The Anti-American Dream

This European is excellent on the First Amendment and the consequences of America’s progressive education.

My only criticism is his equating of political power with economic power (a fallacy that Ayn Rand called package-dealing). To his credit, he does point out that the First Amendment “only applies to government censorship and not to private companies.”

If, however, he were to integrate the distinction between political power and economic power into his thinking, he might avoid painting “big tech” as a censoring villain while still expressing disapproval for the actions particular companies have taken.

— but overall, really good commentary!

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“Sometimes the worst enemies of capitalism are capitalists”

Capitalism And The Mixed Economy Are Not Synonymous

A recent opinion piece in The Hill titled, “Let capitalism — not government —build needed infrastructure,” deserves both praise and criticism. The author argues that infrastructure owned and maintained by government (e.g., bridges, highways, pipelines, dams, and airports), should be privatized. In his words, “opening the infrastructure market to private ownership would ensure sufficient funding and would introduce innovation and cost-effectiveness.”1

In that, the author is correct. A proper government – one that exists to protect individual rights — has no business building and maintaining infrastructure. In a truly free market, which can only exist under capitalism, the best ideas, when properly executed, will rise to the top — not by subsidies or government protection from competition – but on merit; because they provide consumers with a superior value.

Rather than defend capitalism, however, the author undermines any honest attempt to do so by propagating the idea that capitalism is problematic. For example, the author refers to “inherent warts and blemishes of the capitalist system” and presupposes that prior to now, it was “imperative for the government . . . to finance, own and maintain the country’s infrastructure.”

The author commits multiple fallacies, but the focus of this post is to address his incorrect concept of capitalism; particularly, his act of equating capitalism with the mixed economy; the mix being that of capitalism and statism, which, in both theory and practice, is anti-capitalist.

His is a common misidentification in which one recognizes legitimate problems existing under our mixed economy (e.g., cronyism, political inequality, government protected monopolies) and wrongfully associates them with capitalism rather than their actual cause, the statist elements of the mixed economy. One who accepts this false concept2 of capitalism, therefore, accepts that capitalism has “inherent warts and blemishes.”

Capitalism and statism are opposites. Capitalism is a corollary to individualism and logically follows from the idea that each and every individual possesses the inalienable right to life, liberty, and the pursuit of happiness. Statism is a corollary to collectivism and logically requires that some groups of individuals sacrifice to other groups of individuals and live (or die) for the state, the public, the community, the greater good, society, humanity, a race, or some other collective. Just as good is to evil, freedom is to enslavement, nutrition is to poison, and life is to death; capitalism is to statism.

All of the inherent problems of the mixed economy are characteristics and consequences of its statist elements; not of capitalism. Capitalism necessitates the absence of government interference in the economy. Thus, capitalism exists only to the degree that the economy is free of government interference.

Perilously, few people make the distinction between capitalism and the mixed economy, and even fewer identify the mixed economy’s statist elements as evil or inimical to capitalism. Instead, most identify the mixed economy as capitalism and, consequently, presuppose that capitalism is inherently problematic.3

Consider freedom as it relates to each of the two opposing political philosophies of our mixed economy, statism and capitalism. Statist actions and practices – whether of the regulatory or welfare entitlement variety – possess the distinction of denying freedom. In contrast, capitalism distinctly requires freedom — freedom from government controls; freedom from force; freedom from coercion; freedom from regulation; freedom from government created barriers to market entry; freedom of thought and action; freedom of voluntary association; and freedom of voluntary trade.

The act of denying, abating, and suppressing freedom from a given political socio-economic system disqualifies it from being capitalism. In the 19th century and early 20th century, the U.S. was as close to capitalism as any country has ever been. Major progressive reforms under Woodrow Wilson4 and again under FDR5 moved the U.S. significantly away from capitalism and deeper into statism, and subsequent presidents and congresses have continued the increase of statist elements in the lives of Americans.

Yes, some pockets of capitalism still remain, and some industries are freer than others; but don’t make the mistake of thinking that the mixed economy is equivalent to or synonymous with capitalism. The concepts and, thus, the words that identify them are not interchangeable.

To borrow from Harry Binswanger’s 2013 Forbes column titled, “Statism: Whether Fascist or Communist, It’s The Deadly Opposite of Capitalism”:

A government that taxes 40 percent or more of our income, that controls our medical care, that regulates business so thoroughly that every firm large enough to afford it has a department of “compliance,” a government that controls the money supply, sets bank reserve-ratios, regulates stock offerings, margin-ratios, home construction, determines what pharmaceuticals and medical innovations can be sold, operates schools and universities, runs the passenger rail system, forbids “offensive” speech, increasingly intervenes in diet, subsidizes agriculture and “green” businesses, imposes tariffs, decides which businesses may merge, and . . . spies on its own citizens–is not a government remotely consistent with capitalism.6

The author of The Hill piece correctly acknowledges that government ownership of infrastructure puts it “in a position to abuse its power with impunity.” He observes that the government has “no incentive to keep projects on schedule and within budget,” or to concern itself with product quality. He points out that the government is guilty of “manipulating supply and demand to justify constantly raising taxes, user fees and tolls, ostensibly for building and maintaining roads while neglecting the assets’ maintenance and repair.”7

Kudos to the author for identifying several logical consequences that arise from government involvement in the economy. Indeed, these and many more logical consequences apply to all areas of the economy, not only infrastructure.

Despite his correct acknowledgements and good ideas, the author does more damage than good to the pro-capitalism argument. His credential as a senior fellow at a conservative think tank only makes matters worse. This is a person who most Americans associate with capitalism due to his “conservative” credentials. He is a presumed authority on the matter. What conservatives actually stand for, however, is a topic for a later date.

In her essay, “The Anatomy of Compromise” as published in her book, Capitalism: The Unknown Ideal, Ayn Rand identified a few rules (as she called them) “about the working of principles in practice and about the relationship of principles to goals.” One of the rules is as follows: “When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side.”8

In order to win, the rational side of any controversy requires that its goals be understood; it has nothing to hide, since reality is its ally. The irrational side has to deceive, to confuse, to evade, to hide its goals. Fog, murk, and blindness are not the tools of reason; they are the only tools of irrationality.9

Rand expounds:

One who intends to argue for anything in honest standing should educate himself on the principles of both his and his opposition’s positions and use clearly defined terms. Advocates of capitalism are no exception.

To defend capitalism unequivocally and unapologetically, perhaps the easiest thing any honest of its advocates can do is to avoid misidentifying the current system (the mixed economy) as capitalism. Furthermore, a defender of capitalism — or any honest individual — should correct any misuse of the term, capitalism; especially when it explicates or implies subsumed principles contrary to capitalism.

To educate yourself on the principles of capitalism and statism, read Ayn Rand’s Capitalism: The Unknown Ideal and encourage others to do the same.


Footnotes

1., 7. Markovsky, A. (2018, Dec 10). Let capitalism — not government — build needed infrastructure. The Hill.

 

 

2., 3. This is an example of what Ayn Rand called the fallacy of package-dealing.

 

 

4. Tariff Act, Federal Income Tax, Federal Reserve Act, Federal Trade Commission Act, Clayton Antitrust Act, Adamson Act.

 

 

5. The New Deal, Social Security Administration, etc.

 

 

6. Binswanger, H. (2013, Nov 13). Statism: Whether Fascist or Communist, It’s The Deadly Opposite of Capitalism. Forbes.

 

 

8., 9. Rand, A. (1966). The Anatomy of Compromise. In A. Rand, Capitalism: The Unknown Ideal.

 

 

No, we don’t need a new ideology called “moral capitalism.” We need actual capitalism.

Despite the hoopla, Congressman Joe Kennedy III’s call for “moral capitalism”1 doesn’t represent a radical or novel idea. Similar to all proponents of statist policies and practices, Kennedy’s political ideas uphold no rational morality, preserve the statist elements of our mixed economy, and, logically, can only lead to further government controls and, therefore, less freedom; — unequivocally not capitalism.

Kennedy’s rhetoric effectively captured the attention of his fellow politicians and the press, but an attempt to discover Kennedy’s political philosophy reveals more of the same collectivist ideas explicitly associated with the left and poorly challenged – if at all challenged — by the right.

Kennedy’s primary concern is funding the various existing welfare state programs along with any new programs that might arise under the growing statist elements of the current mixed economy. He hasn’t defined the particular actions that he thinks will achieve his ideal, but some of the things he advocates are wealth redistribution, increasing the government prescribed minimum wage, government meddling in corporate structures, and taxing the rich — among other measures — to “meet our needs in infrastructure, childcare, health care, college and climate change.”2

Kennedy, although not unique in this regard, paints wealth creators as an evil element of society who should be punished. He pits CEOs against workers and “the rich” against the rest of society in a Marxist style class warfare.

Such ideas regard some individuals’ needs as a moral claim against — and justification to violate the individual rights of — those who they condemn as the villains of society, i.e., CEOs, “the rich,” successful entrepreneurs, those in the finance industry, employers, “the 1 percent,” “greedy capitalists,” and other productive individuals they decry as immoral, greedy, selfish, and too powerful.

By what criteria are they condemned? By their virtue of being productive; by the fact that they achieved wealth and success; because they dared to take risks and pursue their own self-interests; because they created value where there was none; and because they assert their moral right to profit from their intellectual achievements.

Proponents of the class warfare narrative claim that injustice is committed by value-creators against those who rely on the value they create, i.e., jobs, loans, goods, services, knowledge, and entire industries.

The actual injustice is the violation of rights committed by government against the individuals who create value. Measures like those advocated by Kennedy initiate and reinforce some of these injustices. The irrational principle behind such rights-violating actions holds that the more value one creates, the more he is indebted to anyone who needs what he has created. — This is an absolute injustice and the antithesis of capitalism.

Confusingly, Kennedy rebukes what he calls “Trump’s zero-sum game world view,” in which for “some segment of this society to win, somebody else has to lose,”3 while Kennedy himself displays the same view by invoking the popular but misleading pie metaphor; “Americans spend their days fighting each other over economic crumbs – while our system quietly hand delivers the entire pie to those at the top.”4

As authors Yaron Brook and Don Watkins have pointed out5, the pie metaphor encapsulates two false premises: 1) That wealth is fixed, i.e., it doesn’t grow; and 2) Wealth is owned collectively by society rather than individuals. The truth is that every individual owns his own pie, and some grow their pie larger than others do.

There’s clearly nothing new to Kennedy’s ideas. In this case he’s employed the use of political campaign style tactics to appeal to “the economic needs of working class and middle-class voters.”6 Moreover, he’s corruptly described his ideal political system as moral when it entails coercive force, makes no mention of protecting individual rights, and upholds the needs of society as a moral standard. These are not the hallmarks of capitalism. Kennedy’s proposals are inimical to capitalism and identical to or consistent with the statist elements which currently exist in the U.S.’s mixed economy. To call it capitalism is dishonest.

Contrary to Kennedy, we don’t need a new ideology called “moral capitalism.” We need actual capitalism.

By recognizing individual rights, capitalism is the political corollary to Individualism; the idea that each and every man is an end in himself and must exist for his own sake, independent of the demands, wants, and needs of others. Such is the idea that led to the Declaration of Independence and man’s inalienable right to life, liberty, and the pursuit of happiness.

Collectivism, on the other hand, regards man in terms of an aggregate, community, group, society, race, gender, tribe, class, et cetera. One’s purpose, according to collectivists, is to serve the collective, and he is of value only insofar as he does so. The political corollary to collectivism is any variant of statism, e.g., socialism, communism, fascism, Nazism. Under statism, the individual is subjugated to the demands of the state; he becomes a means to the ends of others.

Capitalism, more specifically laissez-faire capitalism, as described by Ayn Rand, entails separation of state and economics and is “based on the recognition of individual rights, including property rights, in which all property is privately owned.”7

What morally justifies capitalism is that it permits man to act corresponding to the nature of man, a rational animal. The fundamental requirement for man to think and act on his own rational judgement is the freedom to do so. A proper political system entails a government that exists to protect individual rights, and thus preserve one’s — everyone’s — freedom to think and act on his own rational judgement. That system is capitalism.

The only way to establish a proper system of capitalism out of our current mixed economy is to deliberately, consistently, and systematically remove the statist elements.

If you uphold the moral value of individualism and individual rights then advocate unapologetically for capitalism; the only moral social system.


Footnotes

1., 2., 4., 6. LeBlanc, S. (2018, Nov 28). US Rep. Kennedy: Democrats should embrace “moral capitalism”.

3. Wood, M., & Ryssdal, K. (2018, Dec 04). 93: Rep. Joe Kennedy is all about moral capitalism, and that sounds familiar.

5. Brook and Watkins have discussed this on multiple occasions including a 2011 Forbes article and in their book, Equal Is Unfair: America’s Misguided Fight Against Income Inequality. — [Brook, Y., & Watkins, D. (2016). Equal Is Unfair: America’s Misguided Fight Against Income Inequality. New York: St. Martin’s Press.]

7. Rand, A. (1966). Capitalism: The Unknown Ideal. New York: New American Library.

Sports fan loyalty: Is it rational?

I have recently contemplated the idea of fan loyalty in the realm of professional sports.  I don’t have any statistics for you, but I’m certain the quantity of loyal fans of professional sports franchises is huge.

But is it rational?

It seems to me that what fans ultimately gain from following sports is entertainment.  Fans might experience emotions when watching a game, following offseason moves, coaching changes, draft picks, and free-agency acquisitions — emotions such as disappointment, frustration, elation, pride, and embarrassment.  Regardless of the emotions and strength of loyalty, fans cannot contribute to the successes or failures of the teams that they commit their loyalty to.

I have not been able to identify any rational basis for franchise loyalty.  In the NFL, fans desire “their” team to win the Super Bowl.  If that doesn’t happen then they want the team to, at least, make the playoffs.  If that doesn’t happen then they’ll settle for a winning record and a near playoff berth.  If that doesn’t happen then they’ll speculate over what should happen to achieve success next season while lamenting over long gone successes in franchise history (if they have had any).  Regardless of the outcome, a loyal fan will continue associating himself or herself with and supporting the franchise.

One remains loyal to “his” team simply because it’s “his” team.  Never mind that he has no ownership in “his” team.  He doesn’t make plays, call plays, or even warm the bench.  One is powerless to the decisions made, the drills run at practice, and the resulting performance of “his” team.

It makes no sense to commit one’s loyalty to a team that does nothing to justify his or her support and admiration.  If the team achieves success in the future it certainly won’t be a result of anything the fan has done, regardless of how deep his or her loyalty has been.  There is no achievement on the part of the fan.  What could one rationally claim to justify any sense of pride?   … that he or she “stuck it out” through all those years of despair and misery?  Can that really be considered an achievement or something to be prideful of?

Imagine the claim — “My team just won the Super Bowl!  I’m so proud of myself!  My decades of irrational behavior have finally paid off!”

Clearly, that makes no sense, but one who attempts to face the decision to stop supporting his chosen team is likely to experience guilt — guilt that he is committing a betrayal.  Anyone choosing to root for a team for any reason other than loyalty is labeled a band-wagoner.  It is said that he is not a true fan therefore he has no business rooting for the team; as if being a loyal fan is a sacred status or a noble achievement.

I am one of these loyal, thus irrational fans.  The Washington Redskins continue to disappoint me season after season.  They gave their fans a spark of hope in the 2012 season but returned to their typical ineptitude in spectacular fashion this season.  Of course there are other franchises whose fans have endured consistent disappointment.  The Browns, Raiders, Lions, Bills, and Jaguars come to mind.

Maybe an alternate approach to fandom would be more rational

Does the franchise that a loyal fan identifies with reflect anything about that individual?  Can one be judged by the team he or she claims loyalty to?  Coaches and players come and go.  Team “identity” changes from season to season.  Fans base their loyalty on such things as geographic proximity, family tradition, and franchise history.  A fan who has committed his or her loyalty to a particular franchise has, In essence, committed himself or herself to accepting whatever product the organization presents, regardless of its competence or evident lack thereof.  Would a rational person make this same sort of unconditional commitment to a clothing brand, a restaurant, retailer, artist, musician, actor, director, or author?

Consider an approach in which one chooses one’s fandom, based not on franchise loyalty, but on the merits, actions, and achievements of the individuals who best represent the franchise as it exists in a particular point in time; the head coach, the owner, the franchise player etc.  These personnel might not remain in the same organization season to season.  Their replacements might not deserve one’s fandom therefore there would be no reason to continue to associate oneself with the franchise nor a sense of guilt for absence of loyalty to it.

Yet another approach would be for one to be a fan of individual athletes regardless of the team they play for.  Either of these alternate approaches to fandom would be rational and would have no negative effect on the element of entertainment that fans gain from following sports.  Begrudgingly suffering through decades, years, or even a single season of incompetence to satisfy some tribal loyalty is not rational.

Perhaps these approaches wouldn’t work within the current model of professional sports with its “built-in” fan base due to geographic proximity and other factors.  Maybe I’m rationalizing to excuse myself from being a loyal Redskins fan.  The reality is that I don’t need an excuse.  Nobody does.  What does an individual stand to gain from supporting mediocrity or ineptitude?  Personally, I’d rather support a team that I admire for its achievement and the individual merit of its players and coaches.  Why reward anything less with loyalty?  But alas, I, like all “true fans,” am stricken with the irrational guilt of betraying my loyalty.

What are your thoughts on this?

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Steve Jobs on being truly satisfied

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Clint Eastwood on the idea of America

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