Tag: liberty

Capitalism or What?

Part seven in a series of eight on the morality of capitalism.

When analyzing any social or economic system, the three most important words are: “Compared to what?”

Capitalism has its shortcomings. It has shortcomings because life has shortcomings in our own subjective evaluations. That is, we can always imagine a state of affairs better than the one we experience. It is exactly this kind of imagination that has been the driver of human progress. However, when progress has been made it has been by a combination of imagination and an understanding of causal relationships that are unchangeable. The desire to fly, coupled with an understanding of physics, motivated people to create amazing contraptions from airplanes to rockets to parachutes. The desire to fly coupled with a denial of the force of gravity would lead to a much different experience.

When we feel frustrated with the morality of the free market, we should always ask what a better alternative might be. When you get down to it, there are few options. As explained in an earlier post, all government intervention is backed by the threat of violence. This is important to keep in mind when considering alternatives to capitalism.

If you think the price of a good is immoral, for example, ask yourself what you would do to address the problem. Price controls mean threatening violence to anyone who wants to sell above a certain price. Imagine storming to your neighbor’s garage sale with an armed thug and yelling, “Lower your prices or else!” Does that seem more moral than your neighbor peacefully putting an asking price on her old bowling shoes?

From a moral standpoint, since the alternatives to free markets mean coercion (whether partial intervention or complete control), it’s hard to imagine addressing the imperfections that can occur under capitalism with government action. Not to mention the fact that the interventionsdon’t work at achieving the desired results.

Most of the alternatives imagined by critics of capitalism either overlook the coercive nature of the state or rely on a superhuman, all-knowing, all-good state. But if people aren’t good enough to act justly in a market, how could they be good enough to wield government power over others? Sound social theory and historical evidence confirm that indeed, power tends to corrupt and absolute power corrupts absolutely. The difference between the power of a business tycoon in the market (assuming it’s a truly free market and he’s not in bed with government regulators) and the power of a government agent or politician is that the former can only woo while the latter can compel. Much as you mightn’t like the perceived power that people can get in the market, state power is far more dangerous. Businesspeople don’t conscript customers into war or kicked-down doors, except when in cahoots with the state.

There is a philosophical term for the tendency to compare one system to an imagined utopia, rather than to other possible alternatives. It’s called the Nirvana Fallacy. This is a prevalent form of argument against markets. A common example is, “Capitalism hurts the poor.” But compared to what? Look at the evidence of free economies vs. less free economies.

Minimum wage is example of how this fallacy can lead to bad outcomes for the intended beneficiaries. It is a result of the notion that some people don’t make enough money. But compared to what? What alternative is there to free-market wages that can improve the lot of the poor? Minimum wage laws only price the poor out of the labor market.

If we’re honest and use some economic thinking, it becomes clear that even the things we don’t like in a market system are better than the alternatives. (Of course, this is not true for the elites who have mastered the art of gaining political power and favors. For them, markets are worse than corporatism. But aren’t these just the kind of people we would like to see face the rigors of competition and put in an honest day’s work?)

It’s not a very fun argument nor is it the most compelling, but the worst that can be said of capitalism is that it is the “least bad” economic system.

Many accusations against capitalism turn out to be accusations against reality itself. We want to eat our cake and have it, too. We don’t like scarcity, which means trade-offs and choices. We don’t like that some people have no taste for high art (which is why Creed sold more records than Jimi Hendrix!), or that sometimes we enjoy cheap imported goods, or that fossil fuel allows us to do things that we find fulfilling. Capitalism is the wrong target in these cases; we’re frustrated at other people for being different, or ourselves for not being the way we wish we were, or at nature for the materials it yields. We’re upset at cause and effect. Certainly we are justified in feeling unease at failings of those around us or the difficulties nature presents, but we need to look for solutions in reality, not fantasy.

It might seem great if everyone in the world could have twice as much of everything right now. But that’s not possible, and capitalism shouldn’t take the blame for that any more than cement should take the blame for the fact that falling on cement can produce a skinned knee. We should continue to envision a better world and strive to create it, but we shouldn’t pursue a world that’s not possible. Let’s make progress through the peaceful coordination of the market, not the false hopes of a “new man” or the eradication of economic laws created by state centralization and coercion.

(I should add that it is extremely difficult in this country to know whether it is a fact of life or some government policy behind many of the problems we confront. This should make us especially cautious of blaming capitalism, since so often it is a lack of capitalism that makes reality seem harsher than it is. There are innumerable difficulties, both big and small, that entrepreneurs have solved but regulators have perpetuated.)

Capitalism is Not…

Part six in a series of eight on the morality of capitalism.

Capitalism gets saddled with a lot of baggage that doesn’t properly belong to it. Some of this is the result of ignorance of basic economics, some of it a poor reading of history, but most of it is due to a bad definition of capitalism. In the first post in this series I defined what I mean by the term:

[A] system where individuals are free to keep, trade, use, or give away property that was peacefully acquired. This is merely a negation of the use of force in the use and exchange of goods. I do not mean a system that is pro-capitalist, or pro-business, or pro anything but freedom for the individual.

This definition does away with many of the accusations made against capitalism. They may be true of our current system, but not of a genuinely free market. Still, there are a number of claims about capitalism that remain, and I wish to clear up at least a few of the common errors.

Capitalism is not a zero-sum game. For someone to win, it does not require someone else to lose. It is easy to observe a person who has done well and assume that there must be persons elsewhere who had to lose something in order for this person to have gained. That is true of every political system and many simulated scenarios like sporting events, but nothing could be further from the truth in a market.

When exchange takes place in a free market, both parties trade something they want less for something they want more. Of course, either may change their mind later and regret the decision, but at the time of the trade both parties valued what they got more than what they gave, otherwise they would not have traded. It is easy to see how value is created on both sides (because economic value is subjective), and how there was no “loser.” Beyond this simple illustration, over the long run the wealth generation of capitalist trade grows the overall pool of valuable resources and increases choice for all involved. This means the potential for more and bigger “wins” as time goes on and specialization and trade increase. Wealth is created, not distributed.

Capitalism is not for the rich. If there’s any class or group that benefits more from capitalism than any other, it’s not the rich, but the consumer. Of course all of us, rich and poor alike, play the part of the consumer at various times. But it is an inescapable fact that in order to succeed in a market, you must create value for consumers. Ludwig von Mises sums this up nicely:

“The riches of the rich are not the cause of the poverty of anybody; the process that makes some people rich is, on the contrary, the corollary of the process that improves many peoples want satisfaction. The entrepreneurs, the capitalists and the technologists prosper as far as they succeed in best supplying the consumers.”

The rich do not live at the expense of the poor, nor do the rich feel particularly secure in a free market; they often seek government intervention to protect them from competition. But any gains to the rich not only are the result of creating value for the consuming public, they often lead to direct benefits for the poor over time by way of lower prices and access to new technologies.

Even the most selfish, peasant-hating rich person wants to buy fancy new luxuries. Whether they like it or not, being early adopters of such goods helps fund the continual production, research and development of new technology and can bring the cost of production down over time. There is not a modern convenience in existence that did not begin as a plaything of the super-wealthy. TVs, cars, washing machines, cell phones, etc., ad nauseam. If there were no wealthy customers around to purchase these impractical items, it would have been nearly impossible for producers to continue to refine them and lower the cost of production. Rich and poor can certainly dislike each other in a free market, but they cannot avoid helping each other.

Capitalism doesn’t concentrate power. Capitalism disperses power. If you look at the list of Fortune 500 companies 50 years ago vs. today’s list, you’ll notice some familiar names. You’ll also notice that the majority of top players 50 years ago don’t make the list today, and a great many of them don’t even exist. There was a time when Sears threatened to dominate the entire retail industry through its innovative catalog approach. The previous big players in the retail scene, themselves viewed by some as invincible, were put under by Sears. Is Sears a retail hegemon today? Neither will Wal-Mart be tomorrow.

Capitalism is relentless, and consumers want value. They may have brand loyalties, but those only go so far. At the end of the day, the dynamic process of creation, imitation and destruction constantly wreak havoc on the best predictions of who will control the market into the future. Were it not for massive government interventions—including things like anti-trust, which is purported to break-up vested interests but typically does the opposite—we would see even more dynamism and less concentrated power.

It may be a bit disconcerting to realize how dynamic the free market is. The good news is while corporations and products and methods of production are created and destroyed all the time, the human and material resources in the economy are redeployed. It may cause temporary dislocation, but the transition from buggies to Fords was very good for market participants, even though it killed some buggy companies.

Capitalism isn’t about taking advantage of people. In fact, it’s about people taking advantage of the opportunity it provides. I used the example in a previous post of price gouging. Higher prices after a disaster are sometimes seen as an example of people being fleeced by the market when they are the most vulnerable. But when we understand what’s actually happening when prices rise—those less desperate are encouraged to conserve so those who need resources most can get them; suppliers are signaled to deliver more goods to the affected area, etc.—we see that the market is doing more than any other system could to provide for those who need it most.

I’ve heard people talk about the way that businesses take advantage of employees and force them into subpar working conditions. Of course we all have to make choices, and we all wish our options were better than they are (which is why we work to improve them). But is it true that capitalism allows companies to take advantage of people’s needs? Possibly, but no more than people take advantage of companies’ needs.

If you’ve ever shopped at Wal-Mart, supposedly one of the worst offenders when it comes to taking advantage of employees, you’ve noticed that most of the employees are not very helpful. I once waited for 30 minutes to pick up something ordered online. The store was not busy and four or five employees saw me there and did nothing. A few said they were going on break and someone else would help me soon. Some said nothing and just walked past, even when I tried to get their attention. When someone did arrive she was discourteous and messed up the check-out several times. I am far less likely to order from Wal-Mart after this experience.

If Wal-Mart is so good at exploiting employees, why were they unable to make them shorten their break to help me, or treat me with basic kindness, or master the proper checkout procedure? The answer is that Wal-Mart is not any better at getting what they want out of employees than employees are getting what they want out of Wal-Mart. The ease and regularity with which employees quit in the retail business is staggering, and employers often have to tolerate a lot of behavior that is detrimental to their profits to keep needed workers.

I don’t like to moralize about who’s exploiting who, but if we’re going to play that game we ought to consider the many ways in which employees, consumers and shareholders take advantage of managers, investors and corporations. It happens in both directions, but in a free market both are difficult to sustain in the long run. You have to serve other market participants, not cheat or exploit them. It’s not perfect, but capitalism does a better job of generating cooperation and limiting exploitation than any other system.

Capitalism doesn’t corrode our souls. Sure, free markets give us more choice and make us wealthier, but don’t they also make us crude, materialistic and shallow? It is true; in a more abundant market with lower costs, a person can more easily indulge their materialistic impulses. It is also true that countries where few go hungry also have more obesity. The cure is not to restrict the food supply.

A free market forces us to become people of character or suffer the consequences. We have more choices, which means the option of choosing things that are bad for us. But being deprived of choice altogether does not make us better people, just weaker people.

A person who has never lied because their tongue is cut out is not what we hope to become when we strive for honesty. Capitalism cannot corrode your soul, but it can provide you more modes of cultivating and expressing what’s in your soul—good or bad. You can’t escape ultimate responsibility for your choices under any system. Capitalism is up front about that.

Capitalism is Responsible

Part five in a series of eight on the morality of capitalism.

“All things are subject to the law of cause and effect.”

The opening sentence in Carl Menger’s 1871 “Principles of Economics“ seems at first glance little more than a truism, but it is an idea so foundational and so often ignored that it deserves great attention. It applies not only to economic activities, but to all human endeavors. If we seek to live moral lives and promote what is morally good, we ought to heed these words.

What often passes for praiseworthy is any action, or cause, whatsoever that is taken with a sincere desire to achieve a noble effect. The relationship between cause and effect is wholly ignored. But is it moral to take uninformed action that has no causal relationship to the ends sought?

To whom much is given

If I told you that one sick child would get well for every window you smashed, would you be a person of high moral character if you spent the night naively smashing windows with a sincere belief you were doing good? While your heart may be pure as the driven snow, doing good requires at least a genuine effort to understand the world and the likely effects of your actions. As C.S. Lewis said of moral busybodies, “They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth.”

None of us has perfect knowledge, but to the extent that we are able, we are responsible for using sound judgment. In the age of the Internet it would be hard to claim you didn’t know better for taking actions that hinder rather than help the target of your good deeds. A valiant self-education effort is possible in almost every field. To whom much is given, much is required.

Capitalism works

Once we accept the fact that genuine moral good requires more than intentions, it becomes immediately apparent that capitalism has a leg up on every other economic system when it comes to the noble goals of poverty alleviation, peace and health.

The desire to help the poor is nearly universal. But when it comes to actual efforts to do so, there is a spectrum of outcomes ranging from absolute oppression to life-changing relief. We need to consider the outcome before we advocate a course of action. Capitalism is the most powerful force for the material betterment of humanity in the world. State interventions like minimum wages, price caps, foreign aid, immigration restrictions, and professional licensing and regulations do unspeakable harm to those of limited means.

Economic theory predicts better outcomes from markets than governments. Observation backs the prediction. The evidence is abundantly clear that economic freedom does more than government interventions (and private charity) for improving living conditions by every measure. This video gives a brief overview of some of the data.

Many people base their arguments for economic freedom entirely on the fact that it produces better material outcomes. But don’t let that fool you into thinking capitalism “delivers the goods” and ignores morality. I’ve addressed just a few of the ways in which capitalism promotes moral values in previous posts, but let’s not overlook the moral component of an improved quality of life for the least of these. If helping the poor is good, and if good intentions must be coupled with results, a free economy is in excellent moral standing.

Individual responsibility

In addition to achieving the ends of poverty reduction, capitalism also promotes responsibility in individuals. Since it is a negative system in which we can’t force people to do what we want, we must learn patience and peaceful persuasion. We have to be ready to accept the consequences of our decisions and learn to act prudently. Freedom allows us to become responsible.

Poet and theologian John Milton famously argued for free speech by saying that without it, the ability to become a morally responsible individual would cease. Milton said that without the freedom to choose wrongly what books to read or doctrines to believe, there would be no concept of choosing rightly. People would not become moral, but would be of a weaker character and less able to resist evil when they encountered it. There is no righteousness in not making bad choices that are not available to you. A truly free market leaves open the possibility of bad decisions, but any system that does not allow these decisions makes us less, not more, morally responsible.

Capitalism is Humble

Part four in a series of eight on the morality of capitalism.

In a previous post I talked about the honesty of capitalism; people are not angels. A capitalist economy recognizes this fact, and our greed doesn’t ruin the system. Closely related to the honesty about people’s motives is capitalism’s humility about people’s limits. Humans are not all-knowing, and if force is absent, a free-market is what emerges to deal with this fact and spread valuable and coordinating information the best way possible. Markets are a result of our lack of individual knowledge, and a constant reminder of how fallible we are.

Models vs. reality

It has been well documented, especially during the Socialist Calculation Debate that absent a free-market, there is no way to allocate resources effectively. If we believe that people (or at least some group of elite experts) have near perfect knowledge of what resources and finished goods are valued to what extent by whom at what time in what location, then certainly a centrally planned economy would be superior to the messy market with all its profit and loss. Every time an entrepreneur starts a new venture that ends up failing, resources are wasted. His incorrect knowledge about how much people would value his products cause losses. A ruthlessly efficient economy wouldn’t suffer any such waste.

Indeed, the classical (and still standard in most economics textbooks) model of the ideal economy is one in which “perfect competition” is reached. The condition exists when everyone has perfect knowledge of the availability and cost of all resources and the value to consumers of all goods. There is no profit, no loss, no shortages, no surpluses and no speculation in this idealized economy. Everything is in equilibrium.

Seduced by this economic model, many an economist, statesman, do-gooder, social-reformer and power-hungry despot has attempted to achieve it in practice, and with disastrous results as evidenced in places like the former Soviet Union. The model may be a useful tool for testing some economic theories, but only an ill-informed or incredibly arrogant person would see it as a desirable or possible end-state for the real world economy. No one has perfect knowledge. It is impossible to even imagine a world in which they could. Since economic value is subjective and changing all the time, how can anyone know how much another person will value one good compared to another at any given time, let alone millions of people in a constantly changing world?

A process, not an end-state

Capitalism is humble enough to realize our limited knowledge. It relies on the price system—a spontaneous, organic result of billions of free choices—to convey information. It relies on consumers, producers, entrepreneurs and capitalists to act on that information. When they get it right, value is created, and it generates new price signals that encourage more of the same. When they get it wrong, loss results and puts a quick end to the waste of resources and sends a signal telling others not to do the same.

The price system conveys so much information in such a small bundle that I can scarce think of an analogy to show just how valuable it is. It is the most sophisticated communication system the world has ever known. Leonard Read’s famous, “I, Pencil” details the way in which the price system coordinates the actions of thousands of individuals who don’t know each other and might not even speak the same language, to bring an item as simple as a pencil to the market.

Self-knowledge

Beyond merely helping us know the preferences of others, the market system can actually help us discover our own assets and abilities. A professor once told me of a Canadian man who played the bagpipes and made small metal replacement parts for other bagpipe enthusiasts as a hobby. One day he saw an ad in the classifieds for someone who could make small metal parts for an airplane manufacturer. He could use some extra cash, and it sounded similar to his handcrafted bagpipe fittings so he gave it a shot. He ended up making good money producing airplane components—an industry he knew nothing about and never fancied himself skilled enough to enter.

If a central planner was trying to make the best use of all the labor and resources in Canada, he might conduct a survey of the skills possessed by the people there. This man could not have made known his skill in airplane manufacture, because he didn’t even know he had it! The discovery process of the market revealed to him knowledge about a value he could create for others that was previously hidden. If we don’t even know our own economic value, how can we know the values of others?

Greater than the sum

We can’t produce what the capitalist system produces. It is greater than the sum of its parts. It conveys coordinating information that lets us each go about our business and produce end results that are beyond our own abilities and comprehension.

Capitalism’s features—the price system, failure and success, profit and loss, trade, specialization, even the hated speculator, middle man and advertiser—are the result of and cure for our ignorance. We need them to help us choose actions that are valuable to ourselves and others.

A capitalism system does not require perfect knowledge. Through it, we can produce what no planner ever could. This humble, dynamic, trial-and-error approach produces wealth and innovation like no other system. It also keeps us humble on an individual level. When you contemplate the production of a simple pencil, and how far beyond your own skill level it is, it certainly puts things in perspective. It reveals how much we need our fellow man, and how much more we can accomplish when we allow this organic market process to coordinate our activities.

Capitalism is Peaceful

Part three in a series of eight on the morality of capitalism.

Free markets are probably the greatest force for peace in history. There are three distinct ways in which capitalism promotes peace.

A negative system

The simplest way in which capitalism is peaceful is by its abstention from direct acts of violence. Free markets offer no positive prescription for what market participants must do. A genuine capitalist system is one of free trade and voluntary association. People are free to do, in the words of Leonard Read, “Anything that’s peaceful.” There are no “do’s,” and the only real “don’t” at bottom is, “don’t use force.” All else is permitted, but there is no guarantee the market will sustain or reward it.

Capitalism is not a master plan or a system created ahead of time by planners. It is really just the result of peaceful interactions. It is what emerges if force is only used in defense against force. The absence of violence results in secure property rights, contracts and all of the other institutional trappings that are commonly associated with capitalism.

Every other economic system requires a direct application of violence. Any regulation, fee, tax, trade barrier, licensing regime or mandate offered in any kind of “mixed” or corporatist or socialist or fascist regime is backed by the threat of violence.

Raising the cost of violence

Beyond the absence of force in individual actions, capitalism promotes a much broader peace between people groups from different regions and of different cultures and backgrounds. Self-interest begets trade; trade begets specialization; specialization begets cooperation. Ricardo’s law of association demonstrates how much more productive we are when we specialize and trade, which means that over time we come to rely on a vast network of trading partners for our own well-being. Some people find this state of affairs troubling and you hear things like, “What if X country decides to withhold good Y from us? We rely too heavily on imports!” There are plenty of natural and man-made things to fear in the world if you wish to worry, but the cutting off of trade in a truly free market ought not to be one of them. If a person genuinely wants to avoid all reliance on other people (not sure how this would work for a newborn), they are free to live as long as they can only eat what they can find or grow on their own. It’s not hard to see that that kind of “independence” is far more risky than being part of an interdependent trade network.

The more people rely on trade with others, the greater the cost to all parties of a conflict. If I grow apples and trade them to you for chickens, the last thing I want to do is tick you off and lose my chicken supply and vice versa. On the flip side, if you have a lot of chickens and I have none, and there is no trade between us, I will be tempted to try stealing some. Lack of trade builds enmity. There is a famous saying, attributed to Frederic Bastiat, “If goods don’t cross borders, armies will.”

In a free market, the cost of belligerence is very high. When governments come in and restrict trade or subsidize violence by building up large militaries, the cost of belligerence is lowered, and the benefits of peace are reduced. It is the state, not trade, which creates conflict.

Friends, not enemies

Pretend you live in a free-market economy. You are friends with your neighbor, who works at a small grocer in town. You find the selection to be limited and the prices high. A new supermarket chain is coming in to town, and you’re excited about it because the lower prices and better selection mean you’ll have better meals and money left over for leisure activities with your family. Your neighbor is unhappy about the new store because it may cost him his job. The store comes in. You shop there and save while also expressing your heartfelt empathy to your neighbor whose store may soon shut down. You maintain your friendship, even though in the economic sphere you cease to be trading partners.

Now pretend you live in a heavily regulated economic system much like ours today. You and your neighbor the grocer are still friends. This time the chain store is not free to sell in your town without a government permission slip. It goes up for a vote. Your neighbor actively campaigns to restrain the store from opening up, which will prevent you from buying better products for less money. He urges you to join his efforts and put a “No chain stores!” sign in your yard. You tell him that you won’t because you wouldn’t mind the chain store. It turns in to a bitter, possibly friendship-ending disagreement.

Politics makes enemies out of friends. In a market, you are free to express your varied preferences with your own actions and the expenditure of your own resources. If someone sells something you don’t like, you don’t have to buy. But the very anonymity and absence of compulsion in markets allows you to form community bonds quite separate from your trading choices. You can maintain friendships with all kinds of people whose goods and services you do not necessarily value. You can befriend an orchestral violinist without being a patron of the symphony. But when resources are allocated politically rather than in a free market, that friendship is hard to maintain when you would vote against a tax to fund the symphony hall, which she supports.

Capitalism allows our diverse tastes to be explored and expressed in a way that doesn’t restrict choices to zero-sum contests of your preferences over others. A cornucopia of choice exists in the market, and this not only means better products, but also the removal of artificially created conflict between choices A and B, such as those that inevitably spring from government management.

Three kinds of peace

Capitalism relies on voluntarism rather than violence in individual interactions. It also creates cooperative networks that dramatically increase the incentive to get along and raise the cost of conflict, while government intervention does just the opposite. Finally, capitalism allows us to live in harmony despite our different tastes and sometimes conflicting demands for limited resources, while political allocation always forces us to take sides and go to battle against each other. If you want a more peaceful world, promote capitalism.

Capitalism is Honest

Part two in a series of eight on the morality of capitalism.

Capitalism is honest because it accepts reality as it is.

Economist Thomas Sowell describes two ways of looking at the world, or two “visions:” constrained and unconstrained. Sowell’s book, “A Conflict of Visions,” is an application of many themes in the work of economist F.A. Hayek; especially Hayek’s views on the dispersed nature of information, the limits to what humans can know about each other, and the problems with attempts to replace organic and decentralized markets with top-down rational planning.

A constrained vision of the world recognizes some things as more or less unchangeable—scarcity and elements of human nature like the desire to better oneself and even frequent greed and nastiness. The best bet is to deal with these realities as best we can, rather than to wish them away. An unconstrained vision sees these as problems to be solved. Humans and our social systems are perfectible, if only we plan and direct our activities in a more rational way.

Regardless of the merits of each respective vision, it is to the great benefit of us all that a capitalist economic system is based on a more or less constrained vision. Even if it is possible that someday people may be better or scarcity may be gone, it’s here, and capitalism doesn’t need it to go away in order to work.

Honest about interest

Greed and self-interest are different. Self-interest is unavoidable. All people are self-interested, even when acting altruistically, because they believe the action will get them closer to where they want to be than inaction. Greed is unknowable to anyone but the greedy person. As Milton Friedman reminded Phil Donahue, greed can’t be prohibited by any system. Capitalism realizes this, and rather than wishing greed away, it provides an incentive structure that channels self-interest, whether greedy or not, to produce the least harm and the most good.

This is the fundamental insight of Adam Smith, that the butcher doesn’t provide meat out of love for his customers, but out of regard for his own self-interest. It’s not good if the butcher is greedy, but even if he is, good can result if he’s in a capitalist system. Capitalism is not harmed if he is a selfless person, nor is it harmed if he’s greedy. In fact, if he is a greedy jerk, it is likely to hurt his business because customers may not like buying from him. Bigots, jerks, scoundrels and greedy people won’t ruin capitalism, but capitalism might ruin them.

Contrast this to government, where officials and bureaucrats are supposed to do not what is good for them, but what is good for society. For government programs to achieve their goals, it would require people—voters, politicians, employees—to be always selfless. Voters don’t bear the cost of casting selfish votes; politicians can spread the costs of pork across millions of taxpayers and concentrate the benefits to a few; and the workers at the DMV or TSA don’t fear losing your business if they treat you poorly. Governmental solutions are not honest about human greed, and they cannot channel it to create benefits for all like the market can.

Honest about scarcity

Capitalism also recognizes scarcity and is honest about it. Love to save trees? Love to save children?

Say there is a forest that is highly valued by the environmental community. It is also the site on which some philanthropist wants to construct a children’s hospital. What’s more important? In government-run or managed economies, this becomes a bitter political question, and everyone is forced into the unenviable position of deciding whether they care more for trees and animals or sick children. In a market system, the property owner can accept offers for the land and a price will emerge. Those who truly value it most will place a higher bid and proceed with their plans for the forest.

To many people, this seems cold and calculating. It feels as though markets reduce children and trees to dollars and cents. In reality, it is an honest way to deal with scarcity, and it allows for the most valuable actions, as judged by the people involved, to be completed. What is the alternative? A system of price caps, regulations or government decisions about land use will not result in the best use of the land, but the one that is most beneficial to political interests. It prohibits caring people who might be willing to sacrifice great amounts of their own resources from doing so, in order to please other people who may only mildly care and aren’t willing to put any of their own resources behind their desires. “Price gouging” is another excellent example of the good that results from capitalism’s ability to deal honestly with scarcity.

Promotion of personal honesty

Capitalism is not merely a system that honestly recognizes and deals with scarcity and greed, it also encourages and breeds trust among individuals. When I go to the store to buy fish, I don’t really consider the possibility that the store may sell me rotten or poisoned fish. No conscious process takes place in which I analyze the incentives facing the store owners and employees and asses my probability of risk. And these are people I’ve never met, people who don’t care about me, and people who I may dislike if I did meet them. Yet the very anonymity and impersonal nature of markets require a tremendous amount of trust from all parties. And we do trust each other! I needn’t trust anyone’s motives or knowledge personally, but the market itself has proven to be so trustworthy that I don’t feel any suspicion.

Capitalist economies produce trusting people. Contrast that to dictatorships or heavily planned economies. If you’ve ever spent time in a country with a heavily controlled economy, you’ve probably experienced things like vendors holding your money up to the light to check if it’s fraudulent.

Dream of the real world

Dreams of a world without scarcity or greed are wonderful. But an economic system that is honest about the scarce nature of resources and people of less-than-stellar character, is an unheralded blessing for humanity. It helps us make better choices with what we have, it channels the otherwise destructive behavior of others for our good, and it makes us more trusting people which creates a more vibrant civil society.

The Morality of Capitalism

This is part one in an eight part series on the morality of capitalism.  Originally posted here

It is a common belief that capitalism “delivers the goods” and creates prosperity, but does so only at the cost of our souls, our dignity and our humanity. Many people doubt capitalism not because they fail to see its wealth-generating capacity, but because they believe it to be immoral. I wish to contest the idea that capitalism is immoral and present evidence to the contrary. Not only do I believe capitalism passes the minimum test by failing to violate basic moral standards; I believe it actively promotes a robust sense of morality in a way far superior to any other system.

Before I present my arguments, I would like to define what I mean by the word “capitalism.” I mean only a system where individuals are free to keep, trade, use or give away property that was peacefully acquired. This is merely a negation of the use of force in the use and exchange of goods. I do not mean a system that is pro-capitalist, or pro-business or pro anything but freedom for the individual.

In matter of fact, capitalists and established businesspeople have always been the most active enemies of capitalism. That is because capitalism is decidedly not pro-business. It allows for human creativity, competition and ceaseless challenges to vested interests as people continually innovate in order to better serve customers. It is a system that does not allow one to rest on their laurels long, and as such, those who have been successful frequently try to slow capitalism down and look to the state to find shelter from its dynamism.

If the word capitalism is distracting, I encourage you to substitute “free trade,” “free markets,” “voluntary exchange” or simply “freedom.” It will not change the meaning of my arguments in the least. I have chosen to use the term capitalism because it creates a more provocative title and because the term is embraced by the curators of this blog. There are good arguments both for and against the use of the term capitalism by advocates of free markets, but I wish to avoid this debate at present.

The titles of the next seven posts in this series provide a clue as to where I am going:

Through these posts I will attempt to briefly explain why a system of free enterprise is the best possible way to promote these virtues. I don’t think we should merely accept or “put up with” capitalism, but we ought to embrace it as the key to unlocking human potential—moral, mental, spiritual and physical. There is much more to be said on the morality of capitalism than I will say in this series, and I mean only to present some of the most basic arguments.

The Timeless Way of Being

I am currently reading Christopher Alexander’s The Timeless Way of Building on the recommendation of a friend.  It is one of those books that is so full of insight that it cannot be absorbed all at once, especially with the analytical part of the brain.  It is as intuitive as it is logical.  It’s the kind of thing that forces you to think outside of your paradigms, but in a way that is oddly comfortable.

Yesterday a section of the book stood out to me in particular.  It was about the patterns in building that are good at resolving conflicting forces, and those that are not.  Alexander maintains that there is near universal agreement on what patterns of, say, a window or a garden resolve conflicting forces.  He asks people how they feel in a certain window area vs. another, and 95% or more feel good in the same one.  It may seem outlandish to claim that there is so little disagreement about what makes for a good pattern in building, but the key for Alexander is the word feeling.

He does not ask what they think of flat windows vs. Bay windows.  He does not ask their opinion on window material or position.  He does not ask what a builder should do.  He does not ask anything that evokes a belief or idea or a connection to some overarching plan or policy.  These ought expressions get in the way of the is  of the forces at work within us.  It turns out it is incredibly hard to be honest with ourselves about what feels good.  It takes a lot of discovery, and shedding all the baggage and ideology we carry around.

It someone asked me what I thought of using locally grown ingredients in food, my mind would immediately leap to the idiotic and regressive political movements that seek to force economies into localism, drive up prices, drive down quality, get everyone too involved in everyone else’s business while self-righteously proclaiming the superiority of an absurd proximity bias.  In other words, my thoughts on the matter would probably be negative.

Because of this, it is possible that I would overlook an opportunity to bite into a delicious and juicy local fruit at a farmers market, for fear of giving credence to the food busybodies.  These thoughts – my view that no one ought to get preachy about local ingredients – might prohibit me from finding alignment with the genuine feelings within me.  It’s harder than it first seems to constantly stay in touch with what feels right – with who we actually are – in the face of all the things we think we should be and believe.

This is one of the reasons democracy is such a poor way of resolving collective action problems.  It not only seeks and allows our mere opinions, it rewards our proclamations of what we wish we thought, or what we pretend to want, instead of what actually make us fuller, happier people.  It rewards and glorifies the boring lies and spin we weave into our narratives, and vilifies our honesty about what really harmonizes with us.

It’s much more fruitful to dig down to the bottom and discover what you really do feel, and work with those forces rather than pretending they don’t exist.  This is why capitalism is such a powerful and beautiful system of social coordination; because it takes humans as they are, imperfect knowledge and motives and abilities, and the scarcity and difficulty the natural world presents, works with it, and channels it all in a harmonious and life-giving way.  Capitalism is honest.

This is why the economic way of thinking – the rational choice model – is so enlightening and useful in explaining human behavior and institutions.  It does not condone or condemn, it just accepts ends as a given and seeks to understand what means will and will not achieve them.

Certainly some goals or desires or feelings are better than others.  Certainly some are worth trying to change.  But playing pretend and building patterns around forces we wish existed in us and in others, instead of what’s actually there, doesn’t help.  There is no better way to express this insight than to quote The Timeless Way at length:

“But a pattern which is real makes no judgments about the legitimacy of the forces in the situation.

By seeming to be unethical, by making no judgments about individual opinions, or goals, pr values, the pattern rises to another level of morality.

The result is to allow things to be alive – and this is a higher good than the victory of any one artificial system of values.  The attempt to have a victory for a one-sided view of the world cannot work anyway, even for the people who seem to win their point of view.  The forces which are ignored do not go away just because they are ignored.  They lurk, frustrated, underground.  Sooner or later they erupt in violence: and the system which seems to win is then exposed to far more catastrophic dangers.

The only way a pattern can actually help to make a situation genuinely more alive is by recognizing all the forces which actually exist, and then finding a world in which these forces can slide past each other.

Then it becomes a piece of nature.”

Mr. Alexander is an architect and is here talking about patterns in rooms, gardens, buildings and towns.  He refers to things like the human desire to go towards the light in the room, and the desire for comfortable seating.  The patterns he seeks are those that bring into harmony such forces.  But read the above again, slowly, and consider how much broader this insight might apply; to institutions, to social coordination problems, and to our own lives.

Interview with an Optimist: T.K. Coleman

It’s not hard for any moderately observant person to see the oppressiveness of the state all around us. We are taxed, regulated, coerced, controlled, patted down, pulled over, censored, cited, and sued anytime we step outside of the ever-changing boundaries prescribed by the political and bureaucratic classes. Many take umbrage at these violations of our innate human freedom and dignity. We engage in all kinds of activities to push back against the state.

It doesn’t always work, and certainly not immediately. It’s all well and good to try to change the world, but how can we live fulfilling lives in the meantime? The world as it is is unfree. Today, I’m going to talk to someone whose focus is not on how to make the world freer, but on how to live free in the world as it is.

My good friend TK Coleman, creator of the blog Tough-Minded Optimism, has the audacity to claim that we can be free here and now, no matter what the world brings — and he practices what he preaches. TK has an amazing mind, is a lifelong learner, and somehow manages to maintain a mindset of freedom and optimism in some of the most oppressive circumstances. I have learned so much from him and look forward to my daily TMO emails. He’s going to share his philosophy and how he finds a state of freedom while surrounded by a state of oppression.

IMM: First, tell us just a little bit about yourself.

TKC: I currently live in Los Angeles, where I’m actively pursuing my dreams in writing, entrepreneurship, and media production. I’m originally from Chicago, where I grew up in the era of the Michael Jordan’s Bulls dynasty. I’m the son of a preacher man. My father is a pastor, and the majority of my childhood involved being immersed in church services and other related activities.

While I wouldn’t describe myself as religious, I’m one of the lucky few pastor’s kids who grew up in an environment of organized religion without being emotionally scarred or turned off by many of its negative aspects. My academic studies and professional experiences range from philosophy and theater to financial analysis and public speaking. My true love is philosophy. I have a real passion for learning and contemplation. I enjoy pretending that things are more complex than they really are.

IMM: You recently had a horrible run-in with the police. Can you walk me through that experience?

TKC: Sure. Basically, my wife and I were heading out to a Hermosa Beach comedy club for a date night. It was around 7 p.m. on a Friday. We were pulled over by a police car about two miles from where we live. Two cops got out of the car and one of them approached my window, while the other approached my wife, who was sitting on the passenger side. When I let my window down, he asked me if I had legit identification. I answered, “Yes, sir,” and in an unexpected turn of events, he asked me to step out of the car.

Because I know that police officers are very sensitive to how they’re spoken to, I always speak to them with the utmost respect and cooperation. I’m not interested in giving them any reasons to interpret my behavior as threatening. So I politely said, “Yes, sir,” and stepped out of the car as instructed. The officer then put me against my vehicle and started to search me. He grabbed my wallet out of my pocket and sat it on top of my car. He asked me if I had a record. I said no. He asked me if I had any drugs or weapons on me. I said no.

Then he said, “This is how we do it in Los Angeles.” At that point, he walked me over to his car and began searching me more thoroughly. After that, he threw me in the back seat of their car, and both officers started to question my wife. One of the officers went inside our car and started searching around. I had no idea what was going on. They never told me why they pulled us over. They never asked to see my license. They never asked to see registration. After questioning my wife for about 10 minutes, they came back to their car and did a background check on me.

After my record showed up as clean, they let us go. I won’t sugarcoat the experience and say they were kind and respectful. They were rude and vulgar. They were physically aggressive with me, and they harassed my wife. They acted like bullies. At the end of the experience, they gave us no tickets, no warnings, no apologies, and no explanations. Just another day at the office for those guys, I guess.

IMM: Aren’t you angry at the police? How do you live free when something like that happens, or can happen at any time? Did that incident challenge your worldview?

TKC: While I certainly don’t condone the manner in which those police officers treated my wife and me, I wouldn’t describe myself as being angry with them. My absence of anger, however, has nothing to do with the cops. I am not angry, because being angry at them simply doesn’t serve me in a constructive way. Everything that I want, can, and need to do about that situation is more effectively executed when I’m acting from a state of composure and self-control. Since being bitter at those cops offers me no incentives of the kind I would be interested in, I choose to focus my attention in a life-giving way. It not only feels better, but it’s also a more creative and practical approach for me.

This might be a good segue into discussing a critical component of my philosophy. It’s captured in the phrase “Never let anyone steal your fire.” The basic idea is that we are autonomous beings who hold the unconditional power to dictate our inner disposition. While external forces may have the ability to impose unwanted conditions on us, we ultimately get to decide how we perceive and process the data of our experience.

Some people, for reasons as small as a bad night’s sleep to factors as grand as being a victim of abuse, are out there carrying around all kinds of potentially harmful thoughts. When we interact with these people, it’s extremely easy to let them determine our mood and, hence, our quality of life. Refusing to let anyone steal your fire means you don’t become a sponge for other people’s energy. It means you don’t allow your inner spark, your enthusiasm, your passion for life to be snuffed out by someone who’s taking their unhappiness out on you. If you let them steal your fire, they win.

Those police officers took control of my body, but they can’t touch my mind. They had the guns and badges, but I have the dominant vibration because I won’t give them the permission to influence my attitude. I win. They may have issues going on inside themselves, but I don’t take ownership of their mess. They’ve probably ruined lots of people’s days with their behavior, but not mine. When it comes to how I feel, I hold all the badges and the guns.

IMM: What was your response? Did you register any protest with the police?

TKC: Because of the way the situation went down, I wasn’t focused on their badge numbers. I was watching my wife the whole time. My focus was on her safety. Once they let us go, we got out of there. So I didn’t have much information on them. But I did call my local police department and the sheriff’s department, and they responded very respectfully to my concerns.

IMM: There are a lot of people that seek legal or political action or try to educate others in order to fight back against state oppression. Do you think that’s the wrong approach?

TKC: I have no problem with people who aggressively fight against oppression through legal and political battles. Some people get really fired up by that approach, and they seem to be quite effective at it. I say go for it. No matter what your cause is, you have to adopt an approach that charges you up if you want to have an impact.

I don’t think there are “right” or “wrong” approaches in a legalistic sense. I think there are approaches that are more or less effective in relation to desired goals. So if you have a way of going about life or politics or whatever, then I really have no criticism to offer. It’s up to each person to do the cost-benefit analysis on their actions.

Those of us who consider ourselves advocates of freedom comprise a diverse community. Some of us like to get out on the front lines and fight as political activists, while others prefer a more indirect educational approach. I’m pretty nondogmatic about all of this. If you support freedom, I support you.

IMM: Isn’t your worldview just naive, fairy tale stuff? It can sound like feel-good mumbo jumbo to someone who’s got a boot on their neck. Are you too idealistic?

TKC: Well, I should begin by challenging the distinction between the guy who has the boot on his neck and the guy who doesn’t. Lots of self-help gurus let people get away with this, and I think the results are tragic because they allow people to frame messages of hope in a way that’s significantly disadvantaged. If by “boot on your neck” you mean the experience of pain and suffering, then we all have a boot on our neck in some capacity.

Who’s the guy that purports to teach you and me a lesson on what it REALLY means to suffer? One person has money problems, while another has health problems. One person can’t find true love, while another grieves the loss of their soul mate. One person has all the money they need, but can’t overcome the trauma of a lifetime of childhood abuse. Another person grows up with the perfect family, but is constantly harassed and teased because of the way they look. I could go on and on, but my point is this: It’s easy for one person to use their particular experience of difficulty as the definition of what it means to struggle, but no one has a monopoly on heartbreak and hardship.

My suffering is as real to me as yours is real to you.

Whether we share the same philosophy or not, we all share the human experience of being vulnerable to death and disappointment.

It’s unwarranted to assume that optimists are optimists because they don’t know what it feels like to have a boot on their neck. That basically assumes that we would all be pessimists if we were only smart enough to realize how bad the universe actually is. I think it’s the other way around. I’ve never seen a pessimistic belief that was capable of surviving a few well-thought-out questions. So I think pessimism is the fairy tale. I think pessimism is too idealistic.

I became an optimist not because I have a ton of evidence for how awesome life is, but because I lack sufficient evidence to make negative judgments. I arrived at an optimistic perspective through the back door of skepticism, rather than the front door of faith. The real enemy of pessimism, in my opinion, is not positive thinking, but critical thinking. For me, optimism isn’t about deluding yourself with positive BS. It’s about refusing to delude yourself with negative BS. It’s about subjecting the doom-and-gloom perspective to the same sort of scrutiny we apply to the Pollyanna perspective.

So no, this isn’t about feel-good mumbo jumbo. It’s about feel-good mental judo. It’s about using your intelligence in way that’s healthy, productive, and personally fulfilling. It’s not about throwing your brain out the door. It’s about throwing your BS out the door.

Here’s another point: Either an idea is useful to you or it’s not. If it’s useful, use it. If it’s not, throw it out. Forget the labels. Use what’s useful no matter what it’s called. This isn’t a religion. Nobody’s required to believe anything that doesn’t rub them the right way. I haven’t received any messages from beings who’ve come from outer space, so there’s no special reason why you ought to listen to me. Your experience is your authority. If something works, there you go. If not, don’t waste your time arguing with me. I’m just some random happy dude who found his own way. Go find yours.

IMM: Isn’t it kind of selfish to opt for this Zen-like retreatism for your own personal happiness while people suffer all around you? Shouldn’t you take action to help them be free in the physical sense?

TKC: I personally don’t advocate retreatism. I don’t think we should all just sit around drinking green tea 24 hours a day, but I also would hesitate to join the chorus of those who worship the gods of guilt-driven, duty-based, obligatory activism. I think Howard Thurman nailed it on the head when he said, “Don’t ask what the world needs. Ask yourself what makes you come alive and then go do that. Because the world needs people who have come alive.” I swear by that saying.

The real tragedy of charity in contemporary culture is not that too few people are helping out, but that too few people have an appreciation for the social and economic value of self-interest.

Now here’s another interesting point… I don’t think optimistic philosophy is causing the number of charity volunteers to decline. If anything, it’s the other way around. When you are afraid of the world, when you feel like a worthless drag, when you believe evil prevails over goodness, when you believe your life is harder than everybody else’s, what causes are you going to be signing up for? Who are you going to be a benefit to with that kind of mentality?

The people who are most likely to help others are the people with beliefs that reflect an inner sense of abundance. They see themselves as having something to offer (even if it isn’t money). They believe in their capacity to make a difference. They believe in the potential of those they help. Those are all the same ideals I advocate.

IMM: I’m a big fan of books and articles on economics, political philosophy, history and other areas that illuminate the problems of the state and reveal the power of markets. Do you think it’s unhealthy to spend so much time with these ideas? Would I be better off remaining uneducated about the problems of the state — in other words, is ignorance part of the “bliss” you’re trying to achieve?

TKC: I think it varies from person to person. If it gets you going in a constructive way to study those things, then study away. If it’s making you paranoid without adding benefits that offset the costs of your paranoia, then it might be time to find a healthier and more fulfilling hobby. A good analogy for this would be The Lord of the Rings. One character was able to carry the burden, while another was transformed into a demon by those same burdens. There’s nothing wrong, as a matter of principle, with putting your attention on so-called “bad news.” You just have to be your own judge and have a good feel for the burdens that you can handle.

If we’re going to say “Ignorance is bliss,” then we should be careful to define what kind of ignorance we’re talking about, because ignorance of one’s rights and possibilities, for instance, is certainly not blissful, in my opinion. I’m not actively pursuing ignorance as a spiritual path. For me, intelligence is bliss, understanding is bliss, and creativity is bliss, so those are the sorts of qualities around which I build my particular brand of optimism. Another way to put it would be this: Optimism is not the denial of truth, it’s the recognition that truth isn’t something we need to run from or be afraid of. When you take yourself seriously as a creative force, you can face the truth with confidence and composure.

IMM: So how do you balance being knowledgeable about the way the world works with not getting angry at its deficiencies?

TKC: For me, exposing my mind to the truth is not a discouraging exercise. If confronting the truth feels like you’re being whacked upside the head with a billy club, it may be because you’re beating yourself up unnecessarily, you’re communicating the truth to yourself in an unhealthy way, or you’re predominantly focusing on those parts of the truth that are most challenging to you.

People don’t feel beaten up and broken down because of the truths they discover. They feel beaten up and broken down because of the other truths they omit and overlook. If your encounters with truth are failing to increase your sense of personal freedom, the solution is not less truth, but more truth.

If you focus on the world’s deficiencies and stop there, then you’ll probably feel like crap. But why stop there? It’s intellectually dishonest to focus on what’s wrong with the world without acknowledging our rich history of overcoming incredible odds. It’s delusional to lie to yourself about all the crap that’s going on in the world, but it’s also delusional to lie to yourself about being unable to create positive changes. The truth is the truth, even when it’s not negative.

So for me, I find that balance by taking a holistic approach to my studies. I don’t limit myself to just one perspective. I study the problematic truths and the promising ones.

IMM: Any final thoughts?

TKC: My message to the world in a nutshell is quit trying so darn hard to be positive. Optimism isn’t about making positive assumptions, nor is it about forcing yourself to feel good. Optimism is simply the art of remaining open to possibility. In other words, what happens when we are no longer occupying the mind with our judgments, labels, and dogmatic opinions. When we are not trying to artificially make ourselves believe that life is great and when we are not busy assuming that it’s the end of the world, we are left with nothing but possibility.

That state of being open to possibility without judgment is the source of creative power, personal growth, inner peace, and pleasant emotion. Positive assumptions are needed only when you have negative assumptions that you’re trying to overcome. But when you drop your assumptions altogether, your soul stands naked in the open fields of possibility. And what you choose to create from that space is up to you.

A Few Quotes

On politics and government

“Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters.” – C.S. Lewis

“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

“Politics is a dirty business, a ruse, an ideological cul-de-sac, a vast looter of intellectual and financial resources, a lie that corrupts, a deceiver, a means of unleashing vast evil in the world of the most unexpected and undetected sort and the greatest diverter of human productivity ever concocted by those who do not believe in authentic social and economic progress.” – Jeffrey Tucker

“Sed quis custodiet ipsos custodes?” – Juvenal

On tyranny

“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive.[…] those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth.” – C. S. Lewis

“The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.” – Ludwig von Mises

“As long as the public identifies order with law, it will believe that an orderly society is impossible without the law the state provides. And as long as the public believes this, it will continue to support the state almost without regard to how oppressive it may become.” – John Hasnas

“I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man” – Thomas Jefferson

On freedom

“And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.” – Frederic Bastiat

“Every man must have freedom, must have the scope to form, test, and act upon his own choices, for any sort of development of his own personality to take place. He must, in short, be free in order that he may be fully human.” – Murray Rothbard

“I freed thousands of slaves. I could have freed thousands more, if they had known they were slaves” – Harriet Tubman

“The only way to deal with an unfree world is to become so absolutely free that your very existence is an act of rebellion” – Albert Camus

The Seduction of Guarantees

We want guarantees in life.  We are risk-reducing creatures who want to plan and plot and know as much in advance as possible.  We want tight and definite parameters around the possible outcomes of our actions and our world.  Whether we like it or not, they don’t exist.  Still, we persist in fabricating them and acting offended when people acknowledge the impossibility of our desired guarantees.

I recently heard two libertarian philosophers discussing social justice.  One made the case that social justice is a good goal, and that it is congruent with liberty because a truly free society results in the best-case scenario for the least well-off; something even John Rawls would approve of.  He said free-marketers should proudly fight for social justice and remind the world that a free economy will improve the absolute conditions of the poor more than anything else.

The other philosopher responded by saying the world is awash in guarantees   We are not suffering for want of guarantees, but for want of opportunity.  He said guarantees create expectations; when these are not met, they result in complaints, frustration, blame and disillusionment.  We needn’t coddle the unrealistic desire for a sure thing, but encourage an embrace of the risk and uncertainty in life and the courage to create and try even when the end results are unknown.

Even if it is true that free-markets result in better lives for the poor, is it really helpful to make the case for freedom to specific individuals as one that promises this?  To say that freedom will make you better off is appealing to everyone, because everyone wants a guarantee.  And it is correct in a general sense.  But the truth is no system – not a free society or a totalitarian one – can guarantee a specific outcome to specific individuals.  Will markets produce better results than interventionism?  You bet.  But can either system promise what will happen to each individual?  No way.  To hinge the case for liberty on guarantees is to utilize the same false advertising tyrants have been using since time immemorial.

Liberty is beautiful.  It promises nothing but the freedom to be, to act, to try, to create, to produce.  It does not promise what effects will follow cause, only that cause will be unimpeded so long as it does not impede anyone else.  The desire for a guarantee is the very desire that causes people to tolerate and advocate their own enslavement.  This desire itself is dangerous.  Better to disabuse oneself of the myth of a guarantee.

Anyone who’s done sales knows the danger of relying on expected results instead of actual results.  Don’t count the money until the check clears.  If you cultivate a guarantee loving mindset, you’ll find yourself bitter at all the unrealized expectations in life.  You will feel as though everyone, society, the system, or reality itself is your enemy.  Really, by choosing to accept the unreality of guarantees, it is you who have made yourself the enemy of what is.  Why?  It accomplishes nothing but to stunt your own creative and cooperative capacity and replace it with an adversarial outlook towards your fellow man.

The world is uncertain.  We seek to make the most out of it and eliminate hardships, but every course of action only brings probabilities of success, not guarantees.  That’s OK.  In fact, it’s wonderful once we make our peace with it.  Stop debating which ideas can guarantee what, and embrace the fact that guarantees are a serum that slows us down from acting to achieve our ends.  After all, it is the process of seeking just as much as the ends we seek that brings fulfillment   Guarantees put all the emphasis on the sought, and none on the seeking.  Even if our ends are realized, this mindset deprives us of half the joy.

I am not making the case that freedom ought only to be embraced because it’s “right”; far from it.  Freedom will produce better outcomes than statism, and this is the best reason to advocate it.  But what those outcomes are specifically, and how the manifest in each individual’s life is unknown, just as the results of statisms deprivations and favors are unknown.  What is knowable is the fact that freedom produces an outcome for every individual that no system of control and dependency ever could; but it is not an external or material outcome.  It is a sense of pride, of life, of self-worth that is impossible in a system built on false guarantees and dispensations from authorities.  The freedom to experience the effects of one’s cause, regardless of whether it is for good or ill, produces a sturdiness and fullness that humans need to be fully human.  The dignity of uncertain freedom is orders of magnitude greater for the human soul than the patronizing promises of central planning.

The Paradox of Survival

People who live the fullest lives have a loose grip on everything. They don’t cling too tightly to relationships, possessions, health or life itself. They are free from mood-controlling fear and worry. They take the prospect of terminal illness or the loss of a job with ease, because they don’t find their solace in their present material position relative to others, but in something deeper and more unshakable.

The ability to let go of things is useful in every arena of life. Let go of your kids rather than lamenting their choice of hobbies, or the fact that they grow and change. Let go of your fear of losing and put yourself into your sport with abandon. Let go of the desperation to be loved or else you are likely scare others away; to be less lovable. Let go of fear of death, and what life you have is richer.

All this freedom found in letting go, yet humans are programmed to seek their own survival above all else and against all odds. Are we to fight our own hard-wiring? And why are humans so universally inspired by stories of fighting cancer, fighting the odds, resisting the inertia of world, not giving up, not letting go? There is something noble and heroic about refusing to roll with the punches.

How can we square these competing approaches? If suffering from a serious sickness, is it best to let go of our fear of pain and death and find our zen, or should we fight the degradation of our bodies with every fiber?

Both.

There is a way to reconcile a loose grip on life with a refusal to let go of our dreams. I haven’t mastered it. Few have. The space between freedom from worry over the vicissitudes of life, and intense focus on how to overcome them, is the place where greatness emerges. I’ve seen it in sports. Think about Michael Jordan playfully taunting his opponent at the free throw line. He was so free from the worry of missing the shot, or of embarrassment that he closed his eyes while shooting – a loose grip on the game. At the same time, he was so focused on dominating the game, being the best, and making the shot. Greatness.

The key is to hold on to what we have and keep climbing the obstacles that impede us to obtain what we want. The key is also to let go of what we have and be free from the fear of not obtaining what we want. Now all you have to do is both at the same time.

Happy Easter

Whether or not you follow any of the various religions that celebrate Easter, or other celebrations of rebirth and new life this time of year, there is beauty and power in the symbols that accompany the season.  The emergence from winter’s death and dormancy; the wild, erratic, uneven surge of growth; the sights and sounds and smells are impossible to ignore.  Breath in the Spring air, let it fill your lungs, and contemplate the power of life, creativity and change over death, repression and stasis.

If you are so inclined, enjoy this post about the Christian tradition around this holiday, and what it has to remind about the life-giving power of freedom vs. the violence of political power.

Voters are Liars

I recently heard a political commentator bemoan the results of surveys and elections.  He said the sad truth, whether libertarians wanted to hear it or not, is that Americans want big government.  They want handouts, high taxes, regulatory interference, and on and on.  They vote for people who talk about it.  They re-elect them when they deliver it.  On opinion surveys they favor entitlement programs and broad intervention.  I couldn’t help but laugh.

A person who studies only quarterbacks is likely to interpret an NFL game as the result of QB play.  A person who immerses themselves in politics is likely to interpret society as the result of political opinion and activity.  In the former case, there is at least plausible evidence that QB’s are a major factor.  In the latter, it is almost entirely an illusion that politics and political sentiment reveal the broader health of liberty.

Voters are liars.  They tell the truth about their opinion in the abstract, free from trade-offs and constraints, but this has little to no meaning when translated into the real world.  If I asked you to vote between a person who offered a better world, and one who offered a less bad world, and promised that your vote was guaranteed to not change the outcome either way, what would you do?  What could I conclude about your preferences from your vote?

If I polled you and asked whether or not you like the idea of someone giving you something for free, again promising that how you answered had no bearing on the real world, what would you say?  What could I learn from that about your values?

Voting and surveys are free ways to express a sentiment or indulge in a real or desired preference.  Not only that, the sentiments expressed are not about the real world.  Politics is a zero sum game, completely unlike nearly every other arena of life.  Imagine how different your preferences would be if everything were zero-sum like politics.  What if you had to choose once for all between brands of coffee, cars or clothing?  What if you could not go back, at least not for several years, and try another?  What if whatever a majority in your area voted on would be applied to everyone else?  Under this scenario we could poll people and ask which of three or four brands they prefer.  We’d get some data, but it would reveal nothing whatsoever about what people actually value if they were choosing in the non-zero-sum marketplace and bearing the full costs and benefits of their choices.

Back to society today.  Do people really favor less liberty and more government?  Elections and polls are a very poor measure.  Let’s not look at stated preferences about the artificial political world, but revealed preferences in the real world of win-wins, marginal decision making, internalized costs and benefits, and trade-offs.  If you examine the market, what would you say people are “voting” for?  Radically individualistic technology.  More and more choice.  Freedom from being lumped in with groups.  The ability to choose everything.  Private alternatives to government dominated services like transportation, information transmission, education, protection, rule-making  social norms and values, health maintenance, and on and on.

Don’t listen so much to what people say, look at what they reveal by their actions.  Nobody admits to loving Barry Manilow, but the guy sells a ton of records.  No one says they want to abolish public education, but they keep putting their resources into alternatives to it.

Frankly, I don’t care what people say in polls or who they vote for in the fairyland of politics.  What I see around me – the revealed preferences of billions of earth’s citizens – is a vote, indeed a mandate, for more freedom.

Redistribution and Time Travel: A Thought Experiment

A means of effective time travel has been invented. People can freely traverse time, travelling from the present to any point in the past and vice-versa. Access to time travel is pretty universal, and due to this, knowledge of conditions at all points in time is acute.

For those who believe there is a moral obligation on the part of the better-off to help the less well-off, and who believe in redistributive policies to do this, play along and consider the situation.

People in the present are outrageously wealthy compared to people in the past. Even the poorest Americans today have access to abundant clean water, hot and cold water, heated shelter, air conditioning, an overabundance of cheap, calorie-rich food, more clothing than they need, refrigeration, telephony, transport by internal-combustion engine, laundry facilities, bathing facilities, vaccinations, pharmaceuticals, emergency care, and on and on. These present poor are better off by almost any measure than even the wealthy a thousand years ago.

Do people in the present have an obligation to give some of their wealth to those in the past? Is there some minimum standard of living that we need to keep the ancients up to? Do the poor among the rich (present day poor Americans) have an obligation to the rich among the poor (the well-off a millennium ago)?

What kind of redistributive policies should be enacted? Would they work? What might some side-effects be? Is it required to fulfill a moral duty? Is it wrong for someone born in the present to enjoy the relative luxury and wealth they are inheriting from their era, by no merit on their part? Should they pay an inheritance tax to support people in the poorer past?

What about future generations. What if the future is also poorer; does the present owe them a chunk of our wealth? What would be the result of efforts to redistribute from the present to the future? What if the future was wealthier; do they owe the past a portion of their bounty? What would happen if resources flowed to us from the future, in order to ease our relatively lower condition?

Spanning all of human history, would we have a moral obligation to attempt to make all people across all eras more equal? Would we be obligated to narrow the gap between the caveman and the flying-car-owning future woman? How big could we let the gap be? Would narrowing it be possible? Would there be any side-effects of efforts to try?

What is the difference, morally and practically, between redistribution across time and that across space?