Wheels Within Wheels

I credit Murray Rothbard with identifying two types of conspiracies, viz. “capitalist ploys” or conspiracies designed to promote someone’s narrow self-interest at the expense of the general public; and “communist plots” which he further subdivides into conspiracies set up with the goal of promoting an ideology and the goal of acquiring political power. These seem to cover all the relevant cases. Indeed, the most successful conspiracies are those that attack on all three fronts; witness, for example, the combined forces of idealistic but naive anti-private-gun-ownership do-gooders, government regulators, and trial lawyers who want to loot gun manufacturers.

The first type of conspiracy is so ubiquitous, varied, and natural in a semi-free society that we will not be discussing it here. It is enough to note that politically connected companies seek freedom from consumer sovereignty through favorable regulations, anti-trust laws, exemptions from liability, and so forth. Their competitors, realizing that they have to play the game if they want to survive, defend themselves with greater or lesser success. The artificial obstacles also deter some entrepreneurs who would otherwise have challenged the vested interests from even trying. The result is that huge amounts of money are wasted financing projects that are not in the best interests of the consumers. Then there are the resources spent on lobbying (i.e. loot or privilege seeking) which, too, could be employed productively. We are all poorer because of it. Because there is no ideological pressure on the part of the elites to stop this kind of thing, the political landscape becomes a battlefield where only the ruthless survive. Indeed, some economists have expressed astonishment that so little money is spent on lobbying given that the federal government has almost three trillion dollars in stolen money and possesses vast discretionary powers. What a contrast to the harmony of interests in the market!

Ideological “conspiracies” are normal in any society and can be either good or bad depending on the ideology and the means used to promote it, viz. truthful persuasion vs. deception or violence.

Here I would like to focus on government plots. Persons who distrust the government in ways other than those sanctioned by that government are often labelled “paranoid.” (The relevant meaning of this term is “a tendency toward excessive or irrational suspiciousness and distrustfulness of others.”) As I hope to demonstrate, it is a rash and unjustified accusation.

Suppose that I, following Friedrich Hayek, take seriously the possibility of the government’s putting psychotropic drugs in the water supply. What reasons could a non-Nobel-prize-winning economist offer to dismiss my concern out of hand?

I submit that there are exactly five reasons for doing so:

  1. The policy in question cannot be implemented due to inadequate technology. For example, there exist no drugs powerful enough and in sufficient quantities (at least at the moment) to produce the desired effect after being dissolved in great amounts of water.

  2. The policy is unthinkable because the government is bound by ideological, moral, or religious prohibitions. In other words, who would do such an evil thing?

  3. The policy is against government interests. Rulers themselves cannot avoid drinking the contaminated water; drugged-up populace cannot be whipped up into nationalist frenzy; and so on.

  4. The policy will fail due to individual resistance. People, having become aware of what the government has done, will stop drinking tap water and switch to bottled water, move out of the territory affected by the drugs, or likewise evade the state.

  5. The policy will fail due to collective resistance. Secrecy cannot be maintained, and the natural elites can successfully resist this policy in the name of the entire community and threaten to remove the current rulers from power unless they rescind it.

In light of this, shall we say, “rationality test” let us entertain a conspiracy theory. I am going to claim that like Chancellor Palpatine in the movie Star Wars II, George Bush or some other high-ranking federal officials orchestrated the September 11 attack in order to consolidate political power and that Osama bin Laden does not even exist. (I will be focusing exclusively on the president, even though the D.C. mandarinate is composed of a multitude of semi-autonomous and often rival agencies.) Before examining any evidence that I may have, you accuse me of paranoia. Out of the five reasons above, which ones would you use to support your judgment of me?

Now reasons one and four are not applicable, while reason three is explicitly countered by the theory itself. Reason five fails due to several considerations. First, there are no longer practically any institutional restraints left to keep the state in check. Everything that has happened after September 11 has been mopping up.

Second, the government has admitted that bin Laden has managed to mastermind his spectacular crime in almost complete secrecy, and it is difficult to see why this feat would be any easier for a group of conspicuous foreigners than for the compulsively paranoid central government.

Third, the government has confessed to astonishing incompetence in what is supposed to be its primary function, namely, production of security, but why would malicious intent be any more unthinkable than such incompetence, both of which are natural and common occurrences in the life of the Leviathan?

Thus, only the second reason rings true. Suppose now that Bush was as corrupt as any dictator, from Nero to Stalin, and you were a traveler from a distant land studying America. (See G.K. Chesterton’s The Everlasting Man for a marvelous use of this device.) Might it not occur to you that Bush had a hand in this directly?

Wait a minute, you object at once, George Bush is a devout Christian. He is not a tyrant. He is not Saddam Hussein who we are supposed to believe speared babies on bayonets and gassed “his own” people. What kind of a psychopath do I take Bush to be in order to for him to murder thousands of his countrymen? Is he not just one of the guys? To this I will reply that the possession of vast political power along with a pervasive apparatus of flattery and glorification of force has a profound effect on a man. “Power corrupts” is not a cliché but reality. In truth, Bush is Nero and Stalin, and it is anybody’s guess how far gone he is. My conspiracy theory amounts to the claim that enough time had passed for Bush to go insane, and you counter that one year of being president could not have twisted him so badly. Fair enough, but let us understand that our disagreement is a trivial one, based on the evaluation of a man’s character. There is nothing a priori implausible about my theory.

Remember also that much more hideous things have been done by the supposed guardians of the commonwealth throughout history, including American history. It need not necessarily have taken outright madness for George Bush to do something much less destructive than what Stalin or Lincoln did and blow up the towers.

Now obviously I do not actually think that Bush had anything directly to do with the attack. But it is truly scary that this “crazy” conspiracy theory passes the rationality test. But then it can’t happen here, and it can’t happen now.

People Wanted

In thusly named chapter of his book Fair Play economist and moralist Steven Landsburg has posed a number of intriguing problems. (Also see his Be Fruitful and Multiply and Who Shall Inherit the Earth?) I will attempt to solve each one in turn.

1. Landsburg asks

Do living people have any moral obligation to the trillions of potential people who will never have the opportunity to live unless we conceive them?

The answer is surely either yes or no, but either answer leads to troubling conclusions. If the answer is yes, then it seems to follow that we are morally obligated to have more children than we really want. The unconceived are like prisoners being held in a sort of limbo, unable to break through into the world of the living. If they have rights, then surely, we are required to help some of them escape. …

But if the answer is… no, then it seems there can be no moral objection to our trashing the entire earth, to the point where there will be no future generations… If we prevent future generations from being conceived in the first place, and if the unconceived do not count as moral entities, then our crimes have no victims, so they’re not true crimes.

These questions are religious in nature, hence we can reason as follows. If there is pre-existence of the soul (due allowance being made for the possibility that God is “outside” of time) and if the soul is immortal, then it is conceivable that those souls that are not Hell-bound may benefit from a stay in this world. But no religion that I know of has any rules which deal with disembodied souls that have not yet existed as human beings. Indeed, we have no knowledge of any celestial procedure by which souls are assigned to human bodies. Whatever the truth of this matter, it is highly doubtful that souls exist “in a sort of limbo, unable to break through into the world of the living.” (Even if they are in limbo, who is to say that they are unhappy there?) It is true that there is a general commandment in the Bible to “be fruitful and increase in number; fill the earth and subdue it; rule over the fish in the sea and the birds in the sky and over every living creature that moves on the ground.” But it says nothing about precisely what level of human population is most pleasing to God.

If, however, souls do not exist prior to birth, then the unconceived do not exist and hence cannot be said to benefit from the gift of life. It can be argued that when a child is born (or a soul is created) its joy of being alive adds to the total, but it is not at all obvious that we ought to be concerned with the maximization of the amorphous “total happiness” in this peculiar fashion. Now I imagine that almost everyone has experienced the “horror of the void,” a feeling of what it is like not to exist. Indeed, for human beings the idea of not existing is quite unpleasant. But that which does not exist is not aware of its terrible condition and the joys of being alive. Hence we do not seem to have a duty to bring things into being.

Furthermore, if the Biblical commandment is true, then we ought to keep having children. The earth is far from being subdued, and I agree that we could “use” a lot more people. If the commandment is false and God is indifferent to whether or not there are six billion people on earth or only two people, then it cannot be wrong to reduce the total population dramatically. If there is no God, then I see no moral reason not to trash the earth and thereby prevent future generations from being conceived.

2. Landsburg continues:

Surely you know couples like this: They have two children, and they’re undecided about whether to have a third. They waver back and forth; they lean one way and then the other; they weigh the pros and they weigh the cons. Finally they decide to go ahead. And from the instant that third child is born, the parents love it so deeply that they’d gladly sacrifice all their assets to preserve its life.

Compare that with the way people shop for appliances or furniture or compact discs. Ordinarily, the products you hesitate over are not the ones you end up treasuring most deeply. There are exceptions of course — sometimes that CD is surprisingly good once you get it home — by the general rule is that if you weren’t sure you wanted it, it’s unlikely to be cherished. Why, then, are children so different? …

If you’ve already got two kids and are wavering over a third, then you’ve already got a pretty good idea of what parenthood is like, and you already know that, unlike the addict who despises his addiction, you’re going to treasure your attachment to your children. When you know you’re going to love something that much after you’ve got it, how can you hesitate about getting it in the first place?

This inconsistency is due entirely to the difference between things that one creates and consumer items that one purchases. Imagine that you are building your business or writing a complicated computer program or engaging in any sort of creative activity. You may almost fall in love with your “baby.” But before you start, you cannot value the object which you will be creating even if you have run other businesses and written other programs. This is because its value is inseparable from the exercise of your own creative faculties that imbue it with life.

Now consider how people adopt babies from foreign countries. They treat this task as a business endeavor: they pay quite a bit of money, inspect the “merchandise” for “defects,” and so on. For these people the child is, at least temporarily, a consumer item to be bought and sold exactly like a CD. They know what they want, and they do not hesitate to get it.

Creation is difficult. And this is why people hesitate. Nine months of pregnancy, the weaning, the child’s hunger for knowledge, the worrying — it takes a toll. There are payoffs, but first one has to take the plunge.

This insight also gives us a clue as to the reason for the parent’s “addiction” to his child. Not being a parent myself, I can only speculate that it is the trust that the child shows toward the parent in spite and because of the almost unlimited power which the latter has over the child. It is the fact that the child allows the parent to influence it. This is what I find so delightful whenever I play with children, e.g. those of my relatives. It is a great honor to be trusted by a kid who is not one’s own. Kids seem to have a sixth sense by which they tell worthy people from those who are not worthy.

Now the more children one has, the less attention one can devote to each one and the less interaction with each child one will have, as Landsburg points out, hence the less pleasure one can derive from the child’s trust and from the imprint which the parent will leave upon him. One’s child is one’s creation and one has to love it and work on it in order to derive the most utility from it. But love is scarce. So is time. I offer a conjecture that one of the reasons why Landsburg is reluctant to have more children may be that he is subconsciously concerned that his “addiction” to his daughter (or perhaps to his science of economics) will diminish.

3. The final paradox which we will consider is this:

Suppose you’re planning to conceive a child in the near future, and you’re thinking about going down to the bank to purchase some bonds as a gift to that child. There is no doubt that the trip to the bank will cause a slight shift in your schedule for the rest of the day, hence a slight shift in the moment of conception, and hence a complete change in the identity of your child (because the sperm that’s out of the pack at 10:01 is unlikely to be in front of the pack at 10:02).

Now then: If you go to the bank, you will conceive child A, who is destined to be wealthy. If instead you spend all your money at the race track, you will instead conceive child B, who is destined to be poor. Moreover, you know in advance, based on the experience of virtually all parents, that no matter which child is born, that is the child you will prefer. If, twenty years after B is born, you were magically offered the opportunity to trade him for A, it’s a sure bet that you wouldn’t consider it. In fact, if an evil genie threatened to turn B into A, you’d pay him not to do it.

But by going to the bank instead of the racetrack, you are essentially paying for the privilege of siring the wealthy A instead of the impoverished B. This, despite the fact that you’d do practically anything to prevent B from turning into A after he’s born. This seems very hard to reconcile with any economic theory of rational behavior, yet there it is.

I confess to being puzzled by the fact that Landsburg considers this to be a problem. Perhaps I do not understand the paradox. But it seems that at the moment of conception the parent faces the choice of

(an abstract child + wealth) versus (an abstract child + poverty).

Clearly, the first choice is preferable. Twenty years from now he will face a completely different choice:

(a concrete living and breathing son or daughter + poverty) versus (an abstract child + wealth).

This choice is by no means obvious. Moreover, at the moment of conception the parent is not in a position even to consider the second choice, because this living and breathing son or daughter does not yet exist.

I have no hesitation in recommending Landsburg’s book to everyone. It is full of most interesting “moral niceties.”

Update 2/19/2011. If we want to have children, then presumably we love them and will good to them; their happiness makes us happy. Therefore, we owe it to ourselves to care for them, not “trash the earth,” etc.

Menagerie of Happy Men

Permit me a personal anecdote. I have a physicist uncle who is a professor at an important American university. He is a brilliant fellow, only a hair or two away from genius. When I look at the articles he publishes in professional journals, I am staggered by the complexity of their subject matter. The mathematical formulas in these articles are both beautiful and mystifying. Here is a typical and relatively easy passage:

Jiang et al. have used Eqs. (14)-(16) to find the temperature dependances of the in- and out-of-plane resistivities of (Y1-xPrx)Ba2Cu3O7-δ single crystals, and their evolution with Pr concentration. Due to the typical sample dimensions L ~ 1 mm, D ~ 0.04 mm, and relatively low anisotropy ε ~ 10, it was necessary to take into account several leading terms in S(ε) and Vbot, Eqs. (15) and (16). By trial it was found that even for the samples with the lowest anisotropy (ε*π*D/L ~ 1) it was sufficient to retain in Eqs. (15) and (16) only the first three terms, k = 0, 1, 2 to obtain convergence of the results better than 0.1%.

A few years ago he and I had a little venture which on my part involved doing a lot of programming, as well as understanding what the above means. I found this latter task to be quite difficult.

Now the reason why I am bringing my uncle into this and possibly putting him in danger of violent repression by the fashion-impaired thugs is because of what he said right after September 11. (Whatever libertarian views he holds, it is because I influenced him. He is innocent, comrade Bush! As a matter of fact, while I was studying for my B.S. in Computer Science, he took care to introduce me to hard-core conservatism. The very first book of this sort I read was Robert Bork’s Slouching Towards Gomorrah. I was terribly impressed with it and even quoted it a couple of times just to see what would happen while hoping all the time that no one would ask me precisely why I disagreed with the opposite views.) My uncle said it with such unshakable conviction that it was obvious that the possibility of the contrary never occurred to him. Here is what he said:

The authorities will take care of it.

There was no mistake. The authorities — my uncle said — will take care of it. In other words, we are from the government, and we are here to help. This reminded me of a joke which goes like this.

Einstein dies and goes to Heaven. While he is waiting to be shown in, he meets three other people who died at the same time he did. “What is your IQ?” he asks one of them.

“182,” the first replies. “Great, we can discuss my theory of relativity,” says Einstein.

“153,” says the next. “Excellent, we can talk about how to achieve world peace,” says Einstein.

“89,” says the third. “What do you think the economy’s going to do in the short term?” asks Einstein.

Of course, the punchline can be altered to make fun of any group of pretentious individuals. But my intention here is different. My uncle is not only a very talented guy, but also someone who emigrated from the cursed Soviet Union long before it was popular to do so. Yet when he comes down to my level and talks about world peace and the related matters, he is utterly oblivious to the possibility that the state is anything other than a benign protector to which it is best to display childlike trust — a mother and a father who will “take care” of everything. And, after all, isn’t that reasonable? Isn’t that what the authorities are for? To take care of things?

It should be noted that the relationship between the conservative public and the state is more complicated than the simple acceptance of the status quo on the part of the former. For example, in the 90s we witnessed a very real mass conservative rebellion against the Clinton regime, which I in my naivete mistook for an ideological movement. Of course it was none of the sort; when the theocrat George Bush II took power, distrust toward the government evaporated and contentment ensued. George Bush, after all, is an “adult,” a grave and serious man, who will clean up the sex, drugs, and rock ‘n’ roll Clinton party. One wonders whether or not we would be better off with Al Gore as president. It is possible that his far-reaching socialist “master plans” would be vigorously resisted, and he would end up doing less damage than Bush.

Be that as it may, it is clear that we libertarians have our work cut out for us.

Memo To: Jude “Saruman” Wanniski

In his book The Real Lincoln Thomas DiLorenzo briefly mentions one curious justification for the War Between the States, viz. that it was necessary for the preservation of the “mystical union” of the states. Among those who subscribe to this view is Jude Wanniski, who also holds that Lincoln must have been right simply because he won.

Without going into the general problem of the extent to which individuals living under a common legal system resemble the state of holy matrimony or into the subtleties of the 19th century American religious thought, it is useful to draw an analogy between our present regime and the more conventional mystical union.

It would seem on reflection that the United States today is the union between the federal government as the king of Siam, and the fifty states as its fifty slave-concubines whom this government ravages every day of every year — even on Christmas, for the government has no shame whatsoever. Now forgive me for being rude, but this is merely another way of saying that the “political union” amounts to the right of the central state — a relatively small group of people who tend to cluster around Washington, D.C. — to wreak havoc over half the North American continent as opposed to, say, one quarter of it.

It may strike one as odd how easy divorce is in today’s society yet that political secession is looked at with horror. Even more telling is the fact that being “on top of the heap” justifies for Wanniski conquest, the tremendous loss of life and property, the revival of total war, the awful economic policies that included everything from high tariffs to the suspension of Wanniski’s own beloved gold standard, and a bloody and preposterous revolution when, as Wanniski points out, he is already “66 years old.” At that age he is still “status-anxious”?

Now we may very well appreciate his concern for the need for Americans to be “on top”; however, allowing one’s ambitions and power lust to go out of control is not the proper means towards a harmonious union and general happiness. Does Wanniski not share these values? Even more damning is the fact that the correct way to success, wealth, and, indeed, power (insofar as this power is creative and not destructive, a distinction which seems lost on Wanniski), is through freedom and peace and not through mercantilism and war.

The problem is therefore twofold: First, whether the war corrupted American power, and second, whether America would be even more influential had the war never occurred and had secession been allowed. What reason does Wanniski have to answer either question in the negative? Is it not the modern state, this amalgamation of an astonishing variety of human vices that have been institutionalized, raised to dizzying heights, and glorified, that permitted men like Richard Perle whom Wanniski himself calls the “Prince of Darkness” to come to power, while he, a self-proclaimed prophet of God, is ignored and despised? Has he considered whether such a thing could happen in the antebellum America? Finally, is it genuinely helpful to define “power,” as Wanniski does, not as the ability of individuals to create a thriving civilization, but as the ability of Caesar (afterwards deified) to crush anyone who stands in his way?

Well, may we all have a great victory.

Perhaps Wanniski’s obduracy can be explained as follows. Whatever does actually happen, he thinks, is for the best. Divine providence is such that all evil has a purpose; indeed, as Augustine writes, “Since God is the highest good, He would not allow any evil to exist in His works, unless His omnipotence and goodness were such as to bring good even out of evil.” Thus, while it is appropriate to make judgments about those matters in regard to which the outcome of the struggle is still uncertain, past actions are not worth evaluating, because whatever happened was meant to happen and was part of the divine plan.

Yet from this argument Wanniski’s attitude towards the War Between the States does not follow. First, there is a difference between that which is good in itself and that which is evil yet which results in good consequences that somehow outweigh that evil, perhaps unbeknownst to or contrary to the intent of the evildoer. The wrongful act passes, but guilt remains. Does not then justice demand that evil be seen for what it is, regardless of the consequences that follow it?

Second, Wanniski cannot know precisely what good is to come from Lincoln’s “squelching” of the voluntary union, for if he did know, then he could point out to us the greater good that resulted from it. His belief that this greater good is the current American world dominance is, as argued above, unreasonable. (Even the commonplace belief that the benefits of the abolition of slavery were “greater” than the costs of war seems more defensible.) Hence if the war was, indeed, foolish and evil, then prima facie it is worth saying so regardless of our belief that all will be well in the end, whatever that end may be. Is it entirely possible, furthermore, that this greater good may never be known to us or that it will be manifested only in the distant future. Does Wanniski believe himself privy to the precise details of God’s design? Is the American empire really the crown jewel of creation?

We may observe, however, that Wanniski himself does not adhere to this position when it comes to the more recent wars. In order to be consistent, ought not he to defend the United States’ past “squelching” of Bosnia, Iraq, and a dozen other places? Are we not the great power? Is this not why George Bush, too, should be “admired” — for his destructive omnipotence? For the important question is indeed not what “Abe Lincoln and Slobodan Milosevic have in common,” but what Abe Lincoln and Richard Perle do.

Perhaps there is another way to get to the source of Wanniski’s beliefs. If the supporters of a decentralized society have not yet attained their vision, he may think, then that vision must not actually be very good. The failure up until now of the lovers of liberty to succeed beyond “delay[ing] for a while some especially obnoxious measures,” as Ludwig von Mises put it, suggests that liberty may actually be a bad idea. For, surely, if it were good, it would be accepted as such a long time ago. Once again, the crude power of the state is self-justifying. There is no need to enter in the refutation of this view, for nothing will convince those who deify the state.

Finally, we may wonder if Wanniski’s hope is that if he sends a sufficient number of memos to the politicians, the latter will realize the error of their ways and obey the will of God, such as Wanniski believes it to be. If so, then we may wish him all the luck in the world.

Letter to David Gordon

Dear Professor Gordon:

In your review of Atheism, Ayn Rand, and Other Heresies you write that Rand might argue against faith in this manner: “Reason is the key tool to man’s survival. If one uses some other means than reason to arrive at one’s beliefs, one is acting against reason. Such conduct is anti-human, since it impedes survival.”

I was wondering if it might be possible to object as follows:

Reason is not the only tool to man’s survival. As Thomas Aquinas writes, “to faith those things in themselves belong, the sight of which we shall enjoy in eternal life, and by which we are brought to eternal life.” To a believer, then, faith is at least as important a “tool” as reason in assuring his own survival or salvation. Pascal’s wager, it seems to me, is precisely that — an admonition to an unbeliever to acknowledge at the very least the practical utility of faith and hope that in time genuine faith will emerge.

Further, also according to St. Thomas, faith, being the free assent of the intellect to the “unseen” knowledge of God, must first be “infused” into man by the grace of God. If true, then the “Clifford principle” is wrong, because there are other ways of gaining knowledge than argument or evidence.

Yours,

Dmitry Chernikov

Michael Bloomberg’s Reply

(To my letter to him.)

Dear Mr. Chernikov:

Thank you for your letter expressing the idea that New York City should secede from both New York State and the United States. This is quite a controversial suggestion, and in light of the recent tragedies in New York, Washington, D.C. and Pennsylvania, I would have to strongly disagree with New York City becoming an independent entity. Although your points are intriguing, these past two weeks have seen an America that cares deeply for our City, as demonstrated by the Federal government’s commitment to the rescue and recovery efforts at the site of the World Trade Center. Likewise, America needs the spirit and talent of New Yorkers at this important time in our nation’s history.

Sincerely,

Michael R. Bloomberg

Letter to Michael Bloomberg

BLOOMBERG FOR MAYOR

126 E 56th Street
New York, NY 10022

Dear Mr. Bloomberg:

Please consider an idea of mine. I propose that the New York City secede from both the New York State and the United States and become a free city-state, rather like Hong Kong. This idea is not without precedent, as over a hundred years ago NYC mayor Fernando Wood recommended the very same thing. The following are just some of the benefits of secession to the people of New York:

1. No more federal and state taxes. Why send our resources to the federal and state bureaucrats who will “invest” it into absurd projects on the other side of the country, or subsidize poverty and vice, when we can leave in the hands of the productive classes, or spend it on local needs? The feds will no longer be able to extort us by withholding “funding” (our own tax money) and in so doing make us do their evil bidding.

2. No more federal and state regulations, most of which, as you know, do a great deal of damage to the economy. If necessary, we can make our own to suit our needs better. And what better way to save public education than to rid our city of the influence of the Department of Education and the NEA?

3. Our own immigration policy. We’ll have the whole world to choose from, because thanks to our independence and freedom from the heavy hand of government, we’ll quickly become the most prosperous country in the world, and everyone will want to live here. I would suggest that we grant a very limited number of citizenship applications per year, and only to the best and the brightest.

4. Our own currency, pegged either to the dollar or (my own preference) to gold. Sound money, free of political control, will fuel our economy like nothing else. You can even put your picture on it!

5. We’ll kick the evil U.N. bureaucrats out of the city-state. You will have to work out a deal with the state and federal governments regarding their property in our new country.

Sir, the main benefit of secession is self-determination. The central government in Washington, D.C. is a machine dedicated to destruction of wealth, corruption of American society, and endless warfare and foreign interventionism. New York State doesn’t do us any favors either. Let us sever the political ties with them, while maintaining all economic ties. Oh, you will be denounced in many newspapers, and the lawyers will have to work overtime, but I do not believe they will try to stop us by force. In fact, the rest of the country, especially the “red” states, will be happy to let us go (they don’t like us much), and you will make history.

Sincerely,

Dmitry Chernikov

Re: Jude Wanniski (RIP) on the Market

Wanniski records the following opinion:

The [Wall Street] Journal editors look down from their mountaintop and proclaim that the free marketplace will sort things out, with the help of technological advance.

From his prison cell, I think Unabomber Ted Kuczinski is closer to the truth, that technology plus the jungle of the marketplace is a mindless combination that is increasingly wrecking the lives of most of the ordinary people on earth — always excepting those who live and hold their meetings at the top of the mountain.

Wanniski, to me, did not seem like someone who studied economics either formally or informally. And just like David Horowitz, he remained a commie in his heart, as manifested in Wanniski’s fondness for Marx even after his conversion to supply-sidism and in ridiculous metaphors like “the mindless jungle of the marketplace.”

At any rate, the editors of the WSJ are neocons, not libertarians. Hence their support for free markets is severely attenuated. There is no such thing as free markets during a war or a nationalist frenzy.

Our author goes on:

When I ask the leaders of the ordinary people what they want, they tell me “access to capital and credit.” That is shorthand for “opportunity to get from the bottom of the ladder to the top, if at all possible.”

This is a crass misrepresentation of the market order. Under any system it is possible to get to the top. Even in the most regimented societies a man with a gift for political intrigue, who is unscrupulous enough to murder and steal and lie and generally excel at the sort of things that governments do, can ascend into the ruling class, e.g., become High Priest of the socialist empire of the Incas. But it is only capitalism that requires the elites and extraordinary men to serve, rather than subjugate and loot the rest of us, if they want to advance to the top. Conversely, men who are good at lying and stealing are as likely to end up in prison as in government. The idea is not to reshuffle the social hierarchy (does it matter whether Jack or Jill is at the top?), but to allow for progressive improvement in our standard of living. We allow good entrepreneurs to become as rich as they can (or should allow), because in the process they cannot help but benefit us all.

Thus, the purpose of a “fluid society” is not social mobility per se, but to discover and use those individuals who are best at fulfilling consumer wants. The entrepreneurs who are most successful at any given moment at filling the needs of the consumers become part of the “fluid” natural aristocracy. As an “ordinary person” (in the sense of not a millionaire), what I want is access to capital and credit not necessarily for myself, but for those few people who have sufficient entrepreneurial talent to succeed in business. I want all capital to be “high-powered,” i.e., in the hands of the best of the best.

Furthermore, cheap credit coupled with fiat currency and Fed-induced inflation results in malinvestment and business cycles, something I don’t think our author realized or would want.

Wanniski makes another bizarre error of is his writings. He imagines society as a pyramid, with the poorest at the bottom and the richest on the top. Perhaps feudal Japan looked this way, though I doubt even that. The American society looks like this:

  /\
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/    \
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The widest part of this figure is the middle crass, the “bourgeoisie.” It’s a bell curve.