Wednesday, November 4, 2009

Why do libertarians champion gun freedom?

People fall apart in two camps: those that oppose gun freedom and those for it. It's very difficult to find anyone on the middle road.

Libertarians recognize that any order in society exists because the threat of justified aggression keeps most criminal aggression at bay. Non-libertarians see the fire-arm as the source of all societal chaos. They're both correct. Well, except that explosives and stabbing weapons can also contribute to chaos.

This paradox exists because there is a distinction between the responsible use of a gun and the irresponsible use of a gun. It is the responsible use of a fire-weapon that brings criminality down to a minimum. Correspondingly, it is the irresponsible use of a fire-weapon which is criminality.

Non-libertarians recognize this. There is hardly a single one that would propose a law banning all guns. They just want to eliminate the irresponsible use of guns. In their eyes, this is equivalent to banning all guns, except for the state. They trust the state and its officials to use them responsibly.

And here's what makes libertarians different: libertarians do not trust the state. And indeed, why should they? Hasn't history proved time and again that the state does nothing but trample on the rights of human beings, both foreign and at home? And assuming noble intentions, hasn't the state proved time and again that it cannot be efficient in anything it does?

The question should not be, "why do libertarians support gun freedom?" The real question is, "why do non-libertarians support gun restriction?" And the answer is quite simple: they are blinded by their dogmatic trust in the state.

Thursday, September 3, 2009

Health Care Reply to Socialist

Recently, while researching the intricacies of the Belgian health care system, I came across a comment I sort of disagreed with:

Andres VM posted: 02-12-2008 | 5:56 PM

I don't mind private healthcare clinics as long as they're "non-profit". Greedy right wing doctors only see dollar signs not their obligations to administer help regardless of income level. True, Canada has socialized healthcare..which means everyone is covered from the homeless to multi-millionaires...it's called a truely democractic healthcare system...because life is sacred.

The Americans will eventually have full universal healthcare...they already have a socialized pension system, socialized education system, and socialized fire and police departments. This has not lead America to communism as the right wing coporate media states all the time! Watch Star Trek...capitalism no longer exists! True democracy will only exist once we rid ourselves of the monetary system!

Since, for some reason, I couldn't reply on the website, I'll just put my blog to good use. Here's what I intended to reply:

Andres VM: I'm afraid I disagree fundamentally. If a provider of health care is not reimbursed for his service, what motivation does he have to do it, let alone to do it adequately? I assume you do not want to force doctors to give care against their will?

It is a fallacy to assume that doctors would provide their services merely out of the compassion for their fellow humans. They might have an overwhelming sense of compassion, but what makes their job so much more attractive to them, is the fact that it affords them a comfortable living. As a life-saver, I have worked for charity. I like being responsible (and playing the boss). But I have worked for pay far more.

You speak of a doctor's "obligation to administer help regardless of income level." But is it not the nature of freedom that it allows individuals -- and doctors are individuals, too -- to choose what to do and what not to do, regardless of the fates of others? It seems that your ideal society comes at the cost of oppression, since you are effectively reducing the status of doctors to that of slaves. And if you take profit out of the equation ... why, you'd find your medical schools would empty quickly, and their graduates head off to other countries.

The only system that would attract doctors and fill medical schools with aspirant students is one that offers them freedom. Freedom to choose the number of customers in a day. Freedom to choose which customers to help and freedom to refuse care for any customer for whatever reason, or no reason at all. And, importantly, the freedom to charge any obscene price for their services.

And in turn, the influx of doctors competing for your dollars guarantees the lowest price, the best quality, the least discrimination, the quickest service, the best technology. Because if they don't get dollars, they won't be able to maintain the standard of living that attracted them towards the profession in the first place.

Curiously, the allowance for profit enables that very mechanism that minimizes it -- competition. It is also the mechanism that forces the profit-seekers to make health care -- or any industry, for that matter -- most beneficial to the end-consumer. Does this make sense? Welcome to capitalism.

Belgian doctors are greedy capitalists that "only see dollar signs and not their obligations to administer help regardless of income level" (though after 15 years of living here, I have yet to hear of a case where the doctor turned the patient down for lack of funds). Just open your eyes. Capitalism is necessarily efficient because it rewards good behavior and punishes bad through higher and lower profit. Government is necessarily inefficient because it does the opposite: allocating larger budgets to its failing programs and cutting from those that still do work.

Americans will eventually have universal health care ... I dread the day that it comes. The American socialized pension system is a collapse waiting to drown the taxpayer; the quality of the American socialized education system is a downwards spiral. And as a result of the slow and steady march towards fascism and socialism and the increase in the associated gap between civilians and law enforcement officers, hasn't police brutality increased dramatically? As for fire departments, what's wrong with a free market solution? Or are fire departments greedy capitalists waiting only for the houses of the rich to burn down, same as doctors in Belgium are waiting only for rich patients to get sick?

With health care, pensions and education, you seem to accept riches as rights without taking into account the system that produced those riches and why it produced them. You can either have an abundance of those riches, or rationing and scarcity.

If the trend towards universal health care is not a clear step towards communism, then what would be? Government takeover of all banks (and all credit)? Government takeover of the pharmaceutical industry? Government takeover of food? Abolition of money?

The fundamental problem that democracy supposedly solves is that a minority could oppress a majority of the people. Such would be the case of a dictator or oligarchy. But democracy swaps this problem with an even more insidious and equally evil one: in a democracy, the majority can oppress the minority of the people. If by democratic, you mean to say that every person deserves the same set of unalienable, uninfringible human rights ... then democracy is surely not democratic.

We need a system that does not coerce people into populistic behavior or 'serving the community'. In which person and property is secure and freedom reaches only so far that it doesn't violate the freedoms of other individuals. We need to allow for economic calculation, which is the only thing that will lead to the production of wealth and a more prosperous people.

But then, I've never accused a socialist of harboring economic reason.

The problem with every socialist plan is that it is unattractive to the people who will bear the brunt of its cost. The planners tend to overlook how these people will act accordingly to preserve their property, life and freedom. History can testify that socialist schemes spiral out of control and out of allocated funds into a situation that is even worse for the end consumer than the free market which was so viciously detested in the first place. In the words of Margaret Thatcher: "The problem with socialism is that eventually you'll run out of other people's money."


Monday, July 27, 2009

Misrepresentation in Commerce

Libertarianism is often called the most principled of all political philosophies. And it's true: libertarians learn to be very rigorous in the application of their core principles. This is what earns them their uncompromising nature as well as their reputation of being 'unrealistically extreme'.

Extremism is often considered to be a bad thing. But such a verdict is prejudice if it aims to apply to all cases of extremism, not to mention unreasonable. The cases must be assessed individually before one can decide whether rigorous application of libertarian principles is a good thing -- in that particular instance. Let's consider the example of a very specific form of fraud: misrepresentation in commerce, or selling something for something it's not.

No one considers misrepresentation a good thing. It is morally repugnant. We feel maligned -- and rightfully so -- whenever we're the victim of this kind of fraud. The world would probably be better off without it.

Even so, that by itself is no argument for a law against it. Similarly, libel and slander are never considered a good thing -- and we definitely feel maligned when we are the victim of that -- but to restrict libel and slander is to restrict the holy and uncompromisable freedom of speech and press. And the world would probably be better off if there were no incest in it, but you'd be hard-pressed to find a libertarian who would argue to restrict sex between two consenting, adult siblings.

From the freedom of speech one can infer the right to lie. Misrepresentation in commerce comes down to lying about the product before the exchange. Since lying should be possible, this type of fraud should also be possible ... shouldn't it?

Naturally, one could argue that it is the buyer's responsibility to gather correct information about whatever he considers purchasing; that in an environment where misrepresentation is rampant, buyers will automatically shield themselves against it, thus making it harder to do and less profitable; that known brands and trademarks make trustworthy sellers and thus have a market advantage over fraudulent sellers; and lastly, since someone who considers misrepresentation if there were no law is likely to consider the same if there were a law, that a law against it might not at all help to prevent it.

On the other hand, though, one could argue that any transaction between two people is virtuous if and only if it is based on voluntary, mutual consent. A seller who commits misrepresentation, deceives the buyer and acquires his consent to an alternate deal -- one that is much more to the advantage of the buyer -- but different from the actual transaction. Therefore, a such a transaction is based on a false mutual consent, which is no consent at all.

According to this train of thought, every seller has the responsibility to make sure the buyer understands the deal and agrees to it. Indeed, the act of selling an item without the buyer understanding its real value and the associated price, is comparable to blatant robbery.

People often look at me with disbelief in their eyes when I tell them that to me, 'fraud' is in a grey area; that I'm not sure whether I want a carpet law against it or not. Some forms of fraud are indisputably unethical; others, like misrepresentation in commerce, depend on your point of view. What are your thoughts on the matter?

Thursday, May 14, 2009

Governmental Control of the Air?

Recently, I came across an intersting article in the news. Two men, the article reports, were piloting a home-built airplane when all of a sudden, the engines stopped. Thankfully, the pair was able to land the aircraft on the public road.

Even though he first thing that jumped in my eye was the line: "there was no damage or injuries involved," I still have the feeling there might be individuals who would offer this article as a powerful argument why we need government controls on the construction and piloting of home-built aircrafts. Maybe because that was how I came across it in the first place.

I don't think the fact that two people are able to so carelessly risk their own lives is what bothers these people. If that were the case, they would have to be equally strong proponents of government restriction on bungee jumping, mountain climbing, parachute diving ... They would even have to be in favor of government controls on unsafe sex.

The heart of the matter, I think, is that these fliers are able to jeopardize other people's lives and property by using possibly unsafe equipment. (Logically, then, the restrictionists must have no objections when these flight experiments are conducted in a completely secluded area, far away from any civilization.) In reality, they assert the following statements:

  1. Governmental control and inspection of home-built planes makes them safer and more risk-free.
    This assumes that anyone, even if he is properly educated, can effectively become familiar enough with the intricacies of a particular home-built craft. The design of home-built instruments tend to be so far off the beaten track that accurate risk assessment by a third party is near impossible. The people who can best assess the risk of any construction or part are its creators. And in the case of flying machines, the creators have every incentive to assess the risks scrupulously. The only way to make home-built airplanes safer than they already are, is to ban them completely and hope that no one breaks the law. The problem with such a ban is that the government would have to put much more effort into upholding the law than it requires to make an air vehicle. And suppose the home-built-airplane-police finds their quarry, how will they determine it won't be used solely in remote areas -- which we had already agreed on should be allowed?
    And what about relatively new industries, for example spacecrafts? Should the state inspect those too, before launch? How can any one government official be smart enough to assess the risks of a particular shuttle if the leading experts on the field are building it?

  2. Governmental regulation of pilot diplomas makes sure only competent pilots fly, and only with safe planes.
    This assumes that the two men from the article are not already pilots with legitimate diplomas. Doesn't it make sense to assume that someone who was able to home-build an airplane, pilot it and land safely in the case of an engine failure, has had some flight training? But suppose the article's hint that Kyle Davis was a pilot pertains only to his trip that made it to the newspaper and does not imply any prior training. He might not have a diploma, but would you say he is not a competent pilot? He crash-landed a failing airplane, without anyone getting hurt! But still, if you wanted to learn to fly, without having any experience, would you start with a home-built plane? Of course not. For that matter, would you start by flying above a densely populated area, devoid of any flat areas that might turn out useful in case of an emergency? I don't think so.

  3. The cost of such governmental regulation would be smaller than the cost of the accidents that will occur without the regulation.
    We already argued that government action might not at all reduce the risks associated with the home construction of airplanes and the piloting of such airplanes. But for the sake of argument, let us assume it does.
    There are some obvious costs associated to such government intervention: taxes, and the dubious morality of the redistribution of risk costs. That the taxes used to pay for the regulation are greater than the costs of the accidents it supposedly prevents, is already disputable. But there is a more insidious cost: no regulation is free from side effects on the market. Further restriction of plane building and flying would result in a greater barrier for air transport companies, which in turn leads to a monopolization of the market. Apart from taxes, the public would lose money on dictated air travel prices.
    Of course it's not possible to put a price on a human life, but there are things that are more valuable: freedom, for example. No one seems to propose the government imprison all civilians to ensure the survival of its inmates ... yet. Where to draw the line between personal liberty and risking the lives of one's neighbor? When a person is willfully disregarding another person's safety, he may be found guilty of murder -- only in the case that someone else dies. When a person is neglectful with regard other people's safety, he may be found guilty of manslaughter -- only in the case that someone dies. When a person is not at fault, when for risks he could not possibly have foreseen or acted on, another person dies, he is not guilty of anything. When something was due to neglect or was genuinely unforseeable, is up to the courts to decide. That is their job.


Saturday, March 28, 2009

Libertarian Mindset

Just about every political debate is the same. There is the side that wants the government to pass a particular legislation into law or to follow a specific course of action, and there is the side that is ... for a different piece of legislation or course of action. Both parties offer a wide range of arguments that plead their case. But the heart of the matter is hardly ever struck. The real question is whether or not it is the proper role of the government to run that particular area of our lives.

Take the example of requiring drivers to wear seat belts. Everyone wants to reduce the number of fatal accidents to a minimum, but hardly anyone agrees at what costs. Should we increase the number of road traffic controls that inspect seat belts? Or make fines higher? Perhaps the best course of action is to force auto constructors to put into place a mechanism that prevents the engine from starting if all passengers and the driver are not properly seatbelted? The libertarian dissents: the government has no business telling me how to drive. After all, would you like me telling you how to drive?

Such an opinion is generally met by confusion. "Of course the government must do something -- without law, there is chaos!" Have these people lost their basic sense of morality? A driver who isn't wearing his seat belt is not endangering anyone but himself, much like a bungee jumper. How is he aggressive, how is he violating the rights of other people? Indeed, the moral thing to do, is to let the driver be. And not to interfere in the way he handles his own life.

Government does not exist to protect people against themselves. If it did, why isn't there a law that requires us to brush out teeth twice a day? Or a law mandating everyone at least eight hours of sleep? Or laws that prohibit smoking in one's own home? Why doesn't the government put overweight people on a diet?

The same is true for drugs: should we make them illegal, or regulate them? Should we perform more raids on suspected growing houses, or should we increase the penalties on the carriage of soft drugs? The libertarian is not satisfied by these 'options'. The government has no business telling me what I can or cannot smoke, what I can or cannot carry or what I can or cannot own. It does not matter how badly the drug affects the individual. It is his choice.

Gun control, privacy, labor laws, censorship, anti-discrimination laws ... the list goes ever on. The mainstream media and the politicians approach these issues the exact same way. They provide us with a phony debate: more or smarter regulation? The average individual is duped, and he cannot fathom how you could possibly question the government's authority when meddling in your private life.

For the libertarian, there is only one real question: do you want the government telling you how to run your life, or not?

Friday, March 20, 2009

Thank Goodness for Greed

While browsing across the reviews for Tom Woods' Meltdown, I came across one I particularly enjoyed (link):

9 of 84 people found the following review helpful:
(1/5) I thought this book was supposed to be non-fiction.
March 5, 2009
By Stephen Lurie (Charlotte, NC)
(REAL NAME)
Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

The current economic global crisis plain and simply was fueled by greed. Investor greed and the apparently insatiable greed of the Investment Banker community. Compared to Goldman Sachs, Bear Stearns and the rest of the soon to be extinct Wall Street gang, Bernard Madoff should get a good citizens award. Wall Street, not the Fed, ripped off the world. Before you read this nonsense, you might want to read The End, by Michael Lewis on portfolio.com. In nine pages you will have a very clear account of what happened and who is to blame.


(Why do I suspect Mr Lurie never even read the book he is reviewing?)

Greed, eh? So back when the economy was supposedly in great shape, all the bankers were selfless? And then, one day -- *poof* -- everyone decided to become greedy? So the correct way to avoid another economic crisis, is to pass legislation that makes greed illegal, is it?

What exactly is greed? Off the top of my head, I can come up with at least two definitions:
  • greed, n: the extreme of self-interest
  • greed, n: a derogatory word used by haters of capitalism to demonstrate why the free market cannot work

But perhaps the most relevant definition of greed in this case, is the driving force which makes an economy work. It was Adam Smith's finding that the need of one person is served by the self-interest of another. A baker will only give me a loaf of bread because he makes a profit on selling them. Greed is why a dentist agrees to help me when I have a tooth-ache. When I want to buy a car, but have insufficient funds, it is the greed of a bank that allows me to make a loan. Nearly every person acts in self-interest. The economy works because they do.

Yes, there are community workers, charity organizations, volunteer firefighters, doctors that offer pro-bono services. But these people can only do what they do because their self-interest is already met. You'll be hard-pressed to find someone who is willing to contribute to anything, if his basic life demands such as feeding himself and his family, are not met.

The beauty of capitalism is that every transaction between two parties occurs with mutual consent, and that both parties are better off. If that weren't the case, they wouldn't do it. Thus, one person can only make a profit -- that is: one person can only satisfy his greed -- when others are benefiting as well.

Tuesday, March 10, 2009

Keynesianism, and Why It Cannot Work

In light of the current economic crisis, Keynesianism has been taken out once more from the closet and dusted off. Governments left and right are proposing stimulus packages and bailout plans in order to sustain a collapsing economy. "The plan may not be perfect," they defend, "But we have to do something."

But if the cure is worse than the disease, does it not make more sense to do nothing? Unfortunately, that question is never asked, and we are dragged into a phony debate on whether this stimulus package is better than that, which economic sector we should stimulate more, or which failing companies we should bail out. Never do we hear the question that really matters: Does Keynesianism, that is deficit spending by the government in order to boost the economy, at all work?

The first thing to understand is the individual voting power inherent to capitalism. Every dollar, pound or euro that we spend is a vote on whichever product we purchase. Individuals vote on what they want. Producers and suppliers are constantly trying to gain our votes. This leads directly to competition which in turn leads to economic efficiency. Nearly all government action undermines this voting power through taxation, minimum wage laws, trade barriers, creation of jobs that are not in demand and propping up companies that are heading toward bankruptcy for lack of 'votes'.

Secondly, one must realize that governments cannot create wealth. (Why else are taxes necessary?) In order for the government to spend money, it must first acquire that money. It can either do this by raising taxes (taking money directly from the economy), borrowing from foreign nations (but loans, of course, must eventually be paid back ... with interest), or printing the money. Taking money from the economy to put back into the economy is nothing other than redistribution of wealth. Taking loans from foreign nations means raising taxes in the future, which in turn means burdening the economy even more at a later date. Printing money devaluates the currency which effectively also redistributes wealth. When a Keynesian economist asserts that government spending will boost the economy, he really asserts that the combination of governmental redistribution of wealth and deficit spending will be beneficial to the economy in excess of the burdens of inflation and future debt.

But if this kind of market interventionism works, why don't governments constantly apply it? Even when the economy is in good shape, couldn't the government boost it even further? If we were to draw this line of thought to its logical extreme, we speak of a wholly centrally planned economy. History tells us that centrally planned economies don't work because they undermine the consumer voices of capitalism. The government cannot have an accurate idea of the needs of the people without the price mechanism of the free market. Is Keynesianism, then, only supposed to work during an economic depression or recession?

A depression (as opposed to a recession, which is merely a fluctuation in overall productivity and is hardly more stoppable or devastating than the moon phases) is a once-in-a-lifetime event, a period of time during which economic productivity is at an absolute minimum. It is characterized by a sharp increase in the rate of foreclosure and bankruptcy, stock prices in free fall and rising unemployment. It is nearly always sparked off by the popping of a bubble and the evaporation of the associated wealth. The Surface Economist would identify these characteristics as the causes for the depression. He would try to stop the bubble from bursting or, once it does burst, make it difficult for companies to file for bankruptcy or fire employees -- without taking a deeper look at the underlying motivation for this.

Where the cause for a recession is mal-investment, the real cause for a depression is mass mal-investment. Large numbers of individuals and companies that put their money into something they shouldn't have. Consuming instead of saving. Individuals that are living above their means are forcing themselves to live below their means in the future. The same is true for companies. If a company hires too many people or raises their pay above the level of efficiency, it is going to have to cut back. A recession (and by extension, a depression) is not a drop in overall wealth, it a correction of these mal-investments. The worst possible thing a government could do, is to stall or prolong this inevitable tightening of the economy's belt.

Think of it this way: the economy is a football team. The players, instead of conserving their energy to last the game, are going all-out from the very start. While this may seem like a good tactic while the score goes up, eventually the players are left lying exhausted on the grass, trying to catch their breaths, long before the game is over. Any coach's idea to stimulate the players back to playing as they were, is a fallacy. The players need their rest. Of course the coach could forbid that necessary break, but then the players would only continue to play abysmally. The coach could give them an adrenaline shot or some other drug, but this would render the players even worse for wear when the dope runs out. The only proper solution is to let the players to catch their breaths and regenerate their strength, and to resume the game when they are ready for it.

During a recession, consumer spending is next to nothing. Keynesianism asserts that an increase in consumer spending (brought about by intelligent government spending) will boost the economy out of a recession and perhaps even out of a depression. This, in turn, will prove beneficial for the consumer. The methods conceived to achieve this increase in consumer spending are ever more inventive. But money only follows the opposite path of the goods and services it is traded for. In other words, if the consumer spends more, but doesn't work correspondingly harder to attain more income, the consumer deficit will only increase. This deficit is the reason why consumers are not spending!

If increased consumer spending were the answer, why doesn't the government issue printing presses to every individual? Why doesn't the government let consumers spend as much as they like, without thinking of the consequences? The answer seems obvious: the people would spend their way to the currency's demise and the ruin of their economy.

There is no market demand for jobs created by the government. If they were, individuals would already have filled this apparent gap in the market. Since government-created jobs do not experience market demand, they contribute nothing to the economy. A job established by the free market, through either the production or processing of things or the rendering of a service, generates net value. A job established by the government does not. As Ron Paul so eloquently puts it: "a 'job' could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk." In a free market, there is nothing to sponsor such useless jobs. The government, of course, has the power of taxation.

Therefore, government-created jobs are equivalent to tax rebates to an unproductive slice of society. The same goes: isn't that money better put in the hands of those people that earned it -- the productive slice of society? Isn't profit an incentive to be more productive?

Suppose a famous ice cream company was expecting its own bankruptcy in only a couple of months. The government's natural tendency would be to save it from its fate. But does that make any sense? A failing ice cream company is failing because the market is uninterested in ice cream from that company, with those flavors, at that price. If that company could, on its own, increase the market, change the taste of its ice cream or the price of its ice cream, it would do so -- in an unhampered, free market. Therefore, government intervention cannot possibly make companies more economically efficient. Indeed, a company that requires government aid in order to survive is inefficient and unproductive. Propping up a failing company is the equivalent of throwing money down a bottomless pit.

Of course, the government can mandate everyone buy ice cream from that company in order to produce an artificial market. That this market might be gone the instant the legislation is revoked, does not occur to the average politician. Unfortunately, other government proposals that similarly undermine free choice, similar to this ice cream mandate, are not considered as ridiculous. The ice cream example may seem far-fetched. The government only bothers to bail out large corporations, because of campaign contributions, fear of massive lay-offs and unions' rage.

The same is true for banks. A bank that is incapable of sustaining itself is similarly inefficient and unproductive. Banks are subject to the pressure of an uninterested market the same way other companies are. The same reckless spending policies will inevitably lead to the same belt-tightening for banks as it does for individuals. Those that live above their means must eventually live beneath their means.

Government funds, designed to aid a failing bank, distort the market-induced need to correct bad investments. In fact, such government funds put off the healing process and make the situation that much worse.

A government support of anything that cannot make a profit on its own, cannot be anything but a burden to the economy.

So what is the proper course of action when facing a depression? The problem is thinking of a depression -- or of recessions in general -- in terms of a problem that has a solution. The depression is the solution to the problem that is deficit spending, stock over-valuation and mass mal-investment. The free market has the most efficient natural tendency to correct this error. Therefore it must not be impaired by government intervention. The right course of action is to unburden the economy by reducing taxes, dismantling trade barriers and general deregulation.