Tuesday, December 27, 2011

Tibor Machan answers the common "What about the poor?" question

The following dialogue is from Mr. Machan's appearance in William F. Buckley's public affairs show "The Firing Line".

MR. VAN DEN HAAG: [...] Suppose there are a number of orphans in the society. They never had an opportunity to provide for their future; they were orhpaned at age 2. They can obviously not provide for themselves. And now let me make this assumption, which is not that unreasonable: For one reason or another private charity is not sufficient, is not forthcoming to take care of them. [...] Are you maintaining that since you are bitterly opposed to government intervention, these orphans should be left to starve? [...]

MR. MACHAN: Yes, as a matter of fact.

MR. VAN DEN HAAG: Thank you. Now--

MR. MACHAN: Before you continue--because obviously this sounds like a, you know, great touche--now let me just respond a little bit. Almost any political system can be asked that kind of a question with the stipulations of the sort that you made. For example, the Federal Communications Commission or the FTC or the Health and Welfare Department goes bankrupt; it hasn't got any money. I stipulate that. Now, let's see how we help unwed mothers. We can't and they starve. So we have a system in the welfare state very similar to the one that you've just outlined about a libertarian society. I think both of them are totally unrealistic, but nevertheless, if you do push me that way, that's the case.

Saturday, October 29, 2011

Favorite examples of statist cognitive dissonance

On Regulation

Leftist: Corporations own the government

Libertarian: I agree. But the State is what enables corporations to be anti-competitive and externalize costs onto the public. Hence should decrease the power of the State by eliminating taxes and regulations.

Leftist: But corporations are evil and should be regulated.

Libertarian: By what?

Leftist: The Government!!!

On Taxes and George Bush Jr.

Leftist: The greedy rich don’t pay their fair share. Tax them more!

Libertarian: The rich pay the most taxes in America. Close to half of Americans are net beneficiaries of the State and don’t pay taxes at all.

Leftist: Nonsense. Inequality increased under Bush with his tax cuts!

Libertarian: Bush Jr. also added 81,000 pages of new regulations in the federal register and increased government spending so much that it almost doubled the US national debt. Sounds like a president you should praise.

Leftist: Bush was evil. He was pro-rich. Pro-greed.

Libertarian: So you don’t want the Bush administration to have more MONEY and POWER?

Leftist: No.

Libertarian: Then you should support the Bush tax cuts.

Leftist: Huh? What are you talking about? Tax the greedy rich!!!

On Outsourcing

1. Leftists complain about corporations 'exploiting' workers.

2. Then they sic the minimum wage, regulations, and taxes on corporations.

3. Corporations respond by taking their production facilities to China.

4. Leftists then complain that corporations aren't 'exploiting' workers in the US anymore.

Saturday, October 22, 2011

Occupy Wall Street commentary

The Left and what Occupy Wall Street is all about

It looks like the Occupy Wall Street movement has gone global. Like most shows of mass activism, it indicates that the masses have reached the threshold of their tolerance for the police state. The protests are motivated by instinct; it has little to do with a definite aim to establish democracy or anything that the Left sensationalizes this movement to be. The people are simply fed up with increasing food and gas prices and high unemployment rates, even if they don’t have the remotest idea of the root cause. The role of the Left in this picture is in brewing buckets of envy and resentment towards a vague concept of the “greedy capitalist class” or as they like to call it, the “1%”, as is their standard strategy. Class warfare, though, provides the best conditions for a dictatorship to rise. To quote Walter Williams,

For politicians, it's another story: Demonize people whose power you want to usurp. That's the typical way totalitarians gain power. They give the masses someone to hate. In 18th-century France, it was Maximilien Robespierre's promoting hatred of the aristocracy that was the key to his acquiring more dictatorial power than the aristocracy had ever had. In the 20th century, the communists gained power by promoting public hatred of the czars and capitalists. In Germany, Adolf Hitler gained power by promoting hatred of Jews and Bolsheviks. In each case, the power gained led to greater misery and bloodshed than anything the old regime could have done.

Here’s something I found in a Youtube video to characterize the far leftists in OWS crowd,

They're practically begging for a new Hitler.

These protests and these demands carry with them an implication that is deeply horrifying. That being, that the most populous ideological base opposed to the entrenched fascism of the West, is radical fascism.

Let that sink in. The most widespread objection against the most profoundly interventionist economy since the Blat, is that it isn't statist enough.

Let's just all go down to the Treasury, donate what's left of our savings, children and vital organs, and get this all over with.

Peter Schiff speaks with Occupy Wall Street protesters

I saw this video of Peter Schiff discussing with OWS protesters and found common intellectual errors among the protesters.

Problem is structural, not personal

- Protesting ‘corporate greed’ implies that the problem is one of personal moral values. It’s not. I don’t care what motivates entrepreneurs to get up in the morning; all I know is that if they didn’t, I couldn’t buy any groceries. Blaming the problem on ‘greed’ is like blaming airplane crashes on gravity. Inequality is the biggest red herring in socio-political discussions. Egalitarian sentiments are really residual elements from our tribal past when wealth was more or less collectively produced and distributed. The emotion of envy regulated the amounts that each individual consumed for fear of retribution from the tribe. Today, folk/tribal economics doesn’t apply.

- The market economy, insofar as it is unhampered, has made it possible for individuals to earn income without having to personally associate with others. Trade results in win-win situations even though the participants may have incompatible personalities and never be friends. Also, by expanding our social commercial networks, the market economy provides the opportunity to expand our personal connections as well.

- The problem is structural. There’s a saying that goes “blame the game, not the players”.

Incidental versus essential features of economic depressions

There has been a lot of coverage about ‘derivatives’ in the news. These take the form of mortgage backed securities, credit default swaps, collateralized debt obligations, among others. “Derivatives” are a part of the standard narrative of “deregulation” and “lassiez faire capitalism in the United States” that we receive from the mainstream media on culpability for the current depression. The Left, of course, gullibly accepts the standard narrative presented by the same corporate-state media they claim to oppose. In that sense, they perfectly fit the description of useful idiots.

Financial derivatives, though, are only incidental features of the depression. The current depression is the inevitable result of the fractional reserve banking system which is propped up by the Federal Reserve. Artificially low interest rates cause mal-investment and overconsumption, manifested in the boom, which ends in a bust. The damage (mal-investment) is done in the boom phase and the bust is the painful, albeit necessary, adjustment phase. But the government re-inflates the bubble by printing more money and bailing out the banks.

Where do derivatives fit into this? Derivatives are just the vessels that concentrate all the artificial credit that the Federal Reserve created. If derivatives were prohibited by government decree (unenforceable but let’s just assume for argument’s sake), the artificial credit would still be there and hence the mal-investment would still occur. The current depression would have still occurred insofar as borrowing and lending of money is practiced, that is, fiat money which is continuously printed by the central bank.

This also means that the partial repeal of Glass Steagall had nothing to do with the depression. Anyone blaming the depression on the partial repeal of Glass Steagall is committing a red herring fallacy.


A causal understanding of the problem is important. Protesting the symptoms of the problem will get you nowhere. You need to eliminate the cause of the problem. For that, you need to learn economics and the nature of the power of the State in relation to money.

Lastly, belief that the State can somehow be reformed so it can be controlled by "We the People" must be shunned. A concept of "society" or "the people" that is independent of each individual that consists it is a false concept. To quote Ayn Rand,

"This meant that “society” may do anything it pleases, since “the good” is whatever it chooses to do because it chooses to do it. And—since there is no such entity as “society,” since society is only a number of individual men—this meant that some men (the majority or any gang that claims to be its spokesman) are ethically entitled to pursue any whims (or any atrocities) they desire to pursue, while other men are ethically obliged to spend their lives in the service of that gang’s desires."

Hyenas cannot be changed into lambs and politicians who worked their whole lives in attaining power will not suddenly give up that power.

Thursday, August 4, 2011

Misconception: It is important for us to understand the causes of poverty

Dr. Madsen Pirie of the Adam Smith Institute gives an interesting perspective in his book Freedom101 which can be read online

No. There are no causes of poverty. It is the rest state, that which
happens when you don't do anything. If you want to experience
poverty, just do nothing and it will come. To ask what causes
poverty is like asking what causes cold in the universe; it is the
absence of energy. Similarly poverty is the absence of wealth. For
most of humanity's existence on this planet, poverty has been the
norm, the natural condition. People hunted to survive or lived by
subsistence farming, and they were poor. In some parts of the world
this is still the case.
The unusual condition is wealth. This is what changes things. We
should ask what are the causes of wealth and try to recreate and
reproduce them. When you ask the wrong question, “what causes
poverty?” you end up with wrong answers. People fall into the trap
of thinking that the wealth of some causes the poverty in others, as if
there were a fixed amount of wealth in the world and that rich
people had seized too large a share of it.
In fact wealth is created, and it is only during the last 250 years or so
that we have found how to do this on the grand scale. Wealth is
created by production and enterprise, by the specialization of labour,
and most of all it is created by exchange. Instead of trying to take
wealth away from rich people and redistribute it, we should be
seeking to implement the conditions in which as many people as
possible can join in the wealth-creating process for themselves.
Poor countries will not become wealthier because we give them
some of our riches. They will climb out of poverty the same way we
did, by producing and selling goods and services and by creating
wealth in the process.

Tuesday, May 17, 2011

Why Democracy Doesn't Work: A Short Summary

excerpted article from Ryan Faulk

This is just a quick post reiterating why democracy doesn’t work:

1. Rational Ignorance. Because you only have one vote and won’t influence an election, it is rational for most people to not spend time researching the issues. Attempts to curb this problem could be to require a poll test, but that is full of obvious problems. Democracy depends on voters being informed on issues that they cannot have an impact on, which is to say democracy depends on voters being irrational.

2. Package deals. When you buy things from a store, you get to be a la carte to a great degree. You don’t have to buy a complete kitchen set, you can buy the refrigerator and the microwave separately. The specificity depends on demand - few care to buy each component of a refrigerator separately, and so that stuff is harder to find.

With democracy, your only choice is between platforms that have a shot at winning, and this is usually only two or three and encompasses too many issues. Maybe you want school spending to be cut, and want unemployment insurance to be cut, but each candidate or party is only willing to cut one or the other, so you don’t get to truly vote your preference.

3. Voting wars. Group A votes itself the resources of group B. Simple enough. Elections aren’t really a competition of ideas, because trying to get group A to vote for not getting free stuff from group B is not a contest, it’s begging a thief. Humans are moral animals, and so theft-rationalization industries develop, which rationalize the theft with marxoid economic theories, appeals to racial identity and collective intergenerational debt, and various other obtuse and roundabout justifications.

One of these rationalizations is to call opponents of democracy social darwinists. They support an evolutionary environment that enables the irresponsible reproduction of their voting blocs at the expense of the responsible reproduction of their opponents, but you are to believe that that is NOT social darwinism, but when you advocate an environment that enables the reverse, that’s social darwinism. So social darwinism = an evolutionary environment that grants no favoritism to irresponsible reproduction of the takers.

There is also the problem of the identity-democrat, and I don’t necessarily mean advocate of the US democrat party, though that correlation high. The identity-democrat fancies himself an advocate of the little guy, and so masochistically votes for wealth redistribution schemes that harm him. The identity-democrats tend to be “progressive” on social issues and white, while the taker-democrats tend to be more conservative and black and brown (they are NOT “liberals”, they are racial national socialists).

4. Concentrated benefits, diffuse costs. When you cut unemployment insurance, you are no longer giving a concentrated group of people the money they need to survive, and many of them will die. This makes them extremely motivated in opposing cuts. Whereas the people paying for unemployment benefits won’t die from paying a little bit more.

The results of democracy are manifest - constant increases in spending, with anti-spending movements being flash-in-the-pan spoiler operations. The Taxed Enough Already (TEA) party has not achieved any of their goals of cutting spending, and they most certainly will not since the incentives of democracy are against it, as are many of the beneficiaries of democracy-enabled theft.

One should place democracy in the same ideological zone as communism, because the underlying assumption of democracy IS communism, because it assumes things are already communally owned and thus can be voted on. If they weren’t communally owned, if an individual really owned what is called “his home” and “his money”, then you couldn’t just vote to take any of it away to give it to people who don’t have value.

(That’s another reason many are militantly pro-democracy: without it, nobody would care what they said or thought. Democracy is 1 person = 1 vote, giving worthless people a level of influence they couldn’t achieve by honest means.)

Democracy is a form of communism. And the US is a representative democracy. My prediction is that democracy will be remembered as a form of communism, and just as we wonder how the USSR lasted as long as it did under the impossible regime of explicit communism, people will marvel at how the USA lasted as long as it did under a regime of implicit communism. This is easy to understand, but difficult for most to swallow.

One last point is that democracy is inconsistent. Man supposedly needs a state because if left to his own devices it’ll be Mad Max, yet this state is to be controlled either through popularity contests (representative democracy) or man’s own judgement on abstract issues which he has no rational incentive to properly research (direct democracy). Man is fallen so needs a state, but this state is to be controlled by man? Monarchy is at least consistent in this regard.

Wednesday, May 4, 2011

How high should the wage hike be?

Political organization, or more precisely, mob intimidation, cannot change the laws of economics but only make it harder for employers to keep their business running. Raising wages will in the long run reduce job opportunities and increase the price of consumer goods. The poor stand more to lose since they are on fixed income and spend a large portion of it on consumer goods. Notice also that it is always the employers who are at fault while the government itself, which is the source of the problem, is never questioned

I have already argued in a previous article that wages are primarily determined by productivity and not by the discretion of the employer. Generosity or good faith of the employer has very little to do with it. If the laborers get wages which are higher than what all of them can produce, then the employer will either have to pass the additional labor costs to the consumer in the form of higher prices or file bankruptcy.

The minimum wage laws also have glaring contradictions. The labor code allows for exceptions. Physically and mentally impaired individuals as well as apprentices and learners can be paid at least 75% of the minimum wage. Firms employing less than ten workers are exempt from paying minimum wages. If you ask why certain exceptions are made, the answer will be based on economics. But then that only defeats the purpose of the minimum wage law in seeking to reverse the laws of economics. If we must defer to economics in the case of the physically disabled workers, why not defer to economics when it comes to workers in general? After all, economics applies at all times and in all places.

Arguments against minimum wage laws are not only theoretical, as prices of consumer goods increase every time a wage hike is ordered by the Philippine government.

Some don't buy into the argument that businesses would close if minimum wage rates were increased. They charge hypocrisy on business owners who take their families on expensive vacations while not giving workers enough to eat. This is of course an exaggerated claim. If a worker's wage is not enough for him to eat, then why is he still working in that same job in the first place? It is ridiculous to claim that workers don't have enough to eat when a lot of them already support many children with that meager wage, but that is a topic for another discussion. Just because an employer is rich doesn't mean he must pay wages at more than the worker's productivity level. The employer could have gotten the vacation money from saved profits in the past. Why should the employer use those saved profits to subsidize a business which is made unprofitable by the minimum wage? Why should the employer enter into an employment agreement where he has nothing to gain? It really redounds to an advocacy of the Marxist exploitation theory, whether or not people are aware of it. Pro-labor advocates think that profits are undeserved because it is taken from labor's 'full value'. Fortunately, Marxist fallacies have been refuted by economists of Marx's own generation.

To those who think labor has a right to a share in profits, I quote from capitalism.org

"Why are the laborers who demand a share in the capitalist's profits, silent in demanding their "share" when he incurs losses? Why don't they cry out and demand that they get to receive a share in those losses? If labor is the sole cause of all profit, then is it not also the sole cause of all losses? A moments reflection will point out that laborers are only responsible for their job description -- they are not directly responsible for the losses of a business -- and that the cause of an enterprise's losses lies essentially with the owner, as do the profits."

Then there's the bargaining power argument. There are more workers than work, they say, and the workers have to accept lower than productivity wages because the employer can just hire somebody equally desperate for a job. The premise of this claim is palpably false as it does not recognize the primordial fact of scarcity, which is the whole basis for the study of economics. There is always going to be jobs available because humans have unlimited desires and limited means to meet those desires. Bargaining power is actually dependent on productivity. The greater the gap between a worker's productivity level and his wage, the greater the risk that that worker will be hired by a firm offering a higher wage. Competition among employers bids up the price of labor to the point where it approximates productivity levels. If one disdains the difference in 'bargaining power' between employers and employees, then one must place the blame on anti-competitive government interventions such as permits, regulations and anti-trust laws.

The laws of economics cannot be changed by passing legislation. The only way to deal with the primordial fact of scarcity is through entrepreneurial discovery of more efficient ways of allocating resources. This means allowing the price mechanism to work and the profit and loss system that follows it. In hard times such as these, we need markets more than ever.

Monday, May 2, 2011

The idiocy of American Nationalism and the Corrupt Philippine Police and Military

It’s disgusting to see so many people praising the US government for its assassination of Osama bin Laden. Turning on Fox News reveals that national delusion is at an all time high in the US with footage of the ignorant American sheep waving the American flag in celebration of their government’s act of murder.

The enemy is not some bearded men carrying AK-47s living in caves in some backwater country. The real enemy of the American people is its government, which draws awesome power from the Federal Reserve System. Empires are always destroyed from the inside, when its people become infantilized and made dependent on the government, when the specter of total fiscal and monetary socialism looms on the horizon.

Here in the Philippines the government is propping up security measures to ward off possible retaliation from Muslim elements connected to Bin Laden. As a result, more money will go to the most corrupt bureaucracies in the Philippines, namely the police and military. The Philippines shouldn’t even be in this mess if its government did not enter into entangling alliances with the US government.

Here is a blog post in LewRockwell.com that says a lot about this stupid propaganda.

Every time the US waves the bloody shirt of Osama, it has a purpose. Obama has been drastically weakened in recent months, and the US has been hurt by murdering Gadaffi’s family members. The mass-killing in Afghanistan, Iraq, Pakistan, etc. is not going well. The economy is a wreck. Dollar debasement is speeding up. Gasoline prices are high. So…tah-dah…the body of Osama bin Laden for our edification and distraction. It may even be true. Certainly the CIA will assure us that its DNA test proves it.

UPDATE from Darien Sumner:

In re: Osama bin Laden’s death, here are the first three things that went through my mind:

1) Congratulations to the United States government on spending only ten years and a few trillion dollars to kill one old man.

2) This means we get all of our liberties back now, right? And our money? And the thousands of lives lost?

3) Ah, now the Libyan war is beginning to make a lot more sense from a political standpoint. The government needed a new bogeyman to chase.