Thursday, July 8, 2010

Federalist No. 3 "The Divine Beauty of Trade"

More and more every day, American find themselves being lead by those who hide behind the banner of “the greater good” and “charity”, all while demanding more govt control, more political power, and more of your hard-earned tax dollars. War, or the moral equivalent of war, is used to unite mankind under a common cause, to make it easier to push for greater authority and control. Fear is used as a tool by the left and the right to sway the opinions of men, and to blind them to reality. The way to combat that fear, is to expose it to truth, and to support one another with love and compassion, in that truth.

The truth of the matter is this: in a society that does not value individual freedom and private property, “…the reach of the herald is the sound of his voice” (Aristotle). Simply put, governments based on the concepts of common good or concrete communal aims, can only serve to govern small bodies of individuals without the use of fear. Reliance on commonly perceived aims and dangers fails to govern larger bodies, as the greater number of individuals you have in a group, the more diverse their varied interests are, and with greater difficulty does it become to effectively govern them. This is common sense, or at least should be. How then, do you sustain a government that rules over a large body of diverse individuals with varying wants and needs in a manner that is both fair and just?

First: a crash course in economics. We live on a world of scarcity. It dominates our lives, determines our opportunities, and shapes our experiences. If I have an apple, you cannot eat it by the simple fact of reality that I already have. The laws of Nature and physics simply dictate: you cannot consume a resource for one purpose, and then hope to consume it again later. In short: you cannot eat your cake and have it to. And yet, despite this pervasive aspect of reality, there seems to be those who would say, like the French Queen, “Let them eat cake!” Economics is merely the consideration of two consequences that are derived from the reality of scarcity: the problem of allocation, and that of coordination.

Scarcity forces us to make choices. There are only so many hours in a day, and that forces people like you to choose how, when, and in what manner you will spend your time. Time spent sleeping is time not spent working and earning a living. Time spent working is time not spent in preferable leisure and recreation. Scarcity forces everyday people like us to make choices about how we will allocate our time, what we will consume, and when, and whether you will save now so you can enjoy later.

Implied in all theses choices are of course the costs of such choices. Opportunities taken now naturally mean opportunities forgone at the same moment. The cost of work is the 8 hours you could spend doing something else. The cost of a choice is that which we give up when the choice is made.

In a world of scarcity, and the choices imposed by it, the question of allocation is a real and serious one. Who decides what goods and services go to whom, and why? Do we allocate on the basis of first come-first-serve? By random choice? Lottery? Tribal or political affiliations? Executive fiat? Perceived relative need? We can quickly reason out that no matter our choice of allocation, scarcity will STILL exist, and choices will still need to be made at a cost.

And thus we return to our original question: How, do you govern over a large body of diverse individuals with varying wants and needs in a manner that is both fair and just, especially now in light of the very harsh reality of scarcity?

All of human history will prove that where the idea of private, or several, property exists and is protected, along with individual freedom to use his property as he sees fit, civilization has prospered; and where such ideas have been stamped out by central economic planning (i.e govt control), such civilizations have withered away. Civilization is not merely a product of evolution –it is a process of establishing a sound and reliable framework of rules and laws that protect individual freedom and private property.

In this regard trade is almost supernatural in its ability to generate wealth and prosperity. Suppose for example you and I both wanted the apple I had in my possession. Among the various methods of obtaining my apple (guilting me into giving it to you at my expense, stealing it, or killing me to obtain it) by far the most civilized manner is to merely offer me something I value more than the apple itself that is yours to give (perhaps an orange or banana that you have in your possession that you value less than the apple). Thru engaging in such transactions, each of has taken something of value from someone else, something that has been given freely, and yet the net result is that we are BOTH BETTER OFF in terms of personal gratification and happiness. When both of us acted in self-interest, we both mutually benefited, despite the claims of self-proclaimed champions of altruism (i.e. your Marxists, socialists, communists, etc).

In the real world, a safe assumption is that everyone acts out of genuine self-interest. Altruism, while a nice ideal, is not a reliable means of predicting human behavior, and is not a dependable means of governance (you cannot govern a large body of individuals with nothing more than the hope that they will "do the right thing" simply because). Self-interest, however is both these things. People will always act in their own self-interest, unless adequate (and often tyrannical) incentives are provided to encourage otherwise.

Govt control, or central planning, does not work for this very reason: either it will ignore self-interest, and pretend that everyone (or at least, the ruling elite), acts out of selfless altruism, which then results in corrupt and self-interested politicians rising to power and receiving a blind eye to their selfish and destructive behavior; or self-interest is viewed as a threat and in diametric opposition to Utopian altruism, and thus ever-increasingly Draconian measures are exercised in order to provide the aforementioned incentives towards altruism.

Opponents to what Friedrich Hayek called the extended order of economics (capitalism) will argue that such exchanges lack charity, as you are giving something only in exchange for something you value in return. However, such arguments overlook the very obvious fact that even philanthropists are engaged in a willful exchange, for clearly they value the warm-fuzzy feeling that comes with the charitable act of giving more than they value what they have given away. Thus, an exchange has occurred, albeit a less tangible or visible one. In many ways, this is no different than paying money for services rendered to please us such as having our food prepared for us, or our car washed. ALL individuals, even the humble and sincere philanthropist, act in self-interest, for if he did not benefit from such an act of charity, why do so at all? That as outsiders we cannot perceive the benefit obtained by the act, does not diminish that he still benefits from the act in some way, whether it be obtaining the fame and notoriety that comes with philanthropy, or a "feel-good" sensation taught to him by the traditions and morals of his upbringing.

In making such arguments, one should not suppose that I lack certain altruistic tendencies or desires, shared by proponents of social planning (socialism). If anything, my support of the extended order only demonstrates my own altruism and compassion, for without the civilization that would clearly cease to exist without the extended order of free markets, millions of human beings would find themselves subject to poverty and death. There is a distinction to be made between unenlightened self-interest (selfishness or greed), and enlightened self-interest. The former is a character failing that inevitably leads to human suffering if left unchecked. The latter is simply the humble recognition that our our needs and wants should be met first in order that we might be more suited to satisfy the needs and wants of our neighbors. Even Christ found himself needing time away from the masses, begging him for healing and food, so that he could draw closer to His Father in Heaven and recharge His capacities to do good unto them.

The free market system is able to govern large bodies of diverse individuals with varying wants and needs, and to do so without "breaking my leg, nor picking my pocket". The divine beauty of trade allows one to seek his own wants and needs, as he satisfies the wants and needs of others.


Federalist No. 2 "Our Indpendence"

Growing up, my parents -my father especially- tried to instill in me a sense of self-sufficiency and the skills necessary to care for myself. My father would always say "I'm not always going to be there to help take care of you". This ominous warning of the inevitable served to teach me a valuable lesson about the importance of independence.

Today we live in a world that more and more sees dependence as a virtue, rather then a vice. The value of teaching a man to fish has been replaced with the ease of simply giving him the day’s fish. This is to be expected in a world where instant gratification is no longer viewed as impetuous or immature, but instead prudent and sensible. Why bother taking all that time to teach the poor man to fish? After all, he is starving now, and I can afford it. And besides, he probably can’t even learn how to fish. It is so much simpler to just give him the fish. And if he becomes dependent upon me to keep giving him fish, well, than that is just the sacrifice we have to make. Too often is this a common trend seen in well-intentioned, albeit misguided, individuals who advocate dependency as an unintentional, but necessary, byproduct of charity. Such advocates focus too much on what such dependency means for the depended and very little (if at all) on what it means on the dependent. Dependency is a spiritual ill. It weakens the faculties of the mind and soul. Dependency will corrupt a man and make him incapable of providing himself the simplest of needs. It is a debaser of humanity that puts him on the road to serfdom and slavery. Teach a man to fish, and you will feed him for a life time. Feed a man a fish, and not only will you merely forestay his starvation for another day, but you will enable him to become dependent on your subsistence. Which of the two outcomes seems more charitable?

Our Founding Fathers created a system of government designed to preserve our independence by declaring their own independence from a system of government that viewed them as subjects, not citizens, and that demanded their submission and obedience in exchange for the protections of the crown. Freedom cannot exist without accountability, and accountability does not exist without independence. This may explain our natural tendency towards dependency, given our natural aversion to accountability. But to give in to such tendencies results in the ultimate loss of freedom. Dependence on any body of government is the true opiate of the masses. It deprives us of our God-given liberty and agency, and like real opium, addicts us to its promises of security. To become dependent is to become a slave.

This does not mean that we cannot or should not help each other. We all at some point find ourselves depending on a helping hand to lift us up. Be it as children under the loving guidance of our parents, or as students receiving mentor-ship from the more learned and experience professor, or even the simple dependency of friends and loved ones in times of need, we ALL depend on someone at some point in our life. However, if anything, this should encourage independence so as to be able to become that hand that lifts the heavy heart, and strengthens the feeble knees. That dependence is as natural a state for man to be in from time to time as are death and illness make it no more desirable than either. In our quest for charity, we should diligently seek to banish dependence from our own lives and from those we would benefit. We should teach the man to fish.

A system of government that taxes one group to pay for the benefits and needs of another is not charity, but rather legalized looting. “Justice denies that the loss of freedom by some is made right by the greater good of others.” (John Rawls). Such systems appeal to our baser natures, by giving us cause to blame the wealthy and the prosperous for their wealth and possessions, and thus lay claim upon them. They allow us to hold someone else accountable, all for the simple price of submitting to their rule. And they are doomed to fail at some point for the same reason my father insisted I work towards complete and total independence –because someday, our benefactors will no longer be there.

All dependent, or dole, states will one day eventually find themselves deprived of their patrons. Even the wealthy grow old and die, or far more likely, tired of working for fruits they can never reap. Long before they die, those who provide to those who consume will eventually grow tired of their labors, and then demand that they be given the same recompense they doled out in life. With dependency comes the temptation to become more dependent, and with it, the incentive to give up one’s independence for the security of dependence. Why work when someone will provide for you, guaranteed, as they have for others? The number of taxable providers dwindles, and the government that so early promised the fruits of someone else’s labors finds itself with three choices: 1) Taxing the poor, (counter-productive to the dole society; 2) Forcing people to work so they can be taxed (slavery), or 3) diminishing or denying benefits (look at Greece and see how well THAT one takes…) None of these choices is desirable to a society dependent on the government to care for it.

In a society that adopts the doctrine of independence, will there be those who abuse it to justify their own selfish tendencies? Will there be men of such a callous nature as to deny someone in sincere and dire need, and hide behind the pretense of encouraging independence and self-sufficiency? Of course. But we can no more punish society with slavery for the selfishness of a few than we can punish a child for the sins of the father. To do so is a greater injustice than the one performed by the heartless miser who turns the beggar out at doors.

Charity is not the role of the government, but rather the role of its citizenry. If we truly wish to be charitable, let us, as individuals, donate our time and our resources to teaching the man to fish.