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Why Government Spending is not the Answer

Why Government Spending is not the Answer

Since Obama just won (congrats btw), we have some time to accept that America just made a resounding endorsement of Keynesianism. This is not a good thing. I can only assume that most Americans don’t understand the danger of government spending, or that Mitt Romney was an exceptionally bad messenger for liberalization. The latter is certainly true; the former is probably mostly true. Excuse this post for its generalities, but what matters here are the concepts.

There are two main arguments against government spending.

The first argument is that governments tend to spend money much less efficiently than individuals do. To paraphrase Milton Friedman, very few people spend other people’s money better than they spend their own. There is an undeniable truth to this matter. Think about market efficiency with distributed buyers and sellers, all trying to maximize utility individually, as opposed to purchases made by consensus, whether it’s on textbooks or social spending like welfare. It is impossible for a consensus of buyers to maximize utility for all individuals in that group as effectively as each individual can maximize utility for him/herself. The sellers of whatever it is being purchased only have to sell to one customer, which greatly lowers their incentive to create a consistently good product. Especially if that one customer comes with an exclusive contract, and you can create political pressure to keep the customer if jobs are at stake.

So whereas the money might very well end up in the pockets of contractors who hire workers and create jobs, these jobs don’t necessarily have to be productive. It was Keynes who gave the example of the government paying people to dig holes and fill them up. Certainly, this would be government spending that created jobs, but would it be good for the economy? If you take a labor theory of value, that the wealth of a society is the sum value of the goods and services the society produces, then that isn’t the case. It is also apparent from a historical perspective that command economies are far outperformed by free ones. People simply work harder and produce more if they are working for themselves and not for others. This generates more value which generates more wealth which generates more growth, prosperity, and jobs.

The second argument against government spending is that there really is no such thing as government spending. The government doesn’t have any money on its own; it only has money that it borrows through debt, raises in taxes, or creates via inflation. For the government to spend money in the economy, it needs to get money from the economy. No additional value is created; the cycle is only perpetuated. Frederic Bastiat, who developed the notion of opportunity cost, said it best in his essay That Which is Seen and That Which is Not Seen. It is easy to see the benefits of government spending when it arises (contracts going to construction workers, teachers, etc), but much harder to see the tradeoff of where that money is not being spent: money that would have circulated through the economy had it not have been paid to the government in taxes. The exact example Bastiat used, in fact, was of a natural disaster sweeping through a town and destroying buildings. Arguments will be made, he said, that the economy will be helped by the jobs necessitated by the cleanup and rebuilding. But these arguments ignore the money that would then not be spent on the economy had the disaster never come through in the first place. The fact is, a natural disaster destroys value, and that’s that.

Public spending is not really good for growth, and anything that can be taken care of by the private sector should be. There are obviously public goods that cannot be efficiently managed privately, like roads and bridges, but these make up a fraction of the actual government spending today on growth. In general, increased public spending does not create growth, it merely recirculates money through the economy much less efficiently.

What private individuals “hoarding” all their money and not spending it (as during a recession)? Doesn’t that necessitate government spending to stimulate the economy? Well, even if the money is sitting in someone’s bank account, it is still part of the US economy–it is leant out by banks to small businesses, it is invested in pension funds, bonds, etc…unless the money is under a mattress it is being useful. But should we decide to tax “non-useful” money, I certainly wouldn’t want to be the person who had to figure out which money was being useful and which wasn’t for each individual, would you? Mind you, a lot of people save money for retirement, or to pass on to children, and that’s not money I would call non-useful; I would consider it quite immoral to tax that money. Yet tax it we do, since our tax code considers all taxable income to be fairly fungible. The so-called “cash pile” exists because of a credit crisis–people with money are hesitant to invest it or lend it or spend it because they are unsure what the future of the economy will be. Certainly, the government stepping in and starting to tax the cash pile will not make investors more confident to start spending again; more likely, people will start stashing the money overseas.

What about things that people absolutely need? Doesn’t the government have an obligation to provide these things if the market can’t? Well, let’s look at what we mean by “need.” The fundamental concept of economics, that of scarcity, takes as a supposition that society doesn’t have the resources to meet our wants and needs. In other words, our wants and needs are unlimited. For example, it is hard to see a refrigerator as anything less than an absolute necessity today, yet it did not exist for most of human history. The brilliance of the free market is it allows individuals to maximize their own utility, to trade for the things that they want and need the most, trading off with the things they don’t need as much. When the government steps in to provide for solutions to “market failures,” it can have the adverse affect of creating market failure.

November 12, 2012Comments are DisabledRead More
What Adam Smith Really Said About Government

What Adam Smith Really Said About Government

I am a little late to the party, but I read Adam Gopnik’s piece on Obama’s “you didn’t build that” comment, and I am a little disappointed that he fails to understand Adam Smith’s message, or if he does, he has failed to represent his position correctly.  Gopnik should know this, having reviewed Nicholas Phillipson’s Adam Smith: An Enlightened Life (a book I happen to have read just two weeks ago), with its elucidation of the humanistic tradition of the Scottish enlightenment where Smith had his intellectual genesis.  Although Gopnik is correct on one front–that Smith’s theory of free markets was really not a theory of free markets at all, but a sweeping indictment of the British mercantilist class, whose unprecedented wealth and prosperity was founded upon the control of the levers of government commercial policy–he is wrong on another, that “Smith was for a government that intervened regularly and actively on behalf of consumers and against the natural tendency of “producers”—i.e., very wealthy people, whether aristocratic landowners or manufacturers or, perhaps, financial-leverage experts—to band together for their own benefit.”  Just because Smith opposed a government that was in the pocket of the monied classes, it does not follow that he advocated an activist government to oppose the monied classes in the interests of consumers.  His genius was to recognize that a government of this nature would very quickly become virtually identical to the one it was originally created to prevent, as we can very clearly see in our society today.

It didn’t take a genius in Smith’s time–nor does it take one now–to recognize the crass oligarchy of the mercantilists and the guild system’s merchant class opulence at the expense of the poor.  Their monopolies were enforced and guaranteed by government fiat–only approved vendors could trade in tobacco, for example, and these vendors came from the monied class who regulated their own industry’s rules.  This monopoly was what Smith sought to break.  But Smith’s prescription for the madness of the plutocrats was to increase the freedom of the marketplace and thus decentralize their power.  He did not advocate a greater role of government in the economy; in fact, the breakthrough for which he is most famous–first examined in the Theory of Moral Sentiments and then analyzed in Wealth of Nations–was the recognition that people organized voluntarily and privately for their own interests create more wealth and prosperity for society on the whole even though such a result was never part of their intention, whereas individuals who “affect to trade for the public good” often cause great harm to society even though such a result was never part of their intention.

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

The latter (highlighted) part of this invisible hand–called by Milton Friedman the inverse invisible hand–is often ignored by critics of liberalism when they pursue an active government intervention in the economy.  The solution for the unfair distribution of wealth caused by government-created monopolies and trade restrictions was not the re-assignment of this distribution to a different entity led by different interests.  Smith’s solution was the opposite: to lesson the undo influence of monied interests who would “affect to trade for the public good” and thus cause greater economic harm to society on the whole.

The America of today is one that closely resembles 18th century Britain. We, too, have our trade guilds, but we call it “lobbying.”  Almost every industry has a lobbying group that seeks to pass favorable legislation to benefit it, whether it be in the form of subsidy or tax breaks (corn and oil lobby) or in the form of restricting competition from similar industries (tobacco lobby).  Our biggest guilds are, for some reason, immune in the public sphere from criticism, such as the National Education Association, also known as the national teachers’ union, which exists solely to break any competition in the education industry, or our vaunted trade groups such as the American Medical Association or American Legal Association, who determine the legal status of their own practitioners and thus restrict innovation and competition and crush dissent.  Trade associations function as legal cartels–in the US mostly not violent ones, but cartels nonetheless.  Smith saw much the same problems in Britain, and prescribed a wide-ranging set of reforms to address these problems, including, among other things, the elimination of barriers to free trade, both inside and outside national borders.  Jobs and wages, he wrote, should be commensurate with experience and skill, and relate directly to the relationship established between the buyer and seller, not established by fiat, often enforced by thuggery and violence.  (Meanwhile, do you know what happens in the US if you try to open a hair salon without approval from your competition in the hair salon industry?)

Smith’s prescription for today’s America would not be to increase the influence of monied interests.  His prescription would be to decrease their influence by opening up the markets to competition.  This opening up necessitates the absence of government, not its expansion.  To the claim that the government is necessary to open the market–or that such a thing is even possible–Smith’s inverse invisible hand quite clearly shows us the folly of such magical thinking.  In the efforts the US government has made in the last century–ostensibly under the influence of Keynesianism–to make the market “more free” have only resulted in less freedom, and often at the expense of the very people the markets are supposed to help.  The late Interstate Commerce Commission is a good example of this notion–known as regulatory capture–but examples can be found almost everywhere regulatory bodies exist.  The government’s role in the markets provides a perfect opportunity for monied interest to control these regulatory bodies and ultimately use their power for their own advantage.  We have seen, under the proliferation of banking regulation, the number of banks decrease–not increase–and thus the options available to consumers in order to better protect their deposits shrink.  This was probably not the intention of the regulators attempting to improve competition, but it is quite apparently the result.

Gopnik is right that Smith envisioned a role for government included very many things that could be called public goods–roads, bridges, etc.  But this is not where the US government spends most of its money, and this is not what people mean when we say “regulation.”  Regulation for its own sake is not the solution–that sort of assumption leads to justifying every intervention in the so-called service of any constituency.  Price supports to benefit farmers.  Tax breaks to benefit oil companies.  And yes, entitlements to pay for healthcare and old age annuities at the expense of the public at large.  The very things that Gopnik criticizes–for example, the situation that causes “people with undue influence on the government to have a lower tax rate than people who don’t”–is a result of regulation.  We have a pretty giant regulation–the Internal Revenue Code–which was constructed originally to benefit the public at large but has since been hijacked by special interests who use it to their advantage.  Or we can look at the biggest bonus of all, the $1.6 trillion in taxpayers’ money that was spent to impoverish American citizens to the benefit of a few bankers on Wall Street, who have since used their magic security blanket to gamble more money in the markets.  They have achieved this bailout and these results as the result of a revolving door of regulators, treasury secretaries and finance CEOs that have worked with each other to reinforce their own wealth and power at the expense of the public at large.  This is the definition of plutocracy, and it is an outrage that the forces most in favor of bailing out the banks are the liberal elite who most bemoan the undue power and influence of bankers.

We need a government that will guarantee fair adjudication of contracts, protect private property, keep law and order, protect our borders, and, in rare instances, protect those common resources which we all use and thus have a common obligation to pay for.  If Smith truly was a believer in the good of all people–which he was–he would want us to depend on our common morality and decency to support each other in times of need (which we do) and share the fruits of our labor for our own benefit as well as that of others (which we do) and to trust government to protect us from harm (which we do).  But the goodness of people is not so much in question as much as the danger of giving good people the power to do things that they think are good for the public and in doing so, harm society on the whole.  Diagnosing this problem and prescribing a solution–that was the genius of Smith.

July 29, 2012Comments are DisabledRead More
Too Little Central Control in the EU?

Too Little Central Control in the EU?

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” – Alexis de Tocqueville, misattributed

I had the extreme displeasure of reading Paul Krugman’s latest excretion today. He begins by complimenting (nay, sucking up to) the Greek people and ends by making a specious claim about the relationship between a strong central government and the success of the dollar vs. the Euro. He’s clearly not even trying to make a cogent argument anymore. I am neither a Nobel laureate nor a syndicated New York Times columnist, but I will try to respond in kind, by frothing at the mouth and seeing what comes out.

First off, I am able to begrudgingly come to common ground with Mr. Krugman on some points: One, that the Euro is responsible for Greece’s woes. Mr. Krugman, like George Soros, is right that the Eurozone is a terrible idea in the way it’s currently constructed. As a friend of mine recently emailed me, “Where were all these people 15 years ago when the Maastricht Treaty was signed? How did ANYONE think a monetary union without a fiscal union could work?”  Two, Mr. Krugman is right that austerity has been devastating for Europe. He gets no points for making obvious statements. Where he gets me every time is his continued advocacy of democratic socialism and big government spending at a time when the consequences of decades of such rampant opportunism and irresponsibility are clearer than they have ever been.

When times are good, people routinely credit whatever proximate cause they can, and for Europe for the last three decades, the cause célèbre has been “democratic socialism.” It is that wonderful post-Stalin Marxist ideal that attempts to solve the historically failed experiment of socialism by putting a friendlier face on it: we’ll do it Marx-style, but make sure we vote for it first. Thus the people retain their political sovereignty and, fingers crossed, economic productivity as well. Although, of course, we know that the economic productivity part is a joke, since it is based on the notion that people are A) fiscally responsible, B) more fiscally responsible in larger groups and C) able to spend other people’s money better than they can spend their own. But we know that when times are good, there’s no problem.  Political parties coming to power promising to lower the retirement age, shorten the work week, fund hefty retirements and guarantee low cost loans are always going to win elections against those parties that tout the boring virtues of hard work, discipline and fiscal responsibility.

But then times get bad, and the bill comes due, and austerity hits. No one wants to blame themselves, of course, so they turn to the scapegoats. The most wealthy and productive are a favorite of the democratic socialists. Mr. Krugman gets in on it when he complains about “the arrogance of European officials, mostly from richer countries.” Of course, when Mr. Krugman proposes that European governments continue to spend money they don’t have on social programs and entitlements that don’t work, where does he suggest they get the money if not from richer countries like Germany, that have not only singlehandedly funded the entitlements and social programs Mr. Krugman supports and have prevented much worse austerity which he opposes, but have kept the entire Eurozone afloat?

Europe is not suffering because of a lack of strong central government that can coerce the German people to paying for Spanish mismangement. It’s suffering preciely because it has too much power centralized in the hands of too few, a large central monetary union that has done precisely what Mr. Krugman wants it to do: increase spending in poor countries at the expense and risk of rich countries. The problem is, bailouts don’t work in the long term, and now Europe is just staving off disaster one close call at a time. The markets know the danger of moral hazard and contagion, which is why bond yields in Spain shot up well before Spain was in crisis.  And that’s why no one is surprised when Spain’s banks fail, and then Spain has to borrow more money from the EU (read: Germany) to bail out the banks. And when Spain needs to pay off those debts, they will need to borrow more. It’s a pyramid scheme to the tune of hundreds of billions of dollars with the taxpayer money of productive Europeans, people who don’t deserve to have their lifestyles turned upside down by coercion into an economic and political union in which they have no voice. Why should an olive grower in Spain have to pay–dearly–when the Greeks vote for one party over another?

On Sunday, as you recall, there was an election in Greece, and perhaps no time in recent history has so much of the fate of the world economy hinged on one election in such a small country. If anything is needed to demonstrate the folly of this system, it is the idea that 50,000 votes swinging the other way in Greece could have created a global recession. Mr. Krugman wants a bigger political union–a stronger European central government–in order double down on this vulnerability. Why would anybody put power over the economy in the hands of so few? And why would Mr. Krugman, knowing full well the danger of economic collapse, advocate a system whereby economic power is further centralized making a greater collapse even more likely?

And yet Mr. Krugman wants more of that.

June 17, 2012Comments are DisabledRead More
Why We Pursue Freedom

Why We Pursue Freedom

Recently I was having a spirited debate with a friend whom I suspect to be a libertarian sympathizer.  His big criticism of libertarianism–a very fair one–was that libertarians tend to value Freedom as an end in itself, not more tangible and perhaps more measurable goals such as social mobility, humanitarianism, or even wealth creation.  What good is Freedom if the fruits of that freedom for some are poverty, sickness, or despair?  In particular, the criticism here is utilitarian.  Like any ideology, libertarianism proposes a social and economic ideal and lets the policy makers work out the kinks.  Of course, then one is left with the same problems:  addressing poverty, homelessness, trade deficits, human trafficking and Justin Bieber.  Regardless of your ideological positioning, your imperative is to find utilitarian solutions to real world problems.  If wearing seatbelts lowers the risk of death in accidents, why not require the wearing of seatbelts?  If hamburgers increase the risk of heart attack, why not tax burgers?  Etc, etc.  Says the jaunty liberal, here we are trying to solve problems and you don’t care:  all you care about is the principle of Freedom, but not the problems themselves.  Says the social conservative, we agree in theory that Freedom is good, as long as gays and Muslims are just slightly less free than everyone else.

So to the question that was posed to me, which I try to answer here, was this: Why do libertarians promote Freedom as an end to itself?  I can’t speak for all libertarians, but I can speak for myself.  I pursue Freedom as an end goal in itself because:  A) Freedom is a philosophically pleasing concept, one which is, and should be, a satisfying end to itself, B) Societies organized around a political and economic system of Freedom happen to be those that are extremely beneficial for the growth and wealth of individuals, families and society, and C) Free(er) societies also score higher and better for the general welfare, particularly for those indicators which I value as a humanitarian:  diversity, equality, opportunity, tolerance and peace.

Now, I must digress and first establish that I do not think that free societies exist in reality, although certainly it can be said that some societies are freer than others.  Certainly even the freest economies, like Singapore and Hong Kong, exist under less than optimal political regimes, while the high social freedom of the Netherlands is combined with an almost masochistic suppression of economic freedom.  And certainly, the United States, as my main interest, has many free aspects, although on the whole our country has become less and less free economically.  Although much social progress has been made in the twentieth century, this progress has come at the expense of the Fed, the Income Tax, the New Deal, the Great Society and countless other bloated expansions of state power, from tariffs to occupational licensure, that have marred the promise of economic freedom that has been synonymous with America for two centuries.  In fact, one of the great fallacies of the American right is to continue to claim against mounting evidence that America is still the “land of opportunity.”  The fact remains that our stratifying social classes, hardening economic regulations and explosion of the rentier class have made this opportunity dwindle for most and swell for a select few.  Conservatives do themselves no favors by denying the obvious instead of working harder to right the ship, making government smaller and pursuing sensible economic deregulation instead of inexcusable social regulation.  That said, I look forward to a liberal party that is more interested in social deregulation than economic regulation.

Freedom as a Philosophically Pleasing Concept 

I am surprised by how often people tend to discount the central tenant of libertarianism:  the Freedom is important.  It isn’t important like belief in God or being a vegetarian is important.  Freedom is important precisely because it is, in human history, probably the most evasive desire for most people.  I have been reading Nell Irvin Painter’s History of White People, and aside from a compelling critique of the creation and hardening of American whiteness in the last 200 years, she goes into the history of race and slavery in general, establishing a long history of forced labor that reaches every expanse of the globe for most of the middle ages.  Americans today tend to think of slavery as being that particular institution that existed in the Americas for the planting of cotton and cane with slaves imported from Africa.  Painter shows us that not only was African slavery the tail end of an epoch, but a relatively minor part of a much larger epoch than anyone realizes, especially for Europe.  This slavery–white slavery–in Europe not only has a legacy, but an extremely powerful legacy in the Enlightenment when the fundamental philosophical disruption about freedom concerns the plight of not just enslaved foreigners in Europe but enslaved Europeans themselves.  The legacy of slavery in Europe extends well into the 18th century, such that Robinson Crusoe was not only slave trader and owner but was once a slave himself.  By the time of the settling of the new world, Painter estimates that before the boom in African slaves in the 18th century, one-half to two-thirds of the white immigrants to America came in chains.

Why is this important?  It tells us that slavery still had a resounding effect on America’s founding fathers, not in the way that you would expect (in that they mostly all owned black slaves) but in that it was a part of their recent cultural memory as well.  They may have denied humanity to blacks, but they were not immune to fear of their own servitude as well, as many of them, I’m sure, were descendants of white slaves.  Hypocrisies aside, this gives us a very interesting insight into the minds of the founding fathers who had not only utilitarian but personal and cultural reasons to see to the fact that they would never be slaves.  Today, Freedom is often presented from an original position, whereby we know that as citizens we are generally free to pursue a living, have a family, do and say what we want, and these are all freedoms guaranteed to us by our constitution.  But we forget that the constitution was itself a radical leap forward, and even though it gives us an original position of freedom from which we can write our historical narrative as Americans, we should not take it for granted, and realize that Freedom is extremely vulnerable, even in free societies, even today.

Like all things, people don’t realize how important Freedom is until it is taken away.  The discourse of Freedom is often presented as whether or not video games can be sold with obscenities, or whether gays can serve in the military, or even whether having a choice between a low paying job and no job is no choice at all.  Very little do we expand our historical frame and realize just how fundamentally secure our freedoms actually are, not only in comparison to the last generation, or the last century, but even our own so-called free contemporaries today.  In France, for instance, the rights doctrine not only permits, but encourages, the government to ban burqas in the name of freedom.  In Switzerland a similar ban has been placed on minarets.  In Germany, antisemitism is illegal, and in Austria, David Irving was actually put in jail for daring to promote a historical opinion that was deemed untrue by the authorities (as untrue as that opinion is, it does not justify jail time in a free society).  Of course, in America these laws would never work, but we have our own peculiarities, such as an abhorrent anti-drug regime that has imprisoned millions of people for recreational activities, probably the worst violation of freedom of our time.  And we can’t forget the 170 prisoners continuing to be held without a trial at Guantanamo.

Freedom is obviously a specious philosophical concept with many definitions.  Some will say that it is primarily a social concept, a basic form of organization where each individual is free to pursue his own relationships and activities.  Still others will insist that the economic cannot be ignored in pursuit of the social: by what means do we pursue our own interests if not economical?  For me, I will adopt the philosophical paradigm of J.S. Mill, interpreted through the lens of Oliver Wendell Holmes:  My right to swing my fist ends at the other guy’s nose.  Such is an ideal system for social and economic organization.  Since the trade is the basic unit of economic organization, the economic corollary, of course, is that my right to trade freely shall not interfere with your right to do so.  Trades undertaken by free people must be A) Bi-laterally voluntary and without coercion, B) Informed and not based on fraud.  A slave is not free because his labor is coerced and his work is not voluntary.  A snake oil salesman is not free because he lies about the effectiveness of his product.  In both cases, the buyer and the seller of a commodity must be informed and without coercion.  In this way, people do not trade unless each person feels they have something to benefit from the trade.  The great thing about free trade in this manner is that both people can benefit; i.e., it is not a zero-sum game.  Now, as to how we define informed (a sticking point with liberals) and coercion should not distract us from the general principle.  It is interesting to note that the areas where Freedom is most controversial is exactly where the definitions of coercion and fraud factor into the discussion.  In abortion, a fundamental question exists of whether the fetus constitutes an agent of choice free from coercion.  In healthcare, a fundamental question exists of whether adequate medical knowledge is possible for a layperson.  But in general, the principle is sound.  If we can agree on the terms coercion and fraud, the general paradigm of Freedom should solve itself.

The fundamental concept that Freedom is that wonderful system whereby people are able to pursue their own ends for their own purposes, without it being at the expense of others, is not only philosophically satisfying but unquestionably good.  I don’t see how any interlocutor–ignoring the specific questions above–can say that Freedom is morally repellent from a purely philosophical perspective.  I think Americans, whatever their persuasion, recognize this, which is why our cultural memory is shaped most often by those people who fought for more freedom–Martin Luther King, Abraham Lincoln–and those people who defended freedom–Franklin Roosevelt, Ronald Reagan–and those people abroad who fought their own battles for freedom–Mahatma Gandhi, Nelson Mandela.  Even our movie icons are freedom lovers, from John Wayne to Braveheart.  And of course, Freedom is a strong philosophical tradition in its own right.

Still, it is hard to believe today that despite this cultural and philosophical legacy there are many, from all sides of the political spectrum, who want to deprive citizens of their Freedom.  This is why to this end libertarians devote themselves:  To defend Freedom, not as a means to any economic or humanitarian end, but as an end itself.  Although, as I establish below, there are economic and humanitarian benefits to Freedom that more than justify its preeminent position as a philosophical standard bearer.

Freedom as a Means to Greater Wealth

If Freedom were achieved only for its philosophical ends, it would be enough.  But it just so happens that Freedom is a necessary prerequisite of those other elusive human desires: wealth and welfare.  We must distinguish between wealth and welfare.  Wealth is individual, relative and mobile.  Welfare is societal, regresses to the mean, and moves with the lot of society.  Now, it just so happens that Freedom is a boon to both.  In this section I will talk about wealth, and in the next, welfare.

Wealth is an individual concept.  One man’s wealth, speaking strictly economically, is defined by what he is able to purchase and trade, not how his wellbeing is defined in relation to others.  Wealth is also a relative concept.  Poor Americans are materially richer than most people in the world, and yet still find themselves at the bottom of a tremendous spectrum of wealth.  We have abject poverty contrasted with insane amounts of wealth in fictional sounding quantities.  Much has been made about the growth of the gap between rich and poor in Western countries in the last half century, but not nearly as much has been proclaimed about the growth of the lot of the poor, especially in those regions of the world only recently freed from the chains of communism and socialism, the eastern bloc European countries and of course India and China.  Putting that aside for now, we can see that the discourse is very quick to point to relative wealth instead of absolute wealth.

I just finished reading Barbara Ehrenreich’s Nickel and Dimed.  It is a wonderful little book, not so much for its economic content (it has none) but for the narrative it casts over that little scandal in American society we term the working poor.  Of course, the existing of the working underclass is no secret but Ehrenreich brings it to light in an honest and provocative way.  But its lack of economic content leaves the reader wondering–why are the poor people she writes about so thoroughly disfavored by the system, and what can be done about it?  The immediate answer from most liberals is a higher so-called “living” wage, which is academically lazy.  Yes, more money would be great (I would like more money too, thank you very much), but the economic question that the book begs, and she fails to answer is not why workers don’t make enough but why is everything so goddamn expensive?  An economist would be ashamed to propose a fix to the demand side without the supply side, and Ehrenreich talks at length about the obstacles faced by the working poor–housing and lodging costs, cost of food, medical costs, gas–without once questioning when and why the prices have jumped as they have.  Why a pill that can be made for 10 cents costs $10 a pop.  Why gas is almost $5/gallon in some places and rising.  Why the demand for housing from the urban poor has not been met with adequate supply.  And while this book has been met with an immense amount of critical review from proponents of increasing the minimum wage, no one I have found has approached the book as a guide to those truly horrendous treatments our society gives the poor through curtailing the Freedom of society, and that’s the real scandal at play here.

What do I mean?  Well, let’s look at a disadvantaged poor 20-something male in an inner city like Chicago.  From where have his disadvantages come?  First, he has been “educated” in a governmental school: an atrocity where pupils are churned out with no regard to individuality and dumped on society at larger with no skills are training.  He has grown up in public housing, where people of lower socioeconomic status are not only segregated from the public, but are segregated in groups that make it more likely for children to grow up around gangs, drugs and violence. He has a criminal record due to the possession of marijuana, because of puritanical drug laws that increase criminality rates with no discernible effect on drug use.  Occupational licensure has restricted his access to stable middle class employment.  He has been unable to acquire on-the-job training from a young age–the most important path out of poverty–because minimum wage and child employment laws have prevented him from getting a job at a relatively low wage and younger age to acquire skills he would need to get a higher wage later on in life.  Finally, to add insult to injury, he is enrolled in a government welfare scheme that controls where he can live, what size family he can have, what jobs he can take and how many substances he can ingest.

When he works, he has to pay a portion of his income toward a required annuity at sub-market rates that he may never live to receive (Social Security).  His cost of living is significantly increased by a host of regulations:  commodities like clothes and tools face tariffs coming in from China, raising their cost.  Anti-big box store legislation has made it more expensive to get necessities of life from places like Walmart (which isn’t even allowed in Chicago).  The cost of gas has gone up because our government restricts drilling and piping making us vulnerable to foreign markets.  The cost of medical care and drugs has skyrocketed thanks to regulations running the gamut from medical licensure (restricting entry into the profession) to FDA rules (preventing the importing of lower cost drugs or drugs that aren’t available on the market in the US) and regulation of the insurance markets.  And then, the rent situation: virtually anywhere he can live is steeped in housing regulations, from rent control policies which raise rents to building codes which require over-engineering, to hotel codes which raise the cost of bookings.

And this is all before taxes and inflation.

Now, whether or not one agrees with these regulations or believes them necessary (I will be happy to take up any one of these points for further inspection), it cannot be denied that these disadvantages are not inborn but a result of a system of governmental controls that prevent economic mobility and keep poor people poor.  The problem of poverty in wealthy countries has nothing to do with wealth distribution and everything to do with wealth suppression; i.e. active government policies which suppress the accumulation of wealth for those who need it most.  It just so happens that a philosophy of Freedom also applies to economic freedom and ridding society of these pesky regulations–there is no conflict and most importantly, we have historical evidence that the pursuance of these policies are not only infringements on Freedom but destructive to wealth in general.

Throughout history, societies with larger private sectors and greater economic freedom have contributed to greater wealth for the society on the whole.  Can there be any doubt that the bloated public sector of India until the liberalization of the economy in the 1980’s led to poverty, widespread depression and lower wellbeing?  Can there be doubt that the redistributionist policies of Mao led to widespread famine and poverty in China until the private sector was unleashed in the 70’s?  Finally, what is to be said for the paragon of socialism today, the relatively wealthy countries of northern Europe?  Even with a large public sector, certainly, the standard of living has dramatically increased in Europe in the last 50 years.  But I venture to say that such economic gains have been made with short term investments with no regard for long term consequences.  The current financial crisis will cripple Europe for a generation, precisely because far too much borrowing and expansion of the public sector at the expense of future generations was undertaken.  Of course, countries like Sweden are doing very well since they have liberalized in the last 20 years, whereas countries like Greece that have not are stagnant.

So although the US as well as Europe and many other free market societies continue to fail in alleviating poverty, the biggest scandal is that instead of trying to fix the problem by liberalizing, we turn to solutions that have not only been demonstrated ineffective but cause more poverty.

Freedom as a Means to Greater Welfare

Of all the desirable effects of Freedom on a society, perhaps none is as easily attainable–and yet still so widely out of reach–as general welfare.  In unfree societies, many people can become wealthy and thrive.  I attended a very elite university with many of the offspring of these wealthy individuals from unfree societies, individuals who, for the most part, attained their wealth and status by extorting their people’s labor or nationalizing their country’s natural resources.  Robert Mugabe is known for his lavishly expensive birthday celebrations.  The King of Swaziland has a reported $100M fortune.  Certainly tyrants and their cronies know how to enrich themselves at the expense of their people.  What you don’t have in these societies, on the other hand, are thriving economies of ordinary, non-endowed people who likewise are able to acquire wealth for themselves and families.  Societies where a middle class exists and betters itself.  Societies where the general welfare is on the whole greater through cooperation and non-coercion.  So one must distinguish between wealth and welfare, insofar as wealth is a yacht, and welfare is a rising tide that lifts all boats.

Now the phrase itself, “general welfare,” is perhaps misleading because it connotes wealth more than less intangible indicators like happiness, health, human development, safety and security, and peace.  General welfare is about eliminating the restrictions on a society’s opportunity to grow, flourish and succeed based on the merit of individuals–restrictions that have almost exclusively happened at the hands of state power.  Thus the third pillar of Freedom is to support the pursuance of Freedom in the name of welfare, or, as I like to approach the problem, humanitarianism.  The indicators of humanitarianism grow in free societies not out of control but out of voluntary cooperation.  People are happier in mutual partnerships with other people provided that a framework exists to foster free trade, free discourse and free religion.  It is the societies that depart from these fundamental values that find themselves at the short end of the Freedom spectrum.

It is beyond debate that the societies that embrace values consistent with freedom–free trade, free speech, freedom of conscience, and freedom of person (subjected to imprisonment only under the due process of law)–are demonstrably better societies, even if we are talking in just degrees.  There is no question that the quality of life in liberalized France is better than the quality of life in post-communist socialist Slovakia.  There is no question that people are healthier in Singapore than in neighboring Malaysia.  And most importantly, we have three amazing accidents of history in which countries once united factored along lines of economic organization and showed us just how important Freedom is to the welfare of a society:  the Two Koreas, the Two Chinas and the Two Germanys; all showing us that the society with freer trade had freer people, and freer people were not only more productive but happier, healthier and materially richer.  Now of course, as Milton Friedman so often said, free trade is not a sufficient condition for freedom, but it is a necessary condition.  Free trade is philosophically consistent with the basic purpose of Freedom, which is to allow the individual control over her own life and property.

What’s more, the humanitarian values of free societies are consistent with the core philosophies of Freedom:  mutual respect for another’s individuality.  Diversity.  Self-reliance and self-responsibility.  Helping others through voluntary altruism instead of forced wealth distribution (it isn’t charity if you’re doing it with other people’s money).  The very historical heroes of humanitarianism are those people who advocated freedom in the face of government oppression: Mahatma Gandhi, Martin Luther King, and Nelson Mandela, whereas many heroes of socialism insult the values that humanitarianism represents:  Che Guevara, Vladimir Lenin, and Fidel Castro.  This is without mentioning those socialists who actually came to power in a real way, and in doing so destroyed tens of millions of lives:  Joseph Stalin (30-60 million), Mao Zedong (40-70 million), and Pol Pot (a paltry 2 million), to name a few.  Socialism has such a bloody and painful history, it is a wonder that any serious disciple of philosophy or history advocates socialism at all with any qualification, “democratic,” “libertarian” or otherwise.

Socialists thrive in free societies where their voices are unburdened and they find willing listeners among a population that has lost its perspective on what freedom actually means.  When so much material wealth exists around us, one often hears phrases like “a country that is as wealthy as the United States should take care of its citizens with ‘free’ healthcare, ‘free’ tuition, and more.”  This turn of phrase does not take into account that the reason the United States is as wealthy as it is is because it largely did not “take care of its citizens,” i.e. it did not abuse the levers of state power to distribute wealth or take on the mantle of paternalism (while, I might add, the now-collapsing European socialisms did just that).  The United States is a great historical example of the benefits of Freedom.  Of course, it is not a perfect model.  The framework of a constitution written by slaveholders who claimed all men are created equal–as long as they were white and male and owned land–is of course fundamentally flawed, and this directly violates the liberty, at the hands of government, of everyone who doesn’t fit this narrow criteria.  And this goes way beyond access to resources.  This is about human liberty and the dehumanization of blacks, women and Indians from the national project.  Thus our constitution from its very onset was, to a degree, anti-freedom, even though it was arguably more pro-freedom than any framework set up before it.  But we can’t change the past, only look to the future, and we want to improve liberty, we need to look to the problems of today and fix them.  Certainly, today, there are major problems; if we had made it to the ideal of liberty (that libertarians seek), then we wouldn’t be constantly frustrated about how much the government does to destroy Freedom.  So I do not pretend to claim that we have reached the pinnacle of human freedom, or any time in the past was necessarily better for freedom than today.  Of course, in some ways it was and in other ways it wasn’t.  But even a casual observer of history has to recognize the path of progress, and how we’ve slowly gained freedom, for the most part, as a nation, even if we haven’t reached that ideal yet.

There is a final point to be made about peace.  Another elusive political and humanitarian goal, peace is so often on the standards of leftists who simultaneously promote policies that undercut Freedom in its basic sense, and rightists who promote peace with the imperialist sword.  The hallmark of peace is a society without war.  So a fairer question is, not “what can we do to achieve peace” but “what can we do to avoid war,” a question which receives too few answers from the pacifist left and the war-mongering right.  I would certainly side with the leftists in that going to war seems hardly the best way to avoid war.  But I would side with the rightists in that fostering cooperation and trade between nations is the best way to not only avoid war, but to make people in both countries personally invested in a state of peace.  Free trade, like all aspects of Freedom, is about lowering the barriers to competition, letting people mutually cooperate across boundaries of ethnicity, race and class, and more importantly leave nationalism at the door.  When people shop at Walmart, they are shopping for products that were produced by fishermen in Peru and loggers in China.  They are using shopping carts made of metals mined in Angola with wheels made of rubber harvested in Brazil.  The very experience that so many Americans live every day has been shaped by millions of nameless people, all cooperating despite the fact that their mutual religions, races, languages and philosophies may be at odds with each other.  A world at peace is a world where people grow from mutual cooperation, not destroy each other with competition, trade or otherwise (it is one of the main points in support of free trade–the intractability of trade wars).

There are many other points that could be made here:  how Freedom is a proxy for opportunity, how Freedom is favorable to education and learning, how Freedom creates communities that are dependent on each other out of choice and support instead of malice and desperation.  There are so many good points to be made, but for the sake of brevity (I jest) I have given a basic outline of Freedom as a means to general welfare.  But in short, a proper libertarian reading of history views humanitarian injustices as infringements on human freedom.  Our goal is to expand human freedom which requires recognizing the source of past problems (namely, the government being established on the basis of, and then for a long time–and still today–restricting human Freedom), and correcting those problems by pursuing good changes like the Nineteenth Amendment which move the cause of liberty forward, and opposing bad changes like the Eighteenth Amendment which move it backwards.

In Which I Concede Some Ground to the Utilitarians

Above I have tried to answer why Freedom is the goal that libertarians seek, for its undeniable philosophical ends, for its economic ends, and its humanitarian ends.  If he has read this entire essay, a utilitarian will immediately jump on the fact that I have not responded to his concerns that sometimes a government can promote Freedom and sometimes a government can promote wealth and sometimes even a government can promote humanitarianism.  I will concede this point to the utilitarians:  that nothing is perfect; that Freedom is not a perfectly attainable goal given the current political climate, that no true lover of Freedom would be interested in pursuing violent means to achieve the ends of Freedom listed above.  Thus, Freedom lovers must embrace the enemy, so to speak, and work within the bounds of a structure, highly entrenched society like the United States in order to arrive at the conditions conducive to maximum Freedom piecemeal.  It means that lovers of Freedom, however reluctantly, must support some legislation to see their work accomplished.

The Civil Rights Act of 1965 is an excellent example of Freedom coming to opposition with government power, without resulting in evil for society.  There is no question that segregation (itself a result of racist, anti-humanitarian and unfree government legislation) needed to end.  And there is no question that the only thing more powerful than the state of Mississippi in 1965 was the federal government.  We must applaud the political tact of Lyndon B. Johnson in his ability to maneuver a vote on the Civil Rights Act which at least created a reprieve in bad government regulation for an oppressed population.  But lovers of Freedom must also question those parts of the Civil Rights Act that might have done more harm than good in the long run.  Regulations that set the precedent of establishing how a private citizen may spend his money are dangerous to the economic welfare of society.  Regulations that forcibly integrate schools are nominally no different than regulations that forcibly segregate schools.  We benefit from those regulations that support our concept of equality and fairness, but we lose when those regulations create an environment rife for abuse and tyranny.  With schools, especially, we have an atrocious system of education that penalizes the poor, lowers the quality of schooling, and often ends up ironically being more segregated than meeting the public educator’s vision of diversity in education.  But libertarians would not gain credibility or political capital by outright opposing long-held tenants of American progress such as Public Schooling and the Civil Rights Act.  We must be pragmatic in our pursuit of Freedom, even if it means sometimes sacrificing principle in the name of progress, as many progressives and socialists have done in the United States in the past.  With schooling, for instance, support of a voucher program is much more likely to gain support than support of outright privatization.

There is also the question of the utilitarian harm of radical economic change.  For instance, no libertarian worth his salt supports the minimum wage law, but we must not pursue the abolition of the minimum wage before we have pursued other low hanging fruits with a better positive utility for all Americans instead of a negative utility for the poor.  There is no question that if the minimum wage were abolished tomorrow, before the economic benefits of eliminating other burdensome government regulations listed above, the poor would suffer disproportionately more from lower wages and no change in the cost of living.  This would not be progress.  But we also should not shy away from pushing for progress on all fronts:  the minimum wage law could be opposed on a federal level without harming its impact on a state level (where it is often higher).  Another example is healthcare regulation:  most libertarians oppose occupational licensure, but there are benefits to keeping licensure of physicians in place while we push for more structural changes to free up the healthcare market and liberalize hospitals, medical practices and insurance companies.

So the utilitarians are right in their general criticisms toward libertarians, in that we are mainly an ideology of principle.  Let us use our common ground to blur our differences, however.  Libertarians still have a duty and an obligation to be a voice of reason against the radical calls of the socialists on the left and the neo- and social conservatives on the right, with utilitarians often apologists for both, and consistent with Freedom, we should make our case in the marketplace of ideas and not force others to believe as we do against their will.  A devotion to Freedom should not, as a friend of mine has suggested, reach a level of religiosity whereby  we forget ourselves and real utilitarian concerns, but nonetheless libertarians should remain devoted to principle and should always do more to spread the gospel of Freedom to anyone who would hear it.

Conclusion

Unfortunately in this essay I have not done much to define Freedom or ease the concerns of non-libertarians that our definition of Freedom might ignore the very real perils of freedom for people living in free societies: for example, a low wage worker who must choose between working for a corporation that abuses him or starving is not really free by any reasonable definition.  There is an ethical approach to this problem, and to the question of Freedom, that I would like to cover in another essay.  The rough outline of the argument is defining Freedom as a societal problem, not an individual problem, and those solutions which might improve the freedom of the individual often do the opposite to society, and in many cases, the cure is worse than the disease for all parties involved, and still yet in many cases the disease itself is a result of the worker not even living in a truly free society.  But as that essay is an ethical one and this one is a political one, I will leave those points elsewhere.

Hopefully what I have done in this essay is touched on the main concerns of libertarianism as it comes to pursuing Freedom, and make it clear why it is that libertarians pursue Freedom for its own ends, as a means to greater wealth and a greater welfare.  With the goals of Freedom in mind, libertarianism is not only a means to an end, but an ideology committed to those human values which have plagued us from the dawn of civilization.  It may be difficult to convince others, but that does not mean we should shy away from the fight.

June 10, 2012Comments are DisabledRead More
The 53% are Not Shitty

The 53% are Not Shitty

A friend of mine asked me why the 53% seem to be proud of working “shitty jobs” with hard hours while “not pursuing their dreams.” I thought the question was unfair. Certainly, I have philosophical disagreements with any group that claims or believes it is different from any other group (to quote Ferris Bueller, “isms, in my opinion, are not good.”). But we have to hand it to these hard working people. They have been responsible. They have lived within their means and have not asked for handouts. They may have little, but it belongs entirely to them. They are proud of what they have accomplished on their own mettle and they believe that America is the only place on earth where that is possible. They do not believe in life being easy or fair.

They are mad that they pay taxes to benefit the self-proclaimed “99%” who expect handouts from the government, which really means the taxpayers, aka them. They are mad that people are surprised to be $200,000 in debt after college, and expect free money for it. They are mad that people think that the American Dream has anything to do with having a perfect life, when really it is about self-fulfillment through hard work and owning your accomplishments. They are mad that people like them are ridiculed and slandered by the media for being passionate about maintaining their individualism.

They are scared that the people on Wall Street want to take their freedom away from them through government control and radical redistribution. They are bemused that people don’t understand the difference between a government job taking money from society, and a real job based on providing value to society. They are bemused that college graduates don’t understand the financial system in their own country, and don’t have a smidgeon of understanding of world history. They are aware of the hundreds of millions of people who died in the twentieth century because people believed what many people in OWS believe about the “injustice” of wealth inequality.

They are part of a silent majority of Americans who work hard, deserve what they get, for better or for worse, and don’t believe they should have to live in a society where their hard work is taken away from them to benefit someone else. They are more important than the 99%, because they provide the bedrock of the American economy and are the reason America is still the best place in the world to live, even though we aren’t perfect and have a long way to go.

October 20, 2011Comments are DisabledRead More
The Absurdity of Occupy Wall Street; and, Why OWS Owes a Debt of Gratitude to the Tea Party

The Absurdity of Occupy Wall Street; and, Why OWS Owes a Debt of Gratitude to the Tea Party

When Occupy Wall Street began September 17, they received more than their fair share of criticism from both the right and the left, mostly due to their lack of a single message or central organization. The media on the right, especially, seemed to have forgotten the nascent waywardness of its own pet Tea Party movement. The left, on the other hand, was most critical of the more radical elements of Occupy Wall Street that seemed to hurt its core message. Few pundits on the left took the litany of grievances leveled against Wall Street seriously, and for a while it was hard to separate this Marxist drivel from the core meaning of the movement. But since Occupy Wall Street, like the Tea Party before it, did not arise out of careful central planning and hone its message from the media pulpit, it has been fascinating to see a coalition of the willing become an army of vocal, articulate, and passionate advocates for change, organically and without direction, truly revealing the voice of the American public without the influence of politics, media or corporate money.

It is quite clear by now that Occupy Wall Street has gone mainstream, and, like the Tea Party before them, has revealed a fundamental frustration in the core of the American people about the relationship between money and politics. It may seem odd, given the respective movements’ vast philosophical differences, but this is the foundation of real change. Remember, what made the Tea Party stand up two years ago was a philosophical disagreement with the role of government in money, and what has made Occupy Wall Street stand up now is a philosophical disagreement with the role of money in government. If the right wants government out of money, and the left wants money out of government, there has to be some common ground somewhere.

This is positive. If nothing else, Occupy Wall Street has shown that Americans are far from complacent about how their government is run. A decade ago, it was not uncommon to hear pundits speculate whether Americans really cared what happened in Washington. It is clear now that they do. And if you are an incumbent in Congress right now, of either party, you should be shaking in your boots. However, what makes the philosophical argument of the Occupy Wall Street movement absurd is not the basic assumption held by most of these people. It is 100% true that Wall Street is “corrupt,” insofar as you can generalize, in that most, if not all, of the financial firms are not accountable to the people. they should be accountable to the people they serve–and as corporations, they should serve their customers (yes, their shareholders, but theres not much shareholder value if you don’t have paying, happy customers, is there?).

However, in the case of Wall Street, the people they serve is not the people, it is the government. contrary to popular belief, especially among the liberal classes, the government, no matter how democratic or representative it might be, is not the people. It is a machine shaped by special interests and personal greed, people seeking power and and people seeking benefits. These influencers are mostly corporate interests, although a couple other social interest groups get in their from time to time. But the movement again is 100% right in being mad that there is too much corporate influence in government.

Now up to this point, we all hopefully agree that the incestuous relationship between Wall Street and government is bad. It’s bad for people, who have no recourse against corruption, going each way. It’s bad for investors and the economy, because it creates an environment of uncertainty. It’s bad for politics, because it ties our hands in our ability to make smart policy decisions because of corporate interests. The way that both government and the economy should work is this: people voting with their feet. Capitalism is the most democratic form of economic organization, because wealth is earned by creating value for society. The successful entrepreneurs who build better iPhones and better banks should make money. IF they create value. But when Wall Street banks are making FREE money, out of our pockets, without creating value at all, THEN that’s a problem. And the distortion of incentives around Wall Street makes it so that these financial firms are accountable to the government, and not the people they should be serving, their customers.

A perfect example of this is the Dodd-Frank act. This act is singlehandedly responsible for the $5 debit card fee that Bank of America has just started charging its customers. The customers are outraged, and they should be. But who’s fault is it? Someone has to pay for the infrastructure around debit cards. The banks came to an agreement with merchants that merchants would pay a % fee on transactions for the convenience of letting customers pay using debit cards. Dodd-Frank stepped in and made this practice illegal. So the banks had to recover this cost by charging their customers. Is this an example of corporate greed screwing customers out of their money? Or is it an example of financial regulation making banks more accountable to the government than its customers? And who loses at the end of the day? The customers. The people.

This “corruption” is not a result of the very important and beneficial practice of selling a service for profit. This is the result of overregulation that has stepped in and distorted the accountability of financial firms to the expense of the people. And this is the distinction that Occupy Wall Street is failing to make: the difference between capitalism (a truly organic form of economic organization that allows free people to compete over customers and improve the social good) and what libertarians on the right and the left have termed “corporatism,” which is the undo relationship between politics and the market.

This goes back to my original criticism of Occupy Wall Street. Why are they protesting on Wall Street? The financial firms have the same incentives that people do: to gain the most they can in the easiest way possible. In the past, banks had to vigorously compete with each other to attract more customers. To offer better services and hedge risk against failure. Today, banks have to convince White House advisers that they are helping the economy, put out their hand and receive $1.6 trillion in bailouts, which, by the way, hurt the value of everyone’s money. What incentive does a bank have to do anything for these people? None. And who’s responsible? We are. We’re responsible because we elect leaders who look for quick fixes without exploring systemic problems. We’re responsible because we were silent in 2008, too scared to see our economy collapse to say anything about the massive injustice of giving free money to terrible companies that had completely screwed their customers and investors over.

What’s particularly ironic is that the Occupy Wall Street movement and the Tea Party members couldn’t be further apart on the political spectrum. But the Tea Party, to its credit, was protesting the overextension of taxpayer money into the financial system in 2008. They were protesting the very same “corruption” that Occupy Wall Street is protesting. Except they were protesting against the right people: the political leaders who let this happen. So the Occupy Wall Street kids (people who very likely ridiculed the Tea Party with Jon Stewart two years ago), owe a debt of gratitude to the Tea Party for at least starting the conversation around corporatism when it needed to be made–before it was too late.

October 15, 2011Comments are DisabledRead More
The Slippery Slope

The Slippery Slope

The most disturbing story to come out of the news of late has not been the Michael Pfelger videos (although, unlike Wright, he has managed to issue a somewhat sincere apology).  Lost in the Politico’s election analysis and the media’s echo chamber has been a little-noticed story about Dunkin’ Donuts, who just pulled an ad from the air which included Rachel Ray wearing a keffiyeh, a traditional Arabic scarf.

Facing severe criticism that the wearing of the scarf was symbolic support for Islamic terrorism, Dunkin’ Donuts, as the BBC reports, issued a statement that the scarf was not intended to offend and that “given the possibility of misperception the commercial was no longer being used.”

What misperception?  The wearing of a traditional dress, cultural dress, is somehow a support of Islamic extremism?  Conservative bloggers have pointed out, correctly, that the scarf was worn by Yasser Arafat, leader of the Palestinian liberation movement until his death in 2004, and is routinely worn by Islamic extremists and Palestinian nationalists.

True.  But the scarf is also worn by millions of Arabs, and non-Arabs, around the world, and an overwhelming majority of them would rather not perform extreme and violent acts of terror, thank you very much.  Most people who wear the keffiyeh are not extremists, and are certainly not terrorists (and I’m sure Rachel Ray would agree).

Not only do Arabs wear the keffiyeh, but Urban Outfitters sold the scarves until January 2007, when, responding to public pressure, they pulled it from the shelves.  In their statement:  “We apologize if we offended anyone, this was by no means our intention.”

What’s next?  The pulling of Middle East products off store shelves?  The sacking of Arab journalists?

This is symbolic of a much larger undercurrent of American Islamophobia that has swept the United States (and much of Europe) since before September 11.  Indicators of this movement have been rampant: Brigitte Bardot’s incendiary anti-Muslim comments that recently got her fined, riots in the streets of Paris, the Danish cartoon fiasco and of course, conservative commentators’ incessant ranting about the “Muslim problem.”  Bill O’Reilly, Ann Coulter and Rush Limbaugh are especially to blame.

Of course, now that Barack Obama, a black man with the middle name Hussein, is running for president, the ugliest of the hatred of Muslims in America has come out in full force.  In all the talk about racism in this Democratic primary season, the mainstream commentary has forgotten about the real issue of race in this election—not whether Obama is “too black” to be President, but whether or not he is a Muslim.

It was Barack Hussein Obama’s connection to Islam—through his father—that led to the Fox report, later proved to be false, that Obama had attended a radical Islamic school as a schoolboy in Indonesia.  It was this false religiosity that led to the famous “Madrassa Hoax” email, which circulated the internet widely in the early months of the primary and has since emerged again.  The email implored Americans “Let us all remain alert concerning Obama’s expected presidential candidacy,” and that “The Muslims have said they plan on destroying the US from the inside out, what better way to start than at the highest level – through the President of the United States, one of their own!”

Remember Hillary Clinton’s famous “3AM” ad, in which she asked who would best be able to answer a 3AM phone call to the White House in the midst of a catastrophe?  Orlando Patterson wrote for the New York Times that the ad played on subtle racism and the classic white fear of “the outsider within”—the criminal black man infiltrating the safe neighborhood:  “The danger implicit in the phone ad — as I see it — is that the person answering the phone might be a black man, someone who could not be trusted to protect us from this threat.”  However, the more subtle sub-message, the one that did not have to be stated, was the fact that “Something is happening in the world,” and the terrorists behind that “something”—well, you get the picture.  The very idea that a Muslim—a guy who shares a name with the late Iraqi dictator—could be the one answering that call in the White House came across clear enough.  Clinton’s margin of victory in Ohio, much larger than the pre-election polls, suggest that late-deciding voters broke for her, and whether the subtlety of the “3AM” ad had something to do with this final push will never be known for sure.

A Pew poll taken in late March found that one in ten Americans believe that Obama is a Muslim.  The number is telling in part because 10% of Democrats—most of whom already were Clinton supporters—believed this fact, and because 8% of Independents—a group who Obama needs to depend on to win the election in November—believes it as well.  Furthermore, a whopping 19% of rural voters—that’s one in five—believed this to be true.

The fact that the son of a Muslim Kenyan joined a radical black Chicago church, and then stayed in that church for 20 years, does not help diminish the rumor that he is a Muslim.  America is familiar with images of radical black Muslims like Malcolm X and Louis Farrakhan, and should now be equally familiar with Jeremiah Wright’s praise of Farrakhan.  The tendency to equate Islam with radicalism of course has been swollen since 9/11.  But the underlying assumption is that it is Islam that implies radicalism—not blackness.  The fear of Islam “penetrating” American society cannot be understated.

It is disturbing that I have received these emails about “Barack Hussein Obama” being a “secret muslim” who “joined the United Church of Christ in an attempt to downplay his Muslim background.”  These claims are not only outright false, but they force Obama to sink to the level of divisiveness by having to respond.  “No, I’m not a Muslim!” he has had to say, as if being a Muslim were somehow like being a bunny eater.  Such stringent, politicized denial only reinforces the claims, not diminishes them.  It reminds me of the high schooler who insists “I’m not gay!” when he is hit with the G-word in a routine downsizing of his character by his peers.  (Harry Truman, when we was running for a judicial seat in Missouri, was rumored to be Jewish due to his close ties with a Jewish childhood friend and business partner.  “I’m not Jewish,” he is reported to have said, “and if I was, I wouldn’t be ashamed of it.”)

This is a major problem, and one that shows no sign of letting up.  Let the keffiyeh remind us that hatred of Muslims has increased in recent years.  How would America respond if, tomorrow, a skullcap-toting news anchor stepped down because “given the possibility of misperception Mr. ____ will no longer be working with us,” because, after all, “we don’t want anyone to think that we work with Jews.”  It’s unacceptable.

Milton Friedman wrote that in the long run, the free market will work against discrimination.  It’s in the best interest of industry economically, he said, for employers to seek the most qualified people regardless of race, religion, gender, etc.  However, the free market in this case has spoken in another direction:  “Don’t sell this item because people associate it with terrorism, and thus we will lose business if we keep it on the shelves”–this might be good business, but morally it stinks of bigotry.  The underlining assumption is fed, not starved, and thus the evil wheel of bigotry continues to turn, turn, turn.

June 3, 2008Comments are DisabledRead More