Archive for September, 2011

Column on Welfare Statism and Compassion

Welfare Statism and Compassion

Tibor R. Machan*

There are many debates in political theory, most of them focused on what kind of legal system is just. It is an ancient topic, of course, and the various positions do not change all that much, merely get slightly revised by their new generation of champions.

Yet, whatever one’s political convictions, there is widespread enough agreement about what is a political versus an ethical position. The welfare state is a political idea, whereas, say, altruism or utilitarianism is an ethical one. Of course, which is the correct ethical position, which ought to guide human conduct, is also widely debated and has been from time immemorial.

Anyone aware of this elementary point of the history of ideas knows, also, that it is a central feature of any ethical position that when it is practiced by people, they need to practice it voluntarily. No moral credit accrues to someone who does what ethics requires because he or she is coerced to do so. Every parent knows that a child begins to mature ethically when good behavior is exhibited as a matter of free choice, not out of fear of physical punishment. This is regardless of what school of ethics is expected. Whichever ethics is correct, it only earns moral merit if it is done from choice, never because it is done from fear.

Another elementary point is that while support for a given political position can gain one moral credit, that too must be voluntary. If you place a gun to someone’s head and march the individual down to the polling place and he or she votes for a candidate or measure because you have forced it on him or her to do so, that is not credit worthy either. Whichever is the correct political position, it too must be a matter of free choice for one to gain credit for championing it.

So once this is appreciated, let’s suppose that it is morally creditworthy for people to act compassionately, to offer their help to those who need it. Once again one could gain credit only if one acted so because that is what one wants to do. And that’s so with other virtues as well. One is morally praiseworthy only if one practices the virtues because one wants to. Accordingly the flack received by Representative Ron Paul from some of his critics because he does not believe government should engage in welfare policies must be seen in a certain light. It isn’t a sign of Dr. Paul’s lack of compassion to reject government’s role here, not at all. That’s because compassion, too, must come from a free choice, not because government takes one’s resources as hands these to the needy.

So when in his New York Times column on September 16th Paul Krugman chided the likes of Ron Paul (as have some other democrats or liberals) for their lack of compassion in their refusal to back government administered funding of health care, etc., he was quite confused. Just consider: a few days ago the news showed about a dozen people pitching in to lift an automobile so a motorcyclist who was pinned under it could be pulled out and saved. We may assume that these people pitched in voluntarily, not because someone made them do so. But Professor Krugman and his fellow critics of Rep. Paul would have had to consider it far more compassionate had these people reached for their guns at the scene of the accident and forced others to pull out the motorcyclist from under the car. That is the crux of the difference between Professor Krugman’s conception of compassion and Rep Ron Paul’s.

Those who champion government programs to provide support to anyone, the poor, farmers, artists, or others are not in fact being compassionate. They are bullies aiming to make others act in ways that would be compassionate if individuals did it of their own free will. But they are not being compassionate, not by a long shot.

*Machan is the author of Generosity, Virtue of Civil Society (1998).

Machan’s Archives: The Myth of Job Creation and Secuirty (1996)

Machan’s Archives: The Myth of Job Creation and Security (1996)

Tibor R. Machan

During one of his campaigns for the presidency Bill Clinton was stomping one state with a talk parts of which were aired on National Public Radio, the radio network of record on what pleases the modern liberal establishment. The excerpts were typical. Mostly the pres was taking his lines from that funny little movie, DAVE. In it the fictional president-stand-in, played by Kevin Kline, proclaims that first on his political agenda is the secure a job for everyone in the country.

It is one of these pitches coming from politicians that are truly sick. This is because if there is one promise on which politicians cannot possibly deliver it is the one about providing jobs or job security. No one can give another person job security, not unless someone else is placed into involuntary servitude. That is, to secure a demand for some productive activity in the market place, others must make the free choice to purchase its result. This means that there is no way to guarantee any job for anyone if potential customers are treated as sovereign, free agents. If, however, job security is promised to us, those who make such a promise must give up on treating customers as sovereign, free persons. They have to be treated as slaves to the products that have to be purchased in order to secure the jobs in question.

Consider my job. I was at this time a tenured university professor at a large state university. Only if I committed a crime could I be fired or laid off (unless the entire institution were abolished by the politicians in the state). (Which is to say that even politicians cannot force people to keep paying for something, as the Soviet Union found out.) The only way I could have had job security is by forcing the taxpayers of the state to give up their income for the goals I serve, teaching college level philosophy courses.

I, then, had job security only because the citizens of my state were placed into involuntary servitude for the sake of supplying the productive service of college teaching. I lived off their involuntary service, extracted from them in the form of taxes — that is, the forcible relinquishing of a portion of their earnings — each April 15th. The reasons here do not matter — many think education is so important to produce that people ought to be forced to pay for it, never mind their own choices in the matter. This is one of those places where talk about what “we” want hides the fact that some people may well not want it, so the “we” really is just some of us, while the others are being coerced.

In a relatively free society bits and pieces of such job security may get by, even if they, too, are something of a fraud since, after all, the majority of voters may change their minds, too, and pull the rug from under the tenured professors sometime. This has already happened at some colleges and universities that have abandoned tenure and even reneged on it because the money wasn’t there to continue this job security myth. But to promise, as President Clinton did, job security to all workers is rank deception.

No one can deliver jobs or job security to workers in the private sector. A company would be lying if it made such a commitment. How are they going to keep their customers coming back for their product — at the point of a gun? That is exactly what would be needed to deliver on that kind of a promise. And even then the enforcers may go on strike! Eventually the country can collapse from lack of personal initiative. So the promise is phony in any kind of society. Mostly it is phony in one that pretends to some measure of citizen — including consumer — sovereignty.

Wishful thinking has won many elections and, no doubt, without some alternative and realistic vision to take its place, this fraudulent ideal of jobs and job security will once again gain Democrats sizable support in American electoral politics. But the ideal itself is corrupt and that means we will pay for pursuing it — or rather our children will when stagnation sets in as it inevitably must from attempts to institute forced labor in a society.

Column on A Case of Insidious Gov. Regulation

Who Builds Obstacles to Real Stimulus?

Tibor R. Machan

Where I work we have a retirement plan. It comes with the job so once you get your employment you are also part of the system.

Turns out that the accounts set up can contain quite a lot of cash. However, even if one is over the age of 65, even 70, the plan does not permit one to make any cash withdrawals if one is still working full time. One is able to take out loans but these, of course, need to be paid back in monthly payments, so they offer little help with one’s expenses in bad times like ours.

Anyway, what is most interesting is that freeing up some of the retirement funds–say about 15 or 20 %–could make it possible for many of those who work at such places to inject substantial funds into the economy by paying off a mortgage, making improvements on one’s home, purchasing an automobile, taking a vacation or whatever. This is just what the current administration in Washington aims to achieve with money printed or borrowed, i.e., with non-productive economic stimulus.

I haven’t got the figures but I bet that the change of such plans at various companies, universities, hospitals and so forth, so that participants could withdraw some funds and use them to make purchases of various kinds, could amount to a pretty penny! Might even help jump start a dormant system!

When one looks into why these plans do not permit any cash withdrawals, at first it appears that the rule is made by the employers and changing them would require some procedures that a single employee is rarely set up to carry through but a group of them might manage. With some tenacity they could. But a little more investigation shows that it is useless to appeal to the employer. It is certain Department of Labor regulations that in fact coerce employers to disallow such withdrawals by working employees.

In particular, Chapter 4 (Payment of Benefits) of the Employee Retirement Income Security Act of 1974 (ERISA) “sets standards for most employer and union sponsored plans in private industry and imposes responsibilities on those running the plan.” Aha. I was almost convinced that my employer experienced a fit of paternalism at some point and set up the retirement plan in a way that no cash withdrawals are possible if one is still working full time. (Never mind now whether such withdrawals might be wise or not–one size does not fit all in these as in many other cases.) But it turns out that my employer’s hands are tied by federal law.

Talk about government regulation that imposes severe restrictions on citizens regarding how they may use their own resources. That, of course, is the idea behind social security–coercing us all to “save” for our old age! Never mind, once again, that different folks could well use different strokes here, as elsewhere.

It is odd that at this time, when Washington is desperate for some genuine, bona fide economic stimulus, real funds that make it possible for citizens to go to market and generate commerce, including, of course, employment, that very same Washington is prohibiting the use of funds for just that purpose. Instead, it promotes using artificial funds, money printed and borrowed, with which to engage in a Keynesian pseudo-stimulus, with its bizarre device of the multiplier, the something from nothing idea that injecting such phony funds into the market will produce multiples of those funds–as if the law of the conservation of mass and energy had been overturned.

It is sometimes useful to check out the obstacles to coping effectively with some of life’s challenges. It may appear that they are placed there by corporations, businesses, and other economic institutions and one might actually be able to have a chance of removing them by persuading the people at these institutions to change their minds. But, no, it is often the federal government–in this case the Department of Labor via ERISA–that renders it impossible to make adjustments that could help citizens to manage their affairs and, also, downturns in the economy.

Column on Obama’s Keynesian Superstition

Obama’s Keynesian Superstition

Tibor R. Machan

President Obama gave a speech on Thursday afternoon announcing the American Job Creation Act. There were numerous points that were open to criticism but before dealing with a few, it is important to state what creates jobs: Jobs are created when people who have earned an honest buck go to the market and purchase goods and services that other people need to produce. If a good many go to the market to do this, there will be many jobs, if only a few, there will be few jobs. Moreover only if the people get to choose what purchases they make in the market will the resulting jobs be more than make-belief, artificial jobs, like digging holes and filling them up again.

Mr. Obama and his team appear to believe that printing money and handing it to people who may or may not take it to the market and spend it on goods and services serves to create jobs but this is sheer superstition. It is like thinking that steroids produce healthy muscles in one’s body. Such spending is more akin to fueling artificial production–like getting a bunch of extra haircuts with phony money one has obtained from a forger. Or numerous baths or car washes–as if people had no ability to allocate their limited resources prudently but will do well by spending the phony funds (or other peoples’) on duplicate goods and services. So, bottom line: jobs are created from people spending honestly earned income, not from spending phantom income.

Now back to Mr. Obama’s address. He started by telling us all that “the millions of Americans who are watching right now do not care about politics.” Oh? Who are those millions of people who take part in primary elections, in caucuses, and in all the campaigns around election times?

Obama continues: these millions of Americans “have real life concerns,” as opposed to politics. What a thing to say for a lifelong politician. It is a strange confession, to proclaim that politics is not a real life concern. How these little asides turn out to be very revealing from a Harvard educated politician!

Obama also told us that all these Americans “know that Washington hasn’t always put their interests first.” No kidding–”hasn’t always”? How about has very, very rarely. Anyone with only a cursory familiarity with public choice theory–an idea Professors James Buchanan and Gordon Tullock developed (for which Buchanan received the Nobel Prize), in their book The Calculus of Consent (1962)–can appreciate that Obama completely understated the degree to which Washington fails to put the interests of Americans first. For one, Americans are a highly varied lot and they have zillions of interests which plainly cannot be addressed by Washington. Politicians aren’t deities, Mr. President.

Then, also, politicians are mostly busy looking out for their own interests–mostly getting reelected the next time they run for office–except when looking out for the interests of special groups and major donors that happen to further their own. So this entire line of reasoning on which it seems the president is basing his American Job Creation Act is fallacious.

Here is yet another howler from Mr. Obama: “The people in this country work hard to meet their responsibilities.” Well, some do but some don’t. Many people in America believe that they are entitled to benefits from the government simply because they exist, they have been born here, kind of like the what millions of Greek citizens evidently believe. And many believe that they are credit worthy even while being anything but. Which is to say millions of Americans have expected to be provided with loans to buy homes even though they had no idea how to pay them back or had the collateral to back them. This does not testify to what the president has claimed about the people of this country.

The entire plan of the jobs bill amounts to nothing more than artificially manufacturing jobs, from phony money, phony demand. And this doesn’t even address the issue of Mr. Obama’s favorite superstition, namely, his idea that he can somehow turn America into a showcase of green life without incurring massive expenses for this, expenses the country cannot afford. (It is interesting how Obama has avoided the subject of his giving awards to certain companies that went green big time and then went belly up!)

One could go on. Sadly if an Obama enthusiast were to come across these points they would most probably be dismissed as nothing but dirty Republican or Tea Party politics. No one of Obama’s team ever confronts the arguments–they just ridicule the people who put them forth, even demonize them.

And don’t forget the persistent rich bashing that made its appearance in this lecture just as it tends to in every other given to us by Mr. Obama or members of his team. Ok, so some rich folks are doing well even these days. So why begrudge them this? It’s like wanting to injure able bodied folks because there some some who are disabled. Disgusting. Moreover, even as a public finance, the idea of targeting the wealthy is ridiculous. If all those with over $250,000 had their money confiscated by the feds, hardly any dent would be made on the national debt, especially if one subjects the idea to more public choice analysis.

Mr. Obama, you aren’t going to make jobs and you aren’t going to do any good to most Americans apart from some of your pals in the bureaucracy with what you want to do. Take an entirely different approach, namely, remove government regulations and lower taxes for everyone and that will most likely energize the country’s economy.

Machan’s Archives: Column on Liberty: Both Radical & Traditional

Liberty: Both Radical & Traditional

Tibor R. Machan

At times libertarian or classical liberal–or, in yet other words, pure laissez faire capitalist–ideas are dismissed as part of a misguided modernity that’s lacking proper pedigree. But this is all wrong. Already back in circa 600 B.C.E. the Chinese sage Lao Tzu had weighed in with libertarian ideas, writing

“Why are people starving?
Because the rulers eat up the money in taxes.
Therefore the people are starving.

“Why are the people rebellious?

“Because the rulers interfere too much.
Therefore they are rebellious….”

And in ancient Greece, Xenophon records an exchange between Pericles and Alcibiades in which the latter dismisses all government edicts that are coercive as plainly unlawful. As he put it, “It would seem to follow that if a tyrant, without persuading the citizens, drives them by enactment to do certain things–that is lawlessness.”

Of course, merely because a good idea has seen the light of day at some point in time, it doesn’t mean it actually carried the day. Ideas of individual liberty did not begin to animate actual political affairs until rather late in the day, starting around the 11th century A. D. A good example of some such ideas beginning to make an impact is the Magna Carta. And then, in time, came the American Founders, with the Declaration of Independence and the Bill of Rights. They managed, finally, to use the libertarian position, which they absorbed through their reading of history and philosophers such as John Locke, for practical, legal purposes. Why so late with the emergence of practical legal measures that support individual liberty?

One reason is that in much of human history what carried the day was unmitigated, unabashed physical coercion, the powerful and well armed running roughshod over the rest. Conquering thugs, armed to the teeth by monarchs and tribal chiefs, would not let up on their brutal subjugation of the population so they could extort from them their labor and whatever meager resources they have accumulated. There had been slave and peasant revolts but not until a substantial middle class emerged, with the capacity to create wealth, did those not in the ruling class manage to be able to mount a resistance to the rulers. And while some knew about the ideas that supported individualism and libertarianism, many were hoodwinked by stories of the divine rights of monarchs and the widely promulgated myth of class privilege.

In the modern era what stood in the way of the liberation of individuals, the overturning of class rule, is the idea that individualism had been invented to serve the economically lucky and powerful. This was a ruse, of course, perpetrated by the cheerleaders of modern rulers, the likes of Auguste Comte and Karl Marx, who had no patience for individual rights and liberation but believed in a collectivism that included the entire globe! They appealed to the myth of tribalism which they managed to sell to millions of people who, in turn, signed up for a unity of the workers but, of course, under the leadership–read: brutal rule–of the likes of Lenin and Stalin. Or they gave up their chance for freedom to national socialists or fascists like Hitler and Mussolini.

Even today the ideas and ideals of individual liberty fare badly because of the many excuses people use to keep others oppressed. The idea of class warfare that even American politicians deploy, for example, undercuts individualism. Ethnicity, racism, gender politics, and the like are all obstacles to making headway for bona fide individualism, with its politics of everyone’s equal unalienable natural rights as the foundation of the legal system, even as their proponents sometimes invoke individualist ideas to excuse the special political privileges they seek.

The Marxists dismissed individualism as an ideology that supposedly served the capitalist, thereby aiming to destroy the most efficient social engine of productivity, the one that unleashed the enormous energy of individual initiative and entrepreneurship. We are, sadly, still in the grips of the big lie that individualism is some kind of insidious ideology.

What’s the remedy? Relentless, vigilant education in the history and philosophy of individualism and libertarianism. That’s the greatest hope for human liberation.