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Post Tagged with: Wealth

The Giving Season

The Giving Season

Note:  This was originally published in the Hypocrite Reader in September 2014.

Every morning Wentworth stakes out a corner of the Square because that’s where the out-of-towners congregate. He knows their patterns. With his pressed suit and slicked-back hair, clean shave and faint perfume, he gives these people exactly what they expect to see on the streets.

They idle by, each with a purpose. Men hunched over in dark jackets float around him like silent shadows on the wall. A woman in drooping rags pretends not to notice him there with his hand outstretched. His plight is obvious but they move on.

He tries different techniques. He holds a wad of cash in his hand, to show his generosity. He tries stacking the bills neatly in piles around his feet. He puts the big bills on top so they beg to be taken. He puts the small bills on top so he looks less desperate.

One time a child notices him presenting a solitary, crisp banknote in his manicured fingers. The child stops and outstretches his dirtier fingers to take what he desires. But his mother yanks him away with a rebuke. (At least Wentworth assumes it is his mother. He can never tell with these people.) They roll off with their shopping cart piled high with bags and old clothes and sandals. She steels her eyes forward.

The days go on, and sometimes Wentworth has some luck. Occasionally, he manages to give away some cash to a caring passerby or an older fellow. His clothes need constant replacement. His fingernails need constant trimming. Once in a while he does not go to the Square at all, but sits and weeps in the corner of his house, clutching his last remaining suitcase full of money. Every day the suitcase becomes lighter. Every day he walks a little quicker.

One winter evening he rests on a bench near his usual spot on the Square, and buttons his fur coat to the neck. The winds are whistling Christmas music. It is the giving season. He cannot remember the year.

The sound of rustling steps in snowdust catches his attention. He looks up to see several boys, seemingly restless with the slog of adolescence, approach him across the whitewashed plain. They drag heavy bags. Scraps of cloth hanging from their pants tickle the ground as they quickstep over. Tappity-tap, quicker and quicker, the soles of their shoes scrape the street as they snicker.

He has heard of such attacks, but they have never happened to him.

He doubles over as the first boy kicks him in the side. The other boys take turns on his stomach, his legs, his face. His nose is dripping blood on his pressed white shirt. His tie is ripped. His feet are swelling. One of the boys has a backpack that he has to lift with both hands as he brings it down onto Wentworth’s prostrate body. The bag bursts at the seams. The last thing Wentworth remembers is a shower of green money raining onto him. His eyes swell shut as the boys stuff the useless cash in his pockets, his pants, his collar, his mouth.

The next morning, he is awoken by the bells of the holiday carolers as they make their way ghostlike across the Square. They are speaking in hushed and excited tones. Wentworth peers through swollen slits at his pristine body ruined, his black and white turned green and dirty. He struggles to right himself as a wave of out-of-towners crests the hill and bustles past. They notice him but quickly avert their gaze and move on. He collects handfuls of green bills from his body. Some are covered in vomit. He stacks them all in neat piles. Then he exhales and pushes himself up on the icy ground. His corner on the Square beckons him only a few steps away.

He knows now he needs to start again. He needs a new suit and haircut and manicure and shower. He needs to put the money through the wash so it comes out clean. It will take a lot more work than before. But his corner is waiting. He will be back. After all, it is the giving season.

September 18, 2014Comments 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
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
To be Wealthy is No Longer Cool

To be Wealthy is No Longer Cool

A common theme has arisen in this campaign, not necessarily more so than any other political campaign:  to what extent does a candidate’s wealth mean he’s “out of touch” or “elitist,” and in what way can the opposing camp use a candidate’s wealth against him?

This was evident early on in the Democratic race when the candidates were asked if they sent their kids to public or private schools.  Chris Dodd and Barack Obama ended up getting into an argument over whether or not Dodd’s children’s education was sufficiently “common” enough–and it turned into a competition over who was the poorest.  Dodd tried to convince the audience that he’s not doing so well.  “You’re doing all right, Chris,” was Obama’s reply.  It was surprising to me that suddenly, being wealthy in America is big problem.  At least when it comes to politicians.

What is ironic, of course, is the last president we had who was not “elite” when he entered office and just as “common” when he left it was Truman–that’s 60 years of presidential candidates, all of whom try to portray themselves as fundamentally “common” to appeal to everyday voters.  It is easy to see why candidates do it.  Most voters are middle class, and to appeal to these voters it is important to come across as being one of the bunch.  But what is upsetting is how many people buy into the dialog that wealth is a stigma in public life.

The noble public servant, it is said, should be willing to work for no pay.  It is hard to be a noble servant, therefore, if one does not have any money.  Some people believe public servants should receive more pay.  But if they are paid well, they are accused of self indulgence and elitism.

No wonder only people with money end up becoming politicians these days!  The barrier to entry is so high, it requires so much experience in business, finance, law, the military, and networking, that the people who end up at the top can’t be very “common” anymore.  The belief of Thomas Jefferson was that any man could become president, no matter how “common.”  But, then again, Jefferson believed that “commoners” were a) Male, b) Landowners and c) White, so I don’t know how well that analogy works.

Here’s the problem.  In this withering economy, people are getting poorer.  They naturally want to relate to the candidates.  But being wealthy in America, assuming the wealth is earned, not inherited, means that one is successful to some degree.  A wealthy person is a competent person, a smart person, a sociable and wise person.  Why wouldn’t people want that person in the White House?

I just don’t buy that Obama, who just paid off his college loans and has been fortunate enough to be blessed with a bestselling book and a meteoric career, should be chastised for being too wealthy.  Isn’t that what the American Dream is about?  The immigrant with ten cents in his pocket doesn’t land on the shores of America to become the most common person in all the land.  The streets to that immigrant are not paved with guns and religion, but are paved with arugula and gold!

And then we look at McCain, who himself is no wealthy man, but happened to have married a very wealthy woman.  How can we hold that against him?  I smell hypocrisy from the Obama campaign, who criticized their opponents for vetting Michelle, yet feel free to harpoon McCain’s “Wealth” as if he had anything to do with making it.

The way I see it, a candidate’s finances should not be any of the public’s business.  But if they are, they should be treated with admiration, not disgust.  It is not Obama or McCain’s fault that they want to do better for their families, and they shouldn’t be criticized for wanting to do better for yours.

August 22, 2008Comments are DisabledRead More