This video of Friedrich Hayek talking to students gets to be most interesting – we think – round about the 16 minute mark, when he explains why the monopoly power of government to issue money should be taken away from it. He goes on to argue against the idea of “social justice”. Justice applies to individuals, not “a state of affairs”. Most interesting of all, perhaps, is the case he makes against the idea that individuals who “do good” directly to other individuals are the great benefactors of society. On the contrary, the “selfish” people who produce goods for profit do far more good to far more people, indirectly. Towards the end he makes the point that the more complex a society is, the less able government is to understand its needs and plan for them.
This is from a fine article by Jonah Goldberg at Townhall:
Definitions vary, but broadly speaking, libertarianism is the idea that people should be as free as possible from state coercion so long as they don’t harm anyone.
Or as we put it in our Articles of Reason: My liberty should be limited by nothing except everyone else’s liberty.
The job of the state is limited to fighting crime, providing for the common defense, and protecting the rights and contracts of citizens. The individual is sovereign, he is the captain of himself.
It’s true, no ideal libertarian state has ever existed outside a table for one. And no such state will ever exist. But here’s an important caveat: No ideal state of any other kind will be created either. …
Ideals are … goals, aspirations, abstract straight rules we use as measuring sticks against the crooked timber of humanity.
In the old Soviet Union, Mao’s China, Pol Pot’s Cambodia and today’s North Korea, they tried to move toward the ideal communist system. Combined, they killed about 100 million of their own people. That’s a hefty moral distinction right there: When freedom-lovers move society toward their ideal, mistakes may be made, but people tend to flourish. When the hard left is given free reign, millions are murdered and enslaved. Which ideal would you like to move toward? …
How statism/collectivism ever came to be an ideal is puzzling enough, but that there are millions who still want it after those calamitous experiments Jonah Goldberg names, remains to us a mystery beyond all comprehension.
It’s a little bizarre how the left has always conflated statism with modernity and progress. The idea that rulers – be they chieftains, kings, priests, politburos or wonkish bureaucrats – are enlightened or smart enough to tell others how to live is older than the written word. And the idea that someone stronger, with better weapons, has the right to take what is yours predates man’s discovery of fire by millennia. And yet, we’re always told that the latest rationalization for increased state power is the “wave of the future.”
That phrase, “the wave of the future,” became famous thanks to a 1940 essay by Anne Morrow Lindbergh. She argued that the time of liberal democratic capitalism was drawing to a close and the smart money was on statism of one flavor or another – fascism, communism, socialism, etc. What was lost on her, and millions of others, was that this wasn’t progress toward the new, but regression to the past. These “waves of the future” were simply gussied-up tribalisms, anachronisms made gaudy with the trappings of modernity, like a gibbon in a spacesuit.
The only truly new political idea in the last couple thousand years is this libertarian idea, broadly understood. The revolution wrought by John Locke, Edmund Burke, Adam Smith and the Founding Fathers is the only real revolution going. And it’s still unfolding. …
We would add that this revolution has been advanced in thought further by Ludwig von Mises, Friedrich Hayek, Robert Nozick, and (more popularly) Ayn Rand, to name just some of the later philosophers of individual freedom.
What made the American experiment new were its libertarian innovations, broadly speaking. Moreover, those innovations made us prosper. …
I’m actually not a full-blown libertarian myself, but it’s an ideal I’d like America to move closer to, not further away from as we’ve been doing of late – bizarrely in the name of “progress” of all things.
Same goes for us.
“Justice is essentially an attribute of individual human action. A state of affairs cannot be either just or unjust.”
Friedrich Hayek’s own words. Here is the great economist of the Austrian School saying them in contradiction to John Rawls in an interview with James Buchanan.
We see the “Occupy Wall Street” protest as a manifestation of economic ignorance and the politics of envy.
We find confirmation of our view at PowerLine, where Steven Hayward quotes from the great free-market economist Friedrich Hayek:
As we continue to fixate on the inchoate ["incoherent" would be more apt - JB] but plainly radical demands/desires of the lefty-losers Wall Street Occupiers, this passage from Hayek’s famous chapter in The Constitution of Liberty on “Equality Value, and Merit” hits the spot dead on:
“When we inquire into the justification for these demands [to equalize all outcomes], we find that they rest on the discontent that the success of some people often produces in those that are less successful, or, to put it bluntly, on envy. The modern tendency to gratify this passion and to disguise it in the respectable garment of social justice is developing into a serious threat to freedom. Recently an attempt was made to base these demands on the argument that it ought to be the aim of politics to remove all sources of discontent. This would, of course, necessarily mean that it is the responsibility of government to see that nobody is healthier or possesses a happier temperament, a better-suited spouse or more prospering children, than anybody else. If really all unfulfilled desires have a claim on the community, individual responsibility is at an end. However human, envy is certainly not one of the sources of discontent that a free society can eliminate. It is probably one of the essential conditions for the preservation of such a society that we do not countenance envy, not sanction its demands by camouflaging it as social justice, but treat it, in the words of John Stuart Mill, as “that most anti-social and odious of all passions.”
It’s almost as if Hayek wrote this with Occupy Wall Street in mind.
The free market is the engine of our civilization. It works. Works best if it is not interfered with by government. Works as a spontaneous system of co-operation and division of labor.
On which subject, here is part of a splendid short essay by Jonah Goldberg. He writes:
No one in the world knows how to make the newspaper you are holding (and, if you’re reading this on your phone, computer, iPad or Kindle, no one knows how to make those things either).
Even the best editor in the world has no clue how to make a printing press or the ink, or how to operate a communications satellite.
This is hardly a new insight. In 1958, Leonard Read wrote one of the most famous essays in the history of libertarianism, “I, Pencil.” It begins, “I am a lead pencil — the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.” It is one of the most simple objects in human civilization. And yet, “not a single person on the face of this earth knows how to make me.”
The pencil tells the story of its own creation. The wood comes from Oregon, or perhaps California. The lead, which is really graphite, is mined in Ceylon (now Sri Lanka). The eraser, which is not rubber but something called “factice” is “made by reacting rape-seed oil from the Dutch East Indies with sulfur chloride.”
To make a long story short, the simple act of collecting and combining the ingredients of a pencil involves the cooperation of thousands of experts in dozens of fields, from engineering and mining to chemistry and commodity trading. I suppose it’s possible for someone to master all of the knowledge and expertise to make a pencil all by themselves, but why would they?
The lessons one can draw from this fact are humbling. For starters, any healthy civilization, never mind any healthy economy, involves unfathomably vast amounts of harmonious cooperation. …
These days there’s a lot of buzz about something called “cloud computing.” In brief, this is a new way of organizing computer technology so that most of the data storage and number crunching doesn’t actually take place in your own computer. Rather, everyone plugs into the computational equivalent of the electrical grid.
Do a Nexis search and you’ll find hundreds of articles insisting that this is a “revolutionary” advance in information organization. And in one sense, that’s obviously true. But in another this is simply an acceleration of how civilization has always worked. The information stored in an encyclopedia or textbook is a form of cloud computing. So is the expertise stored in your weatherman’s head. So are the intangible but no less real lessons accumulated over generations of trial and error and contained in everything from the alphabet to the U.S. Constitution …
More relevant, the modern market economy is the greatest communal enterprise ever undertaken in the history of humanity. Friedrich Hayek did the heavy lifting on this point over half a century ago in his essay “The Use of Knowledge in Society.” The efficient pricing of markets allows millions of independent actors to decide for themselves how to allocate resources. According to Hayek, no central planner or bureaucrat could ever have enough knowledge to consistently and successfully guide all of those economic actions in a more efficient manner. …
According to progressives, the financial crisis discredited “market fundamentalism” and created a burning need for a more cooperative society where “we’re all in it together.” It’s an ancient argument, with many noble intentions behind it. But it rests on a misunderstanding of one simple, astounding, irrefutable fact. The market economy is cooperative, and more successfully so than any alternative system ever conceived of, never mind put into practice. Admittedly it doesn’t feel that way, which is why everyone wants to find a better replacement for it. But they never will, for the same reason no one can make a pencil.
Find Leonard Read’s classic essay I, Pencil here, either to refresh your memory and enjoy it anew, or to learn its lesson for the first time. It is essential to the proper education of every generation.
Of extraordinary interest, we think, is an essay by Anthony Daniels in The New Criterion, titled Ayn Rand: engineer of souls. (We cannot link to it, but it’s easy to find.)
We are admirers of Ayn Rand, but not uncritically. We believe, as she does, that capitalism is the only creator and sustainer of prosperity. We despise religion as she does. Like her we value reason. Her enormous novels Atlas Shrugged and The Fountainhead have probably won more believers in capitalism and devotees of personal liberty than any other book in any language, even surpassing Hayek’s essential text The Road to Serfdom; and for that she deserves lasting honor.
But her vision of humanity has a comic-book hyperbole about it which keeps her out of the rank of great writers. Her heroes are too big, too superior to us and everyone we’ll ever meet, to be likable. They inspire awe but not affection. We can be sure they’d look down on us if they knew us. We cannot emulate them, we can only wonder at them. They are like gods. They are intensely romantic, and romanticism is the enemy of reason.
Anthony Daniels lists her virtues and vices:
Rand’s virtues were as follows: she was highly intelligent; she was brave and uncompromising in defense of her ideas; she had a kind of iron integrity; and, though a fierce defender of capitalism, she was by no means avid for money herself. The propagation of truth as she saw it was far more important to her than her own material ease. Her vices, of course, were the mirror-image of her virtues, but, in my opinion, the mirror was a magnifying one. Her intelligence was narrow rather than broad. Though in theory a defender of freedom of thought and action, she was dogmatic, inflexible, and intolerant, not only in opinion but in behavior, and it led her to personal cruelty. In the name of her ideas, she was prepared to be deeply unpleasant. She hardened her ideas into ideology. Her integrity led to a lack of self-criticism; she frequently wrote twenty thousand words where one would do. …
A passionate hater of religion, Rand founded a cult around her own person, complete with rituals of excommunication; a passionate believer in rationality and logic, she was incapable of seeing the contradictions in her own work. She was a rationalist who was not entirely rational …
He goes on to paragraphs of stronger condemnation. He finds “horrible” cruelty in her. He perceives that though she was fanatically anti-collectivist, and though she had fled from Soviet Russia to the freedom of America, Stalin’s Russia remained within her.
Her unequivocal admiration bordering on worship of industrialization and the size of human construction as a mark of progress is profoundly Stalinist. Where Stalinist iconography would plant a giant chimney belching black smoke, Randian iconography would plant a skyscraper. (At the end of The Fountainhead, Roark receives a commission to build the tallest skyscraper in New York, its height being the guarantor of its moral grandeur. According to this scale of values, the Burj Dubai would be man’s crowning achievement so far.) Industrialists are to Rand what Stakhanovites were to Stalin: Both saw nature as an enemy, something to be beaten into submission. One doesn’t have to be an adherent of the Gaia hypothesis to know where this hatred of nature led.
Finally, Rand’s treasured theory of literature, what she called Romantic Realism, is virtually indistinguishable from Socialist Realism …
Rand’s heroes are not American but Soviet. The fact that they supposedly embody capitalist values makes no difference. Rand fulfilled Stalin’s criterion for the ideal writer: she tried to be an engineer of souls.
The analysis is not unjust.
But the recruiting sergeant to the Army of Light does not have to be the best exponent of the cause for which it fights.
While acknowledging and regretting all her faults, we keep, for her success as a dedicated recruiting sergeant, an abstract monument to Ayn Rand in our personal Hall of the Defenders of Individual Freedom.
Jillian Becker June 19, 2010
Obama says there should be a limit to how much money anyone should make. He and the “progressive” majority in Congress are trying, step by step, to turn America into a European-style socialist state. Only the state, they believe, can be extravagant, taking money from people who’ve earned it and will earn it in the future, and using it to extend and tighten the power of government. Austerity must be imposed on the people. Let them eat less, feel colder, do without cars. Let them have only the medical treatment and the education government will allow them to have. Limit the amount of wealth any individual may acquire. Profit is a dirty word. Tax, tax, and tax again.
It is a recipe for disaster.
Europe is experiencing the disaster. It is seeing its socialist dream go up in flames on the streets of Athens.
What cannot work, won’t work. Socialism, like all Ponzi schemes, can seem to be working for a time, but must fail. In a favorite word of the Left (applying it where the Left would not) Socialism is “unsustainable”.
Capitalism is sustainable. Capitalism is beautiful. A cornucopia. “The incredible bread machine”. It’s what Adam Smith called “the natural order of liberty”. It could also be called “the system of mutual benefit”.
You want the means to keep yourself alive? Provide something – goods, labor, services, ideas – that others want to buy. You want to live comfortably? Provide more of it. You want to live luxuriously? Provide it better than anyone else does. Both a seller and a buyer you will be. A buyer wants the thing he buys more than he wants the money he pays for it, just as the seller wants the money more than the thing he is parting with.
How can you know what others want? Put what you have to offer on the market and see if it sells. The right price for it is the best price you can get. The free market signals what traders need to know. As the great free-market economists, most notably von Mises, Hayek, and Milton Friedman have explained over and over again, government interference with price controls, minimum wages, rationing, compulsory purchase, bailouts, distort the signals and harm the economy.
Whether idealists and moralists like it or not, human nature is selfish. It has to be. If we were not selfish we would not eat when we’re hungry, warm ourselves when we’re cold, acquire what we need, protect ourselves from enemies. Without selfishness, the human race would not have survived. (It is not only or purely selfish. Individuals can and do choose to act unselfishly too – once they have seen to the needs of their survival.)
The Marxist idea of “from each according to his ability and to each according to his need” ignores human nature. Any attempt by government to put the formula into effect by creating the welfare – or “entitlement“ – state invariably handicaps, suppresses, and impoverishes the nation.
Capitalism is the reverse of that idea. It is a system that encourages each to contribute according to his self-determined need, to be rewarded according to how ably he does it. From each according to his need and to each according to his ability would be a fair description of how the natural order of liberty works.
To satisfy bare need is a poor political aim. It reflects a pinched, narrow, joyless, life-quelling mentality. “O, reason not the need!” King Lear pleads, “our basest beggars are in the poorest thing superfluous.” Generally speaking, in practice, the only way to be sure of having enough of anything is to have too much of it. Profit is a very good thing. It is only when people have extra money and extra time that they can invent new things. And those who produce things that improve the lives of multitudes, things that millions of people want to own and use, are doing far more for the general good than the most generous philanthropist could ever possibly do. Bill Gates with his Microsoft (though he seems not to realize it but to hold some silly lefty views) has actually done more for mankind than all the charities that have ever existed put together.
That is why it’s reasonable to propose that there is no sin of greed. There is a sin of envy. Envy is the raw material of socialist idealism. But wealth, Mr Obama, is not a problem. Poverty is a problem. And your socialist policies will cause it on a massive scale. Let us be free to work for our own maximum profit. Let us have abundance. Let us have feasts, fatness, generosity, might, novelty, and splendor.
Jillian Becker May 11, 2010