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How Ayn Rand’s Philosophy Can Rescue Hayek’s Economics

This is an expanded version of opening remarks made at the Association of Private Enterprise Education (APEE) convention, April 12, 2016, for a panel titled: Hayek and Rand on the (Ab)Use of Reason.”

In discussing Hayek and Rand, we must begin by distinguishing philosophy from economics. In economics, Hayek makes great contributions, because he is a radical. “Radical” in the sense of getting to the root, the fundamental. In economics proper, Hayek rejects “conventional wisdom,” and grasps the fundamental role of production (not Keynesian “demand”) and that the task of production is, at root, intellectual–with primacy going not to Marxian “labor” but to “creative discovery” and economic calculation based on the information content of market prices.

But in philosophy, the story is different: Hayek is more conservative than radical. He doesn’t check the deepest premises of traditional philosophy and works within its limiting and ultimately self-defeating framework. Thus, he gets trapped in the set of false alternatives that has dominated philosophy over the centuries: Rationalism, as in Plato, vs. Empiricism, as in David Hume; mysticism vs. skepticism; contextless absolutes vs. arbitrary, subjective conventions; “instinct” vs. tradition.

For instance, Hayek writes:

The objective physical world is different from that perceived by the senses.1

That’s Plato’s metaphysics, via Kant. The entire Platonic-Kantian philosophy is based on the claim that the world we see, hear, touch, etc. is not objective–not “things as they are in themselves” (Kant), not “the really real reality” (Plato).

Similarly, Hayek writes:

In opposition to the naive rationalist which treats our present reason as absolute, we must continue the efforts which David Hume commenced when he ‘turned against the enlightenment its own weapons’ and undertook ‘to whittle down the claims of reason’ by the use of rational analysis.2

 

And: “The human brain can never fully explain its own operation.”3

In fact, confidence in reason’s ability to guide action is “The Fatal Conceit.”

Most knowledge . . . is obtained not from immediate experience or observation, but in the continuous process of sifting a learnt tradition, which requires individual recognition and following of moral traditions that are not justifiable in terms of the canons of traditional theories of rationality.4

Why does Hayek proclaim reason’s impotence? Because he’s operating under the assumption that reason has to mean Rationalism. He’s working within a Platonic framework, a Platonic view of logic and of abstractions. He does not know a solution to the problem of universals–the age-old problem of identifying what concepts refer to in reality. E.g., what does “man” refer to? The Ancient Greek Sophist Antisthenes said, “I’ve seen many men, but never have I seen man.”

In the whole history of philosophy, only two answers to Antisthenes’ challenge have been offered. 1. The Platonic answer: “You can’t see man with your physical eyes, but if you use your intellectual eye to apprehend the world of Forms, you can intuit the Form of Man. The Form of Man exists in another, non-perceivable dimension. 2. The Humean answer: “There is no such thing as man. There’s only men. They resemble each other, and we use their rough similarities as a basis for calling each individual “a man.” When we assume that what’s true of one man will be true of another, we are making a leap of faith, Humeans hold. There’s no rational basis for inductive generalizations, because there is no identical attribute running throughout the roughly resembling things that we use the same word for. There’s no logic to generalizations–only accidental associations that have become habitual.

So, traditionally, the epistemological alternative was: intuitions of an invisible world, or baseless social conventions. In ethics, that translated into: commandments from on high, or subjective whims. In Freud’s language, the alternative is the superego or the id.

This is the set of false alternatives Hayek accepts in philosophy. And it undercuts his economics, which rightly emphasizes the process of economic calculation, how prices convey information, and competition as a process of “creative discovery”–all of which involve confidence in the power of the intellect.

Ayn Rand’s philosophy offers a way out of the philosophic dilemma. Objectivism upholds a position that is neither Platonic nor Humean, neither Rationalist nor Empiricist, neither dogmatic nor skeptical, neither mystical nor subjective. This new alternative is: objectivity–objectivity understood in a new and deeper way. For Rand, objectivity means, as Leonard Peikoff formulates it, “volitional adherence to reality by the method of logic.”5

Platonists hold that knowledge requires neither method nor choice–we just open our minds to The Truth. Humeans, observing that one man’s “intuition” contradicts another, conclude that we’re doomed intellectually. Only an automatic knowledge would be reliable, they assume, but we have a choice of how to proceed, and there’s no rational standard to judge alternative ways of proceeding.

Both sides of the false alternative agree, in spirit, with Dostoyevsky’s line: “If God does not exist, everything is permitted.” Mystics and skeptics agree that God or some mystical realm is required, if there is to be knowledge of truth and of value. (Skeptics conclude such knowledge is unobtainable.)

Rand rejects the premise. Knowledge does not have to be automatic to be valid and certain. A rational method of forming and using abstractions can be defined; that method is logic, “the art of non-contradictory identification.”6 But Objectivism expands Aristotelian logic to include an awareness of the requirements imposed by the nature of our cognitive equipment; logic is more than syllogistic reasoning (as even Aristotle knew)–it includes concept-formation, definition, and induction.

A rational theory of concept-formation is the root of all the rest. For Rand to develop her concept of objectivity, the crucial first step was grasping the relation of concepts to percepts–i.e., of abstractions to concretes–i.e., solving the problem of universals. Rand accomplished that singular feat by analyzing what underlies similarity. “Similarity,” she writes, “is the relationship between two or more existents which possess the same characteristic(s), but in different measure or degree.”7 I won’t go into the technical part of Rand’s theory of “measurement-omission,” referring only to her clear exposition in Introduction to Objectivist Epistemology, Chapter 2.

Consider now the application of reason to the issue of value-judgments. There, Hayek is also working with received notions, rather than questioning fundamental assumptions. Like most economists, Hayek (properly) rejects the notion of intrinsic value–the belief that the value of a good or service is inherent in it, independent of men’s ideas, values, and needs. It is an error to think there’s a “just price” against which one can judge the market price. But Hayek embraces the other side of the false alternative: if value is not intrinsic, it must be subjective. It exists only in the people’s minds.

Ayn Rand offers the third alternative: value is objective. Value is neither an intrinsic feature of an object, existing apart from man’s evaluations, nor something that exists only in our minds, independent of the facts. Rather, value is a relationship–a relationship between our minds and the facts, based upon applying a rational standard of value to the facts. This she calls the “objective theory” of value. We evaluate the worth to us of a good or service based on our ideas about a whole raft of facts–facts regarding the thing’s attributes, its causal properties, how difficult it is to produce, and much more economic data.

More widely:

The objective theory holds that the good is neither an attribute of “things in themselves” nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value. (Rational, in this context, means: derived from the facts of reality and validated by a process of reason.) The objective theory holds that the good is an aspect of reality in relation to man—and that it must be discovered, not invented, by man.8


Rand bases her defense of the economic functioning of capitalism on its objectivity in regard to value. “The objective view of values permeates the entire structure of a capitalist society.”9


Hayek is famous for the idea of “spontaneous order.” Property rights, respect for the autonomy of persons, and all the capitalist institutions are not things that anyone planned from some political headquarters or some throne. They just evolved.

Why does Hayek hold this? What is the advantage of saying that the capitalist system wasn’t imposed from above but emerged from below? Why does it have to be “spontaneous”–the biggest theme in Hayekian meta-economics? The answer is: if there’s no rational way to decide how society ought to be organized, as Hayek believes, then he can at least argue: “Let’s leave the selection to what evolved naturally. Don’t tamper with nature. We got capitalism as a result of trial and error to find what works. So don’t come in with some Rationalistic, deductive system of ideas and mess with that.

Now this is a terrible argument. This is the same as environmentalism: don’t attempt to improve on what nature provided–who are we to play God? Likewise, Hayek’s argument is who are we to play God in setting up laws, rules, and institutions?

But he only takes this (hopeless) line of argument because he doesn’t understand that one can establish a rational ethics and a rational politics based on that ethics. That is very different from “central planning.” It is true that you cannot rationally impose your ideas on other people, forcing them to obey, in economics (or in any other sphere of life). But the evil of initiating physical force against others is not due to its being “unnatural”; as Rand identified, coercion is evil because “To interpose the threat of physical destruction between a man and his perception of reality, is to negate and paralyze his means of survival.”10

Thus, contra Hayek, the issue is not the planner’s ignorance. Even if someone does know what another person should be doing, one cannot achieve that person’s well being by forcing him to do it.

A value which one is forced to accept at the price of surrendering one’s mind, is not a value to anyone; the forcibly mindless can neither judge nor choose nor value. An attempt to achieve the good by force is like an attempt to provide a man with a picture gallery at the price of cutting out his eyes.11


It is a person’s own mind that he has to rely on. Force is destructive because “the anti-mind is the anti-life.”12

The moral and political principles on which capitalism is based did not arise spontaneously. The principles underlying capitalism were consciously, carefully worked out by Enlightenment Era thinkers, such as John Locke. Locke, in turn, called on the metaphysical and epistemological principles established by Aristotle (transmitted to the modern world by Thomas Aquinas). Thinkers such as Grotius, Pufendorf, and Locke developed the principle that made capitalism possible: individual rights.

Incidentally, vs. the idea of “spontaneously developed order”: the Constitution of the Carolinas was drafted by John Locke! The Declaration of Independence borrowed some of the very language of Locke’s Second Treatise of Government. The American Founding Fathers got the idea of individual rights and set up our Constitution consciously, based upon their careful study of philosophy and history. Reading The Federalist Papers reveals how erudite they were, and how much they knew not only of Locke but of Cicero, Montesquieu, and other great thinkers in political theory.

Hayek, with some justification, talks about “cultural evolution,” but where do the variants for the selective process come from? In biological evolution, the variations come from random mutation and sexual recombination of genetic elements. Where do the ethical-political variations come from? They come from philosophers. And when the required philosophical basis for “what works” loses acceptance, the society retrogresses–as in the fall of Rome and the collapse into the Dark Ages. Hayek’s “cultural evolution” is entirely unable to explain how such a phenomenon as the Dark Ages could occur, if institutions rise or fall based on what works in practice.

Hayek’s philosophy is what stops him from recognizing the cultural impact of philosophy. Hayek’s skepticism about abstract reason is married to his skepticism about morality. Abstract reason is “The Fatal Conceit.” And the frontispiece quote of that work is this quote from the arch-skeptic, David Hume: “The rules of morality are not conclusions of our reason.” Anyone who believes that is, of course, at a total loss when it comes to justifying individual rights, and its consequence: the rule of law and the free market. “Spontaneous order” is what Hayek seeks refuge in, given his belief that no rational, objective moral code can exist.

What Hayek needs is Ayn Rand’s explanation of how concepts can be objective, how reason, no matter how abstract, reflects strict adherence to logic, and how that can be applied to defining a rational, objective, scientific code of morality (see, “The Objectivist Ethics,” in The Virtue of Selfishness).

The overview is that Hayek’s immensely valuable economic points need the philosophic base that Ayn Rand has developed. And let me emphasize that this base is not a few slogans strung together (“Be logical,” “Man is an end in himself”), but a voluminous, rich, detailed corpus of systematic principles, precisely defined. (See Rand’s Introduction to Objectivist Epistemology, Leonard Peikoff’s Objectivism: The Philosophy of Ayn Rand, Tara Smith’s Ayn Rand’s Normative Ethics, and my own How We Know: Epistemology on an Objectivist Foundation.)


 


References

1. The Sensory Order, 8.37.

2. The Constitution of Liberty

3. The Sensory Order, 8.69.

4. The Fatal Conceit, p. 75.

5. Objectivism: The Philosophy of Ayn Rand, p. 116.

6. Atlas Shrugged, p. 934.

7. Introduction to Objectivist Epistemology, p. 13.

8. “What is Capitalism?” in Capitalism: The Unknown Ideal, p. 22.

9. Ibid., p. 23.

10. Atlas Shrugged, p. 940.

11. What is Capitalism?” in Capitalism: The Unknown Ideal, p. 23.

12. Atlas Shrugged, p. 930.

Identity and Motion

Reprinted from The Objectivist Forum, December 1981

Q & A Department

Q: Does the law of identity imply that at every instant in time a moving object must be located at a definite point in space?

A: No. The law of identity implies that there are no such things as “instants in time” or “points in space”—not in the sense assumed in the question.

Every unit of length, no matter how small, has some specific extension; every unit of time, no matter how small, has some specific duration. The idea of an infinitely small amount of length or temporal duration has validity only as a mathematical device useful for making certain calculations, not as a description of components of reality. Reality does not contain either points or instants (in the mathematical sense). By analogy: the average family has 2.2 children, but no actual family has 2.2 children: the “average family” exists only as a mathematical device.

Now consider the manner in which the question ignores the context and meaning of the concepts of “location” and “identity.” The concept of “location” arises in the content of entities which are at rest relative to each other. A thing’s location is the place where it is situated. But a moving object is not at any one place—it is in motion. One can locate a moving object only in the sense of specifying the location of the larger fixed region through which it is moving during a given period of time. For instance: “Between 4:00 and 4:05 p.m., the car was moving through New York City.” One can narrow down the time period and, correspondingly, the region; but one cannot narrow down the time to nothing in the contradictory attempt to locate the moving car at a single, fixed position. If it is moving, it is not at a fixed position.

The law of identity does not attempt to freeze reality. Change exists; it is a fact of reality. When a thing is changing that is what it is doing, that is its identity for that period. What is still is still. What is in process is in process. A is A.

Obama to Americans: You Don’t Deserve to be Free

Almost a million people have viewed this article since it was originally published in Forbes Online at the start of 2014.

President Obama’s Kansas speech is a remarkable document. In calling for more government controls, more taxation, more collectivism, he has two paragraphs that give the show away. Take a look at them.

there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes–especially for the wealthy–our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. (Laughter.) But here’s the problem: It doesn’t work. It has never worked. (Applause.) It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. (Applause.) I mean, understand, it’s not as if we haven’t tried this theory.

Though not in Washington, I’m in that “certain crowd” that has been saying for decades that the market will take care of everything. It’s not really a crowd, it’s a tiny group of radicals–radicals for capitalism, in Ayn Rand’s well-turned phrase.

The only thing that the market doesn’t take care of is anti-market acts: acts that initiate physical force. That’s why we need government: to wield retaliatory force to defend individual rights.

Radicals for capitalism would, as the Declaration of Independence says, use government only “to secure these rights”–the rights to life, liberty, property, and the pursuit of happiness. (Yes, I added “property” in there–property rights are inseparable from the other three.)

That’s the political philosophy on which Obama is trying to hang the blame for the recent financial crisis and every other social ill. But ask yourself, are we few radical capitalists in charge? Have radical capitalists been in charge at any time in the last, oh, say 100 years?

I pick 100 years deliberately, because it was exactly 100 years ago that a gigantic anti-capitalist measure was put into effect: the Federal Reserve System. For 100 years, government, not the free market, has controlled money and banking. How’s that worked out? How’s the value of the dollar held up since 1913? Is it worth one-fiftieth of its value then or only one-hundredth? You be the judge. How did the dollar hold up over the 100 years before this government take-over of money and banking? It actually gained slightly in value.

Laissez faire hasn’t existed since the Sherman Antitrust Act of 1890. That was the first of a plethora of government crimes against the free market.

Radical capitalists are just beginning to have a slight effect on the Right wing. The overwhelming majority on the Right are eclectic. Which is a nice way of saying inconsistent.

The typical Republican would never, ever say “the market will take care of everything.” He’d say, “the market will take care of most things, and for the other things, we need the regulatory-welfare state.”

They are for individualism–except when they are against it. They are against free markets and individualism not only when they agree with the Left that we must have antitrust laws and the Federal Reserve, but also when they demand immigration controls, government schools, regulatory agencies, Medicare, laws prohibiting abortion, Social Security, “public works” projects, the “social safety net,” laws against insider trading, banking regulation, and the whole system of fiat money.

Obama blames economic woes, some real some manufactured (“inequality”) on a philosophy and policy that was abandoned a century ago. What doesn’t exist is what he says didn’t work.

Obama absurdly suggests that timid, half-hearted, compromisers, like George W. Bush, installed laissez-faire capitalism–on the grounds that they tinkered with one or two regulations (Glass-Steagall) and marginal tax rates–while blanking out the fact that under the Bush administration, government spending ballooned, growing much faster than under Clinton, and 50,000 new regulations were added to the Federal Register.

The philosophy of individualism and the politics of laissez faire would mean government spending of about one-tenth its present level. It would also mean an end to all regulatory agencies: no SEC, FDA, NLRB, FAA, OSHA, EPA, FTC, ATF, CFTC, FHA, FCC–to name just some of the better known of the 430 agencies listed in the federal register.

Even you, dear reader, are probably wondering how on earth anyone could challenge things like Social Security, government schools, and the FDA. But that’s not the point. The point is: these statist, anti-capitalist programs exist and have existed for about a century. The point is: Obama is pretending that the Progressive Era, the New Deal, and the Great Society were repealed, so that he can blame the financial crisis on capitalism. He’s pretending that George Bush was George Washington.We radical capitalists say that it was the regulatory-welfare state that imploded in 2008. You may disagree, but let’s argue that out, rather than engaging in the Big Lie that what failed was laissez faire and individualism.

The question is: in the messy mixture of government controls and remnants of capitalism, which element caused the Great Depression and the recent financial crisis?

By raising that question, we uncover the fundamental: the meaning of capitalism and the meaning of government controls. Capitalism means freedom. Government means force.

Suddenly, the whole issue comes into focus: Obama is saying that freedom leads to poverty and force leads to wealth. He’s saying: “Look, we tried leaving you free to live your own life, and that didn’t work. You have to be forced, you have to have your earnings seized by the state, you have to work under our directions–under penalty of fines or imprisonment. You don’t deserve to be free.”

As a bit of ugly irony, this is precisely what former white slave-owners said after the Civil War: “The black man can’t handle freedom; we have to force him for his own good.” The innovation of the Left is to extend that viewpoint to all races.

Putting the issue as force vs. freedom shows how the shoe is on the other foot regarding what Obama said. Let me re-write it:

there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The government will take care of everything,” they tell us. If we just pile on even more regulations and raise taxes–especially on the wealthy–our economy will grow stronger. Sure, they say, there will be winners and losers. But if the losers are protected by more social programs and a higher minimum wage, if there is more Quantitative Easing by the Fed, then jobs and prosperity will eventually trickle up to everybody else. And, they argue, even if prosperity doesn’t trickle up, well, that’s the price of the social safety net.

Now, it’s a simple theory. And we have to admit, it’s one that speaks to our intellectuals’ collectivism and Paul Krugman’s skepticism about freedom. That’s in Harvard’s DNA. And that theory fits well on a bumper sticker. (Laughter.) But here’s the problem: It doesn’t work. It has never worked. (Applause.) It didn’t work when it was tried in the Soviet Union. It’s not what led to the incredible booms in India and China. And it didn’t work when Europe tried it during over the last decades. (Applause.) I mean, understand, it’s not as if we haven’t tried this statist theory.

How does that sound? That’s blaming an actual, existing condition–government controls and wealth-expropriation–not a condition that ended in the late 19th century.

So which is the path to prosperity and happiness–freedom or force? Remember that force is aimed at preventing you from acting on your rational judgment.

Obama’s real antagonist is Ayn Rand, who made the case that reason is man’s basic means of survival and coercion is anti-reason. Force initiated against free, innocent men is directed at stopping them from acting on their own thinking. It makes them, under threat of fines and imprisonment, act as the government demands rather than as they think their self-interest requires. That’s the whole point of threatening force: to make people act against their own judgment.

The radical, uncompromised, laissez-faire capitalism that Obama pretends was in place in 2008 is exactly what morality demands. Because, as Ayn Rand wrote: “No man has the right to initiate the use of physical force against others. . . . To claim the right to initiate the use of physical force against another man–the right to compel his agreement by the threat of physical destruction–is to evict oneself automatically from the realm of rights, of morality and of the intellect.”

Obama and his fellow statists have indeed evicted themselves
from that realm.

Objectivism vs. Anarchism

Reprinted from The Objectivist Forum, August 1981.
Material added, July 20, 2011.

Q: A government has a legal monopoly on the use of physical force within its borders. What is the answer to the “libertarian” anarchists who claim that to maintain this monopoly a government must initiate force in violation of the rights of those who wish to defend their own rights or to compete with the government by setting up private agencies to do so?

A: The anarchist claim merits discussion only to illustrate the sort of self-defeating contradictions generated by anti-philosophical movements, of which the so-called “libertarians” are a prime example.

A proper government is restricted to the protection of individual rights against violation by force or the threat of force. A proper government functions according to objective, philosophically validated procedures, as embodied in its entire legal framework, from its constitution down to its narrowest rules and ordinances. Once such a government, or anything approaching it, has been established, there is no such thing as a “right” to “compete” with the government—i.e., to act as judge, jury, and executioner. Nor does one gain such a “right” by joining with others to go into the “business” of wielding force.

To carry out its function of protecting individual rights, the government must forcibly bar others from using force in ways that threaten the citizens’ rights. Private force is force not authorized by the government, not validated by its procedural safeguards, and not subject to its supervision.

The government has to regard such private force as a threat—i.e., as a potential violation of individual rights. In barring such private force, the government is retaliating against that threat.

Note that a proper government does not prohibit a man from using force to defend himself in an emergency, when recourse to the government is not available; but it does, properly, require him to prove objectively, at a trial, that he was acting in emergency self-defense. Similarly, the government does not ban private guards; but it does, properly, bring private guards under its supervision by licensing them, and does not grant them any special rights or immunities: they remain subject to the government’s authority and legal procedures.

The attempt to invoke individual rights to justify “competing” with the government collapses at the first attempt to concretize what it would mean in reality. Picture a band of strangers marching down Main Street, submachine guns at the ready. When confronted by the police, the leader of the band announces: “Me and the boys are only here to see that justice is done, so you have no right to interfere with us.” According to the “libertarian” anarchists, in such a confrontation the police are morally bound to withdraw, on pain of betraying the rights of self-defense and free trade.

Regarding the purported betrayal, one can only respond: if this be treason, make the most of it.

In fact, of course, there is no conflict between individual rights and outlawing private force: there is no right to the arbitrary use of force. No political or moral principle could require the police to stand by helplessly while others use force arbitrarily—i.e., according to whatever private notions of justice they happen to hold.

“There is only one basic principle to which an individual must consent if he wishes to live in a free, civilized society: the principle of renouncing the use of physical force and delegating to the government his right of physical self-defense, for the purpose of an orderly, objective, legally defined enforcement. Or, to put it another way, he must accept the separation of force and whim (any whim, including his own.)” (Ayn Rand, “The Nature of Government,” The Virtue of Selfishness)

The basic questions that the anti-philosophical “libertarians” ignore or evade are: what is the nature and source of individual rights, and how are these rights to be implemented? Only by answering these questions can one proceed to consider what is or is not proper self-defense in concrete cases.

But the answers to these questions are far from self-evident. To establish even the general principles on which the detailed, concrete administration of justice depends requires political and legal philosophy (and the metaphysics, epistemology, and ethics these fields presuppose). The “libertarians” take a short-cut: they plagiarize Ayn Rand’s principle that no man may initiate the use of physical force, and treat it as a mystically revealed, out-of-context absolute. This one principle, deprived of its philosophical base, is expected to replace jurisprudence, constitutions, legislatures, and courts. Then they imagine that the rest of us are obligated to accept, on faith, any gang’s promise that their use of force will be “retaliatory.”

Bear in mind that, in fact, those who would be granted the right to enforce their own notions of just retaliation include leftists who consider government intervention in the economy to be retaliation against business activities that the leftists view as “economic force.” Then there are the terrorist groups who claim that random slaughter is “retaliation” against “Zionist imperialism,” “British rule,” etc. Are we to assume that the country will have been converted to “libertarianism” before anarchism is instituted? Very well. One wing of the “libertarians” holds abortion to be murder; in their view, force against women who have abortions is retaliation in defense of the right to life. Another wing welcomed the New Left rioters of the 1960’s, including the Black Panthers, as liberators who were retaliating against “state coercion.” How will the principle of no initiated force—in a philosophical vacuum—resolve disputes of that kind?

In any society, disputes over who has the right to what are inescapable. Even strictly rational men will have disagreements of this kind, and the possibility of human irrationality, which is inherent in free will, multiplies the number of such disputes.

The issue, then is: how are political and legal disputes to be settled: by might or by right—by street fighting or by the application of objective, philosophically validated procedures?

The most twisted evasion of the “libertarian” anarchists in this context is their view that disputes concerning rights could be settled by “competition” among private force-wielders on the “free market.” This claim represents a staggering stolen concept: there is no free market until after force has been excluded. Their approach cannot be applied even to a baseball game, where it would mean that the rules of the game will be defined by whoever wins it. This has not prevented the “libertarian” anarchists from speaking of “the market for liberty” (i.e., the market for the market).

By their talk of “competition” in the context of government, these “libertarian” anarchists endorse the statists’ equation of production and force (see “The Nature of Government”). “Competition” is an economic, not a political, concept; it refers to the voluntary exchange of values, not to the exchange of gunfire.

Behind the puerile fantasies of “market solutions” to political and legal disputes lies the collectivist notion that the ideas of the individual are determined by social institutions, so that once the “proper” social institutions have been established, “the people” will automatically agree on political and legal issues, and government will no longer be necessary. In the Marxist version of anarchism, once a socialist economy has “conditioned” men to altruism, they will automatically act according to the principle “from each according to his ability, to each according to his need.” In the “libertarian” version, once a capitalist economy has been established, rational selfishness will become automatic, and “the market” will act to resolve whatever short-lived disputes still arise. In the words of one of the “libertarians”: “Legislation forcing the parties [in a dispute] to submit to binding arbitration would be unnecessary, since each party would find arbitration to be in his own self-interest. Nor would it be necessary to have legal protection for the rights of all involved, because the structure of the market situation would protect them.”

In any irreconcilable dispute, at least one party will find that its view of justice is stymied. Even under anarchy, only one side will be able to enforce its ideas of where the right lies. But it does not occur to the anarchists that when one of their private “defense agencies” uses force, it is acting as a “monopolist” over whomever it coerces. It does not occur to them that private, anarchistic force is still force—i.e., the “monopolistic” subjection of another’s will to one’s own. They are aware of and object to the forcible negation of “competing” viewpoints only when it is done by a government.

Thus, their actual objection to government is not to its “monopolistic” character, but to the fact that “A government is the means of placing the retaliatory use of physical force under objective control—i.e., under objectively defined laws.” (“The Nature of Government”)

The real target of the anarchist’s attack is objectivity. Objectivity requires one to prove that one is acting within one’s rights; they do not want to be held accountable to anyone for anything—not even regarding their use of physical force. They damn governmental retaliation because it is objective; they demand to be “free” to use force on whim.

In the philosophical battle for a free society, the one crucial connection to be upheld is that between capitalism and reason. The religious conservatives are seeking to tie capitalism to mysticism; the “libertarians” are tying capitalism to the whim-worshipping subjectivism and chaos of anarchy.

To cooperate with either group is to betray capitalism, reason, and one’s own future.

[Added July 20, 2011]

There are two further, though lesser, arguments for anarchism that I also want to answer.

The first might be called “the argument from moral freedom.” This argument holds that it is wrong to impose morality by force, and that government, as a monopoly, necessarily does this, since it is on moral grounds that it prohibits “competitors.” The alternative to imposing morality by force, these anarchists claim, is letting a thousand flowers bloom—i.e., non-monopolizing “defense agencies,” each attracting, voluntarily, “customers” who patronize whichever agency has the moral outlook they find most congenial.

But this ignores the fact that our subject here is not the hiring of fruit-pickers or programmers but the hiring of gunmen. Terms drawn from the realm of voluntary trade, such as “competition” and “customers,” do not apply to transactions whose purpose is to command obedience. The purpose of the hired guns is precisely to establish a monopoly over human interactions, to force others to obey to one’s idea of what ought to be.

The wielding of force is monopolistic by its very nature: it is the subjugation of one side’s will to that of the other. Force does not permit dissenters to go their own way. By its nature, force is the imposition of value-judgments—the coercer’s ideas about how those subject to his power ought to behave. The monopolistic imposition of the coercer’s moral ideas is not affected by whether the force-wielder is called “the government” or “Joe’s Defense Agency.”

If one must avoid imposing moral ideas by force, then one must renounce force altogether—i.e., practice pacifism. Like all arguments against the monopolization of force, “the argument from moral freedom,” reduces to an advocacy of pacifism. Pacifism is the most nearly consistent form of anarchism. Few anarchists, however realize this. They implicitly assume that there is such a thing as physical force that lets dissenters go their own way.

Let me concretize this. If someone shoots at me and I shoot back, I am using force to impose my morality—my right to my own life—on the gunman shooting at me. To avoid imposing my morality by force, I could only try to persuade him not to kill me. I could not use defensive force against him.

The non-initiation of force principle is itself a moral principle. Individual rights are moral principles. Is it wrong to use retaliatory force to “impose” freedom and to protect rights?

This points to the equivocation in the term “imposing morality.”

It is indeed wrong for the government to “impose morality” in the sense of trying to force men to be virtuous. But that is not what a proper, limited government does: its coercive “imposition” of morality is retaliatory force used to protect freedom. It is indeed in the name of morality that the government “imposes” freedom: freedom is what makes virtuous action possible. But only the free choice of the individual can make virtue actual. Virtue cannot be coerced.

For example, it is wrong for the government to make men go to church or to stop them from going to church; it is right for the government to wield retaliatory force to secure their freedom to make this choice for themselves. Force used to maintain freedom is force used to “impose morality” to that extent. This is true whether the force is wielded by the government, a private group, or an individual. Again, the only alternative is not merely the absence of government but the absence of retaliatory force—i.e., pacifism.

The failure of “anarcho-capitalists” to see this brings me to a second point:

Anarchism is a product of and expression of collectivism.

“Anarcho-capitalists” fail to see the pacifist implications of their position because they think in terms of groups instead of individuals. They think in terms of “defense agencies,” and picture many “competing” (i.e., conflicting) agencies. These anarchists could not avoid the pacifist implications of their positions if they realized that both a government and a “defense agency” is just a group of individuals. When reduced to the level of individual-to-individual interactions, it becomes clear that “not imposing morality by force” means no individual can use force to defend himself— e.g., cannot shoot back at someone who starts shooting at him.

What if an anarchist holds that an individual is morally justified in using retaliatory force? Then so is any other individual, and so is that organization of individuals we call “the government.” The individual vigilante is acting just as monopolistically as the government. Both the retaliating individual and the government seek to stop someone else’s action. If it is morally proper for an individual to defend himself by force, it is morally proper for him to band together with others to do so—i.e., to form a government.

The same facts that make individual self-defense moral—i.e., the right to self-defense—makes governmental force moral if it is used in defense of the rights of individuals.

Government is not a collective super-organism. Government is the agent of individuals—the individuals who established and support it, by delegating their right of self-defense to it. If those individuals have the right to defend themselves, then the government, as their agent, has the right to do so on their behalf. Only a collectivized mentality can hold that the police, acting on my behalf, cannot forcibly exclude “competitors” but a “defense agency” can.

Put it this way: a proper government is a defense agency, and to carry out its mission it can’t let “competitors” (other gangs) use unsupervised force.

The telling difference between a proper government and a private defense agency is this: a proper government is placed under objective control. Thus non-pacifist anarchists object not to retaliatory force but to placing retaliatory force under objective control. Their objection is to objectivity.

The second argument of “anarcho-capitalists” is “the argument from history”: governments have always grown beyond their proper limits, so we must assume they inevitably do so.

This argument ignores why government has grown. The cause is: bad philosophic ideas—especially altruism. The history of the United States shows exactly this. Our government has grown beyond its proper limits because Americans have rejected the earlier idea of what those proper limits are. The pursuit of happiness is now regarded as ignoble; the moral ideal has become Mother Teresa, because she ignored her own happiness, despised material wealth, and devoted her life to serving the needs of the neediest. In today’s America, the ruling creed is not “Mind your own business” (Benjamin Franklin) but “compassion for the most vulnerable among us” (any politician).

It is men’s ideas that rule their actions and their politics. It is not the power-lust of politicians but the philosophical ideas of the citizenry that have caused the expansion of state power since the founding of this country. The power-lust of politicians would be impotent in a society whose citizenry—and intellectuals—held the Objectivist philosophy of reason and individualism.

Note that if one holds that the majority of men are too irrational to ever see that their own self-interest requires a free society, then one must simply give up and retreat to a deserted island. One cannot consistently advocate any ideas—including anarchism—if the vast majority will not listen to reason. If “the masses” were too irrational to keep government within its proper bounds, they would be too irrational to keep “defense agencies” to the task of actual defense.

One final wrinkle. “Anarcho-capitalists” claim that “the market” would keep defense agencies in check. (This idea represents a collectivist view of the market.) But remember: what is up for grabs here is whether or not there will be a market. When the society is turned over to warring gangs, the race goes to the bloodiest, not to the best producers.

Here again, the “anarcho-capitalists” accept the statist approach of equating the dollar and the gun, production and force. The Left claims that “concentrations of wealth” on the market are coercive. The “anarcho-capitalists” claim that coercion is just another service on the market. But both are wrong: voluntary exchange has nothing in common with coercive interactions.

Production must be kept strictly separate from destruction. A business deals in the creation of goods and services to offer on a free market; a coercer deals in destruction. The proper use of destruction is to combat destruction—to wield retaliatory force against the initiatiors of force. But retaliatory force is still destruction, not production. There is no such thing as “the market for force-wielding.” For there to be a market in the first place, those who would simply seize goods must be met with force. The benefits of a free market presuppose that freedom has been established. Market mechanisms can’t establish or protect the preconditions of there being a market.

“Anarcho-capitalism” is a contradiction in terms. Capitalism can exist only where rights are protected, including property rights. To protect rights, criminals who initiate force must be met with retaliatory force. But the wielding of retaliatory force itself must be placed under objective control, by a constitutionally limited government with objective law. Otherwise, what results is not “competing defense agencies” but civil war. That war will be won by the gang with the most ruthless and most powerful army. Under anarchy, might, not right, determines what the “laws” will be.

In terms of current events, anarchism means Lebanon or Somalia. To link such horrors with the benevolence and prosperity of capitalism is obscene.

Why Objectivists disagree on immigration

Why do Objectivists disagree on immigration? Well, they really don’t. I think we all agree (certainly Leonard Peikoff does) that in a laissez-faire world, there’d be open immigration. The disagreements arise because we are light-years away from that world
.
And it’s not just that we have wrong political conditions. It’s that we know that, within the foreseeable future, we won’t enact the right solutions to the problems created by the statism.

In the case of immigration, the right solution is essentially fourfold:

1. Militarily crush Iran and its ally-states, in an all-out campaign (it would be too short to call it a war). That, coupled with a proper foreign policy, would end the rise of Islam and worry about Muslim immigration.

2. Make immigrants sign away their right–for their whole lives–to any government loot. That would end the worry about poorer immigrants coming to get welfare.

3. Make it impossible for immigrants to get the vote–for their whole lives. That would end the worry about immigrants from statist cultures voting in more statists.

4. Replace multicultural BS with the proud, morally confident assertion of America’s moral superiority over the statist and theocratic societies from which the immigrants are coming. We are right and they are wrong–politically, philosophically, and in other ways. Standing up for our values would end the worry about immigrants diluting (the fast-fading remnants of) American individualism.

But not one of these things is going to happen in the foreseeable future. So what are we to do in regard to immigration?

Look at what this means: given that our government is not going to do the right things, what should it do? But there’s no way to answer that question. If it’s not going to do the right thing, then, by definition, whatever it does will be the wrong thing. Can we pick the best, or least bad, among the wrong things? Yes, to a certain extent, but not in a principled way.

It is a contradiction in terms to ask: “On what principle should we act if we are not going to act on the principle by which we should act?”

But philosophy deals in principles.That’s why there are continuing arguments about immigration among those who accept the Objectivist philosophy.

Deprived of the guidance of principles, the issue then becomes one of concrete facts. Do immigrants, in the aggregate, take more out of the economy than they contribute? Some of us think “yes,” others think “no.” Will the immigrants assimilate and become Americans in spirit as well as in legal status, given our multiculturalist intellectual establishment? It’s a factual question, on which views differ. If immigrants are going to be given citizenship, will they vote leftist or could a better Republican strategy (and other ideological work by us) prevent this? Is there a really dangerous threat to our safety from massive Muslim immigration, or is this a very minor issue compared to what’s going to happen to us from Islamic regimes abroad, with or without that immigration?

People can certainly differ on these factual issues, and raw, statistical (!) facts are all we have left when we can’t appeal to principles, because the principled path is not “politically realistic.”

My story

[On cleaning out old files on my hard drive, I came across this which I posted in 2012, on the occasion of my 50th “birthday” as an Objectivist. In the hope that you will enjoy reading it, I am reposting it now, with a few very small changes.]

Exactly 50 years ago, a bored, depressed college freshman, who was only half-listening to a lecture, suddenly sat up straight, leaned forward, and strained to understand every word he was hearing.

The place was MIT’s Kresge auditorium, the lecturer was Ayn Rand, the student was me.

I’m taking this 50th anniversary as an occasion to tell the personal story of my introduction to Objectivism.

These were the words that, 50 years ago, struck me to the core and set my life on a new trajectory:

Man can focus his mind to a full, active, purposefully directed awareness of reality–or he can unfocus it and let himself drift in a semiconscious daze, merely reacting to any chance stimulus of the immediate moment, at the mercy of his undirected sensory-perceptual mechanism and of any random, associational connections it might happen to make.

I recall my reaction–the exact words–very clearly. It was “Jesus Christ! I’m drifting in a semiconscious daze right now!”–which had been absolutely true right up until I heard Ayn Rand speak those words. I thought, “This is the most important thing I’ve ever heard. It’s the key to everything: I can take control of my own mind, and thus of my life.” (The wording of that part is approximate.)

I next was puzzled and intrigued by this aspect: her idea sounded familiar, as if I, and everyone, already knew it, as if it were the accepted wisdom; yet I was dead sure I’d never heard anyone say anything remotely like it before. How could that be?

That passage occurred halfway through Miss Rand’s presentation of “The Objectivist Ethics.” For the rest of the lecture, I strained to focus on it, though I couldn’t absorb more than 10% of what she was saying–almost all of it was just unintegrateable to me (in my defense, I was 17). But here’s what I have always recalled.

First, she quoted, more than once from John Galt. But clearly, he was her own fictional creation, so she was quoting herself as an authority. “What nerve!” I thought–but in admiration. (From my college experience, I was already sick of the pretentious, second-handed over-quoting of “authorities”.)

Second, she was absolute, radical, black-and-white. I loved that. It especially made her stand out in what was still the atmosphere of the Eisenhower, “Leave it to Beaver,” 50s, even though JFK was president. It was an era when “That’s a value-judgment” was said in reproach, when no one wanted to rock the boat, when one of the top intellectual hits was Arthur Schlesinger, Jr.’s book, “The Vital Center” (which argued that the arguments for communism and free enterprise were interchangeable, so the best thing to do was take a middle position).

It was a time when profundity was ascribed to statements like, “Everything is relative,” and “Values are subjective.” So Ayn Rand’s certainty, passion, and non-centrism made her stand out–and fit very well with my own premises. (About the only thing I knew about Ayn Rand before attending her talk was when I overheard a student saying, “I’m not advocating radical individualism, like Ayn Rand.” I thought, “Radical individualism? That sounds good.”

Ayn Rand herself gave the best description of what then was de rigeur for intellectual sophisticates: “militant uncertainty, crusading cynicism, dogmatic agnosticism, boastful self-abasement and self-righteous depravity . . .” [For the New Intellectual] That description is unfortunately still applicable.

Third, in the question period, I was struck by her response to two questions. When asked, “Are you an atheist?” she answered, “Of course,” as if slightly surprised by being even asked–something like how you would respond if asked, “Do you wear warmer clothing in winter?” On hearing that “Of course,” I instantly became an atheist. Before, I had been a woozy agnostic (“Maybe there’s some basic principle of the universe–like ‘Every process tends toward equilibrium’–that’s an impersonal kind of divinity.”) The sheer tone with which she said “Of course,” yanked the whole issue out of the realm of “What if?” and threw it into a factual, rational, scientific context for me. I realized that the actual question was: “Do I believe there’s some Spirit-Stuff out there beyond the moon? Is that rational?” And the answer was clearly “No.”

Now, Ayn Rand went on to explain that she accepted reason and only reason, and that in thousands of years, no purportedly rational argument for God had ever stood up to inspection. And that added a sense of objectivity to my reaction (I already held infinite respect for reason, knowing that it was what had lifted man up from the cave.)

The other answer which impressed me was in response to being asked what Objectivists held in regard to “sexual ethics.” Her answer began: “We are very chaste.” I was impressed once again. Here was a modern, science-loving intellectual who dared to say “chaste”–in an age when everyone pretending to be sophisticated claimed that sex was a matter of hormones held in check only by taboos.

She went on to explain that sex was a great value, that she was pro-sex, not prudish, etc. What her answer said to me was: she takes herself very seriously. She considers her choices, her values, and her person to be sacred. That appealed to me on a deep level.

Shortly after her speaking event came MIT’s spring break, and I returned to my family home in Richmond, determined to buy the book she had been quoting from: Atlas Shrugged. I went to Thalheimer’s department store, which had a book section, and picked up the paperback. It was very thick. I didn’t like reading, finding it a physically uncomfortable process (perhaps due to visual problems), and I had never read a book of more than about 200 pages. Looking at the size of Atlas, I thought, “Wow, this could be 300 or even 350 pages long!” (Fortunately, I didn’t check the actual length.)

Steeling myself, I purchased it anyway, went to a nearby coffee shop, and began reading over my grilled cheese sandwich.

At the top of the second page, I came to this:

The clouds and the shafts of skyscrapers against them were turning brown, like an old painting in oil, the color of a fading masterpiece. Long streaks of grime ran from under the pinnacles down the slender, soot-eaten walls. High on the side of a tower there was a crack in the shape of a motionless lightning, the length of ten stories.

I was puzzled: how come there was a long crack in a skyscraper? How come the atmosphere of decay? Was this set in the future? Was it science-fiction?

I turned back to the beginning and started to read much more carefully. The rest is history.

I read Atlas very slowly, in small segments, because I needed time to integrate the meaning of what I was reading. It took about a month to finish the novel. By the time I reached Galt’s speech, I was completely sold.

Several things in that first reading stood out in my mind. Early on–I think it was about page 60–I got the idea that Dagny (and Ayn Rand) considered selfishness to be good. On realizing that, I thought: “Wow! She’s gone further than I have: I’ve rejected the idea that selfishness is wrong, but she is saying it is good! I like that!” (I had always been accused of being selfish by my mother, which only made me dislike her.)

To brag a bit: I knew from the first scene with Eddie in the Taggart cafeteria that his mysterious friend, who never was given any lines, was John Galt. That’s because the back cover of my paperback had the line: “The astounding story of a man who said that he would stop the motor of the world–and did.” I remembered that line when I read Eddie Willers saying to the mysterious stranger:

Motive power–you can’t imagine how important that is. That’s the heart of everything. . . . What are you smiling at?

What, indeed! I “got” it.

Leaving aside falling in love with the characters, especially Francisco, I remember being troubled, from a literary standpoint, when I came to this statement by the old cigarette vendor in the Taggart Terminal: “Miss Taggart, to the best of my knowledge, that cigarette was not made anywhere on earth.”

“Oh no,” I thought. “Is this signaling that the strikers have gone to the moon or Mars?” Because I knew that their doing that was just not credible, and it would have taken the whole novel–and its meaning–into the realm of fantasy. In comparison to that thought, the refractor ray in the Rockies seemed downright conservative.

Another needless (though author-intended) worry came when I read:

In mounting panic, the watchers lost their sense of context and language–and their three voices blended into a progression of indiscriminate shrieks: “We want you to take over! . . . We want you to rule! . . . We order you to give orders! . . . We demand that you dictate! We order you to save us! . . . We order you to think! . . . ”

They heard no answer but the beating of the heart on which their own lives depended.

The current was shooting through Galt’s chest and the beating was coming in irregular spurts, as if it were racing and stumbling–when suddenly his body fell still, relaxing: the beating had stopped.

What? Has Galt died?! That would ruin the whole thing!

It was with infinite relief that I read what actually happened, climaxed by Galt calmly saying:

“It’s the vibrator that’s out of order,” said a voice behind them; they whirled around; Galt was struggling for breath, but he was speaking in the brusque, competent tone of an engineer. “Take it out and pry off the aluminum cover. You’ll find a pair of contacts fused together. Force them apart, take a small file and clean up the pitted surfaces. Then replace the cover, plug it back into the machine–and your generator will work.”

What a scene!

What was I to do when I finished the book? Well, for one thing I read this in “A message from the Author,” that was appended to the end of the paperback edition:

If you are the kind of reader who knows that for 1084 pages he has lived in the atmosphere of John Galt’s world–if you now feel regret at the necessity of returning to the gray hopelessness of a culture that is truly bankrupt–if you have understood that it is ideas which create or destroy a world, a culture or a man–if you have understood that the rejection of reason by the neo-mystics of our age is responsible for the present state of the world–then you now why only a philosophy of reason can lead to an intellectual Renaissance.

I was that kind of reader, at least about the regret of leaving John Galt’s world. To her appendix, my reaction was: “Jesus! She not only gave me this unprecedented emotional and intellectual experience, she knows that she did!”

That served even more to take this out of the realm of “a story” into the realm of practical reality. There followed a reference to lectures on her philosophy in New York City, with contact information. I realized there was much more to be gained, that there was a “movement,” which had action-implications for me.

After finishing Atlas, not wanting to accept anything on emotion, I decided to take a full year before absolutely committing myself to this philosophy. During the year, I made it a point not only to learn everything that I could about Objectivism, but also to seek out criticism from opponents. I knew that people disagreed with her, and I wanted to hear “the other side.” I knew I was young and ignorant–maybe there was some fatal flaw in the philosophy that could be pointed out to me. People sure seemed to think there was.

But over the course of the year, every time I asked what the error was in her ideas, I got back some answer that was reminiscent of lines given to the villains in the novel. You know, things like “It isn’t that black and white.” And, “She’s advocating dog-eat-dog, the law of the jungle.” And, “No one can prove an issue of values.” And, “Businessmen use force, too–economic force.”

I thought, “It’s not that her opponents see something she missed; she knows their arguments–and the answers to them. She knows what they know–and more.”

So, on March 12, 1963, I formally accepted what had long been true in fact: I was an Objectivist. To mark my acceptance, I repeated the striker’s oath:

I swear by my life and my love of it that I will never live for the sake of another man, nor ask another to live for mine.

Amnesty for Illegal aliens is not enough, they deserve an apology

[Reprinted from Forbes Online, 3/4/2013]

What has happened to America? When did the land of the free become “You can’t land here”? Did we fight a Civil War to end slavery, in order then to put a wall around the country and keep “undesirables” out? Did we fight against Nazism in order to make our own class of “untermenschen,” and to have petty tyrants demand: “Where are your papers?!”

Freedom of travel is a right. It is a right possessed by every human being, not just by Americans. The Mexican government or the French government has no right to stop you from entering Mexico or France, and our government has no right to stop a Mexican or Frenchman from entering America.

The country does not belong to the government. It does not belong to the majority. Land belongs to individual, private owners, and only they have the right to invite or bar others from coming on their land.

The government has no more right to lock people out than to lock them in. The same principle damning the Berlin Wall damns walls erected to keep people out.

It is said we need to “secure our borders,” but that phrase is pure spin. To secure them against what? Nannies, engineers, carpenters, and waiters?

What about terrorists? The answer to terrorism is not to cower down in a bunker-America. The answer to terrorism is decisive military strikes against our enemies, especially Iran, to punish or end the regimes that sponsor terrorism. Make the rogue regimes worry about securing their borders.

If the laws restricting entry are dead wrong, what are we to think of those “illegals” who have disobeyed these laws? Everyone seems to think that entering the country without the government’s permission is a serious offense, that the illegals should at the least be “sent to the back of the line,” that their law-breaking forever stains them with dishonor. But the law is wrong. The stain of dishonor is not on the illegals but on the illegalizers.

The illegals came here because they value America. They broke an unjust law in order to live a free, better, richer life. In the vast majority of cases, obeying anti-immigration laws would mean never getting to live here. It’s a life sentence.

Breaking bad laws to build a better life is not dishonorable; it is admirable, provided breaking the law involves no use of force. Coming here in defiance of unjust laws is a peaceful act; it is just the avoidance of the force our government would initiate against them. It is certainly wrong to wield private force; it is wrong to take the law into one’s own hand. But these are not involved in illegal immigration.

There is no moral requirement to martyr oneself to any form of obedience to others-neither to their opinions nor to the disgraceful, rights-violating laws they pass.

An “illegal” immigrant is, in principle, like a Jew in Nazi Germany who refused to wear the yellow star. Yes, I grant you that ours is not a barbarous dictatorship like the Nazi regime, and in the name of objectivity, there is a certain deference due to legality and lawfulness as such. But not at the price of wasting one’s life in Senegal, Haiti, or even Greece, instead of America.

The principle established at the Nuremberg war-crimes trials was that a monstrous act cannot be excused by saying that one was merely obeying the law-“just following orders.” Basic morality trumps the merely legal. The corollary is that one cannot be condemned for disobeying a monstrous law merely on the grounds that “those are the rules,” “the nation decided, so just follow orders.” A monstrous law should neither be obeyed nor enforced. It must be repealed.

It is not enough to give “illegals” amnesty. These long-oppressed individuals deserve an official apology from our government.

For Open Immigration

This is a defense of a policy of absolutely open immigration, without border patrols, border police, border checks, or passports.

After a phase-in period, entry into the U.S. would be unrestricted, unregulated, and unscreened, exactly as is entry into Connecticut from New York.

(Note: I am defending freedom of entry and residency, not the granting of citizenship or voting rights, not even after decades of residency.)

An end to immigration barriers is required by the principle of individual rights. Every individual has rights as an individual, not as a member of this or that nation. The rights of Americans do not flow from their status as Americans, but from their status as human beings. In the words of the Declaration:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Instead of “their Creator” the reference should be to “their nature,” but it is quite clear that rights are held to be universal, pertaining to all men as such.

No special geographical location is required in order to have the right to be free from governmental coercion. In fact, government is instituted “to secure these rights”—i.e., to protect against coercion. Only physical coercion can violate rights.

A foreigner has rights just as much as an American. To be a foreigner is not to be a criminal. Yet our government treats as criminals those foreigners not lucky enough to win the green-card lottery.

Seeking employment in this country is not a criminal act. It coerces no one and violates no one’s rights. Jobs taken away? There is no “right” to be exempt from competition in the labor market, or in any other market. (And it is solid economic fallacy to believe that immigrants “take away jobs,” as I show below.)

It is not a criminal act to buy or rent a home here, and then to reside in it. Paying for housing is not a coercive act—whether the buyer is an American or a foreigner. No one’s rights are violated when a Mexican, or Canadian, or Senegalese rents an apartment from an American owner and moves into the housing he is paying for. And what about the rights of those American citizens who want to sell or rent their property to the highest bidders? Or the American businesses that want to hire the lowest-cost workers? It is morally indefensible for our government to violate their right to do so, but that’s exactly what immigration restrictions do.

Immigration quotas forcibly exclude foreigners who want not to seize housing but to purchase it, who want not to rob Americans but to work with them to produce goods and services, raising our standard of living.

Forcibly excluding those who seek peacefully to trade with us is a violation of the rights of both parties to such a trade: the rights of the American seller or employer and the rights of the foreign buyer or employee.

Immigration restrictions treat both Americans and foreigners as if they were state property, and as if the peaceful exchange of values to mutual benefit were an act of destruction.

To take an actual example, if I want to invite my Norwegian friend Klaus to live in my home, either as my guest or as a paying tenant, what right does our government have to stop me? Or to stop Klaus? To be a Norwegian is not to be a criminal. And if some American business wants to hire Klaus, what right does our government have to interfere?

The implicit premise of barring foreigners is: “This is our country, we let in only those we want here.” But who is this collective “we”? The government does not own the country. It has jurisdiction over the territory, but jurisdiction is not ownership. Nor does the majority own the country. America is a country of private property. Housing is private property. So is a job. Only the owner of land, or of a business employing people, may set the terms regarding the use or sale of his property.

There is no such thing as collective, social ownership of the land. The claim, “We have the right to decide who is allowed here” means that some individuals—those with the most votes—claim the right to prevent other citizens from exercising their rights over the land they own. But there can be no right to infringe upon the rights of others.

In a constitutionally limited republic, 60% of the population cannot vote to enslave the other 40%. Nor can a majority issue dictates to the owners of private property. Nor can a majority infringe the freedom of employers to hire whomever they wish. Not morally, not in a free society. In a free society, the rights of the individual are held sacrosanct, superior to any claim made by anyone or any group, regardless of the number of claimants. Even if every citizen of the nation wishes to violate the least right of a lone individual, they have no right to do so. That is the meaning of a society based on moral right, not on mob rule.

The rights of one man end where the rights of another begin. Every man is free to act on his own judgment—but only within the sphere of his own rights. The criminal is the man who deliberately steps outside his rights-protected domain and invades the domain of another, depriving his victim of his exclusive control over his property, or liberty, or life.

The criminal, by his own choice, has rejected rights in favor of brute violence, and thus can claim no rights himself. So, in principle, there’s no objection to barring criminals from entering the country.

There is, however, a procedural objection, and a decisive one: how are government officials to determine whether or not a given man about to enter the country is a criminal? Since potential or actual criminals do not carry signs announcing this fact, how can the government ferret it out—without violating the rights of the innocent immigrant?

And we must ask: “criminal”—by what standard? Is “the criminal” a man convicted in Canada of stealing a car, or a man convicted by a “revolutionary tribunal” in Iran for insulting The Prophet, or a man held to be a criminal in Sierra Leone because . . . ? Is the U.S. government to review every law and every trial of every immigrant from every country in order to bar “criminals”?

The crucial point is often overlooked: in its efforts to capture or bar criminals, the government may not violate the rights of the innocent. That means, no detention at borders, no demand to produce “papers” or “passports,”— such procedures violate the rights of the innocent. In order to interfere with a man’s free movement, the state needs to show “probable cause”—which means specific evidence against the specific individual, not the indiscriminate subjection of everyone to a screening process.

There is no more authority to demand papers at the border than there is for the police to board a city bus and demand papers of everyone on it. Every individual, whether citizen or non-citizen, is to be presumed innocent. He does not have to satisfy the government that he is not a criminal, in the absence of any evidence that he is.

At the nation’s borders, instead of “inspection,” there should simply be a sign: “Welcome to America.”

Things are different in wartime, or when an epidemic breaks out in a certain region, of course, but what about peacetime? What about now, when millions of Mexicans, South Americans, Chinese, Canadians, etc. are seeking entry into the U.S.? What about the overwhelming majority, who are not criminals, not terrorists, and not carriers of some plague? By what moral principle can they be inspected, harrassed, or excluded? Majority vote? No single individual has the right to stop another and “inspect” him to see if he is “acceptable,” so no majority—which is simply a number of individuals—has that right either.

In the absence of specific evidence against him, nothing can justify subjecting an immigrant to coercive interference.

I’m very afraid that the actual reason for limiting immigration is xenophobia, which is simply a polite word for racial bigotry.

The denial of rights to non-citizens is despicable, an affront to moral principles as such. We have erected a vicious and hypocritical double standard: we locals grant ourselves a right to violate the rights of outsiders.

THE MORAL AND THE PRACTICAL

That’s the moral case for phasing out limits on immigration. But some ask: “Is it practical? Wouldn’t unlimited immigration—even if phased in over a decade—be disastrous to our economic well-being and create overcrowding? Are we being told to just grit our teeth and surrender our interests in the name of morality?”

This question is invalid on its face. It shows a failure to understand the nature of rights, and of moral principles generally. Rational moral principles reflect a recognition of the basic nature of man, his nature as a specific kind of living organism, having a specific means of survival. Questions of what is practical, what is to one’s self-interest, can be answered only in that context. It is neither practical nor to one’s interest to attempt to live and act in defiance of one’s nature as a human being.

Yet that is the meaning of the moral-practical dichotomy. When one claims, “It is immoral but practical,” one is maintaining, “It cripples my nature as a human being, but it is beneficial to me”—which is a contradiction.

Rights, in particular, are not something pulled from the sky or decreed by societal whim. Rights are moral principles, established by reference to the needs inherent in man’s nature qua man. “Rights are conditions of existence required by man’s nature for his proper survival.” (Ayn Rand)

Every organism has a basic means of survival; for man, that means is: reason. Man is the rational animal, homo sapiens. Rights are moral principles that spell out the terms of social interaction required for a rational being to survive and flourish. Since the reasoning mind cannot function under physical coercion, the basic social requirement of man’s survival is: freedom. Rights prescribe freedom by proscribing coercion.

“If man is to live on earth, it is right for him to use his mind, it is right to act on his own free judgment, it is right to work for his values and to keep the product of his work.” (Ayn Rand)

Rights reflect the fundamental alternative of voluntary consent or brute force. The reign of force is in no one’s interest; the system of voluntary cooperation by mutual consent is the precondition of anyone achieving his actual interests.

To ignore the principle of rights means jettisoning the principled, moral resolution of conflicts, and substituting mere numbers (majority vote). That is not to anyone’s interest. Tyranny is not to anyone’s self-interest.

Rights establish the necessary framework within which one defines his legitimate self-interest. One cannot hold that one’s self-interest requires that he be “free” to deprive others of their freedom, treating their interests as morally irrelevant. One cannot hold that recognizing the rights of others is moral but “impractical.”

Since rights are based on the requirements of man’s life as a rational being, there can be no conflict between the moral and the practical here: if respecting individual rights requires it, your interest requires it.

Freedom or force, reason or compulsion—that is the basic social alternative. Immigrants recognize the value of freedom—that’s why they seek to come here.

The American Founders defined and implemented a system of rights because they recognized that man, as a rational being, must be free to act on his own judgment and to keep the products of his own effort. They did not intend to establish a system in which those who happen to be born here could use force to “protect” themselves from the peaceful competition of others.

ECONOMICS

One major fear of open immigration is economic: the fear of losing one’s job to immigrants. It is asked: “Won’t the immigrants take our jobs?” The answer is: “Yes, so that we can go on to better, higher-paying jobs.”

The fallacy in the protectionist view lies in the idea that there is only a finite amount of work to be done. The unstated assumption is: “If Americans don’t get to do that work, if foreigners do it instead, we Americans will have nothing to do.”

But work is the creation of wealth. A job is not just drawing a salary, it is acting to produce things—food, cars, computers, internet content—all the goods and services that go to make up our standard of living. And we never get a “too high” standard of living or “too much” wealth. The need for wealth is limitless. And that means the need for productive work is limitless.

From a grand, historical perspective, we are only at the beginning of the wealth-creating age. The wealth Americans produce today is as nothing compared to what we’ll have two hundred years from now—just as the standard of living in 1800 was as nothing, compared to ours today.

Unemployment is not caused by an absence of avenues for the creation of wealth. Unemployment is caused by government interference in the labor market, preventing the law of supply and demand from “clearing the market” in labor services, as it does in every other market. Yet, even with that interference, the number of jobs goes relentlessly upward, decade after decade—from 27 million workers in 1900 to about 140 million in 2010.

Jobs do not exist as a fixed pool, to be divided up. Jobs can always be added because there’s no end to the creation of wealth and thus no end to the useful employment of human intelligence. There is always more productive work to be done. If you can give your job to an immigrant, you can get a more valuable job.

What is the effect of a bigger labor pool on wage rates? Given a constant money supply, nominal wage rates fall. But real wage rates rise, because total output has gone up. Economists have demonstrated that real wages have to rise as long as the immigrants are self-supporting. If immigrants earn their keep, if they don’t consume more than they produce, then they do not subtract from per capita output, which means no one is injured by their employment. And to the extent that immigrants save, postponing current consumption, they increase capital and total output, raising everyone’s standard of living.

And, in fact, rising real wages was the history of our country in the nineteenth century. Before the 1920s, there were no limits on immigration; yet these were the years of America’s fastest economic progress. The standard of living rocketed upward. Self-supporting immigrants brought economic benefit, not hardship.

The protectionist objection that immigrants take away jobs and harm our standard of living is a solid economic fallacy.

WELFARE

A popular misconception is that immigrants come here to get welfare. In fact, this is rarely immigrants’ motive. It is true that the small minority of immigrants who come to get welfare do constitute a burden. But this issue has been rendered moot by the passage, under the Clinton Administration, of the Personal Responsibility and Work Opportunity and Reconciliation Act (PRWORA), which makes immigrants ineligible for most forms of welfare for 5 years. I support this kind of legislation (which should be enacted at the State level as well; currently left-leaning States, like California, continue to throw tax money at immigrants—and myriad other groups).

Further, if the fear is of non-working immigrants, why do protectionists seek to pass legislation aimed at punishing employers of immigrants?

CRIME

Contrary to “accepted wisdom,” the data show that immigrants are less prone to crime than are native Americans. For instance, over one-fourth of the residents of the border-town El Paso, Texas are immigrants. But El Paso has about one-tenth the murder rate of Baltimore, a city of comparable size.

That’s not an anomaly:

If you want to find a safe city, first determine the size of the immigrant population,” says Jack Levin, a criminologist at Northeastern University in Massachusetts. “If the immigrant community represents a large proportion of the population, you’re likely in one of the country’s safer cities. San Diego, Laredo, El Paso—these cities are teeming with immigrants, and they’re some of the safest places in the country.

http://reason.com/archives/2009/07/06/the-el-paso-miracle

Criminals have a short-range, stay-in-the-‘hood mentality. Immigrants are longer-range, ambitious, and want to earn money, not grab it.

The deeper point is moral-legal. The fact that some men in a given category may commit crimes is no justification for treating everyone in that category as criminals. Guilt is not collective. Just as Bernie Madoff’s crimes are his, not those of all hedge-fund operators, just as the fact that Madoff is of Jewish descent in no way legitimates anti-semitism, so it is a slap at morality to curtail the rights of all immigrants because of the crimes of a few individual immigrants.

Man has free will. The choices of some do not reflect on the moral status of others, who make their own choices. Each individual is responsible for his own actions, and only his own actions.

OVERCROWDING

America is a vastly underpopulated country. Our population density is less than one-third of France’s.

You say that hordes of immigrants would come to overcrowd America? Okay, take a really extreme scenario. Imagine that half of the people on the planet moved here. That would mean an unthinkable eleven-fold increase in our population—from 300 million to 3.3 billion people. The result? America would be a bit less densely populated than England. England has 384 people/sq.km; vs. 360 people/sq. km. if our population multiplied eleven-fold.

Here’s another comparison: with half of mankind living here, we would be less densely populated than the state of New Jersey is today (453/sq. km.). Note that these calculations exclude Alaska (our biggest state) and Hawaii. And these density-calculations count only land area.

Contrary to widespread belief, high population density is a value not a disvalue. High population density intensifies the division of labor, which makes possible a wider variety of jobs and specialized consumer products. For instance, in Manhattan, there is a “doll hospital”—a store specializing in the repair of children’s dolls. Such a specialized, niche business requires a high population density in order to have a market. Try finding a doll hospital in Poughkeepsie. In Manhattan, one can find a job as a “Secret Shopper” (a job actually listed on Craig’s List). Not so in Paducah.

People want to live near other people, in cities. One-seventh of England’s population lives in London. If population density is a bad thing, why are Manhattan real-estate prices so high? People are willing to pay a premium in order to live in a densely populated area. And even within that area, the more “crowded” the more in demand: compare prices for apartments in mid-town Manhattan with prices for apartments on the less crowded northern tip of the island.

THE VALUE OF IMMIGRANTS

Immigrants are the kind of people who refresh the American spirit. They are ambitious, courageous, and value freedom. They come here, often with no money and not even speaking the language, to seek a better life for themselves and their children.

The vision of American freedom, with its opportunity to prosper by hard work, serves as a magnet drawing the best of the world’s people. Immigrants are self-selected for their virtues: their ambitiousness, daring, independence, and pride. They are willing to cast aside the tradition-bound roles assigned to them in their native lands and to re-define themselves as Americans. These are the people our country needs in order to keep alive the individualist, hard-working attitude that made America great.

Here is a short list of some high-achieving immigrants: Alexander Hamilton, Alexander Graham Bell, Andrew Carnegie, most of the top scientists of the Manhattan Project, Igor Sikorsky (the inventor of the helicopter), Google co-founder Sergey Brin, and Ayn Rand.

Open immigration: the benefits are great. The right is unquestionable. So let them come.


Copyright © 2014 TOF Publications, Inc. www.hblist.com/immigr.htm
Permission hereby granted to republish, in whole or in part, provided no changes are made in the wording of material used, Harry Binswanger’s authorship is stated, and this notice is carried.

The Dollar and the Gun

[Reprinted, by permission, from Why Businessmen Need Philosophy]

To advocates of capitalism, the following scenario is all too familiar.

You are in a conversation with an acquaintance. The conversation turns to politics. You make it clear you are for capitalism, laissez-faire capitalism. Eloquently, you explain the case for capitalism in terms of man’s rights, the banning of physical force, and the limitation of government to the function of protecting individual freedom. It seems clear, simple, unanswerable. But instead of seeing the “light-bulb look” on the face of your acquaintance, you see shock, bewilderment, antagonism. At the first opportunity, he rushes to object:

“But government has to protect helpless consumers from the power wielded by huge multinational corporations.”

Or: “freedom is impossible under strict capitalism: people must have jobs in order to live, and they are therefore forced to accept the employer’s terms.”

Or: “In a complex industrial society such as ours, government planning must replace the anarchy of the marketplace.”

These apparently diverse objections all commit the same logical fallacy, a fallacy grounded in the deepest philosophical premises of those who commit it. To defend capitalism effectively, one must be able to recognize and combat this fallacy in whatever form it may appear. The fallacy is equivocation–the equivocation between economic power and political power.

“Political power” refers to the power of government. The special nature of that power is what differentiates government from all other social institutions. That which makes government government, its essential attribute, is its monopoly on the use of physical force. Only a government can make laws–i.e., rules of social conduct backed up by physical force. A “government” lacking the power to use force is not a government at all, but some sort of ugly pretense, like the United Nations.

A non-governmental organization can make rules, pass resolutions, etc., but these are not laws precisely because they cannot be enforced on those who choose not to deal with that organization. The penalty for breaking the rules of, e.g., a fraternal organization is expulsion from the association. The penalty for breaking the law is fines, imprisonment, and ultimately, death. The symbol of political power is a gun.

A proper government points that gun only at those who violate individual rights, to answer the physical force they have initiated, but it is a gun nonetheless.

Economic power, on the other hand, is the ability to produce material values and offer them for sale. E.g., the power of Big Oil is the power to discover, drill, and bring to market a large amount of oil. Economic power lies in assets–i.e., the factors of production, the inventory, and the cash possessed by businesses. The symbol of economic power is the dollar.

A business can only make you an offer, thereby expanding the possibilities open to you. The alternative a business presents you with in a free market is: “increase your well-being by trading with us, or go your own way.” The alternative a government, or any force-user, presents you with is: “do as we order, or forfeit your liberty, property, or life.”

As Ayn Rand wrote, “economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.” (Capitalism: The Unknown Ideal, p. 48)

Economic power stems from and depends upon the voluntary choices of the buying public. We are the ones who make big businesses big. One grants economic power to a company whenever one buys its products. And the reason one buys is to profit by the purchase: one values the product more than the money it costs–otherwise, one would not buy it. (The savage polemics against the profits of business are demands that the entire gain should go to one side–that “the little guy” should get all of the gain and businesses none, rather than both profiting from the transaction.)

To the extent a business fails at producing things people choose to buy, it is powerless. The mightiest Big Multinational Conglomerate which devoted its power to producing items of no value would achieve no effect other than its own bankruptcy.

Economic power, then, is purely benevolent. It does not include the power to harm people, enslave them, exploit them, or “rip them off.” Marx to the contrary notwithstanding, the only means of exploiting someone is by using physical force–i.e., by employing the principle of political power.

The equivocation between economic and political power attacks capitalism from both sides. On the one hand, it blackens the legitimate, peaceful, self-interested activities of traders on a free market by equating these activities with the predatory actions of criminals and tyrannical governments. For example, the “power of huge multinational corporations” is thought of as the power to rob the public and to coerce employees. Accepting the equivocation leads one to conclude that government intervention in the economy is necessary to the protection of our freedom against economic power.

On the other hand, the equivocation whitewashes the interventionist actions of government by equating them with the benevolent, productive actions of businesses and private individuals. For example, when the government attempts to substitute arbitrary bureaucratic edicts for the intricately co-ordinated plans of individuals and businesses, this is referred to as “planning.” The systematic destruction of your savings through legalized counterfeiting is styled “managing” the money supply. Antitrust laws, which make it illegal to become too effective a competitor, are held necessary to preserve “free competition.” Socialist dictatorship is spoken of as “economic democracy.”

Americans have always held individual rights and freedom to be sacred and have looked with proper suspicion upon the power of government. The opponents of freedom have flopped grandly whenever their true colors have been perceived by the American public (e.g., the McGovern campaign). The victories of the statists have required camouflage. The equivocation between economic and political power, by reversing the meaning of all the crucial political concepts, has been essential to the spread of anti-capitalism in this country.

The demagogic, rabble-rousing attacks on “Big Business” are the most direct example of the equivocation in practice. Whether it is multinational corporations or conglomerates or monopolies or “oligopolies,” the fear of “concentrations of economic power” is the theme played upon in endless variations by the left. The anti-bigness theme often appeals to the “conservatives” as wen; the first serious breach of American capitalism, the Sherman Antitrust Act of 1890, was and is supported by conservatives. Senator Sherman’s rationale for the Act is a classic case of the equivocation: “If the concerted powers of [a business] combination are intrusted to a single man, it is a kingly prerogative inconsistent with our form of government.” (emphasis added)

In today’s depressed economy where “obscene profits” have turned into (lovely?) losses, the anti-business theme is being played in a new key: the target has shifted to foreign businesses. The equation of the doIJar and the gun remains however. To wit: “Senator Paul Tsongas (D-Massachusetts) believes that the high-technology challenge from Japan is as serious to the United State’s long-term security as the defense threat posed by the Soviet Union.” (lnfoworld, May 30, 1983).

The Soviet Union threatens us with nuclear annihilation. The Japanese “threaten” us with the opportunity to buy cheap, reliable computer parts. One could point out that the law of comparative advantage, a cornerstone of economic science, dictates that one country’s superior productive ability can only benefit an those with whom it trades, that if Japanese firms can produce computer parts at lower cost than U.S. firms can, then our firms will necessarily have a comparative advantage in some other area of production, that any government intervention to protect some U. S. firms from foreign competition sacrifices other U.S. firms and the public at large to inefficiency, lowering our standard of living. But all this would be lost on the kind of mentality that equates imports with bombs.

Anti-capitalists go through the most elaborate intellectual contortions to obscure the difference between economic power and political power. For example, George Will, a popular columnist often mistaken for a pro-capitalist, announces that we must abandon the distinction because “any economic arrangement is, by definition, a political arrangement.” He attacks the idea that “only people produce wealth; government does not” on the grounds that “Government produces the infrastructure of society–legal, physical, educational– . . . that is a precondition for the production of wealth.” (The New Republic, May 9, 1983)

It is true that laws protecting rights are a precondition for the production of wealth, but a precondition of production is not production. In enforcing proper laws, the government does not produce anything–it merely protects the productive activities performed by private individuals. Guns cannot create wealth. When a policeman prevents a mugger from stealing your wallet, no value is created; you are left intact, but no better off.

The absence of a loss is not a gain. Ignoring that simple fact is involved in the attempt to portray the government’s gun as a positive, creative factor. For instance, tax relief is viewed as if it were government encouragement. In reality, tax breaks for schools, churches, homeowners, etc. are reduced penalties, not support. But socialist Michael Harrington writes:

“The Internal Revenue Code is a perverse welfare system that hands out $77 billion a year, primarily to the rich. The special treatment accorded to capital gains results in an annual government benefit of $14 billion for high rollers on the stock exchange.” (Saturday Review, November, 1972) Harrington equates being forced to surrender to the IRS one-quarter of your earnings (the tax rate for capital gains), with being given a positive benefit by the government. After all, the IRS could have taken it all.

Just as the absence of a loss is not a gain, so the absence of a gain is not a loss. When government handouts are reduced, that is not “balancing the budget on the backs of the poor”–it is a reduction in the extent to which the poor are balanced on the backs of the rest of us.

The distinction between economic power and political power–seemingly self-evident–is in fact premised upon an entire philosophic framework. It requires above all two principles: 1) that wealth is produced by individual thought and effort, and 2) that man is an end in himself. From the standpoint of today’s philosophy, which denies both premises, the equation of economic power and political power is not a fallacy but a logically necessary conclusion.

In regard to the first premise, the dominant view today is that “the goods are here.” This attitude comes in several variants, and most people switch freely among them, but in every case the result is the idea that economic power is not earned.

In one variant, the production of wealth is evaded altogether; wealth is viewed as a static quantity, which can only change hands. On this view, one man’s enrichment is inevitably at the price of another’s impoverishment, and economic power is necessarily obtained at others’ expense.

For example: in a full-page advertisement run last year in The New York Times, a pornographic magazine promoted its series of articles on “Big Oil: The Rape of Free Enterprise.” The ad charged “the oil companies have a vise-like grip on the production and distribution of oil and natural gas–and set the market prices. These giants also own vast holdings of coal and uranium. . . . we’re over a barrel-and it’s an oil barrel!.” (January 25, 1982) Despite the ad’s use of the word “production,” the language conveys the impression that barrels of oil, stockpiles of gas, coal, and uranium are not produced, that they were just lying around until–somehow–those demonic giants seized them in their “vise-like grip.”

The truth is that finding, extracting, refining, delivering, and storing oil and other energy sources is such an enormous undertaking that companies too small to be known to the general public spend more than $100 million each on these tasks annually. The notion that wealth is a static quantity overlooks one telling detail: the whole of human history. If wealth only shifted hands, if one man’s gain were always at the price of another’s loss, then man could never have risen from the cave.

In other moods, people acknowledge that wealth is produced, but, following Marx, view production as exclusively a matter of using physical labor to transform natural resources into finished products. In the midst of the “computer revolution,” when technological discoveries are shrinking yesterday’s multi-million-dollar room-sized computer down to the size of a briefcase and making it available for the cost of a used car, people cling to the notion that the mind is irrelevant to production.

On the premise that muscles are the source of wealth, the accumulation of wealth by corporations is a sign of the exploitation of the workers: the economic power of those who do not sweat and toil can have been gained only by preying upon those who do.

In a final variant, people do not deny entirely the role of intelligence in production, but view wealth as an anonymous social product unrelated to individual choice, effort, ambition, and ability. If today’s standard of living is due equally to the work of Thomas Edison, any random factory worker, and the corner pan-handler, then everyone has a right to an equal “share of the pie.” Again, the conclusion is that any man’s possession of above-average wealth means that he has exercised some magical power of diverting the “fair share” of others into his own pocket.

In any variant, the immortal refutation of “the goods are here” approach to wealth is provided by Atlas Shrugged. As Galt says in explaining the meaning of the strike he leads, “We’ve heard it shouted that the industrialist is a parasite, that his workers support him, create his wealth, make his luxury possible–and what would happen to him if they walked out? Very well. I propose to show to the world who depends on whom, who supports whom, who is the source of wealth, who makes whose livelihood possible and what happens to whom when who walks out.”

Once it is admitted that wealth is the product of individual thought and effort, the question arises: who should own that product? On an ethics of rational egoism, the answer is: he who created it. On the moral premise of altruism, however, the answer is: anyone who needs it. Altruism specializes in the separation of creator and his creation, of agent and beneficiary, of action and consequences.

According to altruism, if you create a good and I do not, that very fact deprives you of the right to that good and makes me its rightful owner, on the principle, “from each according to his ability; to each according to his need.” On that premise, anyone who possesses a good needed by another must surrender it or be guilty of theft. Thus altruism turns businessmen into extortionists, since they charge money for relinquishing possession of the goods rightfully belonging to others. A government whose political power is directed to protecting business’s control over their product is, from the altruist standpoint, initiating physical force against the rightful owners of those goods. By this moral code, the economic power of business is political power, since the wealth of businesses is protected by government, instead of being turned over to the needy.

Altruism engenders an inverted, death-dealing version of property rights: ownership by right of non-production.

Is this an exaggeration? Look at the statements of those who take altruism seriously–for example, George Will, who lauds the “willingness to sacrifice private desires for public ends.”

Urging “conservatives” to embrace the welfare state, Will quotes approvingly from the 1877 Supreme Court case of Munn v. Illinois, in which the court ruled that a State could regulate the prices of private businesses: “When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created.” (emphasis added)

One must submit to be controlled–why? Because he created a value. Controlled–by whom? By “the public”–i.e., by all those who have not created that value.

Philosophically, the equivocation between economic power and political power rests on the metaphysics of causeless wealth and the ethics of parasitism. Psychologically, it appeals to a second-hander’s fear of self-reliance.

The second-hander feels that the distinction between the dollar and the gun is “purely theoretical.” He has long ago granted the smiles and frowns of others the power to dictate his values and control his behavior. Feeling himself to be metaphysically incompetent and society to be omnipotent, he believes that having to rely on himself would mean putting his life in jeopardy. A society of freedom, he feels, is a society in which he could be deprived of the support on which his life depends.

When you talk to him in your terms, telling him that we are all separate, independent equals who can deal with each other either by reason or by force, he literally doesn’t know what you are talking about. Having abandoned his critical faculty, any idea, any offer, any deal is compulsory to him if it is accompanied by social pressure. You may tell him that in order to survive, man must be free to think. But he lacks the concepts of independent survival, independent thought, and even of objective reality; his credo is Erich Fromm’s: “Love is the only sane and satisfactory answer to the problem of human existence.” (Man for Himself, p. 133)

I will conclude with another scenario. Imagine that you survive a shipwreck and have to steer your lifeboat to one of two desert islands where you will have to remain for several years. On each island there is one inhabitant. The western island is the property of a retired multi-millionaire, who lives there in high luxury, with a mansion, two swimming pools, and all the accoutrements of great wealth. The eastern island is inhabited by a propertyless beachcomber who lives in rags and eats whatever fruit and fish he can scrounge up. Let’s add that the millionaire is an egoist and strict capitalist, while the beachcomber is a saint of altruism who will gladly share his mud hut with you. Would you, or anyone, head east to escape being exploited by the millionaire’s economic power?

So much for the idea that one is threatened by the economic power of others.

But one doesn’t have to resort to desert-island fables. The same practical demonstration of the life-giving nature of economic power and the fatal nature of unbounded political power is provided by the hundreds of thousands of people–Boat People they are called–who cling to their pathetic, overloaded vessels, fleeing the lands of the gun and heading toward whatever islands of even semi-capitalism they can find left in the world. If for every hundred refugees seeking to flee collectivist dictatorships we could exchange one intellectual who urges us to fear the dollar and revere the gun, America might once again become a land of liberty and justice for all.

Altruism and economics

How does it work? How do people’s ideas on morality affect their economics? It’s not by a direct line, as if one went straight from “One must live for others” to “Supply does not affect price.”

An example of how altruism warps economic thinking is the concept of “unequal bargaining power.” This is a concept accepted by left and right. Remedying the unequal bargaining power of a solitary worker is the justification offered for “collective bargaining” and other atrocities. “In union there is strength”–strength to balance the strength of the rich employer, who can hire you or any of a number of other job-seekers.

But how do the same facts stand in a mind untainted by the creed of need?

First of all, the concepts of “strength” and “power” here package-deal productive power and destructive power–the power of the dollar offered and the power of the sidearm unholstered. That equivocation itself comes from altruism: to an altruist, withholding goods needed by others is theft (see my article “The Dollar and the Gun,” in Why Businessmen Need Philosophy).

And that leads to a startling realization. On egoist premises, the inequality goes in the other direction. It is the poor, starving worker, desperate to get a job who stands to gain an enormous value from it, and the employer who will get only the worker’s marginal product.

The “bargaining power” of one party to a trade is his ability to provide value to the other. You want to find, and trade with, the person or company that has the greatest “bargaining power over you”–i.e., the biggest value to you.

Can one with a high bargaining power exact stiff terms? That language is from the altruist morality. He can’t “exact” anything, he can only offer. And “stiff”? By what standard? Of the various offers available in the market, you take the one that gives you the biggest gain.

Let’s put numbers to it. Suppose someone is selling something, a widget, that you can use to earn $100, but which he values in his situation at only $10. And suppose the seller knows that you can do this (and knows that he can’t do much with it). Does he have any advantage over you? Are you at his mercy? Only if you think altruism is correct–i.e., that you have a right to have that widget. Otherwise–i.e., as an egoist–you look at it this way: he has the potential to provide me with a large gain, and I have the potential to do likewise for him.

Let’s say that the seller, knowing the widget’s value to you, asks a price of $90. If you know that the widget’s value to him is only $10, you’ll counter with some much lower figure. (If you don’t, you might accept the $90 price, and be pleased to make an 11.11% profit: 10/90 = 11.11%). But if you do know that he values the widget at only $10, you could counter at $25–and the negotiation is underway. The final, agreed-upon price will be something giving a big gain to both parties. Say you pay $60 dollars. The seller gains $50 on the trade, and you gain $40. That is a win-win trade for both of you–as it is for any deal mutually agreeable to each party.

I am reminded of the exchange between Al Ruddy and Ayn Rand, when they agreed on the abortive sale of the movie rights to Atlas Shrugged. He said that he would have been willing to pay more. She responded that that was okay, because she would have been willing to take less.

In contrast, suppose the widget is worth $100 to you, but worth $98 to the potential seller–a condition of approximately “equal bargaining power.” The deal can be concluded only in the narrow range of $98.01 to $99.99. But that means that neither party gains much. It would be to your selfish interest to look around for someone who values the widget far less. That is, it would be to your selfish interest to find someone who had “great bargaining power over you.” The limiting case is someone who doesn’t want the widget at all. He would be delighted to sell it to you for $20–even if he knows it is worth $100 to you.

The other factor that an altruist is blind to is competition on the market. Neither party will take a price lower than he can get elsewhere. If other people, besides you, can take a widget and find a way to turn around and sell it for $100, the widget-seller won’t accept a price less than they would pay. Consequently, the “helpless” employee at the “mercy” of the rich employer can demand a price for his services close to their marginal value to the average business. (In widget terms, the price paid will be around $90.)

By the same token, if there are people clamoring for these jobs, the employer can offer much less. Which is his sovereign right. Except that permanent unemployment is impossible in a free market. A high profit on employee-hires attracts capital, bidding up wage rates. (The tendency on a free market is for a uniformity of profit, adjusted for risk–because above-average profits attract capital, which then bids up the cost of factors, lowering the profit rate back to the average.)

The bottom line is that what is styled “superior bargaining power” is one party’s ability to greatly benefit the other. And that’s something for which we “inferior” people are selfishly grateful.

Libertarianism and anarchism

Ray Shelton asks why libertarians should be linked to anarchism when most of them are not anarchists.

As I’ve said often, today’s libertarianism is characterized by tacit anarchism. Even the libertarians who nominally accept the institution of government are largely tolerant of anarchists, seeing the latter as comrades-in-arms in the battle against the state. Libertarians evaluate people like Murray Rothbard as defenders, rather than enemies, of liberty.

Libertarianism attracts people who are motivated not by a desire to establish a political structure that protects individual rights, but by a hostility toward government. This is why they are so opposed to government’s legitimate function of military defense. This is why their guiding premise is the anti-concept of “non-interventionism.” This is why the Cato Institute, for example, regards Islamic jihadism as no threat to us, and opposes military action on our part to destroy the jihadists.

This anti-state attitude is why Cato has as its slogan, “Individual Liberty, Free Markets and Peace.” The first two are absolute values; the third isn’t. The refusal to wage war is not a virtue if we face foreign threats to our freedom. A genuine advocate of individual liberty would not hold “peace” as a fundamental principle. But an anarchist—whether overt or covert—would.

With respect to libertarian politicians, Ron Paul’s views on foreign policy are almost as bad as Rothbard’s. And while his son, Rand Paul, is moderately better, he too believes in “non-interventionism.” For instance, Iran poses a demonstrable danger to America, but Rand Paul has said that even if it acquires nuclear weaponry, we should simply accept that fact and refrain from any military action against Iran.

There is, sadly, a significant number of people today who have adopted the anti-state philosophy of “non-interventionism,” and apply it as a package-deal to both the military and economic spheres (thereby smearing capitalism in the process).  Consequently, there is a cognitive need to label the ideology they hold—and that label, widely accepted in the mainstream media, is “libertarianism.”

It is now a term that does not represent the political philosophy of Objectivism—or of any supporter of actual liberty.

Altruism’s reductio ad absurdum

If I had to pick one company that has most improved my life over the last 15 years, it would be Google.

Knowledge is power, and Google gives you the ability to find out almost anything in a split-second. Just a few days ago, I found the solution to a computer problem that I’ve been having for a decade and on which I recently spent a fruitless 20 hours trying to solve. Google tells me where the products are that I’m looking for; Google maps helped me find the right house to buy; Google images supplied some of the pictures I used in How We Know; and then there are all those questions that used to be just idle curiosity but are now answerable instantly.

And with the Google Chrome web browser, I don’t even have to go to Google–I just type my search string onto the URL line.

I would pay a fair amount for this matchless service, but Google is 100% free.

Yet Google is under attack from governments around the world. It is being prosecuted under antitrust law–for giving away an invaluable product. The theory behind antitrust is the (absurd) idea that businesses will raise their prices and restrict output. Google has a price of zero and a virtually infinite supply of service. Thus, we come face to face with the real basis of antitrust: hatred of success. It’s Google’s virtues that are making it the target of the envy-ridden.

The latest in a long series of crimes against Google is a demand by the French government that Google disclose its algorithms–the formulas it has developed for bringing us all that information, and doing so in a way that competitors can’t match. The government of France wants competitors to have the benefits of Google’s brains to use in competing against Google.

. . . in France, the upper house of parliament yesterday voted to support an amendment to a draft economy bill that would require search engines to display at least three rivals on their homepage. And also to reveal the workings of their search ranking algorithms to ensure they deliver fair and non-discriminatory results. Given that Google has a circa 90% share of the search market in France these amendments, although not specifically naming any companies, are aimed squarely at Mountain View.

http://techcrunch.com/2015/04/17/french-senate-backs-bid-to-force-google-to-disclose-search-algorithm-workings/#.nxncy9:HEl6 Hat tip to Ian Edgar.

Google is constantly updating its algorithms, so this implies that every improvement they make would have to be immediately surrendered to its competitors. That would destroy Google–or at least Google search.

The claim is that Google biases its results to feature those who buy ad space from Google. And what would be wrong with that? It’s like prosecuting someone for giving you a present, on the grounds that you prefer a different present. It’s hard to believe that Google would bias its results–since its competitive edge comes from giving us better search results than any other company does. But that’s not the point. The point is that a firm has the absolute right to give away whatever they wish to whomever wants to take it. (In fact, a firm has the right to offer to sell whatever they wish–but Google search is given free.)

The story of Google’s crucifixion blows altruism’s cover. Altruists are not interested in what helps people, only with forcing the great achievers to their knees. Google is being punished for using extraordinary intelligence to vastly foreshorten the time between desire and fulfillment.