Yaron Brook at Babson College

Why does society reject free markets and like the idea that the government will solve our problems? Why, after a century of ever-increasing government regulations and spending, do Americans think the obvious solution is to increase government regulations and spending? Why, when companies in the least regulated industries prosper and those in the most heavily regulated industries struggle and fail, do people blame failures on capitalism and free markets?

Yaron Brook asked—then answered—these questions in an exhilarating speech, “Capitalism without Guilt: The Moral Case for Freedom,” at Babson College last night.

The answer, of course, is morality. As long as people hold morality to mean sacrifice, altruism, and suffering—as long as people regard selfishness to mean what they have absorbed uncritically since childhood: namely, a predatory or hedonistic satisfaction of personal whims—political freedom is impossible. In articulating every man’s right to pursue his own happiness, the Founders of America expressed, as Dr. Brook pointed out, the most profoundly selfish political declaration in history. The essential foundation for capitalism and political liberty is an embrace of reason and rational self-interest.

image from Ayn Rand Center for Individual Rights

If you ever get a chance to see Yaron Brook speak, you should not miss it. He is one of the greatest living heroes in the fight for liberty.

President Obama and the State University of Baloney

It is instructive to juxtapose two recent news events to consider which is more likely to cause harm.

In his State of the Union address, President Barack Obama issued the latest revision of his energy policy. He wants the government to inject itself even more than it already does into the energy business; the government, according to Mr. Obama, must "invest" more in "clean" energy by spending massively on research and incentives. (Translating this from Obama-speak to English, it means that the government must divert funds from free, productive enterprises to non-productive programs that are either popular with environmentalists or promised to special interests favored by the administration and lawmakers.)

"This is our generation's Sputnik," Obama trumpeted.[1] The logic is obvious, at least to Keynesian true believers: The solution to the crushing national debt with which Obama and his predecessors have hopelessly buried us (along with our descendants) is . . . to create another space race. The oracles of the Obama brain trust promise that if only we trust the government, we will "become the first country to have a million electric vehicles on the road by 2015." Actually, President Obama could have boasted more impressively that thanks to the marvels of Bush-Obama spending habits, we are quite likely to have 300 million bicycles on the road by 2025.

Meanwhile, at the University of Bologna, a pair of scientists claimed to have concocted a (relatively) practical cold fusion device. Naturally, this was met with skepticism, particularly considering the history of cold fusion claims. (Remember Fleischmann and Pons in 1989.) According to a report, Andrea Rossi and Sergio Focardi "announced that they developed a cold fusion device capable of producing 12,400 W of heat power with an input of just 400 W."[2] Supposedly, they performed a demonstration in front of about fifty people, a fact which taken by itself doesn't really say much, considering that Penn and Teller regularly fascinate thousands with somewhat more beguiling illusions before explaining how the tricks were done.

I have absolutely no way to judge the merits of the scientists' claims. The purpose of my bringing it up is that it serves as a useful reminder of how advances are actually made in the civilized world, and how bogus claims don't live very long in a free market. If there is any promise to this research, there is no shortage of private, profit-seeking individuals to invest in it. If cold fusion research ever succeeds, the investors will profit (fantastically, I would guess); if the research fails, the investors lose their own money, not other people's money. If the scientists produce fraudulent reports of progress in order to bilk investors, they can be prosecuted. Above all, no force is exerted upon anybody--scientists, investors, or people who do not wish to invest.

Observe how in every aspect of this scenario, government intrusions can serve only to destroy or hamper progress.

* If there is a potential profit to be made, no government is needed or wanted to call attention to it. Private individuals or corporations will decide to invest in exactly the proportion they judge to be worthwhile.

* Investors risk their own money, and deserve the rewards or punishments accordingly. The government accomplishes only two things when it "invests": (1) it forces some people to pay for others' mistakes and (2) it robs the earnings from private individuals who either would have spent their money elsewhere or would have invested that enterprise anyway.

* Government involvement in any capacity--encouraging investment in this area, discouraging (or forbidding) investment in this area, or encouraging investments in other areas--forcibly distort the market. The adverb "forcibly" is not an exaggeration or metaphor; it is precise. The only thing a government "brings to the table" is a gun.

* In a market free from government intervention--that is to say, free from force-- any research,including cold fusion research, must soon produce a result. The meaning of "soon" is up to the investors, who must balance the timeframe along with other factors when judging the return on their investment. Only when the government is involved can fraudulent or unprofitable pet projects continue without producing anything.

In his State of the Union speech, Mr. Obama delighted his audience by taking an easy shot at "Big Oil."

We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. (Applause.) I don't know if -- I don't know if you've noticed, but they're doing just fine on their own. (Laughter.) So instead of subsidizing yesterday's energy, let's invest in tomorrow's.[1]

This single passage is packed with so many blatant lies and logic problems, I would hope that at least ten percent of the audience would stir uncomfortably at our commander-in-chief's disingenuousness. The notion that oil companies, who have been plundered, hampered, and restricted by the government for over a century, are "on their own" is utterly ridiculous. Tax breaks--which mean that the government seizes less money than it would have otherwise--do not constitute a cost, but only let people keep the money they earned. The fact that tax breaks apply force to favor some companies or industries over others is true, but is obviously a result of the governments' meddling. And insofar as oil companies are subsidized, even if that is true, it is by definition the governments fault; they are the ones who do the subsidizing! (I highly recommend reading Alex Epstein's excellent work in this area at the Ayn Rand Center for Individual Rights. See NOTE 3.)

In any case, if the cold fusion claims from the University of Bologna turn out to be false or mistaken, nobody who hasn't invested will pay a penny for it--unless, of course, the research is prolonged by grants from the Italian government. When the president's formula for energy progress--massive state intervention--fails, it will inevitably (and absurdly) be blamed on freedom and "greed," providing the pretext for still more government power grabs.

Which of these is the greater evil?



NOTES

1. "Remarks by the President in State of Union Address," transcript published on White House web site, 25 Jan 2011, http://www.whitehouse.gov/the-press-office/2011/01/25/remarks-president-state-union-address.

2. Lisa Zyga, "Italian scientists claim to have demonstrated cold fusion," PhysOrg.com, 20 Jan 2011, http://www.physorg.com/news/2011-01-italian-scientists-cold-fusion-video.html.

3. See, for example, the archives at the Ayn Rand Center, http://blog.aynrandcenter.org/author/aepstein/.

Also: Alex Epstein, "The 6 Myths About Oil," http://www.foxnews.com/opinion/2010/12/29/myths-oil/.

Freedom of Speech

I’ve never seen the television show South Park, the creators of which are now the target of “an informal fatwa,” as Ayaan Hirsi Ali aptly called it. I have the general impression that South Park treats just about everything and everyone irreverently, and I am not much interested in that brand of humor. But it is a test of integrity to defend a principle even when it means standing up for people or actions one does not necessarily like or agree with.

Freedom of speech is one of the most important corollaries of individual rights, as inseparable from rights as are property rights (i.e. keeping what one has earned). Unlike property rights, however, which have buckled, crumbled, and fallen under withering attacks from every direction for more than a century, free speech has stood largely intact. It is the last fortification of liberty––and it has lately been under serious assault.

The curious thing about this attack is how puny and irrational it is. A mob of medieval thugs is holding all of western civilization hostage. Someday, assuming civilization wakes up and survives this crisis, mankind will look back on this period with utter bewilderment. How could a band of violent, retrograde primitivists succeed against a civilization that is vastly superior in every way: morally, scientifically, technologically, financially, and militarily?

The answer is: they cannot. It is the western institutions themselves that have dropped their arms, capitulated, and surrendered to militant Islamists. The governments of the West, the institutions whose sole proper function is to defend the rights of men, have abandoned the field––a field already strewn with murdered victims––leaving ordinary, unarmed, civilized people exposed to marauding barbarians.

It is true that the betrayal is not confined to the governments; intellectuals, movie stars, publishers, and the news media have quaked, cowered, and meekly complied with self-censorship. However, though this often constitutes cowardice on their part (and sometimes, just a natural and understandable response to fear), it is not their job or duty to stand up for free speech. It is the job of governments to defend rights, and for this reason, I hold them responsible for the current state of affairs. When Salman Rushdie was threatened with a fatwa issued by Ayatollah Khomeini of Iran in 1989, it was an act of war––a war that the West has since refused to fight or even acknowledge.

Today, because of the capitulations and failures of the Bush-Obama government and the other semi-free governments of the world, a handful of private citizens––authors, filmmakers, cartoonists, and bloggers––are utterly alone on the front line defending free speech. Still fewer of us (mostly Objectivists), defend it as a matter of fact-based, life-embracing principle. We are at once defenseless and unassailable: defenseless, because we are unarmed against murderers who wish to cut our throats; unassailable, because we are right.

UPDATE

I have to credit Elan Journo and his excellent blog post, "South Park and self-censorship," at Voices for Reason. I think I must have read it some days ago, and upon coming upon it again tonight, it is evident that I absorbed his basic point without remembering having done so. The last part of my post makes essentially the same point that he made; he even specifically cited Salman Rushdie as an example of the outrage. Certainly, this all follows from premises I have long held, and I think I made all the connections myself, but in any case, I thank Mr. Journo for his article and his excellent work at the Ayn Rand Center for Individual Rights.

The Separation of Education and State

A New York Times article, “How Christian Were the Founders?” reveals some alarming trends of the Texas Board of Education to direct the curriculum toward religion. The thing that makes the annual meeting of this particular state board significant is that according to the Times article, the Texas board is the most influential in the country – and also one of the most socially conservative.

Image credit: The New York Times, Montage by Carin Goldberg

The article is somewhat lengthy, but worth reading in its entirety for some of its frightening details. (It gets a little bogged down in concretes, pitting one side of the argument against the other, but I suppose that aligns with its journalistic intent.) One of the prominent figures in the article is Don McLeroy, a current Texas Board of Education member and former chairman who was removed from that top position for his aggressive attempt to insert creationism into the classroom:

[McLeroy] identifies himself as a young-earth creationist who believes that the earth was created in six days, as the book of Genesis has it, less than 10,000 years ago . . . ‘Textbooks are mostly the product of the liberal establishment, and they’re written with the idea that our religion and our liberty are in conflict,’ he said. ‘But Christianity has had a deep impact on our system. The men who wrote the Constitution were Christians who knew the Bible. Our idea of individual rights comes from the Bible. The Western development of the free-market system owes a lot to biblical principles.

For McLeroy, separation of church and state is a myth perpetrated by secular liberals. ‘There are two basic facts about man, he said. ‘He was created in the image of God, and he is fallen. You can’t appreciate the founding of our country without realizing that the founders understood that. For our kids to not know our history, that could kill a society.’[Note 2, emphasis mine.]

I don’t want to spend time in this post refuting the several items I disagree with in that quote because there is another point I wish to focus on. In other writings, I’ve addressed the fundamental incompatibility between faith and individual rights (and its derivatives, including capitalism). And notwithstanding isolated quotes (like Madison’s, “If men were angels . . .”), the notion that the life-embracing, Enlightenment principles of America are based in essence upon a “fallen man” point of view is absurd.

The main point I wish to make is that although I sympathize with this Times author’s implicit warning of the incursion of religion into public schools, I see no indication that he grasps the fact that makes it truly lethal: that it is imposed by the state. One gets the impression from the article, particularly from its first few paragraphs, that as long as the Texas Board signs off on text books praising Ted Kennedy instead of William F. Buckley, Jr., or Jimmy Carter instead of Ronald Reagan, then it is perfectly acceptable for the state to ram its monolithic message down students’ throats. The author is irked only because it is not his views that are being declared as the official ones.

The article cites some economic reasons why the Texas Board is particularly influential; they have a huge educational budget, buying and distributing some 48 million textbooks per year. The problem here, however, is not economic power but political power.

If private schools demand that creationism be taught alongside actual science, or that history books be re-written to indicate that America was founded upon Christian values, they have every right to do so. I vehemently disagree with such nonsense, of course, and I sharply criticize it. But private schools that teach creationism (or for that matter, leftist dogma like multiculturalism and quasi-religious environmentalist orthodoxy), however ubiquitous they could become on a free market, cannot block out competing ideas by force. Only governments can do that.

For the very same reason that there must be a separation of church and state, there ought to be a separation of education and state. Governments should not be controlling what children think.[Note 3.] Everything a government does is by its nature compulsory. The more consolidated and federalized public education becomes, the more it uses force to present a single message to students. The very presence of public schools disrupts the potential market of private schools, displacing - and in some cases, eliminating - the ability of competitors to offer other ideas.

Of course, the free market cannot guarantee that schools will teach objective history and science. But what the free market does guarantee is that objective facts will not be silenced or smothered by force.

NOTES

1. Image credit, The New York Times, http://graphics8.nytimes.com/images/2010/02/14/magazine/14texbooks-span/14texbooks-1-articleLarge.jpg.

2. Russell Shorto, “How Christian Were the Founders?” The New York Times, 11 Feb 2010, http://www.nytimes.com/2010/02/14/magazine/14texbooks-t.html?tntemail1=y&emc=tnt&pagewanted=all.

3. An excellent resource on this topic is the ARC web page, Separation of Education and State (http://principlesofafreesociety.com/separation-of-education-and-state/).

Keith Lockitch at the EUEC

Keith Lockitch from the Ayn Rand Center for Individual Rights spoke at the Energy & Environment Conference in Phoenix a couple of weeks ago, where he found himself quite alone among the 650 speakers - a heretic for freedom in the midst of voices clamoring for increased government regulations.

In the interview below, Dr. Lockitch relates some of his experiences at the conference and reminds us that despite some apparent recent victories for human beings (such as the failure of government officials at Copenhagen to fully shackle free nations), such victories are only temporary. What is required is a sweeping shift away from a culture of sacrifice to one of reason and egoism.

The Fall of the Berlin Wall - Twenty Years Later

To commemorate the anniversary of the fall of the Berlin Wall on 9 Nov 1989, here is an interview with Yaron Brook and Onkar Ghate.

Elan Journo on D’Souza’s Agenda

Elan Journo of the Ayn Rand Center for Individual Rights has just published the sixth (and I believe final) installment of his excellent article, “D’Souza’s Trojan Horse.”  In the series, Journo exposes Dinesh D’Souza’s ominous agenda and the broader significance that it signals of religion in America.

Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

Beware Trojan Horses

I want to call attention to a couple of excellent blog posts related to the ominous seeping of religion into the United States.

The first is  “Portland’s Unholy Alliance of Evangelicals and Progressives,” by C. August at Titanic Deck Chairs.  The article notes the recent incursion of evangelical Christianity into one of the most left-leaning, “progressive” cities in America: Portland, Oregon.  That the evangelicals are “less preachy” than is typical may help them deliver their message to a largely secular audience, but C. August puts his finger on a more fundamental reason.  The deeply religious are gaining a foothold in this secular city because of the intellectual and moral vacuum of modern “liberalism.”  With no strong philosophical grounding of their own, the secular left gives way to the zealous newcomers.  Furthermore, the altruism at the heart of Christianity is completely consistent with the left’s statist policies, so this is a natural alliance.

Another great article is actually a series of posts by Elan Journo of the Ayn Rand Center for Individual Rights.  In part 1 of “D’Souza’s Trojan Horse,” Mr. Journo identifies the outrageous tenor of Dinesh D’Souza’s book, The Enemy at Home, and sees beneath the contorted logic and outright falsehoods (which are bad enough) an insidious agenda: "a thinly disguised attempt to establish religion as the central integrating principle of American society.”  In part 2 of the article, Mr. Journo captures the essence of D’Souza’s viewpoint, which differs from jihadist Islam only in degree, not in kind.  Future installments of the article are forthcoming.

Both pieces highlight a point that I have been emphasizing in my posts; both conservatives and “liberals” are anathema to liberty.

Yaron Brook - Capitalism without Guilt: Sacrifice

The Ayn Rand Center for Individual Rights just released a brief video of Yaron Brook discussing sacrifice versus trade.

The points he makes are so obvious to me: that sacrifice consists of giving up a greater value for a lesser one, and that some things commonly regarded as "sacrifices" are not sacrifices at all.  Despite being obvious, Brook's precise account of sacrifice flies in the face of conventional... well, I was going to say conventional thinking, but the passive absorption of cultural norms does not quite deserve to be called thinking.

Voices for Reason

The Ayn Rand Center for Individual Rights just launched a blog, Voices for Reason, featuring (as one might expect) an all-star cast of writers, including Alex Epstein, Elan Journo, Keith Lockitch, Tom Bowden, and Don Watkins. 

While I am at it, I might as well mention a couple of other good blogs that I have recently added to my blog roll.  The New Clarion is a relatively new blog that features several very good authors, not the least of which is Bill Greeley, who, writing as Myrhaf, is one of my very favorite bloggers.  Simply Capitalism is yet another multi-author blog, which focuses on free markets and capitalism.

Capitalism in China: Should We Trade With Them?

A few years ago - almost a decade ago, actually - I struggled with this same question.  The company I was working for was for the first time courting a potential customer in China, and I wondered: was it moral to do so?

I was assailed by conflicting thoughts.  Was doing business with this communist country essentially sanctioning evil?  Or was it a mistake to still regard China strictly as a communist country, since it had evolved so much in a seemingly positive direction during the 1990’s?  Would commerce bolster the Chinese government, or would it weaken it?  Was my doing business with Chinese companies harmful or beneficial to me in the long run?

Needless to say, the Chinese government itself was not the potential customer - that would have made my decision easy.  On the other hand, I’m not sure how much meaning there is in a “private company” in China; however much the strict communism has diminished, as long as the country is officially communist, I don’t see how there can be actual private property.  Another concern of mine was that our product, though it was a consumer product and not military in nature, had some reasonably advanced communications technology.  I worried that it could conceivably fall into a “dual-use” category (i.e. it could be reverse engineered or adapted for military use). 

I did a little bit of research at the time, reading a couple of books and poring over some reports from the Commerce Department and Congress.  (Coincidentally, Congress had just come out with an extensive report on the topic of Chinese trade and espionage, compiled by Christopher Cox, if I recall correctly.)  In the end, the business opportunity fizzled out and so it became a moot point for that particular time.  But after all the thinking I had done about it, I had not arrived at a conclusion with certainty.  I leaned toward trade with China being a good thing - and I am even more of that mind today - but it’s a difficult issue.

Anyway, this all came back to me tonight when I stumbled across this video from the Ayn Rand Center for Individual Rights.

The Financial Crisis Hotline

I've added a new link list in the right column of my blog: The Financial Crisis Hotline.  

The Ayn Rand Center for Individual Rights has dedicated a page that features pertinent articles by Yaron Brook, Alex Epstein, Harry Binswanger, and others.  Unlike the news coverage that for the most part absurdly characterizes the recent crisis as a "failure of the free market," these ARC articles pierce to the root of the matter to show that we are suffering from a failure of the unfree market.

ARC: The Unfree Market Has Failed

The Ayn Rand Center for Individual Rights recently released a short statement by Yaron Brook that accurately captures the nature of our financial crisis:

The Unfree Market Has Failed 
September 19, 2008

Washington, D.C.--“Everyone is blaming ‘the free market’ for today’s financial crisis,” observed Yaron Brook, executive director of the Ayn Rand Institute. “But we should be blaming the unfree market. The mortgage and financial markets have been thoroughly controlled by government--and that is why they failed.

“It was the government’s hand in the creation of Fannie Mae and Freddie Mac, the Federal Reserve Board’s inflationary policy of keeping interest rates artificially low, the irrational lending standards forced on lenders by the federal Community Reinvestment Act, and the quasi-official policy of bailing out large financial institutions deemed too big to fail, that contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments.

“We do not need more regulation or economic ‘supervision.’ What we need to do is remove the government’s power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It’s time for a truly free market.”

NOTES

1. "The Unfree Market Has Failed," Yaron Brook, Ayn Rand Center for Individual Rights, 18 Sep 2008.  ("http://www.aynrand.org/site/News2?page=NewsArticle&id=21249")

Yaron Brook on "putting the country first"

"Both the left and the right have been 'putting the country first' for decades -- and that's the problem," Yaron Brook said in a new press release from the Ayn Rand Center.  

An excellent point.  Behind the calls from both John McCain and Barack Obama to "put the country first" is the doctrine of collectivism - the very opposite of the American ideal of individualism.  The article is brief and well worth reading.

Dr. Brook will be presenting a talk called The Resurgence of Big Government on September 18, 2008, in Costa Mesa, CA.  That is unfortunately on the wrong side of the country for me, but it's a good opportunity for those of you on the west coast.