Socialism vs. Capitalism: Which is the Moral System?

http://www.ashbrook.org/publicat/onprin/v1n3/thompson.html

The extraordinary level of material prosperity achieved by the capitalist system over the course of the last two-hundred years is a matter of historical record. But very few people are willing to defend capitalism as morally uplifting.

It is fashionable among college professors, journalists, and politicians these days to sneer at the free-enterprise system. They tell us that capitalism is base, callous, exploitative, dehumanizing, alienating, and ultimately enslaving.

The intellectuals’ mantra runs something like this: In theory socialism is the morally superior social system despite its dismal record of failure in the real world. Capitalism, by contrast, is a morally bankrupt system despite the extraordinary prosperity it has created. In other words, capitalism at best, can only be defended on pragmatic grounds. We tolerate it because it works.

Under socialism a ruling class of intellectuals, bureaucrats and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In other words, socialism is a form of legalized theft.

The morality of socialism can be summed-up in two words: envy and self-sacrifice. Envy is the desire to not only possess another’s wealth but also the desire to see another’s wealth lowered to the level of one’s own. Socialism’s teaching on self-sacrifice was nicely summarized by two of its greatest defenders, Hermann Goering and Bennito Mussolini. The highest principle of Nazism (National Socialism), said Goering, is: "Common good comes before private good." Fascism, said Mussolini, is "a life in which the individual, through the sacrifice of his own private interests…realizes that completely spiritual existence in which his value as a man lies."

Socialism is the social system which institutionalizes envy and self-sacrifice: It is the social system which uses compulsion and the organized violence of the State to expropriate wealth from the producer class for its redistribution to the parasitical class.

Despite the intellectuals’ psychotic hatred of capitalism, it is the only moral and just social system.

This is one of the clearest, simplest, and most thorough essays on the difference between Capitalism and Socialism I have ever read. It also is an excellent defense of the morality of Capitalism - a defense that few intellectuals have ever proposed (other than Ayn Rand).

The legacy of Milton Friedman, a giant among economists

http://www.economist.com/business/displaystory.cfm?story_id=8313925

Directly or indirectly, Mr Friedman brought about profound changes in the way his profession, politicians and the public thought of economic questions, in at least three enormously important and connected areas. In all of them his thinking was widely regarded at the outset as eccentric or worse.

The first of those areas is summed up by “Capitalism and Freedom”, the title of a book published in 1962 (see our review). To Mr Friedman, the two were inextricably intertwined: without economic freedom—capitalism—there could be no political freedom. Governments, he argued, should do little more than enforce contracts, promote competition, “provide a monetary framework” (of which more below) and protect the “irresponsible, whether madman or child”.

To show where Mr Friedman thought the limit of the state should lie, the book lists 14 activities, then undertaken by government in America, “that cannot...validly be justified” by the principles it lays out. These include price supports for farming; tariffs and import quotas; rent control; minimum wages; “detailed regulation of industries”, including banks; forcing pensioners to buy annuities; military conscription in time of peace; national parks; and the ban on carrying mail for profit.

Celebrating Income Inequality

http://capmag.com/article.asp?ID=5005

Democrat and Republican candidates for President are debating one another on nearly every issue--but nearly all are united on one thing: America faces a crisis of "income inequality." The rich are getting richer, the refrain goes, while the poor and middle class are held back by stagnating wages, lousy schools, and growing healthcare costs. The solution, we are told, is more government intervention: spend more on education, provide "universal healthcare," and force employers to raise wages through minimum-wage increases and union protection legislation.

But all of this outcry is based on a false premise--that income inequality is bad. While some of the problems critics point to are legitimate concerns, income inequality is not. Income inequality is a natural and desirable part of a free, prosperous society.

In America, equality should mean only one thing: freedom for all. If business and wages were deregulated, we would see a dramatic rise in economic opportunity. If education and medicine were left free, with America's businessmen, doctors, and educators liberated to offer education and medicine at all different price points, we would see quality and price improvements like those for computers or flat-panel television sets. But these benefits of freedom require that we recognize the moral right of each individual to enjoy whatever he produces--and recognize that none of us has a right to something for nothing.

Great essay from Alex Epstein of the Ayn Rand Institute. I love topics like this that catch people in the contradiction of their thoughts. Most people instinctively condemn "inequality", but in this case, when they apply their minds to why that inequality exists and what is being proposed to "fix it", they find some difficult pills to swallow. This is yet another example of the two paradigms: one that is risk averse, wanting protection from one's own weakness, and the other that embraces risk and the responsibility that comes with it (and its ensuing rewards).

Too many people see only the rewards gained by some, and covet them. Not understanding why they have those rewards (e.g. proof of their profitable actions), they take on the mentality of the victim, saying that they were unfairly gained, either by unfair competitive circumstances or at the expense (exploitation) of the poor victim.

Introduction to Radical Capitalism - Part III

http://zambia.co.zm/articles/radical_capitalism3.html

There are so many people today who just invoke arbitrary rights without such recourse to logic and reality, which is why we have great confusion in society today, with rights being randomly granted to anything, from animals to trees to God and to just about anything else. Without integrating the factors that make the whole concept of rights viable, such irrational arbitrariness is inevitable.

In our upcoming constitution, we can already see this evidence of divorcing rights from an irrefutable foundation (property rights) which can be derived from common sense, as we have shown. We have had people suggesting all kinds of special rights based purely on their feelings of sympathy. Thus we are going to have special rights for the poor people, for example, which government will be obliged to meet by forcefully taking some property from those who are less poor.

There are no special rights that anyone can claim. Every human being has certain inalienable rights and these are built on the foundation of the principle of property ownership and not on whim or sympathy. This is why the dichotomy of “individual rights versus societal rights” is a false one based on a similarly false reification of society. And it is why the acceptance of property rights leads logically to the absolute acceptance of capitalism and the absolute rejection of socialism and all its variant or resultant forms that reject the sovereignty of the individual in his own life and over his own property (communism, fascism, etc).

This is currently the last of the series - I truly hope Mr. Chisala will continue this particular series of essays, as I have found them very approachable and useful in sharing with people who are misinformed about Capitalism. Chanda brings up the issue of rights in this essay - a crucial topic for any debate on government and the philosophical basis for any moral society. He demonstrates the relationship between rights and property, and shows how a philosophy's definition of rights shapes its entire societal system.

Introduction to Radical Capitalism - Part II

http://zambia.co.zm/articles/radical_capitalism2.html

You suggest that a better method is to simply be “pragmatic”. By this, I believe you mean that we should simply look at what works (or has worked) in practice, for our economic ends, and to follow that path. But pragmatism is a very poor way of guidance in life. Why? Let’s say we discover that corruption is actually good for the economy. Should we encourage corruption in the nation so that we could have economic growth? Your answer, I am sure is no. But why not? From pragmatism, it is not possible for you to simply reject corruption as a way to economic growth if statistics show that it is good for the economy.

The same can be said about slavery. One can possibly argue that some nations have had economic success as a result of using forced free labour (slavery). If pragmatism had had its way in this debate on slavery many years ago, the West would still be practicing it. Indeed there were pragmatists who saw nothing wrong with slavery since the slaves were foreigners and the human trade was helping their economy. But it was banned because a rational moral argument triumphed over mere pragmatism, as it always should. My argument against slavery is simply that you do not have the right to own or control someone else’s property – their mind and their body – and this is the same argument I use for capitalism. Pragmatism does not have a similar moral foundation to be a useful guide.

Bwana says that I should show how capitalism achieves the things that socialism wants to achieve, but in a better way, and so on. But why should I do that? Why should anyone, for example, spend time trying to show why freedom is better than dictatorship, or than slavery? That would be the pragmatic paradigm route, which we have already shown to be morally invalid. Since no one really needs to be convinced that freedom is better than slavery, or that theft is wrong, my responsibility is only to show how socialism is essentially equal to these vices (slavery or theft) – which infringe on property rights - and someone will easily make up their mind after they see this. If this is shown, there is no need to investigate whether it even has any advantages. The discussion simply closes there. Granted, some economists have shown that socialism is actually even counter-productive, but that’s just a wonderful coincidence of the nature of our benevolent universe or our good Lord – the important fact is that it’s immoral, just as slavery is immoral. Corruption has also been allegedly shown to be counter-productive from empirical evidence, but the issue still is that it is immoral, even if it was not shown to be counter-productive, and therefore it is not a valid option for a rational person or society to even investigate.

In Part II of his essays on Radical Capitalism, Chanda Chisala answers his reader's critical comments, particularly an argument for a more pragmatic approach to deciding their society's government. I am impressed with his clear, logical responses. These essays are a very good introduction to what Capitalism entails for those who are unclear or misguided on the subject.

Introduction to Radical Capitalism - Part I

http://zambia.co.zm/articles/radical_capitalism1.html

One of the most common comments one hears whenever there is a discussion on how Africa can solve its problems is this: “we have tried socialism and we have tried capitalism; neither of them have worked. It is time for us to try out a new system of economics, something invented by ourselves.”

This statement always sounds very attractive to many unsuspecting intellectuals and yet it is quite a meaningless statement. To break it down to essentials, what it actually means is this: “we have tried taking the rights of individuals to own their property from them, and we have tried letting individuals keep their rights of owning their property; neither has worked. It is time for us to try out a new system, something invented by ourselves.”

Unfortunately, there is no “third way”. This is a question of very basic logic. Either you allow a person to be an owner of his property or you forcefully assume ownership and control of his property (through government). The former is the essence of capitalism and the latter is the essence of socialism, whether you like those two terms or not.

This is part of an excellent series of essays on Radical Capitalism, written by an editor in Zambia. I stumbled upon these writings by accident, and quickly realized they were very articulate arguments in favor of capitalism. I was further surprised to find out that they were written in the context of a public debate happening right now in Zambia concerning the organization of their society and government! It seems they are in the process of creating a new Constitution, and this writer is advocating the adoption of capitalism as the moral basis of government for Zambia.

AMA is Wrong About Medicare

http://capmag.com/article.asp?ID=4793

Under current restrictions, it is illegal for the doctor to accept a patient's payment for any amount over the government's approved reimbursement for a service covered by Medicare.
The government also prohibits the patient from being reimbursed by Medicare if the patient chooses to privately contract for services with a doctor who does not accept Medicare.

This is a textbook example of why it's wrong for the government to be the middleman for your dollars. If you were freely exchanging your dollars for medical services, you would be within your right to choose which services, which provider (and thereby, what cost) you prefer. But it's not your dollar anymore, it's a dollar that has passed through the hand of government, somehow "sanctifying" it from the taint of profit or greed before being handed to the provider of services you desire.

Unfortunately for you, because you are not the one exchanging the dollar for services anymore, you no longer have the power to negotiate the terms of that exchange (unlike your ability to choose which breakfast cereal you purchase - ironically a real factor in your health). Your options for exchange consist of trying to game the tax system to your benefit, and punching a ballot every now and then to decide who will be your personal benevolent tyrant for a season.

Also working against you is the fact that since your money has been pooled together with everyone else's before reaching this point of medical services, it falls upon the representatives of the People to make sure your best interests (as they define it) are served in this exchange. Unsurprisingly, every incident that brings harm to one becomes a reason to legislate for all - since the only way, in this situation, to keep harm from coming to the one again is to codify the incident into preventative law, transferring the effects of that exchange from one to all. How else could a victim be protected if the terms of their exchanges are dictated by government?

The thousands of pages of directives and regulations dictating the use of what has now become "public money" on your behalf is no different than a hypothetical "government-sanctioned grocery list", posted on the doors of every store, specifying the items you may buy, at what price, and from whom. It would also be illegal in this bizarro world for the grocer to accept any of your personal dollars for his business with you would be funded by the state. Only a selfish, greedy rich person would ever need or want more than the benevolent tyrants had provided.

Would you be surprised to see the shelves eventually sparse and then empty for lack of products to sell? (as all the producers of products chose to do business elsewhere where they could set their own prices with the buyers) Would you be surprised to see lines of disgruntled shoppers, each carrying their apportioned groceries through the "free checkout line"?

We can't forget that medical products and services are not intrinsically different from any other product or service. They must to be bought and sold, and replacing personal choice with government fiat doesn't "wash the (supposed) stain of profit" from the product one buys. That doctor must choose to provide a service, just like the hairdresser - or he is a slave. Those drugs must be manufactured by human beings, who, devoid of the right to choose their incentive, will cease to do so and seek other means of providing for themselves. Treating medical care any different than "food care" results in a world where food is cheap (for the poor), plentiful (for the multitudes), and profitable (for the producers) - while medicine is expensive, scarce, and undesirable to produce.

And don't tell me health care is different because we need it to survive. Starvation is worse than dying from cancer on my list...

The Fear Factor

http://www.lewrockwell.com/paul/paul402.html

While fear itself is not always the product of irrationality, once experienced it tends to lead away from reason, especially if the experience is extreme in duration or intensity. When people are fearful they tend to be willing to irrationally surrender their rights.

Thus, fear is a threat to rational liberty. The psychology of fear is an essential component of those who would have us believe we must increasingly rely on the elite who manage the apparatus of the central government.

A short essay by Ron Paul that highlights the consequences of speaking, legislating, and governing from a perspective of fear. Fear is the hallmark of socialism - the driving emotional force that motivates people to seek protection from benevolant tyrants - those who would promise that nothing bad will ever happen to good people under their watchful care. Stimulated by crisis, both real and perceived, they advocate the restrictions of freedoms for everyone because of the criminal acts of a few. The mindset always boils down to this - prevent anyone from doing anything bad before they get a chance to do so, and forcibly ensure that everyone does good before they fail to do so...

The Five Stages of Counterfeiting

http://www.lewrockwell.com/north/north550.html

A truly serious counterfeiting operation would in fact plan to do something very similar to what Mr. Heath said a counterfeiter would not do – just not in a single step. The goal of a serious counterfeiting operation would be to persuade the public to use its money rather than the official bills it originally copied when it designed its original fake plates. Its goal would be the replacement of the original official bills with its own bills, making them official in the eyes of the public.

This has been the primary goal of central bankers ever since the creation of the Bank of England in 1694

Gary North's essays are always very detailed and thorough, if a bit lengthy. This article covers a very broad scope of economic history and describes the process of converting generations of people to treasure a currency once thought to be worthless. It covers precious metal debasement, fractional reserve banking, fiat money, central banks, and inflation - all in the context of a larger move to legitimize a counterfeit currency.

Economists on the Loose

http://www.CapMag.com/article.asp?ID=4991

First, let's establish a working definition of free markets; it's really simple. Free markets are simply millions upon millions of individual decision-makers, engaged in peaceable, voluntary exchange pursuing what they see in their best interests. People who denounce the free market and voluntary exchange, and are for control and coercion, believe they have more intelligence and superior wisdom to the masses. What's more, they believe they've been ordained to forcibly impose that wisdom on the rest of us. Of course, they have what they consider good reasons for doing so, but every tyrant that has ever existed has had what he believed were good reasons for restricting the liberty of others.

Tyrants are against the free market because it implies voluntary exchange. Tyrants do not trust that people acting voluntarily will do what the tyrant thinks they ought to do. Therefore, they want to replace the market with economic planning, or as Professor Blinder calls it — industrial policy.

A short and simple essay on the basic philosophy of the free market economy vs. central planning/industrial policy. I love Walter Williams ability to concisely demonstrate the mindset that inspires both the capitalist and socialist movements.

Where Michael Moore is Wrong

http://www.realclearpolitics.com/articles/2007/07/where_michael_moore_is_wrong.html

America's medical system has problems, but profit is the least of it. Government mandates, overregulation and a tax code that pushes employer-paid health insurance prevent the free market from performing its efficient miracles. Six out of seven health-care dollars are spent by third parties. That kills the market. Patients rarely shop around, and doctors rarely compete on price or service.

Private competitors innovate or die. Government workers do what they did last year. That's why I want the private sector to provide my health care. Pursuit of profit will give us our best medicines and medical devices.

I'll pay you $1,000 if you can name one thing government does more efficiently than the private sector.

Third in a series on articles by John Stossel on his interaction with Michael Moore. In it he disputes more claims of how government does a better job of providing services than the private sector. Moore's popular belief that certain services shouldn't be "tainted" by profit is deceptive - and attractive to those who don't understand what profit truly is.

Bill Gates Needs an Econ Course

http://www.realclearpolitics.com/articles/2007/06/bill_gates_needs_an_econ_cours.html

At Harvard, Gates said, "We can make market forces work better for the poor if we can develop a more creative capitalism -- if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities."

He misses the point. Gates faults the free market for problems caused by governments. What constricts the reach of the free market is the state. Gates seems oblivious to all the ways that governments here and abroad cripple enterprise. In poor countries, corrupt bureaucracies smother entrepreneurship while enriching cronies. The lack of formal property rights and stable law keeps average people from accumulating capital. So the poor stay poor. That's what causes "scarcity of clean water" and kills "children who die from diseases we can cure."

John Stossel takes Gates to task for confusing the root causes of poverty. Once again, the only-somewhat-informed public debate looks at free markets, looks at suffering, and then determines that the free market has failed, and therefore the State should intervene (or more accurately, since it has been intervening already, it should improve its intervention).

Gates' statement at the end of this article, "We also can press governments around the world to spend taxpayer money in ways that better reflect the values of the people who pay the taxes" is especially telling. The idea that somehow problems would be solved if we just did the wrong thing in a better way is futile. Ignoring the underlying truth that individuals know best how to spend their money does the poor a disservice. The arrogant assumption that the poor - or anyone - would be better off if a benevolent dictator would take their resources and then wisely dispose of them for the greatest benefit of their former owner is a gross deception. I'm baffled that such an idea is so widely accepted...

Cartels: Economists and Central Bankers

http://www.lewrockwell.com/north/north546.html

Economics as a science is seen by its practitioners as having progressed by identifying more and more institutions as governed by personal self-interest. Yet when economists come to banking and education, they refuse to extend this traditional analysis. They either remain silent or invoke the mantra of public interest.

You will search in vain for a chapter on education as an oligopoly within the context of tax-funding, laws mandating education up to age 16, and government licensing of college-accreditation agencies. Somehow, economics textbook authors skip over any analytical discussion of this, the largest sector of the American economy.

Gary North asks some pointed questions in this essay, where he reveals the lack of critical examination on the part of economists when it comes to things like the Federal Reserve. He outlines the obvious contradictions and deceptions being practiced that for some reason, no one ever bothers to question (don't ask, don't tell).

The Romantic Illusion of Universal Health Care

I found all these short essays on CapMag on the same day - so it seemed appropriate to bundle them together and share them here to counter the ignorance I hear every day about Universal Health Care. It's gotten to where the phrase is used as a litmus test - you're either for it or against it (like the abortion issue). Even more perversely, the public consensus has judged that UHC is inherently good (who could possibly be against caring for people?), it is inevitable (everyone else is doing it!), and it is only being held up by selfish, heartless, greedy people (if you're not in favor of the Patriot Act, you must be a traitor!).

Universal Health Care Freedom on the Fourth of July
http://capmag.com/article.asp?ID=4983

The talk about a "right" to health care really means that no one should have the right to any health care at all except through the government. As we celebrate the Fourth of July this year we must remember that our right to manage our own health care as we see fit is as vital to our liberty as freedom of speech or freedom of the press.

Why Health Insurance Should Not Be Universal
http://capmag.com/article.asp?ID=4984

Power-hungry politicians feed off the irrationality of the citizenry. If the citizenry were more rational, there would be no place in the political system for politicians who value power over freedom and justice. Today's problems with medical care are the fault of the people who want the results of capitalism while instructing their leaders to install more socialism.

All Power to the Post Office
http://capmag.com/article.asp?ID=4981

During a recent interview, a talk radio host told me that all private health insurance should be eliminated in order to give us all a reason to work together to make sure the government runs a good health care system.
A better analogy would be that conditions in our prisons might be expected to improve if we were all required to live in them. Socialists and some Liberals would find this level of government-enforced uniformity to be a noble sacrifice to which all citizens must submit. Many Conservatives would reluctantly agree—but suggest a voucher system that would allow us each to select the prison cell of our choice.

Health Care's A Mess--So What's the Solution?
http://capmag.com/article.asp?ID=4980

It's better to consider the possibility that the market didn't fail us in medical care...but it was never allowed to function. If you don't want more of the same, which universal government coverage and control will provide, then consider something radically different: freedom in health care.

Freedom and Benevolence Go Together

http://www.realclearpolitics.com/articles/2007/07/freedom_and_benevolence_go_tog.html

I interviewed Michael Moore recently for an upcoming "20/20" special on health care. It's refreshing to interview a leftist who proudly admits he's a leftist. He told me that government should provide "food care" as well as health care and that big government would work if only the right people were in charge...

Moore followed up with a religious lesson. "What the nuns told me is true: We will be judged by how we treat the least among us. And that in order to be accepted into heaven, we're gonna be asked a series of questions. When I was hungry, did you feed me? When I was homeless, did you give me shelter? And when I was sick, did you take care of me?"

I'm not a theologian, but I do know that when people are ordered by the government to be charitable, it's not virtuous; it's compelled. Why would anyone get into heaven because he pays taxes under threat of imprisonment? Moral action is freely chosen action.

This is textbook socialist thinking - first, that government control is the best solution to the society's ills, when lead by the "right people"; second, that because it is right to do something, people should therefore be forced to do so. While people will argue about the results (charity doesn't cover everyone / civilized society should be like this / etc.), they ignore the moral contradiction of being compelled to do what's right. The first attack on those who stand on principle and advocate individual freedom and responsibility is that such people are cold-hearted and unsympathetic of other's suffering. They champion the "charity" of their forced programs and claim the lover of liberty has no love for his fellow man. Unfortunately, many people believe this rhetoric and end up believing that to advocate freedom is to be against charity. Nothing could be farther from the truth...

Time for Another Revolution

http://www.mises.org/story/2633

In 1913 the relationship between the State and Society was reversed. Areas which had heretofore been considered within the private domain, sacred ground so to speak, were now invaded by the arrogant and enriched State, and within thirty years the individual was squeezed into a corner so small that even his soul lacked elbow room. His case was far worse than it was in 1776; in exchange for an income tax King George III would have conceded every point made against him by the colonists, and might even have done penance for past sins. But, such was the character of these Americans that they challenged him to battle because he presumed to impose a miserable tax on tea. What they won at Yorktown was lost by their offspring one hundred and thirty-two years later.

Were the disposition of the current crop of Americans comparable to that of their forbears, a new revolution, to regain the profit of the first one, would be in order. There is far more justification for it now than there was in 1776. But, people do not do what reason dictates; they do what their disposition impels them to do. And the American disposition of the 1950s is flaccidly placid, obsequious and completely without a sense of freedom; it has been molded into that condition by the proceeds of the Sixteenth Amendment. We are Americans geographically, not in the tradition. In the circumstances, a return to the Constitutional immunities must wait for a miracle.

An excellent essay on the need for a revolution - as great a need as existed at the birth of our nation. Too many people are ignorant of the Constitution - its purpose, its principles, and even its weaknesses and why they exist. It all sounds too anachronistic to be taken seriously today. Defenders of the Constitution are seen as blind nostalgic cultists, out of touch with modernity. That's easy to believe when you don't understand the philosophical and moral challenges of our day, let alone the historical context (and the amazing similarities).

Frank outlines the foundations of the Constitution, the social struggle, the loss of liberty, and the slow erosion of protections against the powers of the State. The entire book can be downloaded for free here.

The Myth of the Rational Voter

http://www.economist.com/world/na/displaystory.cfm?story_id=9340166

Instead, he identifies four biases that prompt voters systematically to demand policies that make them worse off. First, people do not understand how the pursuit of private profits often yields public benefits: they have an anti-market bias. Second, they underestimate the benefits of interactions with foreigners: they have an anti-foreign bias. Third, they equate prosperity with employment rather than production: Mr Caplan calls this the “make-work bias”. Finally, they tend to think economic conditions are worse than they are, a bias towards pessimism.

The make-work bias is best illustrated by a story, perhaps apocryphal, of an economist who visits China under Mao Zedong. He sees hundreds of workers building a dam with shovels. He asks: “Why don't they use a mechanical digger?” “That would put people out of work,” replies the foreman. “Oh,” says the economist, “I thought you were making a dam. If it's jobs you want, take away their shovels and give them spoons.” For an individual, the make-work bias makes some sense. He prospers if he has a job, and may lose his health insurance if he is laid off. For the nation as a whole, however, what matters is not whether people have jobs, but how they do them. The more people produce, the greater the general prosperity.

A good essay exposing the myth that democracy always results in the best choice for all involved (wisdom of crowds, etc.) He outlines four factors that cause voters to act irrationally. In a democracy, he claims, rational politicians give the voters what they (irrationally) want.

Live and Let Live

http://jewishworldreview.com/0707/stossel070507.php3

That same week I happened to interview filmmaker Michael Moore for "20/20." Moore wants government to monopolize health care. His new film, "Sicko," argues that Canada and France approach paradise because their governments provide health care and more. This brought him standing ovations in Cannes.

"But government is force," I said to him. He was incredulous.
Michael Moore: Why do you see it as force?
Me: Because government takes money with force from people and gives it to others.
Moore: No, it doesn't, actually. The government is of, by, and for the people. The people elect the government, and the people determine whether or not they'll allow the government to collect taxes from them.

Is it really necessary to explain that government is force? When the Salvation Army asks you for a donation, you are free to say no, and you suffer no consequences. When the U.S. government demands a tax return and a check on April 15, you can't say no and go about your business. You comply or face fines or imprisonment. Yes, you get to vote for candidates periodically. But having an infinitesimal say in who will coerce you doesn't change that fact that they are using force.

John Stossel is very good at identifying the principles that most people miss when discussing the latest hot-button issues. The universal health care debate is full of misdirection and illusion, and a lot of passionate people championing popular causes while ignoring the foundation of their philosophy. Michael Moore's total absence of awareness about the true nature of any collectivist policy leaves me dumbfounded (yet not totally suprised). When people like him are making sweeping statements in the media that ignore principles, I get worried - it means the public debate is fueled by ignorance.

Walking Through the Looking Glass

http://www.freecapitalist.com/columnists/koerber_archives.php?id=13

What's the difference between failure and prosperity? How can you be sure you are headed in the "right" direction? Is it even possible to chart a course to live the abundant and prosperous life? Is it just an age-old gimmick to trick the naïve and unsuspecting entrepreneur into believing that the American dream is still a possibility? Can an honest person actually make it "big" in the business world?

To anyone with any substantial ambition whatsoever, these questions-and many related to them-are very important. To me, it has been very surprising indeed how I have come to learn the answers to these questions over the last few years.

I have learned that prosperity is not about some external event or some lucky opportunity. Prosperity is about a choice and the subsequent change that starts from within. It is literally like "walking through the looking glass" and seeing a world that so many people never see because of their own fears. I add my voice to those who have gone before me and say, "I too have walked through the looking glass and see a new way of life."

So what happened that enabled me to walk through the looking glass? Did I get lucky? Was I in the right place at the right time? Did I find a partner with a lot of money? No. None of these have anything to do with my success. The fact that I used to think in a way to even conceive such possible explanations for success is almost frightening to me.

This a great essay by Rick Koerber, where he outlines the journey of his failure and success, and describes what made the difference between the two. An excellent introduction to changing you perspective from scarcity to prosperity.

Health Care Is a Business - or Should Be

http://www.capmag.com/article.asp?ID=4948

Ultimately all health care is paid for by business activity. Business provides the wages, the return on investment, the insurance, the taxes that pay directly for health care, and the insurance and taxes that fund government programs. When the government manages to provide services at all, it can give you nothing that it does not take from you or others, or from your employer and other employers. The total added value the government creates for your benefit is nothing.

The government now uses your money to pay for 50 percent of health care. That is up from less than 10 percent, forty years ago. The increase in health care costs that has accompanied this process is largely caused by government—the actual origin of the "health care crisis," discovered and proclaimed by Richard Nixon and Edward Kennedy in 1971. Their proposed solution was more government. They got it.

The "crisis" was created by government, not just through its own reckless spending, but through the consequent destruction of much of the free market.

Socialism, Free Enterprise, and the Common Good

http://www.hillsdale.edu/imprimis/2007/05/

In chapter 21 of St. Matthew’s Gospel, Jesus proposes a moral dilemma in the form of a parable: A man asks his two sons to go to work for him in his vineyard. The first son declines, but later ends up going. The second son tells his father he will go, but never does. “Who,” Jesus asks, “did the will of his father?” Although I am loath to argue that Jesus’s point in this parable was an economic one, we may nonetheless derive from it a moral lesson with which to evaluate economic systems in terms of achieving the common good.

Modern history presents us with two divergent models of economic arrangement: socialism and capitalism. One of these appears preoccupied with the common good and social betterment, the other with profits and production. But let us keep the parable in mind as we take a brief tour of economic history.

This essay is adapted from a speech delivered at Hillsdale College on October 27, 2006, at the first annual Free Market Forum, sponsored by the College’s Center for the Study of Monetary Systems and Free Enterprise.

It makes a thorough argument about what I have often observed in the struggle between capitalism and socialism - that of the difference between the public perception of a philosophy and the actual consequences of the same.

When Talk Isn't Cheap

http://www.opinionjournal.com/diary/?id=110010006

Washington's highest court struck down a decision by Superior Court Judge Chris Wickham, who in 2005 ordered KVI radio hosts John Carlson and Kirby Wilbur had to place a monetary value on "campaign contributions" they made when they argued in favor of Initiative 912, a ballot measure to repeal a 9.5-cent-a-gallon increase in the state's gasoline tax. The antitax measure ultimately lost by 6% of the vote, in part because its opponents outspent its supporters by 20 to 1.

But the "unofficial" support of the measure by talk-show hosts such as Messrs. Carlson and Wilbur, who went so far as to actively tell listeners how they could sign petitions to get I-912 on the ballot, infuriated the self-styled Keep Washington Rolling coalition, which backed the gas tax hike. The coalition convinced a local prosecutor in San Juan County, along with the cities of Kent, Auburn and Seattle, to sue KVI radio demanding that it be brought under the state's campaign finance laws.

In siding with the localities, Judge Wickham insisted he was not restricting speech, merely requiring the reporting of "in kind" contributions to the antitax campaign. But in fact he was equating speech to money, for these "contributions" consisted entirely of speech.

Read to see where our political system is headed...

The Best Way to Save the Earth? Capitalism

http://www.lewrockwell.com/murphy/murphy112.html

Although the friends of the planet might disagree on what they’re for – some care most about the quality of the air we breathe, some want to preserve endangered species, and some extremists wish human beings would leave the scene altogether – they all know what they’re against: capitalism.

Whether the alleged solutions are taxes on gasoline, fines for smokestack pollution, or stepped up enforcement of fishing quotas, the common thread is that free individuals cannot be entrusted to make wise decisions with their private property. Benevolent politicians (taking their cue from the environmentalist experts, of course) must use the power of the government to alter people’s behavior.

So far I’m saying nothing controversial. The tradeoff between jobs and the spotted owl is familiar to all, and indeed the typical environmentalist relishes the material sacrifice necessary to make amends with Mother Nature. (After all, you can’t properly atone for past sins without a little suffering.) But what most people don’t realize is that unbridled capitalism is the best way to achieve the environmentalists’ objectives.

Why are people so easily lead to believe that the government and all its encumbent bureaucracy can do a better job than the self-interested, ruthlessly efficient free market? Has anyone checked the historical record?

I love the irony in this article - those crying for the protection of nature are at the same time demanding that no one have any vested interest in nature (i.e., private ownership), but somehow they expect other people to value natural resources the same way they value their own property. It just doesn't work. All those good intentions are powerless - which is why those with such intentions look to the power of government to force people to act as their intentions would have others act.

Panama Has No Central Bank

http://www.mises.org/story/2533

For a real-world example of how a system of market-chosen monetary policy would work in the absence of a central bank, one need not look to the past; the example exists in present-day Central America, in the Republic of Panama, a country that has lived without a central bank since its independence, with a very successful and stable macroeconomic environment.

The absence of a central bank in Panama has created a completely market-driven money supply. Panama's market has also chosen the US dollar as its de facto currency. The country must buy or obtain their dollars by producing or exporting real goods or services; it cannot create money out of thin air. In this way, at least, the system is similar to the old gold standard. Annual inflation in the past 20 years has averaged 1% and there have been years with price deflation, as well: 1986, 1989, and 2003.

This is a short essay about the argument that we don't need a "federal reserve" or central bank. It doesn't go into a lot of detail about the pitfalls of a central banking system and fiat currency, but it references them clearly. National financial systems can seem horribly complex - and they usually are, when a government agency, beholden to politicians, instead of shareholders, contols monetary policy. Panama provides a good example of how a free market banking system would work.

Security and Liberty

http://www.lewrockwell.com/paul/paul383.html

... The Virginia Tech tragedy may not lead directly to more gun control, but I fear it will lead to more people control. Thanks to our media and many government officials, Americans have become conditioned to view the state as our protector and the solution to every problem. Whenever something terrible happens, especially when it becomes a national news story, people reflexively demand that government do something. This impulse almost always leads to bad laws and the loss of liberty. It is completely at odds with the best American traditions of self-reliance and rugged individualism.

... Freedom is not defined by safety. Freedom is defined by the ability of citizens to live without government interference. Government cannot create a world without risks, nor would we really wish to live in such a fictional place. Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens’ lives. Liberty has meaning only if we still believe in it when terrible things happen and a false government security blanket beckons.

After the Virginia shootings, the age-old debate is once again on the front page: "if we would just ban the guns, these things wouldn't happen" vs. "if the people had been allowed to be armed, they could have defended themselves". Every tragedy brings the same argument of state control vs. self-control (both for the criminal and the victim). Ron Paul makes a great statement here about the true definition of Freedom, and the unseen risks that come with ceding our responsibility to the state.

"The mania for giving the Government power to meddle with the private affairs of cities or citizens is likely to cause endless trouble, through the rivalry of schools and creeds that are anxious to obtain official recognition, and there is great danger that our people will lose our independence of thought and action which is the cause of much of our greatness, and sink into the helplessness of the Frenchman or German who expects his government to feed him when hungry, clothe him when naked, to prescribe when his child may be born and when he may die, and, in time, to regulate every act of humanity from the cradle to the tomb, including the manner in which he may seek future admission to paradise."

-- Mark Twain

You Are What You Grow

The New York Times Online

... To speak of the farm bill’s influence on the American food system does not begin to describe its full impact — on the environment, on global poverty, even on immigration. By making it possible for American farmers to sell their crops abroad for considerably less than it costs to grow them, the farm bill helps determine the price of corn in Mexico and the price of cotton in Nigeria and therefore whether farmers in those places will survive or be forced off the land, to migrate to the cities — or to the United States. The flow of immigrants north from Mexico since Nafta is inextricably linked to the flow of American corn in the opposite direction, a flood of subsidized grain that the Mexican government estimates has thrown two million Mexican farmers and other agricultural workers off the land since the mid-90s. (More recently, the ethanol boom has led to a spike in corn prices that has left that country reeling from soaring tortilla prices; linking its corn economy to ours has been an unalloyed disaster for Mexico’s eaters as well as its farmers.) You can’t fully comprehend the pressures driving immigration without comprehending what U.S. agricultural policy is doing to rural agriculture in Mexico.

And though we don’t ordinarily think of the farm bill in these terms, few pieces of legislation have as profound an impact on the American landscape and environment. Americans may tell themselves they don’t have a national land-use policy, that the market by and large decides what happens on private property in America, but that’s not exactly true. The smorgasbord of incentives and disincentives built into the farm bill helps decide what happens on nearly half of the private land in America: whether it will be farmed or left wild, whether it will be managed to maximize productivity (and therefore doused with chemicals) or to promote environmental stewardship. The health of the American soil, the purity of its water, the biodiversity and the very look of its landscape owe in no small part to impenetrable titles, programs and formulae buried deep in the farm bill.

Given all this, you would think the farm-bill debate would engage the nation’s political passions every five years, but that hasn’t been the case. If the quintennial antidrama of the “farm bill debate” holds true to form this year, a handful of farm-state legislators will thrash out the mind-numbing details behind closed doors, with virtually nobody else, either in Congress or in the media, paying much attention. Why? Because most of us assume that, true to its name, the farm bill is about “farming,” an increasingly quaint activity that involves no one we know and in which few of us think we have a stake. This leaves our own representatives free to ignore the farm bill, to treat it as a parochial piece of legislation affecting a handful of their Midwestern colleagues. Since we aren’t paying attention, they pay no political price for trading, or even selling, their farm-bill votes. The fact that the bill is deeply encrusted with incomprehensible jargon and prehensile programs dating back to the 1930s makes it almost impossible for the average legislator to understand the bill should he or she try to, much less the average citizen. It’s doubtful this is an accident...

This article mixes two of my favorite topics - the consequences of socialistic government interference in the free market, and the current state of our agricultural food system. It boggles my mind what the "corn industrial complex" has become (see also The Omnivore's Dilemna). If the corn industry had achieved its dominance through the free market, then maybe the current situation could be justified - but it's through the subsidies, price-fixing, protectionism and other socialist policies of the farm bill that such a state has come to pass (not by the merits of corn itself or the growers of it).

No, I don't believe that the farm bill is good or bad based on its effects on poor mexican farmers or the comparative price of carrots - I believe it's fundamentally flawed because it violates principle - and therefore the negative effects are symptoms of the problem, and not as such the reason to change the bill. Painting the plight of those crushed by the power of the mighty corn industry only helps to stir yet more protectionist feelings (on the other side of the fence), further feeding the socialist flames, rather than putting them out.

Democracy or Liberty?

http://www.capmag.com/article.asp?ID=4933

Our founders intended for us to have a limited republican form of government where rights precede government and there is rule of law. Citizens, as well as government officials, are accountable to the same laws. Government intervenes in civil society only to protect its citizens against force and fraud but does not intervene in the cases of peaceable, voluntary exchange. By contrast, in a democracy, the majority rules either directly or through its elected representatives. The law is whatever the government deems it to be. Rights may be granted or taken away...

...In Federalist Paper No. 10, James Madison wrote, "Measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority." That's another way of saying that one of the primary dangers of majority rule is that it confers an aura of legitimacy and respectability on acts that would otherwise be deemed tyrannical. Liberty and democracy are not synonymous and could actually be opposites.

I love the seeming contradiction of the title - most people would assume that democracy = liberty. We talk about the two together as if they were inseperable. Unfortunately, most of us are "trained, taught, and educated" that democracy, in and of itself, is the highest form of government possible. It's what we advocate as the cure for oppressed people everywhere - if only all governments would abandon tyranny and become democratic, then their citizens would truly be free...

Without an understanding of the true nature of rights and principles, democracy is nothing more than tyranny of the majority. Freedom is at risk in a pure democracy, because the rights of the minority are forfeit - and every one of us is a minority in one way or another. The smallest minority is the individual. The founders knew this and attempted to create a system where the voice of the people could be heard, while preserving the rights of the individual.

It amazes me how we tout democracy as a panacea for the world's ills, without any mention of the need for the proper constitution and rule of law to protect the minority in any society. But knowing the quality of education that I and so many others have received regarding the proper role of government, I shouldn't be that surprised.

(see principle 12)

In Defense of Income Inequality

http://www.capmag.com/article.asp?ID=4940

Income inequality used to be a rabble-rousing issue of the left. Now it is being raised by mainstream figures, from the head of the Federal Reserve to President Bush, who are apologetically trying to offer solutions. But what is the actual problem they wish to solve? Certainly, it is not a growth in poverty. To the contrary, between 1979 and 2006--the period during which income inequality has supposedly become more acute--real wages for the median worker rose 11.5%. Even workers in the lowest tenth percentile had an increase of 4%.

No, the alleged problem is not that some are becoming poor--but that others are too rich. The complaint is that while the bottom tier enjoyed a 4% rise in income, the top tier enjoyed a 34% increase. The complaint is that over the past 25 years, the share of income of the top fifth of households climbed from 42% to 50%, while that of the bottom fifth fell from 7% to 5%.

But this development represents an injustice only if we use a perverse standard of evaluation. It is unjust only if we measure someone's economic status not by what he has, but by what others have--i.e., only if he benefits not by making more money, but by making his neighbor have less.

This is the standard of egalitarianism--the standard that demands a uniformity of income, regardless of anyone's ability or effort. It is the standard of envy, whereby a problem exists whenever some have more, of anything, than others. And the egalitarian's solution is to eliminate all such inequalities.

Egalitarianism is the antithesis of the valid tenet of political equality, under which we have equal rights. That is, we have the right to achieve whatever our ambition and talents allow, with no one permitted to forcibly stop us. Egalitarianism, however, is a denial of the individual's right to be left free. It is an abhorrent demand that some people be punished for achieving what others haven't. It is a brazen declaration that an equality of condition must be attained.

Highly recommended essay on the fallacy of egalitarianism, and its role in the public clamor over income inequality. This is only an excerpt - click the link above the quote to read the whole article.

Nonsense Ideas About Economics

http://www.capmag.com/article.asp?ID=4927

Some U.S. companies have been accused of exploiting Third World workers with poor working conditions and low wages. Say that a U.S. company pays a Cambodian factory worker $3 a day. Do you think that worker had a higher-paying alternative but stupidly chose a lower-paying job instead? I'm betting the $3-a-day job was superior to his next best alternative.

Does offering a worker a wage higher than what he could earn elsewhere make him worse off or better off? If you answered better off, is the term exploitation an appropriate characterization for an act that makes another better off? If pressure at home forces a U.S. company to cease its Cambodian operations, would that worker be worse off or better off?

It might be a convenient expression to say that the U.S. trades with Japan, but is it literally true? Is it the U.S. Congress and President George Bush who trade with the National Diet of Japan, the Japanese legislature and Prime Minister Shinzo Abe? Or, is it U.S. and Japanese private parties, as individuals and corporations, who trade with one another?

Let's break it down further. Which comes closer to the truth: When I purchased my Lexus, did I deal with the U.S. Congress, the Japanese Diet, George Bush and Shinzo Abe, or did I deal with Toyota and its intermediaries? If we erroneously think of international trade as occurring between the U.S. and Japanese governments, then all Americans, as voters, have a say-so. But what is the basis of anyone having a say-so when one American engages in peaceable, voluntary exchange with another person, be they Japanese, Korean, British, Chinese or another American?

Walter Williams gives some good examples of common misunderstandings about economics. The term exploitation is thrown about today without any thought to its accuracy. There can be no exploitation without force, and last time I checked, the only party using force in any of my commercial transactions was the government. Any interference in the free exchange between individuals results in misery and poverty - ironically, the very conditions the socialists claim to be preventing by interfering.

It is this presumption of need to protect people from their own choices that is central to socialist thought. It's the very reason our society is plagued with victimhood, helplessness, and a lack of dignity. How would someone learn to be responsible for their own actions in an environment where the elite (even those democratically elected) are given a mandate to protect us from ourselves? Is it any wonder there's so much legislation governing how men should do business with each other, far beyond the basic premise - that no man should use force against another (either physical or the force of deception).

Economic Inequality: Process and Results

http://www.capmag.com/article.asp?ID=4803

... many people erroneously use income inequality as a measure of fairness. Income is a result. As such, results cannot establish whether there is fairness or justice.
... For the most part, income is a result of one's productivity and the value that people place on that productivity. Far more important than income inequality, there is productivity inequality. That suggests that if there's anything to be done about income inequality, we should focus on how to give people greater capacity in serving their fellow man, and we should make sure there's a climate of peaceable, voluntary exchange.

A good lesson about the real reasons why some people have a greater income than others (they create more value), and a very plain argument for why redistribution of income is morally unjustifiable.

Losing Sleep over the Trade Deficit?

http://www.capmag.com/article.asp?ID=4897

I'm told to worry about the trade deficit.

Commentators and populist politicians are wringing their hands. The trade deficit is a "malignant tumor in the intestines of the U.S. economy," says Pat Buchanan. Lou Dobbs is very upset that "We're borrowing about $3 billion a day just to pay for our imports"!

Economists had taught me that the trade deficit is not a big deal. (The budget deficit may be a big one, but that's a different issue.) But with all the pundits and politicians alarmed, I began to wonder if I was out of touch.

Then I thought about my local supermarket. I buy stuff from the Food Emporium every week. I spend thousands of dollars a year there. But the supermarket never buys anything from me. Not one thing...

John Stossel teaches a simple principle of economics clearly, and debunks the fearmongering of politicians and pundits.

Global Warming Heresy

http://www.capmag.com/article.asp?ID=4941

Suppressing dissent is nothing new. Italian cosmologist Giordano Bruno taught that stars were at different distances from each other surrounded by limitless territory. He was imprisoned in 1592, and eight years later he was tried as a heretic and burned at the stake. Because he disagreed that the Earth was the center of the universe, Galileo was ordered to stand trial on suspicion of heresy in 1633. Under the threat of torture, he recanted and was placed under house arrest for the rest of his life.

Today's version of yesteryear's inquisitors include people like the Weather Channel's Dr. Heidi Cullen, who advocates that the American Meteorological Society (AMS) strip their seal of approval from any TV weatherman expressing skepticism about the predictions of manmade global warming. Columnist Dave Roberts, in his Sept. 19, 2006, online publication, said, "When we've finally gotten serious about global warming, when the impacts are really hitting us and we're in a full worldwide scramble to minimize the damage, we should have war crimes trials for these bastards -- some sort of climate Nuremberg."

This has become a sore spot for me lately, as I've been discovering a lot of new information about global warming that is less than readily available in the media. Walter Williams, always a good read, makes a clear point about the problem with the brain-off culture that would have you get on board simply because everyone else is doing so. I'm not claiming to have any conclusions about global warming other than this: when someone resorts to force and intimidation to supress dissent, discussion and scientific examination, it's a good indication that their cause doesn't stand on its own merits.

More to come about this topic in the next few days...

Who is Gouging Whom?

http://www.capmag.com/article.asp?ID=4929

Last Wednesday 79 members of the House of Representatives introduced a bill instituting criminal and civil penalties on any corporation or individual found guilty of gasoline "price gouging." But the real gouger driving up gasoline prices is not the private sector, it is our government.

To "gouge" means to extort, to take by force--something that oil companies and gas stations have no power to do. Unlike a government, which can forcibly take away its citizens' money and dictate their behavior, an oil company can only make us an offer to buy its products, which we are free to reject.

Because sellers must gain the voluntary consent of buyers, and because the market allows freedom of competition, oil and gasoline prices are set, not by the whim of companies, but by economic factors such as supply and demand. If oil companies could set prices at will, surely they would have charged higher prices in the 1990s, when gasoline was under one dollar a gallon!

I'm constantly amazed at those who cry foul over what they see as "price-gouging". I can't remember the last time someone forced me to buy anything! I can think of quite a few examples, however, of times where the force of government was abused to limit my choices or take my money for the "common good".

Take a Stand for the Rights of Physicians

http://www.capmag.com/article.asp?ID=4930

While Governor Schwarzenegger and California legislators are busy putting forward proposals to socialize health care, one element is profoundly missing: none of these politicians know or care what physicians think of the proposals. It should have occurred to them that physicians are, to say the least, rather central to maintaining good health care. But physicians and their views are obviously considered to be unimportant—an individual's need for healthcare entitles him to the knowledge, ability, careers and lives of physicians. Apparently, physicians are nothing more than a natural resource, like oil reserves—and are to be allocated by the government.

This treatment of physicians is not only a huge economic mistake but an unjust and immoral basis for health care policy. It is precisely because health care is so important that we should be very careful indeed to protect the rights of physicians.

The moral principle of individual rights must be defended in the face of anyone who needs health care and proclaims that he has a right to force someone else to provide it—to him or others. Politicians who tell you that you have a right to health care usually mean that no one should have access to any health care—unless they get it through the government.

Springtime for Taxes

http://www.realclearpolitics.com/articles/2007/04/springtime_for_taxes.html

Twelve years ago, Estonia became the first country to tax everyone -- companies and individuals -- at the same flat rate. It started at 26 percent, dropped to 22, and will go to 20 in 2009. There are a few deductions for things like mortgage interest, educational expenses, and charitable donations. Very low incomes are exempt.

Unsurprisingly, Estonia is booming. The former Soviet republic used to be poor, with an average income 65 percent below its European neighbors. Today, Estonians are almost as rich as their neighbors, and their economy is growing more than 11 percent a year.

Corporations like a tax system that is low and simple, too, and that leads them to do more business in flat-tax countries. American companies such as Microsoft, Colgate, 3M, Bristol-Meyers Squibb, and Johnson & Johnson opened businesses in Estonia after the flat tax was adopted. Twelve years ago, foreign investment in Estonia made up only 5 percent of GDP, but today, it's up to 20 percent. That means there's more money in the Estonian economy to tax. So while the tax rate dropped, government revenues actually increased.

So why can't we do that here?

Great essay from John Stossel. Not only does it make a case for a flat tax system, but it shows why our politicians are loathe to change the status quo. Our tax code may be obtuse, but it's not hard to understand why such a system gives politicians lots of leverage. If you think you're a victim, you can lobby for a special exemption for whatever unfair burden you suffer from. Nothing looks better on election day than a politician who can claim to have "relieved the burden" of the american taxpayer. How easy would it be to curry favor with voters through tax manipulation if we adopted a flat tax - and eliminated all the exceptions?

I haven't heard anyone yet make a good case for why we shouldn't adopt a flat tax that doesn't hinge upon the idea of redistribution of wealth. Everyone agrees that taxes shouldn't be so hard to file. Most people would agree (except those who depend on it for influence and power) that removing the incentive for politicians to manipulate the tax laws would be a good idea. Of course, most people would hope to pay less taxes under any proposal to change the status quo. Personally, I'm less concerned with how much I'm paying than I am with how clearly the current tax system violates principle and the consequences of such violation.

As for those who would complain about the unfair or disproportionate burden a flat tax would impose on the poor, who prefer a system where the rich would pay a greater portion, I would ask - what is your moral and rational justification for taking by force the wealth of one man to give to another, by virtue of his having less? By what criteria will you make the distinction between rich and poor? What does it do to society to reward failure, and punish success?

How long do you think such a system can sustain itself if it takes from those who have demonstrated their capacity to produce and gives to those who have demonstrated only their capacity to consume?

Why U.S. tax policy makes saving a sucker's game

http://www.slate.com/id/2164050/

If I said to you, "You can have $10,000 to spend now—or $9,500 to spend in 10 years," which would you choose? Probably the $10,000 now. And in doing so, you would be making the same choice many Americans make when deciding whether to save or spend their hard-earned cash.

The problem is how we tax investment gains. Over the past 80 years, the average annual return on Treasury bills (a proxy for savings accounts) has been 3.7 percent per year. Inflation, meanwhile, has averaged 3.1 percent per year. This combination has produced a "real return" of a paltry 0.6 percent per year. If you got to keep that 0.6 percent, you might still have an incentive to save: A $616 real gain on $10,000 in 10 years wouldn't be much, but it would at least be $616 more than you have now. Unless you're so poor that you're exempt from taxes, however, or so flush that you can afford to lock up cash for decades in a tax-deferred annuity or retirement account, you won't be keeping that 0.6 percent. You'll be giving all of it—and probably more—to the government.

I thought this article did a good job of demonstrating just one of the consequences of our current tax system. Having just tried to explain to my wife our tax return this year, I'm extremely frustrated - not at the amount I have to pay, but at the lunacy of the system that has been perverted repeatedly by politicians and the brain-off constituency that clamors for more tax revenue and more exceptions at the same time.

Of course, such negative consequences are not the reason we must overhaul our tax system - they are the symptoms, not the disease. Our tax laws violate natural laws, and the result is tyranny.
(see principles 12+13)

Got Price-Fixed Milk?

http://www.lewrockwell.com/suprynowicz/suprynowicz54.html

Schoolchildren may still be taught that our government has "anti-trust" laws to protect consumers from price-fixing. But Washington actually spends far more money setting up and protecting monopoly trusts than "busting" them.

Under a 1937 law, for example, most American dairy farmers participate in a complex system of interlocking subsidies and protection measures that have the effect of keeping the free market from forcing the price of milk ... down.

That’s right. A recent study by the U.S. Department of Agriculture acknowledges federal "dairy programs raise the retail price" of milk. The watchdog group Citizens Against Government Waste estimates these government-enforced price-rigging programs cost U.S. consumers at least $1.5 billion per year.

Now, an added 20 cents a gallon is chickenfeed to the rich person. But the grocery budget forms a much higher percentage of the spending of a poor family with kids. So here’s a government program that has it all – it subsidizes rich dairy farmers, while placing the bulk of the burden squarely on the shoulders of poor people trying to feed their kids!

A great article on the consequences of government-manipulated markets. Here's a story of someone who didn't join the protectionist government program (though others tried to force him to do so), and not-so-surprisingly, managed to produce more efficiently and cheaply! Of course, such competition threatens the livelihood of the slackers who refuse to rise to the challenge and innovate - who would rather not compete on the merits of their labor, but use force to prevent anyone else from doing so.

Health Care Is Not A Right

http://www.capmag.com/article.asp?ID=4880

Most people who oppose socialized medicine do so on the grounds that it is moral and well-intentioned, but impractical; i.e., it is a noble idea -- which just somehow does not work. I do not agree that socialized medicine is moral and well-intentioned, but impractical. Of course, it is impractical -- it does not work -- but I hold that it is impractical because it is immoral. This is not a case of noble in theory but a failure in practice; it is a case of vicious in theory and therefore a disaster in practice. So I'm going to leave it to other speakers to concentrate on the practical flaws in the Clinton health plan. I want to focus on the moral issue at stake. So long as people believe that socialized medicine is a noble plan, there is no way to fight it. You cannot stop a noble plan -- not if it really is noble. The only way you can defeat it is to unmask it -- to show that it is the very opposite of noble. Then at least you have a fighting chance...

I have quite a bit to say about this, as I am strongly opposed to socialized health care. I'll post more about this in the days to come, but I thought this essay was a good introduction to the principles violated by "universal health care", and the perversion of "rights" being fed to us by those who advocate social programs for the "public good".

"Do we need money to live the life we love, or is prosperity the consequence of learning how to live the life we love?

What do you want? Do you want money, or do you want to love your life?"

-- Rick Koerber

"When you understand the principle that liberty - the thing we cherish the most - is only possible when we respect other people's right to control property, based on mutual agreement, you value freedom more and more. If you only give lip service to it, and salute the flag while you're violating private property, the world becomes more and more socialistic and you wonder when they're going to come and do something bad to you."

-- Rick Koerber
Principle 13: Personal Liberty Requires Private Property

"A true capitalist is a steward over all the resources put in his power.
A consumer denies stewardship and thinks ownership is a license to destroy"

-- Rick Koerber

The 13 Principles of Prosperity

from rickkoerber.com

The foundation of the prosperity economics is true economic principles. These principles or natural laws were rediscovered by America’s Founding Fathers. The Founders studied and realized that all prosperous nations on earth (most notably the ancient Israelites and Anglo Saxons) applied these natural laws and experienced demise once the laws were abandoned.

On August 13, 1776 Thomas Jefferson wrote, “Are we not better for what we have hitherto abolished of the feudal system. Has not every restitution of the ancient laws had happy effects. . . . Is it not better now that we return at once to that happy system of our ancestors, the wisest and most perfect ever yet devised by the wit of man as it stood before the eighth century.”

The Founding Fathers believed the ancient natural laws would lead America to a Novus Ordo Seclorum, a “new order of the ages” (a motto found on the Great Seal of the United States). The Founders’ vision of a “new order of the ages” refers to a paradigm shift, a shift to abundance—which consequently leads to prosperity; Novus Ordo Seclorum does not signify a new world order.

The 13 Principles as outlined by Rick Koerber

1. God is the Author of Prosperity
2. Faith Begins with Self-Interest
3. Agency Implies Stewardship
4. Perspective Determines Action
5. People are Assets
6. Human Life Value is the Source and Creator of All Property Value
7. Dollars Follow Value
8. Exchange Creates Wealth
9. Profit is the Tool of Validation
10. Productivity is the Standard
11. Force Destroys Freedom and Prosperity
12. Collective Action Has No Unique Moral Authority
13. Personal Liberty Requires Private Property

I can't say enough about these principles. I post them here because learning about them has changed my life. At first glance, they may not seem like much, but if you're willing to open your mind, to dig deep and discover the message and the meaning behind the simple phrases, you'll find a wealth of knowledge and opportunity. These principles were the result of much study and thought, and they represent the wisdom of the ages. Prosperity is quite simply the natural consequence of living by these principles.

You can read more about the each principle at freecapitalist.com

The Producer Revolution

The Producer Revolution: An Explanation

The Producer Revolution is a change in mindset which leads to changes in actions, which then lead to a transformation of a person’s physical environment, or physical world. Because of this change in mindset, Producers transcend the Consumer Condition where there is never enough, where life isn’t fair, and where the world needs to cooperate in order for them to prosper. They enter a world of self-reliance where prosperity is within their grasp—regardless of circumstance—where people have intrinsic value and material things do not; where prosperity is a result of helping and creating value for other people, rather than taking advantage of people and getting lucky; and where financial abundance is the result of a predictable formula, rather than pure chance.

Disclaimer: I am a member of the Producer Revolution - many of the thoughts posted here come from what I have learned in this organization. I recommend you read the rest of the above essay - it outlines clearly the paradigms of scarcity and abundance. If you really want to change your life (not just your external circumstances but who you are), I would highly recommend you consider joining the Producer Revolution.

Recommended - Week of April 17

When did America become a nation of frightened wimps?
An excellent essay by Steve Olson that dares to ask why we put up with the "security" alarmists.

Making Money Consciously
A thorough essay that challenges the common notions of money. Also references the consumer/producer paradigms (he calls them the moochers/contributors)

10 Things I wish I had never believed
Very brain-on list in the spirit of this blog - "I’m writing this list for you because I wish somebody had sent me this list years ago."

My Escape from the Culture of Fear
Wonderful personal account of fighting the fear demons - "I have been motivating myself with fear!"

"The ultimate result of shielding men from the effects of folly is to fill the world with fools."

-- Herbert Spencer (1820-1903)
State Tamperings with Money Banks

"Unlike the political opportunist, the true statesman values principle above popularity, and works to create popularity for those political principles which are wise and just."

-- Ezra Taft Benson
The Proper Role of Government

"I do not choose to be a common man. It is my right to be uncommon—if I can. I seek opportunity—not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I want to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole. I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence nor my dignity for a handout. I will never cower before any master nor bend to any threat. It is my heritage to stand erect, proud and unafraid; to think and act for myself, enjoy the benefit of my creations, and to face the world boldly and say, this I have done. All this is what it means to be an American."

-- Dean Alfange