as James Joyce and Jackson Pollack.

Contrary of Conrads justifiably innocent presumption (he lived in the twilight of reason and sanity), there are many individuals in government who do know themselves and dare to impose their mediocre, mean little souls on the rest of us. They are the soul-brethren of Miley Cyrus. Of far more danger is the choice of self censorship. Fear of retaliation in the way of direct or indirect government force can cause an individual to not speak out when it is important that he speak, or even to commit self-perjury. While we now know that the government can and will monitor our phone calls and emails, and has selectively targeted particular and prominent individuals at the behest of presidents and other powers that are satellites of the Oval Office to discredit political opponents or neutralize or silence opposition of any kind (e.g., General David Petraeus), censorship neednt be overt. A more effective means of silencing ideas and truths is to instill fear of retaliation in individuals. The National Security Agency (NSA) is completing a multi-billion dollar facility in Utah that will store every phone call and email of Americans and others. For what purpose? To fight terrorism? You fight terrorism by eliminating states that sponsor it, not by snooping into the privacy of citizens which your agency is chartered to protect from state-sponsored terrorism, and collecting data that can be used to silence citizens via blackmail or threatened coercion lest they oppose government policies or speak truths. In short, you dont fight state-sponsored terrorism by instituting state-sponsored terrorism. That, in short, is the mind-numbing character of censorship by fear. And its advocates know it. After all, if one remains silent for fear of retaliation or retribution, one cant claim that one is being censored, can one? Wheres the gun pointed at ones head? The person holding the gunis you. *Joseph Conrad, A Censor of Plays: An Appreciation, in The Oxford Book of Essays, Ed. and Introduction by John Gross. Oxford/New York: Oxford University Press (1991), 2002, pp. 326-329.

Touchy Topics: Freedom of Association and Discrimination

WALTER WILLIAMS (2013.09.02 )

Heres a question: What is the true test of ones commitment to freedom of expression? Is it when one permits others to express ideas with which he agrees? Or is it when he permits others to express ideas he finds deeply offensive? Im betting that most people would wisely answer that its the latter, and Id agree. How about this question: What is the true test of ones commitment to freedom of association? Is it when people permit others to freely associate in ways of which they approve? Or is it when they permit others to freely associate in ways they deem despicable? Im sure that might be a considerable dispute about freedom of association compared with the one over freedom of expression. To be for freedom in either case requires that one be brave enough to accept the fact that some people will make offensive expressions and associate in offensive ways. Lets explore this with an example from the past. In 1958, Richard Loving, a white man, and Mildred Jeter, a black woman, two Virginia residents, traveled to Washington, D.C., to marry. Upon their return to Virginia, they were charged with and found guilty of violation of Virginias anti-miscegenation laws. In 1967, the U.S. Supreme Court, in Loving v. Virginia, held that laws banning interracial marriages violated the equal protection and due process clauses of the 14th Amendment. The couples conviction was reversed. Thus, Virginias antimiscegenation laws not only violated the U.S. Constitution but also violated the basic human right of freedom of association. Now lets ask ourselves: Would Virginias laws have been more acceptable if, instead of banning interracial marriages, they hadmandated interracial marriages? Any decent person would find such a law just as offensive and for the same reason: It would violate freedom of association. Forced association is not freedom of association. Before you say, Williams, where youre going with this discussion isnt very good, theres another case from our past. Henry Louis Mencken, writing in The Baltimore Evening Sun (11/9/48), brought to light that the citys parks board had a regulation forbidding white and black citizens from playing tennis with each other in public parks. Today most Americans would find such a regulation an offensive attack on freedom of association. I imagine that most would find it just as offensive if the

regulation had required blacks and whites to play tennis with each other. Both would violate freedom of association. Most Americans probably agree there should be freedom of association in the cases of marriage and tennis, but what about freedom of association as a general principle? Suppose white men formed a club, a professional association or any other private association and blacks and women wanted to be members. Is there any case for forcing them to admit blacks and women? What if it were women or blacks who formed an association? Should they be forced to admit men or whites? Wouldnt forced membership in either case violate freedom of association? What if you wanted to deal with me but I didnt want to deal with you? To be more concrete, suppose I own a private company and Im looking to hire an employee. You want to deal with me, but I dont want to deal with you. My reasons might be that youre white or a Catholic or ugly or a woman or anything else that I find objectionable. Should I be forced to hire you? You say, Williams, thats illegal employment discrimination. Youre absolutely right, but it still violates pe aceable freedom of association. Much of the racial discrimination in our history was a result of legal or extralegal measures to prevent freedom of association. That was the essence of Jim Crow laws, which often prevented blacks from being served in restaurants, admitted into theaters, allowed on public conveyances and given certain employment. Whenever one sees laws or other measures taken to prevent economic transactions, you have to guess that the reason theres a law is that if there were no law, not everyone would behave according to the specifications of the law.

In Praise of Privatization and Private Property

JAANA WOICESHYN (2013.09.02 )

In a recent column in Calgary Herald, Naomi Lakritz attacked a think-tanks proposal for improving the citys governance through privatization of many municipal services. According to the typical socialist (il)logic, she abhors the idea of privatization of such currently public services as transit, recreation centers, and golf courses. Lakritz argues: Privatization simply leads to higher prices, due to the profit motive, along with cutting corners and slashing quality, due also to the profit motive. This is the Lefts tired old argument against private property, profit making, and business in general. The argument is also erroneous, both in logic and according to actual evidence. Lakritz envisions a private owner getting rich off running the CTrain and jacking up fares. Who would ride the CTrain, or buses, if fares were jacked up? And how would the owner become rich, if people could not afford to ride the trains? Lakritz and other leftists do not ask, or answer, such questions, because they do fit their world view. However, in reality (provided government does not interfere) when private businesses try to jack up prices or slash quality, their customers flock to alternative suppliers, and new competitors enter to offer better prices and quality. Business firms cannot maximize profits if customers cant afford their p roducts or dont like their qualityit is in companies self-interest to relentlessly pursue lower costs and better quality. Besides being illogical, the Lefts argument against the profit motive is also contradicted by actual evidence. For example, consider the consumer electronics industryone of the freest, least regulated industries in which government does not play any significant role. Apple, Dell, Blackberry, HP, Sony, Samsung, Motorola, Panasonic, and other consumer electronics companies have not jacked up their prices and slashed their quality, contrary to the Lefts claims. Tablet computers which did not exist 25 years agocan perform much more than PCs did then, besides costing only a fraction. Cell phones 25 years ago were heavy, clumsy devices only affordable to a limited market. Today, the simplest cell phones perform much better and can be afforded by the poorest people in developing countries, and even smart phonesunheard of 25 years agoare mass market products. All the lowering of prices and improvement of quality has happened, not because of government regulation, but because the lack of it and relatively free competition.

In Lakritzs imagination, privatization currently publicly funded municipal services would mean that single mothers and low-income families could not afford transit, visits to recreation centers, or an occasional Saturday afternoon of golf. She argues that people with low incomes would be worse off if privatization occurred, and those better off have a duty to lift them up by subsidizing city services so that the low income earners can improve their circumstances and enjoy a better quality of life. But this part of Lakritzs argument is also a myth: every productive individual, regardless of income level and ability, would be better off under privatization and private property ownership. Privatization and free market competition means more affordable, higher quality products available to everyone. Due to increased wealth creation, they also mean more job opportunities for those willing to work, along with higher wages that more demand for skills and knowledge bring about. Even those presently incapable of productive work due to disability or handicap would benefit from a privatized, free-market system, for two reasons. First, competition in free markets leads to technological innovations that enable people with physical disabilities to be productivethink of Stephen Hawking, who thanks to innovations created by computer and other electronics companies can work productively. Second, even those who are completely incapable of being productive, are better off in a privatized, free-market system because privatized companies create much more wealth than a government-controlled or regulated economy ever could (compare businesses in the relatively free markets of the West to governmentrun enterprises in Cuba, or in North Korea). The more wealth is being created, the higher the overall standard of living (due to the lower prices and higher wages). So almost everyone benefits from privatization and free markets. The only exceptions are people who do not want to be productive and want to live as parasites of others. They are the ones defended by socialists like Lakritz.

Hatred of Western Civilization: Why Terrorists Attacked America

JOHN DAVID LEWIS (2013.09.01 )

Originally published on Septmeber 20th, 2001To the students of Ashland University: university teachers have wide latitude in their choice and presentation of subjects. In America university courses have been presented about Black Hair, Oprah Winfrey, and the Social Life of Snails. I see no reason why I should not offer a statement in this class, followed by discussion, about the momentous events of yesterday.

On September 11, 2001 America was attacked. What happened in New York was not a criminal act. It was an act of war. It is wrong to call it criminal activity, or to treat it as a criminal matter. It is wrong to consider it as a matter in which the people responsible must be arrested, brought before a judge and tried. This is war. The attackers must be destroyed. Why is it not a criminal act? First, the scale of the slaughter is far beyond criminal activity. The number of people killed may rise to 5 or 10 times the number killed at

Pearl Harbor. Second, it had no criminal motive: i.e., robbery, or passion against an individual. But most important, the resources required to carry out the attack, especially training given the pilots, were on the scale of that available only to governments. The moral, political, economic, and religious support necessary for these attacks have been provided over the past 25 years by specific governments in the Middle East. Those governments wish to destroy the Great Satan: America, freedom, achievement, trade, values, reason. This is a war against America, her core values, and the prosperity that has followed from our pursuit of those values. The enemy is first and foremost any government who supports the active opponents of those values. This is the material fact that we must face. The particular people involved in the particular acts of war of Sep 11 are not the reason for retaliation. The purpose is not to punish those who have started this war. Punishment is not a concept that applies here. We did not punish the pilots who attacked Pearl Harbor-we destroyed the government of Japan, and imposed a constitutional government that has benefited everyone (most of all the Japanese) ever since. We must not fall into agnosticism over this issue. The governments and leaders who have supported terrorism for years are well-known. The precision with which they are known is more than sufficient to place blame. We know who they are, and no further research is needed. Every such government must be removed from power, now, as a matter of our own personal, and immediate, physical safety. This should be the purpose, and the only purpose, of our response to this attack. So the first question is, how do we seize the initiative in this war, to make us, and freedom, safe again? Note that the question is not how to bring disenfranchised peoples back into the world community, and neither is it to correct the alleged cultural deformities that are supposed to have lead terrorists to kill us. The issue is not how to resolve the Middle East problem, or to find a homeland for one group or another. We hold no such responsibilities to our enemies or their children. I repeat. The first question is how to protect ourselves, and, coincidently, others who value freedom, from such attacks. Our self-protection must be our first, and only, motive. It is an end in itself. I will be specific here. What is needed is an all-out immediate attack, nuclear if necessary, on targets chosen by the US. 24 hours notice should then be given to the

governments of Afghanistan, Iran, Iraq, Syria, Lebanon and Libya, that they are to resign their political positions now or face more of the same tomorrow. Arafat must be told that the leaders of Hamas, Hezbollah, and the Islamic Jihad are to be turned over to us now, or he faces annihilation, in the form decided on by us. If destruction follows it is their fault, not ours. They started it. They evidently wish it. If babies are killed it is because they hide behind them. We didnt start this war-they did, by arming, training, protecting and sanctioning the attackers who killed innocent Americans. Further, the US should not ask permission of anyone about this. In my opinion it is actually vital that such permissions not be asked. Our actions must be unilateral. EVERY government, friend and foe, must know that an attack on America will be followed by retaliation: inevitably, always, everywhere, regardless of what they think. Our retaliation must take on the status of natural justice, as a law of nature, inescapable across time and space. Throw a stone into the air and it falls. A flash of lightning is followed by thunder. Touch a hot stove and you get burned. Touch an American, and fire falls out of the sky onto you and anyone who breathes the same air as you. It must become political suicide for any government to offer aid to an open enemy of the US. It is time for them to become afraid. After we are safe from state-sponsored terrorism, and after the world understands that American soil cannot be violated without massive destruction of anyone even remotely connected with it, then the exact investigations can be made of who in particular manned this particular attack. But the agnosticism involved in the idea that we must study the wreckage for months to determine who is responsible is mindcrippling. It is also a massive evasion. International terrorism has been supported for years by a series of governments. It is long past the time that they be made to pay for their actions. Now, given these material requirements for our survival, we must face the intellectual nature of this war. The fact is that the Islamic Jihad is only one part of a concerted attack on western values, principally our capacity for reason and our desire to live. Our enemies are not only foreign-they live amongst us. To understand this we must understand what our attackers actually want, and who they are. The attackers hate the West because the West brings prosperity.

Make no mistake, it is not that they want the prosperity that has been supposedly denied to them. This argument is a Marxist construct, designed to support the view that the economic oppression of the Middle East caused the present crisis. This argument is itself an attack on the US. In fact the Arab states are swimming in oil revenues, produced by the western oil industry, and their leaders are among the richest people on earth. Let them work to establish a pro-achievement business climate, and start businesses to employ their people. Let them give their own wealth away, if they think that is the answer. But they do not value prosperity. They have the same attitude towards freedom. There has never been a revolution in a Middle-Eastern country in favor of a constitutional republic that protects the rights of its citizens. If the people lack freedom it is because their government recognizes no individual rights. Let their governments establish these principles rather than military coups. And, Ill add, if many people there do want freedom, what better can we do for them than to remove the source of their slavery? Their interests are identical with ours: the destruction of their governments, and the establishment of rights-protecting constitutional republics. But the killers are not of this mind. What they rather want is for the West to lose its freedoms, and its values. They want Israel to be driven into the sea in order to allow warring tribes to return to what was, before Israel, a desert wasteland. They want the towers of New York to fall, to be replaced by muck and Dark Ages incantations. They destroyed 2000 year-old statues in Afghanistan in order to destroy the value that is art. Nihilism, the desire to destroy, is why the enemies of freedom fly planes into buildings and blow themselves up with dynamite. At root, their desire for religious rapture in a paradise attained by mass destruction is a desire to lose the most important value of all, their own lives. Their hatred of the West is not based on jealousy but on hatred of the good because it is good. Their claim that Western culture is evil is based on their view that freedom, productiveness, achievement, reason and happiness are evil. What they want instead is the nothing, das Nichts, that is death. This is why they fly with gay abandon into the inferno-to attain a zero, for their victims and themselves. Of course they recognize, on some level, that the material products of the West are good, since they use the products of freedom in order to destroy the products of freedom. But this shows only that they use these products-they do not value them, and they do not value those who produce them. They much prefer nothing.

They are not alone in this preference. Their use of values to destroy values is a method that has been accepted by a series of anti-capitalists, anti-reason thugs across the globe. The Unabomber used transcontinental industries, computerized delivery services, and communication systems to build and deliver his bombs, and to publish his anti-industrial manifesto. An anti-industrial environmental protester used a mobile phone while sitting in a Redwood tree in California. An anti-capitalist protester in England co-ordinated his troops with digital text pagers. The Arab countries nationalized American and English oil industries after they had been produced, and use the money to destroy the values that made the revenues possible. And now hijackers steal transcontinental jets and turn them into missiles, in order to destroy the values and the people that produced the jet. These people use the same method because they have the same goal: to reduce our present civilization to the level of pre-civilization, as an end in itself. Observe how they agree. The present life expectancy in Afghanistan is 42-almost to the prehistoric ideal of the anti-technology deep ecologists. A motto of one environmentalist group, I remind you, is Back to the Pleistocene. Afghanistan has no technology-the ideal of the Unabomber. It has no businesses-the ideal of the anticapitalists. It has rejected reason-the ideal of anti-reason professors. In these terms Afghanistan is not lacking in development-it is at the pinnacle of human aspirations. Morally there is no difference between an environmentalist who bans DDT at the price of millions of malaria deaths, the Unabomber who selects his victims personally, the anarchist who smashes store windows and dreams of smashing structural steel, and a terrorist who rides a passenger plane into the World Trade Center. Each glories in destruction for its own sake, and each advocates death as the epitome of that destruction. It is no accident that they are all defined in terms of anti -something. Nothing is the aim, and the goal, of all of them. They are brothers-in-arms. Now you see the scope of the battle that America faces. So what do we do about this? Intellectually what we must do is state an idea: that western civilization is moral because it is good. We have a right to exist, and a right to defend ourselves. The purpose and motive of western civilization is life, the exact opposite of the death-worship seen in nihilists of all stripes. Ours is the morality of life and theirs the morality of death.

Once this statement is made, and the basic rights of each person to engage in such work and to trade with others is made clear, then the way will be cleared to respond to the killers of Sep 11. The essence here is to protect those of us who value life, by granting their own wish to those who do not. At the dawn of the twenty-first century American stands at a cross-roads. The choice we have was created, in part, by our past errors. If, when the Lockerbie airline bomber killed so many in the early 1980s, America had presented an ultimatum to Libya backed by force, instead of begging for co-operation, it is doubtful that any government would have allowed itself to be associated with training the Sep 11 killers. The attack, and the present war, might have been avoided. If, when a professor maintained that reason was a mere western prejudice, his students had dropped his classes and demanded his resignation, then the very idea that life, reason and freedom should negotiate with death, mysticism and slavery would be exposed and rejected. If, when you are offered so-called music by anti-capitalist, anti-reason bums who chant of killing cops and blowing up buildings, you refuse to buy those albums, and you speak out against them, the so-called artists will receive neither stardom nor fortune. They will slither back under the rocks they crawled out of, and music companies will change their programming. To straighten out the political and intellectual mess we face today we must re-affirm our commitment to reason and freedom, and their purpose, life, by protecting ourselves from killers, foreign and domestic, physical and intellectual. And we must do it because we are good. First published in Capitalism Magazine on September 20, 2001.

End States Who Sponsor Terrorism

LEONARD PEIKOFF (2013.09.01 )

Originally published on October 2, 2001. All the more relevant today. Editor Fifty years of increasing American appeasement in the Mideast have led to fifty years of increasing contempt in the Muslim world for the U.S. The climax was September 11, 2001.

Photo: Michael Foran

Fifty years ago, Truman and Eisenhower surrendered the Wests property r ights in oil, although that oil rightfully belonged to those in the West whose science, technology, and capital made its discovery and use possible. The first country to

nationalize Western oil, in 1951, was Iran. The rest, observing our frightened silence, hurried to grab their piece of the newly available loot. The cause of the U.S. silence was not practical, but philosophical. The Mideasts dictators were denouncing wealthy egotistical capitalism. They were crying that their poor needed our sacrifice; that oil, like all property, is owned collectively, by virtue of birth; and that they knew their viewpoint was true by means of otherworldly emotion. Our Presidents had no answer. Implicitly, they were ashamed of the Declaration of Independence. They did not dare to answer that Americans, properly, were motivated by the selfish desire to achieve personal happiness in a rich, secular, individualist society. The Muslim countries embodied in an extreme form every idea selfless duty, antimaterialism, faith or feeling above science, the supremacy of the groupwhich our universities, our churches, and our own political Establishment had long been upholding as virtue. When two groups, our leadership and theirs, accept the same basic ideas, the most consistent side wins. After property came liberty. The Muslim fundamentalist movement, writes Yale historian Lamin Sanneh, began in 1979 with the Iranian [theocratic] revolution . . . (New York Times9/23/01). During his first year as its leader, Ayatollah Khomeini, urging a Jihad against the Great Satan, kidnapped 52 U.S. diplomatic personnel and held them hostage; Carters reaction was fumbling paralysis. About a decade later, Iran topped this evil. Khomeini issued his infamous Fatwa aimed at censoring, even outside his borders, any ideas uncongenial to Muslim sensibility. This was the meaning of his threat to kill British author Rushdie and to destroy his American publisher; their crime was the exercise of their right to express an unpopular intellectual viewpoint. The Fatwa was Irans attempt, reaffirmed after Khomeinis death, to stifle, anywhere in the world, the very process of thought. Bush Sr. looked the other way. After liberty came American life itself. The first killers were the Palestinian hijackers of the late 1960s. But the killing spree which has now shattered our soaring landmarks, our daily routine, and our souls, began in earnest only after the license granted by Carter and Bush Sr. Many nations work to fill our body bags. But Iran, according to a State Department report of 1999, is the most active state sponsor of terrorism, training and arming groups from all over the Mideast, including Islamic Jihad, Hamas, and Hezbollah. Nor is Irans government now moderating. Five months ago, the worlds leadin g terrorist

groups resolved to unite in a holy war against the U.S., which they called a second Israel; their meeting was held in Teheran. (Fox News 9/16/01) What has been the U.S. response to the above? In 1996, nineteen U.S. soldiers were killed in their barracks in Saudi Arabia. According to a front-page story in The New York Times (6/21/98): Evidence suggesting that Iran sponsored the attack has further complicated the investigation, because the United States and Saudi Arabia have recently sought to improve relations with a new, relatively moderate Government in Teheran. In other words, Clinton evaded Irans role because he wanted what he called a genuine reconciliation. In public, of course, he continued to vow that he would find and punish the guilty. This inaction of Clintons is comparable to his action after bin Ladens attack on U.S. embassies in East Africa; his action was the gingerly bombing of two meaningless targets. Conservatives are equally responsible for todays crisis, as Reagans record attests. Reagan not only failed to retaliate after 241 U.S. marines in Lebanon were slaughtered; he did worse. Holding that Islamic guerrillas were our ideological allies because of their fight against the atheistic Soviets, he methodically poured money and expertise into Afghanistan. This put the U.S. wholesale into the business of creating terrorists. Most of them regarded fighting the Soviets as only the beginning; our turn soon came. For over a decade, there was another guarantee of American impotence: the notion that a terrorist is alone responsible for his actions, and that each, therefore, must be tried as an individual before a court of law. This viewpoint, thankfully, is fading; most people now understand that terrorists exist only through the sanction and support of a government. We need not prove the identity of any of these creatures, because terrorism is not an issue of personalities. It cannot be stopped by destroying bin Laden and the alQaeda army, or even by destroying the destroyers everywhere. If that is all we do, a new army of militants will soon rise up to replace the old one. The behavior of such militants is that of the regimes which make them possible. Their atrocities are not crimes, but acts of war. The proper response, as the public now understands, is a war in self-defense. In the excellent words of Paul Wolfowitz, deputy secretary of defense, we must end states who sponsor terrorism. A proper war in self-defense is one fought without self-crippling restrictions placed on our commanders in the field. It must be fought with the most effective weapons we

possess (a few weeks ago, Rumsfeld refused, correctly, to rule out nuclear weapons). And it must be fought in a manner that secures victory as quickly as possible and with the fewest U.S. casualties, regardless of the countless innocents caught in the line of fire. These innocents suffer and die because of the action of their own government in sponsoring the initiation of force against America. Their fate, therefore, is their governments moral responsibility. There is no way for our bullets to be aimed only at evil men. The public understandably demands retaliation against Afghanistan. But in the wider context Afghanistan is insignificant. It is too devastated even to breed many fanatics. Since it is no more these days than a place to hide, its elimination would do little to end terrorism. Terrorism is a specific disease, which can be treated only by a specific antidote. The nature of the disease (though not of its antidote) has been suggested by Serge Schmemann (NYT 9/16/01). Our struggle now, he writes, is not a struggle against a conventional guerrilla force, whose yearning for a national homeland or the satisfaction of some grievance could be satisfied or denied. The terrorists [on Tuesday] . . . issued no demands, no ultimatums. They did it solely out of grievance and hatredhatred for the values cherished in the West as freedom, tolerance, prosperity, religious pluralism and universal suffrage, but abhorred by religious fundamentalists (and not only Muslim fundamentalists) as licentiousness, corruption, greed and apostasy. Every word of this is true. The obvious implication is that the struggle against terrorism is not a struggle over Palestine. It is a clash of cultures, and thus a struggle of ideas, which can be dealt with, ultimately, only by intellectual means. But this fact does not depreciate the crucial role of our armed forces. On the contrary, it increases their effectiveness, by pointing them to the right target. Most of the Mideast is ruled by thugs who would be paralyzed by an American victory over any of their neighbors. Iran, by contrast, is the only major country there ruled by zealots dedicated not to material gain (such as more wealth or territory), but to the triumph by any means, however violent, of the Muslim fundamentalist movement they brought to life. That is why Iran manufactures the most terrorists. If one were under a Nazi aerial bombardment, it would be senseless to restrict oneself to combatting Nazi satellites while ignoring Germany and the ideological plague it was working to spread. What Germany was to Nazism in the 1940s, Iran is

to terrorism today. Whatever else it does, therefore, the U.S. can put an end to the Jihad-mongers only by taking out Iran. Eliminating Irans terrorist sanctuaries and military capability is not enough. We must do the equivalent of de-Nazifying the country, by expelling every official and bringing down every branch of its government. This goal cannot be achieved painlessly, by weaponry alone. It requires invasion by ground troops, who will be at serious risk, and perhaps a period of occupation. But nothing less will end the state that most cries out to be ended. The greatest obstacle to U.S. victory is not Iran and its allies, but our own intellectuals. Even now, they are advocating the same ideas that caused our historical paralysis. They are asking a reeling nation to show neighbor-love by shunning vengeance. The multiculturalistsrejecting the concept of objectivityare urging us to understand the Arabs and avoid racism (i.e., any condemnation of any groups culture). The friends of peace are reminding us, ever more loudly, to remember Hiroshima and beware the sin of pride. These are the kinds of voices being heard in the universities, the churches, and the media as the country recovers from its first shock, and the professoriate et al. feel emboldened to resume business as usual. These voices are a siren song luring us to untroubled sleep while the fanatics proceed to gut America. Tragically, Mr. Bush is attempting a compromise between the peoples demand for a decisive war and the intellectuals demand for appeasement. It is likely that the Bush administration will soon launch an attack on bin Ladens organization in Afghanistan and possibly even attack the Taliban. Despite this, however, every sign indicates that Mr. Bush will repeat the mistakes made by his father in Iraq. As of October 1, the Taliban leadership appears not to be a target. Even worse, the administration refuses to target Iran, or any of the other countries identified by the State Department as terrorist regimes. On the contrary, Powell is seeking to add to the current coalition these very stateswhich is the equivalent of going into partnership with the Soviet Union in order to fight Communism (under the pretext, say, of proving that we are not anti-Russian). By seeking such a coalition, our President is asserting that he needs the support of terrorist nations in order to fight them. He is stating publicly that the worlds only superpower does not have enough self-confidence or moral courage to act unilaterally in its own defense.

For some days now, Mr. Bush has been downplaying the role of our military, while praising the same policies (mainly negotiation and economic pressure) that have failed so spectacularly and for so long. Instead of attacking the roots of global terrorism, he seems to be settling for a guerrilla war against al-Qaeda, and a policy of unseating the Taliban passively, by aiding a motley coalition of native tribes. Our battle, he stresses, will be a lengthy one. Mr. Bushs compromise will leave the primary creators of terrorism wholeand unafraid. His approach might satisfy our short-term desire for retribution, but it will guarantee catastrophe in the long term. As yet, however, no overall policy has been solidified; the administration still seems to be groping. And an angry public still expects our government not merely to hobble terrorism for a while, but to eradicate it. The only hope left is that Mr. Bush will listen to the public, not to the professors and their progeny. When should we act, if not now? If our appeasement has led to an escalation of disasters in the past, can it do otherwise in the future? Do we wait until our enemies master nuclear, chemical, and biological warfare? The survival of America is at stake. The risk of a U.S. overreaction, therefore, is negligible. The only risk is underreaction. Mr. Bush must reverse course. He must send our missiles and troops, in force, where they belong. And he must justify this action by declaring with righteous conviction that we have discarded the clichs of our paper-tiger past and that the U.S. now places America first. There is still time to demonstrate that we take the war against terrorism seriouslyas a sacred obligation to our Founding Fathers, to every victim of the men who hate this country, and to ourselves. There is still time to make the world understand that we will take up arms, anywhere and on principle, to secure an Americans right to life, liberty, and the pursuit of happiness on earth. The choice today is mass death in the United States or mass death in the terrorist nations. Our Commander-In-Chief must decide whether it is his duty to save Americans or the governments who conspire to kill them.

Western Values are Superior to All Others

WALTER WILLIAMS (2013.08.27 )

This week begins my 34th year serving on George Mason Universitys distinguished economics faculty. You might imagine my surprise when I received a letter from its Office of Equity and Diversity Services notifying me that I was required to complete the in-person Equal Opportunity and Prevention of Sexual Harassment Policies and Procedures training. This is a leftist agenda for indoctrination, thought control and free speech suppression to which I shall refuse to submit. Lets look at it. Ideas such as equity and equal opportunity, while having high emotional value, are vacuous analytical concepts. For example, Ive asked students whether they plan to give every employer an equal opportunity to hire them when they graduate. To a person, they always answer no. If they arent going to give every em ployer an equal opportunity to hire them, whats fair about forcing employers to give them an equal opportunity to be hired? Im guilty of gross violation of equality of opportunity, racism and possibly sexism. Back in 1960, when interviewing people to establish a marital contract, every woman wasnt given an equal opportunity. I discriminated against not only white, Indian, Asian, Mexican and handicapped women but men of any race. My choices were confined to good-looking black women. You say, Williams, that kind of discrimination doesnt harm anyone! Nonsense! When I married Mrs. Williams, other women were harmed by having a reduced opportunity set. George Masons Office of Equity and Diversity Services has far more challenging equity and diversity work than worrying about the re-education of Professor Williams. They must know that courts have long held that gross racial disparities are probative of a pattern and practice of discrimination. The most notable gross racial disparity on campus, and hence probative of discrimination, can be found on GMUs fabulous mens basketball team. Blacks are less than 9 percent of student enrollment but are 85 percent of our varsity basketball team and dominate its starting five. Its not just GMU. Watch any Saturday afternoon college basketball game and ask yourself the question fixated in the minds of equity, diversity and inclusion hunters: Does this look like America? Among the 10 players on the court, at best there might be two white players. In 2010, 61 percent of Division I basketball players were black, and only 31 percent were white.

Allied with the purveyors of equity, diversity and inclusion are the multiculturalists, who call for the celebration of cultures. For them, all cultures are morally equivalent and to deem otherwise is Eurocentrism. Thats unbridled nonsense. Ask your multiculturalist: Is forcible female genital mutilation, as practiced in nearly 30 subSaharan Africa and Middle Eastern countries, a morally equivalent cultural value? Slavery is practiced in Sudan and Niger; is that a cultural equivalent? In most of the Middle East, there are numerous limits on women such as prohibitions on driving, employment, voting and education. Under Islamic law, in some countries, female adulterers face death by stoning, and thieves face the punishment of having their hand severed. Are these cultural values morally equivalent, superior or inferior to those of the West? Western values are superior to all others. Why? The greatest achievement of the West was the concept of individual rights. The Western transition from barbarism to civility didnt happen overnight. It emerged feebly mainly in England, starting with the Magna Carta of 1215 and took centuries to get where it is today. One need not be a Westerner to hold Western values. A person can be Chinese, Japanese, Jewish, African or Arab and hold Western values. Its no accident that Western values of reason and individual rights have produced unprecedented health, life expectancy, wealth and comfort for the ordinary person. Western values are under ruthless attack by the academic elite on college campuses across America. They want to replace personal liberty with government control and replace equality before the law with entitlement. The multiculturalism and diversity agenda is a cancer on our society, and our tax dollars and charitable donations are supporting it.

A Truly Great Phony

THOMAS SOWELL (2013.08.27 )

Many years ago, I was a member of a committee that was recommending to whom grant money should be awarded. Since I knew one of the applicants, I asked if this meant that I should recuse myself from voting on his application. No, the chairman said. I know him too and he is one of the truly great phonies of our time. The man was indeed a very talented phony. He could convince almost anybody of almost anything provided that they were not already knowledgeable about the subject. He had once spoken to me very authoritatively about Marxian economics, apparently unaware that I was one of the few people who had read all three volumes of Marxs Capital, and had published articles on Marxian economics in scholarly journals. What our glib talker was saying might have seemed impressive to someone who had never read Capital, as most people have not. But it was complete nonsense to me. Incidentally, he did not get the grant he applied for. This episode came back to me recently, as I read an incisive column by Charles Krauthammer, citing some of the many gaffes in public statements by the President of the United States. One presidential gaffe in particular gives the flavor, and suggests the reason, for many others. It involved the Falkland Islands. Argentina has recently been demanding that Britain return the Falkland Islands, which have been occupied by Britons for nearly two centuries. In 1982, Argentina seized these islands by force, only to have British Prime Minister Margaret Thatcher take the islands back by force. With Argentina today beset by domestic problems, demanding the return of the Falklands is once again a way for Argentinas government to distract the Argentine publics attention from the countrys economic and other woes.

Because the Argentines call these islands the Malvinas, rather than the Falklands, Barack Obama decided to use the Argentine term. But he referred to them as the Maldives. It so happens that the Maldives are thousands of miles away from the Malvinas. The former are in the Indian Ocean, while the latter are in the South Atlantic. Nor is this the only gross misstatement that President Obama has gotten away with, thanks to the mainstream media, which sees no evil, hears no evil and speaks no evil when it comes to Obama. The presidential gaffe that struck me when I heard it was Barack Obamas reference to a military corps as a military corpse. He is obviously a man who is used to sounding off about things he has paid little or no attention to in the past. His mispronunciation of a common military term was especially revealing to someone who was once in the Marine Corps, not Marine corpse. Like other truly talented phonies, Barack Obama concentrates his skills on the effect of his words on other people most of whom do not have the time to become knowledgeable about the things he is talking about. Whether what he says bears any relationship to the facts is politically irrelevant. A talented con man, or a slick politician, does not waste his time trying to convince knowledgeable skeptics. His job is to keep the true believers believing. He is not going to convince the others anyway. Back during Barack Obamas first year in office, he kept repeating, with great apparent earnestness, that there were shovel-ready projects that would quickly provide many much-needed jobs, if only his spending plans were approved by Congress. He seemed very convincing if you didnt know how long it can take for any construction project to get started, after going through a bureaucratic maze of environmental impact studies, zoning commission rulings and other procedures that can delay even the smallest and simplest project for years. Only about a year or so after his big spending programs were approved by Congress, Barack Obama himself laughed at how slowly everything was going on his supposedly shovel-ready projects.

One wonders how he will laugh when all his golden promises about ObamaCare turn out to be false and a medical disaster. Or when his foreign policy fiascoes in the Middle East are climaxed by a nuclear Iran.

You Dont Have to Stay Poor The Wealth Choice: Success Secrets of Black Millionaires
WALTER WILLIAMS (2013.09.12 )

No one can blame you if you start out in life poor, because how you start is not your fault. If you stay poor, youre to blame because it is your fault. Nowhere has this been made clearer than in Dennis Kimbros new book, The Wealth Choice: S uccess Secrets of Black Millionaires. Kimbro, a business professor at Clark Atlanta University, conducted extensive faceto-face interviews, took surveys and had other interactions with nearly 1,000 of Americas black financial elite, many of whom are multimillionaires, to discover the secret of their success. Kimbros seven-year study included wealthy blacks such as Byron E. Lewis, Tyler Perry, Daymond John, Bob Johnson, Cathy Hughes and Antonio Reed. Kimbro says that many of todays black multimillionaires started out poor or worse. So what were their strategies? The Wealth Choice argues that wealth (millionaireship) is not a function of circumstance, luck, environment or the cards you were dealt. Instead, wealth is the result of a conscious choice, action, faith, innovation, effort, preparation and discipline. Or, in the words of billionaire W. Clement Stone, founder of Combined Insurance, whom Kimbro met with and mentions early in the book, Try, try, try, and keep on trying is the rule that must be followed to become an expert in anything. He also said, If you cannot save money, the seeds of greatness are not in you. Saving is necessary for investment and wealth accumulation. Therein lies much of the problem for many black Americans. Kimbro gives us some statistics to highlight some of the problem. The median net worth, or wealth, of white households is 20 times that of black households. In 2009, 35 percent of black households had no wealth or were in debt. Twenty-four percent of black Americans spend more than they earn, compared with 14 percent of all Americans. Thirty-two percent of blacks do not save at all, compared with less than 25 percent of all Americans. To underscore these statistics, Earl Graves Jr., CEO of Black Enterprise magazine, said that blacks are six times as likely as whites to purchase a Mercedes-Benz and that blacks who purchase Jaguars have an income one-third less than whites who purchase the same vehicles.

Some, but not all, of the explanation for the wealth differences between blacks and whites has to do with inheritances. Slavery, poverty and gross discrimination didnt create the conditions for inheritances. But slavery and gross discrimination cannot explain todays lack of saving and investing. Nobodys saying that marshal ing the resources for wealth is easy. Gaining wealth is a challenge, as singer Ray Charles lamented in his hit song Them That Got: That old saying them thats got are them that gets is something I cant see. If you gotta have something before you can get something, how do you get your first is still a mystery to me. But as John Harold Johnson, who rose above abject poverty and racial discrimination to build a publishing empire, said, if you want to know how people feel about themselves, look at their bank account. Wealth is less a matter of circumstance than it is a matter of knowledge and choice. The Wealth Choice suggests several disciplines that can be only summarized here. Among them are: Be passionate, and focus on unique strengths; develop clear, delineated goals. Then develop strong work ethic. Recognize the power of ideas, and never consider the possibility of failure. Be thrifty and frugal in nature. My stepfather put Kimbros list of self-disciplines in another way. He said: If you want to be successful at anything, you have to come early and stay late. When Dr. Kimbro graciously sent me a copy of The Wealth Choice, he included an 18-minute video, titled In Conversation with Dr. Dennis Kimbro. On top of putting together an excellent book, he reveals himself as an excellent motivational speaker who should be speaking to young people regardless of race.

Orwell, Obama, and Totalitarianism

EDWARD CLINE (2013.09.12 )

Reading many of George Orwells essays leaves one with the impression that he was an integrated man, that is, his mind was steadfastly anchored to reason and reality. It wasnt. His prescient essays on totalitarianism may lead one to believe that he was 100% rational and had no chinks in his intellectual armor. He wasnt, and the chinks are evident. The most visible chink in Orwells intellectual armor was his steadfast belief in the beneficent advantages of socialism, while at the same time he detested communism. Communism, he wrote, is but totalitarianism by another name. Totalitarianism, or Communism, embraces the totality of an individuals existence, from what he pays for necessities to his social relationships to what goes on in his mind. Orwell observed this totality in Stalins Russia, also in Hitlers Nazi Germany, and, to a lesser extent, in Mussolinis Fascist Italy. Stalin and Hitler were the inevitable heirs to every wistful vision from time immemorial that men could be organized into benign collectives, communes, or cooperatives to corral and control the selfish nature of men to live their own lives for their own reasons. We could begin with the ethics of St. Augustine or Marcus Aurelius, but would need to go back to Plato. Among the minor contributors to the ideal of a collectivist paradise were Auguste Comte and Pierre-Joseph Proudhon. Along came Karl Marx who distilled all those wishes into a system which reduced individuals into mere insensate atoms of an impersonal evolution towards perfect, stateless, selfless socialism. Or, stateless communism. Orwell never grasped that his ideal, stateless socialism, is a contradiction in terms. Socialism cannot be imposed on men except by force. And whether the force compels men to accept socialized medicine, or the redistribution of their private wealth to alleviate state-caused poverty, or mandated florescent light bulbs, or any other altruistic scheme that shackles men together and compels them to become dependent on fiat law and legislated extortion, it must be employed by the agency of a state. A mixed economy of economic and even social controls, must, if not opposed and corrected, lead to total regulation and control. The ideal of a classless society might have been reached by undisturbed tribes in the most inaccessible reaches of the Amazon jungle, but even they have their pecking orders. In any industrialized or semi-industrialized society, under socialism, classes emerge defined by how much loot one gang can accumulate, extort, or seize

from another. Ayn Rand dramatized the progress from socialism to totalitarianism in We the Livingand Atlas Shrugged. What Orwell failed to observe and conclude is that socialism mustlead by degrees and stealthy, almost unnoticeable increments to totalitarianism. That totalitarianism could be of the Nazi (National Socialist) or Soviet brand. Socialism introduces the dry rot of expanding controls into an individuals life. Sooner or later the house will collapse on the individuals head, and when he emerges ragged and bruised from the rubble of his rights and liberties, he will find himself in the stark landscape of totalitarianism. Socialism is tyranny without the iconic leader or figurehead. Orwell caricatured Stalins Communism in his fabulist novel,Animal Farm (1945). As an online student study guide describes the novel and its authors position: Though people on the right tended to conflate socialism and communism, they are in fact completely different thingsone Orwell supported, and the other he abhorred. In fact, as anyone whos read Animal Farm should understand, Orwell saw Soviet-style communism as a profound betrayal of true socialist values. I have read Animal Farm, am not of the right, and dont conflate the two systems. Both Orwell and the study guide are wrong. Socialism and communism are not two completely different things; they are the same thing, differing only in the scale of control over an individual. One is partial, one is total. Under socialism, the government takes a large percentage of your income and wealth and you are free to work harder and create more wealth to be extorted from you. Under communism, the government pays you a paltry allowance, you have no wealth, and you work harder where and when the government says. Stalin did not betray socialism or its true values. He carried its principles to their logical end. Had it not been Stalin, it would have been someone else. However, Orwells insights into the ends and means of totalitarianism are nearly nonpareil. Alone, and far better than Aldus Huxley and other Western writers who penned dystopian novels (excepting a very few), Orwell established the terms by which anyone for decades has discussed totalitarianism, and especially the suppression of freedom of speech. By anyone, I include anyone on the Left and the Right who advocates wholesale or just a little bit of socialism, and also anyone who doesnt quite fit into that artificial and deceptive political c alibration. He established the terms of the issue, and also its lexicon. What I will focus on here is Orwells essay, The Prevention of Literature,* in which he telegraphs the theme and content of his dystopian novel, Nineteen Eighty-Four, published in London by Secker & Warburg in June 1949. He wrote the essay for an anti-communist publication, Polemic, in January 1946. He finished the novel in

December 1948. It was his last literary effort. He died of tuberculosis in January 1950. Orwells statements about totalitarianism can be taken out of his context because they are true statements, not contingent on his prejudices against Stalinism, Nazism, and capitalism. Here is one instance: The organized lying practiced by totalitarian states is not, as is sometimes claimed, a temporary expedient of the same nature as military deception. It is something integral to totalitarianism, something that would still continue even if concentration camps and secret police forces had ceased to be necessary. (p. 258) Yes, mendacity is integral to totalitarianism. We have had a sample of it in Barack Obamas two administrations. From TARP to Obamacare to Benghazi and now an off-and-on-and-off Syrian intervention, all the country has been fed is a continuing stream of lies, fabrications, and falsehoods. Obama gave away his hand early on when he boasted that his term in office would be the most transparent in our history. On that faux transparency, even liberal journalists are beginning to remove the rosedyed gauze from their eyes. In March, TheWashington Post reminded Obama: The day after his inauguration, President Obama promised a new era of openness in government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration, he wrote in one of his first memos to federal agencies. Openness will strengthen our democracy and promote efficiency and effectiveness in Government. But the reality has not matched the Presidents rhetoric. Reality has never matched Obamas rhetoric. Obamas reality has the ethereal substance of the words that scroll up on his Teleprompters. No, we dont yet have concentration camps, but we do have the makings of a secret police, and have had them for a while. It has only just been revealed that the NSA can know virtually all we do and say and refer the information to the appropriate authorities if there are grounds to suspect a threat to national security. Such as my writing these words. Orwell: A totalitarian state is in effect a theocracy, and its ruling class, in order to keep its position, has to be thought of as infallible. But since, in practice, no one is infallible, it is frequently necessary to rearrange past events in order to show that this or that

mistake was not made, or that this or that imaginary triumph actually happened.(p. 259) This is true. In Soviet Russia, that was the case with Lenin, Stalin and their successors. They were a theocracy whose wisdom and authority were not to be questioned. For example, Leon Trotsky, once hailed as a hero of the Soviet Union, was later declared a pariah because he, too, charged Stalin with betraying true socialist values. He was exiled, and later murdered in Mexico on Stalins orders. However, Barack Obama has never portrayed himself as infallible. He is too much the community organizing pragmatist. His hubris is of a lower order. If one thing fails to advance his socialist agenda, then he will try another and count on the news media to help Americans forget the first attempt ever happened. He has never admitted error. He is literally shameless. His hand-picked press agents inside and outside the White House go into action when he is obliged to back-pedal on issues or fabricate a false aura of success or triumph. Orwell: The friends of totalitarianism in this country [in Britain, in addition to America] usually tend to argue that since absolute truth is not attainable, the big lie is no worse than a little lie. It is pointed out that all historical records are biased and inaccurate, or, on the other hand, that modern physics has proved that what seems to us the real world is an illusion, so that to believe in the evidence of ones senses is simply vulgar philistinism.(p. 259) Or, as outgoing Secretary of State Hillary Clinton put it when pressed for a truth: What difference does it make, the size or enormity of a lie or the bungled rush to dismiss and disguise the truth? Immanuel Kant, who devoted countless braincracking paragraphs to proving that absolute truth is unattainable, is an enabler of totalitarianism and its habit of remaking reality to suit the inconvenience or embarrassment of the moment. Lenin, Stalin, Mao, the Perons, for example, were his un-entertaining apprentice masters of illusion. Add Obama and every single one of his political appointees from Day One of his tenure to the present. They are all cut from the cloth of totalitarianism. Every day one can hear their canine whines of discomfort. Orwell: A totalitarian society which succeeded in perpetuating itself would probably set up a schizophrenic system of thought, in which the laws of common sense held good in

everyday life and in certain exact sciences, but could be disregarded by the politician, the historian, and the sociologist. (p. 259) And the modern journalist. If common sense or the honest acknowledgement of the evidence of ones senses, and the willingness to say that a rock is a rock and that a man is a crook or a power-luster who is doing one harm were as ubiquitous as Orwell and other writers assumed, Barack Obama would never have been reelected after his first term. The schizophrenia we are faced with today sits undisturbed in the minds of those who voted and campaigned for him again after the scurrilous opaqueness and venal character of his first term were open to scrutiny by all. Obamas schizophrenia, however, is not a disability which otherwise would disqualify him from any political office. It is an asset in a political culture which regularly dismisses or derogates common sense and rewards him with plaudits and encouragement. Common sense, to Obama and his choirboys inside and outside of the White House, is merely a symptom of vulgar philistinism, and can be brushed off as class or even racial prejudice. Orwell: Totalitarianismdoes not so much promise an age of faith as an age of schizophrenia. A society becomes totalitarian when its structure becomes flagrantly artificial: that is, when its ruling class has lost its function but succeeds in clinging to power by force or fraud. (p. 263) Obama and his administration have clung to power by force andfraud. Obamas tenure in office is flagrantly and transparently artificial, and its character is permitting the country to creep even closer to totalitarianism. But, we mustnt blame him for everything. The groundwork was laid for him by consecutive presidencies and Congresses going back to the late19th century. He is not squandering an inheritance, but leveraging it in conformance to an agenda to remake the country once and for all into a minimum security prison whose inmates are hired out to labor in government-approved and subsidized enterprises. That would make his agenda fascist in means and ends. Or just as totalitarian as communism. Orwell: Political writing in our time consists almost entirely of prefabricated phrases bolted together like the pieces of a childs Meccano set. It is the unavoidable result of self -

censorship. To write in plain, vigorous language one has to think fearlessly, and if one thinks fearlessly one cannot be politically orthodox. (pp. 262-263) I think that quotation, penned by Orwell long before the term political correctness the euphemism for liberal, collectivist political orthodoxy, which gained currency in American political writing much to the discomfort of the politically orthodox succinctly describes the obsequious and fawning nature of modern journalism when the subject is Obama, the welfare state, immigration, Islam, and national security. The term originated, appropriately enough, in debates between socialists and hardline communists and found its way into late 20th century comic books, punditry, and political discussions. Finally, here is a potpourri of Orwells thoughts on the importance of defending freedom of thought and expression: Someof the English scientists who speak so enthusiastically of the opportunities enjoyed by scientists in Russia are capable of understanding this [how some Soviet writers surrender their freedom of expression for lump cash bribes]. But their reflection appears to be: Writers are persecuted in Russia. So what? I am not a writer. They do not see that anyattack on intellectual liberty, and on the concept of objective truth, threatens in the long run every department of thought.(p. 268) So long as physical reality cannot be altogether ignored, so long as two and two have to make four when you are, for example, drawing the blueprint of an aeroplane, the scientist has his function, and can even be allowed a measure of liberty. His awakening will come later, when the totalitarian state is firmly established.(p. 269) [I]t is his job to develop some kind of solidarity with his literary colleagues and no t regard it as a matter of indifference when writers are silenced or driven to suicide, and newspapers systematically falsified.(p. 269) At present we know only that the imagination, like certain wild animals, will not breed in captivity. Any writer or journalist who denies that fact and nearly all the current praise of the Soviet Union contains or implies such a denial is, in effect, demanding his own destruction. (p. 269) And what we are witnessing today and have been witnessing for the better part of half a century is the Blob-like progress of statism and totalitarianism in America, aided and abetted by a succession of presidents, Congresses, journalists, and a goodly portion of the American electorate. Totalitarians are not noted for their

gratitude. Modern journalists, and many writers in other realms of imagination who approve of that direction, are also inviting their own inevitable destruction. And Steve McQueen isnt here anymore to help them think of a way out.

*George Orwell, The Prevention of Literature, in All Art is Propaganda: Critical Essays, Compiled by George Packer. New York: Mariner-Houghton Mifflin Harcourt (2008), pp. 253-269.

Defunding Obamacare
MICHAEL J HURD (2013.09.27 )

Supporters of Obamacare speak as if refusing to fund or implement it will create a Constitutional crisis. Actually, its Obamacare and other laws like it that create the growing crisis with our government. Obamacare is a law that attempts to manufacture a private marketplace by government fiatand then force citizens to take part in it. Its also a law that prevents health insurance companies from imposing requirements on policyholders, such as preexisting conditions. What can be wrong with that? most people ask. The problem is, this kind of law prevents insurance companies from being insurance companies. Insurance companies dont impose restrictions like that simply to be mean. They do it to keep the policies solvent, so that the insurance companies may stay in business and continue to pay claims to paying policyholders. Obamacare proceeds as if all health insurance and medical services are property of the government. Its not a law that actually passes socialized medicine. Instead, it proceeds as if socialized medicine already exists, and then proceeds to treat doctors, patients and insurance companies as if theyre completely under the control of the government with respect to medical care. It actually would have made more logical sense for Obama and Congress to simply nationalize medical care outright. That way, we could be done with insurance companies and fee-for-service doctors. People would simply go to the doctors office of their choosing, and demand treatment as a right. Government would reimburse doctors on its own terms, but doctors would be obliged to provide that right. Therein lies the great deception of Obamacare. It claims to leave everything as it is, while simply providing coverage to those who dont have it. But the law, in order to function as passed, must proceed as if everything involved with medical care belongs to the government. Its a dishonest law, and counts on widespread ignorance and indifference among the population. Right now most people are confused and indifferent about the law. Theyre taking a wait and see attitude, according to most polls and based on nearly everything I hea r nearly everyone say. On the surface, this seems reasonable. But the damage is

already done, unless Obamacare is reversed as well as all laws which put government in charge of medical care. American medicine needs a restoration of a free market, and nobody is proposing legislative steps to make this happen. Defunding Obamacare is a principled step in that direction, although only a preliminary step. Defunding Obamacare is a not a crisis for the Constitution. The Constitution is imperiled by laws like Obamacare. Nationalizing entire industries and enterprises is not the purpose of the Constitution. Defunding Obamacare is a crisis for politicians and people whose interests lie in government power. Thats why theyre shrieking and screaming about it. Notice th at its not only Obama Democrats doing the screaming, but also career politician Republicans who want the law funded. They understand that from where they sit, government power as a principle trumps the rights of individuals they used to champion when initially opposing Obamacare. Laws like Obamacare, and Big Government in general, win by default when the majority of people are passive. The majority of people I encounter willfully avoid having political opinions. They say, I hate politics and I hate everyt hing politicians in both parties are doing. That may be a valid opinion. But if you stop right there, then youre leaving it to the political and government class to do what theyre doing. And thats exactly how Obamacare got passed, and why its going to stay there. Its not enough to hate politicians and politics. You have to deeply want ownership over your own life, destiny and property. You must be willing to fight for whats yours against these twits and hacks we have elected to rule us (and then criticize for doing so). Its hard to imagine an area more relevant or important to all of our lives than medical care. Medical care does not belong to the government. It belongs to the health care professionals who create it, and the patients who purchase itand who have a right to purchase it on a free market, just as they purchase other products and services. Obamacare takes us as far from a free market in medicine as anything in America has to date. As a matter of principle and ideology, Obamacare is a fitting tribute to a

nation whose people have become politically passive and a government who stands ready to take over everything it can.

Freedom of Speech vs. Embarrassing The Government

MICHAEL J HURD (2013.10.08 )

A federal employee decides to write a book on his knowledge of a known government scandal. After signing a book contract with a major publisher, the book deal is subsequently forbiddenby the government. Does this sound like a George Orwell novel? Or an Ayn Rand work of fiction? No. Its really happening. Not in a third world or Communist country. In the United States of America. Right now. Consider the following: The ATF agent who blew the whistle on [the Obama Justice Departments] Operation Fast and Furious has been denied permission to write a book on the botched antigun trafficking sting because it would have a negative impact on morale, according to the very agency responsible for the scandal. After first trying to stop the operation internally, ATF Agent John Dodson went to Congress and eventually the media following the death of Border Patrol Agent Brian Terry in December 2010. Two guns found at the murder scene were sold through the ATF operation. Dodsons book, titled The Unarmed Truth, provides the first inside account of how the federal government permitted and helped sell some 2,000 guns to Mexican drug cartels, despite evidence the guns killed innocent people. Dodson, who is working with publisher Simon & Schuster, submitted his manuscript to the department for review, per federal rules. However, it was denied. [The source of this story is FoxNews.com. However, the same facts are reported by the Obama-leaning huffingtonpost.com.] The extraordinary factor? The reason the government gives for forbidding publication of the book: Harming morale. In other words, the government is essentially saying, You may not publish this bookbecause it will embarrass us. This is a new thing in America. Even under the last President, George W. Bush, no federal agency would have been permitted to say such a thing, much less do it. The outrage from antiBushite Michael Moore to MoveOn.org to the Democratic National Committee would have been explosive. And deservedly so. For reasons nobody seems willing to explain or name, thats no longer the case. It appears that when the Obama administration faces embarrassment for the publication of a book exposing a government scandal, it has every right to assert

government privilege. The idea that any government agency has a right not to be embarrassed is a principle underlying a dictatorship, not a democratic republic supportive of individual rights. In a democratic republic, the individual has a right to speak his mind, or tell his story, provided its on his own time, money and property. If he commits plagiarism or spreads objective falsehoods, hes of course subject to legal sanctions through the due process of courts and law. But thats not whats happening in this case. An agency of the federal government deems it humiliating, and therefore impermissible, for a potential whistle-blower to expose facts or perceptions about a very important scandal involving the government. The Obama administration will argue that they have a right to control a man whos still their employee. Yet the federal government forbids private sector employers discretion all the time. Hiring based on actual (or even alleged) racial or sexual discrimination is illegal, and employers are now mandated to provide health insurance for their employees, otherwise pay a fine. Why is so little discretion allowed private sector employers while the king in charge of the federal government may use any oversight he wishes? Plus, if the Obama administration has nothing to hide in the Fast and Furious scandal, why fear the publication of this book? You need not care about the ATF Fast and Furious scandal, nor even know what it is. But freedom of speech is a wider principleand its for everybody. Its for Democrats, for Republicans, as well as for the nonpartisan or the politically indifferent. Freedom of speech is for writers of any kind, and for all of their readers. Even if you dont care to read, youll fare much better in a society where people are free to think and, as a direct result, free to write and speak their minds as they see fit. Our government is curbing that right in cases where itwell, where its embarrassing to the rulers. If you dont care about that, then its hard to imagine that you care about any of your remaining freedoms.

Who Shut Down the Government?

THOMAS SOWELL (2013.10.03 )

Even when it comes to something as basic, and apparently as simple and straightforward, as the question of who shut down the federal government, there are diametrically opposite answers, depending on whether you talk to Democrats or to Republicans. There is really nothing complicated about the facts. The Republican-controlled House of Representatives voted all the money required to keep all government activities going except for ObamaCare. This is not a matter of opinion. You can check the Congressional Record.

As for the House of Representatives right to grant or withhold money, that is not a matter of opinion either. You can check the Constitution of the United States. All spending bills must originate in the House of Representatives, which means that Congressmen there have a right to decide whether or not they want to spend money on a particular government activity. Whether ObamaCare is good, bad or indifferent is a matter of opinion. But it is a matter of fact that members of the House of Representatives have a right to make spending decisions based on their opinion.

ObamaCare is indeed the law of the land, as its supporters keep saying, and the Supreme Court has upheld its Constitutionality. But the whole point of having a division of powers within the federal government is that each branch can decide independently what it wants to do or not do, regardless of what the other branches do, when exercising the powers specifically granted to that branch by the Constitution. The hundreds of thousands of government workers who have been laid off are not idle because the House of Representatives did not vote enough money to pay their salaries or the other expenses of their agencies unless they are in an agency that would administer ObamaCare. Since we cannot read minds, we cannot say who if anybody wants to shut down the government. But we do know who had the option to keep the government running and chose not to. The money voted by the House of Representatives covered everything that the government does, except for ObamaCare. The Senate chose not to vote to authorize that money to be spent, because it did not include money for ObamaCare. Senate Majority Leader Harry Reid says that he wants a clean bill from the House of Representatives, and some in the media keep repeating the word clean like a mantra. But what is unclean about not giving Harry Reid everything he wants? If Senator Reid and President Obama refuse to accept the money required to run the government, because it leaves out the money they want to run ObamaCare, that is their right. But that is also their responsibility. You cannot blame other people for not giving you everything you want. And it is a fraud to blame them when you refuse to use the money they did vote, even when it is ample to pay for everything else in the government. When Barack Obama keeps claiming that it is some new outrage for those who control the money to try to change government policy by granting or withholding money, that is simply a bald-faced lie. You can check the history of other examples of legislation by appropriation as it used to be called. Whether legislation by appropriation is a good idea or a bad idea is a matter of opinion. But whether it is both legal and not unprecedented is a matter of fact. Perhaps the biggest of the big lies is that the government will not be able to pay what it owes on the national debt, creating a danger of default. Tax money keeps coming

into the Treasury during the shutdown, and it vastly exceeds the interest that has to be paid on the national debt. Even if the debt ceiling is not lifted, that only means that government is not allowed to run up new debt. But that does not mean that it is unable to pay the interest on existing debt. None of this is rocket science. But unless the Republicans get their side of the story out and articulation has never been their strong suit the lies will win. More important, the whole country will lose.

The Moral Equals The Practical

JAANA WOICESHYN (2013.10.14 )

Recently I heard a colleague tell someone: Everyoneexcept the nave idealists knows that one cannot be 100% moral in business; success in business requires compromising moral principles from time to time. In other words, he was arguing that in theory it is good to be moral, but its not always practical. This is a disheartening view for someone teaching at a business school, but it is common also among businesspeopleand it is wrong. Why? To answer, first we need to define moral and practical. Moral means consistent with moral principles or morality. To act morally, a person must follow moral principles. According to the Greek philosophers, morality is a guide to a good life; it tells us how to do the right thing to achieve our values and goals. Practical means effective or successful in achieving goals. Practical action gets things done. In business, practical action maximizes long-term profits. There is no conflict between the moral and the practical. Morality is a guide to a good lifeit is a guide to achieving practical goals. But why do we need such a guide in the first place? Why not just focus on getting things done and maximizing profits? We need a guide for achieving a good life because we do not know automatically what goals are good for us and how to achieve them. Unlike animals that automatically pursue goals that are good for them (within the limits of their knowledge) such as food and mates, we have to first learn what are good, practical goals that enhance our lives and then acquire knowledge about reaching them. A cat sees a mouse, catches and eats itit does not need a guideline for determining whether hunting mice is good or how to go about it; it acts instinctively. But humans cannot safely act on impulse: we need to acquire knowledge of proper goals and means and then apply it. We hold the knowledge we acquire in any field in the form of principles. Principles are generalizations that we induce from observation; they serve as a guideline to action. For example, principles of agriculture, engineering, and nutrition tell us how to achieve goals: better crop yields, sound buildings and bridges, and good healthnone of which can be achieved by acting on impulse. Principles of morality are fundamental. According to Ayn Rand, morality is a code of values to guide mans choices and actionsthose choices and actions that determine the purpose and course of his life. Consider the principle of honesty: whether you choose to follow it or select a career as a con artist, will determine the

purpose and course of your life. Similarly, if you follow the principle of self-interest, the purpose and course of your life will differ dramatically from those who follow the principle of self-sacrifice. If we want to achieve a good life, we need to identify and choose the moral principles that support it. Why do many people think that the moral and the practical conflict? The confusion stems from the prevailing view of morality: altruism. Most are not aware of the morality of self-interest. Instead, they believe that to be moral, one must put others interests ahead of their own. Yet, they realize they must be practical and achieve at least some of their values, such and food and shelter, to survive. If you practice altruism on principle, you will have to give up all your valueswhich is impractical, if you want to live. Naturally, the goal of businessprofit maximizationis incompatible with altruism. The impossibility of following altruism in business (and in life in general) leads many to accept the false alternative of pragmatism: rejecting all principles and doing whatever they feel is practical to get things done. The problem with this approach is that it prevents us from achieving long-term profitability and other goals. As fallible beings without automatic knowledge, we need the guidance of moral principles. Compromising them for so-called practical ends will not lead to achievement of values but to their loss, as those compromising principles such as honesty by deceiving investors or cutting corners in product quality will eventually find out. Its the pragmatiststhose who reject principled moralitywho are nave; they will fail to achieve values in the long term. Those who understand that moralityproper, pro-human morality of rational self-interestis practical will achieve success. The moral code of rational egoism is the guide to a good lifeincluding success in business.

Stealthy Moves against Freedom of Speech

EDWARD CLINE (2013.11.08 )

Advocates and defenders of the First Amendment and freedom of speech are strung out like the three Roman legions that were ambushed and ultimately annihilated by barbarians in the denseTeutoburg Forest in Germany in 9 A.D. Out of a force of about 36,000 fighting men, the Romans suffered between 16,000 and 20,000 casualties. The First Amendment, appended to the Constitution with nine other Amendments which became known collectively as the Bill of Rights, reads: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. And that Amendment is all Americans have at present protecting them from censorship and a dictatorship. We are marching into an ambush by secular advocates of censorship and Islamic ones. Our political leadership is either as ignorant of the perils as were the Roman armys generals, or just as careless in its defense, or oft times even hostile to it. No European nation has the equivalent of the First Amendment. As Bruce Bawer, an American journalist who has lived in Europe for years, noted in his October 2010 column on the trial of Geert Wilders, the Dutch politician who stood trial for blaspheming Islam (and who was subsequently acquitted of all charges): One of the most bizarre aspects of being an American in Western Europe at least if youre an American who has opinions and is used to expressing them freely is getting accustomed to the fact that theres no First Amendment over here. Some of us grew up thinking of Western Europe as part of the Free World. But how free is a country if it doesnt recognize freedom of speech as a fundamental right? Indeed. Just how free is the Free World when most of its members labor under various gradations of the welfare/regulatory state? The fact is that freedom of speech in Europe is granted by the various governments there, but it is a conditional granting by the state, and not a recognized inherent right of the individual. And the conditions are many and malodorous. The chief complainant in Europe has been Islam. Bawer notes:

In recent years, the superiority of America on this score has been affirmed again and again, as one Western European government after another has prosecuted individuals for saying or writing things that were deemed unacceptable. In a preponderance of cases, these prosecutions have been for statements about Islam. Some of the defendants Oriana Fallaci, Brigitte Bardot have been famous. The superiority of the First Amendment lies in the fact that it expresses a fundamental requirement for existence, while European speech laws deal with incidentals, as though the right to express oneself were a spurious privilege, icing on the cake of a government permitting one to live and slave away for the collective. This premise, however, has been introduced into U.S. law in the guise of hate speech and hate crimes. Now, the problem with hate speech is that it is an anti-conceptand an attempt to read mens minds. I hate Islam. So what? I can explain why I hate Islam, but a rational, and even an irrational explanation is irrelevant to hate speech law. So what if I express my hate in words or in images? Words and images and even gestures are not metaphysical entities that can be shot, catapulted, or flung at the object of hate. Words, images and gestures do not have the physical power to destroy or harm anything or anyone. Perhaps even a dhimmi American judge would concede those points. He should conclude: No crime has been committed. However, if my hate speech provokes initiatory force or actions by those claiming defamation or being hurt by my speech, it is the potential provocation to action for which I could be punished, penalized and even jailed. The potential may not even realize itself, but woe to me if Muslims began taking physical action against me and others, resulting in injury, death, or the destruction of property. Look what happened to the Innocence of Muslims trailer-maker. His YouTube film was used as an excuse to blame free speech for the attack on Benghazi, resulting in the deaths of four Americans. He was arrested, held without bail, and subsequently sentenced to a year in prison. Initially, however, it was our own State Department via Hillary Clinton together with President Barack Obama that assigned the blame. It was later proven that the film had nothing to do with the attack. Remember what happened after the publication of the Mohammad cartoons? Muslim mayhem. You wouldnt need to calmly examine Islam as a religious or political system. Even should you suggest that Mohammad had lice in his beard and was probably syphilitic, out would come the crazed, semi-literate Muslim hordes demanding your head on a pike. It would make no difference. My speech could not by any definition be regarded as an initiation of force. But the actions taken by those who wish to punish me, or to suppress it before I have even

spoken it be they Muslims acting on their own, or the government itself on behalf of Muslims can be. And the question is: Were my words provocative? In the final analysis, no. Men are free to agree or disagree with what I say, or even to ignore what I say. Absent any attempt by me to force others to hear what I have to say, to read what I have written, or even to acknowledge a physical gesture (such as giving Mohammad an Italian salute), then any physical or statutory retaliation against me is an initiation of force. Only a government can employ censorship against a nations citizens, that is, use initiatory force to silence anyone from expressing a viewpoint, disseminating information, voicing opposition to a political system, or even showing a picture. Only a government can legally punish an individual for expressing what is on his mind. And it is the mind which both a censorial government and groups such as Muslims wish to neutralize or extinguish. In the U.S. censorship is a mosaic of disparate instances that do not add up to blanket censorship one might otherwise associate with iron-fisted dictatorships like Nazi Germany, Soviet Russia, and Communist/Fascist China. Censorship by private individuals, corporations, newspapers, magazines and the like, however, isnot censorship: It is the barring of viewpoints, language, images or behavior on nominally private premises, be they pages in a newspaper, over the airwave, physical private property, or an Internet venue (e.g., Facebook), because they are in opposition to the hosts viewpoint or violate its rules. Absent in private censorship is the element of force. Individuals do not have a right to force others to act as their soapboxes for viewpoints or behavior others find objectionable or repellent. Nor have they a right to literally force themselves on anothers property. Europe continues to follow the path to a state of affairs concerning speech so restrictive that Europeans may as well not even bother opening their mouths or writing an essay, for the least criticism, especially of Islam, can be interpreted by Muslims and by European Union bureaucrats as hurtful or defamatory or an expression of hate. Soeren Kern, in his October 28th Gatestone article EU Proposal to Monitor Intolerant Citizens, reported: While European leaders are busy expressing public indignation over reports of American espionage operations in the European Union, the European Parliament is quietly considering a proposal that calls for the direct surveillance of any EU citizen suspected of being intolerant. Critics say the measure which seeks to force the national governments of all 28 EU member states to establish special administrative units to monitor any individual

or group expressing views that the self-appointed guardians of European multiculturalism deem to be intolerant represents an unparalleled threat to free speech in a Europe where citizens are already regularly punished for expressing the wrong opinions, especially about Islam. The proposed European Framework National Statute for the Promotion of Tolerance was recently presented to members of the Civil Liberties, Justice and Home Affairs Committee of the European Parliament, the only directly-elected body of the European Union. Kern goes on to explain that the focus of the proposed legislation is an unqualified tolerance that will not tolerate the least criticism of especially Islam, and provides a breakdown of the intent and method of enforcing tolerance. Importantly, he emphasizes: Section 6 states: It goes without saying that enactment of a Statute for the Promotion of Tolerance does not suffice by itself. There must be a mechanism in place ensuring that the Statute does not remain on paper and is actually implemented in the world of reality. An explanatory note to Section 6 (a) states: Members of vulnerable and disadvantaged groups are entitled to a special protection, additional to the general protection that has to be provided by the Government to every person within the State. Another note adds: The special protection afforded to members of vulnerable and disadvantaged groups may imply a preferential treatment. Strictly speaking, this preferential treatment goes beyond mere respect and acceptance lying at the root of tolerance. [Italics mine] The reality in Europe is that Islam is setting the terms of every Europeans political existence. One after another, national and local governments capitulate to demands by Muslims that they be accommodated in terms of mosque construction, blaring calls to prayers, closing off public streets for mass prayers, the serving of Islamic halal food in schools and other public venues, and nume rous other concessions to Islamic mores (such as they are). Who actually are the new members of vulnerable and disadvantaged groups? Non Muslims. What do the architects of Islams preferential treatment expect of non Muslims beyond mere respect and acceptance? The total surrender of their minds and obsequious submission not only to Islam, but to the EUs totalitarian dictats. The Soviets, by forbidding and punishing all instances of independent thought, hoped to nurture the creation of a Soviet Man, that is, an automaton that would unthinkingly do the Partys bidding. The EU hopes its speech suppression laws will produce the Tolerant Person, an automaton that will tolerate its own destruction by being assimilated into Islamic society.

Jacob Mchangama, in an analysis of the origin and implementation of hate speech law in his December 2011 Hoover Institution paper, The Sordid Origin of Hate Speech Laws, writes that, indeed, hate speech laws are a legacy of Soviet totalitarianism: All western European countries have hate-speech laws. In 2008, the EU adopted a framework decision on Combating Racism and Xenophobia that obliged all member states to criminalize certain forms of hate speech. On the other side of the Atlantic, the Supreme Court of the United States has gradually increased and consolidated the protection of hate speech under the First Amendment. The European concept of freedom of expression thus prohibits certain content and viewpoints, whereas, with certain exceptions, the American concept is generally concerned solely with direct incitement likely to result in overt acts of lawlessness. Yet the origin of hate-speech laws has been largely forgotten.The divergence between the United States and European countries is of comparatively recent origin. In fact, the United States and the vast majority of European (and Western) states were originally opposed to the internationalization of hate-speech laws. European states and the U.S. shared the view that human rights should protect rather than limit freedom of expression. [Italics mine] Rather, the introduction of hate-speech prohibitions into international law was championed in its heyday by the Soviet Union and allies. Their motive was readily apparent. The communist countries sought to exploit such laws to limit free speech. That divergence between Europe and the U.S. is shrinking to a state of convergence. Bruce Bawer also weighed in on the proposed legislation in his October 30th FrontPage article, EU Unveils Crackdown on Free Speech. The first thing I ever wrote about Islam was an essay forPartisan Review entitled Tolerating Intolerance, which was published a few months after 9/11. My argument, in brief, was that Islam is not just a religion but an ideology that teaches an extreme and violent intolerance and that Europeans had a right to protect the freedom of their societies by implementing well-informed immigration and integration policies. Now the European Council on Tolerance and Reconciliation (ECTR), founded in 2008 and consisting largely of former European presidents or prime ministers, has issued a report whose thrust is and I quote that theres no need to be tolerant to the intolerant. But the argument of the report which was presented to the European Parliament in late September and takes the form of a Model Statute for Tolerance that the ECTR

hopes to see enacted b all EU member states, is light-years away from the one I made all those years ago in Partisan Review. The ECTRs concern is not with addressing the importation into Europe of Islamic intolerance but, rather, with addressing the purported intolerance of Europeans toward (among other things) imported Islam. President Barack Obama pronounced at the U.N. in September 2012, The future must not belong to those who slander the prophet of Islam. But the future seems to belong to Muslims and Western judges who would persecute anyone who gave Islam and Mohammad a scholarly or visceral middle finger. To Islam, everything said about Mohammad by infidels is slanderous. Cooperating with the European Parliament is the Organization of Islamic Cooperation (OIC), with its recent Geneva Conference on speech and its United Nations Resolution 16/18, which seeks to ban and punish all defamatory speech, most and especially about or against Islam. Deborah Weiss reported on October 22nd in her FrontPage article, Geneva Conference Moves Toward Criminalizing Islamophobia. In its quest to criminalize speech thats critical of all Islam -related topics, the Organization of Islamic Cooperation (OIC)* endorsed the formation of a new Advisory Media Committee to address Islamophobia. This past September, the OIC held The First International Conference on Islamophobia: Law & Media. The conference endorsed numerous recommendations which arose from prior workshops on Islamophobia from media, legal and political perspectives. A main conclusion was the consensus to institutionalize the conference and create an Advisory Media Committee to meet under the newly established OIC Media Forum based in Istanbul Turkey. Note that the conference was not held to discuss the criminalization of Judeophobia or Christophobia or even Atheistiophobia. Supposedly, the purpose of the conference was to support an OIC campaign to correct the image of Islam and Muslims in Europe and North America. By this, it means to whitewash the intolerant, violent and discriminatory aspects of Islam and Islamists. The OIC has launched a campaign to provide disinformation to the public, delinking all Islam from these undesirable traits and attacks all who insist on these truths, as bigots, racists and Islamophobes. Its present goal is the international criminalization of all speech that defames Islam, which the OIC defines as anything that sheds a negative light on Islam or Muslims, even when its true (wrote Clare Lopez in American Thinkerin 2011).

Its target is the West and one of its tactics is to accuse those who criticize Islam or its various interpretations as Islamophobic. It is attempting to pass the equivalent of Islamic blasphemy codes in the West, using accusations of bigotry to silence anyone who speaks the truth about Islamic terrorism or Islamic persecution of religious minorities. The OIC wants enforceable laws passed in Western nations that complement its wish to criminalize speech regarding Islam. In practice, this would mean that only Islamic clerics and spokesmen would be allowed to say anything about Islam. And Muslims, treated as victimized minorities in those nations, would be free to persecute, murder, rape, and terrorize Jews, Christians, atheists and other non-Muslims with impunity and indemnity everywhere and any time they wished. As they do now. Can such Orwellian laws be passed in this country? The existence of hate speech and hate crime judicial decisions in American courts has prepared the ground for them here. It was Secretary of State Hillary Clinton who invited OIC members to a conference in Washington to discuss how American law can conform to U.N. Resolution 16/18 and the OIC agenda. What difference can it make to her if Americans are gagged and threatened with prosecution for speaking out against Islam or drawing to the publics attention the gruesome facts of Islam in practice and in action? Just remember, and to paraphrase that Orwellian warning: Hate speech is hate crime. Just ask Audrey Hudson, the journalist whose home was raided by Federal and Maryland state law enforcement in search of evidence of her own hate crime. And so began Hudsons nightmare held captive by armed agents of the U.S. Coast Guard, Maryland State Police and the Department of Homeland Security as they staged a pre-dawn raid in search of unregistered firearms and a potato gun. I think they found a great way to get into my house and get a hold of my confidential notes and go through every other file in my office. Audrey Hudson, journalist But instead of taking the potato gun, agents seized unrelated government documents and notes from the former Washington Times journalist. Agents took Hudsons records during a search for guns and related items owned by her husband, a civilian Coast Guard employee. They also confiscated her legally registered firearms, according to court documents obtained by The Associated Press. The lesson here is that a search warrant no longer is a protection against the depredations of any government agency that has the power to expropriate ones

property, or to intimidate anyone who has been critical of government policies, gaffes, failures and tyrannical behavior. Search warrants are now just a pretext to violate ones person and ones rights. The barbarians and totalitarians inside and outside our borders are ready to ambush the First Amendment and render us helpless against their onslaught.

Victims of capitalism?
JAANA WOICESHYN (2013.11.07 )

When the Canadian government recently announced the plan to build a monument to victims of communism, Elizabeth May, the Green Party leader (and the partys sole MP) tweeted: no mention of monument to victims of capitalism. While the government should not build any monumentsit is spending our money without our consentMs. Mays tweet warrants comment. It reflects widespread ignorance of capitalism, and not just among politicians. As the system consistent with requirements of human survival and flourishing, understanding capitalism is in our self-interest. Many people confuse our current mixed economy with capitalism. However, there is no capitalist system anywhere in the world (the closest to it was 19th century America but even there capitalism was not pure but entailed government involvement in the economy), so there hardly could be any victims of capitalism. But more fundamentally, there cannot be victims of capitalism because the whole concept is a contradiction. To see why, we must be clear what victim and capitalism mean. Victim is a person destroyed, sacrificed, or injured by another, or by some condition or agency; one who is cheated or duped (The Living Webster Encyclopedic Dictionary of the English Language). In another words, a person is victimized by physical forcewhether initiated by another or caused by a natural phenomenon (such as earthquake or flood)or by fraud committed by another. Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned (Ayn Rand: Capitalism: The Unknown Ideal). In other words, capitalism is a system in which the initiation of physical force and fraud is banned. Under capitalism, only the government can use forcebut only in retaliation against its initiators, such as terrorists and other criminals. Because initiation of physical force and fraud are banned in a capitalist system and the governments only role is to protect the individual rights of its citizens, there are no victims. Quite the contrary: capitalism is the only victimless social system. People are free to pursue their interests but they cannot violate the rights of others by

initiatingor threatening to initiatephysical force against them. The government via independent courts and objective lawis there to deter and punish them in case they do. Under capitalism, violations against others life, liberty, and property are deterred and punished, including crimes such as polluting someone elses property, or otherwise damaging or stealing it. Under capitalism, the government protects individual rights and cannot itself initiate force, for example by confiscating citizens property to build monuments. In every statist system, including the mixed economies prevalent in most countries of the world, there are victims because the individual rights are not fully protected and governments themselves initiate physical force in varying degrees, from taxation and confiscation of property for the sake of alleged public interest to imprisoning and executing dissidents. If we want more freedom and recognition of individual rights necessities for human survival and flourishingthe first step is to understand what capitalism means and then promote it, by educating all those willing to listen. Elizabeth May might not be among them but many others will be.