Monthly Archives: April 2011

What free-market capitalism is not

It is not about being “connected and protected”:

Thanks to EPJ:

A “V for Vendetta” moment?

Via EPJ:

NYPD cops give ticket to bicyclist riding on the sidewalk. Passerby makes a joke about it, he gets arrested.

Remembering the Real Ayn Rand

From wsj.com:

By DONALD L. LUSKIN

Tomorrow’s release of the movie version of “Atlas Shrugged” is focusing attention on Ayn Rand’s 1957 opus and the free-market ideas it espouses. Book sales for “Atlas” have always been brisk—and all the more so in the past few years, as actual events have mirrored Rand’s nightmare vision of economic collapse amid massive government expansion. Conservatives are now hailing Rand as a tea party Nostradamus, hence the timing of the movie’s premiere on tax day.

When Rand created the character of Wesley Mouch, it’s as though she was anticipating Barney Frank (D., Mass). Mouch is the economic czar in “Atlas Shrugged” whose every move weakens the economy, which in turn gives him the excuse to demand broader powers. Mr. Frank steered Fannie Mae and Freddie Mac to disaster with mandates for more lending to low-income borrowers. After Fannie and Freddie collapsed under the weight of their subprime mortgage books, Mr. Frank proclaimed last year: “The way to cure that is to give us more authority.” Mouch couldn’t have said it better himself.

But it’s a misreading of “Atlas” to claim that it is simply an antigovernment tract or an uncritical celebration of big business. In fact, the real villain of “Atlas” is a big businessman, railroad CEO James Taggart, whose crony capitalism does more to bring down the economy than all of Mouch’s regulations. With Taggart, Rand was anticipating figures like Angelo Mozilo, the CEO of Countrywide Financial, the subprime lender that proved to be a toxic mortgage factory. Like Taggart, Mr. Mozilo engineered government subsidies for his company in the name of noble-sounding virtues like home ownership for all.

Associated PressAyn Rand in 1962

luskin

luskin

Still, most of the heroes of “Atlas” are big businessmen who are unfairly persecuted by government. The struggle of Rand’s fictional steel magnate Henry Rearden against confiscatory regulation is a perfect anticipation of the antitrust travails of Microsoft CEO Bill Gates. In both cases, the government’s depredations were inspired by behind-the-scenes maneuverings of business rivals. And now Microsoft is maneuvering against Google with an antitrust complaint in the European Union.

The reality is that in Rand’s novel, as in life, self-described capitalists can be the worst enemies of capitalism. But that doesn’t fit in easily with the simple pro-business narrative about Rand now being retailed.

Today, Rand is celebrated among conservatives: Rep. Paul Ryan (R., Wis.) insists that all his staffers read “Atlas Shrugged.” It wasn’t always this way. During Rand’s lifetime—she died in 1982—she was loathed by the mainstream conservative movement.

Rand was a devout atheist, which set her against the movement’s Christian bent. She got off on the wrong foot with the movement’s founder, William F. Buckley Jr., when she introduced herself to him in her thick Russian accent, saying “You are too intelligent to believe in God!” The subsequent review of “Atlas Shrugged” by Whittaker Chambers in Buckley’s “National Review” was nothing short of a smear, and it set the tone for her relationship with the movement ever since—at least until now.

Rand rankled conservatives by living her life as an exemplary feminist, even as she denied it by calling herself a “male chauvinist.” She was the breadwinner throughout her lifelong marriage. The most sharply drawn hero in “Atlas” is the extraordinarily capable female railroad executive Dagny Taggart, who is set in contrast with her boss, her incompetent brother James. She’s the woman who deserves the man’s job but doesn’t have it; he’s the man who has the job but doesn’t deserve it.

Rand was strongly pro-choice, speaking out for abortion rights even before Roe v. Wade. In late middle age, she became enamored of a much younger man and made up her mind to have an affair with him, having duly informed her husband and the younger man’s wife in advance. Conservatives don’t do things like that—or at least they say they don’t.

These weren’t the only times Rand took positions that didn’t ingratiate her to the right. She was an early opponent of the Vietnam war, once saying, “I am against the war in Vietnam and have been for years. . . . In my view we should fight fascism and communism when they come to this country.” During the ’60s she declared, “I am an enemy of racism,” and advised opponents of school busing, “If you object to sending your children to school with black children, you’ll lose for sure because right is on the other side.”

If anything, Rand’s life ought to ingratiate her to the left. An immigrant woman, she arrived alone and penniless in the United States in 1925. Had she shown up today with the same tale, liberals would give her a driver’s license and register her to vote.

But Rand was always impossible to pin down politically. She loathed Dwight Eisenhower, whom she believed lacked conviction. And in 1975 she wrote, “I urge you, as emphatically as I can, not to support the candidacy of Ronald Reagan,” primarily on the grounds that he didn’t support pure laissez-faire capitalism. But she endorsed Richard Nixon in 1968 because he supported abolition of the military draft. Rand was especially proud of her protégé Alan Greenspan for serving with Milton Friedman on Nixon’s Gates Commission, the findings of which led to today’s all-volunteer army.

Rand was not a conservative or a liberal: She was an individualist. “Atlas Shrugged” is, at its heart, a plea for the most fundamental American ideal—the inalienable rights of the individual. On tax day, with our tax dollars going to big government and subsidies for big business, let’s remember it’s the celebration of individualism that has kept “Atlas Shrugged” among the best-selling novels of all time.

Mr. Luskin is chief investment officer at Trend Macrolytics LLC and the co-author with Andrew Greta of “I Am John Galt,” out next month by Wiley & Sons.

Affidavit of Fear – Do Not Help Governments Appear Legitimate

(from www.marcstevens.net)

By Marc Stevens

I’ve mentioned on the radio show a few times about sending the IRS and other tax agencies affidavits. The affidavits state we are terrified of the IRS and only file returns and report financial transactions out of terror of being attacked, put in jail and having all our property stolen. I’m encouraging everyone, if you file or report to the IRS and other tax agencies, send an affidavit of fear with the return. Let them know you are only complying out of a sense of terror, not because you think there is a legitimate obligation. You may comply, but you will not conceal the threats and coercion they used to get compliance. We will not help them make it look legitimate.

There are several reasons for this, and you’ll see it’s another tool to help bring about a voluntary society, building the free market.

It makes the bureaucrats aware of the violence. I’m convinced, from years of personal experience with tax agents and other bureaucrats, the violent nature of government is very uncomfortable to them. They think they’re the good guys and they have told me they “take offense” when I point out governments have no voluntary support, it’s all compulsory. I have to tell them if it’s really offensive, then do something to change it; quit and offer your services to the market on a voluntary basis: but throw a few thousand assessments out first.

Imagine when there are thousands, perhaps millions of people sending a copy of the affidavit of fear with every return and financial report sent to the IRS and other tax agencies. Think of the impact when they start telling friends and family about these affidavits they are getting with returns and other payments.

There is a real issue of admissibility. I’ve had tax attorneys admit any information/testimony given under threat, duress and coercion is inadmissible. Yes, they play desperate word games in a silly attempt to convince the gullible it’s not really threat, duress and coercion when you use the word government; we know better. We know people are coerced to pay taxes and file returns and reports such as 1099’s; we also know there is a very real threat of jail for non-compliance:

Rational people aren’t fooled; facts are very stubborn things. Governments don’t ask for support, they demand it and are very willing to attack people and forcibly take their property if they don’t get compliance. People are terrified of the IRS: I had a Ms. Little, an IRS agent in Austin, Texas, tell me on April 7, 2011, that she was afraid of the IRS. Ms. Little told me when she gets a letter from the IRS she gets “flushed” and fearful. Anyone who tells you they are not afraid of the IRS is probably lying to you.

The IRS relies on us to send them reports so they can attack us. Problem is, coerced testimony is usually considered inadmissible, at least to those of us interested in truth and justice. That’s looks like a pretty big fly in the ointment to me. If they’re going to use threats, duress and coercion instead of providing a service we are wiling to voluntarily pay for, then we’re not going to hide that fact. Let’s make sure the violence – our only real problem with the idea of government – is never ignored and is always center stage. It undermines everything they are trying to put over on us, such as protecting us and that we are obligated to pay taxes. Yes, pay or go to jail: sounds like great protection, no wonder they have no voluntary support.

We should also be doing this for business and driver’s licenses; any time we are coerced to pay something, we should include the affidavit of fear. I prefer to see more people trading freely, that is, without licenses and taxes. But, if you are afraid of retaliation from those called government if you were to trade freely with others, then let them know when you get that business license it is out of fear. Let’s send so many they cannot ignore it and will see the futility in trying to spin it. Remember, no one can testify to your mental state, your perceptions, even they know that. We are not lying when we testify we are afraid of people like the IRS.

I’ve got two templates you can use and edit appropriately template 1, template 2. Have it notarized and make up a few dozen copies and keep in mind we don’t have to just send them to tax agencies, it’s appropriate to send to politicians, such as governors and mayors. Let them know you only pay their salary out of fear of being attacked. They are people like us, only they may not recognize the true violent nature of their support. Let’s help them see behind the PR and distractions such as elections. Let’s help them see the truth.

It’s got to be difficult to continue doing a job when your pretended customers keep filing affidavits they are only complying out of fear. If we’re going to continue to comply out of fear, we may as well let them know. Why make farming us any easier for them?

The Silence of Institutions

By Butler Shaffer

A few decades ago one could . . . still accept the expression “My Country right or wrong” as a proper expression of patriotism; today this standpoint can be regarded as lacking in moral responsibility.

~ Konrad Lorenz

I was startled the other morning to see a cable television news headline that read: “Department of Justice studying police officer shootings.” My initial response was to wonder if Will Grigg’s LRC articles and blogs on the brutalities, murders, and other criminal acts by police officers had generated so much attention that the political establishment was forced to deal with what appears to be a rampant problem. I later discovered that the DOJ was concerned not with police officers shooting ordinary people (what Will calls the “mundanes”), but with people shooting police officers. I felt a bit embarrassed having imagined, for even an instant, that modern government officials might have had occasion to regard such police assaults on individuals as the violation of a moral principle worthy of attention.

There is little doubt that political systems represent the most destructive, repressive, anti-life, and dehumanized form of social organization. If one were to consciously design and carry out a scheme that would prove disastrous to human well-being, it would be difficult to improve on what we now find in place. Such entities thrive on the energies generated by the mobilization of our inner, dark-side forces, a dynamic that can be brought about only through us, by you and me agreeing to structure our thinking to conform to the preeminence of such institutionalized thinking. I explored these processes in my book Calculated Chaos.

But it is not sufficient for the state, alone, to organize and direct how we think of ourselves, others, and the systems to be employed in conducting ourselves in society. Organizations that began as flexible tools that allowed us to cooperate with one another through a division of labor to accomplish our mutual ends, soon became ends in themselves, to which we attached our very sense of being. Tools became our identities; our shared self-interests became co-opted by the collective supremacy of the organization. In this way were institutions born.

In order to clearly distinguish one form of organization from another, I have defined an “institution” as “any permanent social organization with purposes of its own, having formalized and structured machinery for pursuing those purposes, and making and enforcing rules of conduct in order to control those within it.” In short, an “institution” is a system that has become its own reason for being, with people becoming fungible resources to be exploited for the accomplishment of collective ends.

While the state is the most apparent and pervasive example, our institutionally-centered thinking dominates how we conduct ourselves in society. Economic organizations (e.g., business corporations, labor unions), religions, educational systems, the news media, are the more familiar forms of human activity engaged in through hierarchically-structured institutions. The values by which we measure our personal success or social benefits arising from such systems are those of particular interest to institutions themselves. These include, among others, such considerations as material well-being (e.g., income, employment, money, GDP); institutional certification (e.g., diplomas and degrees, SAT scores, professional licensing); and social status (e.g., fame, wealth, power, and other consequences of achieving success within institutions). In the vernacular of modern psychology, institutions are largely driven by such left-brained factors as linear and logical thinking, quantitative reasoning, and applied science (i.e., engineering).

Within our highly-structured world, values that do not serve institutional purposes tend to be regarded as forms of entropy (i.e., energy unavailable for productive work). These may include feelings and emotions, the role of fantasy and imagination, risk taking, spirituality, aesthetics, and spatial relationships. These make up what is referred to as right-brained expressions of our humanity. At best, such qualities are tolerated by the institutional order although, in times of turmoil, may be forcefully resisted (e.g., people being told “don’t get emotional”; or to embrace “security” and “certainty” over the risks associated with liberty.

That psychologically healthy men and women incorporate both left- and right-brained influences in their lives is not to be denied. The importance of living centered lives – i.e., living with the integrity that harmonizes (i.e., integrates) our values and actions without conflict or contradiction – is what makes civil society possible. But institutionalized thinking does not allow for such symmetry. An entity that is regarded as an end in itself – its own raison d’etre – is immediately in conflict with the idea of individuals as self-owning beings. From a property perspective, one cannot enjoy decision-making autonomy over his or her life and, at the same time, respect an institution as its own reason for being. This is why a system grounded in liberty and private ownership of property cannot be reconciled with the state.

For such reasons, the interests of individuals and institutions are incompatible, a fact that is reflected in the tendency of members of the institutional order to converge on issues central to the maintenance of centralized authority over people. Whether we are considering the war on drugs; police surveillance; government regulation of the economy; state-funded welfare; the so-called “national defense” industry; support for government schools, wars and the expansion of empire; or numerous other state systems premised on the vertical structuring of human action, one rarely finds major institutions dissenting from established policy. Institutional entities have developed a symbiotic relationship that brings them together, as one, when the order, itself, is challenged. What business corporation, university, major religion, member of the mainstream media, corporate-sponsored “think-tank,” international labor union, or other member of the “establishment,” has offered a frontal criticism of war, defense contracting, the police system, or government schools?

As our institutionally-directed world continues to collapse into wars and domestic militarism; economic dislocations and corruption brought on by crony-capitalism; the failure of such state-controlled systems as education and health-care; the increasing resort to police brutality, torture, enhanced punishment, and imprisonment; increased levels of taxation and inflation; and other examples of the failure of expectations most of us have had of “the system,” there is an ever-widening disconnection between institutions and individuals. There is also a growing awareness that the operational values essential to the interests of each group are not only incompatible, but beyond repair.

In the face of such a systemic bankruptcy within the institutional order – whose power we have been conditioned to embrace as the essence of social order – thoughtful minds might ask: “where is there any fundamental analysis or criticism coming from within these established entities?” What major corporations are heard speaking of the need to abandon our neo-mercantilist practices in favor of laissez-faire policies? What churches have denounced the run-away war system, daring to invoke the name of Jesus on behalf of conditions of love and peace? What colleges and universities truly tolerate the diversity of thought that could give rise to the consideration of new ideas and practices? What members of the major media offer the public anything more than propaganda useful to the political and corporate interests that own them?

It is this institutional group-think that now finds itself threatened by new technologies that do not lend themselves to centralized controls. The Internet and other unstructured tools will continue to destabilize the herds that the institutional order has worked so feverishly to keep confined to their assigned pastures. There is nothing quite so liberating as the increased flow of information, and there is nothing the establishment fears quite so much as a world of truly liberated people. Julian Assange’s and Wikileaks’ release of state secrets into the hands of persons political systems pretend to serve, are not the problem confronting the establishment: they are precursors of an emerging, life-sustaining social order.

In the meantime, do not expect institutional hierarchies to abandon their left-brained, linear, “bottom line” preoccupations with the accumulation of wealth and power. As George Orwell informed us, institutions may sense our right-brained needs for emotional and spiritual values, and will continue to corrupt language so as to persuade the weak-minded of an alleged commonality of purpose.

To such ends, “liberty” will become defined as a condition in which your obedience to the state will keep you out of prison. “Peace” will be what prevails among nations as long as they acknowledge the sovereign authority of the American Empire. “Life” will be a respected value as long as the living act in conformity with the collective interests of institutions. To expect anything more from the established order is to fail to understand the fundamental dichotomy between human beings and the organizations we have too long revered.

April 4, 2011

Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law. He is the author of the newly-released In Restraint of Trade: The Business Campaign Against Competition, 1918–1938 and of Calculated Chaos: Institutional Threats to Peace and Human Survival. His latest book is Boundaries of Order.

Copyright © 2011 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

There’s No Such Thing as Homemade Ice Cream

By Jeffrey Tucker

In the freezer section of the grocery store, there’s Vanilla Bean, French Vanilla, and yet another vanilla flavor called Homemade Vanilla. Now, come on! I’m in the store here, looking at rows and rows of commercial products produced by a vast capitalistic machinery, a cornucopia of frozen goods made by advanced industrial technologies, made from goods and services that require a global division of labor and a sophisticated trading and price system rooted in private property and replete with entrepreneurial risk at every stage of production.

There’s nothing “homemade” about anything here, and surely everyone knows that. It’s just marketing – not that there’s anything wrong with that.

But it got me thinking. What is real homemade ice cream? Oh, I’ve made it before. It has always struck me that you can’t really make real homemade ice cream with an electric machine. Electricity is so artificial, and if you are going to plug in a machine, in what sense are you actually making the stuff? Pouring ingredients into an electric bucket and waiting isn’t really “making” anything. You might as well let someone else do that and buy it from them. You might as well make a trip to the freezer section of the grocery store.

Nope, homemade must be hand cranked all the way, so the “elbow muscle” does the hard work. And it can be exhausting. You turn and turn and crank and crank and it seems like it will never become thick like ice cream. Then when it finally happens, and you are tired out, the turning gets harder and harder until you have to throw your whole body into it and finally you just can’t turn it anymore. At that point, it is ready to eat.

Is it worth it? That’s a subjective judgment. But consider: how many of the ingredients themselves are homemade? Is the stuff that makes the ice cream really homemade and truly authentic? We’ve already dispensed with the need for an electrical plant in your backyard by settling on the hand-cranked method. This is a great step toward homemade.

But what about the rock salt, a product that seems useful for either breaking up ice on the sidewalk or for making ice cream but not much else? I bought my packet at the store. This is clearly a compromise of the seeming need for autarky in ice-cream production, so what if we made this ourselves?

Wikipedia says that rock salt:

occurs in vast beds of sedimentary evaporite minerals that result from the drying up of enclosed lakes, playas, and seas. Salt beds may be hundreds of meters thick and underlie broad areas. In the United States and Canada extensive underground beds extend from the Appalachian basin of western New York through parts of Ontario and under much of the Michigan Basin. Other deposits are in Ohio, Kansas, New Mexico, Nova Scotia and Saskatchewan. The Khewra salt mine is a massive deposit of rock salt near Islamabad, Pakistan. In the United Kingdom there are three mines, the largest of these is at Winsford in Cheshire producing half a million tonnes on average in six months.

All I can say is, Yikes, I’ve got some travelling to do. And some crews to hire. And then I have the problem of packaging the stuff and shipping it back from Islamabad or Winsford or wherever. But wait, it seems like Morton sells a product that might be the same thing but, in any case, markets itself as Ice Cream Salt, as distinguished from just plain rock salt for driveways and the like. What the difference is, I don’t know. But I’m not taking any chances, so more research on this point is clearly necessary.

Then there’s the problem of milk. I could buy a cow but that’s a lot of upkeep. I understand that you have to milk one of these things regularly whether you are making ice cream or not. And there’s the problem of feed and waste and many other issues. Raising and keeping this animal healthy might turn into a full-time job, with no time left over for making, much less enjoying, ice cream.

Of course you need refrigeration and ice, without which matters are rather hopeless. It took most all of recorded human history to invent the refrigerator, which only became common in American homes in the 1920s and 1930s, and so it is pretty presumptuous for me to assume that I could construct one on my own. Plus, these things run on electricity, and I thought I had dispensed with that in the name of authenticity. So long as I’m using electricity to store the milk and ice, why not just let electricity turn the crank too?

I’m back to plan A: get a generator. I’ll pretend not to notice the problem of making homemade gasoline to power it. After all, I could use a river (need to get one of those) or erect a giant windmill (prepare for dead bird carcasses to litter up the yard), but then there’s no power on windless days. How about a solar-based generator? Break out the Windex (can I make that at home too?). This is getting expensive.

Of course you need eggs, which means chickens, which I wouldn’t entirely rule out, but everyone I know who has tried to raise chickens for eggs eventually throws in the towel. It is a disgusting job, fully of unexpected headaches, like getting rid of varmints and keeping the chickens warm and buying expensive feeds and dealing with filthy critters and chicken coops.

It is doable, provided I wanted to quit my job into order to raise a cow and chickens. But there’s still the problem of sugar and flavor. Sugar can be had in many ways. I could raise bees or sugar cane or extract it from fruit and many others processes, each rather daunting. It would be far easier just to buy some, but then what about authenticity and that important “homemade” aspect of my ice cream?

Now let’s talk about vanilla. Apparently this derives from a bean grown in Mexico and Madagascar, and, says Wikipedia, “extensive labor required to grow the vanilla seed pods.” Now I seem to have bumped up against an impossible problem. I live in neither place, and apparently my climate just can’t do the vanilla-growing thing. Maybe I need a greenhouse. Artificial vanilla would require a chemistry lab out back.

I’ve said nothing about the ice-cream maker itself, which uses stainless-steel gears and a crank. In the whole history of humanity, steel as we know it only became economically viable in the 19th century, and stainless steel is very much a modern invention. It would require vast study for me to even figure out the metallurgical aspects of this. And at the least, I would need a blast furnace out back, and one wonders how the cow, the chickens, the electrical plant, and vanilla-producing greenhouse would fare amidst that.

Once I have the steel I would still need to form it. Then there’s the problem of the wood for the maker too, so I would need to cultivate trees and mill them and somehow shape them into round slats. Already, it would appear that I need a backyard full of stuff from all nations and all times, not to mention the physical impossibility of maintaining all these contraptions without a vast labor force that included engineers from many fields and experts in a huge range of tasks. Bankruptcy would begin even before this operation began.

The division of labor – global and involving thousands and even millions of people – is looking ever better, all beautifully coordinated by the price system and given forward motion by entrepreneurs at every stage, operating in coordination from all parts of the world.

In fact, it is pretty clear that there is no such thing as homemade ice cream, and that we use the phrase only in the most metaphorical sense. Thank goodness. In this case, I’m seeing the point: the store is just the last stop in a huge and extended process that emerged over centuries and requires the involvement of people all over the world.

They can call their vanilla ice cream homemade if they want to. Given what they go through to get us good food at good prices, capitalists have more than earned the right to stretch the language a bit when trying to persuade us to buy their products. We are the beneficiaries of a remarkable system of human cooperation.

Reprinted from Mises.org.