Sunday, September 23, 2012

More Milt.

Millions of smart people, who would never judge themselves capable of rendering expert opinion outside their field of expertise, do exactly that when it comes to the field of politics.  A doctor who would not think of taking on the tasks of a software engineer, not without going back to school or learning as an apprentice first, has none of those qualms when it comes to rendering a verdict on the future direction of the country and all her citizens.  Certainly we all have some sense of the right decisions to make when it comes to furthering our own narrow interests, whatever they may be.  But to make decisions that are truly wise, decisions that have the capacity, in the long run, to benefit all, we have to have a wider awareness.  We have to be better educated.

The philosophical, moral, and practical arguments for capitalism and freedom are an area where most people are lacking.  These arguments are not taught in schools to the extent they used to be, and much of academia and the press are overtly hostile to them.  Absent this knowledge, and simultaneously content that our expertise in other fields is enough to make up for it, we are easily seduced by arguments and opinions that sound good.

It is hard to be well educated in this realm, because these days you pretty much have to do it yourself.  And doing it means running against the tide of a huge chunk of the messaging that hits us from print, radio, television, and movies.  The fact that it's hard speaks volumes for its worth.  I have devoted other essays to Milton Friedman's work and I recently read his first book devoted to issues of governance.  The title is "Capitalism and Freedom".  It was published 50 years ago in 1962.  If more people would read it, and other books like it, I believe the United States, and the world, would be a better place.

Tuesday, June 26, 2012

Epic Fail

One of the regular contributors to our local newspaper’s guest editorial section is a fellow who bills himself as a “lifetime environmentalist”.  In his most recent essay he referenced the publication, “The Limits To Growth”, written by the Club of Rome in 1972.  The book is famous for predicting the imminent exhaustion of virtually every non-renewable resource important to prosperous, 20th century living—crude oil, aluminum, copper, molybdenum, natural gas, gold, silver, etc.  And what did they rely on for these predictions, all of which have been proven wrong?  A computer model, of course.  As my sons would say, “epic fail.”

I had assumed that the Club of Rome had quietly disbanded so as to avoid further embarrassment, but our intrepid editorial writer has made me aware that the Club endures, and has published a new manifesto, “2052, A Global Forecast for the Next Forty Years”, to coincide with the Rio +20  Earth Summit.  Faced with the failure of their 1972 models, and forced to recognize that human creativity and changing economics have extended the lifetimes of natural resources far beyond the artificial limits they postulated, the 2012 Club has changed its strategy.  In 1972 it was the scarcity of resources that would cause the collapse of civilization, now it is the use of them.  The Club is now predicting climate catastrophe, based on computer models of course.

The solutions proposed for the problem in 1972 and 2012 are the same.  In 1972 “The Limits To Growth” set out to prove, scientifically, that the earth’s limited resources heralded an end, sadly but necessarily, to the age of human freedom.  A more enlightened governance than self-governance would henceforth be required.  Jorgen Randers, the author of the Club’s new book, and co-author of the first, said this in a recent press release:  “We need a system of governance that takes a more long-term view.  It is unlikely that governments will pass necessary regulation to force the markets to allocate more money into climate friendly solutions, and must not assume that markets will work for the benefit of humankind.”  In other words, a more enlightened governance than self-governance will henceforth be required.  You can imagine who constitutes the enlightened.

Thus is revealed the true nature of the Club of Rome, and other groups like them.  They are anti-human.  They view human beings primarily as consumers and polluters, and not as creators, innovators, and stewards.  The “solutions” that these Malthusian groups have proposed and carried out in the past have killed millions upon millions of people.  The “solutions” that they propose today are rife with vague and undefinable terms like sustainability and social justice.  In truth, what they propose is arbitrary rule by “experts”, and wealth redistribution writ large.  Developed nations are expected to abandon the standard of living they have achieved, and developing nations are expected to abandon their aspirations for development.  Cooking over a dung fire and praying that the swarms of mosquitoes that surround you won’t infect you with malaria is good enough, isn’t it?  For all their talk about a better tomorrow, the Club of Rome is appalling in its disregard for human life.

Monday, May 14, 2012

Hej Då Sweden

I have always had a soft spot for the country of Sweden.  The city of Umea was (perhaps still is) the sister city of Saskatoon, the city where I was born and went to college.  One of my best friends in college grew up in a home where they spoke Swedish pretty much exclusively, and I remember listening to their lilting conversations and wishing I could take part more fully.  During my first year playing for the University of Saskatchewan soccer team our modest fortunes depended largely on the skills of a foreign student, Stig, who had come over from Sweden for a year of study.  And though I no longer have any admiration for the regulatory heavy-handedness which decrees that companies must provide lengthy parental leave for new parents (480 days in Sweden, shared between the mother and the father, with 60 days reserved for each), one can at least surmise and admire the notion that the Swedish government believes that lasting parental involvement is the most important factor in the development of successful and happy children.  Well, up to a point.

Once a child is a year old or so, the Swedish government is no longer so concerned about lasting parental involvement.  At that point, other priorities take over, and parents who do not surrender their children to daycare and then the school system are now harassed and fined.  Until 2010, it was possible to home school in Sweden.  New laws prevent the practice in almost all cases, and private schools have to teach the state curriculum.  Parents who wish to home school are actually fleeing the country--many are going across the Baltic sea to the Aland Islands, a part of Finland where the locals speak Swedish and parents can home school in peace.  One has to wonder, why the heavy hand? Why the disconnect between the official philosophy of the first 16 months and the next 16 years?

I suspect I know the reason.  Gender equality is a huge issue in Sweden, and the implementation of policy designed to achieve it is backed by the full force of the government.  The website Sweden.Se says this:
"Sweden has one of the highest levels of gender equality in the world.  This is based on the belief that when women and men share power and influence equally it leads to a more just and democratic society.  A well-developed welfare system makes it easier for both sexes to balance their work and family life."
What this means, without saying it explicitly, is that the traditional division of labor between husband and wife is not really an acceptable arrangement any more, because men and women are not sharing power and influence equally.  In this way of thinking, the sharing of power and influence only occurs when men and women are out in the workforce together, doing the same jobs, and having the same dreams and ambitions.  To further that, manufactured rights (all children have a "right" to daycare), and punishment (in the form of fines and harassment should a family choose to buck the system and home school their children) are all designed to promote the idea that a woman's place is decidedly not in the home.  To show just how serious (and creepy) the Swedes are about their genderless society, there is a  preschool in Stockholm called "Egalia" (makes me gag) where the children are not boys or girls, only genderless "friends".  Pronouns such as "he" and "she" are not used at the school and have been replaced by new words that do not appear in any dictionary.

I have written in earlier essays that once you move beyond the functions of government that are broadly accepted by everyone -- infrastructure, national defense, the police, objective application of the rule of law -- it is very difficult to reach any sort of broad consensus on how the limited tax dollars of a country should be spent.  Inevitably, though there may be some significant number of citizens who feel that every child should attend a federally funded public school, and are willing to contribute their tax dollars toward this effort, there will be other citizens who prefer a different option.  Though I have no problem with a government sketching broad outlines designed to ensure that all children are indeed being educated, why should it matter how it happens?  What if you are a Swedish woman (or man) who is every bit the intellectual, accomplished, and ambitious equal of your spouse and you want to devote your waking hours not to the functioning of a retail store or a hospital, but to the education of your children?

Sorry, but you can't, and the reason you can't is that a small group of influential people have projected their vision of the correct way to live upon the Swedish population at large.  Tyranny results.  It's a soft tyranny at first; you only notice it if you pay attention.  This is the time when the utopian dreamers (all of this is for a better world) are satisfied to try and cajole and educate.  They print pamphlets, make television commercials, lecture at universities, attract disciples, and lobby politicians for expanded mandates and additional funding.  But there are always holdouts who are not enlightened enough to see the beauty of the new way of living, and this is when the totalitarian tendency always appears.  Friedrich Hayek put it this way in his landmark book, "The Road To Serfdom":
"... planning leads to dictatorship because dictatorship is the most effective instrument of coercion and the enforcement of ideals and, as such, essential if central planning on a large scale is to be possible."
In other words, the planners, the dreamers, the visionaries who only want to secure a better way of life for everyone say, "you know, if we're really going to get this thing done, we're just going to have to get rough with those who refuse to go willingly."  Which is why on one day in Sweden you are able to homeschool your children (though you must do it in the face of official discouragement), and the next day you cannot, unless you want to be fined and harassed.  Don't complain, it's for your own good.

I will always think fondly of my college friend, and the game-saving skills of Stig, but I am losing my interest in Sweden, the country.  I would hate to live under that sort of nanny-statism.  The Swedish people are not free, and I suspect that as time passes a very many of them will come to realize they have lost something very precious indeed.

Monday, April 23, 2012

Thinly Veiled Slander

In recent weeks, when discussing the budget framework proposed by Congressman Paul Ryan of Wisconsin, the President referred to it as "thinly veiled Social Darwinism".  The statement was pejorative, of course, meant to convey the idea that Republicans would prefer that we all live in a sort of Hunger Games world where every man is pitted against every other man, tooth and claw, to secure the means of survival.  With that formulation, one can see how little President Obama thinks of the American people, how little he trusts us.  For it is only for the last 50 years that the United States has lived with an expansive social safety net.  Before the 1960's, which is when the intellectual class suddenly discovered that the cause of poverty was structural, not personal, the consensus among social scientists and the public at large was that poor people were no different than the rest of society in that there existed among them the full spectrum of moral capacity--some were good and some were bad.  Thus, the indiscriminate provision of aid to those who were wanting contained a substantial moral hazard, namely that the aid itself would reduce much of the incentive required to push people to work hard enough to take care of themselves, certainly among those who were less concerned about trying their best, and even among those who did care.  So for virtually all of American history, there existed no such thing as a lavish social safety net, and what did exist was hedged with qualifications to guard against the encouragement of vice.

And what happened during those dark days?  Families looked after each other.  Pioneers raised barns together.  Wealthy women in the large cities organized charity organizations to look after the deserving poor and to offer them spiritual guidance, encouragement, training, and jobs so they could begin to look after themselves.  Does the President think we are so different today?  Have we become, in the last 50 years, so uncaring, so greedy, so completely focused on ourselves that we care not a whit for our friends, family, and neighbors?  No, we haven't.  But if you follow the implications of the President's words through to their logical conclusion, that is where you end up.  It is a shame that this slander goes unchallenged.

And it's not as if the Ryan budget is proposing to take us back to the level of services that were offered a century ago.  Rather, it only proposes that we, in time, spend only as much as we make, rather than living beyond our means to the tune of 1 or 2 trillion a year.  According to the President, such economizing as is practiced daily by millions of families and businesses, and which must be done if we are not to end up as Greece writ gargantuan, is somehow cruel and unusual punishment.

Friday, February 17, 2012

Early in the morning on February 17th, 2012

Contrast the words below, from President Reagan's first inaugural address, with the paragraphs I quoted in my previous post about President Obama's State of the Union speech.
"From time to time, we have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.

We hear much of special interest groups. Our concern must be for a special interest group that has been too long neglected. It knows no sectional boundaries or ethnic and racial divisions, and it crosses political party lines. It is made up of men and women who raise our food, patrol our streets, man our mines and our factories, teach our children, keep our homes, and heal us when we are sick—professionals, industrialists, shopkeepers, clerks, cabbies, and truckdrivers. They are, in short, "We the people," this breed called Americans."
Whereas President Obama sees the government as the agent that defends the citizens against any and all injustices, President Reagan recognizes that it can also be the oppressor, and that this tendency must be constantly monitored and defended against.  The idea that governance could be better and more fairly conducted by "experts" is the basis for the progressive/liberal movement, but in the Obama administration there has been less emphasis on experts running the government "better", and more on experts running the government "meaner".  Meaning that the modern progressive sees the system as rigged against the ordinary citizen--rigged by special interest groups, rigged by rich people, rigged by corporations (owned by rich people), and rigged even by the environment itself (which they say is changing in ways that will be detrimental, even devastating to the average person, caused of course by corporations owned by rich people).  The response of the Obama administration to this malevolent universe is to punish those responsible by making them "pay their fair share".  And honestly, there are many ordinary citizens who have no interest in liberal/progressive ideology who see the system as rigged against them also, and they would be right.  The system is rife with carve-outs, loopholes, special deals, special rules, accommodations, and dispensations.  But here is the paradox.

President Obama's proposals to add more of the same, to add regulation and penalty that will tip the scales in favor of the little guy, only guarantee the perpetuation of the special interest politics that are a plague on us all.  Big government begets special interest politics.  Why?  Because if the government is in your business, then it is in your interest to lobby and twist the proposed rules to your advantage.  If the government leaves you alone, the reasons to lobby for advantage are diminished and your success depends to a greater degree on your own energy, creativity and intelligence.  Smaller government leaves us closer to the meritocracy we are supposed to be.

In the long term, life, liberty, and the pursuit of happiness can only be secured through President Reagan's trust in everyday Americans, and it can only be lost through President Obama's trust in his experts.

Sunday, February 5, 2012

Oh Captain My Captain

I watched about 60 or 70 percent of the State of the Union address last week.  The President definitely gave it the old college try, punctuating many of his statements with a throaty urgency that was calculated, I'm sure, to express just how much he cares about us and the country.  Listen to me people, can't you tell how hard I'm trying to do the right thing!

At the end of the speech I played an interesting game with myself.  Here is the text of the last paragraph:
"So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those 50 stars and those 13 stripes. No one built this country on their own. This nation is great because we built it together. This nation is great because we worked as a team. This nation is great because we get each other's backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong."
I was reading the text of the speech as he delivered it, and as he read the sentences above, I added one word, several times.
So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those 50 stars and those 13 stripes. No one built this country on their own. This nation is great because we built it together, voluntarily. This nation is great because we worked as a team, voluntarily. This nation is great because we get each other's backs, voluntarily. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we are joined in common purpose, voluntarily, as long as we maintain our common resolve, voluntarily, our journey moves forward, and our future is hopeful, and the state of our Union will always be strong.
Right there, one sees the prism through which the President views the world.  He is correct when he says that no one built this country on their own, but the education, friendships, partnerships, negotiations, and collaborations it took to build this great nation were not all planned and facilitated by the federal government. He fails to understand that there is no Union unless the Union is voluntary.  Johah Goldberg stated it clearly in this recent article in National Review Online.  In reference to that same final paragraph he wrote:
This nation isn’t great because we work as a team with the president as our captain. America is great because America is free. It is great not because we put our self-interest aside, but because we have the right to pursue happiness.
Those of the liberal/progressive bent do not trust us to work together voluntarily, and they certainly don't want us pursuing too much happiness (they like to refer to it as greed), so they have undertaken to teach us all the error of our ways through the patient establishment of education and journalism professions that are largely sympathetic to their cause.  But they will never convince everyone, and recent trends in talk radio, television news, and alternatives to traditional public schools have made their job more difficult.  So the President's utopian vision will come about only if resort is made to those techniques that have worked before (and are the only ones that will ever work), totalitarianism and terror.

There was a moment in the speech when he used this quote from Abraham Lincoln:
"That government should do for people only what they cannot do better by themselves, and no more."
Would that it were so!  This President plans on doing everything for us, or at the very least, telling us how to do everything.  Does he ever see a situation and think, you know, this'd probably turn out better if I just left things alone.

And this one's a howler.  When he was talking about energy, and the vast quantities of natural gas and oil that companies have recently figured out how to liberate from shales and other "tight" rocks, he said this:
"And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock - reminding us that government support is critical in helping businesses get new energy ideas off the ground."
Now I'm sure that there have been some professors and graduate students around the country who have done some publicly funded research projects that have contributed to the discovery of methods and technologies that allow hydrocarbons to be produced from rock formations that were previously ignored.  But to imply that they were a critical element is ridiculous.  Smart men and women, working on their own or for companies like Chesapeake, EOG, EnCana, and Devon, driven by profit potential and the excitement of discovery, are the reason that the United States is now known to be the host of vast reserves of natural gas and oil that were virtually unknown less than a decade ago.  To suggest otherwise is an insult.  The President wants us to do big things, like Hoover dams, and Golden Gate bridges, and interstate highways.  Finding enough natural gas to last the country for 100 years isn't big enough for you?

I'll leave you with this thought, formed freely and without coercion in my own mind.  Commerce, conducted freely, among all activities conducted by men, is perhaps the greatest agent of tolerance and cooperation of them all.  Given the propensity of this President to interfere, at every level, with the free conduct of commerce, is it any wonder that he is the most polarizing President I have known in my lifetime?

Tuesday, December 13, 2011

The Missing Link

Several months ago, I started reading what has turned out to be one of the most intellectually demanding books I have ever opened.  The book is a classic, "The Theory of Money and Credit", written by Ludwig von Mises in 1912, and first translated into English in the early 1930s by a British economist, Lionel Robbins, who learned Mises' business cycle theory from Mises' famous follower, Friedrich von Hayek.  Much of the book is very technical and demanding on the intellect of a non-economist such as myself--so demanding that I often had to accept the fact that I was not going to sort out the meaning of certain sections and passages, and plunge ahead regardless.  Part four of the book, entitled "Monetary Reconstruction" is the easiest to read, and the most related to all the previous writing I have done on this blog.  It addresses the political importance of sound money and the gold standard.  It is that which I plan to discuss.

Professor von Mises begins section four of his book by stressing the importance of a market economy and private property rights to the development of a prosperous and happy society.
The liberal doctrine sees in the market economy the best, even the only possible, system of economic organization of society.  Private ownership of the means of production tends to shift control of production to the hands of those best fitted for this job and thus to secure for all members of society the fullest possible satisfaction of their needs.
It makes nations and their citizens free and provides ample sustenance for a steadily-increasing population.
He then acknowledges that in order to protect the contracts and the property of those citizens who are going about, participating in the market economy, from criminals within and enemies without, governments must be formed.  In order to be able to enforce the laws which protect citizens, governments must be able to use force to punish aggression and deter attacks.  But then there is a danger.  How to keep those who are entrusted with the functions of government from turning their weapons, their instruments of compulsion and deterrence, against their own citizens.  That, says Ludwig von Mises, is the essential theme of Western civilization.
Defence of the individual's liberty against the encroachments of tyrannical governments is the essential theme of the history of Western civilization.  The characteristic feature of the Occident is its peoples' pursuit of liberty...  All the marvellous achievements of Western civilization are fruits grown on the tree of liberty.
Economic organization based on private property and a free market may indeed "secure for all members of society the fullest possible satisfaction of their needs", but it will not provide everyone with everything.  Every person, to varying degrees according to their wealth, must still make choices about which needs they choose to fulfill.  This is the very nature of the science of economics, which the aforementioned Lionel Robbins defined this way:  Economics is the study of the use of scarce resources which have alternative uses.  The reality of life is that there has never been enough to satisfy everyone completely.  The place where every person is completely satisfied is not the Earth that we know, it is the Garden of Eden, where bad stuff went down despite the heavenly abundance.  It is this essential aspect of life that governments, through their monetary policies, have attempted to suspend, at first, I will be charitable, out of concern for their fellow human beings, but lately out of concern only for the perpetuation and growth of their power over others.  This is what Professor von Mises warned about.  How does this relate to the gold standard?  von Mises puts it this way:
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments.  Ideologically it belongs in the same class with political constitutions and bills of rights.
The excellence of the gold standard is to be seen in the fact that it renders the determination of the monetary unit's purchasing power independent of the policies of governments and political parties.  Furthermore, it prevents rulers from eluding the financial and budgetary prerogatives of the representative assemblies.  Parliamentary control of finances works only if the government is not in a position to provide for unauthorized expenditures by increasing the circulating amount of fiat money  Viewed in this light, the gold standard appears as an indispensable implement of the body of constitutional guarantees that make the system of representative government function.
I would say it this way.  The efforts and programs advanced by the progressive movement to improve society (so they say) and ameliorate suffering (so they say) have grown steadily since their first stirrings in the mid-1800s.  Eventually they grew so large and costly that the financial restrictions imposed by the gold standard could no longer be tolerated, and so the gold standard was abandoned in order to pave the way for the inflation, credit expansion, and fiat money that would be used to pay for the programs that would not be supported by the citizens if they knew about, and were forced to pay their full cost.  In the words of Professor von Mises:
It is not just an accident that in our age inflation has become the accepted method of monetary management.  Inflation is the fiscal complement of statism and arbitrary government.  It is a cog in the complex of policies and institutions which gradually lead towards totalitarianism.
I'll go further.  Over and over again we are bludgeoned with the message that greed and unfettered consumerism are the logical result of a capitalist system that rewards individual effort and self-interest.  Greed and consumerism are not the fault of capitalism.  Rather, it is the largely successful efforts of the progressive movement, funded by inflation and credit expansion, to prevent the citizens, rich, middle-class, and poor alike, from ever having to engage in that most necessary, most natural, most real of all human activities--making a choice.  It is the suspension of hard choices--a big house or a small house, a big car or a small car, an iPhone or a flip phone, to earn food or go hungry--that has led to the greed and consumerism we are saddled with.  The progressives have largely succeeded in their quest; they have borrowed and printed enough money to suspend want; they have given us our Garden of Eden.  But just like the biblical version, this garden has its serpents, and so we must either leave of our own accord, or, like the citizens of bankrupt Greece, be cast out by forces beyond our control.