The November attack by North Korea against its southern neighbor raises the old question of the genesis of dictatorial “power.” How does a Kim Jung Il, a Stalin, or an Ahmadinejad come to power and stay “in power” when their people are so miserable?
The sources of that kind of control leads to thinking about just what is “power.” We think about power in terms such as horse power, purchasing power, muscle power, brain power, or wind power. It is impossible to conceive of any power except in connection with a source. We know useful motive power emanates from rationally developing things in the service of a human objective.
The other power, to convince or persuade, when honestly used is based on truth. It emanates from rational argument, wisdom, experience, reality, logic, proof. It has respect and love for fellow men. A person using this kind of power, the power of persuasion, attempts to illuminate a topic or an idea. To clarify.
Both motive power and persuasive power are based in objective reality and truth. Motive power can’t be faked. It either delivers or it does not. Persuasive power has a more uneven record.
The dishonest user of persuasion, (propaganda, deceit, or fraud) seeks to obfuscate his ideas or agenda, to make them seem complex, beyond the understanding of mere men (the electorate). Or, the deceiver may carefully chose a hot topic laden with emotion that defies cool logic and then presses it upon others. “Disaster is at our door” ushers in bad ideas and then sneaks them quickly into laws no one really understands. Taking advantage of a crisis is the seed of many a demagogues’ ascent to power. First, convince the people of something that is not true or merely half-true, then find the scapegoat (insurance companies, bankers, foreigners, atheists, fundamentalists, the list goes on). Then, based on the falsehood, you pass laws, institute injustice, and rule without much interference from the ruled. Where there is no logic in law, there is no justice. We revert to a jungle ruled by the biggest teeth.
To convince men of an idea’s worth through thoughtful debate and conversation, and over time is the genesis of good law. That path to good law is built into our Constitution through the Amendment Process—a process that takes debate and time and permission (votes) from the consenting-governed. Judges legislating from the bench create the antitheses of this. Unconstitutional laws are curtailing more and more of our right to choose our own course of action. It is the fundamental undermining of America’s promise because poorly considered law results in ever stronger coercion.
Unfortunately, coercion can be an effective substitute for sound ideas if the populace is cowed. Only power that is coercive can cause man to do what he does not see as being in his self-interest or as morally correct. Coercion may be gloved in velvet, or naked, but it is always the threat behind any idea that can not be defended with logic.
The Founder Fathers understood the danger in government always had to do with using the legitimate force of government for illegitimate or secret ends. Instead of guaranteeing freedom, power-seekers would use the apparatus of government to beat us (or coddle us) into submission. Today, abuse of power might flow from the halls of the IRS, TSA, FDA, ATF, or any of many other appointed power brokers, and it is easily used as weapons against the people. Bureaucratic rules, never reviewed by the judicial process of the Constitution, take on the force of law (body scans and pat-downs at airports).
“All unuttered truths turn poisonous,” Nietzsche wrote. The more I think about the abuse of power around the world historically and currently, the more I understand truth as the antidote to abusive political power. The Founding Fathers understood the importance of an individual being able, without fear, to stand up to those in power and tell them and the world where governing policies are destructive or wrong.
Freedom to speak in the public square and freedom to print and analyse the news are enshrined in the Constitution because information and debate are the tools of navigating for the long-run in the real world. Only by freely “uttering” ideas and examining them by debate can we determine whether they are likely to be right for a free people. Any person or group advocating to end debate by taking away the microphone or shouting the speaker down because they disagree with the speaker’s position, is advocating political poison via political correctness.
In an essay by Robert Grudin titled The Truth About Truth, he warns to beware of the man who “rushes you” to accept his truth. To be rushed into an idea stifles thoughtful criticism. It condones “do as I say, not as I do” and doesn’t work well in raising children, nor in running a nation. We find it disgusting when Congress exempts itself from legislation that inhibits or prescribes the actions of less “powerful” citizens. Can it be the truth that a piece of legislation is good for you and me if it exempts Barney Frank and Chris Dodd, or McDonalds?
Speaking truth to those in power can be personally dangerous. To stand up to a strongman and speak of his destructive policies is at least frightening. When the time comes that you have to consider retribution from a bureaucrat, a politician, or any group if you speak, you are on the road to “powerlessness.” That is the time it is most important to speak. Wait too long and you may not even recognize the truth. I often wonder, did anyone live to tell about confronting Mao, Pot Pol, Stalin, Hitler, or Saddam Hussein during their reigns of terror?
There is little hope for North Koreans to overcome the Kim family. The current generations have never known anything other than the Dear Leader’s proclamations of reality. Stalin’s Russians had a better chance when he died in 1953. They at least knew something of the world outside. In Iran, truth is whispered because the people are better educated and have a living memory of freedom. Additionally, they have the internet to communicate with the freer world and be reminded of truth.
Sunday, November 28, 2010
Thursday, September 30, 2010
The Timeless Gifts of Hayek, von Mises, and Read
The Timeless Gifts of Hayek, von Mises, and Read
In 1944, as Europe was slipping gracelessly under the sea of socialism, two small life rafts of common sense, Friedrich Hayek’s The Road to Serfdom and Ludwig von Mises’ Bureaucracy, were published. The messages of both are must-reads today.
The authors were of the Austrian School of Economics noted for its study of economic man as he is, not as social and economic planners wished him to be (and often murder him when he is not). The Austrian school recognized that man’s inherent objective is to live and that his rational choices to achieve life are most successful under the least governmental burden. Under the whip of severe governmental interference, men become serfs directed in all aspects of their lives, often with little hope of even a subsistence existence for themselves and no real hope for a better life for their children.
In addition to taking away their right of acting in their own best interest, citizens are coerced into giving up truth. Hayek writes, “To make a totalitarian system function efficiently, it is not enough that everybody should be forced to work for the same ends. It is essential that the people should come to regard them as their own ends. Although the beliefs must be chosen for the people and imposed upon them, they must become their beliefs, a generally accepted creed which makes the individuals as far a possible act spontaneously in the way the planner wants.”
The Austrians also understood and articulated that under any centrally planned economy there was no way to rationally allocate resources, that is to calculate the true value of productive inputs: land, labor, and other resources of production--there was only a government official somewhere decreeing what was to be produced and by whom. As communist and deeply socialist nations eventually come to recognize this huge shortcoming of their system, they either loosen the reins of economic control (China) or fall into fifth-rate nations living on the handouts of other dictators not so far down the road of communist bankruptcy (think Cuba, first economically supported by USSR and today by Chavez of Venezuela).
The Road to Serfdom garnered much attention in the United States at the time it was published and is credited in some circles for saving us from ending up even more like Europe. The Road to Serfdom is experiencing renewed interest in the face of America’s relentless slide toward socialism under the Obama crusade. This year it has sold 70,000 copies as word spreads among a disaffected populace. Part of Serfdom‘s popularity in 1944 America was its condensation in Readers’ Digest. Its popularity today is based on the yearning for answers to the Obama administration’s destructive initiatives.
Ludwig von Mises’ (1881-1973) small book, Bureaucracy, is read mostly by students and economists, but his writing is easy to follow and has a message for us clearly paving “the road to freedom” that also leads to abundance for all of us.
Mises poses the question if production is not being planned and set in motion by government directive and carried out by a bureaucracy, how will it happen? Who will run it? Who will be “the boss?”
Mises answers in his introduction to Bureaucracy, “The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality.”
Another gifted voice for the free market was Leonard E. Read (1898-1983). In 1958, Read, founder of the Foundation for Economic Education (FEE.org) wrote the booklet I, Pencil, My Family Tree as Told to Leonard E. Read. It is the amazing story of a yellow #2 lead pencil. Yes, that amazing instrument (a typical pencil is good for about 45,000 words or a line 35 miles long...) you probably used learning to write.
I, Pencil provides a clear understanding of how the specialized knowledge and production of disparate workers across the globe from the digger of graphite clay to the manufacturer of yellow paint, each pursuing his own well-being, contribute to the construction of a pencil. Read traces the discoveries of substances (rubber, zinc, copper, graphite), the design of machines (mining equipment, paint mixers, sawmills), and the hundreds of other kinds of knowledge that combine without coercion under a free market to produce what we want at a price we can afford.
When we look around the globe at countries that have a command leadership, whether plain vanilla dictator as in North Korea, or dictatorship of the proletariat as in Cuba, or a theocratic dictatorship as in Iran, and look at our own government of czars and bureaucrats appointed with no check from elected representatives, we are provided with evidence that it can and is happening here and now. Every time we give over any power regarding our personal decisions, over what is the truth, over what our children are taught in school, over our agreements and contracts, over what we eat, over who we see as a danger, over how much government is too much government, we fall into the muck of an “uncivilization” that will be run by a bureaucracy of non-elected, non-responsive men. Men who will paint the road signs to our new state of being...serfdom.
Oh, and you won’t need that pencil because it might be used to foment revolution...
-------------------------------------------
I, Pencil is available free to download at the www.FEE.org website. Read it with your children. You will also find a huge library on line of valuable insight in FEE’s other publications and jargon-free lectures. FEE is located in Irvington-On-Hudson and has regular lectures by world-renown freedom-loving authors and teachers. Founded by Read in 1946, it really is the foundation for economic education for a free nation.
In 1944, as Europe was slipping gracelessly under the sea of socialism, two small life rafts of common sense, Friedrich Hayek’s The Road to Serfdom and Ludwig von Mises’ Bureaucracy, were published. The messages of both are must-reads today.
The authors were of the Austrian School of Economics noted for its study of economic man as he is, not as social and economic planners wished him to be (and often murder him when he is not). The Austrian school recognized that man’s inherent objective is to live and that his rational choices to achieve life are most successful under the least governmental burden. Under the whip of severe governmental interference, men become serfs directed in all aspects of their lives, often with little hope of even a subsistence existence for themselves and no real hope for a better life for their children.
In addition to taking away their right of acting in their own best interest, citizens are coerced into giving up truth. Hayek writes, “To make a totalitarian system function efficiently, it is not enough that everybody should be forced to work for the same ends. It is essential that the people should come to regard them as their own ends. Although the beliefs must be chosen for the people and imposed upon them, they must become their beliefs, a generally accepted creed which makes the individuals as far a possible act spontaneously in the way the planner wants.”
The Austrians also understood and articulated that under any centrally planned economy there was no way to rationally allocate resources, that is to calculate the true value of productive inputs: land, labor, and other resources of production--there was only a government official somewhere decreeing what was to be produced and by whom. As communist and deeply socialist nations eventually come to recognize this huge shortcoming of their system, they either loosen the reins of economic control (China) or fall into fifth-rate nations living on the handouts of other dictators not so far down the road of communist bankruptcy (think Cuba, first economically supported by USSR and today by Chavez of Venezuela).
The Road to Serfdom garnered much attention in the United States at the time it was published and is credited in some circles for saving us from ending up even more like Europe. The Road to Serfdom is experiencing renewed interest in the face of America’s relentless slide toward socialism under the Obama crusade. This year it has sold 70,000 copies as word spreads among a disaffected populace. Part of Serfdom‘s popularity in 1944 America was its condensation in Readers’ Digest. Its popularity today is based on the yearning for answers to the Obama administration’s destructive initiatives.
Ludwig von Mises’ (1881-1973) small book, Bureaucracy, is read mostly by students and economists, but his writing is easy to follow and has a message for us clearly paving “the road to freedom” that also leads to abundance for all of us.
Mises poses the question if production is not being planned and set in motion by government directive and carried out by a bureaucracy, how will it happen? Who will run it? Who will be “the boss?”
Mises answers in his introduction to Bureaucracy, “The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality.”
Another gifted voice for the free market was Leonard E. Read (1898-1983). In 1958, Read, founder of the Foundation for Economic Education (FEE.org) wrote the booklet I, Pencil, My Family Tree as Told to Leonard E. Read. It is the amazing story of a yellow #2 lead pencil. Yes, that amazing instrument (a typical pencil is good for about 45,000 words or a line 35 miles long...) you probably used learning to write.
I, Pencil provides a clear understanding of how the specialized knowledge and production of disparate workers across the globe from the digger of graphite clay to the manufacturer of yellow paint, each pursuing his own well-being, contribute to the construction of a pencil. Read traces the discoveries of substances (rubber, zinc, copper, graphite), the design of machines (mining equipment, paint mixers, sawmills), and the hundreds of other kinds of knowledge that combine without coercion under a free market to produce what we want at a price we can afford.
When we look around the globe at countries that have a command leadership, whether plain vanilla dictator as in North Korea, or dictatorship of the proletariat as in Cuba, or a theocratic dictatorship as in Iran, and look at our own government of czars and bureaucrats appointed with no check from elected representatives, we are provided with evidence that it can and is happening here and now. Every time we give over any power regarding our personal decisions, over what is the truth, over what our children are taught in school, over our agreements and contracts, over what we eat, over who we see as a danger, over how much government is too much government, we fall into the muck of an “uncivilization” that will be run by a bureaucracy of non-elected, non-responsive men. Men who will paint the road signs to our new state of being...serfdom.
Oh, and you won’t need that pencil because it might be used to foment revolution...
-------------------------------------------
I, Pencil is available free to download at the www.FEE.org website. Read it with your children. You will also find a huge library on line of valuable insight in FEE’s other publications and jargon-free lectures. FEE is located in Irvington-On-Hudson and has regular lectures by world-renown freedom-loving authors and teachers. Founded by Read in 1946, it really is the foundation for economic education for a free nation.
Sunday, April 18, 2010
Why I Love “Obscene” Profits
by Vivian Yess Wadlin
Admittedly, “obscene” is the word of choice used by people who don’t make any (or enough) profit. They use the word to define the outcome of very successful business models. A successful business perceives a need, finds a solution, and provides it in the marketplace at a price people are willing and able to pay. You find the adjective, “obscene”, used almost exclusively by pandering politicians, government employees (who by the way, make more than the average taxpayer), socialists of all stripes, government bureaucrats, community organizers, and assorted business failures.
They all mean that somehow “the public” must have been duped or cheated for any entity to make profits of “that magnitude.” It is never defined what that magnitude is nor is the amount of investment that created the profit in question ever discussed. The value of the driving idea, the rate of return on the investment, the research and development costs, the investment in terms of time to bring the profitable enterprise into being are also glossed over, if acknowledged at all.
Congress members act as if they produce something of value and act as heroes when they give away what they have not earned. Remember: Government activity produces nothing of real value. If it did, it would not have to tax you. Government can only give by confiscating from its truly successful sector— a productive individual or business enterprise. Yes, Congress can and does “borrow,” but that is just a hidden confiscation of your wealth. When Washington can no longer honestly pay its debt, its printing presses begin paying it. Inflation is less painful for politicians than taxing, but it is ultimately destructive for a nation.
The politician is always there protecting you from the company earning “obscene” profits, and which, God forbid, pays their executives–based on contractual obligations–obscene salaries.
Profit to government is a flag. It uses profit to target businesses that are satisfying the desires of a large number of people. Profit gives bureaucrats a straw man. Honest profits are only available to individuals and businesses who buy or produce scarce resources (any resource that is not free), reconfigures them, and turns out something that their fellow human beings are willing to trade hard-earned dollars to acquire. That is, if the market is allowed to operate unimpeded. Big “if,” I admit.
Where the market is left unimpeded, and where individual efforts have succeeded, there is the possibility of temporary, but very large, in government-speak, “obscene” profit. (Low profit or outright failure is simply an indication the business is not supplying something people want at a price they can afford).
Why I really love any “obscene” profit though, is they are a “turn on.” Any large profit is a beacon to other entrepreneurs to compete. It says “Look here! This is a product or service that people want. You can make money here. Come. Compete. Do better. Make more people happy, healthy, wealthy, or wise. Get rich.”
As soon as other entrepreneurs enter the market, price drops. More of us can afford the product. The profit normally drops and additional resources are not then sequestered for additional units of that product or service.The businesses are not expanding output because the profit margin is shrinking. That is, unless the originator or the new competitors add something so wonderful that the consumer is willing to pay more for it. Through time, the “”obscene”” profit continues to provide us with better and better, and/or less expensive, things. Most often, both.
I’ve never seen a justly acquired profit, tiny, “obscene”, or pornographic, that did not inspire my admiration for the person or company earning it. The sooner you fall in love with “obscene” profits, the sooner we can tell the political class their truly obscene game is over.
Don’t let them make you believe that productive people are your enemy. Envy is not attractive. Profit is.
by Vivian Yess Wadlin
Admittedly, “obscene” is the word of choice used by people who don’t make any (or enough) profit. They use the word to define the outcome of very successful business models. A successful business perceives a need, finds a solution, and provides it in the marketplace at a price people are willing and able to pay. You find the adjective, “obscene”, used almost exclusively by pandering politicians, government employees (who by the way, make more than the average taxpayer), socialists of all stripes, government bureaucrats, community organizers, and assorted business failures.
They all mean that somehow “the public” must have been duped or cheated for any entity to make profits of “that magnitude.” It is never defined what that magnitude is nor is the amount of investment that created the profit in question ever discussed. The value of the driving idea, the rate of return on the investment, the research and development costs, the investment in terms of time to bring the profitable enterprise into being are also glossed over, if acknowledged at all.
Congress members act as if they produce something of value and act as heroes when they give away what they have not earned. Remember: Government activity produces nothing of real value. If it did, it would not have to tax you. Government can only give by confiscating from its truly successful sector— a productive individual or business enterprise. Yes, Congress can and does “borrow,” but that is just a hidden confiscation of your wealth. When Washington can no longer honestly pay its debt, its printing presses begin paying it. Inflation is less painful for politicians than taxing, but it is ultimately destructive for a nation.
The politician is always there protecting you from the company earning “obscene” profits, and which, God forbid, pays their executives–based on contractual obligations–obscene salaries.
Profit to government is a flag. It uses profit to target businesses that are satisfying the desires of a large number of people. Profit gives bureaucrats a straw man. Honest profits are only available to individuals and businesses who buy or produce scarce resources (any resource that is not free), reconfigures them, and turns out something that their fellow human beings are willing to trade hard-earned dollars to acquire. That is, if the market is allowed to operate unimpeded. Big “if,” I admit.
Where the market is left unimpeded, and where individual efforts have succeeded, there is the possibility of temporary, but very large, in government-speak, “obscene” profit. (Low profit or outright failure is simply an indication the business is not supplying something people want at a price they can afford).
Why I really love any “obscene” profit though, is they are a “turn on.” Any large profit is a beacon to other entrepreneurs to compete. It says “Look here! This is a product or service that people want. You can make money here. Come. Compete. Do better. Make more people happy, healthy, wealthy, or wise. Get rich.”
As soon as other entrepreneurs enter the market, price drops. More of us can afford the product. The profit normally drops and additional resources are not then sequestered for additional units of that product or service.The businesses are not expanding output because the profit margin is shrinking. That is, unless the originator or the new competitors add something so wonderful that the consumer is willing to pay more for it. Through time, the “”obscene”” profit continues to provide us with better and better, and/or less expensive, things. Most often, both.
I’ve never seen a justly acquired profit, tiny, “obscene”, or pornographic, that did not inspire my admiration for the person or company earning it. The sooner you fall in love with “obscene” profits, the sooner we can tell the political class their truly obscene game is over.
Don’t let them make you believe that productive people are your enemy. Envy is not attractive. Profit is.
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