Interview on Capitalism, Freedom and the Future

An interview where I am asked some nice open-ended softballs on liberty, regulations, and the future.  The blog where the interview is posted is apparently supporting a particular politician, but I do not personally support or endorse any politicians, and the fact that the interview is posted to this blog should not be interpreted as support.

Oh, and I am referred to in the post as an “economist” and “Dr. Morehouse”, neither of which I am.  Full text of the interview below.

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Josiah Schmidt: Thank you for agreeing to talk with us, Dr. Morehouse!  Tell us how you came to hold such a liberty-oriented philosophy.

Isaac Morehouse: I grew up in a typical Midwestern conservative home and I was taught responsibility, hard work and initiative.  In high-school, my brother told me about this book he was reading called “Capitalism and Freedom” by Milton Friedman.  I liked the ideas in the book, since I was sort of predisposed towards free-markets.  As I began to read more I eventually (after a long road and lots of rabbit trails) realized that, at bottom, government is force, and everything it does is backed by force.  It made me realize that so many things I wanted done in the world–good things–should not be done by force, but peacefully and voluntarily.  Not only did it sit right with me from a moral standpoint, but I learned through studying economics that voluntary actions have better results than centrally planned attempts by government to make the world a better place.

Josiah Schmidt: How would you define capitalism, in short?

Isaac Morehouse: Technically, capitalism is simply an economic system where individuals own the “means of production”, rather than government.  In popular usage however, capitalism has come to mean a lot of different things, some of which I support (property rights, free-markets, etc.), some of with I do not (bailouts, subsidies, regulations against competition, etc.).  I’m careful how I use that word, since people give it different meanings.  To me, it means simply free-markets.

Josiah Schmidt: Why, fundamentally, does capitalism work?

Isaac Morehouse: Capitalism works because without private property and the right to reap the gains and losses of our own efforts there is little incentive to produce or to innovate.  Property and free-trade also allow prices to form, which provide some of the most valuable information on the planet such as where demand and scarcity are and where surpluses are.  Prices, which form spontaneously as a result of free-exchange, allow for the most impressive coordination in the history of man; billions of people and resources constantly adjust their individual behavior in a way that benefits society, not because they are trying to or would even know how if they were, but because they are responding to signals sent through the price system.  No “rational” system of central planning can even come close to replicating that.

Josiah Schmidt: Is it meaningful to advocate a “mixed economy” of capitalism and socialism?

Isaac Morehouse: No.  Any coercion in the peaceful, voluntary and spontaneously coordinating market reduces it’s efficiency, not to mention it’s a violation of individual rights.  An only partly “planned” economy may be degrees better than a fully socialist one, but a free economy is magnitudes better than both. [For more on “mixed” economies see this article.]

Josiah Schmidt: How does capitalism, as opposed to socialism, accept human nature as it is, accounting for the flaws and fallibility of man?

Isaac Morehouse: It avoids what F.A. Hayek called the “Fatal Conceit” by recognizing that no one has enough knowledge to know where to put all the resources in the world all the time.  It recognizes the dignity of each individual by allowing anyone to justly obtain and use property, but it recognizes the limits of each individual by not allowing any one person to control all others by force.  If people are corrupt, the last thing we want to do is give a small number of them monopoly control over the rest, which is what government is.

Josiah Schmidt: Do government “consumer protection” measures actually protect consumers?

Isaac Morehouse: What is called “consumer protection” is almost always a special privilege or protection for some politically favored business or industry over their competitors.  Since government hands out favors and makes regulations, instead of competing in the marketing place by trying to better serve customers, many businesses go to government and lobby for regulations that they can afford, but that will cripple their smaller competitors.  The result is higher priced products, fewer choices, less competition, corruption in government agencies, and often times less attention to safety by consumers and producers who believe the government will do the work for them.

Josiah Schmidt: What is one of the most egregious examples of “consumer protection” measures that actually harmed consumers, in your view?

Isaac Morehouse: Oh boy, there are so many.  It’s hard to say which is the most egregious, but certainly some very silly examples that really bug me are things like requiring decorators, hair stylists, yoga instructors or lemonade selling kids to get state licenses and pay fees just to offer their goods and services.  These examples all exists in at least some states, and in every instance the laws were passed at the behest of some industry lobby that didn’t like lower priced competition.  It’s very sad for the people who just want a chance making a living by offering their skills to consumers.  They aren’t forcing anyone to buy, yet government is forcing them not to sell.

Josiah Schmidt: What advice would you give to libertarians reading this interview?

Isaac Morehouse: Take heart.  It’s too easy to see all the violations of liberty around us and feel things are always getting worse.  If you keep the big picture in mind and study some world history you will see that, in so many ways, freedom has advanced tremendously and there is no reason it cannot continue to do so.  Don’t follow the news too closely or you’ll be angry all the time, and angry people are rarely good advocates of the ideas they believe in.  Be optimistic and never stop learning about and fighting for freedom.  It’s worth it.

Josiah Schmidt: Anything else you’d like to say to our readers?

Isaac Morehouse: Sometimes it helps to remember that really, liberty is all around us.  We often feel that it would require such a radical change in our everyday existence if government were not so invasive.  While I do not want to downplay the destructive effects of government meddling, it is instructive to stop and think about what really makes the world tick.  Why don’t people run through the shopping mall naked?  I’ll give you a hint: it is not because they are afraid of indecent exposure laws.  That may play some very small part, but it is primarily because they would be embarrassed.  They are afraid of the social consequences.  This is just one example of how society remains orderly without the use of force; without government mandates and rules and regulations.  In fact, nearly all of the order, cooperation and coordination we see around us is not the result of government edicts, but of the forces of spontaneous order that emerge in a voluntary society.  In many ways, government is less important than even libertarians think.  The message we need to send to our big-government friends is not that government is so bad (even though it often is), but that society voluntarily produces so much good that we don’t need to use the blunt instrument of government.

Josiah Schmidt: Very insightful thoughts.  Thanks again for taking the time out of your schedule to answer some of our questions.

Worldviews Matter

This is an article I wrote during the last presidential election for the Western Standard Shotgun Blog.  The election-specific parts are really not the crux of the post, so I think it’s still relevant.

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A colleague sent me this article by Michael Knox Beran for the City Journal, titled, “Obama, Shaman”. The article is fantastic, not because it is a critique of one candidate from one party, but because the insights are far broader and can be applied to nearly any political or cultural folk-heroes of today. Beran draws upon strains of thought throughout ancient and classical literature and philosophy to highlight two very different worldviews.

America has a strong tradition of the worldview that sees man as fallible and existence as including pain and discomfort. Indeed, this worldview sees any life without some form of pain being a life without cause and effect, without choice; a robotic reality that would really be no existence at all.

The other worldview, the author points out, has surfaced in various forms throughout history and is the impetus for movements that nearly always result in a great deal of concentrated power. Since man need not be fallible, giving “the right person” unlimited power to do what is good for all is not viewed as dangerous, but rather necessary. From Machiavelli to Saul Alinsky, strategists have created a playbook for an ascent to power by those believing pain can forever be alleviated if only they are given the absolute power to enact their reforms. But the strategists only lay the plan; the philosophy that engendered the belief that such a plan could (or should) actually work came first. In the article, Beran describes many of those who have championed a paradigm which makes this belief possible.

As I’ve written before, paradigms are powerful, and hard to change. The lens through which one views the world, especially the human world, will determine the conclusions drawn from any set of data. Data, sensory perceptions, are completely devoid of actionable meaning without a theoretical framework through which to interpret them. For this reason, establishing and continually re-evaluating one’s framework becomes the constant task of the honest intellectual.

All good political philosophy and economics is essentially an effort to synthesis data and extract some kind of meaning from it – to create from observations a viable paradigm of human action. Knowing human nature is the most important and foundational element of ethics, political philosophy and economics. As the old adage goes, “knowing thyself” is the best place to start. I submit that the best way to know thyself is to find out what your worldview is (you have one, whether you know it or not).

What kind of lens do you look at the world through? What are the assumptions you take with you into every situation? Know your worldview, analyze it for logical consistency, test it against observation, discard or reform it if need be; this is the most difficult, rewarding and necessary task of human understanding.

Some snippets from the Beran article below should whet your appetite to read the entire piece:

“In his unfinished treatise Economy and Society, Max Weber defined charisma as “a certain quality in an individual personality by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities.” Weber was able to do little more, before he died in 1920, than give a pseudoscientific élan to an idea that had been kicking around for centuries. Most of what he said about charismatic authority was stated more cogently in Book III of Aristotle’s Politics, which described the great-souled man who “may truly be deemed a God among men” and who, by virtue of his greatness, is exempt from ordinary laws.

What both Aristotle and Weber made too little of is the mentality of the charismatic leader’s followers, the disciples who discover in him, or delusively endow him with, superhuman qualities. “Charisma” was originally a religious term signifying a gift of God: it often denotes (according to the seventeenth-century scholar-physician John Bulwer) a “miraculous gift of healing.” James G. Frazer, in The Golden Bough, demonstrated that the connection between charismatic leadership and the melioration of suffering was historically a close one: many primitive peoples believed that the magical virtues of a priest-king could guarantee the soil’s fertility and that such a leader could therefore alleviate one of the most elementary forms of suffering, hunger. The identification of leadership with the mitigation of pain persists in folklore and myth. In the Arthurian legends, Percival possesses an extraordinary magic that enables him to heal the fisher king and redeem the waste land; in England, the touch of the monarch’s hand was believed to cure scrofula.

It is a sign of growing maturity in a people when, laying aside these beliefs, it acknowledges that suffering is an element of life that sympathetic magic cannot eradicate, and recognizes a residue of pain in existence that even the application of technical knowledge cannot assuage. Advances in knowledge may end particular kinds of suffering, but these give way to new forms of hurt—milder, perhaps (one would rather be depressed than famished), yet not without their sting. We do not draw closer to a painless world.”

And…

“The danger of Obama’s charismatic healer-redeemer fable lies in the hubris it encourages, the belief that gifted politicians can engender a selfless communitarian solidarity. Such a renovation of our national life would require not only a change in constitutional structure—the current system having been geared to conflict by the Founders, who believed that the clash of private interests helps preserve liberty—but also a change in human nature. Obama’s conviction that it is possible to create a beautiful politics, one in which Americans will selflessly pursue a shared vision of the common good, recalls the belief that Dostoyevsky attributed to the nineteenth-century Russian revolutionists: that, come the revolution, “all men will become righteous in one instant.” The perfection would begin.”

America’s Great Depression

Murray Rothbard’s seminal but often overlooked work, America’s Great Depression, is especially enlightening since the 2007 financial crisis.  If you want to read the entire 400 page book (which I highly recommend), here it is.  If you’re short on time, here’s a 12 page summary of the main arguments in the book with some additional context.  Enjoy.

Was Adam Smith Wrong?

Here’s an article I originally wrote for the Prometheus Institute.

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Disagreeing with a man whose face appears on the necktie of many a freedom-lover is perhaps dangerous, but sound reason can’t be sacrificed on the altar of great men – and Smith was a great man.

Indeed, Adam Smith, in his depiction of the division of labor in a pin factory and his timeless prose on the invisible hand and the self-interest of the butcher, offers some of the greatest explanations and defenses of capitalism ever written, even some 230 years later. I consider Smith a great thinker, and a hero of liberty. That doesn’t mean he was never wrong; particularly when it comes to the question of value.

Smith’s thoughts on the derivation of value in his Wealth of Nations laid the groundwork in this area for later thinkers like David Ricardo (another brilliant mind who was right about many other things) and eventually Karl Marx. In the case of the latter we have clearly seen how bad ideas can have horrific real-world consequences. As John Maynard Keynes famously remarked,

“Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”

I might add too the bad ideas of otherwise good economists.

Smith essentially, though somewhat confusedly, argued that the value of any good was ultimately derived from the amount of labor it took to produce. Money or commodity prices reflected only the nominal but never the real value of a good. In this way he described the different prices of different goods as a simple formula:

“If among a nation of hunters, for example, it usually costs twice the labor to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer.” (The Wealth of Nations, Book I, Chapter VI)

Smith elaborated further by describing other costs of producing a good, including the role of the entrepreneur and capitalist and the profits they require. Unlike Marx, Smith never denigrated the role of the capitalist or the profits they earned, but his conception of value resulting from the cost of production (ultimately labor) opened the door for the idea that anything charged or earned above the cost of real inputs is unnecessary; excellent fodder for anyone anxious to obtain power by appealing to an envious middle class.

The problem with Smith’s analysis is not that the cost of production has no link to the value or money price of a good – indeed, the two are closely connected. He merely had the relationship backwards.

In reality, prices reflect the money equivalent of the value a buyer places on a good. That is to say, an individual who wishes to have a good places an entirely subjective value upon that good as compared to other goods, and the difference is typically expressed in terms of money. If in Smith’s example no one cared for beavers, the cost of killing a beaver wouldn’t matter; the beaver would sell for little or nothing. There is no one value of a good, but each individual values each good differently, as compared to other goods. It is the same for Smith’s supposedly changeless measure of value, labor. An hour of the same kind of labor may be valued (or disdained) to different degrees by different people.

It is for this reason that price is merely the reflection of the amount of money an individual was willing to give up to obtain a given good in the most recent exchange.

However, Smith was correct in seeing a relationship between the cost of production and price: Once a producer or entrepreneur has an indicator of what someone was willing to pay for a good, he can speculate how much others will be willing to pay in the future. He may be incorrect, but he will start with an estimate based on past experience and hope to get an equal or higher price. It is the estimated price (which reflects the value others place on the good) that will dictate how much he can spend on production. If a producer expects a good to sell for $1, he will be willing to spend up to $0.99 to produce it. (This is obviously a simplification, as he may be willing to take short term loss if he expects long term gains, he may want more than a $0.01 profit, etc.) In other words, the amount of labor and other costs of production flow from the expected sale price of the good, not the other way around. No one will spend more to produce an item than they believe others will be willing to pay to buy it.

Smith correctly saw that the various costs which go into production must be paid by the sale price of the final good. What he failed to see is that the costs of production do not create the price of the final good or imbue it with some objective value, but that the subjective value that each consumer places on the good sends signals backwards to producers and tells them how much they can expend on production without suffering a loss.

That Smith saw the factors which go into the production of a good as the cause of the price, rather than the effect, may seem like a small error. But economics, like all attempts to study the behavior of human beings, is a subtle science which requires great attention to the correct logical progression of actions. A misunderstanding between cause and effect can be fatal.

A slight adjustment to the angle of a satellite signal can, when extrapolated over thousands of miles, result in a beam nowhere near its target location. Likewise, looking at an economic phenomenon, such as the price of a good, from an even slightly incorrect angle can result in consequences far greater than imagined when spread over time and by different minds in different cultures. I would never single-handedly blame Adam Smith for the horrors of socialism. But his backwards theory of value contributed, over time and space, to a set of ideas which laid the theoretical groundwork for socialism – a philosophy completely contrary to the views of Smith.

I still admire and respect Adam Smith as one of the world’s great minds and a positive force in the battle for liberty. His conclusions and prescriptions were correct, even though his methodology was sometimes flawed. However, the lessons to be gleaned are to never let admiration for a great mind blind you to areas in which they are in error; and that even correct conclusions, if based on incorrect reasoning, can be dangerous.

Published in Libertarian Papers: Milton’s Areopagitica and Economic Freedom

My paper on John Milton’s Areopagitica was just published in Libertarian Papers: An Online Journal for Libertarian Scholarship.

Abstract: This article draws general economic arguments against central planning, state licensure and regulation from Milton’s Areopagitica, a 17th Century pamphlet on free-speech. Though Milton’s work was written primarily as a defense for moral man and a warning against religious encroachment by government it provides some of the best and most foundational general arguments, both moral and practical, against government intervention in any field. Milton’s accessible and persuasive style and his ability to combine practical and moral arguments made his work a monumental case against censorship. However, the work has more to offer than a defense of free-speech. Libertarian economists can find in Milton many compelling arguments against central planning, licensure and regulation which have been and should continue to be reiterated.

Check it out.

The Problem of Paradigms

Here’s an old and dusty blog post on paradigms.  Recent events brought it to memory so I’m posting it here.  Also see this post on worldviews.

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Johan Norberg wrote a brilliant and devastating critique for the Cato Institute on Noami Klein’s recent book, The Shock Doctrine.

Norberg’s article is well worth a read.  It reminded me of the immense importance of the long-term battle of ideas.  The practice of teaching political ideas on a simple continuum of left to right, with fascism on one end and communism on the other, has resulted in all manner of untruthful re-interpretations of history, philosophy and economics.   This book is probably the strongest example of the major problems this simplistic and inaccurate paradigm creates.

Klein is unable to see the world through any lens besides the left/right paradigm.  Because of this, she is forced to make everything fit into this vision.  She crams big government Republicans, fascists, despots, corporate welfare leeches, bureaucrats, militarists, and libertarians all into one bizarre category.  No matter how strongly reality disagrees with this view, and no matter how impossible it is to fit these different shapes together, she still tries and apparently believes she’s succeeded.

The paradigms we form early in our intellectual endeavors can prove incredibly hard to shake.  Seeing the world as merely a left/right world is the root cause of almost all of Klein’s inaccurate, and frankly stupid, conclusions.  It seems glaringly apparent that libertarians and neoconservatives are not even close to the same thing – scads of books, websites, essays and debates are widely available which make this overtly clear to even a casual observer.  Yet Klein holds so firmly to her left/right paradigm that she fails to see these distinctions, and sometimes even offers critiques of government and calls them critiques of free-markets.

If we are to analyze policies and philosophies on their moral and practical merits, it is imperative that we learn to break out of overly-simplistic paradigms, and allow each argument to stand on its own rather than be mashed together in unnatural associations that are easier to label and fit on our continuum.  (Though also simplistic, here’s another at least somewhat better way to view political ideas – one that allows for more deviations and does a better job of explaining the world that we actually see.)

Paradigms are important and necessary mental tools that help us understand abstractions and put them into a broader and more meaningful context.  However, they are only mental tools – the paradigm should never be confused with the truth itself.  When reality does not fit into our paradigms, we need to explore new ones rather than bend and twist reality and deceive ourselves into believing it fits.  Paradigms should be checked against logic; a sometimes difficult task that would’ve saved Ms. Klein from a great deal of error.

Klein’s book should serve as a reminder that the current left/right political spectrum is one of the least useful or explanatory paradigms around, and adherence to it in the face of divergent realities can be dangerous – to freedom and to truth.

Elections Don’t Matter

This was written for the Shotgun Blog during election season.

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“I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing. Unless it is politically profitable for the wrong people to do the right thing, the right people will not do the right thing either, or if they try, they will shortly be out of office.” – Milton Friedman

Amidst the din surrounding the U.S. presidential elections there is much debate and discussion over which candidate can best lead the nation in the right direction. The right direction to me is towards greater freedom. Which candidate can move us there?

None of them.

This is not because of the specific field of candidates we have to choose from this election; this is always the case. As Milton Friedman pointed out (quote above), the nature of politics is such that a politician will only be able to do as much as he or she can get away with. No president, no matter how much he or she wanted to, could enact reforms more radical than what the general populace finds acceptable. In the end, all governments – monarchies, autocracies, democracies – can only do what the majority of the populace allows. Even a powerful tyrant, in the long run, cannot resist the will of the majority of people if they are motivated enough to oppose him. It is the ideas that they hold which determine their motivation.

Ideas, not people, run the world.

In a system like ours with democratic elections, government leaders are particularly sensitive to the mood of the public. Relatively frequent elections, recall threats, loss of fundraising from would-be supporters, and constant media coverage create a high price for unpopular decisions. Even the ability to change policy after being elected without sufficient popularity is limited – since multiple branches of government are needed to enact policy an unpopular leader will have little luck convincing congressional colleagues to go out on a limb for him.

Why then have we moved away from freedom in many areas? Because in the battle of ideas, temporary comfort, promises of impossible “equality”, lack of self-respect and responsibility, and a desire for the state to impose our tastes upon others by force have had too many victories.

Freedom will not keep without constant maintenance. Freedom is an idea. Ideas must be continually re-stated, defended against the trends of the day, taught and passed down, communicated and re-communicated in ways relevant to each generation. If we give an inch, the deceptive lures of state-sponsored “comfort”, “equality”, “fairness”, “niceness”, etc. will quickly creep in and gain a mile.

The ideas we hold, the value we place on freedom, our understanding of why it matters, our interpretation of history and the warnings it provides against statism – these are what determine the policies of the nation. Indeed, choose the candidate that seems best. Choose the one that you believe can best restrain the urge to take more power and trample more freedom. But know that in the end it is what you believe, and what others around you believe and how strongly we believe it that will determine what the politicians do.

Is freedom your passion this year, or is it the candidate of the month? The former can truly transform the world forever; the latter can only follow our mood swings. Don’t expect your vote or candidate to change the world – nothing worth having can be had so easily. I hope to change the world with ideas; the candidates will follow.

“I am really sorry to see my Countrymen trouble themselves about Politics. If Men were Wise the Most arbitrary Princes could not hurt them. If they are not Wise the Freest Government is compelled to be a Tyranny. Princes appear to me to be Fools. Houses of Commons & Houses of Lords appear to me to be fools, they seem to me to be something Else besides Human Life.” – William Blake

Attack of the Moral Busybodies

This is a post originally written for the Prometheus blog, but it no longer appears there so I thought I’d repost it.

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“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” — C. S. Lewis, God in the Dock

At the gym the other day I overheard two older women talking as they ran on treadmills.  They were talking (quite loudly – I wasn’t straining to eavesdrop) about the current situation with banks and home mortgages.  They both agreed that many people with adjustable-rate mortgages were going to be struggling to make payments if rates continued to rise.  The culprit, they said, was greed.  The banks were greedy for giving adjustable rate loans to people who may have a high risk of default.

I tried to tune them out and focus on pumping up my already massive 157 body to no avail (both the tuning out and the pumping).  Their conversation moved on to last night’s TV viewing.  “I was watching that Deal or no Deal show, and I couldn’t believe it!”  She went on to share her absolute amazement and disgust with various contestants for choosing to pass up tens of thousands of dollars in order to try for more.  Both of the treading ladies agreed that this was “A shame”, and that it boiled down to “Greed.  Just pure greed.”

As I strained to lift the smallest denomination of barbells in the gym I thought about these nice old ladies, seemingly concerned with the welfare of all mankind.  What was so greedy?  Banks chose to loan money to people, which always bears a risk of default.  These women felt the default risk was too great and the loan shouldn’t have been made; the banks, apparently, did not.  Game show contestants were faced with a choice to take a sum of money and walk, or to risk walking with nothing for the chance of a larger sum.  The joggers thought they should take the money, they thought the risk of trying for more was too great; the contestants did not.

Both of these were instances where the risk preferences of the ladies differed from those whom they were criticizing as greedy.  Whose risk preference should be enforced?  If these ladies had their way, there might be laws and regulations imposing their risk preferences on everyone else.  Would we really be better off if the opinions of these women dictated who got a loan, rather the calculations of those who own the resources?  Would we be better off if game show contestants had to call the treadmill duo and ask permission to hit the big red ‘No deal’ button?

There are two problems with anti-greed sentiment that seeks government intervention.

1. One man’s greed is another man’s self-interest

Greed is an internal condition where a person wants more than is good for them or others.  Like lust, envy, or self-deception, it cannot be identified or defined from the outside.  Only the greedy person is really able to know whether or not they are greedy.  How is an outside observer to judge whether or not it is greedy for you to seek a pay raise, or try to find a cheaper car, or buy another song on iTunes?  They can’t.

2.  There are some things the law just can’t do

Even if we were able to find some objective, identifiable, universal definition of greed, how could it be enforced?  If the point is to make people less greedy when assessing risk and making decisions, how can any external punishment make them a better judge?  To add the additional risk of fine or imprisonment to behaviors deemed greedy (presumably because they bear more risk than the result warrants) the greedy person can still be perfectly greedy in choosing to abstain from the activity.  It is the self-interested or “greedy” desire to stay out of prison that motivates to obey the law.  Law cannot change the heart.

Both the bankers and the game show contestants were merely assessing risk, and choosing to do what they believed would give them the best result.  Isn’t that what we all do with every decision we make?

As one of the ladies stepped off the treadmill and into the tanning booth I wondered to myself if she felt greedy for doing so.  Her skin was tan enough already.  Artificial sunlight increases the risk of cancer.  She chose to engage in the risky behavior of tanning anyway, just to have more bronze.

Greed.  Just pure greed.

Aristotle on Mixed Economies

This is an article I wrote some time ago for the Ludwig von Mises Institute.

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A friend recently commented that he has found wisdom in moderation. He said it seems that truth and goodness are found not at the extremes, but at the place of balance between extremes. This can be very true.

As Aristotle wrote in his Nicomachean Ethics, “Virtue must have the quality of aiming at the intermediate.” In Aristotle’s examples, it is cowardice and recklessness that are the extremes, courage the middle ground. It is drunkenness and uptightness that are extremes, and moderate drinking the mean.

My friend went on from this concept to state that he believed in neither socialism nor capitalism, but in a mixed economy — or what he called a “messy middle ground.” There are two main problems with this conclusion.

The first is that statements like this in the abstract are meaningless. To construct a pretend spectrum, and place various actions and beliefs on it and then to choose the “middle” between them does not give meaning to that middle in and of itself. That is, without actual arguments and definitions regarding what that middle choice or belief is, it is simply a made up point on an imaginary spectrum on which other ideas are arbitrarily placed. Using this logic, I could claim that, since the mean is always good, green beans and omelets are both extremes and I prefer the middle ground.

Most often, those advocating an idea simply because it is in the “middle” of their mentally constructed spectrum do so because they lack any real arguments about the idea itself. For the idea of a middle ground or moderation to have any meaning, the extremes must first be defined and understood as opposite responses to a common problem, and must be placed on an ordinal value spectrum, such as a standard of basic morality that always holds falsehood as bad and truth as good.

The second problem with the conclusion that, since even Aristotle recognized moderation as the source of virtue, a mixed economy is better than capitalism or socialism is that it departs from the logic used in the earlier examples of courage and moderate drinking.

Courage and moderate drinking were the mean because either an excess or a deficiency was problematic. However, both courage and moderate drinking are extremes in another sense. Courage is a word that describes the good state of mind in the face of danger. There is no case in which courage itself is bad or not to be desired, since it is by definition the proper balance between cowardice and recklessness — you cannot have too much courage, nor too little, only too much fear or too little. There is either courage or noncourage (cowardice, recklessness), just as there is either truth or falsehood. In this sense it is an extreme.

Perhaps this sounds like a simple matter of definitional difference. There is, however, a fundamental difference here, meant to show that moderation is only good if it is moderating between two bad extremes and to a good mean, and not if it is moderating between a good and a bad. As Aristotle put it:

But not every action nor every passion admits of a mean; for some have names that already imply badness, e.g., spite, shamelessness, envy, and in the case of actions adultery, theft, murder; for all of these and suchlike things imply by their names that they are themselves bad, and not the excess or deficiencies of them. It is not possible, then, ever to be right with regard to them; one must always be wrong.

The midpoint between murder and nonmurder is not the good choice — nonmurder is. However, the moderation between not caring a lick about the actions of another and caring so much you would use violence to control them is a good middle ground — but this middle ground is not to be confused with socialism.

Socialism is a system where government uses force to tell people what decisions they can and cannot make. There may be degrees of freedom within different socialist systems, just as a prisoner may be treated better or worse by different wardens, but if you are not free, you are not free.

Capitalism is an economic system that allows people to make choices free from government intervention. All government intervention is backed by the threat of violence — if it were not, it would not be a government policy, but rather a voluntary recommendation, or a rule of a voluntary association. The fact that one cannot avoid taxation and obedience to a government without physical consequences proves that it is not a voluntary institution, but rather one backed by force.

Advocating a “mixed economy” or a middle ground between socialism and capitalism is nothing more than advocating a middle ground between threatening your neighbor with violence if he doesn’t do your will and not threatening him with violence. If he resists, it becomes the same as the “middle ground” between murdering and not murdering. In that sense, capitalism is an extreme, just as courage is an extreme against noncourage.

In another sense, there is a middle ground economically. The middle ground is between caring so much about the economic decisions people make that you would threaten them with murder to control them, and caring so little that you would allow them to harm themselves or others. By definition, you cannot escape the second extreme by application of the first. You cannot care about individuals by threatening them with violence. Such care must come peacefully and voluntarily: by persuasion, not force.

The middle ground in this case is not socialism — or control by threat of violence — but a capitalist system in which individuals voluntarily look out for one another, and peacefully persuade others to look out for themselves and others. Capitalism is not a virtue in the way that courage is a virtue; it is rather a framework that avoids the extreme of violent coercion. Avoiding the one extreme, as a capitalist system does, does not guarantee avoidance of the other extreme, just as not being reckless does not guarantee you will be courageous. But again, avoiding the extreme of neglecting others cannot be achieved by embracing the extreme of coercing them.

The true middle ground is to accept a capitalist system — i.e., avoid the extreme of coercion — and choose personally to care for and about others, and persuade them to do the same — i.e., avoid the extreme of neglect. Since caring for others is a highly subjective, individual concept, no form of coercive economic arrangement can bring it about; one can only allow it to occur.

In one sense capitalism is an extreme in that it is the opposite of coercion. In another sense, capitalism is simply a system that allows individuals to choose the middle ground between coercion and neglect. Socialism, on the other hand, is an extreme in both cases; it is the opposite of freedom and it is not a middle ground between coercion and neglect; it is itself coercion.

Attempting to find a middle ground between coercion and freedom is a bad idea.

Finding a middle ground between coercion and neglect is a good one.

Capitalism is the only system that allows for both of these. We should not stop advocating capitalism, nor should we stop caring about ourselves and others in peaceful, voluntary ways.

I find it no less disturbing when someone says both capitalism and socialism are extreme and they seek a middle ground than if someone were to say both love and cruelty were extreme, and they therefore seek a middle ground. Some vices or virtues are found in moderation; some are found in absoluteness. As Barry Goldwater famously said,

Extremism in the defense of liberty is no vice! — Moderation in the pursuit of justice is no virtue.

Capitalism is just. Socialism is unjust. There is no “messy middle.”

Christianity and Freedom

Is there a dichotomy between law and love?

After reading an article I wrote (Palm Sunday and Politics), a friend of mine told me he thought I espoused a sort of dualistic view of Christian life.  As if Christ came only to preach a spiritual transformation as something entirely separate from physical life.

Upon a rereading of the article, I can see how one might draw that conclusion.  That is not, however, what I meant to communicate.  Indeed, I view life as holistic, with all elements – spiritual, emotional, mental, physical – inextricably intertwined.  I view the Christian life as wholly transformative, of the spiritual life as well as the others listed above.  I do not see a dichotomy between the spiritual and physical life as far as my Christianity is concerned.

That said, there was a dualism expressed in the post.  It was not a dichotomy between the spiritual and physical life, but a dichotomy between peace and force – and by force I am referring to the initiation of physical violence, or the threat of it.

The things I believe as a Christian affect every aspect of my life.  My goals in life spring from my theistic view of the world and the resulting actions that view brings.  Things like caring for those in need, learning humility, showing love and offering freedom to others–these are goals because of my acceptance of the Kingdom Jesus preached.

These beliefs and duties are physical as much as anything else.  What they are not is violent.

To attempt to achieve these goals by initiating force against others is antithetical to the ends themselves.  Though physical force may be justified in some instances (such as self-defense, though Christ and many others refrained even from this and chose martyrdom), I do not see any way in which the initiation of violence can be seen as a moral way to advance the work of Christ.  When Jesus taught kindness to the poor, do you think he meant it by first doing violence to the rich or middle class?  When he taught righteousness, do you think he meant making others righteous on threat of fine or imprisonment?

I do not.

If we do not feel justified in using force to advance these goals individually, why should we feel justified doing it as a group, or hiring it out to others?

Everything government does is done by force.  If it’s a new law or regulation, it is backed by threat of fine, imprisonment, or (if you are persistent enough in resisting) force to the point of death.  If it is a welfare program, it is funded by tax dollars, which are not given voluntarily.  Try not paying your taxes long enough and you’ll find that indeed, force is what’s ultimately behind tax collection.  If it were not, funds would be collected by a voluntary association, not government.  Government has nothing to give but that which it first takes, and it takes by force or the threat of it.

If you’ve accepted the Christian life, it should indeed transform your entire being and all your actions.  Far from believing Christ’s example and words regarding righteousness or care for the poor to be merely spiritual commands, I see them as part of the holistic goal of His kingdom, and involving physical actions.  However, I do not see these ends as a justification for violent means.

To attempt to use government to achieve Christian goals is to, ultimately, use physical force.  This not only corrupts government, it corrupts the goals themselves and diminishes the true depth of the work of the Kingdom.  It reduces a life-transforming message delivered by loving believers into a program for political preferences pushed by a religious interest group.

Oh, and it just so happens that the way human nature works, peaceful and voluntary means of helping the poor and promoting moral behavior achieve unimaginably more than any force-backed government initiative ever can.  The genius of creation is manifest in economics – free individuals acting to prosper individually achieve more for their fellow man than mandatory efforts.  What is moral, it turns out, is also very efficient.

Christians should not only daily examine their hearts to see if their goals and actions are in line with the ultimate Truth; they should also ask themselves if the means they are using to accomplish those goals are righteous.  Sometimes a government program would be easier than doing the work of Christ ourselves, or organizing voluntary efforts.  Then again, Christ never said it would be easy.

Palm Sunday and Politics

When He approached Jerusalem, He saw the city and wept over it, saying, “If you had known in this day, even you, the things which make for peace! But now they have been hidden from your eyes.” Luke 19:41–42

As Jesus entered Jerusalem on Palm Sunday to shouts of, “Hosanna” and cloaks and palm branches thrown on the road before him, it seems it must have been a joyful experience. But instead of taking joy in the cheers of the people, Jesus wept over the city.

I’m no Biblical scholar or Jewish historian, but what little I’ve studied of the Bible and the history of the time suggests that the kind of savior the people expected was not the kind Jesus came to be. And for their misplaced hopes, he felt pain.

When Jesus came into the city that day the people gathered to see him and many began to think he may be the Messiah that had been promised the Jews for hundreds of years. They were under the control of the Roman Empire and its various local puppet governments. Understandably, when the Jews learned the promises of a savior and King in the line of their great king David, they expected a Messiah who would free them from Roman rule.

When Jesus entered the city they waved Palm Branches and shouted, “Hosanna.” History suggests these were significant, even dangerous political gestures. Hosanna was a Hebrew word that meant, “Save, now!” and had a very physical connotation. It was not at that time a cry of spiritual or abstract salvation, but a very real shout for physical salvation, which had specific meaning to a people under Roman rule. The Palm branch was a nationalistic symbol for the Jews, a symbol that had appeared on the last coins made when Israel was free. That is perhaps why the Pharisees told Jesus to “rebuke” his disciples – because to openly praise one they thought came to defy their rulers was politically dangerous.

As the crowd of people saw Jesus entering the city, they saw a political savior; one who might at last rise up and free them from the Romans, and they cheered His arrival. But He wept. He wept because they did not know, “The things which make for peace.” He had not come to free them primarily from political bondage.

Jesus did not intend to be a political figure. He seemed to largely ignore the Romans, and even saved His criticisms and rebukes not for the political leaders, but for the leaders of His own people; their spiritual leaders. When He taught righteousness it was never backed by force. When He told the rich man to give all he had to the poor the man walked away; Jesus did not force him to obey, but instead let him go. He refused to use earthly law to punish a prostitute by stoning; instead he told her, “Go and sin no more,” and left her free to decide. He did not come to spread his Kingdom with the tools of earthly kingdoms – force and coercion. He did not come to offer political freedom. He came to offer freedom from something much deeper.

To conflate the work of Christ with the work of worldly politics is to miss the meaning of His life, death, and resurrection. To claim that a Christian must vote for a specific policy or politician, that Christians must use government to enforce our morals – to prohibit bad behavior or to force good behavior – is to reduce the work of Christ to the work of a politician. He is not too weak or insignificant for political battles; political battles are too weak and insignificant for Him. The kind of freedom and righteousness He offers is far too great, too personal, to be advanced by physical force (which all politics boils down to); politics is beneath the spiritual life, not above it.

Physical freedom is a worthy goal. Defending oneself from violence and oppression is not immoral. But as a Christian, to use government to enforce the morality you believe in through law, backed up by the agents of the state, is to contradict Christ Himself.

It is that desire to look to Christ as a way to accomplish political goals that made Him weep as He entered Jerusalem. They looked for peace through a political savior; He knew the peace He brought was much deeper and could be had regardless of the physical conditions around them. Politics is force. Jesus’ entrance into Jerusalem that day had been prophesied by Zechariah, who described Him as, “Gentle.”

Let us emulate Him when we attempt to alter the world around us. Let us never forget that the freedom He brings transcends this world, and His peace cannot be attained or spread by force.

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Read the follow-up to this post, Christianity and Freedom.

Why I Don’t Follow the News

I rarely follow the news and almost never get it direct from news sources. What news I’m up on tends to find it’s way to me through filters – blogs I read, emails from friends, Facebook posts and hearsay.

This is not because of laziness or a lack of concern with being informed.  Indeed, I love information, trivia, knowledge and truth.  However, I found that keeping up on the news, especially reading papers and watching news shows, significantly diminished my quality of life.  It made me angry and depressed more often than not.

This is not because the cold, hard realities of terrestrial life are simply all bad news.  In fact every day billions of people are voluntarily, peacefully co-operating and being made better off through trade, commerce, community, and friendship.  Millions of things are invented, quality of life improves, the creative destruction of the market (in both goods and ideas) brings about untold beauty and opportunity.  Indeed, with a little bit of reflection it is not hard to see how vast, mysterious and awesome life is, even in the smallest tasks of a typical day.

But, probably for rational reasons, the news chooses to focus on those relatively few happenings between relatively few people that are violent, coercive and troubling.  A disproportionate amount of space is devoted to that tiny sliver of our individual and societal existence, politics, and nearly all the rest to all the other dangers and troubles in the universe.

It’s not an accurate picture of the world, nor is it particularly useful.  I think it was for this reason (and perhaps the generally bad quality of the writing) that C.S. Lewis warned against frequent newspaper reading.  Mark Twain (I think) said “Those who don’t read the news are uninformed.  Those who do are misinformed”.

Does this mean we turn a blind eye to reality so that we can be happy?  Isn’t that a form of escapism?  Frankly, I think that’s the wrong question.

There is a phenomenal scene in The Silver Chair, part of C.S. Lewis’s Chronicles of Narnia series, where a group of children and a kindly swamp creature are trapped in an underground world by an evil queen.  The queen has them under a sort of spell and she is trying to convince them that there is no outside world, but only the cavernous underworld.  When they object and say that the outside world is real she asks them what it is like.  They tell her it has a sun, which is much like the lights in the cave only bigger and brighter; it has lions which are much like the cats of the underworld only grander and more fierce, and so on.

The queen remarks that there is no outside world at all, but that the children have simply taken things from the real world and pretended they were bigger and better.  It was a mere game, and the reality was in the caves all along.

The group is on the verge of being persuaded of this sad state when the humble swamp creature proclaims that even if this were true, what would it say about the real world?  What kind of world would it be if children could easily create a make-believe world that was so much better?  Even if the outside world is make-believe, he declares, it’s so much preferable to the “real world” underground that he’d rather go on pretending.  At that the spell was broken, hope restored and the deceptive queen’s power rendered inert.

It is more than a mere cliche to say that perception is reality.  Expectation is also reality.  Believing a better world is real and possible makes this world better, if for no other reason than that positive, optimistic people are more pleasant to be around.

The evidence also supports optimism.  Who could ever have predicted the kinds of technologies and opportunities we have available today even just 50 or 100 years ago?  The iPhone alone is jam packed with capabilities that were the stuff of sci-fi even a decade ago.

Why then do we listen to the news when it constantly reports on the fearful side of the present and future?  That is only one view of reality.  It’s a tiny slice of all that is, and a very unrepresentative slice at that.  If a human can only take in so much of reality at once, why would I focus on the negative in a sea of positive?

I’d rather create my own reality – a powerful, free, beautiful one – than get angry about the false reality portrayed by the news.  If that’s escapism, so be it.  Escaping something bad into something better is nothing to be ashamed of.  It’s a choice to perceive and embrace reality in a more useful, constructive manner.

It doesn’t mean injustice doesn’t exist, or that there are not things I am hoping and fighting to change – not least of which are in myself.  It just means there are better ways of doing it and thinking about it.

Instead of letting it be selected for me, I choose each day what bits of news I take in about the vast and wondrous universe.  It beats the hell out of the paper.

The Pursuit

This was written in response to a challenge issued among myself and some good freinds.  We wanted to see who could write the best short story using only 200 words.  My attempt clocks in at 200 words exactly.

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The crinkling of the paper bag brought hope and tension…thankfully there was life inside.  Shep did not hesitate to pull out the store-bought mini pie, half eaten though it was.   They split it.  Any sustenance the two could get was welcome, especially in weather like this.

Until tonight Tad had enjoyed the thrill of the chase.  An outlaw.  Free, yet a slave to stealth.   Their faces were posted everywhere, they were wanted, and for no small reward.  Many days practicing the art of evasion were catching up to the old friends, and they felt it in their lungs and stomachs.  Both had thoughts of turning themselves in and ending the whole thing…not after coming so far.

Neither spoke; neither rested well, both constantly wondered when the other would suggest they continue on.  Both knew they soon must.  It was difficult to think of trading the shelter of the highway bridge for the cold rain.  A moment of daydreaming was broken…Tad’s muscles tensed as he saw light not fifty yards away…

As they fled their shelter the sound of voices echoed behind them, reminding them how close they were to caught:

“Tad! Tad! Shep!”

“C’mon boys, c’mon…”

“Good hunting dogs indeed!”

A Pure Duality

It has come into my mind that you’ve grown frustrated, or confused as to why I have not been in any real sense present in your life. I will not pretend to have an answer sufficient to settle your uneasiness and feeling of loss, but I can perhaps provide a fuller perspective.

I don’t know exactly where I am, or rather where all of me is. Have you ever been two places at once? I don’t suspect so, as I think it is rare among the healthy on earth. Maybe I should start from the beginning…

Late in the fall some twenty years ago I awoke on a typical morning and left for work. I left a wonderful family and a great house, and headed off to a promising job. I don’t remember giving much thought to my life during that short car ride, but I felt somewhere that I had led a good one.

Something happened…blackness…I don’t remember much for a long period of time-like when you know you’re asleep, but you’re not dreaming or thinking, just blackness. This felt like weeks, or months.

As if my eyes were opened, there I was. I was suddenly in a great green field, surrounded by multitudes of rejoicing people. It was a magnificent celebration, and we seemed to be in some beautiful valley on a beautiful sunny day. It was unlike any landscape I’d seen before, unreal in its beauty, yet more real than any solid object.

A wise old man, who seemed one thousand years of age, yet looked not fifty and healthy, stepped out from the crowd and greeted me warmly.

“Welcome! We have been waiting for you for quite some time!”

Thinking I was dreaming I didn’t respond, but just watched and listened.

“Come, walk with me; you have many choices before you.” He said, “You have come here because you are greatly needed…your gifts make you extremely precious in these times, and those to come no doubt. I can assure you it will all make sense eventually, and your every need will be met, you have only to choose whether you are willing, or not.”

“What are you talking about?” I asked.

“Not many are given this choice you know.” He replied.

“What choice am I given? Am I dreaming? Given the choice to wake or continue dreaming, I would gladly wake, and remain sensible.”

“You are in no way dreaming!” He shouted, not seeming in the least amused, “I took you for smarter than one who thinks this is a dream!”

Not wanting to further offend him, but still unsure of the nature if this experience, I did not attempt to defend my statement.

“Now, your choice?”

“Explain to me what choice you refer to, and I will gladly tell you my thoughts on it.” I replied.

“Your thoughts on it? Your thoughts? This surely will not do! This is not a choice but to muse on, or some hypothetical presented for mental exercise or sport! This is The choice! The choice!”

Still confused I was forced to ask again what now seemed a stupid question.

“What choice?”

“Sit down son.” He said, “I can see that you are still fresh in your logic, and your time in the darkness did not cleanse you from your confidence in what you know and have taught yourself to react to. Impressive mind indeed, very impressive.”

Not knowing what kind of statement this was, but choosing to take it as a compliment, I felt proud of whatever it was that my mind had done to slow this process, and necessitate further explanation.

“Your ignorance, at least, is a result of much discipline and so being is quite consistent, and finely tuned, so I shall paint for you a simpler picture, in your undeveloped language.”

I think he sensed my pride after his previous statement, and simply had to let me know that whatever plane he operated on was one higher than mine. At first I grew resistant, but this lasted only a minute, as my curiosity soon overtook my dual senses of dignity and defensiveness, and I listened to what he had to say.

“Here in this realm, let us call it X, for I can only assume by your look that you are comfortable with mathematical terms, there is a great movement occurring in the great war that is ever raging. Though I cannot explain it without giving you references to what you know as ‘time’, try not to focus on the sequential order of these events. Our enemy has hit us with something so twisted, so divisive and confusing, that we petitioned our superiors for an exception. This exception was sought so that we might bring you here, for we knew that to overthrow this plot of our foe, you were our only choice. An exception was granted. Which is what brought you, after a long time in the darkness for purposes of ‘unlearning’, (though now I see perhaps not long enough) out of what we shall call subordinate X, and into X.”

Though not understanding all of this, I moved on to the original question, and repeated it. “Yes, but you have still not told me what this choice is?”

“As with any exception, it is only granted on the condition that you are given the choice of whether or not to accept. You see, without this choice your presence here would be counterproductive and even fatal. By denying you choice, the enemy would have already won, and our need of you to combat his attack would no longer exist. Thus, I have been given the authority to grant you your choice.”

“Yes, yes but again, what is the choice! I cannot see any choice at all, for I am here listening to you speak whether I want to wake up or not!”

“You are incorrect! Even now you are choosing. You do not have to be here, but your willingness brought you, and now your curiosity keeps you here. Do not so underestimate your will. However, I need not go further into this. You are correct to seek an explanation of the choice. You have been pulled, temporarily, from subordinate X to be presented with the situation we are facing in our war, and our need of your gifts. Your choice is, quite simply, whether you want to help us, or return to your family and all that you previously knew (in the simplest sense of the word ‘know’ that is) in subordinate X. “

It suddenly occurred to me that I had a family. Three young children, a beautiful wife, a life that I loved….it suddenly sank in that I was indeed in another place, away from all of that, and that this wasn’t a dream.

“You mean, I must choose whether to stay here and help you, and never return to my family and my life as it was…or to go back, and leave you without whatever of me you are in need of?”

“Precisely.”

“And what of you, if I choose to go back?”

“I know not. I only know that things were desperate enough for me to be granted an exception. This is evidence enough of the nature of our situation for me to implore you with all my heart, please stay! But in any case, please choose soon, for time, as you know it, though not passing here, is growing short in the place from which you come.”

I felt, for no reason I could identify, an urge more pressing that any I’d felt before to stay with this wise stranger and to fight. I knew almost nothing of what I was needed for, or what would ensue, and yet never has my heart desired anything more than to stay and accomplish it. It was what I was made for! I almost shouted out with all my soul that I’d stay, and fight! But suddenly I saw my family again, my three children, my wife, my friends, all that was depending on me for provision, for love, for support and strength….I could not choose!

“Surely there is another way!”

“There is no other way!”

“But I cannot, and will not, abandon my family and my life for this! Yet I cannot and will not run from this place, where I know deep down I was made to serve and fight! No, there is another way, and I choose it!”

“But I tell you, there is not!”

“You? You who tell me all that is unbelievable, all that is profound, you who tell me that you yourself sought and were granted and ‘exception’, now say that there is no way?!?! I don’t believe it! There is another way, and I choose it!”

Suddenly another voice spoke, and thundered with all the urgency and authority in the universe…

“Granted!”

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I have been here in X since that one word was spoken. Yet somehow, in some way I know I am also somewhere else. I am two persons, not just one split in half, but two, somehow the same, but entirely different. Neither complete, both lacking something, but each existing where each is needed. I cannot tell you what this means, yet I know, somehow, that this was the right choice. I am here, fulfilling my destiny…yet I know, somehow I am there.

I am sorry you do not see me nor hear me as I once was. But I implore you, do not give up! I do hear you! I do see you! And what you see of me, whatever may be lacking, is me, and yet, not all of me. I am here….and I am there.