Archive for November, 2011

Column on Who Needs Austerity When Some are Rich?

Who Needs Austerity when some Are Rich

Tibor R. Machan

Portugal is broke but austerity measures there are protested persistently. Greece is in the same fix. And indeed in America, too, the Occupy Wall Street crowd appears to believe that if even a few folks are doing very well, no one need tighten his belt since all that’s needed is to rip off those well off and force them to continue to work hard.

The math is, of course, terribly off — even if all the wealthy were raided for their resources, it would do very little to improve the situation of the vast numbers of those who need to cut back on their spending (including, especially, governments). It’s like a pyramid shaped storage of stuff, taking from the top and distributing it below isn’t going to create abundance. What is required for that is overall productivity, nothing less.

But these days millions of people, especially their politicians and academic agitators, hold the insane idea that wealth is collectively owned, sort of like in a family or commune. No private property is recognized so whatever anyone owns, everyone else owns as well. So if you have been profligate for years and now can’t pay your bills, never mind; there are those others with some money stashed away which can be confiscated because, well, it belongs to everyone. Never mind that it is just that kind of thinking and behavior that leads to widespread poverty, a direct result of the tragedy of the commons.

I have recounted this episode of my life before but it is relevant here again: At about 12 I was being lectured by a good communist teacher in my elementary school in Budapest about how we should all live by the Marxist idea, “From each according to his abilities, to each according to his needs” (taken from his famous essay, “Critique of the Gotha Programme”). I asked the teacher how would this work if my friend and I both started with a few bucks and I spent it on booze and he on wood. Once he made a nice little table, I’ll simply drink myself under it, so would he have to help me out, would his table be my table, as well? And this landed me in hot water. (Both the Nazis and Commies dealt severely with students who asked the wrong questions, what today would be called politically incorrect ones!)

The idea now is that so long as other people are productive and lucky, the rest of us need not fret since we can always dip into their stuff and conscript them to work for us. But since the math in this “solution” sucks, it leaves everyone without sufficient wealth and, moreover, tends to discourage people from trying to increase theirs. Marx knew that this would happen so he envisioned communism as the society in which everyone became a “new man” and would automatically work for the commonwealth, the public interest (is how it is called now). With self-interest having been erased from the human race, no one would mind being poor, having to cope with austerity.

Sadly, the Occupy Wall Street people and others of similar attitude around the globe haven’t experienced this necessary alteration of human nature, whereby no one cares about himself and his intimates but only about the society as a whole. (Not that that would work out but at least people might put up with it more compliantly.) They are very much concerned mainly with their own and their loved ones’ well being. Certainly they care nothing about the well being of those who are productive, especially on Wall Street. Instead they hold the view that other people must all become fierce altruists while they themselves can remain self-indulgent. (At least that is how they behave, so I think it is fair to attribute that line of thinking to them.)

That there are free loaders among us is no news, nor a tragedy. What is, however, really disgusting is how many erudite people throughout academia, governments, and the media egg them on in their pathetic misconceptions.

Column on Inequality


Tibor R. Machan*

Much consternation is spent on income and related inequality. Or call it unequal advantages in life. As if it were some kind of moral or political imperative that we must all enjoy equal benefits and burdens, though few will say why that would be a good thing or why it is right to aim for it, considering that throughout nature inequality is clearly the norm.

Isaiah Berlin is supposed to have stated that equality is a virtual axiomatic norm of social-political life, so Amartya Sen, the Harvard Nobel Laureate in economic science tells us in his book The Idea of Justice (2009). Professor Martha Nussbaum of the University of Chicago Laws School and Philosophy Department also adheres to this idea. Indeed, it is widely embraced by philosophers at the top schools everywhere. It has made its appearance in political history mainly in the writings of the French philosopher Jean Jacques Rousseau.

Yet, as hard as I have tried to locate an argument for the idea, I haven’t been able to find any. Even as a matter of moral intuition, something many contemporary thinkers in ethics favor, it doesn’t appear to be plausible that everyone ought to be enjoying the same conditions of life and that when they don’t, it becomes a political and legal imperative to rearrange things so that they will. It was the late Robert Nozick who in his famous book Anarchy, State, and Utopia (1973) advanced an argument against the intuitive power of egalitarianism. He did this with his famous Wilt Chamberlain thought experiment in which we are all equally well off but then many of us decide to contribute some of our resources to Wilt so we can see him play his fabulous basketball game, which immediately upsets the supposedly desirable equality among us all since, of course, Wilt will be but the rest of us will not be very rich. So this will require constant readjustment, wealth redistribution, by the government which will of course have to be very powerful, much more so that the rest of us, and this once again shows that inequality is unavoidable.

Of course, we have different kinds of equality before us and some do appear to be imperative, such as equal protection of our rights in the legal system. But this is about a procedural matters, not about results. But perhaps the fact of our humanity alone supports the equality that egalitarians promote? Yet while people are alike in all of them being human, this itself goes hand in hand with immense legitimate diversity and inquality among us.
Just take a peak around you and confirm the plain fact that inequality is everywhere–in talents, beauty, athletic prowess, luck (good and bad), etc., etc. And there is, of course, that fact of the widespread inequality of wealth enjoyed by us, the inequality that appears to annoy so many people. I am not convinced it really is since we all live with it day in and out everywhere and peace still prevails among most of us. No doubt there are people who are heavily beset with envy and for them all inequality of advantage justifies massive political efforts to even things out. (Consider Occupy Wall Street as a case in point!)

Of course in some areas equality is imperative, if only to make things more interesting. For example, in foot races and such the competitors all start at the same point–none is supposed to enjoy an unequal advantage, at least not in their initial positioning. (Yet even there, some start with a good night’s sleep behind them, others with nerves having kept them awake all night long.) The oft mentioned “level playing field” is a myth, too, since while the field may be level in some cases, much else isn’t.

In life, including human affairs, inequality is routine. What matters is that whatever inequality exists not be the result of violence, if coercion. If my fellow marathon runners are unequal in their readiness for the race, so be it. But if they try to undermine the readiness of their competitors by spiking their breakfast or water bottles or tripping them up during the race, that’s where things become intolerable. Similarly with wealth. If you are Bill Gates or Warren Buffet but got there peacefully, without using force against those who didn’t, such is life and upsetting it merely increases the coercive power of some people (thus introducing the most insidious form of inequality among human beings).

So unlike in the wilds where many animals rule others by means of physical strength and brutality, in human society advantages are to be gained and kept without resorting to force or fraud. Once those are ejected from the sphere, the outcome cannot be objectionable other than as a matter of a wish or hope. Even those would be unbecoming, which is why envy is a vice, not some admirable sentiment toward those who are well off.

*Tibor Machan is the author of Equality, So Badly Misunderstood (2010).

Adam Smith Forum lecture on Social Compact theories–Hobbes v. Locke

My 11-12-11 lecture at the Adam Smith Forum in Moscow, Russia:

Column on Is The US Government Against Monopoly?

Is The US Government Anti-Monopoly?

Tibor R. Machan

So you may have heard that the US Federal Government is opposed to monopolies and that is why the Department of Justice has its various rules against them. All those antitrust provisions are supposed to keep competition going and prevent any business from becoming the only one around to serve customers. Right, you have heard this — I certainly have.

Only it isn’t true. The federal government is in fact dedicated to preventing competition one place where it could come in very handy. This is in the service of delivering first class mail! No one else is permitted by the government to do this apart from the United States Postal Service. So when one finds that this service doesn’t quite manage to suit one’s postal needs, there isn’t a thing to be done about it apart from hiring a helicopter and paying thousands of dollars to get some letter delivered. But, oops, even that is unavailable since if you were to start such a helicopter service, it would be illegal! The USPS simply forbids anyone else from providing first class mail service to us, period. No, Fed Ex or UPS isn’t allowed — they may only serve us with parcel and not with first class deliveries.

And the USPS’s monopoly isn’t a very nice one either. (Of course, some of the personnel can be friendly but even the most generous of them follow the rules in ways a German soldier from the Third Reich could be proud of. For example, when I recently asked my postal clerks to please place my accumulated first class mail — while I was on a week long trip — into one of the boxes where they put parcels for customers to pick up, they said “No way! That is forbidden by the rules.” Why? Well, they had no idea why — it’s just what the rules state, period, and you must live with it.

Yet what exactly is supposed to be the horror of monopolies? That they will refuse to allow for variety in the delivery of their services or products. Everyone must live with what the monopolists demand! That is why they must be broken up by the trust busters! Or so the story goes, never mind that the government’s most visible monopoly, the USPS, demands exactly that from us.

So the real story is that the US postal service, provided to us by the federal trust busters, is full of tedious unyielding rules no one may escape. Our post office, in particular, is open between 8AM and 4PM M-F and 10AM and 12AM on Saturday and if a resident who must pick up the mail there is unable to go to the office during these hours, that’s just too damned bad. No adjustment is allowed! This is exactly what we are told that monopolists would do if not broken up by the feds. But in the case of the USPS no other service is permitted by law to help with first class mail. The clerks at the local post office being such good soldiers will not go against their rules and will not place the mail into the boxes which normally contain only parcels so as to serve customers. Oh, but I forget — government agencies do not have customers, only subjects! Like monarchs used to. They must all bend to the will of the rulers and the USPS is but an extension of the ruling government, certainly not ready to help out customers who might not be able to bend to its rules!

But you heard it everywhere — the US government is opposed to nasty, dastardly monopolies. Just another lie the government tells us. But at least there is some justice in the world: the USPS is bust, bankrupt, unable to pay its bills. And given its unaccommodating service to some of us, this isn’t very surprising.

Column on From Russia with Trepidations

From Russia with Trepidations

Tibor R. Machan

The invitation was just too nice to turn down despite my increasing reluctance to do very long trips. (I did some such a while back, like twice to New Zealand and twice to Cape Town.) Back and knee troubles tend to impede such ventures these days. But my hosts in Moscow were very pleasant from the start and expressed very serious interest in what I might have to say (about social “contract” theories and Adam Smith and morality) and treated me like a VIP once I arrived. So despite the brevity of the visit, only five days there, I went and found it mostly rewarding. The visit was sweetened by superb accommodations for the trip itself and the stay.

The first thing that struck me — and all I can report is that, since five days in not enough time to dig into a place — is just how vast and busy Moscow is. People crowded every place, with the Metro and the immense avenues filled with them.

Much still reminded me of when the Soviets were occupying Budapest in the 1950s, including the “service” I received at the state owned hotel (where you are treated as you would be at the DMV here). Folks are often sullen, especially in service industries where they seem to feel like indentured servants instead of employees and where they show zero courtesy to customers. (This harks back to the good old days of Soviet Russia where the members of the working classes seemed to be the least happy bunch in society.)

The cultural offerings are a varied lot indeed, with everything from what recalls village life in Russia and elsewhere to cosmopolitan London or Milan. Do not expect people to speak even a word of English, not like everywhere else in Europe, outside of fashionable shops. But the signs around town do tend to be multilingual. Something that struck me is just how replete the place is with iPhones and iPads and electronic gadgets in general, even in the middle of the most dilapidated regions of the city.

The best thing about my hotel was the elevator (or lift). It worked great and came to your floor in seconds. But there were no amenities like a gym or pool or even a shop for trinkets. The one shop, selling designer clothing, was nearly always closed despite the signs that announced the hours it was to be open.

What was very welcome is just how intensely interested members of my audience — students and faculty alike — were in the topics I covered and how ready they were to explore arguments and take issue with them. Much better than at home, in my classes here at Chapman University (where it takes about two years for students to warm up to what they are supposedly there for). Of course, members of the audiences in Moscow came of their own accord, whereas students in many of my classes at Chapman are required to take the course they take from me and, sadly, do not connect their choice to major in business with the course they must then take from me. (A lot of them, no doubt, would just like to get the passing grade, never mind doing work in the subject. Only after a few terms in college do they begin to make the connection, probably because after having been forced into primary and secondary schools, they look upon college as a kind of liberation!)

From what I gathered in my discussion with my hosts and members of my audiences, Russia is understood by many people as in the grips of crony capitalism. There was little hope shown among those I met for changing this soon although most are aware of the bad end it will lead to.

Corruption is rife; the legal authorities are the farthest thing from upholding any sensible idea of the rule of law but tend, in the main, to be in the pockets of some special interest group. I know a lot of people who champion what they call anarchism and anarcho-capitalism, but what the anarchism in Moscow appears to many classical liberals and libertarians there has nothing at all with the political economy of capitalism, quite the contrary. Government is directly involved in calling winner and losers in the economic realm. Bribery appears to be routine. Arbitrary regulations of business as well.

All this was supplemented, sadly, with the grayest five days I have ever spent since I left Fredonia, NY, where I taught for some ten years and where we called the sun a purely theoretical entity.