Liberty isn’t Utopia

Statists. You can’t even get them to ask (or acknowledge) the right questions.

Whether the topic is “borders”, drugs, guns, rights, or socialism, they address all kinds of peripheral questions which seem to legitimize more statism when answered, but they avoid the real questions which would completely invalidate statism.

Is it intentional or are they really that ignorant? I honestly don’t know, and suspect it is some of both.

For example, I recently heard one arguing against ending prohibition because when the “laws” against Cannabis are loosened and the cartels’ profits go down, the cartels turn to smuggling opioids. What? How does that justify propping up the failure which is prohibition? All you’ve managed to point out is that if you relax prohibition in a piecemeal way, the cartels will focus on those areas where the profit motive is still high due to continued prohibition.

When you sink that deep into statism, you can’t seem to see beyond statism.

So, look at my crude graph . Sorry, it’s not to scale or painted (a lame Back to the Future joke).

See how I readily admit there are still problems with a condition of zero statism (total liberty)?

So?

Utopia isn’t an option.

But statists don’t like that admission and it’s a deal-breaker for them. Liberty would have to be Utopia with no problems at all for them to accept it in place of their favored statist Dystopia– no matter the specific issue.

Obviously, death– with no more problems for the dead– will result from increased statism long before total statism (whatever that may be) is achieved, but the exact place where that happens will vary from individual to individual and is hard to pin down. Use your imagination to adjust the exact scale of the graph.

We live somewhere along the line between zero statism (liberty) and total statism. The exact spot is debatable, but it’s irrelevant for my point. Wherever we are, there are problems– more problems than there would be under liberty. But statists don’t like liberty so that option is unthinkable and invisible to them. They advocate more statism to solve the problems which exist; most of which are worsened due to statism. They will claim that with added statism, the total problems will decrease. That’s not reality. More statism equals more problems.

But, because there are problems, and they can see ways to justify more statism because of those problems, they are blind to solutions which don’t mean more statism. They won’t even ask questions which might risk opening their eyes to the reality.

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Without Profit, There Would Be No Investment

Among the numerous fallacies embraced by socialism, one of the most notable is completely ignoring the value of investment and risk. Socialists love to talk about the value of “labor” and how profit is made on the backs of “labor,” but they ignore the fundamentals of human nature and of how the market actually works.

Labor doesn’t invest in building a widget factory. Labor doesn’t take the risk of widgets going out of style or being supplanted by something new in the market. Labor doesn’t pay for health and safety inspections. Labor doesn’t take the hit of depreciation.

Labor is paid first, before any profit is seen. Labor loses nothing when the factory burns down. Labor makes no investments and takes no risks, and therefore labor is not entitled to share in the reward. Labor makes a direct trade of time and skill for money. Beyond that, labor has no claim on the possible profits which a capitalist’s investment and risk may generate.

To be a laborer rather than a capitalist is a choice. It is a safe choice in which risk is traded for certainty and the possibility of profit is traded for the guarantee of wages. Most people are both laborers and capitalists. We engage in some direct trades of time and skill for money but we also make investments—be it in the stock market, bonds, cryptocurrencies, or even a loan (with interest) to a friend or neighbor.

Profit is not earned through labor. Wages are earned through labor. Profit is earned through investment and risk. The socialist sees this as unfair, but the socialist cannot explain why anyone would undertake a risky investment if there were no possibility of profit. Instead, the socialist is forced to embrace central planning as an alternative to all the productivity of the free market.

The socialist would have “the state” take on all the risk of investment in industry, infrastructure, research and development, and all other such things and then selflessly distribute the profits it will theoretically generate to the people—the laborers—regardless of what role or lack thereof they played in the generation of said profits.

What could possibly go wrong?

Everything, as it turns out. Unlike capitalists, who regularly fail, go bankrupt, and lose everything, the state cannot afford to take such significant risks. The state lacks the motivation of the capitalist and so it recoils when faced with the same odds at which the capitalist would jump. Even if one ignores the corruption and inefficiency which are endemic to all states, the state is just too risk averse to make meaningful gains in any sectors where it has primacy.

The possibility of profit is what makes investment and risk worthwhile. Without it, there is no incentive for investment and risk, and without investment and risk, there is no societal advancement, no innovation, and no wealth creation. People aren’t going to risk their resources unless the reward for doing so outweighs the risk. That’s basic human nature.

Contrary to what you may have heard, socialism doesn’t “work on paper” any better than it works in practice. It just doesn’t work, period. Attempting to remove profit from human existence removes the motivation which drives humanity to improve itself. Even if socialism didn’t fail catastrophically (as it always has when put into practice), it would, at best, still lead to the devolution of mankind as productivity ground to a halt. That’s not a future anyone should advocate.

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Intellectual Property & Stealing Future Profits (30m) – Editor’s Break 115

Editor’s Break 115 has Skyler giving his commentary on the following topics: resources and scarcity; the purpose of property rights; ideas as patterns of information; the attempt to apply property rights to non-scarce ideas in the forms of copyright and patent; why intellectual property makes everyone a thief; how intellectual property rights necessarily violate material property rights; the argument that copying ideas is to steal future profits; and more.

Listen to Editor’s Break 115 (30m, mp3, 64kbps)

Subscribe via RSS here, or in any podcast app by searching for “everything voluntary”. Support the podcast at Patreon.com/evc.

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On Intellectual Property

The hue and cry against “stealing” intellectual property makes a terrible assumption: that the creator or inventor is being robbed of something. What exactly are they being robbed of? Copying a creative work or building someone else’s invention does not deprive the originator of their work. When you steal someone’s car, they no longer have their car. When you “steal” someone’s story, they still have their story. On this point I hope we can agree, no theft has occurred. So where is the robbery? It is claimed that the robbery occurs when future profits are moved from the originator to the copier. Can robbery occur over future profits? If that is true, then wouldn’t other events that affect future profits also be considered robbery? May businesses compete without robbing each other of future profits? No, and that’s the point of competition, to “steal” profits from the other guy. Should competition be outlawed, like “stealing” creative works and inventions is? If we are to be consistent, then yes, it should be. What kind of world would that be when stealing future profits in every case is illegal? I don’t want to know. And that’s today’s two cents.

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“Sanction”: The Triumph of Ayn Rand’s Worst Idea

Ayn Rand is widely hated.  Indeed, if you made a list of thinkers that people “love to hate,” she’d be near the top of the list.  Liberals hate her.  Conservatives hate her.  Socialists hate her.  Indeed, plenty of libertarians hate her.  It’s hardly surprising, then, that she has not been broadly influential.  While she has millions of fans, they’re only a tiny share of any country’s population.  Even when her fans gain positions of power, they’re hopelessly outnumbered by powerful people who disagree.

There is, however, one notable exception.  One of Ayn Rand’s ideas has spread far and wide.  Indeed, it pervades social media.  The idea: The virtue of moral intolerance.  Here’s how Rand explained it back in 1962:

One must never fail to pronounce a moral judgment.

Nothing can corrupt and disintegrate a culture or a man’s character as thoroughly as does the precept of moral agnosticism, the idea that one must never pass moral judgment on others, that one must be morally tolerant of anything, that the good consists of never distinguishing good from evil.

It is obvious who profits and who loses by such a precept. It is not justice or equal treatment that you grant to men when you abstain equally from praising men’s virtues and from condemning men’s vices. When your impartial attitude declares, in effect, that neither the good nor the evil may expect anything from you—whom do you betray and whom do you encourage? (emphasis original)

In Randian jargon, we must never grant our intellectual enemies our “moral sanction.”  Simply put, “[I]n no case and in no situation may one permit one’s own values to be attacked or denounced, and keep silent.”  Building on this position, Rand’s inner circle ultimately denounced not only “sanctioning,” but “sanctioning the sanctioners.”  Randian Peter Schwartz, who coined the latter phrase, elaborated:

The weapon necessary to defend against evil is justice: the unequivocal identification of the evil as evil. This means the refusal to grant it, by word or by deed, any moral respectability. It is by scrupulously withholding from the irrational even a crumb of a moral sanction — by rejecting any form of accommodation with the irrational — by forcing the irrational to stand naked and unaided — that one keeps evil impotent.

What does this mean in practice?  Don’t talk to your intellectual enemies – and don’t talk to people who talk to your intellectual enemies.  Because they’re your enemies too.  Sure, you can denounce them; but you can’t have a civilized conversation.  Indeed, engaging in such a conversation practically makes you as bad as they are.*

In my late teens, I knew many Randians who took the virtue of moral intolerance seriously.  I partially bought into it myself; I was, after all, a teenage misanthrope.  But the extreme forms always seemed crazy to me, and I gradually broadened my intellectual milieu.  Once I was in my late-20s, I had so little contact with Randians that I gradually forgot about their self-conscious moral intolerance.

Over the last decade, however, the Randian virtue of moral intolerance has spread far and wide – especially on social media.  All major political views now have outspoken exponents who self-consciously and self-righteously refuse to “sanction” unbelievers.  Or “sanction those who sanction” them.

Is Rand really causally responsible for modernity’s moral intolerance?  Probably not; the lines of intellectual communication don’t fit.  Yet the fact remains: One of Rand’s most peculiar positions has spread like wildfire.

Is this really such bad news?  Yes.  I lived in a subculture that embraced Rand’s virtue of moral intolerance, and saw the devastation.  Genuinely smart and nominally rational people were quick to take offense and afraid to ask questions.  Indeed, many were so afraid to talk to the “wrong people” that they stayed in their Randian intellectual ghetto, parroting their guru and her appointed successors.  Vocal free-thinkers were often purged.  As a result, Randians were mired in error.  When they were wrong (as they often were), they lacked the cognitive methods and social lifelines to stop being wrong.

The party line, of course, was that Randians had no need to root out error because they were so clearly and thoroughly right.  Everyone outside of their ambit probably finds this megalomania comical, but the problem goes deeper than one Russian novelist’s eccentricities.  Every group that deems itself clearly and thoroughly right is deeply wrong due to (a) their dogmatic methods and (b) the complexity of the worldIncluding yours.  Including mine.  Talking to people who agree with you while talking at people who disagree with you is a blueprint for building a Tower of Error.

Still, Randian moral intolerance did have one saving grace: It was a tiny subculture.  Anyone who had enough could easily walk away.  If the perceived virtue of moral intolerance continues to mainstream, where will curiosity find a new home?

This doesn’t mean we should listen respectfully to everyone.  Personally, I draw the line at avowed Communists and Nazis.  They really are unworthy of a response; therefore, I don’t respond to them.  Nevertheless, we should still listen respectfully to a wide range of views.  Perhaps your opponents are intellectually dishonest, but if you don’t listen respectfully, it’s very hard to tell.  Indeed, even if you do listen respectfully, it’s hard to tell.  I can’t read minds; can you?  In any case, if you want to understand the world, you should focus on the truth of the message, not the morals of the messenger.  Tolerantly engaging a wide range of viewpoints is a vital reality check.  Ayn Rand badly needed this check.  So do you.

* I’m well-aware that Rand enjoined her readers to judge others judiciously:

The opposite of moral neutrality is not a blind, arbitrary, self-righteous condemnation of any idea, action or person that does not fit one’s mood, one’s memorized slogans or one’s snap judgment of the moment. Indiscriminate tolerance and indiscriminate condemnation are not two opposites: they are two variants of the same evasion.

But in practice, Rand almost never criticized anyone for indiscriminate condemnation – and her movement largely followed suit.

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Let’s Stop the Merchants of Death

Imagine that back in the day, the U.S. government had contracted postal services out to a private company rather than setting up its own “public” agency. Today the U.S. Postal Corp. would have officers, directors, and employees who were not on the government payroll. They would be paid from the money raised by selling its services to the public and the government.

Would things be essentially different from how they are today? I think not. Regardless of appearances, the U.S. Postal Corp. would be a de facto government agency. The government could use various methods to guarantee its existence, from an outright prohibition on competition to lesser measures like taxpayer subsidies, direct low-rate loans, loan guarantees, and explicit or implicit bailout promises such as banks receive. Even if none of those measures prevented competition from arising, the fact would remain that what looked like a private entity was actually a government bureau. It would be private in name only. We could say that a nominally private “firm” would not really be private if the government were indispensable to its existence, but maybe that’s too high a bar. (We can argue about how and where to draw the line. Murray Rothbard had some controversial thoughts about this in his 1969 article “Confiscation and the Homestead Principle.”)

We can certainly distinguish between an entity like the postal service, which does things that, per se, people have the right to do — deliver mail — and an entity like the Internal Revenue Service [sic], which does things no one has the right to do — extort money. (The government might have contracted out for tax collection.) But for our purposes here, that distinction is unimportant.

Advocates of freed markets would hardly want to express sympathy for a nominally private entity in the name of private enterprise or defend its questionable conduct on the grounds that if it’s conduct were not serving consumers, it wouldn’t survive market forces. Rather, advocates of freed markets would talk about this entity the way they talk about the U.S. Postal Service, the IRS, and other government agencies — with contempt. (On a related point, see my article “Can Mutually Beneficial Exchanges Be Exploitative?”)

Another method by which a nominally private, but de facto government operation could be sustained is by government purchases of its products and services. This would be especially clear where the government was a monopsonist, or single-buyer of its products and services, but the same effect could result were the government a virtual monopsonist.

Now let’s talk about America’s arms makers, the military contractors, which are routinely mislabeled “defense” contractors. (The military-industrial complex of course has little if anything to do with defense. It’s about empire,  aggression, and illicit profits.)

A nominally private corporation wouldn’t need direct startup cash, loans, or loan guarantees from the government to qualify as a de facto state agency. All it would need is the promise of government contracts. In fact, the very prospect of government contracts could entirely account for its founding in the first place. If the founders guessed wrong and the contracts did not materialize, the company would have to liquidate or write a more viable business plan.

It’s safe to say that America’s major military contractors would not exist — or exist in anything like the size and form we know them — were it not for the U.S. government and its mammoth military establishment. When it comes to demanding weapons of mass destruction — and I don’t mean only weapons that satisfy some technical definition; so-called conventional bombs can wreak mass destruction — the Pentagon has no rival. Its budget is larger than the next seven or so countries combined. And the U.S. government is the world’s largest arms exporter. Other patrons of those contractors, Israel, for instance, each year receive huge grants in  U.S. taxpayer money to buy their products. It is true that some patrons don’t need U.S. government assistance — Saudi Arabia comes to mind — but that should not lead us to believe that U.S. arms makers would be just fine if those were their only customers. It is surely the case that the U.S. government’s patronage, not to mention its involvement in basic R&D, has enabled those companies to achieve the economies of scale necessary to filling smaller orders profitably. Also, if a company were to get stiffed by a foreign government, I imagine that such a government would have to answer to the United States.

The upshot is that Lockheed Martin, Raytheon, Northrup Grumman, and others should not be regarded as private enterprises deserving of respect from advocates of freed markets. And so it follows that those advocates should not bridle at, say, congressional restrictions on to whom the contractors may sell. U.S. law pays lip service to the principle that American-made weapons should not be transferred to governments that are likely to use them aggressively, whether internally or externally. That principle, of course, is more honored in the breach than in the observance, and it would be nice if such hypocrisy would at last come to an end.

There would be no better time and place to start than now and Saudi Arabia, a rotten-to-the-core regime that oppresses the people who live directly under it as well as the people of Yemen, among others. Israel is another case. It receives more than $3 billion a year from the U.S. taxpayers for weapons that it routinely uses to kill and otherwise oppress innocent Palestinians. Aiding such regimes is immoral.

The murder of Jamal Khashoggi has fueled new congressional opposition to arms sales to Saudi Arabia. But after tens of thousands of deaths in Yemen (with many more in the offing) at the U.S.-aided hands of Saudi Arabia, it should not have taken the death of a Washington Post columnist to focus attention on that savage regime. That’s politics for you.

We cannot be optimistic that weapons sales to Crown Prince Mohammed bin Salman will be blocked or that such a ban would launch a more general campaign against the arms industry. We certainly shouldn’t expect any senator or representative to oppose military aid to Israel; that, alas, would be political suicide. But were the effort to block the Saudi arms deal to succeed, it would be encouraging and might even stimulate innovative thinking about how to stop the U.S. government and its military contractors from behaving like merchants of death.

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