March being Women’s History Month, it's a good time to recall how Rose Wilder Lane’s experience with the reality of Russian socialism, as a visitor there with the Red Cross, brought many, like her, to see the paramount importance of freedom.  Rose later wrote that she “came out of the Soviet Union no longer a communist.” She began to realise America enjoyed a degree of freedom no other nation held. “Like all Americans, I took for granted the individual liberty to which I had been born. It seemed as necessary and as inevitable as the air I breathed; it seemed the natural element in which human beings lived.” For Rose, the Soviet Union was “not an extension of human freedom, but the establishment of tyranny on a new, widely extended and deeper base.” Gary Galles give more of the story in this guest post.

The Moment Rose Wilder Lane’s Faith in Communism Was Pierced

by Gary Galles

March is Women’s History Month. Among the women who have been remembered and honoured, however, one has clearly not received enough attention: Rose Wilder Lane (daughter of 'Little House on the Prairy' creator Laura Ingalls Wilder).

Among the past century’s most ardent proponents of liberty, she developed the inseparable connection between life and liberty and the importance of individuals understanding the implications of their freedom. In her honour, especially given the current lack of serious attention to protecting our liberties in current American politics, revisiting her book Give Me Liberty (1936), which traces her evolution from believing in communism to devotion to liberty, seems particularly appropriate. The book has surprisingly clear implications for today.

In 1919 I was a communist.

From this point of view… the Profit System causes the injustice, the inequality, we see. We must eliminate profit; that is to say, we must eliminate the Capitalist. We will take his current profits, distribute his accumulated wealth, and ourselves administer his former affairs…When the Capitalist is gone, who will manage production? The State… It was at this point that the first doubt pierced my Communist faith.

This economic revolution concentrated economic power in the hands of the State… so that the lives, the livelihoods, of common men were once more subject to dictators… Every advance toward personal liberty which had been gained…was lost by the collectivist economic reaction.

Representative government cannot express the will of the mass of the people…the population of a country is a multitude of diverse human beings with an infinite variety of purposes and desires and fluctuating wills…Any government of multitudes of men, anywhere, at any time, must be a man, or few men, in power.

Centralised economic control over multitudes of human beings…must become such minute and rigorous control of details of individual life as no people will accept without compulsion.

What I saw was not an extension of human freedom, but the establishment of tyranny on a new, widely extended and deeper base.

The Soviet government exists to do good to its people, whether they like it or not… To that end they have suppressed personal freedom; freedom of movement, of choice of work, freedom of self-expression in ways of life, freedom of speech, freedom of conscience.

[Coordinating] vast multitudes of human beings are activities so intricately inter-related and inter-dependent that efficient control of any part of them demands control of the whole.

The Communist hope of economic equality… rests … on the death of all men and women who are individuals.

I came out of the Soviet Union no longer a communist, because I believed in personal freedom…I [saw] an essentially medieval, planned and controlled economic order was taking over the fruits of the industrial revolution while destroying its root, the freedom of the individual.

I understood at last that every human being is free; that I am endowed by the Creator with inalienable liberty as I am endowed with life; that my freedom is inseparable from my life, since freedom is the individual’s self-controlling nature.

I hold the truth to be self-evident, that all men are endowed by the Creator with inalienable liberty, with individual self-control and responsibility…The extent to which this natural liberty can be exercised depends upon the amount of external coercion imposed upon the individual.

The men who met in Philadelphia to form a government believed that all men are born free. They founded this government on the principle: All power to the individual…The intent was actually to give the governing power to each common man equally…Common men were to govern themselves…Power was diminished to an irreducible minimum…Never before had the multitudes of men been set free to do as they pleased.

Individualism. In less than a century, it created our America.

American wealth is innumerable streams of power…flowing through the mechanisms that produce the vast quantities of goods consumed by the multitudes, and the men who are called the owners can hardly be said even to control the wealth that stands recorded as theirs, for…in this American chaos business and industry were compelled to serve those desires or perish.

There is no system here…But if this chaos were replaced by a system…functioning for the sole purpose of serving the public good, these men must be replaced by a bureaucracy…controlling in detail, and according to a plan devised by men possessing centralised economic power, all the processes.

[America’s] brief experiment in individualism has not only created great wealth and an unimaginable multiplication of forms of wealth in goods and services, but it has also distributed these forms of wealth to an unprecedented and elsewhere unequalled degree.

As I read Lane’s words, a strong sense that “this is as much about today as it is about when she wrote” began to grow in me. But as I kept reading, I was floored by just how true that was.

I read … that less than 10 percent of our population own more than 90 percent of the wealth. This alarmed me in 1893 … But it seems to me even more alarming that many American minds accept this statement as true upon no better proof than that they have read it, and from it conclude, first, that “something must be done,” and, second, that the proper thing to do is to take ownership away from individuals and have property administered by The State; which means, by autocratic rulers giving orders through an enormous bureaucracy.

There is nothing new in planned and controlled economy. Human beings have lived under various forms … for six thousand years. The new thing is … individualism … the principle that created this country and has, in fact, brought the greatest good to the greatest number.

Can individualism … stand against the determined attack of [those] organised, controlled, and fanatically sure that a strong man in power can give a people better lives than they can create for themselves?

Will [we] defend the Constitutional law that divides, restricts, limits and weakens political-police power, and thus protects every citizen’s personal freedom, his human rights, his exercise of those rights in a free, productive, capitalist economy and a free society? Or … suppressing individual liberty, sacrificing human rights to an imagined “common good,” and substituting for civil laws the edicts, or “directives,” once accurately called tyranny and now called administrative law? This is the choice that every American must make … the present situation puts it before us and requires a decision.

In 1933 a group of sincere and ardent collectivists seized control of the Democratic Party, used it as a means of grasping Federal power, and … began to make America over. The Democratic Party is now a political mechanism having a genuine political principle: national socialism.

Reactionary pseudo-thinkers shifted American thought into reverse … They called it “liberal” to suppress liberty; “progressive” to stop the free initiative that is the source of all human progress; “economic freedom,” to obstruct all freedom, and “economic equality” to make men slaves … We never heard that these United States are a political structure unique in all history, built upon … the fact that individual persons are naturally free, self-controlling and responsible.

These United States stand for a political principle that must conquer and change the whole world, because it is true.

Today, Federal administrative agencies have nearly destroyed those divisions of the political power which alone protect the property, liberty and lives of American citizens … because a state that dictates men’s action in producing and distributing goods must have undivided and absolute power.

Leading statesmen assume that … suppression of liberty is good for mankind, and that these new forms of an old tyranny are here to stay.

Free thought, free speech, free action, and freehold property are the source of the modern world. It cannot exist without them. Its existence depends upon abolishing these reactionary state controls and destroying the socialist State.

The task before Americans is to end these police-controls of peaceful, productive American citizens, to repeal all the reactionary legislation and … executive orders … to abolish the Federal corporations, departments, bureaus and agencies that dictate and enforce these State controls … to require men in public office to recognise again every American’s natural right as a free person.

No politician, yet, has asked American voters to give him the power to strip any State of the powers it has usurped from its citizens, nor to strip the Federal Government of the powers it has usurped from the States; to restore the rights of the citizens, the rights and powers of the States … nor to add …further restrictions that will adequately protect the property, liberty and lives of persons …  and make the United States again the world-champion of human rights and the leader of the world-liberating revolution.

Rose Wilder Lane’s experience with the reality of Russian socialism, expressed insightfully, has brought many to see the paramount importance of freedom (or more often, the tragedy of its absence) in human lives. What we can learn from her Give Me Liberty is also reinforced in her 1943 companion book The Discovery of Freedom. She offers us lessons which need re-learning in each generation, if liberty is to be defended from the erosion that is not just ongoing but accelerating now. And it is very hard to miss just how appropriate her words still are for the political situation Americans face now. That is why it is useful to remember what she wrote in her autobiographical sketch,

I am now a fundamentalist American; give me time and I will tell you why individualism, laissez-faire and … capitalism offer the best opportunities for the development of the human spirit. Also I will tell you why the relative freedom of human spirit is better — and more productive, even in material ways — than … any other rigidity organised for material ends.

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Dr. Gary Galles is a Professor of Economics at Pepperdine University, California. His research focuses on public finance, public choice, the theory of the firm, the organisation of industry and the role of liberty including the views of many classical liberals and America’s founders­. His books include Pathways to Policy Failure; Faulty Premises, Faulty Policies; Apostle of Peace; and Lines of Liberty.

This article was originally published on FEE.org. Read the original article. 

With a new government here just beginning its work, its worth reminding ourselves that the work that truly matters in government is the protection and expansion of individual liberty. Gary Galles reminds us in this guest post that at at time when far more resources are forcibly taken from some, for whatever and whoever the government decides, the insights  on liberty of Henry Hazlitt are more important than ever.

Henry Hazlitt on Liberty: 21 Choice Quotes

by Gary Galles

November 28 marked the 1894 birth of one of American history’s most prolific public intellectuals—Henry Hazlitt (1894-1993). According to Lew Rockwell, he “was familiar with the work of every important thinker in nearly every field,” and he “wrote in every important public forum of his day.” His published work as a journalist, literary critic, philosopher, and economist ran to roughly 10 million words before his death in 1993, including perhaps the most popular economics book ever written: Economics in One Lesson.

In that vast output, perhaps Hazlitt’s most important contribution was his consistent defense of the central importance of liberty in daily life, even though it lost him more than one job. At a time when real commitment to liberty is scarce, we should all pay heed to his wisdom.

Here are twenty-one of his most essential quotes:

“True adherents of liberty ... [believe] in limited government, in the maximisation of liberty for the individual and the minimisation of the coercion to the lowest point compatible with law and order ... we believe in free trade, free markets, free enterprise, private property.”

“Liberty is the essential basis, the sine qua non, of morality. Morality can only exist in a free society, it can exist [only] to the extent freedom exists.”

“‘Freedom to’” is a guarantee that no one, including the government, will be allowed to interfere with one’s freedom.”

“The future of human liberty ... means the future of civilisation.”

“The State, of course, is absolutely indispensable to the preservation of law and order, and the promotion of peace and social cooperation. What is unnecessary and evil, what abridges the liberty and therefore the true welfare of the individual, is the State that has usurped excessive powers and grown beyond its legitimate function.”

“The superior freedom of the capitalist system, its superior justice, and its superior productivity are not three superiorities, but one. The justice follows from the freedom and the productivity follows from the freedom and the justice.”

“Government can’t give anything without depriving us of something else.”

“When your money is taken by a thief, you get nothing in return. When your money is taken through taxes to support needless bureaucrats, precisely the same situation exists.”

“Only if the modern state can be held within a strictly limited agenda...can it be prevented from regimenting, conquering, and ultimately devouring the society which gave it birth.”

“Liberty is so precious an end in itself that Lord Acton was moved to declare that it is ‘not a means to a higher political end. It is itself the highest political end.’ Yet though liberty is beyond doubt an end in itself, it is also of the highest value … as a means to most of our other ends. We can pursue not only our economic but our intellectual and spiritual goals only if we are free to do so.”

"Government planning always involves compulsion."

“Many of today’s writers who are most eloquent in their arguments for liberty in fact preach philosophies that would destroy it.”

“In a thousand fields the welfarists, statists, socialists, and inverventionists are daily driving for more restrictions on individual liberty.”

“The solution to our problems is not more paternalism, laws, decrees, or controls, but the restoration of liberty and free enterprise.”

“Capitalism will continue to eliminate mass poverty in more and more places and to an increasingly marked extent if it is merely permitted to do so.”

“The ‘private sector’ of the economy is, in fact, the voluntary sector...the ‘public sector’ is, in fact, the coercive sector.”

“Capitalism, the system of private property and free markets, is not only a system of freedom and of natural justice—which tends…to distribute rewards in accordance with production—but it is a great co-operative and creative system that has produced…affluence that our ancestors did not dare dream of.”

“The crying need today is not for more laws, but for fewer. If the friends of liberty and law could have only one slogan it should be: Stop the remedies!”

“Our intelligentsia …. misprize economic liberty because … they lack the knowledge or understanding to recognise that when economic liberties are abridged or destroyed, all other liberties are abridged or destroyed with them.”

“Liberty is a whole, and to deny economic liberty is finally to destroy all liberty.”

“When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: ‘Yes, stand a little less between me and the sun.’ It is what every citizen is entitled to ask of his government.”

Henry Hazlitt recognised liberty as the only moral system and economic liberty, or capitalism, as the only means of organizing society that can benefit all. And he defended that position powerfully against many attacks. As Ludwig von Mises described him, “in this age of great struggle in favor of freedom and the social system in which men can live as free men, you…are the economic conscience of our country.”

During his life, Hazlitt saw America taking the opposite course, prompting him to conclude that “So far as the politicians are concerned, the lesson … does not seem to have been learned anywhere.”

Now, with far more resources forcibly taken from some for whatever and whoever the government decides, his insights are more important than ever.

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Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network.
In addition to his most recent book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

"The essence of the strike, then, is the resort to coercion to force unwilling exchange or to inhibit willing exchange."

“Rarely challenged is the right to strike. While nearly everyone in the population, including the strikers themselves, will acknowledge the inconvenience and dangers of strikes, few will question the right-to-strike concept....
    "This is not to question the moral right of a worker to quit a job or the right of any number of workers to quit in unison. Quitting is not striking, unless force or the threat of force is used to keep others from filling the jobs vacated. The essence of the strike, then, is the resort to coercion to force unwilling exchange or to inhibit willing exchange. No person, nor any combination of persons, has a moral right to force themselves—at their price—on any employer, or to forcibly preclude his hiring others....
    "Lying deep at the root of the strike is the persistent notion that an employee has a right to continue an engagement once he has begun it, as if the engagement were his own piece of property. The notion is readily exposed as false . . . A job is but an exchange affair, having existence only during the life of the exchange. It ceases to exist the moment either party quits or the contract ends. The right to a job that has been quit is no more valid than the right to a job that has never been held."

~ Leonard Read, from his 1969 The Coming Aristocracy

"Unionism...[utilises] crude doctrines of sheer force, constraint of anybody and everybody who stand in the way of the immediate end, limitation of numbers and excessive prices built up on monopoly. . . 

    "[T]he labour of the country never can obtain for itself, except at the expense of other labour, more than the free and open market will yield. . . . Extracting more . . . is very near to dishonesty, since he is forcing this higher price at the expense of others. . . .
    "If the employer had behaved badly, the true penalty would fall upon him; those who wished to leave his service would do so . . . That would be at once the true penalty and the true remedy. Further than that in labour disputes has no man a right to go. He can throw up his own work, but he has no right to prevent others accepting that work. 

    "Force rests on no moral foundations."

~ Auberon Herbert, composite quote from his his 1891 'The True Line of Deliverance,' and his 1908 'A Plea for Voluntaryism' 

[Hat tip Gary Galles]

 

Middle-class welfare at its finest

"Contrary to the claim that taxpayer subsidies for higher education provide great social benefits, these subsidies actually are a wealth transfer from the less-well-off to wealthy people."

~ Gary Galles, from his article 'Subsidising Higher Education Is Not Creating Widespread External Benefits'

"If freedom of association is a right, then unions are in the wrong and pushing further in the wrong direction." Bonus #QotD

"If freedom of association is a right, then unions are in the wrong and pushing further in the wrong direction."

~ Gary Galles in his post 'Unions Are Clearly in the Wrong about Freedom of Association'
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Shut-down disharmony: The lesson from Bastiat

The continuous encroachment of government into people's everyday lives was dramatically demonstrated in the recent U.S. Federal Government partial shutdown. You might think, write Gary Galles in this guest post, that with the shutdown at an end, that national harmony would now break out.
But you would be wrong: because as Frédéric Bastiat famously pointed out, as long as government coercion continues, and expands, then there is no possibility of any genuine harmony.
The reason is simple: Genuine harmony requires cooperation, it relies on voluntary human interaction; coercion makes this impossible. Freedom requires government “exerted solely for the maintenance of order, security, and justice.” Every expansion beyond that narrow bound expands disharmony.

Amid the hyperbole devoted to the partial government shutdown, Americans have heard the soap-opera details of behind-the-scenes jockeying and Twitter smack-downs while being told how dire things are as a result. In fact, with all the blaming of opponents for extremism and unprincipled intransigence in preventing a resolution, you might think that the government status quo they are trying to get back to is the means to national harmony. That would be seriously mistaken.

The government we suffer from is the primary cause of our disharmony, which is why liberty itself requires a partial government shutdown.

Continually leveraging government power into ever-more areas where people’s views dramatically differ expands how frequently some people’s preferences are forced on others. That guarantees acrimony, not harmony. And our public servants in Washington could use some wisdom on that score. For that, they could turn to one of the most insightful observers of government’s influence on social comity—Frédéric Bastiat, among history’s ablest defenders of freedom. In his seminal book, Economic Harmonies, he writes:

"All men’s impulses, when motivated by legitimate self-interest, fall into a harmonious social pattern…the practical solution…is simply not to thwart those interests or to try to redirect them.
    Coercion…[has] never yet done anything…except to eliminate liberty.
    Where do you…establish the acting principle of coercion?... if you entrust men with arbitrary power, you must first prove that…their minds will be exempt from error, their hands from greed, and their hearts from covetousness.
    But it is not necessary to force into harmony things that are inherently harmonious.
    Let men labour, exchange, learn, band together, act, and react upon one another…there can result from their free and intelligent activity only order, harmony and progress.
    The question is whether or not we have liberty...not profoundly disrupted by the contrary act of institutions of human origin.
    Social order, freed from its abuses and the obstacles that have been put in its way…[is] the most admirable, the most complete, the most lasting, the most universal, and the most equitable of all associations.
    The laws of Providence are harmonious…only when they operate under conditions of freedom…Therefore when we perceive something inharmonious in the world, it cannot fail to correspond to some lack of freedom or justice.
    The state always acts through the instrumentality of force…What are the things that men have the right to impose on one another by force?... I have no right to force anyone to be religious, charitable, well educated, or industrious; but I have the right to force him to be just: this is a case of legitimate defence.
    If, therefore, the use of force by the individual is justified solely on grounds of legitimate defence, we need only recognise that government action always takes the form of force to conclude that by its very nature it can be exerted solely for the maintenance of order, security, and justice. All government action beyond this limit is an encroachment upon the individual’s conscience, intelligence, and industry—in a word, upon human liberty.
    Accordingly, we must [turn]…to the task of freeing the whole domain of private activity from the encroachments of government.
    It seems evident to me that to restrict the public police force to its one and only rightful function, but a function that is essential, unchallenged, constructive, desired [xxxvi] and accepted by all, is the way to win it universal respect and co-operation.…from what source could [then] come all our present ills of systematic obstruction, parliamentary bickering, street insurrections, crises, factions, wild notions, demands advanced by all men to govern under all possible forms, as dangerous as they are absurd, that teach the people to look to the government for everything. We shall have an end … to the ever increasing and unnatural meddling of politics into all things.
"[Many] causes of disturbances, friction, disaffection, envy, and disorder would no longer exist…it reduces evil to the smaller and smaller area left open to it by the ignorance and perversity of our human frailty, which it is the function of harmony to prevent or chastise."

Bastiat's Economic Harmonies identified the principled defence of individual rights and freedom as central to social harmony and progress. But such freedom required government “exerted solely for the maintenance of order, security, and justice.” Every expansion beyond that narrow bound expands disharmony.

Politicians promise harmony and blame opponents for destroying it. But government acting as the ubiquitous dispenser of goodies and garnishments destroys harmony. So the fight in Washington is not the cause of division, and no temporary DC détente can eliminate it. The core fight is over how invasive, and thus how destructive of harmony, government will be.

* * * * * 

Gary M. Galles is a professor of economics at Pepperdine University. His recent books include 'Faulty Premises, Faulty Policies' (2014) and 'Apostle of Peace' (2013). He is a member of the FEE Faculty Network.
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Did Ayn Rand really want us to be selfish?

 

 

An intelligent non-Objectivist raises a big Happy Birthday to one of Ayn Rand’s most powerful and most misunderstood ideas. “No, Ayn Rand Did Not Want Us to Be Selfish,” says Gary Galles in this guest post. Except, she sort of did …

February 2 marks the birth of one of the most praised and criticised thinkers of the past century – Ayn Rand. [Yay! – Ed.]

Rand sold more than 30 million books. Atlas Shrugged has been ranked behind only the Bible as an influence on readers’ lives. She has also been stridently attacked for issues such as her militant atheism. But perhaps least understood has been her full-bore rejection of altruism. On her birthday, it is worth reconsideration.   

Altruism has commonly been held up as the standard for moral behaviour. But Rand rejected it, asserting it was “incompatible with freedom, with capitalism, and with individual rights,” and therefore “the basic evil behind today’s ugliest phenomena.”

That head-on collision arises from French philosopher Auguste Comte, coiner of the term altruism. The altruists.org website describes Comte’s meaning as “Self-sacrifice for the benefit of others,” where “the only moral acts were those intended to promote the happiness of others. The only moral acts. The philosophybasics.com website describes it as a doctrine that “individuals have a moral obligation to serve others and place their interests above one’s own.” Comte’s Catechisme Positiviste further asserts that altruism “gives a direct sanction exclusively to our instincts of benevolence,” and, therefore, “cannot tolerate the notion of rights, for such a notion rests on individualism.” In short, Comte asserted that people had to be altruistic to be moral and fully selfless to be altruistic.

In Comte’s view, [an idea derived from philosopher Immanuel Kant] any act performed for any reason beyond solely that of advancing someone else’s well-being is not morally justified. That implies taking a tax deduction for a charitable act strips it of its morality. The same is true when done because “what goes around comes around.” Something as seemingly innocuous as feeling good about doing good also fails Comte’s joyless standards. Even “love your neighbour as yourself” fails his unlimited duty of altruism. As George H. Smith summarised it, “One should love one’s neighbour more than oneself.” [It brings to mind WH Auden’s celebrated criticism of this ‘otherism’: "We are all here on earth to help others; what on earth the others are here for I don't know.” – Ed.]

It is hard to imagine a bleaker criterion for morality than one that demands such joylessness.

Ayn Rand’s attacks on altruism are aimed specifically at Comte’s definition. Modern usage however has eroded his original meaning to little more than a synonym for generosity, so Rand’s rejection of the original meaning is now often taken as a rejection of generosity, which it is not. In Roderick Long’s words,

… her sometimes misleading rhetoric about the “virtue of selfishness”… was not to advocate the pursuit of one’s own interest at the expense of others … she [explicitly] rejected not only the subordination of one’s interest to those of others, (and it is this, rather than mere benevolence, that she labelled “altruism”), but also the subordination of others’ interest to one’s own.

Rand’s categorical rejection of altruism was a rejection of Comte’s requirement of total selflessness, because that was inconsistent with any individuals mattering for their own sake. Rand vehemently opposed such an invalidation of each individual’s significance.

The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue, and value.

Rand’s “virtue of selfishness” was a response to Comte’s demand for complete selflessness – that each person completely disregards benefits to him- or herself arising from any of their actions. Not only is a requirement for everyone to completely disregard themselves an unattainable ideal, it is self-contradictory. You cannot possibly sacrifice yourself fully for me while I am also sacrificing myself fully for you. [Just what are those others here for?- Ed.] And if no one has any intrinsic value, why would the results, even if possible, be meritorious?  As Adam Smith noted long ago. “Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.” In contrast, Comte’s view would characterise a society where everyone was sustained as a beggar, dependent on charity, as moral, but would characterize people providing for themselves and their families as immoral.

With Comte as a starting point, more attention to people’s own well-being – more selfishness, in Rand’s terminology – is the only way to move toward recognising value in each individual and significance in each life.

As Rand recognised and pointed out so colourfully, Comte’s conception of altruism is inconsistent with liberty, and fatally undercuts its underpinnings.  Comte’s duty to put others first at all times and in all circumstances denies ‘self-ownership’ and the power to choose that derives from it. Everyone else maintains never-ending presumptive claims on every individual, overriding any rights they may have. In contrast, benevolence involves voluntary choices to benefit others of one’s own choosing, in ways and to the extent individuals choose for themselves.

This is why Rand criticised equating altruism with benevolence. The key distinction  is not the “doing good for others” aspect that the two words share, but that between benevolence’s individual discretion in making such choices with one’s recognised-as-valid claim to decide such things and altruism’s unconditional requirement to sacrifice for others in all things. Rand called the latter treating man as “a sacrificial animal.” As she put it,  

Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime…The issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence.

An omnipresent duty of self-sacrifice also makes people vulnerable to manipulation by those who disguise power over others as “really” a means to attain some noble goal. The desire to sacrifice for the good of others can be transformed into the requirement to sacrifice to the desires of leaders. As Rand expressed it:

Those who start by saying: “It is selfish to pursue your own wishes, you must sacrifice them to the wishes of others” – end up by saying: “It is selfish to uphold your convictions, you must sacrifice them to the convictions of others.”

Philosopher Leonard Peikoff’s description of the results is particularly striking:

Every man, [altruists] argue, is morally the property of others—of those others it is his lifelong duty to serve; as such, he has no moral right to invest the major part of his time and energy in his own private concerns…if he refuses voluntarily to make the requisite sacrifices…he is a moral delinquent, and it is an assertion of morality if others forcibly intervene to extract from him the fulfilment of his altruist obligations…Thus has moral fervour been joined to the rule of physical force, raising it from a criminal tactic to a governing principle of human relationships.

In sum, Comte’s view of altruism can be seen as logically inconsistent, joyless, liberty excluding and morality eroding. And, as Ayn Rand took the lead in showing, it has enabled the imposition of vast harm on vast numbers. It is not entitled to deference as a guide for morality. And one need not accept everything Rand ever argued to recognise her rebuttal of Comte as overwhelming.

However, with the world having largely transformed altruism in Comte’s sense into a synonym for benevolence, why should we still care about a rebuttal of a term that now usually means something else? The key here is Rand’s emphasis on duty.

While in typical modern usage, what people who endorse altruism really advocate is benevolence (something Rand did not reject, despite misrepresentations that she did). But just below the surface, the concept of duty remains. And it frequently re-emerges as an illustration of William Graham Sumner’s “forgotten man.”

The key here is Rand’s emphasis on duty [that ethical vestige of Kant – Ed.]:

When A needs something, in B’s opinion, if C, who can do something about it refuses … C is pilloried as someone who is selfish rather than altruistic for not choosing to support B’s cause. The faulty syllogism remains that “C is failing to do his duty here. C should do his duty. So C should be made to do it.” And … that syllogism as a bludgeon remains an ever-present threat from everyone who wants to do good with someone else’s resources, and finds coercion an acceptable mechanism.

[The alleged ethical duty to sacrifice slides so easily into the political desire to coerce the sacrifice of others. – Ed.]

Rand reminds us of the central defence against the threat of coercion lurking beyond altruistic demands placed on people. [It lies in both politics and ethics. – Ed.]  [Politically,] it lies in protecting individual ‘self-ownership’ and the property rights that derive from it. When that is maintained as fundamental, my power to choose what to do with myself and my property – including when my conclusion is, “I could contribute to cause X, but I choose not to” – is accepted as legitimate. [Ethically, it lies in rejecting any taint of self-sacrifice in our morality. – Ed.] Thus we would soundly reject the view that “Apart from such times as [someone] manages to perform some act of self-sacrifice, he possesses no moral significance.”

Without the coercive violation of rights, liberty can be maintained. [Without the fallacious equation of morality with altruism, the ethical underpinnings of liberty can be secured. – Ed.]  Their voluntary arrangements, including their chosen generosity, creates a better world than Comte’s altruism.

To Rand, Comte’s view of altruism is logically impossible, joyless, and liberty-excluding, and has enabled vast harms to be imposed on vast numbers. It does not deserve deference as a guide to morality. However, Rand offers no criticism of voluntary benevolence. That is why we should still care about her objections to altruism, which we now mistakenly take to mean whatever voluntary individual choices people make to be generous to others.

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Gary M. Galles is a professor of economics at Pepperdine University. He is the author of The Apostle of Peace: The Radical Mind of Leonard Read.
This article previously appeared at FEE and the Mises Daily.

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No, unions don't increase everyone's wages

 

Where would all workers be without unions? Probably much better off says Gary Galles in this guest post.

There is a well-established tradition in which unions claim credit for every worker gain. Among their most common assertions, often incorporated in attributing negative wage trends to eroding union power, is that unions raise all workers’ wages. Unfortunately, while sometimes raising those of their own members, unions retard rather than raise the real earning power of all workers in general.

Unions leverage special government-granted powers (e.g., unique exemptions from antitrust laws) allowing current employees to prevent competition from others willing to do the same work for less. This is a form of collusion that, done by any business, would be legally prosecuted.

The higher union wages that result are then credited for raising all workers’ wages because they supposedly force up other employers’ wages to keep their workers from leaving for those better-paying alternatives. However, their claim cannot be true without violating the law of demand.

Higher Wages, Fewer Jobs 

Higher wages from unions’ government-imposed monopoly power would push up others’ wages only if it increased the number of such high-paying jobs. The reason is that employers need only outbid employees’ actual options to retain them. But by artificially forcing up the cost of hiring their workers, unions reduce rather than increase the number of such jobs offered by employers, reflecting the reduced output consumers will buy at the higher costs and prices that result. Instead of improving the alternatives available to non-union workers, they are worsened, as the displaced workers are forced into competition with others for non-union jobs.

Those displaced workers increase the labour supply for non-union employment. That pushes wages for all workers in those jobs down, not up. Consequently, union wage premiums do not benefit all workers; benefits come primarily from other workers’ pockets.

With only about 18% of America’s private sector workforce remaining unionised, union power therefore cuts the real incomes of more than 4 out of 5 workers. And since unions also hike government service costs directly, as well as through other cost-increasing policies (e.g., the “Living Wage” nonsense and project labour agreements) which big labour’s political clout has pushed through, all other workers are also harmed as taxpayers.

Union Opposition to International Trade

Unions have also used the same “big lie” technique of constantly repeating the opposite of the truth as fact in other areas. For example, aware that their monopoly power to exclude competing workers stops at the border, unions have long been the core backers of protectionism. They focus their attention on those getting special protection, then assert that their benefits will also spread throughout the economy to benefit others.

But they ignore protectionism’s much larger harms — to all other workers who would have gained from expanded exports; to all other workers who, as consumers, have their access to lower cost and superior imports (and domestic production forced to compete with it) restricted; and to all other workers adversely affected by the reduction in real wealth and income produced by domestic protectionism and induced foreign protectionist responses.

Given that Labor Day in the US has been considered the traditional start of “serious” presidential campaigning, it is an appropriate time to remember just how damaging unions’ “big lie” strategy is. Its illogical twist can derail accurate understanding of the harm unions impose on almost all Americans, offering a sobering reminder that “It ain’t ignorance that does the most damage; its knowing so derned much that ain’t so.” After all, when people know they are ignorant of important variables that bear on their decisions, they usually don’t bet the house on them, but when they think they know what is false to be true, they often lose the house.

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Gary M. Galles is a professor of economics at Pepperdine University. He is the author of The Apostle of Peace: The Radical Mind of Leonard Read.
A version of this post appeared at the Mises Wire.

 

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How Special-Interest Groups Benefit from Minimum Wage Laws

Guest post by Gary Galles

Those campaigning for a “living wage,” or a substantial jump in the minimum wage, all assert that the purpose is to help working families. Unfortunately, careful students of the evidence come to a different conclusion. As Mark Wilson summarises it, “evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels.”

Some workers lose jobs (high minimum-wage places have among the highest unemployment rates); others have hours cut. The least-skilled get competed out of the jobs that remain (e.g., the minimum wage hits teenage employment hardest). It crowds out on-the-job training, impeding workers’ ability to learn their way out of poverty. And those effects are worse in a recession.

It also raises costs and prices that workers pay as consumers.

How can we explain support for a policy that harms people supporters say they wish to help? We explain it by focusing not on low-income workers, but their substitutes.

Consider an analogy. If the price of ice cream was pushed up, earnings of ice cream producers might go up or down, depending on how much less was bought as a result. But producers of frozen yogurt, a substitute for ice cream, will definitely benefit, because a higher price of ice cream will increase demand for frozen yogurt, clearly benefiting its producers.

Similarly, increasing the minimum wage will raise the cost of hiring low-wage workers. And while it might actually hurt low-wage workers, it will help each substitute for low-wage labour by increasing its demand. Thus, what may best explain support for higher minimum wages is not compassion for the working poor, but the narrow self-interest of those offering substitutes for low-skill labour.

Unions top that list. [Which is why union blogs The Standard and The Daily Blog support them.]

A higher minimum wage increases the demand for union workers by reducing competition from lower-skilled workers. For instance, if the minimum wage was $15 and the union wage was $30, employers give up 2 hours of low-skilled work for every union worker-hour utilized. But increasing the minimum to $20 means employers give up 1.5 hours of low-skilled work for every union worker hour.

Union employers benefit as well, because the higher costs imposed on non-union competitors raise the prices they must charge, increasing demand for union employers’ output.

This can also explain why other “altruists” support higher minimum wages.

Other beneficiaries are non-union workers and employers in high cost-of-living areas, where virtually everyone earns above the federal minimum wage, – they benefit by raising the cost of production imposed on rivals where wages are lower (which is why many in high-wage areas in the U.S. favour higher federal minimum wages, while those in low-wage states — the alleged beneficiaries — often oppose them). Workers and producers where state minimum wages exceed the federal minimum also gain because it raises the cost of production where the federal minimum is binding, relative to where they are located.

Because all these substitutes for minimum-wage workers will see increased incomes, businesses and politicians in those locations will also benefit, and so join the bandwagon pushing for “doing good” in a way that directly benefits them.

Even Wal-Mart benefits from this effect. Because Wal-Mart already pays more than the federal minimum, in low-wage areas a federal minimum-wage increase raises competitors’ costs, but not theirs. In high-wage areas, supporting a higher federal minimum wage is a costless way for Wal-Mart to demonstrate compassion for workers.

Virtually everyone who supports higher minimum wages asserts their intent to help working families. But it may frequently be a false compassion whose common denominator is advancing one’s own self-interest while harming working families. That would also explain why so many are unwilling to seriously consider whether such compassion actually works, rather than just sounding good.

The same mechanism is at work in the depression-era Davis-Bacon Act, which is still in force. It required the payment of “prevailing wages” on any project that received federal money. But its genesis was the explicitly racist intent to exclude lower-cost southern firms employing black workers from underbidding local white workers for construction projects, by forcing them to pay their workers more.

A similar illustration came from South Africa, under apartheid. White labour unions backed “equal pay” laws for blacks and whites in the guise of helping black workers. But what it really did was raise the price of hiring blacks, who had less education and fewer skills on average, as well as being discriminated against, relative to the price of hiring whites. Whites gained, but black unemployment jumped as a result of that “compassion” on their behalf.

Another illustration from outside the labour market is the support of corn farmers, corn syrup processors, and those in their communities for restrictions on sugar imports from other countries. By substantially raising the price of sugar in the U.S., the policy has driven many candy makers and the jobs they create outside the U.S., harming those workers and their communities. But it has raised the price of a substitute for corn syrup, increasing demand for corn syrup and the inputs that go into making it, benefiting those in corn-producing states.

Most people don’t seem to recognize this clearly self-interested mechanism behind support for supposedly compassionate or altruistic policies to benefit others, which is why it typically stays under the political radar. But once a person thinks through it, the connection becomes obvious.

Further, it suggests the appropriate test that should be applied in such cases: Whenever someone claims an altruistic reason to support a policy, but it clearly advances their narrow self-interest, the latter effect can explain such support regardless of whether it actually helps the supposed beneficiaries. Therefore, a great deal of cynicism is justified. And when their “story” for how supposed beneficiaries are helped cannot stand the slightest real scrutiny, as with the current minimum-wage campaign, there can be no doubt that such cynicism is justified.

Gary M. Galles is a professor of economics at Pepperdine University, and the author of The Apostle of Peace: The Radical Mind of Leonard Read.
This post first appeared at the Mises Daily.

Testing liberty against slavery

What's liberty?  In a sentence, it's the absence of physical coercion.

So, what does it mean then when some of you argue that we can't have complete liberty?  That we need restraints on our freedom? Well, you do the maths: What you're really saying is you prefer to take your liberty with just a little bit of slavery.  And as F.A (Baldy) Harper used to say, "Strange is a concept of 'liberty' [where]…you enjoy the right to be forced to bow to the dictates of others."

Some of you will try to wriggle free of what's just been pointed out by declaring that you disagree with that simple sentence at the top of the post.  Harper was onto your ploy and, paraphrasing Lincoln, he pointed out what it gains you:

We all declare for liberty, but in using the same word we do not all mean the same thing. With some the word liberty may mean for each man to do as he pleases with himself, and the product of his labor; while with others the same word may mean for some men to do as they please with other men, and the product of other men's labor. Here are two, not only different but incompatible things.

Harper sagely rebutted most of the bromides that are used to argue that a little bit of slavery does you good, which is what you're saying when you tell me the price of liberty for you is too high.  You know the sort of thing; you've head them all before:  "Our liberty is maintained because the government can only do what advances the general welfare" ... "Though our power to vote, infringements on our liberty are prevented" ... "Government does not violate our liberty because it just provides goods and services people want" ...  Taxation is the price we pay for civilization ...  To them all, Harper applied the simple yet rigorous test of 'examining the statement for slavery,' and then demolished them by pointing out that the statements are simply pleas by those who exercise them to wield coercion over others.

Read a summary of Harper's use of slavery to test liberty at the Mises Blog: Distinguishing Liberty from Slavery. It's good.