Democracy And The Modern World

The modern world really began with the end of the Victorian Age and WW I.  This signaled the end to the power of the nobility and the rise of the common man.  The aristocrats survived but they are nothing more than quaint anachronisms and are irrelevant today.  The end of WW I brought great social change across the Western world but it also signaled the rise of the Bolsheviks, the Muslim Brotherhood, the Nazi’s, and even what became Communist China.  These all represent populist movements intended to right the wrongs of the past socially, politically, and economically.  The history of the twentieth century is littered with the enormous cost in human lives brought about by the failures of these movements.  But the echoes of these movements continue into the twenty first century and the social and economic problems which these movements meant to solve remain and are growing with the growth in population.

The globalization of markets made possible by technology and the speed of communications has spread global capitalism or at least the concept of individual worth  which has highlighted the unequal distribution of benefits and wealth that characterize capitalism.  In effect there are more rich people it the world today but there is also a larger and growing underclass of the working poor.  This isn’t as obvious in the developed western countries but it is very visible in the large cities in South America, Asia, and Africa.  This population of underpaid and frequently unemployed is a destabilizing influence and forms a ready source for radical terrorists, which is readily visible throughout the Middle East and Africa.  Throughout the twentieth century the poor were largely isolated geographically and technologically but that has changed in the twenty first century.

It is estimated that by 2010 thirty percent of the world’s population will have communication access through the internet and cell phones and that number will continue to grow.  This spread of technology will not and historically has not led to stability, but instead has been a destabilizing influence most recently demonstrated by the Islamic based violence around the world.  History shows that the invention of the printing press led to the religious reformation but also to the wars, controversies, and religious schisms that followed.  The current spread of information access is repeating this historical pattern.  We are witnessing the rise in violence triggered not by oppression but by the freedom of speech via communications not easily controlled by governments but readily available to the general population.

Policy makers – especially in the industrialized countries, are focused on bringing democracy to many of these countries currently under the thrall of dictators and religious zealots.  This policy of “democratization” is based on the assumption that this is a solution, but historically political freedom has unleashed the violence we are witnessing in Egypt and across the Middle East and North Africa.  These large populations of uneducated underpaid, and unemployed are unstable and as can be seen from the violence in these areas, easily manipulated by ethnic, religious, and power driven leaders.  The historic reality is that dictatorships can actually serve the people better than representative governments.  Anwar Sadat and King Hussein of Jordon are examples how a dictator who truly acts in the interest of the people can be more effective than an unstable and unworkable representative government.  Sadat and Hussein could not have made peace with Israel without the dictatorial power they possessed.  The current policy of democratization of countries is unlikely to yield stable governments but more likely to contribute to rising violence.

Some believe that if Egypt and Syria made peace with Israel the violence in the Middle East would cease or at the very least decline to a manageable level.  This is a false hope that rests on the premise that Israel itself is the casus belli but if Israel were to vanish the problems and carnage would remain.  The root cause of the problems in the Middle East is not Israel but the power struggle between Islamic factions and Israel is merely an excuse.  None of the Islamic states cares about Palestine or the Palestinians because they have never been willing to accept them as immigrants.  Instead they use the conflict with Israel for their own political ends, which are religious, ethnic, and struggles for power.  Therefore, democratization of Islamic states is unlikely to stabilize them and the reality of this can already be seen in Egypt.  The Mubarak dictatorship was overthrown and a democratic government elected which immediately failed because the newly elected leaders moved immediately to install a religious dictatorship.  It is unlikely that a democracy is the solution in the Middle East and in Egypt a military backed dictatorship may be the best solution.

 

Is Wealth Zero Sum -- Revisited

There seems to be a whole group of people who view wealth not as an abstraction or even in terms of tangible goods, but solely in terms of “currency” with a sub-text regarding the inequities of wealth distribution. It is this idea that wealth should be shared and that all wealth has been gained at the expense of others, that seems to be the foundation of the “Occupy Wall Street” movement as well the anti-capitalism forces found in academia today. Even the academics and social philosophers admit that wealth can be created and destroyed so they restrict their arguments to currency – usually in dollars and Euros but the argument can be applied to any form of fiat currency. But perhaps the best illustration of this view of wealth is to use art as an example. For example many of Van Gogh’s paintings initially sold for tens of dollars and that same painting today is worth millions, but was wealth created? The value increased but not because of any tangible change, only the demand increased and even that value is not realized until the painting is resold at its greater value. This illustration can be applied to stocks, bonds, or virtually any form of investment. Certainly there was no creation of wealth only a change in demand and the value of the investment as a result of the demand. The point is that when a country prints more currency it is not creating more wealth until that currency is exchanged for some tangible gain or goods, but the law of supply and demand remains. So no wealth is created by increasing the supply of currency but that doesn’t mean that the sum of wealth is finite, it just means the supply may exceed the demand at that specific point in time. For some inexplicable reason some argue that wealth – in terms of currency – is zero sum because printing more money doesn’t create more wealth. Taken at face value that is probably true but only if the law of supply and demand is suspended or held static. That means the value of some tangible asset will be increased because the supply of currency has exceeded the demand – momentarily. Those that subscribe to this fallacious argument then claim the economic policies of a country allow for some to become very rich while some become poverty stricken. Of course this is the very foundation of capitalism because as an economic philosophy it allows for the unequal distribution of wealth. The unasked question of course is how did the rich become rich and how did the poor become poor. Furthermore, how is rich defined and how is poor defined. The reality is that some have taken advantage of the opportunities presented by capitalism while others have expected to be taken care of – by the government, which is the very foundation of socialism and communism. The argument then shifts to the belief – not fact – that the wealth being created in a capitalist society by entrepreneurs, employers, and individuals is not shared or returned to society as a whole. This is a fallacious argument because those individuals with the greatest wealth pay the most in taxes while those with the least wealth pay little or even no taxes at all. It is the taxes of the wealthiest that pay for defense, for roads, for environmental control, energy, and all of the services provided by the government. Does capitalism permit inequality in wealth? Certainly it does, but it also provides equal opportunity for the individual to become wealthy while those who choose not to take advantage of those opportunities remain at a lower income level. I submit that wealth is NOT zero sum and that wealth can be and is being created daily, but that wealth creation is not the result of an increased supply of currency. To equate global wealth in term of currency is a specious argument because the demand for currency is elastic. This means that the total global wealth will wax and wane determined by the law of supply and demand. Therefore, those arguments regarding the inequality of wealth distribution have nothing whatsoever to do with wealth being finite. They are simply a philosophy that believes that wealth should be shared through governmental force, even though this philosophy has failed in every instance that it has been tried. The result has universally been universal poverty for the masses and even greater privileges and wealth for the elites.

Is Wealth Zero Sum

The postulation that wealth is zero sum, meaning that whatever wealth I have has been gained at the expense of others, in effect total global wealth is finite but is inequitably distributed. This argument rests on the assumption that wealth cannot be created and wealth can be defined and quantified. I submit that this is a fallacious argument.

First wealth can be defined in many ways such as the value of knowledge, a great many friends, honors, respect, or many other abstractions where the “wealth” is self determined or determined arbitrarily by others. This type of wealth is not finite and can be both created and destroyed. Therefore, for any meaningful argument wealth must be defined in terms of tangible goods such as gold, money, art, land, etc. But the postulation is that wealth is zero sum meaning that it is finite when it is obvious that the world’s available wealth today is far greater than it was a hundred years ago. But the professor / philosopher avoids this inconsistency by stating that his zero sum argument only applies to the moment and cannot be viewed in any historical context. But this refutes his argument that wealth cannot be created because global wealth has increased and he acknowledges this. This reduces his argument to the total global wealth is finite at any given moment, which is true at that moment, but in the next moment new wealth can be created e.g. a gold strike, oil strike, new invention, etc. The professor / philosopher acknowledges this but then moves to the more abstract view of wealth common to those who argue that wealth can only be gained at the expense of others – hence that wealth is finite.


The argument then becomes increasingly doctrinaire as he attacks – without noting – capitalism. He argues as follows:

“Material wealth obviously originated in the creation/origin of the universe (that is where the stuff comes from). Once we had the earth and people, people could start acquiring material goods like land and resources. These resources can be made more valuable by the addition of labor, thus creating wealth. They can also be made more valuable by other means, such as creating scarcity and controlling pricing. These material goods can be acquired in various ways, fair and foul. The classic method is, of course, conquest.”

How this argument supports a zero sum conclusion is beyond me because it demonstrates how wealth can be created and shared yielding a wealthier population overall. The actual argument appears to be the inequity of some people being wealthier than others based on the assumption that unethical and even illegal means were used to accumulate that wealth. He leaves no room for wealth accumulation via fair means. But his argument has ceased being the creation of wealth but instead has shifted to the sharing of wealth.
At this point the argument shifts to the abstraction of money “the pieces of paper” whose value is commonly agreed to but his real argument doesn’t appear to be the creation of wealth but how that wealth is created.
“Monetary wealth is obviously a social construct: we made up the financial game and the “creation” of wealth depends on the sort of game being played at any given time. For example, some folks “created” wealth by clever repackaging of toxic assets. Other people “create” wealth by working and investing their money (which is supposed to give them more money). In many ways, this is “fictional” wealth in that we are literally just making this stuff up and its value depends entirely on how far we are willing to all play make-believe. Yes, I play the game-it is a convenient way to handle exchanges in some ways. But, I always remember that it is just a game we are playing (I work, I get some paper, I hand the paper to someone and they give me an apple).”
The point being made here is a little fuzzy to me because everyone knows that paper money is an abstraction whose value is set by common agreement and backed by the government. The creation of wealth followed the same rules when commerce depended entirely on gold and silver currency. It appears that he is simply opposed to how wealth is created and how it is inequitably distributed. But he concludes his argument that wealth is finite by arguing that currency (paper) is finite because printing more doesn’t create wealth but results in inflation. That is true but then at a stroke he reduces wealth to how much money you have and since that is finite wealth is finite and zero sum. That is ridiculous of course because tangible wealth can be created in many ways and the currency is simply a method of measuring the wealth created.
In my opinion this entire argument illogical and rests on false assumptions. And when the argument is reduced to its core it appears that it is anti-capitalism and the unequal distribution of wealth.


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Ayn Rand in Summary

Several days ago I was challenged for being an ideologue without actually understanding conservatism or acknowledging the extreme views of Ayn Rand. As part of this discussion I was asked to respond but in something short of a white paper.

Ayn Rand is a very complex person while paradoxically seeming to be simplistic and predictable. I agree with others in that Rand’s philosophy can be summed up as “Objective Materialism”, but what this means probably falls into the same amorphous category as ‘socially conscious”. Do I find her views “appealing?” Yes and no – I think Rand makes some very valid philosophical points but that doesn’t mean that I subscribe to all of her positions, which can be extreme. Some of the left have asked that I distill Rand’s philosophy into a set of bullet points. The bullets below represent my effort to do so, but condensing Rand’s philosophy into a series of bullets probably cannot provide any in depth insight into her philosophy as a whole. So here is my (pathetic?) attempt to summarize Ayn Rand’s philosophy.

1. Probably the simplest and easiest way to view Rand’s philosophy is to summarize it as the struggle of society and government between individualism and collectivism. Where the individual has a right to be himself and to retain the fruits of his labor while the collectivist represents the right of government to take the fruits of the individual’s labor and use it for the “greater good”.

2. Rand sees the collectivists as destroyers of capitalism and the profit motive who if left unchecked will cause the ultimate collapse of society itself. Although Rand died before the collapse of the USSR I think that bears out her conclusion.

3. The Philosophy of Objectivism essentially is a defense or advocacy for reason, individualism, capitalism, and the free market economy while establishing a rejection of government coercion through laws and regulations intended to further government control and support for the greater good of society.

4. Much of Ayn Rand’s philosophy can be summarized as describing the inherent conflict between Marxism (Rand was a strong anti-Marxist) and Capitalism in the form of a free market and individual rights over the collective.

5. Rand’s Magnum Opus “Atlas Shrugged” actually was a treatise on how fascism, communism, and socialism or any form of government control of society is fatally flawed at its core and ultimately destructive to society as a whole. She feels that any form of coerced self-sacrifice is destructive to society.

6. Perhaps the most controversial part of Ayn Rand’s philosophy is her rejection of God or any sort of higher being. In her philosophy she rejects anything which she sees as claiming authority or control over the individual or the individual’s mind. Whether or not she is an outright Atheist is unclear, but this position puts her at odds with much of the conservative political movement.

7. Rand’s philosophy when examined at its core echo’s the position of Frederic Bastiat (The Law) which postulates that no man or government can obtain anything of value from an individual through force either physical or legal. In effect the rights of the individual are paramount (read rights of property) and that the individual has the fundamental right to the fruits of his labor. In effect Rand supports laissez faire capitalism – a free and unregulated market. Rand (and Bastiat) reject any legislation based on enforced or coerced altruism (e.g. equalization of opportunity) which Rand sees as a triumph of special interests over those who produce value (the individual).

8. Another summarized view of Ayn Rand’s philosophy and what probably makes it attractive to the political conservative is her position that society must protect itself from the parasites and “looters” (her term) who are represented by the “tax the rich politicians”, big labor, government ownership, government spending, government economic planning, onerous federal regulations, and most of all any form of wealth redistribution. That latter point in and of itself makes her philosophy attractive to the political right.

I think the above is a brief summarization of what passes for Ayn Rand’s philosophy called Objectivism and Individualism. There is undoubtedly more than what is shown here but I think these brief paragraphs demonstrate why she is attractive to the political right. Now it can be argued that her positions are extreme and that a society composed entirely of individuals beholden to no one but themselves could not be sustained anymore than the collectivist society that she condemns. On the other hand it can be argued that the US was a great deal richer and freer before the federal government became so powerful while the failure of the collectivist society is demonstrated by the failure of the USSR and the growing woes of the socialist European nations

Rome - America - Capitalism

This lengthy essay is in response to a comment posted by Susanna.

Susanna:
Thank you for your comments regarding Ancient Rome. Yes it is true that Roman society was sharply divided between the wealthy and everyone else but the society did function. The Gracchi’s did attempt to land reform but as you may know it failed. Nevertheless land was constantly being allocated to former members of the military and the majority of Roman Society lived better than they did after the Romans were eclipsed by those who desired their wealth without actually earning it. The result was grinding poverty and marginal living for virtually all of society. So eliminating slavery and redistributing land and wealth didn’t actually improve things.

While in college my history class addressed the issue of land reform as a means of wealth redistribution. The idea was that most of the land and wealth was in the hands of a few so various “Presidente`s” elected to take the land from the wealthy land owners and give it to the peons. This was done several times and it failed every time. Within a very few years the wealthy land owners once again owned the land and the peons were back working it. The root cause was not greed or even predatory practices – the fundamental issues were that not everyone is a good farmer so some simply failed to work the land properly and had to sell it in order to eat. Others could farm the land but could not make enough to feed their families because they didn’t have enough land. Eventually these farmers also sold their land and within a few years the land was back in the hands of the wealthy, the government collapsed, and a new Presidente` was in place.

Now you note that 90% of the wealth of America is in the hands of 10% and you say this as if this was wrong. In my work I travel extensively and I have noted that virtually everyone owns a car, has housing, eats regularly, has a TV, and most have one or more computers. I would say that everyone I meet on a daily basis is not “rich” nor are they in that rarefied 10% so your statistic is really meaningless. I also have in my circle of friends 3 people who do in fact reside in that 10% and probably in the 5% range. One man escaped from the communists and came to the US with no money whatsoever. He worked as a carpenter, saved his money, bought land, and today owns homes all over the world, contributes heavily to the Republican Party and commented recently that the very words used by President Obama were the exact words the communists used when they seized his family’s farm and livestock. Another man sold tools out of the trunk of his car. He gradually built his business and recently sold it for $57M and retired. One my oldest friends left the Navy and worked as door to door salesman. He borrowed money to buy one share of the business he worked for. Twenty years later he bought the last share of that business and today he owns it and is worth millions. All three of these men contribute heavily to charity and employ hundreds of others. So opportunity exists for those who choose to work. Those who choose not to work have no right to the wealth of others.

Since you are student of Roman History you might check Emperor Severus. As I recall he tried the Obama approach of taxing the wealthy in order to raise revenues. Paradoxically the higher he raised the taxes on the rich the lower his revenues dropped. You cannot take from the wealthy and give to the unproductive without reducing the total revenues and lowering the standard of living. This was made very obvious with the various communist regimes in the 20th Century.

I do agree that there is a growing underclass in America but I disagree with your implied root cause. You state that this underclass is the result of a lack of education, housing, and healthcare. Public schools are available throughout the country. The schools are routinely destroyed by the children of the underclass whom they are serving. These children do not attend, do not do the work, assault the teachers, and destroy the property. Rather than take responsibility for the poor education their children are receiving they blame the government, the wealthy, the whites, anyone but themselves. So the education is there if they choose to take advantage of it and many do. I am not responsible for the bad decisions of the underclass regarding their education. The government has routinely built public housing for the underclass who have just as routinely destroyed it. The government has torn these projects down and built new ones with the same result. The government then offered programs so the homeless could buy houses with no money down. This allowed hundreds of people to buy homes they couldn’t afford which forced them into bankruptcy and the ill advised government program to spend trillions of dollars keeping companies out of bankruptcy after the government forced them into this ridiculous program to start with.

This brings us to the question of healthcare which you apparently think is some sort of right of the underclass. The actuality is that every hospital in the country is required to provide service to the indigent without charge. The cost of this service is borne by those who have (and pay for) health insurance. So the reality is that there is no one in this country who must go without healthcare and that includes millions of illegal aliens who are slowly bankrupting the welfare system.

Some how you have concluded that the social welfare programs initiated by Roosevelt and expanded by every President since, have not worked because of greed. Precisely whose greed you don’t mention, but I suspect you attribute the woes of society to those who actually work for a living and those businesses that strive to make a profit while employing others. Making a profit is not greed and taking money from those who earn it and give it to those who do not, is communism in its purest form. I think this philosophy has failed repeatedly. I

In the late 1990’s shortly after the fall of the Communist Regime (USSR), I was part of a university program dealing with Russian professionals. The objective was to give them insight into businesses being run for profit. This was an astonishing experience for all parties but those that visited my home never grasped the size of my home and the quality of my life as the result of how hard I worked. They were accustomed to not working and drinking constantly. Prior to this program I was on a tour in Denmark of manufacturing facilities. The other American and I were appalled at the gross inefficiencies and commented that we could increase production and decrease costs by at least 50%. The tour guide stated that the objective of the socialist government was employment not profit or efficiency.

Now you think that people who work hard are doing it solely so they can have more money than their neighbor. I have no idea where you got that idea from – perhaps it is your personal motivation – I don’t know but I do know most of the people I know work because they like to work. I know I do what I do for fun and the fact that I make a lot of money doing it is a by product not the driving motive. In fact I would turn this around and say that those people who you view as the underclass are there due to their own decisions. They are the ones who didn’t like school. They are the ones who don’t have a trade because work requires you arrive on time, follow directions, don’t take drugs, and don’t drink. These simple rules are too stringent for most of those whom you see as the underclass. They are the ones who make these decisions that prevent them from enjoying the fruits of their labor. Instead they whine and appeal to politicians to give them something from the government. Of course most politicians seem to forget that the government doesn’t make money it extorts it from those who do work to give it to those who don’t. The current economic collapse is a direct result of these government run attempts to satisfy the demands from this underclass who are there because of their own bad decision making.

Do I despise and distrust the elected representatives? I certainly do although not as much as I distrust the Judiciary. Beginning with FDR the congress and the judiciary have step by step and inch by inch distorted the Constitution and Declaration of Independence into something totally unrecognizable. Apparently you think this battle over healthcare reform is the main issue – it is not. The Congress and the liberal community based on the West and East Coasts have so lost touch with the temper of the country that they really don’t understand this ground swell of anger or how to cope with it. They keep tying it to healthcare which has little to do with it. The anger begins with affirmative action which has led to quotas and reverse discrimination. It starts with the idea that prayers cannot be said in public, that we are not a Christian Nation, that atheists can dictate how we live and worship, that politicians are distorting the Constitution to restrict guns, that the courts give more rights to criminals than they do to citizens. That the President can by pass congress and appoint czars to run the businesses which he is illegally seizing. The great majority of the population is tired of being ignored and having the very fabric of the country eroded by thoughtless self-seeking politicians and judges with their own agendas.
Now to return to Rome for a moment, the reality is that the Roman Empire encompassed the entire Mediterranean Basin. The vast majority of people in the empire lived happy productive lives. The bread and circuses really was a City of Rome issue and not an issue in the Empire per se. In fact an argument could be made that a lot of loafers and idlers gravitated to Rome for the simple reason they could get handouts from the government. This welfare system was unique to Rome. It didn’t work there and it isn’t working here either because it still rewards idlers and loafers. Corruption for the most part is a government institution and enjoyed by those politicians who need to be turned out of office. Just look at the current administration – it is filled with jail birds, tax evaders, and officials totally out of touch with the people.

I urge you to read:
“The Law” by Frederick Bastiat
“ The Worldly Philosophers” by Heilbronner

Royce

THE RICH, THE POOR, AND THE REFORMERS

Civilization as we know it probably began in the Middle East and probably in Mesopotamia or Egypt. These societies were agrarian with each family farming for itself – essentially a subsistence life. However, very quickly these societies divided into farmers and craftsmen and not long after that came military and governors. Of course the governments and the military were consumers not producers so the society had to support them in the form of taxes. Naturally as the society continued to evolve it began to stratify into classes with the military and officials becoming the upper class, the nobility, and the rich. The point of this obvious historical review is to point out that mankind has always been divided into the rich and the poor and that wealth has never been equally distributed. In fact the very idea of equality much less egalitarianism is a relatively modern concept.

Nevertheless this idea that business, businessmen, and capitalists are evil and that the primary purpose of government is to distribute the wealth of society equally. The underlying principle seems to be that the capitalist has no right to the profits because those profits are earned by the workers he employs, therefore, the revenues generated by the business rightfully belong to the workers. Because these capitalists are reluctant to return the profits to the workers who earned them it is the responsibility of government to seize those profits and redistribute them to the workers. The fact that this has never worked in practice is ignored by these social activists who generally have never actually had to earn a profit or been accountable for the results of their decisions. Currently we see this philosophy being employed by Hugo Chavez in Venezuela. He has seized the assets of foreign investors, fixed prices, over employed people, and then blames the US and others for the failure of his policies. The standard of living is declining, goods are disappearing, and while prices are fixed the items are only available on the black market. This result was first observed under the Emperor Diocletian. Lessons from history don’t seem to be learned by social activists.

Of course the most famous of these social reformers was Lenin, who corrected the abuses of the aristocracy by slaughtering all who disagreed with him, seizing all methods of production, confiscating all revenues in the name of the state, and eliminating private property. Theoretically this was supposed to take the revenues generated by the workers and return the wealth to the workers equitably. Of course as George Orwell observed in his famous satire “Animal Farm” some animals are more equal than others. In practice the wealth was not distributed equally but along selective party lines and the result was the stratification of society into the rich and the poor – a fact either ignored or denied by the social activists who even today believe Marx was right and Lenin failed to implement Communism correctly. Hugo Chavez seems to be one of those who think Lenin was wrong and Marxism is right. His failures to make Marxism work he attributes to interference by the US.

But these are the obvious actions of these social reformers whose failures are highly visible. However, there are social activists among us today who still believe in the tenets of Marxism but don’t use such inflammatory names; instead they call for social reforms through legislation. This began with the infamous book “Silent Spring” by Rachel Carson. This book was later determined to be a hoax but the damage was done, industries ruined, and DDT was banned. Of course the damage to public health was ignored in favor of the animals which were alleged to be endangered by DDT. This was followed up by various other efforts at social reform and perhaps the most famous was the ban on smoking. Any empirical ties between smoking and cancer remain statistical even though the incidence of lung cancer has remained steady even as the number of smokers declines. But these were just warm-ups for the social reformers because they really are after business and the rich. These are their real targets because they truly believe that the rich have no right to what they earn as long as there are people living in poverty.

They are attacking capitalism as evil and as allowing the wealth to be concentrated into fewer and fewer hands. They believe that the profits earned by a corporation should be shared with the workers through profit sharing and not distributed to the shareholders – who of course capitalized the business to start with. The idea that it was the capitalists who created and grew the business is ignored. The workers wouldn’t have jobs and there would be no revenues much less profits to share without the capitalists who funded the enterprise initially. These social reformers rarely have actually run a business or have held positions where they were required to earn a profit. Instead, they are opposed to layoffs as a cost cutting measure because in their eyes that is immoral. For them the socialist ideal of employment over efficiency and profit is what should drive industry, not return on investment.

These are the people who are horrified at the “obscene” profits being generated by the oil companies. What is being ignored is the difference between gross revenues and net profits, but this subtlety is ignored in their drive for wealth distribution which is and always has been their objective. This is the whole purpose of the graduated income tax – it is a legislated method to strip the wealth from those who earn it and redistribute it in the form of handouts to those who did not. These are the people who feel that there is something morally wrong with some people being rich while others are poor. They never make the connection between decisions, lifestyle, responsibility and wealth. Those who work hard and make responsible decisions prosper and those who do not suffer the consequences of their bad decisions and efforts to redistribute the wealth to the poor has historically only resulted in increasing the number of poor and lowering the quality of life for everyone. The reality is there are poor and there are rich and there has always been this dichotomy and every effort to form an egalitarian society has failed.

Conspiracy and Intelligence

It is worth noting that conspiracy theories abound just as they always have but recently they seem to have exploded into a full time activity for people who seem to have nothing better to do with their time. Actually as it turns out that isn’t precisely true because many of these conspiracy addicts are young people who were infected with there inability to think clearly while still in college. As we already know the University System is stuffed to the brim with “professors” like Ward Churchill who have never actually held a job, have never had to make a profit, who have never served in the military or served their country in any way. These are the dregs of the Flower Power generation, the men (?) who remained in college with a deferment hoping to outlast the Viet Nam War. Unfortunately that war dragged on and on in spite of their best efforts to derail it. Ultimately they succeeded with the help of the media and such illustrious patriots as Barbra Streisand, Jane Fonda, and Walter Cronkheit, but by the time the war was over they had their Phd’s in political science, sociology, black studies, are some similar subject, certainly not degrees in any challenging subject like mathematics because they had to maintain their grade point average in order to keep their deferments. So this gaggle of patriots found themselves in post-doctoral work and holding positions as professors at their universities because they had no skills to sell in the job market. The common thread with these university whack jobs is their universal hatred of the military, of capitalism, the government, and of course anything that even smells like competition.

However, it is their universal hatred of the military and mistrust of the government that they have conveyed to their students over the last 30 years. With the accessibility of the internet we now find these young people sitting at their desks surfing the internet while they slave for some capitalist pig, so they don’t see their failure to give a days work for a days pay as stealing, it is merely redistributing the wealth and this is their share. But these are the people who create these wild conspiracies out of thin air because they cannot accept that any poor, down trodden, non-American, would actually attack America unless manipulated by that cabal of arch criminals – the CIA. Therefore, Al Qaeda is either a totally made up organization or if real it is simply a shadow organization being used by the CIA, the Pentagon, and oil magnates to gain control of the Middle Eastern oil fields. So logically (in their clouded and immature minds) the destruction of the World Trade Center could not possibly have been accomplished by some ignorant goat herders from Saudi Arabia.

The educational background of these Saudi’s was obviously made up by the CIA because no educated person would be capable of such a crime. So while these ignorant peasants may have actually flown airplanes into the twin towers, the actual destruction was an implosion carried out by the federal government under the direction of the administration. The objective of this entire exercise was to trigger the invasion of Iraq for the purpose of seizing control of the oil wealth of Iraq. To these simple minds America is imperialist and Americans are evil grasping people bent on taking control of the world’s wealth. They see any reduction in taxes as “welfare” for the rich and any legislation aimed at giving unearned money to the “poor” as the redistribution of wealth and morally justified. The fact that most of these theorists do not earn a great deal, may in fact be unemployed, and certainly do not hold positions of any responsibility is ignored as other members of this lightly educated elite rush to their support.

To actually believe any of these conspiracy theories you must believe that the American Military is morally corrupt. That the senior military officers would commit crimes like the destruction of the Twin Towers without regard to the law or the morality of such an act. You must believe that the Pentagon was destroyed – not by an airplane being flown into it but by a missile launched by the military against itself. What happened to the missing plane and people is ignored because these theorists were never taught critical thinking in college. The Ward Churchill’s of the universities do not encourage questioning – just belief.

The real irony is that these same people carry signs and placards calling President Bush a stupid man and that he and his administration are hiding these vast secrets from the American people. First, off President Bush has been consistently “misunderestimated” by his critics. I am reminded of the Emperor Claudius who played the fool to survive and outlived all of his smarter relatives. President Bush uses these ignorant fools to great advantage and makes them seen even dumber than they are. Secondly, no administration since Washington’s has been able to keep a secret longer than it takes to call the newspaper. If any part of these conspiracies were even partially true it would be all over the New York Times and Washington Post. The reality is that it is our premier universities, the tenure system, and the force of groupthink in those classrooms that are our greatest threat today.

Imperial America Part II

Previously we concluded that America does not meet the criteria for an Imperial Power in the classical sense because it does not have a policy of territorial expansion, domination, or power, yet America is widely viewed by others as Imperialistic. Many liberals and non-Americans reject this classic definition of Imperialism because America doesn’t fit the definition therefore; they have elected to redefine Imperialism. The basis for this new definition for Imperialism is to ensure America can be described as Imperialistic because it includes “influence” and on this basis American can indeed be accused of Imperialism. But even with this expanded definition, America may not actually be Imperialistic because this would require America to have a formal and announced policy to influence or change other countries and cultures. But the question becomes, if others choose of their own accord to emulate America, does that represent Imperialism?

Within this new framework the New Imperialism includes economic, political, and cultural influence. Certainly America is an economic superpower not only through our vast expenditures worldwide, which range in the trillions of dollars and touch almost every country, but through our consumption as well. If the American market were to collapse, the entire world would drop into global depression and whole countries would be ruined economically. This actually happened in 1929 when the American Stock Market crashed it brought the whole world to its knees and that was before America became the economic powerhouse it is today.

There is no doubt but that the American economy represents a major part of the world economy if not the actual foundation of it. But the reality is that it is our purchasing power that makes us such a formidable economic force, not some policy of economic domination. Our purchasing power is a direct result of our productivity and capitalist system. It is capitalism that is shunned by much of the world because it permits a great disparity in wealth, and this brings us to the concept of Imperialism via political domination. This charge is leveled at the US primarily by the various dictators and Marxists around the world, because the very word “democracy” is a threat to their power.

America is frequently accused of attempting to impose democracy – American style democracy – on the rest of the world, but this is really not the situation. America’s policy has always been one of self-determination by the people being governed. Now having a policy and being able to enforce it are two separate things entirely, hence the USSR was able to subjugate Russia and most of Eastern Europe through intimidation. This is also true in Cuba, Venezuela, and various countries around the globe. The US has chosen not to intervene because these governments at least appear to be self-detemined. However, when it is possible the US has consistently acted in the interest of the people being governed and when military force is used, that military is withdrawn as soon as practical. But that just means that the US is not Imperialistic in the classical sense, yet American politics influences much of the world.

The concept of equal rights for women or equal rights for all was initiated by America and voluntarily adopted by various other countries. The same is true for the concept of sexual harassment, hate crimes, environmental protection, and many more. These political changes have been freely adopted by other countries – primarily in the west. It was the US that pioneered the concept of human rights and human rights violations which are widely recognized today. However, these were changes that the US adopted internally and never inflicted on other governments. These concepts were freely adopted by other governments reflecting America’s drive for equal treatment for all. So America’s political views are widespread but spread through influence not through any policy that inflicts these on others. But America’s influence isn’t restricted to the political arena but it extends culturally as well and perhaps this is the one area that causes the most criticism around the world.

America exports our culture through movies, television, language, the internet, and business. There is a long list of American companies whose names and logo’s appear around the world; companies such as Coca Cola, McDonalds, Burger King, IBM, Disney, Microsoft, and many others. These are businesses which are expected to make a profit and represent investment and employment in the countries where they exist. Yet, many regard these businesses as a form of American Imperialism, when in fact they are an example of American entrepreneurship and capitalism. If these businesses didn’t have customers they would go out of business, so the critics of these American companies do not represent the feelings of the majority of the citizens. This is particularly true in France where English words are creeping into the language, in spite of strenous efforts by the government to prevent it.

Of course television has played a dramatic role in the cultural influence of America. When the USSR ran a television show that showed poverty in America it backfired on them because the poor in America had TV sets, automobiles, nice clothes, food, and generally a home, things missing for many citizens of Russia and other countries. The result of television and movies has been the spread of American style of dress, food, and language which are being adopted worldwide, especially by the youth of these countries. It isn’t that people want to be Americans as much as they want to be LIKE Americans. Consequently, America is seen as Imperialistic by many liberals and governments, when in fact the influence of America is being voluntarily absorbed by the people to the chagrin of the governments. America is not Imperialistic by policy but there is no doubt that America’s influence is impacting virtually every country in the world and it is this influence that offends many governments who fear that influence, the Muslim countries in particular see American culture as destabilizing. America is seen as the great Satan because of the temptations it offers in the form of freedom.

FREAKYnomics

Recently a book was published titled “Freakonomics” which was a joint effort between a University of Chicago Professor Steven Levitt and a reporter Stephen Dubner. The authors pose six questions and then provide answers by mining data from various sources. Of course the problem with data mining is the same as mining minerals, all that glitters is not gold and data can be selected to provide a desired conclusion just as ore samples can be selected to provide a higher value to the raw material. But the fact that this manipulation is possible doesn’t mean it was intentional or that the resulting conclusions are wrong – it just means that some skepticism might be useful in evaluating the conclusions. Levitt’s position is that “teachers and criminals and real estate agents may lie, and politicians and even CIA analysts, but numbers don’t?” Of course anyone who has ever actually done data mining or statistical analysis knows full well that numbers CAN lie and frequently do, global warming (cooling) being a recent example of how data can be selected and interpreted to arrive at a desired conclusion.

Initially Levitt and Dubner address incentives and their impact which frequently is opposite of what is intended. The first case they address is actually a negative incentive in the form of a penalty for parents who pick up their child after the agreed upon time. Before the penalty was enacted there were approximately 8 late pickups per week but after the penalty was instituted the number of late pick-ups increased to 20 per week – the exact opposite of what was intended. As it turned out the late fee was simply too small because it was less than the current cost of baby-sitting. Had the penalty been substantial it probably would have worked.

Another example of social action and reaction cited by Levitt and Dubner was the sudden disappearance of seven million children. It seems that when the IRS demanded a social security number for every child claimed as a dependent the number of children suddenly declined because the alleged parents were cheating on their taxes. This of course is an example of a successful incentive. But Levitt and Dubner started their analysis by posing the question “What do schoolteachers and Sumo wrestlers have in common?” The answer turned out to be that they both cheat – the conclusion reached by Levitt was that incentives for teachers and Sumo wrestlers are structured so that they are encouraged to cheat.

All three of these are examples of “The Law of Unintended Consequences”, but is the data used to perform the analysis correct? If we assume that the data is in fact correct and the conclusions accurate, then why was the analysis done on schoolteachers and not on taxation? The reality is that historically high taxes do not generate higher revenues for governments but do in fact result in less revenue while tax reductions generate higher revenues. This has been demonstrated repeatedly since the Roman Empire and as of this writing the unemployment rate is at an all time low and the stock market at an all time high. However, this type of analysis and logical conclusion would have been counter to the prevailing view in academia and the media that the Bush tax cuts were favors to his rich friends and not good for everyone else. In fact there seems to be a veiled subtext running throughout this book that supports the liberal view.

In the analysis of what the Klu Klux Klan and Real Estate brokers have in common, the objective is supposed to be how information and the control of it can and does influence decisions. This is really not very surprising since sound decisions are based on having good information. However, in this case the authors show how the use of adjectives and adverbs is used to sway opinion and how businessmen are essentially dishonest. For examples he uses Enron, Insurance Companies, and Real Estate Brokers and compares them to the Klu Klux Klan. Naturally the Klan is more emotionally charged than say – ABC, NBC, or CNN -- who routinely slant their reports with emotionally laden words. This does not mean that the data present is false or that the conclusions are wrong, but just as one Robin does not make a Spring neither does one dishonest individual or company mean that ALL business people are dishonest or that all insurance companies are crooked. This is the flaw throughout this book, it implies things that are not true and is actually a veiled attack on business and the free market.

Riding to the rescue is John Lott, another economist from academia, including the University of Chicago current home of Steven Levitt. Lott takes the position in his book “FREEDOMnomics, that not only is FREAKonomics a pile of rubbish, it is a veiled attack on the free market and business in general. Lott points out that the assertion that the Klan is like a group of Real Estate agents who use “fear” to take advantage of others is beyond the rhetorical boundaries of taste if not accuracy. In fact Lott dissects the example used by Levitt and Dubner and demonstrates that while it might have been an actual example, their analysis of the motivation and result is a simplistic view of the data and a more detailed analysis would show their conclusions to be incorrect and the reality to be completely opposite.

Lott goes on to cite example after example of how the liberal tendency to root for the underdog and to blame corporations for the bad judgment of plaintiffs cost individuals and society a great deal more than the liberals realize. Liberal empathy is not rooted in hard analysis but is driven by emotion. As an example Lott cites the judgment against Wyeth Labs over a girl who contacted polio two weeks after receiving the vaccine, even though it was demonstrated in court that the girl had contacted polio PRIOR to receiving the vaccine. The upshot was that the court decided against Wyeth in sympathy for the little girl but Wyeth had to raise its prices for the vaccine thus causing other little girls to not receive the vaccine because it was now too expensive. Lott cites multiple examples of these decisions that reward an individual or a small group at the expense of everyone else.

In his examination of crime and the death penalty Levitt states “ It is hard to believe that fear of execution would be a driving force in a rational criminal’s calculus in modern America”. Perhaps this comparison is the most illustrative of the pitfalls of data mining and the liberal's tendency to substitute rigorous analysis for a superficial one that supports a desired outcome . The initial comparison showed that the murder rates between states that had capital punishment and those that didn’t showed that it was ineffective in reducing murder. Actually 10 of the 12 states without capital punishment have homicide rates BELOW the national average. At first glance this would seem to bear out the proposition that the death penalty was an ineffective deterrent. What is NOT stated is that these states have historically had lower murder rates than the national average so the statistics cited by Levitt and Dubner were not meaningful because they did not rely on a common factual basis.

During the years 1968 to 1976 when the death penalty was suspended nationwide, these 12 states had a lower murder rate than the national average. However, when the death penalty was reinstated those states that reintroduced it had a 38% drop in their murder rates. This statistic paints a very different picture than the one painted by Levitt.

These are both very interesting books and worthwhile reading but both are based on statistics and anything based on statistics is highly suspicious.

Blame America

Why do so many Americans seem so embarrassed about being American that they are compelled to apologize and hang their heads over the actions of the freest, most generous, and kindest nation ever to trod the earth? The French go into orgasmic elation over Napoleon and the “Glory” of France. Ignoring the pre-emptive wars initiated by Napoleon, the thousands of deaths, and the failure of France to ever recover its power after his fall. The Spanish reflect with pride on the reign of Phillip II, without regard to the rape of the New World or the Armada, which marked the beginning of the decline of Spain as a world power Even the Mongolians, leap to their feet and cheer at any mention of the “Great Khan (Genghis)”, who is noted for his barbarism as much as his generalship. But to mention George Washington or the founding fathers and we are immediately reminded that they owned slaves, they were hypocrites, and just a bunch of old white guys protecting themselves – hail academia!!

The fact is that since its founding, America has consistently been the freest and most welcoming nation in the world. While it took a while to free the slaves and even longer to accord the Negro the equal rights promised to all men, it was done and today everyone is assured of equal protection under the law. The United States has attempted to remain free of the entanglements of foreign treaties advised by George Washington, but modern technology has rendered this impossible. America has consistently been labeled a colonial power while systematically eliminating colonialism. It was America that wrested the Spanish Colonies of Cuba, Philippines, and the Caribbean Islands from Spain. These have all been freed but not necessarily for the better.

The real tests came with World War I, where the Germans were intent on dominating Europe and were ably supported by the Ottoman Empire and were well on their way when the United States entered the war on the side of the British. Had the United States maintained its isolationist policies Europe would be a far different place today. But this was the first taste Europe had of the awesome power of the United States. Not necessarily military power but industrial might. However, once the war was over, Europe returned to its old colonial ways and merrily began creating arbitrary countries and re-establishing their empires, while the US returned to its internal affairs, rendering the League of Nations totally impotent.

Following WW I Lenin overthrew the Czar and founded the USSR, a communist nation based on Marxism and glorified by the western intelligentsia. It is this same intelligentsia that is still attempting to establish the moral equivalence between the Soviet style Communism and the American Style Capitalism. The University of California Press in 2004 published titled “The American Gulag and then in 2005 published another book titled “The British Gulag”. The latter was written by a Harvard (no surprise there) Historian named Caroline Elkins. To equate these to Soviet Gulags is outrageous because the people in these prisons are there after being convicted in a court while those in the Soviet Prisons were commonly sent there without any trial or even informed of their crime.

During the 30’s and 40’s the Western Intellectuals couldn’t get enough of communism and George Bernard Shaw visited Russia in 1931 and wrote a panegyric upon his return – denying rumors at the time of mass starvation. In fact there was a systematic suppression of the growing evidence of mass starvation in Russia by the Western Press. The New York Times between 1921 and 1934 actively suppressed the truth about the Ukrainian famines and in 1932 won the Pulitzer Prize for a report that stated “any report of famine in the Ukraine was exaggerated or malignant propaganda, even thought the author (William Duranty) had been there and personally knew of the millions dying of starvation. These are the same people, the same intellectuals, and the same media that are still attempting to demonstrate the bankruptcy of capitalism and the evil empire of America.

Then came WW II which was the direct result of the failure of France and England to grasp their aspirations for territorial expansion and their crippling punishment of Germany. When it became obvious that the neither the French nor the British could withstand the onslaught of Germany, they turned to the United States of help. This actually marked the turning point in world history where the New World – the United States – became the world power – the hegemonic power – and Europe started its ongoing decline into irrelevance. But it was the awesome power of America – both military and industrial power – that ultimately defeated the Axis Powers of Japan, Germany, Italy, and the turncoat French.

The great tragedy in the aftermath of WW II turned out to be the creation of the United Nations. The League of Nations was thought to have failed because America failed to join so the belief was that if America joined the United Nations it was sure to succeed. It has been an unmitigated disaster for America. It has failed in every endeavor it has undertaken. It has not prevented any war, has not prevented or even alleviated poverty; it has become a highly corrupt and ineffectual organization whose only purpose seems to be to thwart America, while expecting America to pay for everything. Worse, the American Left as well as the leftists the world over seem to think that the UN has the moral authority over America so America should not act in its best interest without UN approval. The real irony is that the UN ignores every other country that acts unilaterally but castigates the US.

Another irony is that the political left continues to wail about the poverty in the US without actually understanding the realities. The reality is that being poor in America is a far cry from being poor anywhere else. In America 46% of the “poor” own their own homes, 72% have washing machines, 60% own microwave ovens, 92% have color TV’s, 76% have air conditioning, and 66% own one or more cars. Two thirds of poor households in America have two or more rooms per person and the average poor person in America has more living space than the average person in Paris. In spite of all of these advantages and contributions to the world, the American Intellectuals still view America as oppressive. However, I note they don’t move to Cuba, Russia, or even to North Korea so I guess America isn’t as oppressive as they maintain. Can you spell hypocrite?

Socialism Is Love

Hugo Chavez is clearly a closet Marxist but when asked why he was such an avid socialist he summed up socialism by describing it as “love”. “Socialism is Love” is perhaps the best description, in the fewest words, of socialism and communism that I have ever heard. If you consider the motives of many of the outspoken Liberals, Socialists, and even Marxists, you see that what they are seeking is to ensure that everyone shares in the wealth and advantages of society as a whole. Truly a worthwhile objective but then why have these altruistic philosophies failed in practice – or have they failed”

It seems clear today that Communism has failed. Lenin overthrew the Czar in 1917 and purged not just the aristocracy but the capitalists, the business owners, and even the farmers who owned land. Everything was taken over by the state and was to be run for the benefit of everyone. The very foundation of Marxism is expressed in this one phrase:

“From each according to his ability. To each according to his needs.”

This simple phrase indicates that everyone will work to their capacity and give to the state all of their output so the state can redistribute the wealth they generated according to the needs of everyone. In practice this means that if you can generate $100 but only require $10 to support yourself then the state returns $10 to you and distributes the remaining $90 according to the “needs” of others. Of course in practice it seems that members of the Communist Party had more needs than non-members and senior party members had even more needs. Intellectuals, artists, and professionals were generally viewed as parasites because they didn’t produce anything tangible and were treated accordingly.

The stark reality is that the left wing of society closed its collective eyes to the failure of Communism under Lenin and Stalin. The Western Intelligentsia continued to extol the glories of the Worker’s Paradise even when it was obvious that it was nothing short of a crude dictatorship that was systematically murdering thousands of people. This self-deception continued right up to and beyond the fall of the USSR. Castro came to power as a “socialist” whose objective was to overthrow the evil Dictatorship of Bautista with a free and democratic – albeit socialist – government. However, once Bautista was gone, the free and democratic government never materialized, instead Castro declared himself not just a “socialist” but a Marxist. Elections were held but the only party was the Communist Party and the only candidate Fidel. Gone was any semblance of freedom. This same scenario is being played out today in Venezuela by Hugo Chavez who describes himself as a “socialist” while he is rigging elections, nationalizing industries, and wrecking the economy in the his efforts to spread the wealth. Even Chavez himself hints that he is a Marxist, but few people in the media or on the left are willing to call him what he is – a Marxist Dictator cut from the Stalinist cloth.

Every communist regime from Lenin until now has been a disaster economically as well as politically. There has never been a Communist government voted into office and once in control no communist regime has ever been unseated electorally – all have been overthrown by violence. Fortunately few communist regimes remain but those that do are repressive and examples would be North Korea, Viet Nam, and Cuba. Of course many of the fellow travelers would point out that China is “communist” and very successful. However, modern China is no longer a “communist” nation but rather an updated version of Imperial China. The country has adopted many of the trappings of a capitalist society like entrepreneurship, profits, and individuality. Of course there is little freedom of the press, assembly, or speech, but then those things weren’t characteristics of Imperial China either. China has let the capitalist cat out of the bag and they will never be able to put it back, so China will slowly continue its evolution from Communism to Capitalism.

But what of those nations that are truly socialist – countries like France and Sweden? Aren’t they successful? Obviously it depends on how you measure success, but keeping in mind that one of the primary objectives of socialism is employment not profitability or productivity, then the socialist countries of Western Europe do not perform well.

The Gross Domestic Product per capita of France is 26% below that of the US, Sweden is 22%
And Germany is 38% below that of the United States. When viewed in terms of Gross Domestic Product per Employed Person the United States produces $81,024 per person while France produces $63,097, Sweden $63,401, and Germany $59,052 and these are countries where employment is a primary objective and the rationale for government control. But the unemployment rate in the US is at 4.5% while France and Germany have unemployment rates of 9% and Sweden 7%.

The obvious conclusion is that capitalism undoubtedly has greater swings in employment it has greater productivity and wealth generation than any of the socialist countries and ironically less unemployment. So while the socialists and Marxists show their “love” for the poor and downtrodden at the expense of the rich and successful, the overall result is a reduction in overall wealth and greater unemployment, not considering the flight of capital and brains as the more educated and aggressive members of their society flee their loving embrace. One is reminded of George Orwell’s “New Speak” where “Love is Hate”. This certainly seems to apply to Communism and Socialism.

Perspectives on Capitalism

Laissez Faire capitalism is actually Laissez Faire Trade and it is an ideal form of capitalism much as Communism is an ideal form of government or economics. When viewed in their pure form both are superior. There is no doubt that Communism is not only a pure form of Christianity but it is superior to virtually every other form of government, although Communism is probably more a philosophy of economics than government. In its pure form Communism would require very little government and would be closer to anarchy than democracy. Unfortunately in practice Communism has failed in every instance it has been tried because it cannot accommodate human nature. The result is rather than elevating mankind to a superior level it reduces everyone to the lowest level of the basest member and Laissez Faire Capitalism has the same problems.

In theory Laissez Faire Capitalism would bring prosperity to the world. It would be a place without unemployment where everyone was a productive member of society and the wealth would be shared by everyone on the basis of their contribution to the common good. In this theory there would be no government restrictions or controls over business or trade. Monopolies and cartels would be possible because these would increase productivity, efficiency, and generate more revenues to be shared by all either in the form of lower prices or dividends on their investments. Alas – in practice what we get is greed, higher prices, and reduced availability to the mass. There are two active cartels in the world today, OPEC and DeBeers, both keep tight control over product availability to maintain high prices, and these exist in economies that are controlled by governments, you can imagine the situation if there were no controls.

Communism failed because humans are frail creatures who succumb to greed, sloth, envy, and the other deadly sins. The same is true for Laissez Faire Capitalism. At the beginning of the Industrial Revolution trade and business was virtually unrestricted but instead of glorifying mankind it highlighted the worst characteristics of mankind. This was the period of the Robber Barons, the entrepreneurs who formed monopolies to restrict supply and thus raise prices. The drive to profit led to a destruction of the environment and the death of water ways, the extermination of species, child labor, unsafe working conditions, and corruption in government, slums, and disease. Eventually most of these actions came under government scrutiny and eventually laws were introduced to control or eliminate them – over the resistance of the entrepreneurs. The result is what we now have which is a form of controlled capitalism but a far cry from Laissez Faire Capitalism.

Perhaps the foremost proponent of Capitalism or one of the most influential, has been Ayn Rand and her various novels, which are actually expositions of her philosophy of self-determination. Essentially Rand’s position is that the government has no right to dictate or govern your actions as long as those actions don’t harm others. However her characters are flawed and their actions are sometimes illegal. Roark commits arson because his work has been compromised and he feels it within his right to destroy what he created regardless of who owns it or who paid for it. This is how she constructs the situation in which to mount her argument regarding self-determination, but this is a literary fiction and must be viewed through the lens of reality. In practice what she is saying is that anyone who has created or produced anything retains ownership rights eternally. This means that if you modify your automobile the manufacturer has the right to confiscate it and destroy it. If you add rooms or change the roof of your house the architect or builder has the right to prevent you. In essence Rand’s view is extreme and untenable because it violates the law at many levels, but her essential philosophy is that a person should stick to their principles regardless of the cost. Unfortunately, like communism her views are extreme and to a great extent unrealistic because they are untenable in the real world.

At a more fundamental level Rand makes a further point and that is that the strong cannot be forced to support the weak. If a person is a ne’er-do-well or an outright failure the government has no right to force an individual through taxation or other means to support or help that person. Each person should rise and fall based on their own actions and the strong should not be coerced into helping the weak. This is a common thread through all of her work and the foundation of many extreme right wing beliefs. This is the essential position taken by Bastiat in his 1830 paper “The Law”.

What is missing or at least what is minimized is the dichotomy of law versus morality. Essentially the position held by Rand is that the government has no right to coerce--through the law – an individual to support someone else who is less capable, less industrious, less intelligent, or simply lazy. In effect the collective authority has no right to enforce morality or obligate a person to a moral standard. This coercion is via taxation and social programs but in reading Rand’s novels she takes this coercion a step further and maintains that no one has the right to demand anything from an individual and that an individual retains his rights over everything he produces. Clearly this is an extreme position and falls outside of any form of capitalism or even reality. But this isn’t the most egregious flaw in Rand’s philosophy or in Laissez Faire Capitalism.

The flaw is the total lack of any morality or moral obligation on the part of the individual. The concept of Noblesse Oblige is ignored. While a person should establish and adhere to their own principles (within the law) they also must establish a moral code that acknowledges their obligation to society and to others. The strong and the powerful have a personal obligation to care for those under their control or influence. The crux of the argument is that the government or some central authority does not have the right to force the individual into fulfilling this moral obligation, but that same individual should have the moral fiber to voluntarily assume these responsibilities and in practice most do.

Theoretical positions must always viewed with some degree of skepticism because theories have the unfortunate history of failing in practice. More than one philosopher has postulated Utopia and every attempt to implement these philosophies has failed. This doesn’t mean these are bad philosophies it just means we should only take those portions that can realistically be applied and ignore the rest. Hence we have a capitalist society but not a laissez faire one.

The Wealth of Nations

For some people the purpose of government is to redistribute the wealth so that all can share equally. This of course was the foundation of that cornerstone of Marxism “From each according to his abilities, and to each according to his needs.” Of course this didn’t work well in practice because very quickly those with ability stopped producing and joined the ranks of those in need. The result was the grinding poverty, hunger, and alcoholism that characterized the Soviet Union. However the failure of Marxism has not deterred those “progressives” who feel it is their moral duty to take the earned wealth of the few and distribute it to the poor. These programs were first introduced by Robin Hood in the 12th Century and not unexpectedly were hugely popular with poor but less popular with those who were being robbed. Since that time the Robin Hoods have abandoned their weapons and become politicians who now use the power of government to legally take the wealth of the industrious and distribute it to the “needy”.

Those individuals who have resisted this governmental robbery have been labeled “filthy capitalists” who exploit the poor for profit. Of course “poor” is a relative term, much like “rich” but those who feel they must provide for the “poor” never actually want to define precisely who is “poor” and who is “rich”. So precisely who is “rich?” In a shocking study conducted by the Helsinki based World Institute for Development Economics Research of United Nations, it was discovered that the world’s wealth is more unequal than the world distribution of income. In this study wealth was viewed as “assets minus debts”. On this basis, assets of $2.200 per adult was enough to place a household in the top half of world wealth and assets of $61,000 would place the household in the top 10%. For those with assets of $500,000 or more, they are in the top 1% of the world’s wealthiest people, which equates to approximately 37 million people, not exactly an exclusive club.

What is missing from this study is any correlation between the government and the wealth of individuals. The collective wealth of those countries with Socialist Governments amounts to 23%:

Germany == 4%
Italy ==4%
France == 5%
Britain == 6%
Netherlands == 2%
Canada == 2%
Spain == 1%
Switzerland == 1%

However, those countries with a capitalist economy account for 65% of the top 1% of the wealthy:

United States == 37%
Japan == 27%
Taiwan == 1%

It is worth noting that both Japan and Taiwan are small countries with relatively small populations, yet these countries account for more individual wealth than France, Germany, Italy, and Britain combined. Of course the socialists tax profits at confiscatory rates and in general consider it the responsibility of government to redistribute the wealth and to assure all citizens are comfortable. This comfort also translates into lower productivity because the attitude of these socialists is that work is the means to pleasure. The United States and Japan have the highest productivity in the world and control 64% of the total 1% of world wealth and the prevailing attitude is that work is pleasure, yet both countries have considerable tax requirements.

Naturally this opens the argument regarding the “quality” of life. The Europeans are more relaxed, have more fun, and don’t work as hard as the Americans and Japanese. But is that really true? Do Americans work for money like the Europeans or do they work for pleasure? If they work for pleasure then they are having as much fun as the Europeans and are living considerably better. Americans have greater material wealth in the form of assets – which equates to single family homes unlike Europeans who generally live in apartments. The list of course is virtually endless but the end result is that the Europeans have fewer possessions but more vacations. They have high unemployment but the government subsidizes the poor through the high tax burden, which penalizes the industrious and leaves them little money to invest or save – if they are to enjoy their vacations.

It seems that the lesson here is that the capitalist countries have higher productivity, greater wealth, lower unemployment, and a better life in general than those socialist countries who hold themselves up as superior but in reality have considerably less other than vacations.

Is McDonald's an Imperial Power

Classic imperialism is defined as a policy of extending control or authority over foreign entities or countries as a means of acquisition and maintenance of empires. Usually this applied to the direct territorial conquest of these entities or countries. This form of imperialism describes the Roman and Persian Empires as well as the European Empires of the 19th Century. These empires were essentially the expansionist adventures by stronger nations over weaker ones primarily for the purpose of monetary gain via taxes or enslavement. None of these empires proved stable or enduring although to some extent they did have a residual cultural influence.

The term “Imperialism” was actually coined in the mid-1800’s to reflect the expansionist policies of the European countries – primarily France and England. It was argued by Lenin as well as other anti-capitalists that capitalism induced imperialism because these capitalist countries had to find new markets for their goods and new sources for the needed raw materials. However, this argument rings hollow because no demonstration is offered showing that capitalism is the root cause of expansionist policies. Even if these countries had not been capitalist but instead socialist, communist, or even some other alternative, could they have grown and prospered without looking externally for resources and markets? The historical fact is that the greatest of the Communist Regimes, founded by Lenin was imperialistic and became the USSR, so the logical conclusion is that capitalism is not the driver of imperialism or expansionist policies.

More recently it has been argued by Marxist scholars who are unwilling or incapable of abandoning their view that capitalism is the root of all evil, that capitalistic international trade and banking is the driver of Imperialism. This argument seems to be mounted in order to forgive the USSR its demonstrated imperialism. Unfortunately it seems the USSR fragmented but prospered once it abandoned the Marxist policies of central planning and government control and introduced capitalism. Now it can be argued that it is capitalism that drives political freedom as well as economic vitality. This has been illustrated more recently as the Peoples Republic of China moves increasingly to a capital orientation. In fact the current PRC more closely resembles the old Imperial China than it does the People’s Paradise that the Marxist apologists would have you believe.

Furthermore, if international trade is an indicator of imperialism then the most imperialistic nation on the planet is the PRC. They manufacture and export more goods than they import and they dominate the world markets. This view of international market expansion is true of other nations as well so international trade per se does not seem to be a good indicator of either imperialism or expansionism. So this brings us to the issue of the World Trade Organization and the impact open markets have on the international community. Products are financed by country A, manufactured in country B, and sold in countries C and D, by country A. The implication is that country A is exploiting the workers in country B by paying wages lower than they would have paid in Country A and that by selling their products in countries C and D they are denying work to the people in those countries. Obviously the inference is that had not country A sold their products in these countries someone would have produced the same product locally. Unfortunately this isn’t quite how it works. Work is being generated in all of these countries because people must organize and distribute these products. The focus is on the manufacturing rather than on the selling, distribution, or the law of supply and demand. It is also worth noting that the greatest beneficiary of these trade policies has been the PRC and third world countries whose revenues have increased while the trade deficit of the most capitalist country in the world has increased. And this brings us to the nub of the problem and that is the growing Americanization of the world. Those who feel that America is to blame for the world’s ills, have now coined a new version of imperialism and that is “Cultural Imperialism”

This form of imperialism is associated with America primarily although both Russia and China have not only practiced classic imperialism but have also forced their culture onto other countries who they have occupied. However, even though these countries have received some condemnation for these actions, they have largely been ignored by the international community while the United States is viewed as the epitome of an imperialistic nation. France in particular has adopted strong measures against “Americanization” and much of the Islamic violence is being justified on the basis of resisting the erosion of Islamic values by America’s cultural imperialism.

Clearly the US is not a classic imperialist nation and this is evidenced by the withdrawal of American forces from every country they have had to liberate from invaders and this includes France as well as Haiti and it can be argued that the Haitians would be a great deal better off under American control. Instead this charge against the US rests on the spread of American culture through the internet, Television, Cinema, and of course food, with McDonalds being the visible manifestation of American domination. American English has become the lingua franca of the world. Virtually everyone in the world speaks English and protesters write their signs of protest in English so when their protests are broadcast via satellite television everyone will be able to read them. After all not many people can read Chinese, Swahili, or Urdu, but virtually everyone can read English. Because American television and movies are seen worldwide, American customs and styles are in great demand. Hence you see people in some very remote places wearing sweatshirts and T-shirts carrying the names of American Universities and wearing baseball caps. Usually these products are not manufactured in the United States and may not even be sold by an American company, but they represent America and the desire by others to be “American”, which is actually a state-of-mind”.

Then of course we have McDonalds and Coca Cola who represent the physical imperialism of America. These products are in great demand and the largest McDonalds in the world is in Russia. Obviously the local people want these products or these companies would simply close up shop and leave, but these companies are growing and expanding everywhere. What is not noted is that they also create jobs in the host country and generate revenues via taxes. Since these companies as well as Burger King, Starbucks, Microsoft, and others are in great demand and expanding with demand we can conclude that the people do not view America as either evil or imperialistic, so who does? Certainly the French government sees America as imperialist and is fighting a losing battle against the “Americanization” of the French Language. American English – like America itself is a polyglot – where words from virtually every language in the world are simply adopted and used which has made English the most subtle and expressive language in the world. The French government wants to keep French “pure” but that is impossible because they cannot compete with the sheer volume of new words. But the French are rather silly and don’t really represent any serious threat to the US.

The greatest threat to America comes from Islam and it is the spread of American culture and ideals which drive their violence toward America. America is called the “Great Satan” which is a term generally misunderstood by the West. Satan is the tempter – the evil one who corrupts and leads souls astray and in this context it is easy to see how America can be viewed as the Great Satan. We have freedoms unheard of in other parts of the world and these are viewed and demonstrated in television and movies everyday. We have great wealth and this is demonstrated as well and it is these things that motivate others who covet a better life. Virtually everything – good and bad – is available in America and it is freedom to pursue individual happiness that sets America apart and drives the man-in-the-street to be more “American”. So it isn’t the average citizen who sees America as Imperialistic but rather it is the power elite and the religious leaders who oppose America and who accuse America of being imperialistic. The people want what they see America has and it is this demand that drives the demand for American culture, not some deliberate effort by America to obliterate the local culture. In fact, this resistance to Americanization is simply an example of Cultural Fascism where the local governments are using force both directly and indirectly to thwart the desires of their people.

So while Russia and China practiced forced cultural imperialism, America’s cultural domination is not via any government policy of the United States but is the result of the desires of the local populace to have the freedoms and wealth they see in the US. So is Ronald McDonald an imperialist? It seems a better question is “can imperialism be self-induced”? If people are voluntarily seeking to adopt American products and culture that hardly qualifies as imperialistic while the active resistance of their governments to their desire to be more American is cultural fascism.

The Decline and Fall of Reason

The State of Michigan is declining in virtually every way and certainly a great many more people are moving out than moving in. The auto industry – as represented by Ford, GM, and Chrysler – is sinking as well. The quality of the schools in appalling and the scores on standardized tests are poor and got even worse after the difficulty of the test was reduced. The state is strongly Democratic, highly taxed, and heavily unionized, but no one seems to connect the dots between these facts and the state of decline. The Reign of Reason seems to be in jeopardy – at least in Michigan, but I suspect it is throughout the US – if Howard (Mad Dog) Dean and Senator John Kerry are any example of what passes for rational thought.

The UAW has virtually built a socialist society with the auto industry so the workers absolutely believe that they are entitled to free healthcare, high salaries, full employment, low skill requirements, and of course as little work as possible. This socialist attitude has been brought into the population as a whole and is propagated by the teachers who are fully unionized. These unionized teachers are highly paid – among some of the highest paid in the country but are demanding more money. Of course they like to compare their salaries on a per annum basis rather than the per diem basis which permits a more realistic comparison. On a per diem basis teachers in Michigan are being paid wages equivalent to Computer Programmers and Engineers. But salary is only part of the problem because these unionized teachers are also strongly oriented to socialism and regularly indoctrinate their students about the virtues of socialism and the evils of capitalism. Not only that they resist any effort to measure their productivity or quality of output. Within the European socialist governments the objective is employment not productivity and this attitude seems to have infected the UAW and the other Unions in the US.

The reality is that Socialism – like Marxism – does not work. It drains the economy, stifles creativity, and certainly curtails capital investment. Europe, especially France, is dominated by Socialist governments, which are staggering under the weight of their welfare programs. In most of these countries there is a large and growing population of the unemployed, some of whom would like to work but a great many more find that they can live well on the government dole. This is a class of parasites that --like all parasites -- is slowly killing the host. These welfare programs have forced the EU to continuously reduce its defense spending to the point that their military capability is seriously impaired. Although they are strongly Anti-American they are totally dependent on the US for their defense. The fact that they can’t connect the dots between their anti-American actions and their own security is simply another illustration of the decline of reason.

But the evidence that not only is critical thinking disappearing but even the decline in rational thought is all about us. Consider science, which from where I sit is not only in decline it is virtually disappearing. The culprit is “Epidemiology” which is literally the study of epidemics, how they spread and their impact on large groups of people. Of course Epidemiology itself is merely the application of statistical analysis of a data sample, which is then projected to the larger group. However, for anyone who has actually used statistics or analyzed data for any purpose the accuracy of any analysis is suspect. When the analysis is based on an a priori assumption any reliability the analysis might have had is now dramatically reduced because only the data that supports the a priori position is considered. This is the basis for the conclusion that everything from Alar to charcoal to tobacco causes cancer. There is absolutely no science behind any of these conclusions, yet the media reports them as fact and the great majority of people accepts the conclusions as true and acts accordingly. Where is the critical thinking or rational thought?

The famous scientist Carl Sagan was accepted by PBS and thus by the public as a true scientist, when in actual fact he was a shameless self-promoter who hounded those with whom he disagreed, especially Immanuel Velikovsky who postulated several theories that were plausible but counter to the popular ideas of the time. Velikovsky has not been proven right or wrong but then neither have the theories supported by Sagan. The fact is that the popular science crowd has stated things as fact when in reality much of what they have said is open to speculation or even downright wrong. The dinosaurs were killed off by a huge meteor that changed the Earths climate was something that Sagan stated as fact when it was a theory -- certainly a plausible theory but a theory nonetheless and not the fact as reported. There is growing evidence that the Earth has indeed been struck by massive meteors but the connection between that event and the disappearance of the dinosaurs is speculative and does not address the issue that every geological epoch has ended with catastrophic mountain building, including the Cretaceous, which spelled the end of the dinosaurs .

Then we have the debacle over DDT, which has been banned from production on the basis of a book written by Rachel Carson titled “Silent Spring”. The fact that Carson was dying of cancer and was personally convinced that pesticides were responsible was never questioned at the time. Instead the usual gaggle of environmentalists – acting on nothing but emotion – succeeded in having DDT banned worldwide. Since that time all of Carson’s assumptions have been disproven but the damage has been done, malaria has once again become the scourge of Africa. . No critical thinking was employed and certainly no empirical evidence was ever offered to support her claims. The reality is that NO ONE knows precisely what causes cancer, but we DO know what causes malaria, which is carried by mosquitoes that are very effectively killed by DDT. The thinking among the environmentalists seems to be that a bird is more precious than a human life. But no one seems willing to question this, which seems to be another illustration that critical thinking and rational thought is in retreat.

Of course the most outrageous position taken by the popular science crowd and academia in general is Evolution. Evolution is a THEORY and with the advance of paleontology, not a very sturdy one. None of the tests stated by Darwin as necessary for proof have been met and current paleontologists think they will never be met. The reality is that the very foundation for Evolution is crumbling and the evidence is piling up that it is probably partially wrong if not totally wrong. In fact Darwin’s book “The Origin of Species” is still taught without any critical examination even though ironically the book doesn’t describe or address the origin of species. No transitional life forms have ever been found and several eminent paleontologists (e.g. Stephen Gould) have stated that none will ever be found. Even the vaunted example of the Eohippus has turned out to be false and the fossil record incorrect. Nevertheless, many scientists, the media, and certainly academia continue to state Evolution as fact, not as a theory, and worse – these people won’t even consider any alternative – more evidence of the death of science and the decline of reason.

Recently the United States has undergone a virtual epidemic of Diabetes. The media and the medical community are all in a dither over this and the usual Nannies are calling for all sorts of government intervention or action to correct this “threat to public health”. The Pharmaceutical companies are cranking out pills by the zillion in order to meet this threat. The reality is that the National Institute of Health lowered the threshold for Diabetes from 200 to 100, which overnight plunged the country into this “health crisis”. Of course the drug companies are cleaning up and no one in the media or in the medical community seems concerned enough to criticize or even investigate the situation. Even if you don't think science and critical thinking are in retreat at the very least you must admit that dot connection is certainly in decline.

Of course this brings us to the issue of Cholesterol and heart disease. The average untreated cholesterol for white males has historically been between 220 and 240 and it continues at that level today. Gradually the National Institute of Health has lowered the bar – first to 180 and now to some where around 100. The only correlation between heart disease and cholesterol has been statistical and no empirical connection has been established. If anything the body may self-regulate cholesterol, but that isn’t the point. The point is that once again as the desired level of Cholesterol drops the number of people taking the cholesterol lowering drugs increases as does the profits of the drug companies. That statistical correlation seems to go unreported and critical thinking doesn’t seem to apply to these health issues. Of course the proponents of these drugs point out that the life span of the average American continues to grow. I suppose the ultimate goal is to prevent cancer and heart disease, the two leading causes of death. Once that is accomplished I guess we will all have to resort to suicide or simply euthanize the old.