Archive for January, 2012

Column on the Bottom Line on Obama-Economics

The bottom line on Obama-economics!

Tibor R. Machan

Economic fairness is impossible: an oxymoron. Since economic activities are inherently varied and often competitive and since one size doesn’t fit all and not everyone can win in a competition, no such thing as fairness is possible unless it simply means no one may be prevented from taking part. Certainly, however, the outcome will most likely be very different for different participants.

The sort of fairness and equality President Obama and his supporters are after maybe achieved around a family or fraternity dinner table or in a last will and testament where goods are being distributed among family members who each expect the fulfillment of an implied promise from elders to receive a “fair share” of the wealth left to them. “Fair” here makes sense since the idea is that no one is going to get much less or more than another. But no such expectation makes any sense throughout a country! The government owns nothing and can thus leave nothing to the citizenry without engaging in massive redistribution of wealth it doesn’t have any authority to distribute or redistribute.

When fairness is demanded, it implies that the government does have the authority to assign winners and losers in the economic sphere. As if we still lived in a monarchy awaiting the decision of the king as to who will be the beneficiary of his largess. All the subjects can hope they will receive a fair share of the wealth of the country.

But in a free country, with the principle of private property rights as the law of the land, the king or government has no business engaging in wealth distribution so the issue of fairness is entirely moot. It’s a dream and where attempted, it leads to a police state. All that Mr. Obama needs to do to appreciate this is to read George Orwell’s Animal Farm, a wonderful parable about what happens when equality is demanded and government tries to produce it. He might also check out the late Robert Nozick’s famous Wilt Chamberlain example, from this book Anarchy, State, and Utopia (1973) where he shows that when goodies are fairly distributed among people they will turn right around a rearrange it all so the “fair” distribution is completely upset.

Or if he wants real life cases from which to take lessons, Obama & Co. might remember the Soviet Union and investigate how things are panning out in that heavenly egalitarian country, North Korea. They could perhaps consider that in Cuba the rulers are finally realizing the futility of the socialist-egalitarian ideal and are making changes to turn the place into more and more of a free market system.

Still, there will always be those who want to level the economy. The main reason is the misguided conviction that we are, after all, in the same boat, just as are the children in a family. But the government isn’t like our parents who have made a promise to care for all their children. We aren’t the children of Mr. Obama and his administration! To try to serve us all with all the benefits that parents owe to their offspring would be futile and invites totalitarianism.

Parents, after all, own their resources and owe some of it to their children; this is not the case with governments and the citizenry. They don’t own anything at all without confiscating it. At most they may do this up to what is needed for administering the laws of the land–providing the citizenry with national defense and a sound legal system and its maintenance. Even some of this can be achieved without much government management. After all, who is the government but other citizens who have been hired to do a rather limited job in the country. It is up to the citizenry to secure for themselves economic growth, solvency, innovation, investment, etc. To attempt anything more would involve the government in tasks that free citizens aren’t entitled to.

Sadly Obama & Co. see the country as it if were some club or team where everyone is part of it and needs the same treatment as everyone else. But a country is not a club or a team–those are the results of free men and women coming together voluntarily for a great variety of purposes. The government of such free men and women must not get involved with what the clubs are embarking upon, be it business, athletics, education, entertainment or whatever else peaceful such folks will embark upon. Like the proverbial cop on the beat, the government isn’t there to pick the goals and tasks of those whom they serve in a limited capacity of securing their rights. It’s there to keep the peace, that is all!

TSA & the Free Society: Are They Compatible?

TSA & a Free Country: Are the Compatible?

Tibor R. Machan

Why does the TSA annoy so many of us? Not having the resources to do a survey, I resort here to what might be called educated speculation. I suspect it is because free men and women consider it invasive for government agents to order them around–pat them down, make them endure electronic surveillance, being ordered around by TSA agents, etc.–unless they give their permission.

Just because someone embarks upon air travel it doesn’t follow that such permission can be inferred, especially if the search is conducted by government agents. If a private carrier states up front that utilizing it will require submitting to various intrusions, there is a difference. People may require of visitors to their homes or business establishments to submit to certain reasonable precautionary measures, say, for hygienic or security purposes. That’s because their home belongs to them and they may impose conditions for accessing it to others even if these others do not quite understand the rationale behind the measures to which they are subjected. They can go elsewhere. But when government imposes such requirements, given the overwhelming force it wields and its monopolistic powers, certain due process provisions must be met. One cannot escape the government since it runs air traffic. Thus, not unless there is solid reason to suspect someone of misconduct or ill will may they be interfered with by the government. Otherwise the policy is arbitrary.

Interestingly, when Senator Rand Paul was subjected to the TSA’s measures on January 23, another issue, apart from due process, arose: the US Constitution disallows interference with the travel by a member of Congress. There is a bit of ambiguity about it, though. Among other things, if such an individual “breaches the peace,” the interference is warranted. Yet, what constitutes breaching of the peace? Simply embarking upon air travel surely does not. So the TSA hasn’t even the legal ability and thus the authority to detain someone like Senator Rand Paul. And arguably it should not have such authority when it comes to citizens who aren’t suspected of any crimes.

I was traveling recently and boarded a flight at Newark Airport in New Jersey and was subjected to the pat down, etc., procedure. I was informed that my right palm tested positive for a substance that had been instrumental in causing the Oklahoma City blast of several years ago. I wasn’t actually shown this, even though I asked, but I didn’t insist since I needed to catch my flight and there wasn’t much time left to do so. I didn’t carry with me any materials of the kind detected on my right palm–I was not checking bags and everything I had was put through the machinery at the security check. Despite this, I was physically patted down by some bloke, something I didn’t welcome but because of their power over me I couldn’t escape. Either I underwent the procedure or I was barred from boarding my flight.

What exactly counts as grounds for suspicion? No clue but maybe by setting off some instrument that’s calibrated some way to detect hazardous substances establishes sufficient grounds. Of course, different people can become suspicious for different reasons, based on their own experiences, knowledge, worries, etc. Risk assessment is certainly not an exact science. Much of it is based on input from experts who have different ways of weighing risks. Here, too, competition is needed to figure out what policy is best.

It is wisest not to forget that levels of fear and concern vary and that here, too, one size does not fit all. So what the TSA selects as decisive in how to measure risk may well be largely subjective. At most the best results will be an inter-subjective assessment. No wonder people feel very uneasy when they are subject to such a wishywashy system.

In this area, too, a competitive market is necessary so as to come up with results that are reasonable. Unfortunately when government manages airport security, this isn’t possible. Too many factors influence the managers and there is little hope for an objective determination or even of one that is at least plausible. Which means that policies will be debated forever and will result in policies that are arbitrary. That is the result of the tragedy of the commons in his area of concern. The king’s intuitions rule but no one can figure out whether they make sense!

Column on BBC & Capitalism

BBC’s Biased Coverage of Capitalism

Tibor R. Machan

On the BBC website an interview was featured recently with the famous orthodox Marxist, Eric Hobsbawm, who promptly denounced capitalism as if he had established definitively its inferiority as a political economic system. Is the BBC such an irresponsible news organization that it will feature Mr. Hobsbawm’s characterization of capitalism with no one who champions that system featured responding to him? (If you search, no such balanced presentation can be found on the BBC website.) Or is this happening because, after all, BBC is a state broadcast endeavor and has a big stake in discrediting a system that relies on private initiative?

From a Marxist perspective especially this conclusion is quite reasonable, since we are all supposed to be driven by economic motives and here is an instance that might just fit this idea perfectly. The BBC would be one of the casualties of capitalist inspired privatization! As a creature of the state it relies on confiscated resources for its operations and capitalism goes against that policy big time.

The question that was put to Mr. Hobsbawm by the BBC’s interviewer, had to do with capitalism and responsibility. That is, whether agents in a free market would be motivated to act responsibly and the answer Mr. Hobsbawm gave is “No.” Yet if people act irresponsibly in genuine free markets, this will soon be known and they would lose trust from fellow market agents. Only when governments protect market agents from the consequences of their behavior will they be able to persist in acting irresponsibly.

Moreover, if those who would regulate our economic conduct are, as they must be, human beings, why would they be virtuous while the we would not be? Why would they not use their monopolistic legal power to secure advantages for themselves, just as public choice theory (as per James Buchanan and Gordon Tullock) postulates?

What free market capitalism cannot offer, because it doesn’t control people, is compliance with all tenets of ethics. But neither can anyone else make such a promise and when they pretend they can, this invites the most insidious lack of ethics, namely, tyranny.

The bottom line here is that if you are interested in the nature of capitalism, don’t ask a Marxist but a champion of that system of political economy, such as Professor Richard Epstein (NYU) or Randy Barnett (Georgetown U.) or, yes, me! Then go and find some critics and contrast their different answers and let the audience assess which approach is more reasonable.

The BBC doesn’t appear to honor this approach, the only balanced one, when dealing with the nature of capitalism. Too bad. Failing to let a competent defense of that system be aired on BBC may even promote some major economic malpractice, including the appointment of all kinds of petty tyrants who presume to know how to run our economic affairs.

“As an economic system capitalism has nothing to do with responsibility,” says the Marxist sage, yet this is perverse, uninformed, given that trust and being responsible to fulfill one’s promises is essential to free market capitalism. Indeed, one reason that that system works pretty well when uncorrupted by state interference is that those who fail to be responsible do not flourish in it unless favored with privileges they haven’t earned.

As many have pointed out, the famous association between capitalism and the pursuit of self-interest is widely misunderstood. “Self-interest” in how capitalism operates means nothing more than that people are doing what they want (since they are free to do so). But what they want to do may be for their own or for someone else’s benefit; nothing in capitalist theory spells that out. Indeed, it is a strong feature–not without some problems–of capitalist economic theory that saying that people pursue their self-interest says nearly nothing about what they are likely to do. This is because in that theory self-interest is understood subjectively. Whatever one believes is in his or her interest is exactly what is; but this makes it perfectly reasonable that someone who wants to consume heroin or engage in innumerable other self-destructive activities (by common sense standards) is actually pursuing his or her self-interest.

In any case, the main point here is that the BBC seems not to care to practice responsible journalism even while asking Mr. Hobsbawm to comment on the relationship between responsibility and capitalism. How ironic.

Column on MLK’s Public Philosophy of Freedom

MLK’s Public Philosophy of Freedom

Tibor R. Machan

As I flew home across the country from NYC on January 16th, the holiday this year in honor of the birthday of Dr. Martin Luther King, Jr., I had the opportunity to watch several programs on television devoted to his legacy. I was especially struck by the fact that commentators — for example Amy Goodman, the host and executive producer of Democracy Now!,” a national, daily, independent, award-winning news program” — keep imputing to him a welfare statism that seems not to have been part of his thinking. (I have no idea what Democracy Now! is independent of since all the programs on it evidence a distinct perspective, no less so that those on Fox TV.)

During the flight I managed, also, to listen again to the entire speech Dr. King gave in Alabama, on the day before he was assassinated, and what it was mostly about is freedom, not at all about welfare statism.

There are, admittedly, several senses of the term “freedom” in use. In particular there is negative and positive freedom. The former is strongly associated with the American political tradition — spelled out, for example, in the Declaration of Independence and the Bill of Rights — the latter with the ideas of FDR’s New Deal. The first means being free from the intrusions of other people, including government, however well intentioned; the second means being provided with support by others, including the government through its power of taking what belongs to one so as to hand to another. So one is free to do what one chooses to do if one is free in the first sense, while one is free from having to cover one’s various expenses in the second sense.

The free society as understood by classical liberals stresses the protection of the freedom of the citizenry with a suitably framed legal system, while the society fashioned by modern liberals stresses government’s providing to people what they are said to need by way of confiscatory taxation for this purpose.

It seems to me that Dr. King was talking about the former kind of freedom, freedom from the oppressive acts of most whites toward most blacks, for example. Many of those who today wish to invoke his stature and ideas for their political purposes, however, are talking about the second kind of “freedom or liberty.” That is the freedom, so called, that the welfare state is supposed to protect for people, at the expense of those whose resources are confiscated so as to achieve this goal. Yet there are many who insist that Dr. King had in mind the second type of freedom — or perhaps that he believed in both. As one commentator put it, “On that day, Dr. King spoke of two types of freedom — one from ‘the chains of discrimination’ and one from living on ‘a lonely island of poverty in the midst of a vast ocean of material prosperity.’ Somehow his first message has been taken to heart while his second has been forgotten.” (This is what John Fullerton, founder of Capital Institute, declared in his recent essay on Huff Post.)

The problem with attributing to MLK this two-pronged idea of freedom is that if it is correct, it makes his ideas incoherent. The first type of freedom just cannot co-exists with the second. If A can be coerced to provide support for those who are “living in a lonely island of poverty in the midst of a vast ocean of materials prosperity,” then A would have his right to freedom violated. If anytime that someone achieves material prosperity that individual becomes a target of the adjusters who would not accept his or her freedom to make use of it, then such an individual is not free in the first sense. To steal from Peter so as to provide for Paul does not support freedom but servitude.

It is much more sensible to attribute to Dr. King the more coherent view that if the freedom of individuals to do as they choose is properly respected and protected, they will be enjoying the first kind of freedom — freedom from others’ intrusions — and become capable of achieving freedom from poverty. Free men and women have generally been quite able to provide for themselves, perhaps with occasional voluntary help from their friends and neighbors. That is one of the lessons of history! It is entirely inappropriate to suggest that one person’s poverty authorizes others to take from those who have managed to achieve prosperity. I doubt that Martin Luther King Jr. didn’t grasp something so elementary — it is an insult to his memory to believe that.

Instead what seems to be happening is that people who are aspiring to rule others are invoking his good name for their coercive purposes. It would be a shame if this were tolerated by all those who admire Dr. King for his championing of human liberty.

Essay on Rand & Rothbard: Diverse Champions of Liberty

Ayn Rand & Murray Rothbard: Diverse Champions of Liberty

By Tibor R. Machan*

No one should attempt to treat Ayn Rand and Murray N. Rothbard as uncomplicated and rather similar defenders of the free society although they have more in common than many believe. As just one example, neither was a hawk when it comes to deploying military power abroad. There is evidence, too, that both considered it imprudent for the US government to be entangled in international affairs, such as fighting dictators who were no threat to America. Even their lack of enthusiasm for entering WW II could be seen as quite similar.

And so far as their underlying philosophical positions are concerned, they both can be regarded as Aristotelians. In matters of economics they were unwavering supporters of the fully free market capitalist system, although while Rand didn’t find corporations per se objectionable, arguably Rothbard had some problems with corporate commerce, especially as it manifest itself in the 20th century. One sphere in which they took very different positions, at least at first glance, is whether government is a bona fide feature of a genuinely free country. Rand thought it is, Rothbard thought it wasn’t. Yet the reason Rothbard opposed government was that it depended on taxation, something Rand also opposed, so even here where the difference between them appears to be quite stark, they were closer than one might think.

When intellectuals such as Rand and Rothbard have roughly the same political-economic position, it isn’t that surprising that they and their followers would stress the difference between them instead of the similarities. Moreover, in this case both had a similar explosive personality, with powerful likes and dislikes not just in fundamentals but also in what may legitimately be considered incidentals–music, poetry, novels, movies and so forth.

Yet what for Rothbard might be something tangential, even incidental, to his political economic thought, for Rand could be considered more germane since Rand thought of herself–and many think of her–as a philosopher (roughly of the rank of a Herbert Spencer or Auguste Comte). Rothbard wrote little in the sphere of metaphysics and epistemology, although he was well informed in these branches of philosophy, while Rand chimed in, quite directly, on several philosophical issues, having written what amounts to a rather nuanced long philosophical essay on epistemology and advanced ideas in metaphysics, such as on free will, causality, and the nature of universals. Her followers, such as Nathaniel Bradnen, Leonard Peikoff, Tara Smith, Alan Gotthelf, James Lennox, and David Kelley, among others, have all made contributions to serious discussions in various branches of philosophy.

The central dispute, however, between Rothbard and his followers and Rand and hers focuses, as I have already noted, on whether a free country would have a government. The debate is moved forward in the volume edited by Roderick Long and me, Anarchism versus Minarchism; Is Government Part of a Free County (Ashgate, 2006).

Even apart from their disagreement about the justifiability of government in a bona fide free country, there is the difference between them about the subjectivity of (some) values. Rothbard holds, for example, that “’distribution’ is simply the result of the free exchange process, and since this process benefits all participants on the market and increases social utility, it follows directly that the ‘distributional’ results of the free market also increase social utility.” The part here that shows the difference between Rothbard and Rand is where Rothbard says that the “free exchange process … benefits all participants on the market.” Maybe most of them benefit in such exchanges do but some do not. Suppose someone exchanges five ounces of crack cocaine for an ounce of heroin. Arguably, at least as Ayn Rand would very likely maintain, neither of these traders gains a benefit in this exchange, assuming that both commodities being trade are objectively harmful to the traders’ health. Both are, then, harmed, objectively speaking, even if they believed they would benefit.

This may be a minor matter but it isn’t, not at least if Rothbard’s idea is generalized to apply to all market exchanges. True, from a purely economic viewpoint both parties in free exchanges tend to take it or believe that they are benefited by these. But this belief could well be false.

Now of course Rand would agree with Rothbard that just because people engage in trade that’s harmful to them, it doesn’t follow that anyone, least of all the government, is authorized to ban such trade or otherwise interfere with it. Such matters as what may or may not harm free market traders from the trades they choose to engage in are supposed to be dealt with in the private sector. Family, friends, doctors, nurses, et al., or other agents devoted to advising people what they should and should not do are the only ones who may launch peaceful educational or advisory measures to remedy the private misjudgments and misconduct of peaceful market participants. Such an approach sees public policies such as the war on drugs as entirely unjustified even if consuming many drugs is objectively damaging to those doing so.

In any case, the Randian view doesn’t assume that all free trade benefits those embarking on them. Let me, however, return to the major bone of contention between Murray Rothbard and Ayn Rand, namely, whether government is (or could be) part of a free country. Given that Rothbard believes government cannot exists without deploying the rights-violating policy of taxation, his view is understandable but the underlying assumption that gives rise to it is questionable. Rand did indeed question it in her discussion of funding government in the chapter “Government Financing in a Free society” in The Virtue of Selfishness, at least by implication, when she argued that government can be financed without taxation. If she is correct, then Rothbard or his followers need to mount a different attack on the idea that the free society can have a government. (And some have indeed made this argument, including me in, for example, my “Anarchism and Minarchism, A Rapprochement,” Journal des Economists et des Estudes Humaines, Vol. 14, No. 4 [December 2002], 569-588.)

Rand proposed that instead of taxation, which involves the rights-violating policy of confiscation of private property, a government could be funded by way of a contract fee, a lottery, or some other peaceful method. Whether this is so cannot be addressed here but it shows that Rand and Rothbard were not very distant from each other on the issue of the justifiability of government in a free country. Perhaps the term “government” is ill advised when applied to whatever kind of law-enforcement institution would be involved in bona fide free countries. But this is not what’s crucial–a rose by any other name is still a rose and a law-enforcement, judicial or defense agency in a free society is what is at issue here, not what term is used to call it. So, again, Rand and Rothbard seem closer than usually believed.

Yet it’s not just about taxation for many who follow Rothbard. Most also hold that the idea is mistaken that government–or whatever it is called–needs to serve a society occupying a continuous instead instead of Swiss cheese like region. The idea of a disparately located country, without a continuous territory and with the possibility of all parts being accessible by law enforcers without the need of international treaties, makes sense to Rothbardians. Not, however, to Randians, it can be argued, not unless the familiar science fiction transportation option of being “beamed up” from one area to anther (so that law enforcement can reach all those within its jurisdiction) is available. Otherwise enforcement of the law can be easily evaded by criminals.

Again, this isn’t the place to resolve the dispute between Rand & her followers and Rothbard and his. This brief discussion should, however, indicate where their differences lie. It doesn’t at all explain, however, why the different parties to the debate tend often to be quite acrimonious toward each other. What may explain this, though, is a simple point of psychology. Nearly all champions of a fully free, libertarian society are also avid individualists and often tend to insist on what might be called the policy: My way or the highway! Even when their differences don’t warrant it.