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Monday, October 31, 2011

Armstrong vs. The Ivy League: "The Justice of Income Inequality Under Capitalism"

I very much enjoyed Ari Armstrong's blog post on The Objective Standard titled "The Justice of Income Inequality Under Capitalism."

He makes a crucial distinction not between the rich and poor or the "1% and 99%" but between "producers and looters."  That is, he distinguishes between those who work hard and produce or earn their wealth and those who do not, i.e., those who attempt to steal or seize other people's wealth.

This critical difference allows him to support OWS protesters and others who oppose forcible transfers of wealth between say taxpayers and banks, but also, for the same reason, it allows him to oppose forcible transfers of wealth between productive individuals and those seeking handouts from taxpayers for everything from housing, to student loans, to mortgage support.     

In this great formulation he writes:
Looters win (in their own short-sighted view) at the expense of others. Producers win as they help others win. At worst, a looter takes your life; at best, he steals what you produce. At worse, a producer leaves you alone; at best—and most typically—he greatly enriches and expands our lives.
His post is a great example of why objectively defining and analyzing concepts is so critical to fundamentally understanding reality - a principle completely lost on modern intellectuals. 

Contrast Ari's post with this video debate between two prominent Ivy League professors, Jeffrey Sachs (left) and Niall Ferguson (right).  Neither reason nor argue in terms of essentials so the debate is utterly devoid of any meaningful insight as the premise of the morality of income equality is taken for granted by both.

Tuesday, October 25, 2011

This is Amazing - Hospital Bill From 1960

One of my favorite bloggers, Dr. Paul Hsieh (We Stand Firm), posts a Hospital Bill From 1960 saying: "One of my friends just sent me this copy of a hospital bill from 1960. This was for a relative of hers who had delivered a baby..." It shows that delivering a baby in 1960 cost $230. 

This example demonstrates the devastating effects of general dollar inflation combined with medical inflation due to government intervention in the health care market. Dollar inflation is due to the massive creation of dollars not backed by hard assets like gold and silver and raises the price of everything more than otherwise.  Medical inflation, which has outpaced even dollar inflation, is due to government intervention in the health care market which takes many forms. For example, the government creates incentives and mandates for employers to sponsor heavily regulated and uneconomical third party payer programs.

His website is a great resource for advocates of free market health care or anyone trying to understand the causes and solutions to the government caused health care crisis.

Thursday, October 20, 2011

Reisman: How a Highly Productive and Provident One Percent Provides the Standard of Living of a Largely Ignorant and Ungrateful Ninety-Nine Percent

Great post by Dr. George Reisman in which explains "how all of us, one hundred percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate.." He concludes:
Thus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe. It is their mentality, the Marxism that permeates it, and the government policies that are the result, that are responsible for what they complain about. The protesters are, in effect, in the position of being unwitting flagellants. They are beating themselves left and right and as balm for their wounds they demand more whips and chains. They do not see this, because they have not learned to make the connection that in violating the freedom of businessmen and capitalists and seizing and consuming their wealth, i.e., using weapons of pain and suffering against this small hated group, they are destroying the basis of their own well being.

However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better, if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well being, including their own.

I highly recommend his post and all of his other work.   

Monday, October 17, 2011

OWS: Dogs Chasing Cars

“Do I really look like a guy with a plan? You know what I am? I’m a dog chasing cars. I wouldn’t know what to do with one if I caught it. You know, I just… do things”

I thought of the Joker's nihilistic ramblings while reflecting on some news related to the Occupy Wall Street protests. What did Obama’s utterly vacuous campaign slogan “change we can believe in” actually mean? Or, recall Pelosi urging the electorate to pass Obamacare "in order to find out what’s in it." Or, for a more innocuous example, recall Cameron Diaz causing a furor in Peru by sporting a Maoist-themed bag.  In other words, it seems the left is very good at wearing revolutionary accessories, fighting the police, and just doing things, but, when pressed, they are very cagey about what they actually want. Well now we have the ultimate manifestation of this phenomenon - a global movement supposedly comprised of hundreds of thousands of protesters who openly brag about having no demands “something Legba Carrefour, a participant in the Occupy D.C. protest, found comforting on Sunday.”
"When movements come up with specific demands, they cease to be movements and transform into political campaign rallies," said Carrefour, who works as a coat check attendant despite holding a master's degree in cultural studies. "It's compelling a lot of people to come out for their own reasons rather than the reasons that someone else has given to them."
So, can there be a movement for the sake of a movement with no demands and no political aspirations - a movement in which people "come out for their own reasons?" In reality, the fact that some of its participants are either too ignorant or too evasive to acknowledge it, this movement certainly does have a political agenda (aspects of which I blogged about here).  So why not acknowledge this agenda, define it, and proudly advocate for it?

Uh, that's where things get a little tricky. 

The inability and unwillingness for the left to argue critically for its agenda is a recurring theme that I have blogged about for years. Clearly, a sheer unanimity of angst exists among them related to perceived societal injustices, yet the vaguest sense of cause and effect, context, or solutions does not. The corollary is that they rarely understand or even acknowledge the implications of their own positions.  For example, socialism necessitates the initiation of force against innocent people - that is the point of the redistribution of wealth and the abrogation of property rights. However, most will become angry, switch topics or even deny the reality of that logic to the point of denying the facts of history.    

The left chooses not to acknowledge or clarify their demands because it brings into focus the actual political policies necessary to achieve them.  And why would that be bad? Because, at root, socialism necessitates the violent transfer of wealth from one group to another group, a rather frightening position to explicitly advocate. Such a program is not only highly impractical, since it leads to stagnation, poverty and misery, but is profoundly immoral as it treats the productive as slaves authorizing the state to perpetrate acts of escalating violence against innocent individuals who want to own the products of their labor.   

The important point is that once someone names "socialism" or any policy as a specific concrete demand, someone can come along and logically analyze it by reference to political and  economic principles in the context of actual history.  Socialism can not withstand such an analysis since it is a immoral in principle and literally a bloody disaster in practice.     

So why would it be bad for them to understand the logical implications of their own ideas, and what keeps motivating these people to protest if they have no concrete political demands?

On a basic level, human beings are attracted to the sense of moral idealism. The reality of a particular “ideal” is a whole other story. Since the protesters barely bother to analyze their own moral premises they accept them by default.  And what is the default morality of our culture?  The morality of self-sacrifice or self-abnegation, i.e., altruism.  Those that seek profit, whether through voluntary trade and cooperation or through government favors and pull peddling, are regarded by the left as equally evil.  No effort is ever made to disentangle the two, although in reality, this is precisely what is necessary in the context of a mixed economy (an economy that combines elements of capitalism with elements of socialism). In the socialist world view, owning the "means of production" or owning capital is necessarily exploitative and the job of the state is to rectify this supposed injustice.

On the other hand, the morality of egoism which upholds the right of the individual to exist for his own sake, neither sacrificing for others nor sacrificing others to himself, recognizes the difference, in principle, between two types of individuals, the parasitic businessman who feeds off government favors or pull and the honest businessman who succeeds through productivity and effort. That is the root of free market advocates' call for less government power to enable honest individuals to voluntarily cooperate in the market based on their own independent judgment free from government coercion - free from government favors - free from welfare for the rich and the poor. 

In short, this is why socialism is properly associated with sacrifice and why true laissez faire capitalism is rightly associated with egoism. The dominant morality of our culture and the universities is the former and what explains the attraction of so many to socialist politics. The implicit logic for them is as follows: profit is evil, businessmen seek profit, businessmen are evil, person X is a businessman, person X is evil, therefore, let's go to businessman X's home and threaten to kill him unless he gives back (to us) his ill gotten gains. 

The important point is that this implicit train of logic stems from certain moral premises. By evading specific political policies and staying in the realm of the "protest,"  they can continue to bask in a gushy, idealistic love fest , i.e., they can continue to FEEL good about what they are doing while avoiding both the need to examine their own premises and the messy stuff of intellectual debate over principles, and political policies which further entails knowledge of economics, history, and maybe even arithmetic, subjects with which they are uncomfortable or ignorant. 

This also explains the ferocity of the protesters even in the face of facts and rational economic principles.  Motivated by the morality of sacrifice, the modern left is the secular equivalent of religious fanatics. It is why they routinely advocate for government censorship of their enemies in the same way that right wing religious fanatics or Islamists try to censor whatever they deem inappropriate.  It is only natural that individuals motivated not by reason but by the emotional frenzy that follows from unchecked moral premises would gather in this form. In a previous post I wrote:      
When an individual rejects the efficacy of his own mind, like an animal, he must turn to a group for guidance, protection, and a sense of pseudo-self worth. The subjectivist left regards people, not as individuals, but as members of collectives whose identities are determined by the attributes of their group. Accordingly, they do not evaluate an idea in terms of truth or falsehood. That is too "simplistic." According to the left, people are conditioned by their circumstances, their "environment", or their race, socio-economic class, or gender. Therefore, it is not necessary to reason or offer a policy that is logically consistent with abstract principles pertaining to individual rights or the laws of economics. One must condition the opposition or "penetrate the message war" by finding some non-cognitive form of appeal, i.e., by offering warm and fuzzy platitudes or demonizing the opposition.

Accordingly, the left must view ideas as the arbitrary products of warring mobs.
I guess now they are getting to the warring mobs part. 

Thursday, October 13, 2011

OWS Protesters Want Things Because They Want Them

As the Occupy Wall Street demonstrations have made abundantly clear, the modern left is a motley collection of intellectually bankrupt factions loosely united by their allegiance to vague, incoherent platitudes concerning a multitude of eh, well, concerns.  Evidently, these concerns range all the way from  “greed” (it’s bad - unless you are a movie star or a rapper) to warm weather in the year 2099 (trust me, it’s horrendously bad).  Judging by their signs, chants, and effigies of bloodied businessmen with hatchets through their heads, their remedy for such perceived injustice appears to range from higher taxes to re-education camps to guillotines. However, if there is a uniting motive that can be ascertained I believe it is this: the desire to transfer unlimited power to federal bureaucrats to seize and transfer the earnings of productive individuals to non-productive individuals. 

In other words, when you step back from the hand drums, chanting and public defecation, this throng of idealists' sole motive appears to be granting the state the unlimited power to confiscate the property of others, i.e., turn the productive into sacrificial serfs of the all powerful State - a system which necessarily entails the initiation of force against innocent individuals all for the sinister crime of voluntarily producing and exchanging goods and services - goods and services which, ironically, seem to be in great demand amongst the protesters.     

Fortunately, the ultimate goal of these protests is not something many of the protesters have even bothered to consider.  In a post titled "OWS Protester Wants College Paid for Because That Is What He Wants," Charles C.W. Cooke interviews many of the protesters, and this video interview serves as a fantastic example to support my point.  He writes:
...nothing had prepared me for meeting this gentleman, who wants his college paid for because, well . . . that’s what he wants. He has perfectly articulated a sentiment I have heard repeatedly but was struggling to distill with anything like the clarity he achieved: That being that if there is something someone doesn’t like about their life, someone else somewhere should change it. And if they don’t, well then, the American Dream is dead:
The "at least your honest" award goes to this protester who rightly observes that "violence will be necessary to achieve their goals." While some may bristle at his suggestion, they should realize that he is merely stating the simple truth.  Socialism necessitates violence as it involves the seizure and control of other people's property.  Controlling the usage and disposable of other's property is tantamount to theft and a profound usurpation of individual rights whether sanctioned by "majority vote" or not - just as censorship is an infringement of individual rights whether sanctioned by "majority vote" or not. As uncomfortable as this may be for some of these protesters, they should realize that socialism is nothing more than the organized initiation of force by the state against innocent individuals.  

Although many of the protesters do explicitly understand their motives and proudly call for the state to perpetrate violence against the productive, others are justifiably unhappy simply because of the state of the economy or the injustice of government handouts. However, the latter should realize that the root cause of this economic malaise and the injustice of pull peddling are inherent to the very policies that the majority of the protesters advocate! 

In other words, the essence of socialism and its less extreme cousin, Western welfare statism, is government intervention in the economy on behalf of politicians motivated by special interest groups, all of which claim to represent the "public good." What they need to realize is that their Marxist protesting brethren are not concerned with the injustice of government favors or pull peddling per se, they are merely concerned with the current recipients of these favors and pull peddling.  They don't care that the state robs some people for the unearned benefit of others as a matter of justice, they just want the state to rob the appropriate people, which to the Marxist are the businessmen, and transfer the proceeds to the "lower class" or the earth or some other to be defined class. 

If there are honest individuals among these protesters, they should advocate for the protection of individual rights, i.e., a system in which the state protects all equally from the initiation of force and does not seek to sacrifice one group to any other group.  This system, laissez faire capitalism, most closely approximated at America's founding, does not exist, but it is the ideal.

As for the rest of the protesters, I am not concerned.  Collectivism, defined by Ayn Rand as "the subjugation of the individual to the group" for the benefit of the "common good," is a dead end.  As this bizarre and frightening video demonstrates, I don't think this group is going to take over anything anytime soon - although, if you become a "block," it appears they will do a "mic check."  

Monday, October 10, 2011

Frezza on How Government Intervention is Causing Medicine Shortages

How is that businesses left free of government interference manage to create an abundance of products in every type of industry (can you say i-pad, wide screen tv's, barbecues, etc.) yet, in sectors dominated by government regulation we virtually always see poorer quality products, rationing and shortages (public education, public housing, collectivized farming, etc.)?

Bill Frezza, writing for Forbes, applies this knowledge to the recent shortages in medicine. He writes:
Congress has held hearings to determine what additional authority should be given to the FDA or other federal agencies, in order to give them more power over manufacturers. The paucity of attempts to understand the root cause of the problem reveals the intellectual bankruptcy of that approach.
Indeed, has Congress ever determined the root cause of anything especially when the root cause of the problem is Congress? 

Wednesday, October 5, 2011

Hsieh: Don't Blame Capitalism for High Health Insurance Costs

Great op-ed by Paul Hsieh on how government causes high health insurance costs, not the free market.