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

posted: June 19, 2015  

[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

posted: June 13, 2015  

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

posted: June 1, 2015  

[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

posted: June 1, 2015  

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

posted: April 23, 2015  

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.

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Altruism’s reductio ad absurdum

posted: April 22, 2015  

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.

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