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| Makes me wonder why anyone watches cable news |
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| Is the dumbest |
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| Smells the worst |
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| Is a traitor |
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| Has the most air in her head |
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| Is the ugliest |
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| Grunts the loudest |
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| Emits noxious gas when he speaks |
Wednesday, May 28, 2014
Which Little Piggy
Tuesday, May 27, 2014
FA Hayek on How Obama's War on Income Inequality Will Nazify America
I'm rereading The Road to Serfdom. Accessibly written, Hayek lays out many of his most important ideas. According to Bruce Caldwell's introduction to the Definitive Edition, the book has sold 300,000 copies, which is rare for a book written for an academic audience. Hayek comments on income inequality, an issue that the Democrats and their media have adopted this year.
I do not understand this obsession because the greatest gains to the poor have occurred in countries whose laws are objective, that is, that follow the rule of law and that permit entrepreneurs to innovate. Such innovation results in increasing real wages, but it allows even greater gains to the entrepreneurs. The result is that in free market economies the poor become better off because of income inequality; the greater the entrepreneurial success, the greater the gains to the poor.
I wonder if the aim of the advocates of income redistribution is really to enhance state control, further reduce freedom, and improve the position of the inept rich, crony capitalists, at the expense of the poor. College professors do well when the inept rich do well because crony capitalism typically benefits universities. Show me a proposal for regulation, and I will show you a Rockefeller, Ochs-Sulzberger, Bundy, or Bush angling for the fruits of government violence. I will also show you a clique of academics cheering on the redistributive policy and the inadvertent gains to the inept rich in the interest of additional government subsidies to universities.
In order to effect wealth equality, government must violently compel its victims to give up their wealth to benefit the state's beneficiaries. Government violence results in declining national wealth, as failed socialist economies such as North Korea's, France's, India's, and the United States' show. As Winston Churchill put it, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." Of course, the effect of government violence is never really equality. Government cronies inevitably do well as the families of Kim Il-sung, George W. Bush, Barack Obama, and John D. Rockefeller illustrate.
Capitalism benefits the poor the most. Life expectancy in early modern Britain was between 25 and 40 years old, and in revolutionary America it was about 35. The gains in life expectancy came about because of improvements in sanitation and public health, and secondarily because of the invention of drugs. Market capitalism made both possible. For example, the wealth needed to construct sanitary housing did not exist in the precapitalist economy. The capitalist increases in the real hourly wage that continued in the US until the expansion of government spending in the 1960s, when the US transitioned from a capitalist to a socialist state, meant that the poor working person could improve his lot through saving. Today, many working Americans cannot save because of the high costs of home ownership, commodities, and taxation, all due to government and Federal Reserve policy.
In The Road to Serfdom Hayek discusses how, in the absence of public resistance, socialism leads to totalitarianism. The requirements of central planning, economic regulation, and wealth redistribution directly contradict the requirements of the rule of law and democracy. Wealth redistribution is inherently coercive. The advocacy of income equality is the advocacy of violence.
With respect to government programs to enforce wealth equality, Hayek draws parallels to Nazis (p. 117):
A necessary and only apparently paradoxical result...is that formal equality before the law is in conflict with, and in fact incompatible with, any activity of the government deliberately aiming at material or substantive equality of different people, and that any policy aiming directly at a substantive ideal of distribution justice must lead to the destruction of the Rule of Law. To produce the same result for different people, it is necessary to treat them differently. To give different people the same objective opportunities is not to give them the same subjective chance. It cannot be denied that the Rule of Law produces economic inequality--all that can be claimed for it is that this inequality is not designed to affect particular people in a particular way. It is very significant and characteristic that socialists (and Nazis) have always protested against "merely" formal justice, that they have always objected to a law which had no views on how well off particular people ought to be, and that they have always demanded a "socialization of the law," attacked the independence of judges, and at the same time given their support to all such movements as the Freirechtsschule which undermined the Rule of Law.
Hayek, who came from Austria, adds this footnote:
It is therefore not altogether false, when the legal theorist of National Socialism, Carl Schmitt, opposes to the liberal Rechstaat (i.e., the Rule of Law), the National Socialist ideal of the gerechte Staat) ("the just state")--only that the sort of justice which is opposed to formal justice necessarily implies discrimination between persons. [Editor Bruce Caldwell adds the following: German jurist Carl Schmitt (1888-1985) was a critic of liberal parliamentarianism and defender of the authoritarian state. In the 1930s he attempted to reconcile his views with those of the Nazis, offering legal justifications of their takeover of the government and defending the Nuremberg Laws that excluded Jews from public and social life. Though he lost favor with the Nazis by 1936, outside of Germany he was often viewed as the legal theorist of National Socialism. Hayek also refers to the Freirechtsschule, which is the German term for "legal realism," a doctrine that holds that instinct rather than rule-following is the actual basis of judicial interpretation of the law."--Ed.]
I do not understand this obsession because the greatest gains to the poor have occurred in countries whose laws are objective, that is, that follow the rule of law and that permit entrepreneurs to innovate. Such innovation results in increasing real wages, but it allows even greater gains to the entrepreneurs. The result is that in free market economies the poor become better off because of income inequality; the greater the entrepreneurial success, the greater the gains to the poor.
I wonder if the aim of the advocates of income redistribution is really to enhance state control, further reduce freedom, and improve the position of the inept rich, crony capitalists, at the expense of the poor. College professors do well when the inept rich do well because crony capitalism typically benefits universities. Show me a proposal for regulation, and I will show you a Rockefeller, Ochs-Sulzberger, Bundy, or Bush angling for the fruits of government violence. I will also show you a clique of academics cheering on the redistributive policy and the inadvertent gains to the inept rich in the interest of additional government subsidies to universities.
In order to effect wealth equality, government must violently compel its victims to give up their wealth to benefit the state's beneficiaries. Government violence results in declining national wealth, as failed socialist economies such as North Korea's, France's, India's, and the United States' show. As Winston Churchill put it, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." Of course, the effect of government violence is never really equality. Government cronies inevitably do well as the families of Kim Il-sung, George W. Bush, Barack Obama, and John D. Rockefeller illustrate.
Capitalism benefits the poor the most. Life expectancy in early modern Britain was between 25 and 40 years old, and in revolutionary America it was about 35. The gains in life expectancy came about because of improvements in sanitation and public health, and secondarily because of the invention of drugs. Market capitalism made both possible. For example, the wealth needed to construct sanitary housing did not exist in the precapitalist economy. The capitalist increases in the real hourly wage that continued in the US until the expansion of government spending in the 1960s, when the US transitioned from a capitalist to a socialist state, meant that the poor working person could improve his lot through saving. Today, many working Americans cannot save because of the high costs of home ownership, commodities, and taxation, all due to government and Federal Reserve policy.
In The Road to Serfdom Hayek discusses how, in the absence of public resistance, socialism leads to totalitarianism. The requirements of central planning, economic regulation, and wealth redistribution directly contradict the requirements of the rule of law and democracy. Wealth redistribution is inherently coercive. The advocacy of income equality is the advocacy of violence.
With respect to government programs to enforce wealth equality, Hayek draws parallels to Nazis (p. 117):
A necessary and only apparently paradoxical result...is that formal equality before the law is in conflict with, and in fact incompatible with, any activity of the government deliberately aiming at material or substantive equality of different people, and that any policy aiming directly at a substantive ideal of distribution justice must lead to the destruction of the Rule of Law. To produce the same result for different people, it is necessary to treat them differently. To give different people the same objective opportunities is not to give them the same subjective chance. It cannot be denied that the Rule of Law produces economic inequality--all that can be claimed for it is that this inequality is not designed to affect particular people in a particular way. It is very significant and characteristic that socialists (and Nazis) have always protested against "merely" formal justice, that they have always objected to a law which had no views on how well off particular people ought to be, and that they have always demanded a "socialization of the law," attacked the independence of judges, and at the same time given their support to all such movements as the Freirechtsschule which undermined the Rule of Law.
Hayek, who came from Austria, adds this footnote:
It is therefore not altogether false, when the legal theorist of National Socialism, Carl Schmitt, opposes to the liberal Rechstaat (i.e., the Rule of Law), the National Socialist ideal of the gerechte Staat) ("the just state")--only that the sort of justice which is opposed to formal justice necessarily implies discrimination between persons. [Editor Bruce Caldwell adds the following: German jurist Carl Schmitt (1888-1985) was a critic of liberal parliamentarianism and defender of the authoritarian state. In the 1930s he attempted to reconcile his views with those of the Nazis, offering legal justifications of their takeover of the government and defending the Nuremberg Laws that excluded Jews from public and social life. Though he lost favor with the Nazis by 1936, outside of Germany he was often viewed as the legal theorist of National Socialism. Hayek also refers to the Freirechtsschule, which is the German term for "legal realism," a doctrine that holds that instinct rather than rule-following is the actual basis of judicial interpretation of the law."--Ed.]
Monday, May 26, 2014
Brooklyn College's Role in the Publication of FA Hayek's Road to Serfdom
I teach at Brooklyn College. I'm always delighted to see historical references to it. For instance, I recently learned that John Hospers, the first Libertarian Party presidential candidate, had taught philosophy at Brooklyn before moving on to USC and Harvard. As well, Ayn Rand spoke at Brooklyn in the early 1960s. I just learned that a former president of Brooklyn College, Harry Gideonse, had worked on behalf of FA Hayek to secure a publisher of what became Hayek's most famous book, The Road to Serfdom. In his introduction to Volume II of the Definitive Works of FA Hayek, Bruce Caldwell writes this:
In a letter dated August 8, 1942, Hayek asked Fritz Machlup, who was by then in Washington at the Office of Alien Property Custodian, for his help in securing an American publisher...Machlup's first stop was Macmillan, but they turned him down...Machlup's next move was, at Hayek's request, to send the (by now completed) typescript to Walter Lippmann, who would promote it to Little, Brown. This was done, but they also declined...Machlup then turned to Henry Gideonse, by now the [p]resident of Brooklyn College, but who previously had served as the editor of public policy pamphlets in which [Hayek's] "Freedom and the Economic System" had appeared. Gideonse took the manuscript with his strong endorsement to Ordway Tead, the economics editor at Harper and Brothers. This initiative also failed...Nearly a year went by...It was at this point that Aaron Director came to the rescue. Director wrote to fellow Chicago economists Frank Knight and Henry Simons to see if the University of Chicago Press might want to consider publishing it...The acceptance letter to Hayek was dated December 28, 1943.
In a letter dated August 8, 1942, Hayek asked Fritz Machlup, who was by then in Washington at the Office of Alien Property Custodian, for his help in securing an American publisher...Machlup's first stop was Macmillan, but they turned him down...Machlup's next move was, at Hayek's request, to send the (by now completed) typescript to Walter Lippmann, who would promote it to Little, Brown. This was done, but they also declined...Machlup then turned to Henry Gideonse, by now the [p]resident of Brooklyn College, but who previously had served as the editor of public policy pamphlets in which [Hayek's] "Freedom and the Economic System" had appeared. Gideonse took the manuscript with his strong endorsement to Ordway Tead, the economics editor at Harper and Brothers. This initiative also failed...Nearly a year went by...It was at this point that Aaron Director came to the rescue. Director wrote to fellow Chicago economists Frank Knight and Henry Simons to see if the University of Chicago Press might want to consider publishing it...The acceptance letter to Hayek was dated December 28, 1943.
Monday, May 5, 2014
Did the Jews in the Dachau Gas Chambers Thank Government for Protection from Power Companies?
In my business class yesterday I mentioned my distaste for government regulation. A recent concern is the National Security Agency's use of personal information to retaliate against American dissidents. The NSA's actions are like the Soviet Union's 20th century economic retaliation against its dissidents. In a recent Reason Magazine article and the video above, William Binney, a former NSA official turned whistle blower, describes retaliation for his revealing the NSA's misuse of personal information about US citizens.
A student raised this point: "It is difficult to choose between regulation that suppresses competition and the absence of regulation that allows large firms to take advantage of individual citizens." The trouble is that there is little evidence that large firms took advantage of citizens when there was no regulation. There is little evidence that the benefits of regulation, if any, exceed the costs. The growth of large firms coincided with the growth of regulation; regulation is a prerequisite to large scale, so advocates of regulation claim to solve a problem that they have caused. Before federal intervention, cartelization of industry repeatedly failed. It did not succeed until the Sherman Antitrust Act and Theodore Roosevelt encouraged it. The Sherman Antitrust Act encouraged the growth of large-scale firms by illegalizing collusion or cooperation among small firms.
Moreover, the threat that large government poses to private citizens' welfare is worse than large firms' extraction of monopoly rents. Is a United States government that has expanded through imperialism, murdered Native Americans, enabled the enslavement of Blacks through the US Constitution and the Fugitive Slave Act, murdered a million-and-a-half Vietnamese, exiled immigrants who disagreed with the capitalist system, and funded political correctness in universities to be trusted to make us safe from power companies?
Did the Jews gassed in Dachau feel grateful to the Nazi government for regulating power companies?
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